FRC - First Republic Bank: Enviable Earnings Growth At Too High A Stock Price
- Strong loan growth will likely continue in the year ahead because of strength in FRC’s markets.
- Allowances for loan losses are quite high relative to actual loan losses. Therefore, the provision expense will likely remain subdued in the year ahead.
- Due to loan portfolio characteristics, the net interest income takes a greater hit from rate cuts in the second year of cuts than the first year.
- The year-end target price suggests a significant downsidefrom the current market price. FRC is offering a low and unattractive dividendyield.
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First Republic Bank: Enviable Earnings Growth At Too High A Stock Price