Why First Republic Bank (NYSE: FRC) stock is under pressure

Free $100 Forex No-Deposit Bonus

First Republic Bank (NYSE: FRC) stock lost over 4.1% on April 15th, 2020 (As of 2:02 pm GMT-4; Source: Google finance). Loan origination volume was slightly over than $10 billion. The average loan-to-value ratio for all real estate loans originated during the first quarter was at a conservative 55%. Single-family residential volume was $3.5 billion. Refinance had accounted for 69% of single-family residential volume during the first quarter. The majority of the refinance activity came from clients of other institutions. Multi-family and commercial real estate lending also performed well. Balances are up 17% from a year ago. In the business banking segment, the business loans and line commitments had increased 17% year-over-year.

Moreover, total deposits had risen by 15% from a year ago. The company continues to maintain a diversified deposit funding base. Checking deposits rose by $5 billion in the first quarter and now represent approximately 62% of total deposits. Business deposits forms 55% of total deposits, which are in line with the prior quarter. The company’s assets under management had fallen by 9% from year-end due to market conditions but are down only modestly year-over-year. The company has reported the net client inflow of $5 billion during the quarter.

FRC in the first quarter of FY 20 has reported the adjusted earnings per share of $1.20, beating the analysts’ estimates for the adjusted earnings per share of 92 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 13.5 percent to $916.18 million in the first quarter of FY 20, beating the analysts’ estimates for revenue by 5.14%. The company’s net interest margin for the first quarter was 2.74%, up 1 basis point from the prior quarter.

Additionally, in January, the company had successfully completed a common stock offering, which raised $290 million in new equity. At the end of March, the company’s Tier 1 leverage ratio was 8.46%. The company has now announced a $0.01 increase in the quarterly dividend to $0.20 per common share.

The company’s liquidity position also remains strong. HQLA was 14.8% of total average assets in the first quarter. The HQLA percentage had risen by approximately 80 basis points from the elimination of the reserve requirement by the Federal Reserve in March.

FRC expect the net interest margin for the full year 2020 to be in the range of 2.65% to 2.75%.

Copyright © 2020. 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.