5 Best Small Bank Stocks To Invest In

2. First Republic Bank (NYSE:FRC)

Number of Hedge Fund Holders: 39

First Republic Bank (NYSE:FRC) provides private banking, private business banking, and private wealth management services in the US. The company is based in San Francisco, California.

An Outperform rating was reiterated on First Republic Bank (NYSE:FRC) shares on November 10 by analyst David Chiaverini at Wedbush.

First Republic Bank (NYSE:FRC) has a competitive strategy resulting in a superior value proposition to its customers. The company compounded its revenues at a rate of 18% from 2016 to 2021. In the second quarter of 2022, it also generated a growth rate of 23% in mortgage originations.

There were 39 hedge funds long First Republic Bank (NYSE:FRC) in the third quarter, with a total stake value of $1.2 billion.

RiverPark Funds, an investment management firm, mentioned First Republic Bank (NYSE:FRC) in its second-quarter 2022 investor letter. Here’s what the firm said:

“First Republic Bank is one of the most differentiated business models in our large cap universe. What makes the Company so different is not necessarily the activities that it does, but the activities it does not do. These trade-offs are an incredibly important strategic decision that every company must make. However, in our experience, rarely are these forgone activities lauded or even recognized as critical differentiators. The Company does mention these foregone activities, on page 45 of its most recent investor presentation appendix.

When we consider the financial industry, especially banking, is fraught with competition, simply being better than any of the other massive money-center banks is not enough to sustain many decades or even years of superior performance. Rather than try to outcompete every bank in the country, First Republic’s competitive strategy of doing only a handful of things well results in a superior value proposition to its customers. These trade-offs are easy to understand but difficult to copy, given widespread competitive and institutional imperatives that pressure management teams to revert to the mean…” (Click here to see the full text)