First Republic Bank said Friday that its first-quarter profit increased 12.9% from the same period last year to $186.9 million, thanks to record loan originations during the three-month period and double-digit gains in wealth management fees.
Earnings per share came in at $1.13, 6 cents above the mean estimates of analysts polled by FactSet Research Systems.
First Republic, with $86.7 billion of assets, originated $7.6 billion of loans during the quarter, an increase of nearly 30% from the same period in 2017. In terms of loan demand, it was the strongest first quarter in First Republic's 33-year history, the company said in a news release.
The growth was driven by an 86% increase in multifamily loans to $761 million, an 116% increase jump in business loans to nearly $2.1 billion, and a 95% jump in construction loans to $465 million. At March 31, First Republic had total loans of $65.2 billion, up 21% from a year earlier.
The surge in loan demand combined with slightly higher loan yields boosted net interest income by 17.6% year over year, to $588 million.
Noninterest income, meanwhile, climbed 31% year over year to $133.1 million, due to market appreciation and gains in wealth assets under management. Fees from investment management, brokerage, loan servicing and foreign exchange services all increased by double digits, offsetting a sharp decline in the gain on sale of loans.
Overall revenue climbed 20% year over year to $720 million. Deposits increased 16.4% to $67.2 billion.
The strong growth in both interest and noninterest income more than offset a 22% increase in expenses to $462 million.
First Republic attributed the higher expenses higher salary and benefits costs, increased investments in technology and continued investment in the growth of the franchise. The efficiency increased by 1 percentage point year over year to 64%.