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UPDATE: BMO Capital Raises PT on First Republic Bank on Favorable Near-Term Outlook, Organic Growth Story

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Can Record-High Loan Originations Protect First Republic Bank's From Low Interest Rates?

In a report published Thursday, BMO Capital Markets analyst Lana Chan reiterated an Outperform rating on First Republic Bank (NYSE: FRC), and raised the price target from $46.00 to $50.00.

In the report, BMO Capital Markets noted, “FRC remains one of the few organic growth stories in banking. Near term, we expect loan growth to be robust (up 18% annualized from 2Q) as FRC benefits from a strong housing market. Gain on sale income is expected to decline in 2H13 owing to a lower volume of loans sold (as residential mortgage demand is shifting from long-term fixed-rate product to hybrid ARMs or adjustable-rate mortgages, driven by the recent uptick in long-term rates); however, we believe this is already reflected in Street estimates. We expect its wealth management assets to benefit from positive equity market performance QTD, and deposit growth has been good across its footprint, which will help fund on-balance-sheet loan growth.”

First Republic Bank closed on Wednesday at $45.53.

Latest Ratings for FRC

Aug 2016BarclaysMaintainsOverweight
Jul 2016Keefe Bruyette & WoodsMaintainsMarket Perform
Jul 2016JP MorganMaintainsOverweight

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