Strong loan growth combined with a surge in wealth management assets powered First Republic Bank in San Francisco to a $90.7 million profit in the fourth quarter, up 19% from the same period in 2010.
Earnings per share jumped 13%, to 66 cents, beating the consensus analysts' estimates by two cents.
For the full year, First Republic reported record net income of $352.1 million, or $2.65 per diluted share, compared to earnings of $142.4 million, or $1.14 per share, in 2010.
In a news release Tuesday, the $27.8 billion-asset company, which caters largely to business owners and high-net worth individuals, attributed its strong 2011 results to 21% increase in loans year over year and a 22% increase in wealth management assets.
The surge on new loans — the $3.3 billion it originated in the fourth quarter was the second-most in its history for a three-month period — plus a sharp increase in income from investments helped boost its net interest income in the quarter by 11% year over year, to nearly $315 million. Fee income rose more than 7%, to $29.4 million, thanks primarily to a 13% jump in fees from investment advisory, trust and brokerage fees.
First Republic's shares were trading at $31.70 late Tuesday, up a nickel from Friday's closing price. The shares are up 45% since they hit a 52-week low of $21.88 in October.
Also Tuesday, First Republic announced a preferred stock offering in which it intends to offer investors depositary shares at $25 each.
Each depositary share is equally to 1/40th of the company's noncumulative perpetual preferred series A stock. The company did not say how many depositary shares it will offer, but Sandler O’Neill & Partners LP said in a research note Tuesday that it expects the offering to bring in roughly $100 million. The bulk of the proceeds will be used to redeem preferred shares issued by a First Republic subsidiary, Sandler said, and the remainder will be used to support balance-sheet growth.