First Republic Bank (NYSE: FRC) stock rose over 1.1% on April 13th, 2018 (as of 2:17 PM GMT-4; Source: Google finance) driven by a decent first quarter.
The bank’s total revenue rose 20% while the Net interest income enhanced 18% in the first quarter of 2018. The tangible book value per share rose 12% boosted by solid growth across their franchise. The overall deposits enhanced 16%, while the total loans rose 21% and wealth management assets grew by 25%.
The loan origination volume reached 7.3 billion during the quarter while maintaining a solid Credit quality. The Nonperforming assets were a very low five basis points, while net charge-offs for the quarter were a nominal $154,000. Residential real estate buys are holding up well which partially offset rents pressure.
The group continued to invest in future client household acquisition opportunities, showing the success of their student loan refinance product, which helps younger urban professionals to control their student debt. The group had only 1,300 student loan refinance client households but rose to over 13,000 households, which is a tenfold rise in just over 2 years. The group’s 2017 Net Promoter Score reached 75, which is a rise of 3 points against 2016 scores.
Loan origination volume surged 30% yoy to $7.3 billion wherein Single-family residential lending, is the biggest component of loan volume, which was 46% purchase and 54% refinance. Residential lending is a major way to acquire new households, both through purchase activity and the refinancing of loans from other institutions. Multifamily and commercial real estate loan to value ratios are very low at 52% and 48%, respectively.
Business banking is a major contributor which has been successful in taking care of their clients’ personal banking needs and then following them to their businesses and the nonprofit organizations they support. Business loans outstanding rose 30% from a year ago during the quarter boosted by a rise in business loan commitments and higher utilization rate. Deposits rose 3% against earlier quarter and surged 16% from a year ago.