First Republic Bank (NYSE: FRC) reported stronger-than-expected Q4 results. Driven by robust growth in loans, deposits, and wealth management assets, FRC exceeded both earnings and revenue estimates.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
However, despite the quarterly beat, shares of the American bank and wealth management company dropped 4.2% on January 14 to close at $192.06.
Q4 Performance
The bank reported earnings of $2.02 per share, a 26.3% year-over-year gain, further outpacing analysts’ estimates of $1.90 per share. The company reported earnings of $1.60 per share for the prior-year period.
Furthermore, revenues jumped 26.4% year-over-year to $1.4 billion and exceeded consensus estimates of $1.34 billion.
During the quarter, the bank witnessed the highest loan originations of $16.96 billion, in its history. In addition, credit quality remained strong with non-performing assets that were as low as 8 basis points of the total assets.
Net interest income climbed 25.4% to $1.1 billion, while net interest margin improved to 2.68% in the quarter, up 3 basis points from the year-ago period. The provision for credit losses was $24 million for the quarter.
The company reported total loans of $135 billion, up 19.9% from the prior-year quarter, driven by a higher number of single families, capital call lines of credit, and multifamily and stock-secured loans, which were partially offset by a decline in PPP loans. Additionally, total deposits surged 36% to $156.3 billion.
Furthermore, the bank declared a quarterly cash dividend of $0.22 per common share payable on February 10 to shareholders on record as of January 27.
Management Weighs In
The bank’s Co-CEO (Acting) and President, Mike Roffler, commented, “This was a terrific year for First Republic…Loans, deposits and wealth management assets all grew nicely for both the fourth quarter and the full year. First Republic continues to succeed by executing a client-centric business model focused on exceptional service.”
Wall Street’s Take
Following the Q4 results, Maxim Group analyst Michael Diana reiterated a Buy rating on First Republic Bank with a price target of $250 (30.2% upside potential).
Overall, the stock has a Hold consensus rating based on 2 Buys, 5 Holds and 1 Sell. The average First Republic Bank price target of $222.50 implies 15.9% upside potential to current levels. Shares have gained 24% over the past year.
Download the TipRanks mobile app now
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Read full Disclaimer & Disclosure
Related News:
SAP Foresees Q4 Beat and Provides FY2022 Guidance; Shares Leap 3%
Taiwan Semiconductor Posts Q4 Beat & Robust Guidance; Shares Pop 5.3%
Paragon 28 Acquires Disior Oy; Shares Down 3.6%
