What led to the First Republic Bank (NYSE: FRC) stock weakness?

Free $100 Forex No-Deposit Bonus

First Republic Bank (NYSE: FRC) stock fell over 2.5% in the pre-market session of January 15th, 2020 (Source: Google finance). For fiscal 2020, the company expects loan growth to be in the mid-teens. The net interest margin is expected to be in the range of 2.65% to 2.75%, which assumes an unchanged fed funds rate throughout 2020. The efficiency ratio is expected to be in the range of 63.5% to 64.5%.

For the fourth quarter of FY19, FRC’s net interest margin was 2.73% for the fourth quarter. During FY 19, net interest income increased 10.5% during 2019 as the result of the average earning assets being up a very strong 15%. The efficiency ratio was 63.7% for the fourth quarter.

Moreover, in October, the company had retired $190 million of the Series D 5.5% perpetual preferred stock. Then in December, the company had successfully raised $395 million of perpetual preferred stock at the historically attractive rate of 4.7%. As a result of these capital actions, the company now expects preferred stock dividends to be approximately $15 million beginning in the second quarter of 2020. The liquidity also remains strong with high-quality liquid assets being at 12.7% of average total assets in the fourth quarter. Further, the company had net recoveries of $1.1 million during the fourth quarter. And for the full year 2019, net charge-offs were only $4.6 million, less than 1 basis point of average loans. During 2019, the company had added $62 million to the loan loss reserves to support the strong loan growth. Loan originations for the fourth quarter were $11.2 billion.

FRC in the fourth quarter of FY19 has reported the adjusted earnings per share of $1.39, while the adjusted revenue of $877.46 million in the fourth quarter of FY19. Additionally, in the Business banking, the total business loans and lines outstanding were $11.6 billion at year-end, representing 13% of total loans outstanding. Business deposits rose up 15% for the year and represented 56% of total deposits at year-end.

Copyright © 2021. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.