First Republic’s 2019 Wealth Tally: Ten New Teams
First Republic Bank recruited ten wealth management teams in 2019, helping to lighten the loss of a flagship wealth team last summer.
In 2019, it lured two teams from UBS Wealth Management USA in Los Angeles producing about $5 million and $11 million, and another $3.6 million UBS group in New Jersey. It also hired a $16-million group of producers in Washington, DC from Merrill, a $2.5-million Merrill team in Palo Alto, Calif., and Wells Fargo Advisors teams in New York and San Diego producing $5.5 million and $4.7 million, respectively.
“Our integrated banking and wealth management model continues to attract very successful wealth managers,” First Republic President Hafize Gaye Erkan told analysts after the bank reported fourth-quarter results on Tuesday.
A bank spokesman declined to comment on the total size and locations of the new advisers, and on how many advisors left during the year. First Republic lists 195 brokers with the titles of wealth manager or wealth advisor on its Private Wealth Management “team” website.
In June, a $16-billion-asset team that put First Republic on the retail brokerage map when it purchased their RIA, Luminous Capital, in 2012 broke away following expiration of their non-compete contract. (The former Merrill Lynch advisors in San Francisco, who sold Luminous to First Republic for $125 million, split into two separate RIAs.)
First Republic Chief Executive Jim Herbert and Chief Financial officer Mike Roffler said on the bank’s second-quarter earnings call that it expected to retain only about $2 billion of the departing advisors’ customer assets.
On Tuesday, the bank reported that assets in its wealth management businesses—brokerage, investment management and trust—rose 19.7% to $151 billion as of Dec. 31 from a year earlier, on market appreciation and new assets from existing and new clients. Brokerage assets of $68.8 billion represent more than half of the total.
“Strong referrals between bank and wealth management” and the “ability to attract exceptional wealth management teams” contributed to the growth of the wealth management division, First Republic said in a presentation accompanying earnings.
The wealth division’s quarterly revenue of $128.4 million, up 7.3% from a year earlier, represents 14.1% of First Republic’s total revenue, roughly unchanged from 2018.
First Republic as a whole reported net income of $264.3 million for the quarter, up 6.4% from a year earlier. Revenue for the company rose 8.2% to $877.5 million.
The company’s $1.39 a share in quarterly earnings beat analysts’ consensus estimate of $1.26, with record loan originations and strong revenue topping expectations, according to Zacks Equity Research.
On a full year basis, First Republic’s profit rose 9% to $930.3 million on revenue that increased 9.7% to $3.3 billion.