Earnings of First Republic Bank (FRC) increased and exceeded expectations in the fourth quarter, reflecting a sharp growth in interest income amidst record loan growth. The positive results spurred a stock rally and the bank’s shares gained in the early trading hours Tuesday.
Net profit grew by 19.6% to $215.19 million and earnings per share rose 17.3% to $1.29 per share during the fourth quarter, surpassing analysts’ forecast.
At $810.8 million, revenues of the San Francisco-based financial services provider were higher by 16% compared to the fourth quarter of 2017, and above the market estimates. Wealth management revenues moved up 15.4% compared to last year, which represents about 14.8% of the total revenues. The overall outcome was positively impacted by the relatively low value of nonperforming assets.
During the fourth quarter, the overall performance was positively impacted by a decline in nonperforming assets
Driving the top-line growth, net interest income advanced 17.3% to $667.2 million and noninterest income moved up 10.2% to $143.5 million. Loan originations climbed 12% to an all-time high of $8.4 billion, aided by higher multifamily and business lending. At the end of the quarter, tangible book value per common share stood at $45.26, up 12% from last year. There was a 14.7% increase in deposits to $79.1 billion.
“Organic growth continues to be strong across the franchise. Our client-focused business model is driving our growth and delivering consistent results in all types of economic conditions,” said CEO Jim Herbert.
The management declared a cash dividend of $0.18 per share for the fourth quarter, to be paid on February 14, 2019, to shareholders of record on January 31, 2019.
Earlier, Citigroup (C) reported higher fourth-quarter earnings, mainly reflecting the management’s aggressive cost-cutting initiatives. Revenues declined, hurt by the continuing softness in the fixed income securities business. Among others, Wells Fargo (WFC) reported a decline in earnings and revenues for the fourth quarter.
Shares of First Republic Bank dropped about 6% over in the past twelve months. The stock, which closed the last trading session slightly lower, gained about 5% in early trading Tuesday following the announcement.
Production disruption and logistics issues continue to have a crippling effect on the industrial sector but the performance of companies, in general, has been mixed so far. Fastenal Company (NASDAQ:
Netflix, Inc. (NASDAQ: NFLX) Thursday said it added 8.3 million paid members in the December quarter. Revenues increased and matched estimates, aided by the relaxation of COVID restrictions and resumption
Investment management firm Charles Schwab Corporation (NYSE: SCHW) has stayed largely unaffected by the coronavirus crisis, rather it managed to tap into new opportunities. The company owes its impressive financial