First Republic's profits soar on surge in new loans, wealth revenues

Record loan originations and the continued accumulation of wealth management assets added up to a strong first quarter for First Republic Bank in San Francisco.

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Susie Cranston, who takes over as COO in September, will help solidify First Republic's executive team after the abrupt departures early this year of two key leaders. Mike Roffler was named CEO in March.
David Paul Morris/Bloomberg

The $76 billion-asset bank said Thursday that its first-quarter profit increased 12.2% from the same period last year, to $176.8 million. Earnings per share climbed 8.6% year over year to $1.01, in line with the estimates of analysts polled by FactSet.

Loan originations in the quarter totaled $5.6 billion, an increase of nearly 18% over the first quarter of 2016 and the most ever in any first quarter over the bank’s 32-year history. Excluding loans held for sale, First Republic had $53.9 billion of loans on its books at March 31, an increase of nearly 19% year over year, as it reported double-digit gains in mortgage, commercial real estate and business loan balances.

Noninterest income increased 6.5% to $101.5 million, due primarily to a 13% increase in wealth management revenues. Wealth assets under management climbed nearly 23% year over year to $90.1 billion. First Republic attributed the growth to a combination of market appreciation and net new assets from existing and new clients, including those of wealth management teams hired during the quarter.

The bank’s total revenues increased 15.7% year over year to $601.1 million.

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Originations Commercial lending Wealth management Earnings
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