Shares of First Republic Bank FRC rallied around 3.5% after the company reported positive surprise of 10% in the first quarter of 2016. Notably, First Republic’s earnings per share for the first quarter came in at 88 cents, beating the Zacks Consensus Estimate of 80 cents. Moreover, results exceeded the year-ago tally by 23.9%.Results reflected organic growth aided by strong a top line along with a considerable rise in loans & deposit balances and reduced provisions. However, higher non-interest expenses were a drag.Net income available to common shareholders for the first quarter increased 29.8% year over year to $132.4 million. First Republic Bank (FRC) EPS BNRI & Surprise Percent - Last 5 Quarters | FindTheCompany Performance in DetailNet revenue in the quarter was $519.6 million, up 22.9% year over year, recording impressive performance across all segments. However, it lagged the Zacks Consensus Estimate of $529.2 million.First Republic’s net interest income increased 21.9% year over year to $424.3 million. Moreover, core net interest margin, excluding the positive impact of purchase accounting, increased 5 basis points (bps) year over year to 3.14%.The company’s non-interest income came in at $95.3 million, up 27.2% year over year. The rise was primarily driven by higher wealth management revenues.Non-interest expenses were $319.2 million, up 24.8% year over year. An increase in salaries and expenses in information systems primarily drove this rise.Efficiency ratio was 61.4% compared with 60.5% in the prior-year quarter. A rise in efficiency ratio indicates deterioration in profitability.As of Mar 31, 2016, net loans increased 16.2% year over year to $45.4 billion, while total deposits rose 27.5% to $50.9 billion.First Republic’s total wealth management assets were $73.4 billion as of Mar 31, 2016, increasing 30.3% year over year. Wealth management assets included investment management assets, brokerage assets, money market mutual funds, and trust and custody assets.Credit QualityFirst Republic’s credit quality represented a mixed bag in the quarter. On a year-over-year basis, total non-performing assets jumped 21.7% to $60.6 million. Further, the non-performing assets to total assets ratio remained unchanged at 0.10%.On the other hand, as of Mar 31, 2016, the ratio of net loan charge-offs to average total loans was 0.00%, in line with the prior-year period figure. Moreover, provision for loan losses decreased 62.2% to $4.5 million in the reported quarter.Capital PositionFirst Republic was well capitalized during the quarter. As of Mar 31, 2016, the company’s Tier 1 leverage ratio was 9.38% versus 9.90% as of Mar 31, 2015.Tier 1 risk-based capital ratio was 13.24% compared with 13.73% as of Mar 31, 2015. Notably, book value per share increased 12.5% year over year to $33.12.Dividend UpdateConcurrent with the earnings release, First Republic announced a 6.7% increase in its quarterly cash dividend. The new dividend of 16 cents per share will be paid on May 12, 2016, to shareholders of record as of Apr 28. Our ViewpointFirst Republic delivered a strong performance in the first quarter. We are encouraged by the continued growth in revenues and expect the rise in loans and deposits to keep the company’s organic growth momentum alive.Further, despite the rising expenses, we are optimistic about the company’s prospects. Higher expenses in the recent quarters were triggered by an increase in compliance and infrastructure investments. These were, however, necessary for First Republic as it was headed toward becoming a $50-billion plus institution. Going forward, the company intends to offset increased expenses through various cost-containment initiatives. First Republic currently carries a Zacks Rank #3 (Hold).Others in the SpaceAmong other West banks, SVB Financial Group SIVB is slated to release first-quarter 2016 results on Apr 21; while Zions Bancorporation ZION will report on Apr 24 and BBCN Bancorp, Inc. BBCN on Apr 18.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ZIONS BANCORP (ZION): Free Stock Analysis Report SVB FINL GP (SIVB): Free Stock Analysis Report FIRST REP BK SF (FRC): Free Stock Analysis Report BBCN BANCORP (BBCN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research