First Republic Bank (NYSE:FRC) Q1 2019 Earnings Conference Call Transcript

Apr 12, 2019 • 10:00 am ET

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First Republic Bank (NYSE:FRC) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the First Republic Bank's First Quarter 2019 Earnings Conference Call. During today's call, the lines will be in a listen-only mode. Following the presentation, the conference will be opened for questions.

I would now like to turn the call over to Mike Ioanilli, Vice President and Director of Investor Relations. Please go ahead.

Executive
Michael Ioanilli

Thank you, and welcome to First Republic Bank's first quarter 2019 conference call. Speaking today will be Jim Herbert, the Bank's Chairman, Chief Executive Officer and Founder; Gaye Erkan, President; and Mike Roffler, Chief Financial Officer.

Before I hand the call over to Jim, please note that we may make forward-looking statements during today's call that are subject to risks, uncertainties and assumptions. For a more complete discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements, see the Bank's FDIC filings, including the Form 8-K filed today, all are available on the Bank's website.

And now I'd like to turn the call over to Jim Herbert.

Executive
James H. Herbert

Thank you, Mike. It was a strong first quarter. Loans, deposits and wealth management assets have all grown nicely compared to a year ago. I'm pleased to say that we have now surpassed the $100 billion in total bank assets during this first quarter. We've achieved this milestone after a bit of over 34 years of organic growth. This growth has been guided and driven by delivering exceptional client service; one client at a time as our cultural bedrock. We intend to continue our approach to banking in the similar manner.

Let me share some year-over-year highlights. Total revenue growth was 12%; net interest income was up 15%; earnings per share grew 11.5%; and tangible book value per share increased by 13%. These results have been driven by strong performance year-over-year across the franchise. Total deposits have grown by 14.5%; total loans have been up by 18.5%; and wealth management assets have grown by 24%. Credit quality and capital strength each also remained very strong. Non-performing assets were very low 5 basis points, while net charge-offs for the quarter were a nominal $127,000. Our Tier 1 leverage ratio increased to 8.84% at the end of the first quarter, a bit up year-over-year in spite of our asset growth. This is due in part to the completion of an aftermarket common stock offering in early-January, at the same time as we were added to the S&P 500 Index. This offering raised approximately $170 million net in new common equity.

Our client satisfaction levels remained strong, as reflected in our recently received 2018 net promoter score. The third-party compiled net promoter score measures our clients' satisfaction and our clients' willingness to refer First Republic to their friends and colleagues. Our 2018 score is 72. This is very strong and remains more than twice the banking industry average. Indeed, the score is higher or equal to many of the world-leading consumer and service brands, not just higher than banking. When clients identify