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Analysts are having difficulty predicting First Republic’s quarterly results.

  • During last month’s financial turbulence, First Republic’s shares lost the majority of its value.
  • They’ll also want a balance-sheet update, namely a look at the bank’s real estate loan portfolio.
  • Investors are looking forward to the bank’s quarterly results, which are as difficult to predict as the bank’s present financial situation.

When First Republic Bank (FRC), a San Francisco-based regional bank in the epicenter of last month’s global banking turbulence, announces its first-quarter financial results on Monday, it may record a loss due to decreased net interest revenue.

The concern stems from 14 analysts that gave First Republic with first-quarter financial predictions, which in turn represent doubt regarding the bank’s financial health.

Because those experts supplied such a wide range of predicted revenue, net income, and per-share profits estimates, the ensuing consensus predictions seem to have been distorted. As a result, investors may not find them very interesting.

However, it is probable that First Republic will record a fall in net interest income, bringing the company’s quarterly revenue and profitability to at least the lowest levels since the Covid-19 pandemic’s peak.
March Was a Disaster

When sister Bay Area lender Silicon Valley Bank and New York-based Signature Bank collapsed in March, the company’s shares plummeted, losing 89% of its value, amid investor fears over unrealized losses on their balance sheets.

Moody’s Analytics had put the bank on evaluation for a potential rating downgrade at the time. Furthermore, according to a Wedbush assets research report, the unrealized losses on First Republic’s loans and held-to-maturity assets more than quadrupled its book value under generally accepted accounting standards (GAAP).

Of course, the corporation would only have to register such losses if the relevant loans and securities were sold. Nonetheless, investors and banking authorities were concerned that those and other balance-sheet losses indicated possible liquidity and credit difficulties across the banking sector.

 

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