FRC
$195.93
First Republic Bank
($1.00)
(.51%)
Earnings Details
2nd Quarter June 2021
Tuesday, July 13, 2021 7:00:00 AM
Tweet Share Watch
Summary

First Republic Bank Beats

First Republic Bank (FRC) reported 2nd Quarter June 2021 earnings of $1.95 per share on revenue of $1.3 billion. The consensus earnings estimate was $1.71 per share on revenue of $1.2 billion. The Earnings Whisper number was $1.82 per share. Revenue grew 21.4% on a year-over-year basis.

First Republic Bank and its subsidiaries provides private banking, private business banking and private wealth management, including investment, trust and brokerage services.

Results
Reported Earnings
$1.95
Earnings Whisper
$1.82
Consensus Estimate
$1.71
Reported Revenue
$1.30 Bil
Revenue Estimate
$1.19 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

First Republic Reports Second Quarter 2021 Results

Tangible Book Value Per Share Up 15.5% Year-Over-Year

Net Interest Income Increased 27.5% Year-Over-Year

SAN FRANCISCO--(BUSINESS WIRE)--First Republic Bank (NYSE: FRC) today announced financial results for the quarter ended June 30, 2021.

“First Republic had another very strong quarter of organic growth,” said Jim Herbert, Founder, Chairman and Co-CEO of First Republic Bank. “First Republic’s brand of exceptional client service resulted in significant growth in single family loans, deposits and wealth management assets.”

“Our results this quarter were representative of how our service-focused business model continues to resonate strongly with clients,” said Hafize Gaye Erkan, Co-CEO and President. “Providing exceptional service is a proven differentiator for First Republic.”

Quarterly Highlights

Financial Results

– Year-over-year:

– Revenues were $1.2 billion, up 33.9%.

– Net interest income was $1.0 billion, up 27.5%.

– Net income was $373.1 million, up 45.3%.

– Diluted earnings per share of $1.95, up 39.3% (included $0.11 positive impact from tax benefits on vesting of stock awards).

– Tangible book value per share was $61.72, up 15.5%.

– Loan originations totaled $16.8 billion, our strongest quarter ever.

– Net interest margin was 2.68%, compared to 2.67% for the prior quarter.

– Efficiency ratio was 62.0%, compared to 63.5% for the prior quarter.

Continued Capital and Credit Strength

– Tier 1 leverage ratio was 8.05%.

– Nonperforming assets were at a very low 8 basis points of total assets.

– Net charge-offs were only $1.2 million, or less than 1 basis point of average loans.

Continued Franchise Growth

– Year-over-year:

– Loans totaled $123.1 billion, up 22.7%.

– Deposits were $134.7 billion, up 36.7%.

– Wealth management assets were $240.9 billion, up 54.6%.

– Wealth management revenues were $183.6 million, up 61.2%.

“We are quite pleased with the growth of revenue and net interest income during the second quarter,” said Mike Roffler, Chief Financial Officer. “Credit quality remains excellent, further reflecting the safety and stability of First Republic.”

Quarterly Cash Dividend of $0.22 per Share

The Bank declared a cash dividend for the second quarter of $0.22 per share of common stock, which is payable on August 12, 2021 to shareholders of record as of July 29, 2021.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were at a very low 8 basis points of total assets at June 30, 2021. The Bank had modest net loan charge-offs of only $1.2 million for the quarter.

During the second quarter, the Bank recorded a provision for credit losses of $16.1 million, which was primarily driven by loan growth.

Continued Book Value Growth and Capital Strength

Book value per common share at June 30, 2021 was $62.99, up 14.9% from a year ago. Tangible book value per common share at June 30, 2021 was $61.72, up 15.5% from a year ago.

The Bank’s Tier 1 leverage ratio was 8.05% at June 30, 2021, compared to 8.32% at March 31, 2021.

Continued Franchise Growth

Loan Originations

Loan originations were our largest ever at $16.8 billion for the quarter, up 24.7% from the same quarter a year ago. This was primarily due to increases in single family and business lending, partially offset by a decrease in loan originations under the Small Business Administration’s Paycheck Protection Program (“PPP”).

Single family loan originations were 52% of the total volume for the quarter and had a weighted average loan-to-value ratio of 60%. Multifamily and commercial real estate loans originated were only 9% of total originations, and had a weighted average loan-to-value ratio of 49%.

Loans totaled $123.1 billion at June 30, 2021, up 22.7% compared to a year ago, primarily due to increases in single family loans, business, multifamily and stock secured loans, partially offset by a decrease in 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 $634 million, and were only 0.5% of total loans as of June 30, 2021, down from a peak of approximately 4% of total loans as of June 30, 2020.

Deposit Growth

Total deposits increased to $134.7 billion, up 36.7% compared to a year ago, and had an average rate paid of 7 basis points during the quarter.

At June 30, 2021, checking deposit balances were 68.0% of total deposits.

Investments

Total investment securities at June 30, 2021 were $22.9 billion, a 5.6% increase compared to the prior quarter and a 19.9% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $23.2 billion at June 30, 2021, and represented 14.3% of quarterly average total assets.

Wealth Management

Total wealth management assets were $240.9 billion at June 30, 2021, up 10.0% compared to the prior quarter and up 54.6% 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 $183.6 million for the quarter, up 61.2% compared to last year’s second quarter. Such revenues represented 14.9% of the Bank’s total revenues for the quarter.

Wealth management assets at June 30, 2021 included investment management assets of $99.5 billion, brokerage assets and money market mutual funds of $125.5 billion, and trust and custody assets of $15.9 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.2 billion for the quarter, up 33.9% compared to the second quarter a year ago.

Net Interest Income Growth

Net interest income was $1.0 billion for the quarter, up 27.5% compared to the second quarter a year ago. The increase in net interest income resulted primarily from growth in average interest-earning assets.

Net Interest Margin

The net interest margin increased to 2.68% in the second quarter, from 2.67% in the prior quarter.

Noninterest Income

Noninterest income was $226.6 million for the quarter, up 72.2% compared to the second quarter a year ago. The increase was primarily driven by higher wealth management fees, income from investments in life insurance and loan servicing fees.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $762.8 million for the quarter, up 33.9% compared to the second quarter a year ago. The increase was primarily due to increased salaries and benefits, information systems and occupancy costs from the continued investments in the expansion of the franchise, and higher professional fees and advertising and marketing costs.

The efficiency ratio was 62.0% for both the second quarter of 2021 and 2020.

Income Taxes

The Bank’s effective tax rate for the second quarter of 2021 was 17.4%, compared to 21.9% for the prior quarter, and 19.4% for the second quarter a year ago. The decrease from the second quarter a year ago was primarily the result of higher excess tax benefits upon vesting of stock awards due to higher market valuation levels. For the first six months of 2021, the Bank’s effective tax rate was 19.6%, compared to 19.4% a year ago.

Conference Call Details

First Republic Bank’s second quarter 2021 earnings conference call is scheduled for July 13, 2021 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (800) 458-4148 and provide confirmation code 3341684 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 July 13, 2021, at 11:00 a.m. PT / 2:00 p.m. ET, through July 20, 2021, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 3341684#. 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.

Non-GAAP Financial Measures

Our management uses and believes that investors benefit from using certain non-GAAP measures of our financial performance, which include tangible book value per common share, return on average tangible common shareholders’ equity, and net interest income on a fully taxable-equivalent basis. Management believes that tangible book value per common share and return on average tangible common shareholders’ equity are useful additional measures to evaluate our performance and capital position without the impact of goodwill and other intangible assets and preferred stock. In addition, to facilitate relevant comparisons of net interest income from taxable and tax-exempt interest-earning assets, when calculating yields and net interest margin, we adjust interest income on tax-exempt securities and tax-advantaged loans so such amounts are fully equivalent to interest income on taxable sources. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information that is not otherwise required by GAAP or other applicable requirements. These non-GAAP financial measures should be considered in addition to, not as a substitute for, financial measures prepared in accordance with GAAP. A reconciliation of the non-GAAP calculation of the financial measure to the most comparable GAAP financial measure is presented in relevant tables in this document.

CONSOLIDATED STATEMENTS OF INCOME

 

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

(in thousands, except per share amounts)

 

2021

 

2020

 

2021

2021

 

2020

Interest income:

 

 

 

 

 

 

 

 

 

 

Loans

 

$

912,885

 

$

791,286

 

 

$

873,170

 

 

$

1,786,055

 

$

1,587,938

 

Investments

 

156,947

 

146,515

 

 

140,711

 

 

297,658

 

295,084

 

Other

 

5,103

 

5,059

 

 

5,189

 

 

10,292

 

12,019

 

Cash and cash equivalents

 

3,070

 

564

 

 

2,894

 

 

5,964

 

4,504

 

Total interest income

 

1,078,005

 

943,424

 

 

1,021,964

 

 

2,099,969

 

1,899,545

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Deposits

 

24,096

 

72,480

 

 

27,571

 

 

51,667

 

191,325

 

Borrowings

 

50,044

 

83,532

 

 

55,611

 

 

105,655

 

168,676

 

Total interest expense

 

74,140

 

156,012

 

 

83,182

 

 

157,322

 

360,001

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

1,003,865

 

787,412

 

 

938,782

 

 

1,942,647

 

1,539,544

 

Provision (reversal of provision) for credit

losses

 

16,143

 

31,117

 

 

(14,608

)

 

1,535

 

93,487

 

Net interest income after provision (reversal of

provision) for credit losses

 

987,722

 

756,295

 

 

953,390

 

 

1,941,112

 

1,446,057

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

136,516

 

85,083

 

 

119,042

 

 

255,558

 

184,379

 

Brokerage and investment fees

 

17,574

 

12,406

 

 

14,564

 

 

32,138

 

28,232

 

Insurance fees

 

2,668

 

1,713

 

 

3,074

 

 

5,742

 

3,870

 

Trust fees

 

6,245

 

4,599

 

 

5,731

 

 

11,976

 

9,575

 

Foreign exchange fee income

 

20,612

 

10,105

 

 

17,167

 

 

37,779

 

22,289

 

Deposit fees

 

6,618

 

5,248

 

 

6,169

 

 

12,787

 

11,845

 

Loan and related fees

 

8,877

 

7,456

 

 

7,485

 

 

16,362

 

13,570

 

Loan servicing fees, net

 

1,057

 

(4,445

)

 

1,488

 

 

2,545

 

(2,793

)

Gain (loss) on sale of loans

 

58

 

(1,147

)

 

309

 

 

367

 

778

 

Gain on investment securities

 

1,329

 

1,529

 

 

655

 

 

1,984

 

4,157

 

Income from investments in life insurance

 

21,457

 

7,800

 

 

16,549

 

 

38,006

 

15,960

 

Other income

 

3,597

 

1,222

 

 

3,618

 

 

7,215

 

3,751

 

Total noninterest income

 

226,608

 

131,569

 

 

195,851

 

 

422,459

 

295,613

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

481,503

 

344,204

 

 

463,404

 

 

944,907

 

705,408

 

Information systems

 

88,980

 

74,037

 

 

83,516

 

 

172,496

 

144,752

 

Occupancy

 

63,526

 

54,941

 

 

57,549

 

 

121,075

 

108,582

 

Professional fees

 

25,475

 

15,517

 

 

21,254

 

 

46,729

 

28,634

 

Advertising and marketing

 

16,560

 

8,621

 

 

12,633

 

 

29,193

 

20,464

 

FDIC assessments

 

13,254

 

11,275

 

 

11,900

 

 

25,154

 

21,460

 

Other expenses

 

73,467

 

60,863

 

 

70,140

 

 

143,607

 

122,175

 

Total noninterest expense

 

762,765

 

569,458

 

 

720,396

 

 

1,483,161

 

1,151,475

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

451,565

 

318,406

 

 

428,845

 

 

880,410

 

590,195

 

Provision for income taxes

 

78,459

 

61,638

 

 

94,012

 

 

172,471

 

114,741

 

Net income

 

373,106

 

256,768

 

 

334,833

 

 

707,939

 

475,454

 

Dividends on preferred stock

 

23,655

 

14,817

 

 

18,525

 

 

42,180

 

27,837

 

Net income available to common shareholders

 

$

349,451

 

$

241,951

 

 

$

316,308

 

 

$

665,759

 

$

447,617

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

1.98

 

$

1.41

 

 

$

1.81

 

 

$

3.79

 

$

2.61

 

Diluted earnings per common share

 

$

1.95

 

$

1.40

 

 

$

1.79

 

 

$

3.74

 

$

2.60

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares—basic

 

176,419

 

171,627

 

 

174,820

 

 

175,624

 

171,231

 

Weighted average shares—diluted

 

178,864

 

172,659

 

 

176,951

 

 

177,913

 

172,343

 

CONSOLIDATED BALANCE SHEETS

 

 

As of

($ in thousands)

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

June 30,
2020

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,876,952

 

 

$

8,889,492

 

 

$

5,094,754

 

 

$

3,099,170

 

Debt securities available-for-sale

 

2,634,983

 

 

2,428,833

 

 

1,906,315

 

 

1,576,956

 

 

 

 

 

 

 

 

 

 

Debt securities held-to-maturity

 

20,244,705

 

 

19,240,358

 

 

16,610,212

 

 

17,513,211

 

Less: Allowance for credit losses

 

(8,407

)

 

(8,024

)

 

(6,902

)

 

(5,383

)

Debt securities held-to-maturity, net

 

20,236,298

 

 

19,232,334

 

 

16,603,310

 

 

17,507,828

 

 

 

 

 

 

 

 

 

 

Equity securities (fair value)

 

29,550

 

 

21,221

 

 

20,566

 

 

21,104

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

Single family

 

69,908,787

 

 

65,178,442

 

 

61,370,246

 

 

52,435,246

 

Home equity lines of credit

 

2,441,034

 

 

2,392,314

 

 

2,449,533

 

 

2,419,359

 

Single family construction

 

877,548

 

 

841,962

 

 

787,854

 

 

733,909

 

Multifamily

 

14,803,219

 

 

14,141,208

 

 

13,768,957

 

 

13,187,857

 

Commercial real estate

 

8,234,934

 

 

8,065,262

 

 

8,018,158

 

 

7,793,137

 

Multifamily/commercial construction

 

2,060,980

 

 

2,101,119

 

 

2,024,420

 

 

1,966,292

 

Capital call lines of credit

 

8,127,473

 

 

8,653,802

 

 

8,149,946

 

 

6,173,992

 

Tax-exempt

 

3,566,385

 

 

3,454,471

 

 

3,365,572

 

 

3,186,066

 

Other business

 

3,656,598

 

 

3,679,420

 

 

3,340,048

 

 

3,179,023

 

PPP

 

1,374,765

 

 

2,142,253

 

 

1,841,376

 

 

2,092,307

 

Stock secured

 

2,965,857

 

 

2,519,637

 

 

2,518,338

 

 

1,924,107

 

Other secured

 

2,051,617

 

 

1,862,529

 

 

1,818,550

 

 

1,702,535

 

Unsecured

 

3,047,981

 

 

3,050,999

 

 

3,113,267

 

 

3,221,405

 

Total loans

 

123,117,178

 

 

118,083,418

 

 

112,566,265

 

 

100,015,235

 

Allowance for credit losses

 

(636,910

)

 

(620,825

)

 

(635,019

)

 

(583,997

)

Loans, net

 

122,480,268

 

 

117,462,593

 

 

111,931,246

 

 

99,431,238

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

3,169

 

 

 

 

20,679

 

 

313,655

 

Investments in life insurance

 

2,597,637

 

 

2,328,844

 

 

2,061,362

 

 

1,468,712

 

Tax credit investments

 

1,224,114

 

 

1,127,465

 

 

1,131,905

 

 

1,105,853

 

Premises, equipment and leasehold improvements, net

 

418,725

 

 

412,331

 

 

403,482

 

 

388,256

 

Goodwill and other intangible assets

 

224,497

 

 

225,925

 

 

227,512

 

 

230,975

 

Other real estate owned

 

 

 

1,334

 

 

 

 

1,071

 

Other assets

 

3,920,541

 

 

3,667,588

 

 

3,101,003

 

 

3,159,069

 

Total Assets

 

$

161,646,734

 

 

$

155,797,960

 

 

$

142,502,134

 

 

$

128,303,887

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

$

59,449,158

 

 

$

53,806,762

 

 

$

46,281,112

 

 

$

37,586,940

 

Interest-bearing checking

 

32,165,327

 

 

32,542,600

 

 

30,603,221

 

 

23,833,458

 

Money market checking

 

20,373,535

 

 

19,210,069

 

 

16,778,884

 

 

14,639,069

 

Money market savings and passbooks

 

14,747,597

 

 

14,097,001

 

 

12,584,522

 

 

10,236,015

 

Certificates of deposit

 

7,921,218

 

 

8,250,521

 

 

8,681,061

 

 

12,238,479

 

Total Deposits

 

134,656,835

 

 

127,906,953

 

 

114,928,800

 

 

98,533,961

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

 

 

 

 

 

5,000

 

Long-term FHLB advances

 

9,000,000

 

 

10,505,000

 

 

11,755,000

 

 

15,405,000

 

Senior notes

 

997,193

 

 

996,668

 

 

996,145

 

 

995,109

 

Subordinated notes

 

778,535

 

 

778,423

 

 

778,313

 

 

778,096

 

Other liabilities

 

2,939,444

 

 

2,669,186

 

 

2,293,230

 

 

2,010,793

 

Total Liabilities

 

148,372,007

 

 

142,856,230

 

 

130,751,488

 

 

117,727,959

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

Preferred stock

 

2,142,500

 

 

2,142,500

 

 

1,545,000

 

 

1,145,000

 

Common stock

 

1,767

 

 

1,763

 

 

1,741

 

 

1,721

 

Additional paid-in capital

 

5,204,166

 

 

5,191,932

 

 

4,834,172

 

 

4,543,051

 

Retained earnings

 

5,936,669

 

 

5,626,958

 

 

5,346,355

 

 

4,858,965

 

Accumulated other comprehensive income (loss)

 

(10,375

)

 

(21,423

)

 

23,378

 

 

27,191

 

Total Shareholders’ Equity

 

13,274,727

 

 

12,941,730

 

 

11,750,646

 

 

10,575,928

 

Total Liabilities and Shareholders’ Equity

 

$

161,646,734

 

 

$

155,797,960

 

 

$

142,502,134

 

 

$

128,303,887

 

 

 

Quarter Ended June 30,

 

Quarter Ended March 31,

 

 

2021

 

2020

 

2021

Average Balances, Yields

and Rates

 

Average
Balance

 

Interest
Income/Expense
(1)

 

Yield/
Rates
(2)

 

Average
Balance

 

Interest
Income/Expense
(1)

 

Yield/
Rates
(2)

 

Average
Balance

 

Interest
Income/Expense
(1)

 

Yield/
Rates
(2)

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

11,280,780

 

 

$

3,070

 

 

0.11

%

 

$

2,789,666

 

 

$

564

 

 

0.08

%

 

$

11,448,652

 

 

$

2,894

 

 

0.10

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored

agency securities

 

100,000

 

 

398

 

 

1.59

%

 

214,835

 

 

1,367

 

 

2.55

%

 

93,889

 

 

339

 

 

1.45

%

Agency residential and

commercial MBS

 

5,646,537

 

 

29,000

 

 

2.05

%

 

6,615,707

 

 

42,661

 

 

2.58

%

 

5,625,748

 

 

30,536

 

 

2.17

%

Other residential and

commercial MBS

 

30,297

 

 

154

 

 

2.04

%

 

27,499

 

 

182

 

 

2.65

%

 

32,992

 

 

154

 

 

1.87

%

Municipal securities

 

15,082,004

 

 

147,297

 

 

3.91

%

 

11,949,615

 

 

126,906

 

 

4.25

%

 

13,349,101

 

 

134,990

 

 

4.04

%

Other investment

securities (3)

 

1,375,557

 

 

9,800

 

 

2.85

%

 

43,800

 

 

309

 

 

2.83

%

 

429,289

 

 

2,568

 

 

2.39

%

Total investment securities

 

22,234,395

 

 

186,649

 

 

3.36

%

 

18,851,456

 

 

171,425

 

 

3.64

%

 

19,531,019

 

 

168,587

 

 

3.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate (4)

 

69,853,517

 

 

491,229

 

 

2.81

%

 

53,737,207

 

 

404,691

 

 

3.01

%

 

65,458,977

 

 

469,010

 

 

2.87

%

Multifamily (5)

 

14,392,073

 

 

126,888

 

 

3.49

%

 

12,887,676

 

 

120,657

 

 

3.70

%

 

13,922,237

 

 

122,829

 

 

3.53

%

Commercial real estate

 

8,117,288

 

 

78,427

 

 

3.82

%

 

7,718,257

 

 

77,635

 

 

3.98

%

 

8,032,825

 

 

77,879

 

 

3.88

%

Multifamily/commercial

construction

 

2,969,059

 

 

37,522

 

 

5.00

%

 

2,632,682

 

 

29,468

 

 

4.43

%

 

2,867,284

 

 

31,100

 

 

4.34

%

Business (6)

 

15,894,165

 

 

128,914

 

 

3.21

%

 

13,069,640

 

 

115,666

 

 

3.50

%

 

15,076,564

 

 

123,741

 

 

3.28

%

PPP

 

1,842,716

 

 

15,476

 

 

3.32

%

 

1,620,772

 

 

7,659

 

 

1.87

%

 

1,989,987

 

 

15,766

 

 

3.17

%

Other (7)

 

7,652,991

 

 

41,518

 

 

2.15

%

 

6,658,487

 

 

42,116

 

 

2.50

%

 

7,347,624

 

 

39,685

 

 

2.16

%

Total loans

 

120,721,809

 

 

919,974

 

 

3.03

%

 

98,324,721

 

 

797,892

 

 

3.23

%

 

114,695,498

 

 

880,010

 

 

3.07

%

FHLB stock

 

312,647

 

 

5,103

 

 

6.55

%

 

491,938

 

 

5,059

 

 

4.14

%

 

344,990

 

 

5,189

 

 

6.10

%

Total interest-earning

assets

 

154,549,631

 

 

1,114,796

 

 

2.87

%

 

120,457,781

 

 

974,940

 

 

3.22

%

 

146,020,159

 

 

1,056,680

 

 

2.90

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

385,537

 

 

 

 

 

 

425,440

 

 

 

 

 

 

413,625

 

 

 

 

 

Goodwill and other

intangibles

 

225,183

 

 

 

 

 

 

231,934

 

 

 

 

 

 

226,683

 

 

 

 

 

Other assets

 

6,724,321

 

 

 

 

 

 

4,905,493

 

 

 

 

 

 

6,091,492

 

 

 

 

 

Total noninterest-earning

assets

 

7,335,041

 

 

 

 

 

 

5,562,867

 

 

 

 

 

 

6,731,800

 

 

 

 

 

Total Assets

 

$

161,884,672

 

 

 

 

 

 

$

126,020,648

 

 

 

 

 

 

$

152,751,959

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

91,379,594

 

 

1,740

 

 

0.01

%

 

$

58,978,081

 

 

3,127

 

 

0.02

%

 

$

83,679,569

 

 

2,074

 

 

0.01

%

Money market checking

 

19,927,834

 

 

6,100

 

 

0.12

%

 

14,315,050

 

 

9,860

 

 

0.28

%

 

18,888,949

 

 

7,644

 

 

0.16

%

Money market savings and

passbooks

 

14,783,456

 

 

6,117

 

 

0.17

%

 

9,818,650

 

 

5,364

 

 

0.22

%

 

13,640,388

 

 

6,310

 

 

0.19

%

CDs

 

8,039,804

 

 

10,139

 

 

0.51

%

 

12,721,452

 

 

54,129

 

 

1.71

%

 

8,413,083

 

 

11,543

 

 

0.56

%

Total deposits

 

134,130,688

 

 

24,096

 

 

0.07

%

 

95,833,233

 

 

72,480

 

 

0.30

%

 

124,621,989

 

 

27,571

 

 

0.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

 

 

 

%

 

2,747

 

 

 

 

0.04

%

 

6

 

 

0

 

 

0.18

%

Long-term FHLB advances

 

10,062,253

 

 

34,892

 

 

1.39

%

 

15,868,682

 

 

68,391

 

 

1.73

%

 

11,321,666

 

 

40,463

 

 

1.45

%

Senior notes (8)

 

996,937

 

 

6,040

 

 

2.42

%

 

994,905

 

 

6,034

 

 

2.43

%

 

996,412

 

 

6,038

 

 

2.42

%

Subordinated notes (8)

 

778,480

 

 

9,112

 

 

4.68

%

 

778,044

 

 

9,107

 

 

4.68

%

 

778,369

 

 

9,110

 

 

4.68

%

Total borrowings

 

11,837,670

 

 

50,044

 

 

1.69

%

 

17,644,378

 

 

83,532

 

 

1.90

%

 

13,096,453

 

 

55,611

 

 

1.72

%

Total interest-bearing

liabilities

 

145,968,358

 

 

74,140

 

 

0.20

%

 

113,477,611

 

 

156,012

 

 

0.55

%

 

137,718,442

 

 

83,182

 

 

0.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities

 

2,796,202

 

 

 

 

 

 

2,067,585

 

 

 

 

 

 

2,637,481

 

 

 

 

 

Preferred shareholders’ equity

 

2,142,500

 

 

 

 

 

 

1,145,000

 

 

 

 

 

 

1,963,583

 

 

 

 

 

Common shareholders’ equity

 

10,977,612

 

 

 

 

 

 

9,330,452

 

 

 

 

 

 

10,432,453

 

 

 

 

 

Total Liabilities and

Shareholders’ Equity

 

$

161,884,672

 

 

 

 

 

 

$

126,020,648

 

 

 

 

 

 

$

152,751,959

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (9)

 

 

 

 

 

2.67

%

 

 

 

 

 

2.67

%

 

 

 

 

 

2.65

%

Net interest income (fully

taxable-equivalent basis) and

net interest margin (10)

 

 

 

$

1,040,656

 

 

2.68

%

 

 

 

$

818,928

 

 

2.70

%

 

 

 

$

973,498

 

 

2.67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of tax-equivalent net interest

income to net interest income: (11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent adjustment

 

(29,702

)

 

 

 

 

 

(24,909

)

 

 

 

 

 

(27,876

)

 

 

Business loans tax-equivalent adjustment

 

(7,089

)

 

 

 

 

 

(6,607

)

 

 

 

 

 

(6,840

)

 

 

Net interest income

 

$

1,003,865

 

 

 

 

 

 

$

787,412

 

 

 

 

 

 

$

938,782

 

 

 

 

 

Six Months Ended June 30,

 

 

2021

 

2020

Average Balances, Yields and Rates

 

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

 

$

11,364,252

 

 

$

5,964

 

 

0.11

%

 

$

2,321,623

 

 

$

4,504

 

 

0.39

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency securities

 

96,961

 

 

737

 

 

1.52

%

 

261,142

 

 

3,574

 

 

2.74

%

Agency residential and commercial MBS

 

5,636,200

 

 

59,537

 

 

2.11

%

 

6,681,185

 

 

89,846

 

 

2.69

%

Other residential and commercial MBS

 

31,637

 

 

309

 

 

1.95

%

 

15,667

 

 

214

 

 

2.73

%

Municipal securities

 

14,220,340

 

 

282,375

 

 

3.97

%

 

11,654,183

 

 

249,935

 

 

4.29

%

Other investment securities (3)

 

905,037

 

 

12,367

 

 

2.73

%

 

43,791

 

 

629

 

 

2.87

%

Total investment securities

 

20,890,175

 

 

355,325

 

 

3.40

%

 

18,655,968

 

 

344,198

 

 

3.69

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate (4)

 

67,668,387

 

 

960,239

 

 

2.84

%

 

52,518,610

 

 

809,674

 

 

3.08

%

Multifamily (5)

 

14,158,453

 

 

249,718

 

 

3.51

%

 

12,726,699

 

 

239,601

 

 

3.72

%

Commercial real estate

 

8,075,290

 

 

156,306

 

 

3.85

%

 

7,646,415

 

 

156,244

 

 

4.04

%

Multifamily/commercial construction

 

2,918,453

 

 

68,622

 

 

4.68

%

 

2,591,664

 

 

59,753

 

 

4.56

%

Business (6)

 

15,487,623

 

 

252,666

 

 

3.24

%

 

12,730,013

 

 

238,698

 

 

3.71

%

PPP

 

1,915,944

 

 

31,242

 

 

3.24

%

 

810,386

 

 

7,659

 

 

1.87

%

Other (7)

 

7,501,151

 

 

81,201

 

 

2.15

%

 

6,555,772

 

 

89,687

 

 

2.71

%

Total loans

 

117,725,301

 

 

1,799,994

 

 

3.05

%

 

95,579,559

 

 

1,601,316

 

 

3.33

%

FHLB stock

 

328,729

 

 

10,292

 

 

6.31

%

 

449,455

 

 

12,019

 

 

5.38

%

Total interest-earning assets

 

150,308,457

 

 

2,171,575

 

 

2.88

%

 

117,006,605

 

 

1,962,037

 

 

3.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

399,504

 

 

 

 

 

 

434,348

 

 

 

 

 

Goodwill and other intangibles

 

225,929

 

 

 

 

 

 

233,006

 

 

 

 

 

Other assets

 

6,409,654

 

 

 

 

 

 

4,813,403

 

 

 

 

 

Total noninterest-earning assets

 

7,035,087

 

 

 

 

 

 

5,480,757

 

 

 

 

 

Total Assets

 

$

157,343,544

 

 

 

 

 

 

$

122,487,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

87,550,852

 

 

3,813

 

 

0.01

%

 

$

56,420,801

 

 

11,559

 

 

0.04

%

Money market checking

 

19,411,261

 

 

13,744

 

 

0.14

%

 

13,519,835

 

 

39,163

 

 

0.58

%

Money market savings and passbooks

 

14,215,079

 

 

12,427

 

 

0.18

%

 

9,784,569

 

 

20,931

 

 

0.43

%

CDs

 

8,225,414

 

 

21,683

 

 

0.53

%

 

13,453,699

 

 

119,672

 

 

1.79

%

Total deposits

 

129,402,606

 

 

51,667

 

 

0.08

%

 

93,178,904

 

 

191,325

 

 

0.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

3

 

 

 

 

0.18

%

 

617,287

 

 

4,700

 

 

1.53

%

Long-term FHLB advances

 

10,688,481

 

 

75,355

 

 

1.42

%

 

14,644,643

 

 

134,957

 

 

1.85

%

Senior notes (8)

 

996,676

 

 

12,078

 

 

2.42

%

 

880,106

 

 

10,807

 

 

2.46

%

Subordinated notes (8)

 

778,424

 

 

18,222

 

 

4.68

%

 

777,991

 

 

18,212

 

 

4.68

%

Total borrowings

 

12,463,584

 

 

105,655

 

 

1.71

%

 

16,920,027

 

 

168,676

 

 

2.00

%

Total interest-bearing liabilities

 

141,866,190

 

 

157,322

 

 

0.22

%

 

110,098,931

 

 

360,001

 

 

0.66

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities

 

2,717,280

 

 

 

 

 

 

2,048,845

 

 

 

 

 

Preferred shareholders’ equity

 

2,053,536

 

 

 

 

 

 

1,145,000

 

 

 

 

 

Common shareholders’ equity

 

10,706,538

 

 

 

 

 

 

9,194,586

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

157,343,544

 

 

 

 

 

 

$

122,487,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (9)

 

 

 

 

 

2.66

%

 

 

 

 

 

2.68

%

Net interest income (fully taxable-equivalent basis) and

net interest margin (10)

 

 

 

$

2,014,253

 

 

2.67

%

 

 

 

$

1,602,036

 

 

2.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of tax-equivalent net interest income

to net interest income: (11)

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent adjustment

 

 

 

(57,667)

 

 

 

 

 

 

(49,113)

 

 

 

Business loans tax-equivalent adjustment

 

 

 

(13,939)

 

 

 

 

 

 

(13,379)

 

 

 

Net interest income

 

 

 

$

1,942,647

 

 

 

 

 

 

$

1,539,544

 

 

 

_____________________

(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.

(11)

Fully taxable-equivalent net interest income is considered a non-GAAP financial measure, and is reconciled to GAAP net interest income in this table.

 

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

Selected Financial Data and Ratios

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

Return on average assets (1), (2)

 

0.92

%

 

0.82

%

 

0.89

%

 

0.91

%

 

0.78

%

Return on average common shareholders’ equity (1)

 

12.77

%

 

10.43

%

 

12.30

%

 

12.54

%

 

9.79

%

Return on average tangible common shareholders’

equity (1), (3)

 

13.04

%

 

10.70

%

 

12.57

%

 

12.81

%

 

10.04

%

Average total equity to average total assets

 

8.10

%

 

8.31

%

 

8.12

%

 

8.11

%

 

8.44

%

Dividends per common share

 

$

0.22

 

 

$

0.20

 

 

$

0.20

 

 

$

0.42

 

 

$

0.39

 

Dividend payout ratio

 

11.3

%

 

14.3

%

 

11.2

%

 

11.2

%

 

15.0

%

Book value per common share

 

$

62.99

 

 

$

54.80

 

 

$

61.26

 

 

$

62.99

 

 

$

54.80

 

Tangible book value per common share (4)

 

$

61.72

 

 

$

53.46

 

 

$

59.98

 

 

$

61.72

 

 

$

53.46

 

Efficiency ratio (5)

 

62.0

%

 

62.0

%

 

63.5

%

 

62.7

%

 

62.7

%

 

 

 

 

 

 

 

 

 

 

 

Net loan charge-offs

 

$

1,219

 

 

$

1,098

 

 

$

487

 

 

$

1,706

 

 

$

1,300

 

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

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan credit losses to:

 

 

 

 

 

 

 

 

 

 

Total loans

 

0.52

%

 

0.58

%

 

0.53

%

 

0.52

%

 

0.58

%

Nonaccrual loans

 

479.3

%

 

354.1

%

 

359.3

%

 

479.3

%

 

354.1

%

_____________________

(1)

Ratios are annualized.

(2)

Return on average assets is the ratio of net income to average assets.

(3)

Refer to “Return on Average Common Shareholders’ Equity and Return on Average Tangible Common Shareholders' Equity” table in this document for a

reconciliation of this non-GAAP financial measure to the most comparable GAAP measure.

(4)

Refer to “Book Value per Common Share and Tangible Book Value per Common Share” table in this document for a reconciliation of this non-GAAP financial

measure to the most comparable GAAP measure.

(5)

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

 

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

Effective Tax Rate

 

2021

 

2020

 

2021

 

2021

 

2020

Effective tax rate, prior to excess tax benefits—stock

awards

 

21.7

%

 

22.5

%

 

22.6

%

 

22.1

%

 

21.9

%

Excess tax benefits—stock awards

 

(4.3

)

 

(3.1

)

 

(0.7

)

 

(2.5

)%

 

(2.5

)%

Effective tax rate

 

17.4

%

 

19.4

%

 

21.9

%

 

19.6

%

 

19.4

%

 

 

 

 

 

 

 

 

 

 

 

Provision (Reversal of Provision) for Credit Losses

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Debt securities held-to-maturity

 

$

383

 

 

$

296

 

 

$

1,122

 

 

$

1,505

 

 

$

714

Loans

 

17,304

 

 

43,189

 

 

(13,707

)

 

3,597

 

 

90,868

Unfunded loan commitments

 

(1,544

)

 

(12,368

)

 

(2,023

)

 

(3,567

)

 

1,905

Total provision (reversal of provision)

 

$

16,143

 

 

$

31,117

 

 

$

(14,608

)

 

$

1,535

 

 

$

93,487

 

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

Mortgage Loan Sales

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Loans sold:

 

 

 

 

 

 

 

 

 

 

Flow sales:

 

 

 

 

 

 

 

 

 

 

Agency

 

$

4,315

 

 

$

10,810

 

 

$

42,402

 

 

$

46,717

 

 

$

36,584

 

Non-agency

 

 

 

 

 

1,073

 

 

1,073

 

 

31,870

 

Total flow sales

 

4,315

 

 

10,810

 

 

43,475

 

 

47,790

 

 

68,454

 

 

 

 

 

 

 

 

 

 

 

 

Bulk sales:

 

 

 

 

 

 

 

 

 

 

Non-agency

 

 

 

 

 

 

 

 

 

437,669

 

 

 

 

 

 

 

 

 

 

 

 

Securitizations

 

 

 

300,116

 

 

 

 

 

 

300,116

 

 

 

 

 

 

 

 

 

 

 

 

Total loans sold

 

$

4,315

 

 

$

310,926

 

 

$

43,475

 

 

$

47,790

 

 

$

806,239

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of loans:

 

 

 

 

 

 

 

 

 

 

Amount

 

$

58

 

 

$

(1,147)

 

 

$

309

 

 

$

367

 

 

$

778

 

Gain (loss) as a percentage of loans sold

 

1.34

%

 

(0.37)

%

 

0.71

%

 

0.77

%

 

0.10

%

 

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

Loan Originations

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Single family

 

$

8,661,680

 

 

$

5,875,184

 

 

$

6,902,192

 

 

$

15,563,872

 

 

$

9,394,520

 

Home equity lines of credit

 

610,658

 

 

457,737

 

 

623,661

 

 

1,234,319

 

 

853,245

 

Single family construction

 

215,014

 

 

119,318

 

 

224,504

 

 

439,518

 

 

228,480

 

Multifamily

 

1,101,450

 

 

946,820

 

 

791,070

 

 

1,892,520

 

 

1,728,123

 

Commercial real estate

 

458,196

 

 

330,683

 

 

313,991

 

 

772,187

 

 

782,541

 

Multifamily/commercial construction

 

272,145

 

 

131,414

 

 

310,824

 

 

582,969

 

 

752,335

 

Capital call lines of credit

 

2,921,192

 

 

1,405,347

 

 

3,131,317

 

 

6,052,509

 

 

3,790,576

 

Tax-exempt

 

208,327

 

 

184,054

 

 

213,967

 

 

422,294

 

 

284,073

 

Other business

 

520,394

 

 

914,257

 

 

1,025,154

 

 

1,545,548

 

 

1,534,036

 

PPP

 

35,586

 

 

1,981,797

 

 

688,948

 

 

724,534

 

 

1,981,797

 

Stock secured

 

775,795

 

 

519,416

 

 

710,038

 

 

1,485,833

 

 

1,111,976

 

Other secured

 

598,630

 

 

358,730

 

 

438,989

 

 

1,037,619

 

 

772,554

 

Unsecured

 

372,192

 

 

203,270

 

 

345,848

 

 

718,040

 

 

526,158

 

Total loans originated

 

$

16,751,259

 

 

$

13,428,027

 

 

$

15,720,503

 

 

$

32,471,762

 

 

$

23,740,414

 

 

 

As of

Asset Quality Information

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

 

June 30,
2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

132,880

 

 

$

172,794

 

 

$

184,132

 

 

$

164,247

 

 

$

164,930

 

Other real estate owned

 

 

 

1,334

 

 

 

 

 

 

1,071

 

Total nonperforming assets

 

$

132,880

 

 

$

174,128

 

 

$

184,132

 

 

$

164,247

 

 

$

166,001

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

0.08

%

 

0.11

%

 

0.13

%

 

0.12

%

 

0.13

%

 

 

 

 

 

 

 

 

 

 

 

Accruing loans 90 days or more past due

 

$

 

 

$

851

 

 

$

 

 

$

935

 

 

$

3,764

 

 

 

 

 

 

 

 

 

 

 

 

Restructured accruing loans

 

$

11,407

 

 

$

11,658

 

 

$

11,253

 

 

$

11,378

 

 

$

11,501

 

 

 

June 30, 2021

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

 

Unpaid
Principal
Balance

 

LTV (6)

 

Average Loan
Size

 

Number of
Loans

($ in millions)

 

 

 

 

 

 

 

 

Single family

 

$

124

 

 

60%

 

$

1.1

 

 

116

 

Home equity lines of credit

 

2

 

 

64%

 

$

0.3

 

 

6

 

Single family construction

 

2

 

 

75%

 

$

2.4

 

 

1

 

Multifamily

 

161

 

 

51%

 

$

6.4

 

 

25

 

Commercial real estate

 

157

 

 

47%

 

$

5.2

 

 

30

 

Multifamily/commercial construction

 

9

 

 

45%

 

$

8.9

 

 

1

 

Capital call lines of credit

 

 

 

n/a

 

$

 

 

 

Tax-exempt

 

141

 

 

n/a

 

$

23.5

 

 

6

 

Other business

 

30

 

 

n/a

 

$

2.5

 

 

12

 

Stock secured

 

 

 

n/a

 

$

 

 

 

Other secured

 

2

 

 

n/a

 

$

0.4

 

 

6

 

Unsecured (7)

 

6

 

 

n/a

 

$

0.1

 

 

60

 

Total

 

$

634

 

 

 

 

 

 

263

 

_____________________

(1)

 

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

(2)

 

Includes 62 loans totaling $274 million that have completed their deferral period, but for which a regular payment is not yet due.

(3)

 

Includes 136 loans totaling $328 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 June 30, 2021,

$3.4 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 June 30, 2021 totaled $7 million for initial relief, and

$2 million for additional relief beyond the initial modification period.

(6)

 

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

(7)

 

Consists of household debt refinance loans.

 

 

June 30, 2021

Loan Industry Information

 

Unpaid
Principal
Balance

 

LTV

 

Average Loan
Size

 

Number of
Loans

 

Personal
Guarantee %

($ in millions)

 

 

 

 

 

 

 

 

 

 

Retail

 

$

1,859

 

 

49

%

 

$

2.6

 

 

729

 

 

78

%

Hotel

 

468

 

 

48

%

 

$

7.3

 

 

66

 

 

76

%

Restaurant (1)

 

210

 

 

49

%

 

$

1.1

 

 

199

 

 

95

%

Total (2)

 

$

2,537

 

 

 

 

 

 

994

 

 

 

_____________________

(1)

 

Approximately 74% of loans to restaurants are real estate secured.

(2)

 

Amounts in the table above exclude $50 million of loans to hotels and $214 million of loans to restaurants under the PPP.

 

 

As of

Loan Servicing Portfolio

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

 

June 30,
2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

Loans serviced for investors

 

$

5,640

 

 

$

6,314

 

 

$

7,094

 

 

$

7,799

 

 

$

8,316

 

Return on Average Common Shareholders’ Equity

and Return on Average Tangible Common

Shareholders’ Equity (1), (2)

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shareholders’ equity (a)

 

$

10,977,612

 

 

$

9,330,452

 

 

$

10,432,453

 

 

$

10,706,538

 

 

$

9,194,586

 

Less: Average goodwill and other intangible assets

 

225,183

 

 

231,934

 

 

226,683

 

 

225,929

 

 

233,006

 

Average tangible common shareholders’ equity (b)

 

$

10,752,429

 

 

$

9,098,518

 

 

$

10,205,770

 

 

$

10,480,609

 

 

$

8,961,580

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders (c)

 

$

349,451

 

 

$

241,951

 

 

$

316,308

 

 

$

665,759

 

 

$

447,617

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common shareholders’

equity (c) / (a)

 

12.77

%

 

10.43

%

 

12.30

%

 

12.54

%

 

9.79

%

Return on average tangible common shareholders’

equity (c) / (b)

 

13.04

%

 

10.70

%

 

12.57

%

 

12.81

%

 

10.04

%

_____________________

(1)

 

Return on average tangible common shareholders’ equity is considered a non-GAAP financial measure, and is reconciled to GAAP return on average common

shareholders’ equity in this table.

(2)

 

Ratios are annualized.

 

 

As of

Book Value per Common Share and Tangible

Book Value per Common Share (1)

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

 

June 30,
2020

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

$

13,274,727

 

 

$

12,941,730

 

 

$

11,750,646

 

 

$

11,344,609

 

 

$

10,575,928

 

Less: Preferred stock

 

2,142,500

 

 

2,142,500

 

 

1,545,000

 

 

1,645,000

 

 

1,145,000

 

Total common shareholders’ equity (a)

 

11,132,227

 

 

10,799,230

 

 

10,205,646

 

 

9,699,609

 

 

9,430,928

 

Less: Goodwill and other intangible assets

 

224,497

 

 

225,925

 

 

227,512

 

 

229,185

 

 

230,975

 

Total tangible common shareholders’ equity (b)

 

$

10,907,730

 

 

$

10,573,305

 

 

$

9,978,134

 

 

$

9,470,424

 

 

$

9,199,953

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares of common stock outstanding (c)

 

176,742

 

 

176,287

 

 

174,124

 

 

172,188

 

 

172,094

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

62.99

 

 

$

61.26

 

 

$

58.61

 

 

$

56.33

 

 

$

54.80

 

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

 

$

61.72

 

 

$

59.98

 

 

$

57.30

 

 

$

55.00

 

 

$

53.46

 

_____________________

(1)

 

Tangible book value per common share is considered a non-GAAP financial measure, and is reconciled to GAAP book value per common share in this table.

 

 

As of

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

 

June 30,
2021 (3)

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

 

June 30,
2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio (Tier 1 capital to average

assets)

 

8.05

%

 

8.32

%

 

8.14

%

 

8.38

%

 

8.15

%

Common Equity Tier 1 capital to risk-weighted

assets

 

9.51

%

 

9.64

%

 

9.67

%

 

9.78

%

 

9.80

%

Tier 1 capital to risk-weighted assets

 

11.38

%

 

11.60

%

 

11.18

%

 

11.50

%

 

11.04

%

Total capital to risk-weighted assets

 

12.60

%

 

12.87

%

 

12.55

%

 

12.94

%

 

12.49

%

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital:

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 capital

 

$

10,875,436

 

 

$

10,548,615

 

 

$

9,894,870

 

 

$

9,375,688

 

 

$

9,103,771

 

Tier 1 capital

 

$

13,017,936

 

 

$

12,691,115

 

 

$

11,439,870

 

 

$

11,020,688

 

 

$

10,248,771

 

Total capital

 

$

14,420,504

 

 

$

14,082,378

 

 

$

12,842,344

 

 

$

12,396,304

 

 

$

11,604,141

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

Average assets

 

$

161,636,891

 

 

$

152,465,399

 

 

$

140,493,283

 

 

$

131,517,445

 

 

$

125,690,830

 

Risk-weighted assets

 

$

114,404,874

 

 

$

109,413,168

 

 

$

102,321,489

 

 

$

95,823,385

 

 

$

92,870,859

 

_____________________

(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 June 30, 2021 are preliminary.

 

 

As of

Wealth Management Assets

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

 

June 30,
2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

First Republic Investment Management

 

$

99,459

 

 

$

90,819

 

 

$

83,596

 

 

$

74,661

 

 

$

68,124

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and investment:

 

 

 

 

 

 

 

 

 

 

Brokerage

 

112,359

 

 

101,478

 

 

88,059

 

 

76,769

 

 

70,178

 

Money market mutual funds

 

13,109

 

 

11,435

 

 

9,003

 

 

4,416

 

 

5,933

 

Total brokerage and investment

 

125,468

 

 

112,913

 

 

97,062

 

 

81,185

 

 

76,111

 

 

 

 

 

 

 

 

 

 

 

 

Trust Company:

 

 

 

 

 

 

 

 

 

 

Trust

 

11,496

 

 

10,986

 

 

9,910

 

 

8,687

 

 

7,905

 

Custody

 

4,439

 

 

4,216

 

 

3,889

 

 

3,651

 

 

3,646

 

Total Trust Company

 

15,935

 

 

15,202

 

 

13,799

 

 

12,338

 

 

11,551

 

Total Wealth Management Assets

 

$

240,862

 

 

$

218,934

 

 

$

194,457

 

 

$

168,184

 

 

$

155,786

 

 

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

Source: First Republic Bank