4 Western Bank Stock Picks
After the bank reported its second-quarter results in July, Coffey said that "net Interest Income and non-interest income were both near the highest estimates on the Street, at $301 million and $37 million, respectively," and that "NII of $290.6 million, a 3% increase from the previous quarter, resulted from a 7% sequential increase in gross loans to $25 billion," while "non-interest income, including gain on sales of mortgages, increased 12% to $36.6 million due to a 25% increase in gain on sale and a 13% increase in wealth management fees."
First Republic's shares trade for 1.7 times their reported June 30 tangible book value of $19.58, and for 11 times the consensus 2013 EPS estimate of $2.88. The consensus 2012 EPS estimate is $2.69.
Coffey rates the bank "outperform," with a price target of $39, and estimates First Republic will earn $2.76 a share for all of 2012, followed by 2013 EPS of $3.28.
Interested in more on First Republic Bank? See TheStreet Ratings' report card for this stock.
1. Wilshire Bancorp
Shares of Wilshire Bancorp (WIBC) of Los Angeles closed at $6.28 Tuesday, returning 73% year-to-date, following a drop of 53% during 2011.
Wilshire specializes in lending to Korean businesses in the U.S. "There are two other comparable banks in the L.A. market," according to Coffey, the largest of which is BBCN Bancorp (BBCN) , "which has more of retail focus," and Hanmi Financial (HAFC) , "which is trying to get out of a severe regulatory order, so Wilshire really doesn't have much competition for what it does very well."
BBCN was created through a merger-of-equals between Nara Bancorp and Center Financial in November 2011. "Nara was more retail, and they are about 55% of the company's assets, while Center was more business focused," according to Coffey. Jae Whan Yoo -- formerly the CEO of Center Financial -- is now the CEO of Wilshire Bancorp, and "has taken his model and strategies to Wilshire and is now a direct competitor with his former company," Coffey says.