Research Desk Line-up: PNC Financial Services Post Earnings Coverage
LONDON, UK / ACCESSWIRE / July 17, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on First Republic Bank (NYSE: FRC), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=FRC, following the Company's release of its financial results on July 14, 2017, for the second quarter fiscal 2017. The Bank reported its second best quarter of loan originations, up 12.1% on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Money Center Banks industry. Pro-TD has currently selected The PNC Financial Services Group, Inc. (NYSE: PNC) for due-diligence and potential coverage as the Company reported on July 14, 2017, its financial results for Q2 2017. Register for a free membership today, and be among the early birds that get access to our report on PNC Financial Services when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on FRC; also brushing on PNC. With the links below you can directly download the report of your stock of interest-free of charge at:
http://protraderdaily.com/optin/'symbol=FRC
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Earnings Reviewed
For the quarter ended June 30, 2017, First Republic reported total revenues of $641.3 million, up 19.9% on a y-o-y basis. The Company's revenue numbers fell short of analysts' expectations by $25.32 million.
For Q2 FY17, First Republic's net interest income was $531.96 million, up 20.5% compared to net interest income of $441.62 million in Q2 FY16, driven by growth in average earning assets. The Bank's net interest margin was 3.16% for the reported quarter compared to 3.13% for the prior quarter. First Republic's non-interest income was $109.4 million in Q2 FY17, up 17.0% on a y-o-y basis, attributed to growth in wealth management revenues.
During Q2 FY17, First Republic's noninterest expense was $397.1 million, up 24.1% compared to $320.08 million in Q2 FY16. The Company's efficiency ratio was 61.9% for the reported quarter compared to 63.0% for the prior quarter and 59.8% for the year earlier quarter. The increase in noninterest expense on a y-o-y basis was attributed to increased salaries and benefits, information systems, and occupancy costs from the continued investments in the expansion of the franchise.
First Republic reported net income of $172.26 million, or $1.06 per share, compared to $147.62 million, or $0.97 per share, in Q2 FY16. The Company's earnings numbers lagged behind Wall Street's expectations of $1.09 per share.
Key Metrics
During Q2 FY17, First Republic's loan originations totaled $7.3 billion, its second best quarter for loan volume and up 12.1% compared to the second quarter a year ago, primarily due to increases in single family, construction, and business loans. The Company's loans, excluding loans held for sale, totaled $57.8 billion at June 30, 2017, up 21.3% compared to the year ago same period.
First Republic's total deposits increased to $63.3 billion in Q2 FY17, up 23.7% compared to a year ago. At June 30, 2017, the Company's checking accounts totaled 63.4% of deposits. The average rate paid on deposits was 0.18% during the reported quarter, compared to 0.15% for the prior quarter and 0.13% for the year earlier corresponding quarter.
For Q2 FY17, First Republic's total investment securities at June 30, 2017 were $16.9 billion, up 45.6% compared to a year ago. The Company's high-quality liquid assets, including eligible cash, represented 12.8% of average total assets for the reported quarter and totaled $9.9 billion at June 30, 2017.
During Q2 FY17, First Republic sold $439.8 million of loans and recorded a gain on sale of $841,000, compared to loan sales of $920.8 million and a gain of $822,000 during Q2 FY16. The Bank's loans serviced for investors at quarter-end totaled $11.8 billion, up 6.6% from a year ago. Net loan servicing fees for the reported quarter were $3.6 million, up 1.9% from a year ago.
Credit Quality
For Q2 FY17, First Republic had net charge-offs for the quarter of only $609,000, while adding $23.9 million to its allowance for loan losses. The Company stated that provision for loan losses was entirely due to loan growth, including an increase in the utilization rate of business lines of credit to 37% at quarter-end, compared to 29% at the end of the last quarter. First Republic's nonperforming assets were only 6 basis points of total assets at June 30, 2017.
Capital Strength and Access to Capital Markets
For Q2 FY17, First Republic's total regulatory capital grew 27.4% on a y-o-y basis. The Bank's Common Equity Tier 1 ratio was 10.72% at June 30, 2017, compared to 10.74% a year ago. During the reported quarter, First Republic issued $200.0 million of 5.125% Noncumulative Perpetual Series H Preferred Stock, which qualifies as Tier 1 capital, and redeemed the $150.0 million 6.20% Noncumulative Perpetual Series B Preferred Stock. During the reported quarter, the Bank completed a public offering of $500.0 million of 2.50%, fixed-rate, 5-year term, and unsecured senior notes.
Wealth Management
First Republic's wealth management revenues totaled $86.3 million for Q2 FY17, up 22.2% on a y-o-y basis and represented 13.5% of the Bank's total revenues for the reported quarter. First Republic's total wealth management assets were $95.4 billion at June 30, 2017, up 14.2% for the first six months of 2017 and up 25.9% compared to a year ago. The growth in wealth management assets was due to both net new assets from existing and new clients and market appreciation.
Wealth management assets included investment management assets of $47.5 billion, brokerage assets and money market mutual funds of $39.1 billion, and trust and custody assets of $8.8 billion.
Stock Performance
On Friday, July 14, 2017, the stock closed the trading session at $101.21, slightly declining 0.14% from its previous closing price of $101.35. A total volume of 1.61 million shares has exchanged hands, which was higher than the 3-month average volume of 870.25 thousand shares. First Republic Bank's stock price soared 12.23% in the last three months, 10.19% in the past six months, and 41.99% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 9.84%. The stock is trading at a PE ratio of 25.30 and has a dividend yield of 0.67%. At Friday's closing price, the stock's net capitalization stands at $15.94 billion.
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