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First Republic Bank's (FRC) Ratings Affirmed by Moody's

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Moody's Investors Service, a rating arm of Moody's Corporation (MCO - Free Report) , recently affirmed all the ratings of First Republic Bank . The bank’s deposits rating have been affirmed at A1/Prime-1 while unsecured and subordinated debt ratings at Baa1. The bank’s counterparty risk assessments is A2(cr)/Prime-1(cr), while it has a stand-alone baseline credit assessment (BCA) of a3.

Further, the rating firm’s outlook for the bank has remained at “stable”.

Rationale Behind the Affirmation

Moody’s affirmation reflects First Republic Bank's steady financial performance, including strong asset quality and sustainable niche business model, which focuses on both consumer and commercial clients.

Per Moody’s, First Republic Bank holds a commendable position among peers with minimal net charge-offs and non-performing assets. Moreover, the bank’s conservative underwriting and lending strategy has eased risks associated with commercial real estate exposure of the bank and speedy loan growth.

Moreover, the rating agency affirmed ratings on expectations of the bank’s other financial credit metrics and liquidity profile supported by common equity issuances. In addition, profitability metrics are on an upswing, but elevated expenses on digitization can be a challenge. Furthermore, accelerated pace of loan growth is a headwind despite other positives.

First Republic Bank currently carries a Zacks Rank #4 (Sell). The company has recorded growth of 2.9% over the last three months, underperforming 8.8% growth for the industry.



Stocks to Consider

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JPMorgan (JPM - Free Report) has been witnessing upward estimate revisions for the last 60 days. Year to date, the company’s share price has been up more than 7%. It currently carries a Zacks Rank of 2 (Buy).

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