Is it a Wise Decision to Invest in First Republic Bank (FRC)?

Wedgewood Partners, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, the fund’s Composite (net) declined by -10.6%. The S&P 500 Index declined by -4.6%. The Russell 1000 Growth Index declined -by 9.0%, while the Russell 1000 Value Index declined -by 0.7%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Wedgewood Partners mentioned First Republic Bank (NYSE:FRC) and explained its insights for the company. Founded in 1985, First Republic Bank (NYSE:FRC)  is a San Francisco, California-based bank and wealth management company with a $28.8 billion market capitalization. First Republic Bank (NYSE:FRC)  delivered a -22.16% return since the beginning of the year, while its 12-month returns are down by -9.09%. The stock closed at $160.75 per share on April 15, 2022.

Here is what Wedgewood Partners has to say about First Republic Bank (NYSE:FRC) in its Q1 2022 investor letter:

“First Republic Bank continued its streak of +20% loan growth – well above the banking industry. First Republic’s differentiated high-touch strategy with clients is in stark contrast to the Company’s low-touch, internet-obsessed competitors. First Republic’s culture has been an important driver of its growth over the years, so it is not a surprise that the stock reacted negatively to executive turnover during the quarter. However, much of the leadership that made the Company successful over the past several decades continues to be intact. As interest rates have skyrocketed – at least relative to 2020’s lows – we would expect the Company’s mortgage refinance business to slow, but home purchases to pick up as First Republic has seen during the past couple periods of rising rates. Furthermore, we are optimistic that a more normalized monetary policy environment, vis-à-vis the Federal Reserve’s unwinding of its $9 trillion balance sheet, could finally allow for healthier rates of return on actual loans.”

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Our calculations show that First Republic Bank (NYSE:FRC) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. First Republic Bank (NYSE:FRC) was in 39 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 35 funds in the previous quarter. First Republic Bank (NYSE:FRC) delivered a -19.83% return in the past 3 months.

In March 2022, we published an article that includes First Republic Bank (NYSE:FRC) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.