Buoyed by interest income growth and large gains on the sales of loans and securities, First Republic Bank in San Francisco reported a 20% increase in profits in the third quarter when compared to the same period last year.
The $46.7 billion-asset bank said Thursday that net income available to shareholders in the quarter was $122 million, or 86 cents per share, up from $101 million and 74 cents per share in last year's third quarter.
Interest income climbed nearly 9% year over year, to $376.4 million on a 6% increase in loans and a 27% increase in investments. However, the bank's net interest margin fell 25 basis points year over year, to 3.25%, due to a decrease in loan yields.
Noninterest income nearly doubled in the quarter, thanks to a $13.7 million gain on the sale of home loans and a net $23.6 million gain on the sale of investment securities, compared to a $369,000 loss on investments in the same period last year. Even excluding those sales, noninterest income still increased roughly 25% year over year as a result of higher fees from brokerage and investment advisory.