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Is it Smart to Invest in First Republic Bank (FRC)?

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Giverny Capital, an asset management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of 10.73% was delivered by the fund for the fourth quarter of 2021, slightly below its benchmark, the S&P 500 Index, which delivered an 11.03% gain for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Giverny Capital Asset Management, in its Q4 2021 investor letter, mentioned First Republic Bank (NYSE: FRC) and discussed its stance on the firm. First Republic Bank is a San Francisco, California-based investment company with a $30.7 billion market capitalization. FRC delivered a -17.02% return since the beginning of the year, while its 12-month returns are up by 4.01%. The stock closed at $171.36 per share on February 25, 2022.

Here is what Giverny Capital Asset Management has to say about First Republic Bank in its Q4 2021 investor letter:

"We ended the year with roughly a 7% weighting to US banks, in three holdings: First Republic Bank, JP Morgan and M&T. Normally, I like to try to identify the best company in an industry and own that one. In this case, however, our three banks have different business models. First Republic arguably is less a bank than a service organization for wealthy people and institutions. Over its four-decade history, it has suffered virtually no credit losses, as it makes extremely low risk loans to affluent borrowers. High net worth individuals tend to have different financial services needs than regular bank customers and they appreciate First Republic’s service."

Bank
Bank

Our calculations show that First Republic Bank (NYSE: FRC) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. 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 -18.88% return in the past 3 months.

In January 2022, we also shared another hedge fund’s views on FRC in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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