Rising mortgage lending and a growing wealth management business is propelling profits at First Republic Bank (FRC) in San Francisco.
Earnings at the $32.5 billion-asset company rose 10.6% to $97 million in the third quarter, compared with a year earlier.
Net interest income was $298.8 million, up 11.1% from a year earlier, though its interest margin fell 35 basis points, to 4.13%, due to declining yields on assets.
First Republic sold $774 million in primarily longer-term, fixed-rate home loans during the quarter, a nearly 352% increase from a year ago, and an increase of 77.5% from the second quarter. The bank recorded net gains of $12.5 million on the loans in the third quarter, an increase of 184% from the prior quarter.
Noninterest expense climbed 23.2% from a year earlier to $178.3 million, primarily because of an increase in personnel to support growth in its lending and wealth management businesses, the company said.
Noninterest income rose 20%, to $43.8 million. The increase reflected a rise in fees in investment advisory, trust and foreign exchange services, according to the company. First Republic recorded $24.8 billion in wealth management assets, 34.8% higher than a year earlier.