First Republic Bank (FRC) in San Francisco reported a 9% rise in quarterly profit on increased lending and continuing improvement in its wealth management income.
The $50 billion-asset lender earned $112 million in the third quarter, compared to $103 million in the third quarter of 2012, it reported Tuesday. Earnings per share of 75 cents missed the estimates of analysts polled by Bloomberg by a penny.
Net interest income rose 3%, to $308.2 million, as First Republic's loan book grew by 22%, to $32.3 billion. The company originated $4.9 billion in loans, the second-highest quarterly total in its history. But the Net interest margin decreased by 63 basis points, to 3.50%, which the company attributed to "elevated" cash balances as a result of strong deposit growth.
The bank's noninterest income increased by 22%, to $53.6 million, thanks to an 87% rise in investment advisory fees, to $28.8 million. First Republic's wealth management assets rose 56% from a year ago, to $38.2 billion.
First Republic's provision for loan losses fell 39%, to $10 million, but its nonperforming assets rose 33%, to $51.8 million. The ratio of nonperforming assets to total assets held steady, at .13%.
Overhead costs rose 14%, to $203.6 million, driven by higher compensation costs and tax-credit investments.