First Republic Bank (NYSE:FRC) has raised $1.2 billion of new Tier 1 capital in Q3 2021

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First Republic Bank (NYSE:FRC), a provider of private banking, private business banking, and private wealth management services, stock rose 2.45% (As on Oct 14, 11:49:32 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the third quarter of FY 21 backed by steady growth in assets across all of its segments as well as excellent credit quality. Net Interest Income grew 26.7% year-over-year to $1.1 billion, driven by growth in average interest-earning assets. During the quarter, the bank’s loan originations grew to $15.5 billion and the net interest margin was 2.65%. Also, the bank’s non-performing assets were very low at 7 basis points of total assets. Total loans outstanding were up 18.8% year-to-date annualized.

Total deposits have grown 39% year over year. At quarter end, checking deposits represented 69% of total deposits. Business deposits represented 62% of total deposits, up slightly from the prior quarter. The average rate paid on all deposits for the quarter was just 6 basis points, leading to a total funding cost of 17 basis points. Wealth management assets were up 50% year over year to a total of more than $250 billion. This is an increase of $57 billion Year to date, over 60% of which was from net client inflows. Year to date, wealth management fees were up 47% from the same period a year ago.

During the third quarter, the bank has raised $1.2 billion of new Tier 1 capital to support the continued growth. This included common equity as well as our Series M Perpetual Preferred Stock, which was issued at the lowest dividend rate ever actually 4%. At quarter end, the Tier 1 leverage ratio was 8.55%. The HQLA liquidity level at quarter end was 16.7% of total average assets.

FRC in the third quarter of FY 21 has reported the adjusted earnings per share of $1.91, beating the analysts’ estimates for the adjusted earnings per share of $1.83, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 30.1 percent to $1.3 billion in the third quarter of FY 21, beating the analysts’ estimates for revenue by 2.95%.

Additionally, the bank declared a quarterly cash dividend of $0.22 per common share payable on November 12 to shareholders of record on October 28. In the fourth quarter of 2021, the preferred stock dividend will be approximately $33 million.

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