Canada markets open in 3 hours 13 minutes
  • S&P/TSX

    19,361.88
    -110.82 (-0.57%)
     
  • S&P 500

    4,188.43
    -44.17 (-1.04%)
     
  • DOW

    34,742.82
    -34.98 (-0.10%)
     
  • CAD/USD

    0.8262
    0.0000 (-0.00%)
     
  • CRUDE OIL

    64.50
    -0.42 (-0.65%)
     
  • BTC-CAD

    67,850.81
    -2,691.66 (-3.82%)
     
  • CMC Crypto 200

    1,495.58
    -65.72 (-4.21%)
     
  • GOLD FUTURES

    1,838.80
    +1.20 (+0.07%)
     
  • RUSSELL 2000

    2,212.70
    -58.93 (-2.59%)
     
  • 10-Yr Bond

    1.6020
    0.0000 (0.00%)
     
  • NASDAQ futures

    13,176.00
    -180.75 (-1.35%)
     
  • VOLATILITY

    21.34
    +4.65 (+27.86%)
     
  • FTSE

    6,979.15
    -144.53 (-2.03%)
     
  • NIKKEI 225

    28,608.59
    -909.71 (-3.08%)
     
  • CAD/EUR

    0.6787
    -0.0020 (-0.29%)
     

First Republic Reports First Quarter 2021 Results

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·18 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Revenues Increased 24% Year-Over-Year

Tangible Book Value Per Share Increased 14.5% Year-Over-Year

10% Quarterly Dividend Increase Marks 10th Consecutive Year of Dividend Increases

First Republic Bank (NYSE: FRC) today announced financial results for the quarter ended March 31, 2021.

"First Republic is off to a very strong start in 2021, driven by strong growth in loans, deposits and wealth management assets," said Jim Herbert, Founder, Chairman and CEO. "Our client-centric business model continues to perform very well."

Quarterly Highlights

Financial Results

– Year-over-year:

– Revenues were $1.1 billion, up 23.8%.

– Net interest income was $938.8 million, up 24.8%.

– Net income was $334.8 million, up 53.1%.

– Diluted earnings per share of $1.79, up 49.2%.

– Tangible book value per share was $59.98, up 14.5%.

– Loan originations totaled $15.7 billion, our strongest first quarter ever.

– Net interest margin was 2.67%, compared to 2.73% for the prior quarter.

– Efficiency ratio was 63.5% for both the first quarter of 2021 and 2020.

– Increased quarterly dividend by 10% to $0.22 per share.

Continued Capital and Credit Strength

– Tier 1 leverage ratio was 8.32%.

– Nonperforming assets were at a low 11 basis points of total assets.

– Net charge-offs were only $487,000, or less than 1 basis point of average loans.

Continued Franchise Development

– Year-over-year:

– Loans totaled $118.1 billion, up 23.9%, excluding loans held for sale.

– Deposits were $127.9 billion, up 36.5%.

– Wealth management assets were $218.9 billion, up 58.8%.

– Wealth management revenues were $159.6 million, up 18.7%.

"We’re pleased with the very strong growth of revenue and earnings per share during the first quarter," said Mike Roffler, Chief Financial Officer. "We also increased the quarterly dividend for the 10th consecutive year and accessed the capital markets twice during the quarter, which contributed to the 25% increase in total equity year-over-year."

Quarterly Cash Dividend of $0.22 per Share

The Bank announced an increase of $0.02 in its quarterly cash dividend to $0.22 per share of common stock, our 10th consecutive year of quarterly dividend increases. The first quarter dividend is payable on May 13, 2021 to shareholders of record as of April 29, 2021.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were only 11 basis points of total assets at March 31, 2021. The Bank had modest net loan charge-offs of only $487,000 for the quarter.

During the first quarter, the Bank recorded a reversal of provision for credit losses of $14.6 million, which was primarily driven by a substantially improved economic outlook since year-end 2020 and the significant resumption of regular, consistent loan payments on COVID-19 loan modifications following the end of the modification period.

Continued Capital Strength and Book Value Growth

The Bank’s Tier 1 leverage ratio was 8.32% at March 31, 2021, compared to 8.14% at December 31, 2020.

During the first quarter, the Bank issued $747.5 million of 4.250% Noncumulative Perpetual Preferred Stock, which qualifies as Tier 1 capital, and redeemed all of the outstanding shares of its 5.50% Noncumulative Perpetual Preferred Stock, which totaled $150.0 million.

In addition, the Bank sold 2,012,500 new shares of common stock in an underwritten public offering, which added approximately $331.3 million to common equity.

Total common stock sold and preferred stock issued, net of preferred stock redeemed, added approximately $914.2 million of Tier 1 capital in the quarter and contributed to the 25% increase in total equity year-over-year.

The Bank has not and does not engage in common stock buybacks.

Book value per common share at March 31, 2021 was $61.26, up 14.0% from a year ago. Tangible book value per common share at March 31, 2021 was $59.98, up 14.5% from a year ago.

Continued Franchise Development

Loan Originations

Loan originations were $15.7 billion for the quarter, up 52.4% from the same quarter a year ago, primarily due to increases in single family and business lending, as well as loan originations under the Small Business Administration’s Paycheck Protection Program ("PPP").

Single family loan originations were 44% of the total volume for the quarter and had a weighted average loan-to-value ratio of 57%. In addition, multifamily and commercial real estate loans originated were 7% of total originations, and had a weighted average loan-to-value ratio of 49%.

Loans totaled $118.1 billion at March 31, 2021, up 23.9% compared to a year ago, excluding loans held for sale, primarily due to increases in single family loans (71% of growth), business and multifamily loans, as well as PPP loans.

COVID-19 Loan Modifications Continue to Decline

Remaining loan modifications to those borrowers experiencing financial challenges as a result of COVID-19 (not classified as troubled debt restructurings) totaled $967 million, and were less than 1% of total loans as of March 31, 2021, down from a peak of approximately 4% of total loans as of June 30, 2020.

The Bank has limited loan exposure to several of the areas most directly impacted by COVID-19, such as the retail, hotel and restaurant industries, which totaled $2.5 billion as of March 31, 2021, only 2.1% of total loans. As of March 31, 2021, the Bank had modifications of these portfolios totaling $141 million, only 0.1% of total loans.

Deposit Growth

Total deposits increased to $127.9 billion, up 36.5% compared to a year ago, and had an average rate paid of 9 basis points during the quarter.

At March 31, 2021, checking deposit balances were 67.5% of total deposits.

Investments

Total investment securities at March 31, 2021 were $21.7 billion, a 17.0% increase compared to the prior quarter and a 15.4% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $23.3 billion at March 31, 2021, and represented 15.3% of quarterly average total assets.

Wealth Management

Total wealth management assets were $218.9 billion at March 31, 2021, up 12.6% compared to the prior quarter and up 58.8% compared to a year ago. The increases in wealth management assets were due to both net client inflow and market appreciation.

Wealth management revenues totaled $159.6 million for the quarter, up 18.7% compared to last year’s first quarter. Such revenues represented 14.1% of the Bank’s total revenues for the quarter.

Wealth management assets at March 31, 2021 included investment management assets of $90.8 billion, brokerage assets and money market mutual funds of $112.9 billion, and trust and custody assets of $15.2 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.1 billion for the quarter, up 23.8% compared to the first quarter a year ago.

Net Interest Income Growth

Net interest income was $938.8 million for the quarter, up 24.8% compared to the first quarter a year ago. The increase in net interest income resulted primarily from growth in average interest-earning assets, partially offset by a decrease in net interest margin.

Net Interest Margin

The net interest margin declined to 2.67% in the first quarter, from 2.73% in the prior quarter. The decrease was primarily due to higher average cash balances during the quarter.

Noninterest Income

Noninterest income was $195.9 million for the quarter, up 19.4% compared to the first quarter a year ago. The increase was primarily driven by higher wealth management fees and higher income from investments in life insurance.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $720.4 million for the quarter, up 23.8% compared to the first quarter a year ago. The increase was primarily due to increased salaries and benefits and information systems costs from the continued investments in the expansion of the franchise, and higher professional fees.

The efficiency ratio was 63.5% for both the first quarter of 2021 and 2020.

Income Taxes

The Bank’s effective tax rate for the first quarter of 2021 was 21.9%, compared to 22.1% for the prior quarter, and 19.5% for the first quarter a year ago. The increase from a year ago was primarily the result of lower excess tax benefits from a decrease in stock option exercises by employees, and growth in pre-tax income greater than interest income on tax-exempt municipal securities.

Conference Call Details

First Republic Bank’s first quarter 2021 earnings conference call is scheduled for April 14, 2021 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (800) 458-4121 and provide confirmation code 8396045 approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (856) 344-9290 and provide the same confirmation code.

The call will also be broadcast live over the Internet and can be accessed in the Investor Relations section of First Republic’s website at ir.firstrepublic.com/events-calendar. To listen to the live webcast, please visit the site at least 15 minutes prior to the start time to register, download and install any necessary audio software.

For those unable to join the live presentation, a replay of the call will be available beginning April 14, 2021, at 11:00 a.m. PT / 2:00 p.m. ET, through April 21, 2021, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 8396045#. International callers should dial +1 (719) 457-0820 and enter the same confirmation code. A replay of the webcast also will be available for 90 days following, accessible in the Investor Relations section of First Republic Bank’s website at ir.firstrepublic.com/events-calendar.

The Bank’s press releases are available after release in the Newsroom and Investor Relations section of First Republic Bank’s website at firstrepublic.com.

About First Republic Bank

Founded in 1985, First Republic and its subsidiaries offer private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic specializes in delivering exceptional, relationship-based service and offers a complete line of products, including residential, commercial and personal loans, deposit services, and wealth management. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach and San Diego, California; Portland, Oregon; Boston, Massachusetts; Palm Beach, Florida; Greenwich, Connecticut; New York, New York; and Jackson, Wyoming. First Republic is a constituent of the S&P 500 Index and KBW Nasdaq Bank Index. For more information, visit firstrepublic.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this press release that are not historical facts are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipates," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimates," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them.

Forward-looking statements involving such risks and uncertainties include, but are not limited to, statements regarding: projections of loans, assets, deposits, liabilities, revenues, expenses, tax liabilities, net income, capital expenditures, liquidity, dividends, capital structure, investments or other financial items; expectations regarding the banking and wealth management industries; descriptions of plans or objectives of management for future operations, products or services; forecasts of future economic conditions generally and in our market areas in particular, which may affect the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans; our opportunities for growth and our plans for expansion (including opening new offices); expectations about the performance of any new offices; projections about the amount and the value of intangible assets, as well as amortization of recorded amounts; future provisions for credit losses on loans and debt securities, as well as for unfunded loan commitments; changes in nonperforming assets; expectations regarding the impact and duration of COVID-19; projections about future levels of loan originations or loan repayments; projections regarding costs, including the impact on our efficiency ratio; and descriptions of assumptions underlying or relating to any of the foregoing.

Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: significant competition to attract and retain banking and wealth management customers, from both traditional and non-traditional financial services and technology companies; our ability to recruit and retain key managers, employees and board members; natural or other disasters, including earthquakes, wildfires, pandemics or acts of terrorism affecting the markets in which we operate; the negative impacts and disruptions resulting from COVID-19 on our colleagues and clients, the communities we serve and the domestic and global economy, which may have an adverse effect on our business, financial position and results of operations; interest rate risk and credit risk; our ability to maintain and follow high underwriting standards; economic and market conditions, including those affecting the valuation of our investment securities portfolio and credit losses on our loans and debt securities; real estate prices generally and in our markets; our geographic and product concentrations; demand for our products and services; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate and the 11th District Monthly Weighted Average Cost of Funds Index, as well as other alternative reference rates; the regulatory environment in which we operate, our regulatory compliance and future regulatory requirements; any future changes to regulatory capital requirements; legislative and regulatory actions affecting us and the financial services industry, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), including increased compliance costs, limitations on activities and requirements to hold additional capital, as well as changes to the Dodd-Frank Act pursuant to the Economic Growth, Regulatory Relief, and Consumer Protection Act; our ability to avoid litigation and its associated costs and liabilities; future Federal Deposit Insurance Corporation ("FDIC") special assessments or changes to regular assessments; fraud, cybersecurity and privacy risks; and custom technology preferences of our customers and our ability to successfully execute on initiatives relating to enhancements of our technology infrastructure, including client-facing systems and applications. For a discussion of these and other risks and uncertainties, see First Republic’s FDIC filings, including, but not limited to, the risk factors in First Republic’s Annual Report on Form 10-K and any subsequent reports filed by First Republic with the FDIC. These filings are available in the Investor Relations section of our website.

All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout our public filings under the Exchange Act. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

CONSOLIDATED STATEMENTS OF INCOME

Quarter Ended
March 31,

Quarter Ended
December 31,

(in thousands, except per share amounts)

2021

2020

2020

Interest income:

Loans

$

873,170

$

796,652

$

845,150

Investments

140,711

148,569

138,429

Other

5,189

6,960

5,754

Cash and cash equivalents

2,894

3,940

1,819

Total interest income

1,021,964

956,121

991,152

Interest expense:

Deposits

27,571

118,845

30,405

Borrowings

55,611

85,144

68,019

Total interest expense

83,182

203,989

98,424

Net interest income

938,782

752,132

892,728

Provision (reversal of provision) for credit losses

(14,608

)

62,370

35,066

Net interest income after provision (reversal of provision) for credit losses

953,390

689,762

857,662

Noninterest income:

Investment management fees

119,042

99,296

114,287

Brokerage and investment fees

14,564

15,826

11,489

Insurance fees

3,074

2,157

5,569

Trust fees

5,731

4,976

5,366

Foreign exchange fee income

17,167

12,184

14,688

Deposit fees

6,169

6,597

6,115

Loan and related fees

7,485

6,114

7,167

Loan servicing fees, net

1,488

1,652

1,248

Gain on sale of loans

309

1,925

2,412

Gain on investment securities

655

2,628

88

Income from investments in life insurance

16,549

8,160

16,997

Other income

3,618

2,529

2,211

Total noninterest income

195,851

164,044

187,637

Noninterest expense:

Salaries and employee benefits

463,404

361,204

415,767

Information systems

83,516

70,715

79,331

Occupancy

57,549

53,641

56,627

Professional fees

21,254

13,117

18,015

Advertising and marketing

12,633

11,843

13,762

FDIC assessments

11,900

10,185

11,650

Other expenses

70,140

61,312

70,892

Total noninterest expense

720,396

582,017

666,044

Income before provision for income taxes

428,845

271,789

379,255

Provision for income taxes

94,012

53,103

83,695

Net income

334,833

218,686

295,560

Dividends on preferred stock

18,525

13,020

16,072

Net income available to common shareholders

$

316,308

$

205,666

$

279,488

Basic earnings per common share

$

1.81

$

1.20

$

1.61

Diluted earnings per common share

$

1.79

$

1.20

$

1.60

Weighted average shares—basic

174,820

170,835

173,111

Weighted average shares—diluted

176,951

172,039

174,708

CONSOLIDATED BALANCE SHEETS

As of

($ in thousands)

March 31,
2021

December 31,
2020

March 31,
2020

ASSETS

Cash and cash equivalents

$

8,889,492

$

5,094,754

$

3,949,378

Debt securities available-for-sale

2,428,833

1,906,315

1,243,798

Debt securities held-to-maturity

19,240,358

16,610,212

17,534,920

Less: Allowance for credit losses

(8,024

)

(6,902

)

(5,087

)

Debt securities held-to-maturity, net

19,232,334

16,603,310

17,529,833

Equity securities (fair value)

21,221

20,566

19,575

Loans:

Single family

65,178,442

61,370,246

49,063,193

Home equity lines of credit

2,392,314

2,449,533

2,703,919

Single family construction

841,962

787,854

779,239

Multifamily

14,141,208

13,768,957

12,823,392

Commercial real estate

8,065,262

8,018,158

7,715,266

Multifamily/commercial construction

2,101,119

2,024,420

1,839,445

Capital call lines of credit

8,653,802

8,149,946

7,512,231

Tax-exempt

3,454,471

3,365,572

3,087,751

Other business

3,679,420

3,340,048

3,094,922

PPP

2,142,253

1,841,376

Stock secured

2,519,637

2,518,338

1,919,971

Other secured

1,862,529

1,818,550

1,531,705

Unsecured

3,050,999

3,113,267

3,214,028

Total loans

118,083,418

112,566,265

95,285,062

Allowance for credit losses

(620,825

)

(635,019

)

(541,906

)

Loans, net

117,462,593

111,931,246

94,743,156

Loans held for sale

20,679

354,873

Investments in life insurance

2,328,844

2,061,362

1,460,909

Tax credit investments

1,127,465

1,131,905

1,106,693

Premises, equipment and leasehold improvements, net

412,331

403,482

392,953

Goodwill and other intangible assets

225,925

227,512

232,985

Other real estate owned

1,334

1,071

Other assets

3,667,588

3,101,003

2,879,705

Total Assets

$

155,797,960

$

142,502,134

$

123,914,929

LIABILITIES AND EQUITY

Liabilities:

Deposits:

Noninterest-bearing checking

$

53,806,762

$

46,281,112

$

36,920,635

Interest-bearing checking

32,542,600

30,603,221

20,941,790

Money market checking

19,210,069

16,778,884

12,636,674

Money market savings and passbooks

14,097,001

12,584,522

9,052,690

Certificates of deposit

8,250,521

8,681,061

14,140,550

Total Deposits

127,906,953

...

114,928,800

93,692,339

Long-term FHLB advances

10,505,000

11,755,000

16,250,000

Senior notes

996,668

996,145

994,742

Subordinated notes

778,423

778,313

777,990

Other liabilities

2,669,186

2,293,230

1,840,093

Total Liabilities

142,856,230

130,751,488

113,555,164

Shareholders’ Equity:

Preferred stock

2,142,500

1,545,000

1,145,000

Common stock

1,763

1,741

1,714

Additional paid-in capital

5,191,932

4,834,172

4,543,650

Retained earnings

5,626,958

5,346,355

4,652,089

Accumulated other comprehensive income (loss)

(21,423

)

23,378

17,312

Total Shareholders’ Equity

12,941,730

11,750,646

10,359,765

Total Liabilities and Shareholders’ Equity

$

155,797,960

$

142,502,134

$

123,914,929

Quarter Ended March 31,

Quarter Ended December 31,

2021

2020

2020

Average Balances, Yields
and Rates

Average
Balance

Interest
Income/Expense
(1)

Yields/
Rates
(2)

Average
Balance

Interest
Income/Expense
(1)

Yields/
Rates
(2)

Average
Balance

Interest
Income/Expense
(1)

Yields/
Rates
(2)

($ in thousands)

Assets:

Cash and cash equivalents

$

11,448,652

$

2,894

0.10

%

$

1,853,579

$

3,940

0.85

%

$

6,965,598

$

1,819

0.10

%

Investment securities:

U.S. Government-sponsored agency securities

93,889

339

1.45

%

307,449

2,207

2.87

%

50,000

196

1.57

%

Agency residential and commercial MBS

5,625,748

30,536

2.17

%

6,746,664

47,186

2.80

%

5,786,312

32,237

2.23

%

Other residential and commercial MBS

32,992

154

1.87

%

3,834

32

3.33

%

35,437

184

2.08

%

Municipal securities

13,349,101

134,990

4.04

%

11,358,749

122,542

4.32

%

12,638,677

130,938

4.14

%

Other investment securities (3)

429,289

2,568

2.39

%

43,783

320

2.92

%

76,272

511

2.68

%

Total investment securities

19,531,019

168,587

3.45

%

18,460,479

172,287

3.73

%

18,586,698

164,066

3.53

%

Loans:

Residential real estate (4)

65,458,977

469,010

2.87

%

51,300,013

404,982

3.16

%

61,523,322

445,028

2.89

%

Multifamily (5)

13,922,237

122,829

3.53

%

12,565,723

118,944

3.74

%

13,596,444

125,042

3.60

%

Commercial real estate

8,032,825

77,879

3.88

%

7,574,573

78,609

4.11

%

7,909,682

78,599

3.89

%

Multifamily/commercial construction

2,867,284

31,100

4.34

%

2,550,647

30,285

4.70

%

2,788,321

31,588

4.43

%

Business (6)

15,076,564

123,741

3.28

%

12,390,386

122,971

3.93

%

13,382,558

115,809

3.39

%

PPP

1,989,987

15,766

3.17

%

%

2,004,127

14,419

2.82

%

Other (7)

7,347,624

39,685

2.16

%

6,453,056

47,572

2.92

%

7,253,376

41,385

2.23

%

Total loans

114,695,498

880,010

3.07

%

92,834,398

803,363

3.44

%

108,457,830

851,870

3.11

%

FHLB stock

344,990

5,189

6.10

%

406,974

6,960

6.88

%

412,789

5,754

5.55

%

Total interest-earning assets

146,020,159

1,056,680

2.90

%

113,555,430

986,550

3.46

%

134,422,915

1,023,509

3.02

%

Noninterest-earning cash

413,625

443,255

452,927

Goodwill and other intangibles

226,683

234,078

228,315

Other assets

6,091,492

4,721,313

5,706,213

Total noninterest-earning assets

6,731,800

5,398,646

6,387,455

Total Assets

$

152,751,959

$

118,954,076

$

140,810,370

Liabilities and Equity:

Deposits:

Checking

$

83,679,569

2,074

0.01

%

$

53,863,519

8,432

0.06

%

$

73,876,676

2,214

0.01

%

Money market checking

18,888,949

7,644

0.16

%

12,724,620

29,302

0.93

%

16,890,334

8,214

0.19

%

Money market savings and passbooks

13,640,388

6,310

0.19

%

9,750,489

15,567

0.64

%

12,259,216

5,925

0.19

%

CDs

8,413,083

11,543

0.56

%

14,185,945

65,544

1.86

%

8,813,489

14,052

0.63

%

Total deposits

124,621,989

27,571

0.09

%

90,524,573

118,845

0.53

%

111,839,715

30,405

0.11

%

Borrowings:

Short-term borrowings

6

0.18

%

1,231,827

4,700

1.53

%

8,638

4

0.17

%

Long-term FHLB advances

11,321,666

40,463

1.45

%

13,420,604

66,566

1.99

%

13,298,478

52,873

1.58

%

Senior notes (8)

996,412

6,038

2.42

%

765,308

4,773

2.49

%

995,892

6,034

2.42

%

Subordinated notes (8)

778,369

9,110

4.68

%

777,938

9,105

4.68

%

778,260

9,108

4.68

%

Total borrowings

13,096,453

55,611

1.72

%

16,195,677

85,144

2.11

%

15,081,268

68,019

1.80

%

Total interest-bearing liabilities

137,718,442

83,182

0.24

%

106,720,250

203,989

0.77

%

126,920,983

98,424

0.31

%

Noninterest-bearing liabilities

2,637,481

2,030,107

2,341,078

Preferred equity

1,963,583

1,145,000

1,552,609

Common equity

10,432,453

9,058,719

9,995,700

Total Liabilities and Equity

$

152,751,959

$

118,954,076

$

140,810,370

Net interest spread (9)

2.65

%

2.69

%

2.71

%

Net interest income (fully taxable-equivalent basis) and net interest margin (10)

$

973,498

2.67

%

$

782,561

2.74

%

$

925,085

2.73

%

Reconciliation of tax-equivalent net interest

income to reported net interest income:

Municipal securities tax-equivalent adjustment

(27,876

)

(23,718

)

(25,638

)

Business loans tax-equivalent adjustment

(6,840

)

(6,711

)

(6,719

)

Net interest income, as reported

$

938,782

$

752,132

$

892,728

__________

(1) Interest income is presented on a fully taxable-equivalent basis.

(2) Yields/rates are annualized.

(3) Includes corporate debt securities, mutual funds and marketable equity securities.

(4) Includes single family, home equity lines of credit, and single family construction loans. Also includes single family loans held for sale.

(5) Includes multifamily loans held for sale.

(6) Includes capital call lines of credit, tax-exempt and other business loans.

(7) Includes stock secured, other secured and unsecured loans.

(8) Average balances include unamortized issuance discounts and costs. Interest expense includes amortization of issuance discounts and costs.

(9) Net interest spread represents the average yield on interest-earning assets less the average rate on interest-bearing liabilities.

(10) Net interest margin represents net interest income on a fully taxable-equivalent basis divided by total average interest-earning assets.

Quarter Ended
March 31,

Quarter Ended
December 31,

Operating Information

2021

2020

2020

($ in thousands, except per share amounts)

Net income to average assets (1)

0.89

%

0.74

%

0.84

%

Net income available to common shareholders to average common equity (1)

12.30

%

9.13

%

11.12

%

Net income available to common shareholders to average tangible common equity (1)

12.57

%

9.37

%

11.38

%

Dividends per common share

$

0.20

$

0.19

$

0.20

Dividend payout ratio

11.2

%

15.9

%

12.5

%

Efficiency ratio (2)

63.5

%

63.5

%

61.6

%

Net loan charge-offs (recoveries)

$

487

$

202

$

(600

)

Net loan charge-offs (recoveries) to average total loans (1)

0.00

%

0.00

%

(0.00

)

%

Allowance for loan credit losses to:

Total loans

0.53

%

0.57

%

0.56

%

Nonaccrual loans

359.3

%

432.1

%

344.9

%

__________

(1) Ratios are annualized.

(2) Efficiency ratio is the ratio of noninterest expense to the sum of net interest income and noninterest income.

Quarter Ended
March 31,

Quarter Ended
December 31,

Effective Tax Rate

2021

2020

2020

Effective tax rate, prior to excess tax benefits—stock awards

22.6

%

21.3

%

22.5

%

Excess tax benefits—stock awards

(0.7

)

(1.8

)

(0.4

)

Effective tax rate

21.9

%

19.5

%

22.1

%

Provision (Reversal of Provision) for Credit Losses

Quarter Ended
March 31,

Quarter Ended
December 31,

2021

2020

2020

($ in thousands)

Debt securities held-to-maturity

$

1,122

$

418

$

1,186

Loans

(13,707

)

47,679

29,672

Unfunded loan commitments

(2,023

)

14,273

4,208

Total provision (reversal of provision)

$

(14,608

)

$

62,370

$

35,066

Quarter Ended
March 31,

Quarter Ended
December 31,

Mortgage Loan Sales

2021

2020

2020

($ in thousands)

Loans sold:

Flow sales:

Agency

$

42,402

$

25,774

$

152,210

Non-agency

1,073

31,870

Total flow sales

43,475

57,644

152,210

Bulk sales:

Non-agency

437,669

Total loans sold

$

43,475

$

495,313

$

152,210

Gain on sale of loans:

Amount

$

309

$

1,925

$

2,412

Gain as a percentage of loans sold

0.71

%

0.39

%

1.58

%

Quarter Ended
March 31,

Quarter Ended
December 31,

Loan Originations

2021

2020

2020

($ in thousands)

Single family

$

6,902,192

$

3,519,336

$

7,777,589

Home equity lines of credit

623,661

395,508

619,257

Single family construction

224,504

109,162

223,909

Multifamily

791,070

781,303

1,016,575

Commercial real estate

313,991

451,858

437,947

Multifamily/commercial construction

310,824

620,921

303,054

Capital call lines of credit

3,131,317

2,385,229

3,854,094

Tax-exempt

213,967

100,019

305,826

Other business

1,025,154

619,779

771,484

PPP

688,948

Stock secured

710,038

592,560

669,840

Other secured

438,989

413,824

412,902

Unsecured

345,848

322,888

312,809

Total loans originated

$

15,720,503

$

10,312,387

$

16,705,286

As of

Asset Quality Information

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

($ in thousands)

Nonperforming assets:

Nonaccrual loans

$

172,794

$

184,132

$

164,247

$

164,930

$

125,418

Other real estate owned

1,334

1,071

1,071

Total nonperforming assets

$

174,128

$

184,132

$

164,247

$

166,001

$

126,489

Nonperforming assets to total assets

0.11

%

0.13

%

0.12

%

0.13

%

0.10

%

Accruing loans 90 days or more past due

$

851

$

$

935

$

3,764

$

Restructured accruing loans

$

11,658

$

11,253

$

11,378

$

11,501

$

13,418

March 31, 2021

COVID-19 Loan Modifications (1), (2), (3), (4), (5)

Unpaid
Principal
Balance

Deferred
Interest (6)

LTV (7)

Average Loan
Size

Number of
Loans

($ in millions)

Single family

$

274

$

5

59

%

$

1.2

232

Home equity lines of credit

15

62

%

$

0.7

22

Single family construction

2

75

%

$

2.2

1

Multifamily

199

1

50

%

$

6.2

32

Commercial real estate

274

1

46

%

$

6.5

42

Multifamily/commercial construction

19

1

38

%

$

19.0

1

Capital call lines of credit

n/a

$

Tax-exempt

135

1

n/a

$

19.3

7

Other business

32

n/a

$

1.3

24

Stock secured

n/a

$

Other secured

4

n/a

$

0.3

13

Unsecured (8)

13

n/a

$

0.1

118

Total

$

967

$

9

492

__________

(1) COVID-19 loan modifications are not classified as troubled debt restructurings.

(2) Includes 93 loans totaling $28 million that have completed their deferral period, but for which a regular payment is not yet due.

(3) Includes 294 loans totaling $566 million that received additional relief beyond their initial modification period.

(4) Excludes loans that have completed their deferral period and returned to a regular payment schedule or are no longer outstanding. As of March 31, 2021,

$3.3 billion of loans have completed their deferral period or are no longer outstanding, and 99% of the outstanding loans were current.

(5) Loan modifications requested by borrowers that were in process but not yet completed as of March 31, 2021 totaled $12 million for initial relief, and

$7 million for additional relief beyond the initial modification period.

(6) Represents interest payments not made during the deferral period through March 31, 2021.

(7) Weighted average loan-to-value ("LTV") ratios for real estate secured loans are based on appraised value at the time of origination.

(8) Consists of household debt refinance loans.

March 31, 2021

Loan Industry Information

Unpaid
Principal
Balance

LTV

Average Loan
Size

Number of
Loans

Personal
Guarantee %

($ in millions)

Retail

$

1,862

49

%

$

2.7

713

77

%

Hotel

420

48

%

$

6.6

65

73

%

Restaurant (1)

215

49

%

$

1.1

204

94

%

Total (2)

$

2,497

982

__________

(1) Approximately 72% of loans to restaurants are real estate secured.

(2) Amounts in the table above exclude $62 million of loans to hotels and $240 million of loans to restaurants under the PPP.

As of

Loan Servicing Portfolio

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

($ in millions)

Loans serviced for investors

$

6,314

$

7,094

$

7,799

$

8,316

$

9,203

As of

Book Value per Common Share and Tangible

Book Value per Common Share

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

(in thousands, except per share amounts)

Total shareholders’ equity

$

12,941,730

$

11,750,646

$

11,344,609

$

10,575,928

$

10,359,765

Less: Preferred stock

2,142,500

1,545,000

1,645,000

1,145,000

1,145,000

Total common shareholders’ equity (a)

10,799,230

10,205,646

9,699,609

9,430,928

9,214,765

Less: Goodwill and other intangible assets

225,925

227,512

229,185

230,975

232,985

Total tangible common shareholders’ equity (b)

$

10,573,305

$

9,978,134

$

9,470,424

$

9,199,953

$

8,981,780

Number of shares of common stock outstanding (c)

176,287

174,124

172,188

172,094

171,395

Book value per common share (a) / (c)

$

61.26

$

58.61

$

56.33

$

54.80

$

53.76

Tangible book value per common share (b) / (c)

$

59.98

$

57.30

$

55.00

$

53.46

$

52.40

As of

Regulatory Capital Ratios and Components (1), (2)

March 31,
2021 (3)

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

($ in thousands)

Capital Ratios:

Tier 1 leverage ratio (Tier 1 capital to average assets)

8.32

%

8.14

%

8.38

%

8.15

%

8.46

%

Common Equity Tier 1 capital to risk-weighted assets

9.64

%

9.67

%

9.78

%

9.80

%

9.87

%

Tier 1 capital to risk-weighted assets

11.60

%

11.18

%

11.50

%

11.04

%

11.14

%

Total capital to risk-weighted assets

12.87

%

12.55

%

12.94

%

12.49

%

12.62

%

Regulatory Capital:

Common Equity Tier 1 capital

$

10,548,615

$

9,894,870

$

9,375,688

$

9,103,771

$

8,887,905

Tier 1 capital

$

12,691,115

$

11,439,870

$

11,020,688

$

10,248,771

$

10,032,905

Total capital

$

14,082,378

$

12,842,344

$

12,396,304

$

11,604,141

$

11,365,654

Assets:

Average assets

$

152,465,399

$

140,493,283

$

131,517,445

$

125,690,830

$

118,626,842

Risk-weighted assets

$

109,412,853

$

102,321,489

$

95,823,385

$

92,870,859

$

90,072,400

__________

(1) As defined by regulatory capital rules.

(2) Beginning in 2020, ratios and amounts reflect the Bank's election to delay the estimated impact of the Current Expected Credit Losses ("CECL") allowance methodology on its regulatory capital, average assets and risk-weighted assets over a five-year transition period ending December 31, 2024.

(3) Ratios and amounts as of March 31, 2021 are preliminary.

As of

Wealth Management Assets

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

($ in millions)

First Republic Investment Management

$

90,819

$

83,596

$

74,661

$

68,124

$

60,056

Brokerage and investment:

Brokerage

101,478

88,059

76,769

70,178

60,189

Money market mutual funds

11,435

9,003

4,416

5,933

6,893

Total brokerage and investment

112,913

97,062

81,185

76,111

67,082

Trust Company:

Trust

10,986

9,910

8,687

7,905

7,288

Custody

4,216

3,889

3,651

3,646

3,461

Total Trust Company

15,202

13,799

12,338

11,551

10,749

Total Wealth Management Assets

$

218,934

$

194,457

$

168,184

$

155,786

$

137,887

View source version on businesswire.com: https://www.businesswire.com/news/home/20210414005210/en/

Contacts

Investors:
Andrew Greenebaum / Lasse Glassen
Addo Investor Relations
agreenebaum@addoir.com
lglassen@addoir.com
(310) 829-5400

Media:
Greg Berardi
Blue Marlin Partners
gberardi@firstrepublic.com
(415) 239-7826