FRC
$140.88
First Republic Bank
$.72
.51%
Earnings Details
Quarter December 2022
Friday, January 13, 2023 7:00:00 AM
Tweet Share Watch
Summary

First Republic Bank Beats

First Republic Bank (FRC) reported Quarter December 2022 earnings of $1.88 per share on revenue of $2.0 billion. The consensus earnings estimate was $1.82 per share on revenue of $1.4 billion. The Earnings Whisper number was $1.87 per share. Revenue grew 38.8% 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
$1.88
Earnings Whisper
$1.87
Consensus Estimate
$1.82
Reported Revenue
$1.96 Bil
Revenue Estimate
$1.44 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

First Republic Reports 2022 Results

Net Interest Income Grew 17% Year-Over-Year

Tangible Book Value Per Share Increased 11% Year-Over-Year

SAN FRANCISCO--(BUSINESS WIRE)--First Republic Bank (NYSE: FRC) today announced financial results for the quarter and year ended December 31, 2022.

“2022 was another terrific year of safe, consistent and organic growth,” said Mike Roffler, Chief Executive Officer and President. “We achieved our highest Net Promoter Score ever, which reflects our unwavering focus on exceptional client service.”

Full Year Highlights

Financial Results

  • Revenues were $5.9 billion, up 16.5%.
  • Net interest income was $4.8 billion, up 17.5%.
  • Net income was $1.7 billion, up 12.7%.
  • Diluted earnings per share of $8.25, up 7.4%.
  • Loan originations totaled $73.4 billion, our best year ever.
  • Book value per share was $75.38, up 10.3%.
  • Tangible book value per share was $74.19, up 10.6%. (1)
  • Efficiency ratio was 61.7%, compared to 62.5% last year.

Continued Capital and Credit Strength

  • Tier 1 leverage ratio was 8.51%.
  • Nonperforming assets were a low 5 basis points of total assets.
  • Net charge-offs were only $2.9 million, or less than 1 basis point of average loans.

Continued Franchise Growth

  • Loans totaled $166.9 billion, up 23.6%.
  • Deposits were $176.4 billion, up 12.9%.
  • Wealth management assets were $271.2 billion, down 2.9%.
  • Wealth management revenues were $877 million, up 15.4%.

Quarterly Highlights

Financial Results

  • Compared to last year’s fourth quarter:
    • Revenues were $1.4 billion, up 5.2%.
    • Net interest income was $1.2 billion, up 4.9%.
    • Net income was $386 million, down 3.6%.
    • Diluted earnings per share of $1.88, down 6.9%.
  • Loan originations totaled $15.6 billion.
  • Net charge-offs were $0.9 million.
  • Compared to the prior quarter:
    • Net interest margin was 2.45%, compared to 2.71%.
    • Efficiency ratio was 63.9%, compared to 60.3%.
    • Wealth management assets were up 8.7%

“Revenue and net interest income growth were strong in 2022,” said Neal Holland, Chief Financial Officer. “Credit quality remains excellent, with nonperforming assets near all-time lows. Tangible book value per share increased 11%.”

Quarterly Cash Dividend of $0.27 per Share

The Bank declared a cash dividend for the fourth quarter of $0.27 per share of common stock, which is payable on February 9, 2023 to shareholders of record as of January 26, 2023.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were at a very low 5 basis points of total assets at December 31, 2022.

The provision for credit losses for the quarter was $30 million, with net loan charge-offs of only $0.9 million for the quarter. For the year, the provision for credit losses was $107 million, with net loan charge-offs of only $2.9 million.

Continued Book Value Growth

Book value per common share at December 31, 2022 was $75.38, up 10.3% from a year ago. Tangible book value per common share at December 31, 2022 was $74.19, up 10.6% from a year ago. (1)

Capital Strength

The Bank’s Tier 1 leverage ratio was 8.51% at December 31, 2022, compared to 8.59% at September 30, 2022.

Continued Franchise Growth

Loan Originations

Loan originations were $15.6 billion for the quarter. This was down 7.5% from the same quarter a year ago. For 2022, loan originations totaled $73.4 billion, up 13.2% compared to the prior year. The decrease for the quarter was primarily due to decreases in capital call lines of credit and single family lending. The increase for the year was primarily due to increases in single family, multifamily and commercial real estate lending.

Single family loan originations were 38% of the total loan origination volume for the quarter and 43% for the year, and had a weighted average loan-to-value ratio of 61% for the year. Multifamily and commercial real estate loans originated were 16% of total originations for both the quarter and the year, and had a weighted average loan-to-value ratio of 51% for the year. In addition, capital call lines of credit originated were 16% of total originations for both the quarter and the year.

Loans totaled $166.9 billion at December 31, 2022, up 23.6% compared to a year ago. The increase was driven by growth in substantially all loan categories, partially offset by lower capital call lines of credit outstanding.

Investments

Total investment securities at December 31, 2022 were $31.7 billion, a slight increase compared to September 30, 2022 and a 23.4% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $26.0 billion at December 31, 2022, and represented 12.6% of quarterly average total assets.

Deposit Growth and Funding

Total deposits increased to $176.4 billion, up 12.9% compared to a year ago. Deposits were our primary source of funding at December 31, 2022, and represented 92% of our large funding base.

At December 31, 2022, our deposit base consisted of 58.8% checking deposits, 26.9% other liquid deposits including money market checking and money market savings and passbooks, and 14.3% CDs.

Other sources of funding at December 31, 2022 included short-term and long-term FHLB advances, which totaled $14.0 billion.

Deposits had an average rate paid of 99 basis points during the quarter, and average total funding costs were 112 basis points during the quarter.

Wealth Management

Total wealth management assets were $271.2 billion at December 31, 2022, up 8.7% compared to the prior quarter and down 2.9% compared to a year ago. The increase in wealth management assets for the quarter was due to net client inflow and market appreciation. The decrease in wealth management assets for the year was due to market decline, meaningfully offset by net client inflow. Wealth management assets at December 31, 2022 included investment management assets of $112.2 billion, brokerage assets and money market mutual funds of $138.9 billion, and trust and custody assets of $20.1 billion.

Wealth management fees, which consist of investment management, brokerage and investment, insurance, trust and foreign exchange fee income, totaled $210 million for the quarter, up slightly compared to last year’s fourth quarter. For 2022, wealth management fees were $877 million, an increase of 15.4% compared to the prior year. Such revenues represented 14.6% of the Bank’s total revenues for the quarter and 15.0% of the Bank’s total revenues for the year.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.4 billion for the quarter, up 5.2% compared to the fourth quarter a year ago and were $5.9 billion for 2022, up 16.5% compared to the prior year.

Net Interest Income Growth

Net interest income was $1.2 billion for the quarter, up 4.9% compared to the fourth quarter a year ago, and was $4.8 billion for 2022, up 17.5% compared to the prior year. The increases in net interest income for the quarter and the year resulted primarily from growth in average interest-earning assets, partially offset by decreases in net interest margin compared to a year ago.

Net Interest Margin

The net interest margin declined to 2.45% in the fourth quarter, from 2.71% in the prior quarter. For 2022, the net interest margin was 2.65%, compared to 2.67% for the prior year. The declines were due to average funding costs increasing more rapidly than the offsetting increases in the average yields on interest-earning assets.

Noninterest Income

Noninterest income was $263 million for the quarter, up 6.4% compared to the fourth quarter a year ago, and was $1.0 billion for 2022, up 12.1% compared to the prior year. The increase for the quarter was primarily driven by higher brokerage and investment fees and higher income from investments in life insurance, partially offset by lower investment management fees. The increase for the year was primarily driven by higher investment management fees and higher brokerage and investment fees.

Noninterest Expense and Efficiency Ratio

Noninterest expense for the quarter remained unchanged compared to the third quarter of 2022. Noninterest expense was $919 million for the quarter, up 6.2% compared to the fourth quarter a year ago, and was $3.6 billion for 2022, up 14.9% compared to the prior year. The increases were primarily due to continued investments in our business expansion, including hiring additional colleagues to support our growth, information systems initiatives and occupancy costs.

The efficiency ratio was 63.9% for the quarter, compared to 63.3% for last year’s fourth quarter. For 2022, the efficiency ratio was 61.7%, compared to 62.5% in 2021.

Income Taxes

The Bank’s effective tax rate for the fourth quarter of 2022 was 20.9%, compared to 16.1% for the fourth quarter a year ago. For 2022, the Bank’s effective tax rate was 22.2%, compared to 19.1% a year ago. The increases were primarily the result of higher research and development tax credits claimed in the prior year and lower excess tax benefits recognized in the current year.

__________

(1) Represents a non-GAAP financial measure. See reconciliation in “Book Value per Common Share and Tangible Book Value per Common Share” table in this document for additional details.

Conference Call Details

First Republic Bank’s fourth quarter 2022 earnings conference call is scheduled for January 13, 2023 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (888) 204-4368 and provide confirmation code 7764494 approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (856) 344-9221 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 for the live presentation, a replay of the webcast 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. First Republic specializes in delivering exceptional, relationship-based service and provides a complete line of products, including residential, commercial and personal loans, deposit services, and private wealth management, including investment, brokerage, insurance, trust and foreign exchange services. 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; Jackson, Wyoming; and Bellevue, Washington. 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, net interest income, net interest margin, capital expenditures, liquidity, dividends, capital structure, investments or other financial items; forecasts of future economic conditions generally and in our market areas in particular, including expectations relating to interest rates and inflation, which may affect our net interest margin, the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans; expectations regarding the banking and wealth management industries; descriptions of plans or objectives of management for future operations, products or services; 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; 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 the COVID-19 pandemic (collectively referred to as “COVID-19” herein); expectations regarding our executive transitions; 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: economic and market conditions, including volatility in the financial and securities markets, which may negatively impact the valuation of our investment securities portfolio, credit losses on our loans and debt securities, and the performance of our wealth management business; inflation; interest rate risk and credit risk; 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 adverse effects of climate change on our business, clients and counterparties; 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; our ability to maintain and follow high underwriting standards; 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; the regulatory environment in which we operate, our regulatory compliance and future regulatory requirements, which may result in costs, fees, penalties, business restrictions, reputational harm or other adverse consequences; any changes to liquidity and regulatory capital requirements applicable to us, including more stringent liquidity requirements and heightened capital requirements applicable if we become a Category III banking organization under the FDIC’s regulations by reporting $250 billion or more in total consolidated assets or $75 billion or more in weighted short-term wholesale funding, nonbank assets or off-balance sheet exposure, based on a four quarter trailing average; 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; changes in federal, state or local tax laws; 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.

Explanatory Note

Some amounts presented within this document may not recalculate due to rounding.

CONSOLIDATED STATEMENTS OF INCOME

 

 

Quarter Ended

December 31,

 

Quarter Ended

September 30,

 

Year Ended

December 31,

(in millions, except per share amounts)

 

2022

 

2021

 

2022

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,438

 

$

992

 

 

$

1,269

 

$

4,803

 

$

3,725

Investments

 

 

231

 

 

165

 

 

 

219

 

 

839

 

 

624

Cash and cash equivalents

 

 

24

 

 

6

 

 

 

27

 

 

67

 

 

17

Other

 

 

6

 

 

4

 

 

 

3

 

 

13

 

 

19

Total interest income

 

 

1,699

 

 

1,167

 

 

 

1,518

 

 

5,722

 

 

4,385

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

428

 

 

20

 

 

 

169

 

 

654

 

 

95

Borrowings

 

 

97

 

 

27

 

 

 

80

 

 

234

 

 

176

Total interest expense

 

 

525

 

 

47

 

 

 

249

 

 

888

 

 

271

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

1,174

 

 

1,120

 

 

 

1,269

 

 

4,834

 

 

4,114

Provision for credit losses

 

 

30

 

 

24

 

 

 

36

 

 

107

 

 

59

Net interest income after provision for credit losses

 

 

1,144

 

 

1,096

 

 

 

1,233

 

 

4,727

 

 

4,055

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

141

 

 

150

 

 

 

142

 

 

612

 

 

554

Brokerage and investment fees

 

 

29

 

 

19

 

 

 

34

 

 

118

 

 

74

Insurance fees

 

 

8

 

 

7

 

 

 

6

 

 

21

 

 

19

Trust fees

 

 

7

 

 

7

 

 

 

7

 

 

28

 

 

25

Foreign exchange fee income

 

 

25

 

 

24

 

 

 

25

 

 

98

 

 

88

Deposit fees

 

 

7

 

 

7

 

 

 

7

 

 

28

 

 

27

Loan and related fees

 

 

10

 

 

9

 

 

 

10

 

 

39

 

 

33

Income from investments in life insurance

 

 

34

 

 

27

 

 

 

23

 

 

82

 

 

85

Other income, net

 

 

2

 

 

(3

)

 

 

 

 

5

 

 

15

Total noninterest income

 

 

263

 

 

247

 

 

 

254

 

 

1,031

 

 

920

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

551

 

 

544

 

 

 

557

 

 

2,235

 

 

2,003

Information systems

 

 

123

 

 

99

 

 

 

124

 

 

468

 

 

362

Occupancy

 

 

73

 

 

66

 

 

 

73

 

 

285

 

 

254

Professional fees

 

 

27

 

 

27

 

 

 

31

 

 

108

 

 

101

Advertising and marketing

 

 

23

 

 

21

 

 

 

19

 

 

71

 

 

64

FDIC assessments

 

 

19

 

 

13

 

 

 

17

 

 

66

 

 

52

Other expenses

 

 

103

 

 

96

 

 

 

98

 

 

384

 

 

311

Total noninterest expense

 

 

919

 

 

866

 

 

 

919

 

 

3,617

 

 

3,147

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

488

 

 

477

 

 

 

568

 

 

2,141

 

 

1,828

Provision for income taxes

 

 

102

 

 

77

 

 

 

123

 

 

476

 

 

350

Net income

 

 

386

 

 

400

 

 

 

445

 

 

1,665

 

 

1,478

Dividends on preferred stock

 

 

40

 

 

32

 

 

 

40

 

 

158

 

 

99

Net income available to common shareholders

 

$

346

 

$

368

 

 

$

405

 

$

1,507

 

$

1,379

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

1.89

 

$

2.05

 

 

$

2.23

 

$

8.32

 

$

7.78

Diluted earnings per common share

 

$

1.88

 

$

2.02

 

 

$

2.21

 

$

8.25

 

$

7.68

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares—basic

 

 

183

 

 

179

 

 

 

182

 

 

181

 

 

177

Weighted average shares—diluted

 

 

184

 

 

182

 

 

 

183

 

 

183

 

 

180

CONSOLIDATED BALANCE SHEETS

 

 

As of

($ in millions)

 

December 31,
2022

 

September 30,
2022

 

December 31,
2021

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,283

 

 

$

5,532

 

 

$

12,947

 

Debt securities available-for-sale

 

 

3,347

 

 

 

3,348

 

 

 

3,381

 

Debt securities held-to-maturity, net

 

 

28,348

 

 

 

28,247

 

 

 

22,292

 

Equity securities (fair value)

 

 

24

 

 

 

22

 

 

 

28

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

Single family

 

 

98,768

 

 

 

94,345

 

 

 

76,793

 

Home equity lines of credit

 

 

2,775

 

 

 

2,801

 

 

 

2,584

 

Single family construction

 

 

1,217

 

 

 

1,154

 

 

 

993

 

Multifamily

 

 

21,588

 

 

 

20,364

 

 

 

15,966

 

Commercial real estate

 

 

10,830

 

 

 

10,039

 

 

 

8,531

 

Multifamily/commercial construction

 

 

2,139

 

 

 

2,089

 

 

 

1,927

 

Capital call lines of credit

 

 

9,988

 

 

 

9,393

 

 

 

10,999

 

Tax-exempt

 

 

3,713

 

 

 

3,655

 

 

 

3,680

 

Other business

 

 

5,072

 

 

 

4,629

 

 

 

3,961

 

Paycheck Protection Program ("PPP")

 

 

20

 

 

 

30

 

 

 

545

 

Stock secured

 

 

4,553

 

 

 

4,251

 

 

 

3,435

 

Other secured

 

 

3,191

 

 

 

3,001

 

 

 

2,457

 

Unsecured

 

 

3,014

 

 

 

3,016

 

 

 

3,085

 

Total loans

 

 

166,868

 

 

 

158,767

 

 

 

134,956

 

Allowance for credit losses

 

 

(784

)

 

 

(760

)

 

 

(694

)

Loans, net

 

 

166,084

 

 

 

158,007

 

 

 

134,262

 

 

 

 

 

 

 

 

Investments in life insurance

 

 

3,435

 

 

 

3,409

 

 

 

2,650

 

Tax credit investments

 

 

1,383

 

 

 

1,285

 

 

 

1,220

 

Premises, equipment and leasehold improvements, net

 

 

483

 

 

 

483

 

 

 

454

 

Goodwill and other intangible assets

 

 

218

 

 

 

219

 

 

 

222

 

Other assets

 

 

5,034

 

 

 

4,557

 

 

 

3,631

 

Total Assets

 

$

212,639

 

 

$

205,109

 

 

$

181,087

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing checking

 

$

62,579

 

 

$

69,931

 

 

$

70,840

 

Interest-bearing checking

 

 

41,178

 

 

 

40,706

 

 

 

41,248

 

Money market checking

 

 

25,805

 

 

 

25,582

 

 

 

20,303

 

Money market savings and passbooks

 

 

21,663

 

 

 

20,231

 

 

 

16,573

 

Certificates of deposit

 

 

25,212

 

 

 

15,932

 

 

 

7,357

 

Total Deposits

 

 

176,437

 

 

 

172,382

 

 

 

156,321

 

 

 

 

 

 

 

 

Short-term FHLB advances

 

 

6,700

 

 

 

5,100

 

 

 

 

Long-term FHLB advances

 

 

7,300

 

 

 

5,900

 

 

 

3,700

 

Senior notes

 

 

500

 

 

 

500

 

 

 

998

 

Subordinated notes

 

 

779

 

 

 

779

 

 

 

779

 

Other liabilities

 

 

3,477

 

 

 

3,329

 

 

 

3,391

 

Total Liabilities

 

 

195,193

 

 

 

187,990

 

 

 

165,189

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

Preferred stock

 

 

3,633

 

 

 

3,633

 

 

 

3,633

 

Common stock

 

 

2

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

6,256

 

 

 

6,230

 

 

 

5,725

 

Retained earnings

 

 

7,886

 

 

 

7,591

 

 

 

6,569

 

Accumulated other comprehensive loss

 

 

(331

)

 

 

(337

)

 

 

(31

)

Total Shareholders’ Equity

 

 

17,446

 

 

 

17,119

 

 

 

15,898

 

Total Liabilities and Shareholders’ Equity

 

$

212,639

 

 

$

205,109

 

 

$

181,087

 

 

 

Quarter Ended December 31,

 

Quarter Ended September 30,

 

 

2022

 

2021

 

2022

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 millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

2,704

 

$

24

 

 

3.49

%

 

$

15,342

 

$

6

 

 

0.15

%

 

$

4,733

 

$

27

 

 

2.22

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency securities

 

 

165

 

 

1

 

 

2.05

%

 

 

100

 

 

0

 

 

1.59

%

 

 

165

 

 

1

 

 

2.05

%

Agency residential and commercial MBS

 

 

10,535

 

 

66

 

 

2.49

%

 

 

7,011

 

 

29

 

 

1.65

%

 

 

10,642

 

 

59

 

 

2.23

%

Other residential and commercial MBS

 

 

18

 

 

0

 

 

3.77

%

 

 

25

 

 

0

 

 

1.82

%

 

 

20

 

 

0

 

 

2.97

%

Tax-exempt municipal securities

 

 

17,697

 

 

175

 

 

3.97

%

 

 

14,869

 

 

146

 

 

3.93

%

 

 

17,389

 

 

169

 

 

3.91

%

Taxable municipal securities

 

 

1,774

 

 

13

 

 

3.13

%

 

 

1,670

 

 

12

 

 

2.99

%

 

 

1,773

 

 

14

 

 

3.09

%

Other investment securities

 

 

1,440

 

 

10

 

 

2.88

%

 

 

1,405

 

 

10

 

 

2.86

%

 

 

1,440

 

 

11

 

 

2.87

%

Total investment securities

 

 

31,629

 

 

265

 

 

3.37

%

 

 

25,080

 

 

197

 

 

3.15

%

 

 

31,429

 

 

254

 

 

3.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

100,645

 

 

772

 

 

3.07

%

 

 

78,436

 

 

545

 

 

2.78

%

 

 

95,588

 

 

701

 

 

2.93

%

Multifamily

 

 

20,856

 

 

192

 

 

3.60

%

 

 

15,479

 

 

154

 

 

3.90

%

 

 

19,139

 

 

171

 

 

3.48

%

Commercial real estate

 

 

10,401

 

 

107

 

 

4.02

%

 

 

8,525

 

 

83

 

 

3.82

%

 

 

9,558

 

 

94

 

 

3.84

%

Multifamily/commercial construction

 

 

2,105

 

 

31

 

 

5.77

%

 

 

2,044

 

 

24

 

 

4.70

%

 

 

2,062

 

 

26

 

 

5.05

%

Business

 

 

17,745

 

 

240

 

 

5.29

%

 

 

17,210

 

 

139

 

 

3.15

%

 

 

18,664

 

 

205

 

 

4.30

%

PPP

 

 

26

 

 

0

 

 

0.95

%

 

 

732

 

 

9

 

 

4.65

%

 

 

48

 

 

1

 

 

9.49

%

Other

 

 

10,479

 

 

103

 

 

3.86

%

 

 

8,578

 

 

45

 

 

2.03

%

 

 

9,957

 

 

77

 

 

3.02

%

Total loans

 

 

162,257

 

 

1,445

 

 

3.53

%

 

 

131,004

 

 

999

 

 

3.02

%

 

 

155,016

 

 

1,275

 

 

3.26

%

FHLB stock

 

 

353

 

 

6

 

 

7.27

%

 

 

143

 

 

4

 

 

11.17

%

 

 

366

 

 

3

 

 

3.26

%

Total interest-earning assets

 

 

196,943

 

 

1,740

 

 

3.51

%

 

 

171,569

 

 

1,206

 

 

2.79

%

 

 

191,544

 

 

1,559

 

 

3.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

 

478

 

 

 

 

 

 

426

 

 

 

 

 

 

451

 

 

 

 

Goodwill and other intangibles

 

 

219

 

 

 

 

 

 

223

 

 

 

 

 

 

219

 

 

 

 

Other assets

 

 

8,464

 

 

 

 

 

 

6,967

 

 

 

 

 

 

8,199

 

 

 

 

Total noninterest-earning assets

 

 

9,161

 

 

 

 

 

 

7,616

 

 

 

 

 

 

8,869

 

 

 

 

Total Assets

 

$

206,104

 

 

 

 

 

$

179,185

 

 

 

 

 

$

200,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$

39,252

 

 

55

 

 

0.55

%

 

$

36,896

 

 

1

 

 

0.01

%

 

$

41,404

 

 

27

 

 

0.26

%

Money market checking

 

 

24,084

 

 

134

 

 

2.20

%

 

 

21,925

 

 

5

 

 

0.10

%

 

 

21,817

 

 

65

 

 

1.19

%

Money market savings and passbooks

 

 

20,423

 

 

100

 

 

1.95

%

 

 

16,935

 

 

6

 

 

0.15

%

 

 

18,616

 

 

47

 

 

1.01

%

CDs

 

 

20,546

 

 

139

 

 

2.69

%

 

 

7,482

 

 

8

 

 

0.42

%

 

 

9,607

 

 

30

 

 

1.26

%

Total interest-bearing deposits (3)

 

 

104,305

 

 

428

 

 

1.63

%

 

 

83,238

 

 

20

 

 

0.10

%

 

 

91,444

 

 

169

 

 

0.74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased

 

 

419

 

 

5

 

 

4.00

%

 

 

 

 

 

 

%

 

 

371

 

 

2

 

 

2.31

%

Short-term FHLB advances

 

 

6,131

 

 

54

 

 

3.51

%

 

 

 

 

 

 

%

 

 

7,586

 

 

45

 

 

2.36

%

Long-term FHLB advances

 

 

6,004

 

 

26

 

 

1.79

%

 

 

4,582

 

 

12

 

 

1.06

%

 

 

5,308

 

 

21

 

 

1.49

%

Senior notes

 

 

500

 

 

3

 

 

2.15

%

 

 

998

 

 

6

 

 

2.42

%

 

 

499

 

 

3

 

 

2.15

%

Subordinated notes

 

 

779

 

 

9

 

 

4.68

%

 

 

779

 

 

9

 

 

4.68

%

 

 

779

 

 

9

 

 

4.68

%

Total borrowings

 

 

13,833

 

 

97

 

 

2.79

%

 

 

6,359

 

 

27

 

 

1.72

%

 

 

14,543

 

 

80

 

 

2.16

%

Total interest-bearing liabilities (4)

 

 

118,138

 

 

525

 

 

1.76

%

 

 

89,597

 

 

47

 

 

0.21

%

 

 

105,987

 

 

249

 

 

0.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

 

67,067

 

 

 

 

 

 

71,308

 

 

 

 

 

 

73,851

 

 

 

 

Other noninterest-bearing liabilities

 

 

3,609

 

 

 

 

 

 

3,044

 

 

 

 

 

 

3,685

 

 

 

 

Total noninterest-bearing liabilities

 

 

70,676

 

 

 

 

 

 

74,352

 

 

 

 

 

 

77,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders’ equity

 

 

3,633

 

 

 

 

 

 

3,158

 

 

 

 

 

 

3,633

 

 

 

 

Common shareholders’ equity

 

 

13,657

 

 

 

 

 

 

12,078

 

 

 

 

 

 

13,257

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

206,104

 

 

 

 

 

$

179,185

 

 

 

 

 

$

200,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

1.74

%

 

 

 

 

 

2.58

%

 

 

 

 

 

2.30

%

Net interest income (fully taxable-equivalent basis) and net interest margin (6)

 

 

 

$

1,215

 

 

2.45

%

 

 

 

$

1,159

 

 

2.68

%

 

 

 

$

1,310

 

 

2.71

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of tax-equivalent net interest income to net interest income: (7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent adjustment

 

 

(34

)

 

 

 

 

 

 

(32

)

 

 

 

 

 

 

(34

)

 

 

Business loans tax-equivalent adjustment

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

Net interest income

 

$

1,174

 

 

 

 

 

 

$

1,120

 

 

 

 

 

 

$

1,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and noninterest-bearing)

 

$

171,372

 

$

428

 

 

0.99

%

 

$

154,546

 

$

20

 

 

0.05

%

 

$

165,295

 

$

169

 

 

0.41

%

Total deposits (interest-bearing and noninterest-bearing) and borrowings

 

$

185,205

 

$

525

 

 

1.12

%

 

$

160,905

 

$

47

 

 

0.12

%

 

$

179,838

 

$

249

 

 

0.55

%

 

 

Year Ended December 31,

 

 

2022

 

2021

Average Balances, Yields and Rates

 

Average
Balance

 

Interest
Income/
Expense (1)

 

Yield/
Rates

 

Average
Balance

 

Interest
Income/
Expense (1)

 

Yield/
Rates

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

6,095

 

$

67

 

 

1.10

%

 

$

12,876

 

$

17

 

 

0.13

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency securities

 

 

153

 

 

3

 

 

1.92

%

 

 

98

 

 

2

 

 

1.56

%

Agency residential and commercial MBS

 

 

10,251

 

 

220

 

 

2.14

%

 

 

6,125

 

 

117

 

 

1.91

%

Other residential and commercial MBS

 

 

21

 

 

0

 

 

2.72

%

 

 

29

 

 

1

 

 

2.00

%

Tax-exempt municipal securities

 

 

16,855

 

 

653

 

 

3.87

%

 

 

13,704

 

 

549

 

 

4.01

%

Taxable municipal securities

 

 

1,759

 

 

54

 

 

3.09

%

 

 

1,510

 

 

45

 

 

2.98

%

Other investment securities

 

 

1,434

 

 

41

 

 

2.87

%

 

 

1,157

 

 

32

 

 

2.80

%

Total investment securities

 

 

30,473

 

 

971

 

 

3.19

%

 

 

22,623

 

 

746

 

 

3.30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

92,061

 

 

2,660

 

 

2.89

%

 

 

72,679

 

 

2,048

 

 

2.82

%

Multifamily

 

 

18,453

 

 

656

 

 

3.50

%

 

 

14,735

 

 

539

 

 

3.61

%

Commercial real estate

 

 

9,399

 

 

368

 

 

3.86

%

 

 

8,260

 

 

321

 

 

3.83

%

Multifamily/commercial construction

 

 

2,026

 

 

103

 

 

5.03

%

 

 

2,067

 

 

105

 

 

4.99

%

Business

 

 

18,366

 

 

750

 

 

4.03

%

 

 

16,033

 

 

520

 

 

3.20

%

PPP

 

 

147

 

 

11

 

 

7.65

%

 

 

1,418

 

 

51

 

 

3.58

%

Other

 

 

9,785

 

 

283

 

 

2.85

%

 

 

7,938

 

 

169

 

 

2.10

%

Total loans

 

 

150,237

 

 

4,831

 

 

3.20

%

 

 

123,130

 

 

3,753

 

 

3.03

%

FHLB stock

 

 

260

 

 

13

 

 

5.13

%

 

 

266

 

 

19

 

 

7.14

%

Total interest-earning assets

 

 

187,065

 

 

5,882

 

 

3.13

%

 

 

158,895

 

 

4,535

 

 

2.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

 

455

 

 

 

 

 

 

404

 

 

 

 

Goodwill and other intangibles

 

 

220

 

 

 

 

 

 

225

 

 

 

 

Other assets

 

 

7,895

 

 

 

 

 

 

6,671

 

 

 

 

Total noninterest-earning assets

 

 

8,570

 

 

 

 

 

 

7,300

 

 

 

 

Total Assets

 

$

195,635

 

 

 

 

 

$

166,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$

40,732

 

 

88

 

 

0.21

%

 

$

33,977

 

 

6

 

 

0.02

%

Money market checking

 

 

22,114

 

 

217

 

 

0.98

%

 

 

20,662

 

 

25

 

 

0.12

%

Money market savings and passbooks

 

 

18,668

 

 

165

 

 

0.89

%

 

 

15,308

 

 

25

 

 

0.17

%

CDs

 

 

11,119

 

 

184

 

 

1.66

%

 

 

7,926

 

 

39

 

 

0.49

%

Total interest-bearing deposits (3)

 

 

92,633

 

 

654

 

 

0.71

%

 

 

77,873

 

 

95

 

 

0.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased

 

 

245

 

 

7

 

 

2.74

%

 

 

0

 

 

0

 

 

0.09

%

Short-term FHLB advances

 

 

4,193

 

 

108

 

 

2.58

%

 

 

0

 

 

0

 

 

0.15

%

Long-term FHLB advances

 

 

4,785

 

 

67

 

 

1.39

%

 

 

8,609

 

 

115

 

 

1.34

%

Senior notes

 

 

670

 

 

16

 

 

2.32

%

 

 

997

 

 

24

 

 

2.42

%

Subordinated notes

 

 

779

 

 

36

 

 

4.68

%

 

 

779

 

 

37

 

 

4.68

%

Total borrowings

 

 

10,672

 

 

234

 

 

2.19

%

 

 

10,385

 

 

176

 

 

1.70

%

Total interest-bearing liabilities (4)

 

 

103,305

 

 

888

 

 

0.86

%

 

 

88,258

 

 

271

 

 

0.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

 

72,135

 

 

 

 

 

 

61,325

 

 

 

 

Other noninterest-bearing liabilities

 

 

3,566

 

 

 

 

 

 

2,847

 

 

 

 

Total noninterest-bearing liabilities

 

 

75,701

 

 

 

 

 

 

64,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders' equity

 

 

3,633

 

 

 

 

 

 

2,502

 

 

 

 

Common shareholders' equity

 

 

12,996

 

 

 

 

 

 

11,263

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

195,635

 

 

 

 

 

$

166,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

2.27

%

 

 

 

 

 

2.53

%

Net interest income (fully taxable-equivalent basis) and net interest margin (6)

 

 

 

$

4,994

 

 

2.65

%

 

 

 

$

4,264

 

 

2.67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of tax-equivalent net interest income to net interest income: (7)

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent adjustment

 

 

 

 

(132

)

 

 

 

 

 

 

(122

)

 

 

Business loans tax-equivalent adjustment

 

 

 

 

(28

)

 

 

 

 

 

 

(28

)

 

 

Net interest income

 

 

 

$

4,834

 

 

 

 

 

 

$

4,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and noninterest-bearing)

 

$

164,768

 

$

654

 

 

0.40

%

 

$

139,198

 

$

95

 

 

0.07

%

Total deposits (interest-bearing and noninterest-bearing) and borrowings

 

$

175,440

 

$

888

 

 

0.51

%

 

$

149,583

 

$

271

 

 

0.18

%

__________
Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

(1)

Interest income on tax-exempt securities and loans has been adjusted to the fully taxable-equivalent basis using the statutory federal income tax rate in effect for each respective period presented.

(2)

Yields/rates are annualized.

(3)

Refer to supplemental information in this table for average balances, interest expense and rates for total deposits (interest-bearing and noninterest-bearing).

(4)

Refer to supplemental information in this table for average balances, interest expense and rates for total deposits (interest-bearing and noninterest-bearing) and borrowings.

(5)

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

(6)

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

(7)

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

Selected Financial Data and Ratios

 

Quarter Ended
December 31,

 

Quarter Ended
September 30,

 

Year Ended
December 31,

 

2022

 

2021

 

2022

 

2022

 

2021

($ in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Data and Ratios:

 

 

 

 

 

 

 

 

 

Return on average assets (1), (2)

 

0.74

%

 

 

0.89

%

 

 

0.88

%

 

 

0.85

%

 

 

0.89

%

Return on average common shareholders’ equity (1)

 

10.05

%

 

 

12.08

%

 

 

12.12

%

 

 

11.60

%

 

 

12.24

%

Return on average tangible common shareholders’

equity (1), (3)

 

10.21

%

 

 

12.31

%

 

 

12.33

%

 

 

11.80

%

 

 

12.49

%

Average equity to average assets

 

8.39

%

 

 

8.50

%

 

 

8.43

%

 

 

8.50

%

 

 

8.28

%

Dividends per common share

$

0.27

 

 

$

0.22

 

 

$

0.27

 

 

$

1.03

 

 

$

0.86

 

Dividend payout ratio

 

14.4

%

 

 

10.9

%

 

 

12.2

%

 

 

12.5

%

 

 

11.2

%

Efficiency ratio (4)

 

63.9

%

 

 

63.3

%

 

 

60.3

%

 

 

61.7

%

 

 

62.5

%

 

 

 

 

 

 

 

 

 

 

Selected Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

Net loan charge-offs

$

0.9

 

 

$

0.1

 

 

$

1.0

 

 

$

2.9

 

 

$

2.1

 

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

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

 

 

 

 

 

 

 

 

Selected Ratios (period-end):

 

 

 

 

 

 

 

 

 

Book value per common share

$

75.38

 

 

$

68.34

 

 

$

73.74

 

 

 

 

 

Tangible book value per common share (5)

$

74.19

 

 

$

67.10

 

 

$

72.54

 

 

 

 

 

__________

(1)

For periods less than a year, 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)

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

(5)

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.

Effective Tax Rate

 

Quarter Ended
December 31,

 

Quarter Ended
September 30,

 

Year Ended
December 31,

 

2022

 

2021

 

2022

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate, prior to excess tax benefits—stock awards and other adjustments

 

21.9

%

 

22.0

%

 

23.3

%

 

23.3

%

 

22.3

%

Excess tax benefits—stock awards

 

(0.3

)

 

(1.5

)

 

(0.6

)

 

(0.5

)

 

(2.1

)

Research and development tax credit adjustments

 

(0.7

)

 

(4.4

)

 

 

 

(0.2

)

 

(1.1

)

Tax refund from amended tax returns

 

 

 

 

 

(1.1

)

 

(0.4

)

 

 

 

Effective tax rate

 

20.9

%

 

16.1

%

 

21.6

%

 

22.2

%

 

19.1

%

Provision (Reversal of Provision) for Credit Losses

 

Quarter Ended
December 31,

 

Quarter Ended
September 30,

 

Year Ended
December 31,

 

2022

 

2021

 

2022

 

2022

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities held-to-maturity

 

$

 

$

 

 

$

 

$

2

 

$

2

 

Loans

 

 

25

 

 

26

 

 

 

32

 

 

93

 

 

61

 

Unfunded loan commitments

 

 

5

 

 

(2

)

 

 

4

 

 

12

 

 

(4

)

Total provision

 

$

30

 

$

24

 

 

$

36

 

$

107

 

$

59

 

Loan Originations

 

Quarter Ended
December 31,

 

Quarter Ended
September 30,

 

Year Ended
December 31,

 

2022

 

2021

 

2022

 

2022

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family

 

$

5,894

 

$

7,013

 

$

6,999

 

$

31,907

 

$

29,575

Home equity lines of credit

 

 

499

 

 

617

 

 

708

 

 

2,640

 

 

2,440

Single family construction

 

 

387

 

 

245

 

 

385

 

 

1,579

 

 

968

Multifamily

 

 

1,581

 

 

1,723

 

 

2,658

 

 

8,278

 

 

4,815

Commercial real estate

 

 

879

 

 

597

 

 

1,141

 

 

3,402

 

 

2,094

Multifamily/commercial construction

 

 

445

 

 

190

 

 

410

 

 

1,731

 

 

1,129

Capital call lines of credit

 

 

2,477

 

 

3,690

 

 

3,232

 

 

11,825

 

 

12,871

Tax-exempt

 

 

195

 

 

130

 

 

178

 

 

555

 

 

590

Other business

 

 

1,090

 

 

650

 

 

598

 

 

3,304

 

 

2,729

PPP

 

 

 

 

 

 

 

 

 

 

725

Stock secured

 

 

976

 

 

966

 

 

791

 

 

3,818

 

 

3,205

Other secured

 

 

839

 

 

546

 

 

563

 

 

2,883

 

 

2,130

Unsecured

 

 

360

 

 

517

 

 

333

 

 

1,475

 

 

1,539

Total loans originated

 

$

15,622

 

$

16,884

 

$

17,996

 

$

73,397

 

$

64,810

 

 

As of

Asset Quality Information

 

December 31,
2022

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

109

 

 

$

120

 

 

$

137

 

 

$

140

 

 

$

139

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

109

 

 

$

120

 

 

$

137

 

 

$

140

 

 

$

139

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans to total loans

 

 

0.07

%

 

 

0.08

%

 

 

0.09

%

 

 

0.10

%

 

 

0.10

%

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.05

%

 

 

0.06

%

 

 

0.07

%

 

 

0.08

%

 

 

0.08

%

 

 

 

 

 

 

 

 

 

 

 

Accruing loans 90 days or more past due

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Restructured accruing loans

 

$

12

 

 

$

12

 

 

$

12

 

 

$

12

 

 

$

13

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan credit losses to:

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

0.47

%

 

 

0.48

%

 

 

0.48

%

 

 

0.50

%

 

 

0.51

%

Nonaccrual loans

 

 

720.5

%

 

 

635.3

%

 

 

531.2

%

 

 

498.8

%

 

 

500.5

%

 

 

As of

Loan Servicing Portfolio

 

December 31,
2022

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans serviced for investors

 

$

3,459

 

$

3,632

 

$

3,919

 

$

4,298

 

$

4,677

Return on Average Common Shareholders’

Equity and Return on Average Tangible

Common Shareholders’ Equity (1), (2)

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended
December 31,

 

Quarter Ended
September 30,

 

Year Ended
December 31,

 

2022

 

2021

 

2022

 

2022

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shareholders’ equity (a)

 

$

13,657

 

 

$

12,078

 

 

$

13,257

 

 

$

12,996

 

 

$

11,263

 

Less: Average goodwill and other intangible assets

 

 

(219

)

 

 

(223

)

 

 

(219

)

 

 

(220

)

 

 

(225

)

Average tangible common shareholders’ equity (b)

 

$

13,438

 

 

$

11,855

 

 

$

13,038

 

 

$

12,776

 

 

$

11,038

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders (c)

 

$

346

 

 

$

368

 

 

$

405

 

 

$

1,507

 

 

$

1,379

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common shareholders’ equity (c) / (a)

 

 

10.05

%

 

 

12.08

%

 

 

12.12

%

 

 

11.60

%

 

 

12.24

%

Return on average tangible common shareholders’ equity (c) / (b)

 

 

10.21

%

 

 

12.31

%

 

 

12.33

%

 

 

11.80

%

 

 

12.49

%

__________

(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)

For periods less than a year, ratios are annualized.

Book Value per Common Share and Tangible

Book Value per Common Share (1)

 

As of

 

December 31,
2022

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

(in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

$

17,446

 

 

$

17,119

 

 

$

16,426

 

 

$

16,154

 

 

$

15,898

 

Less: Preferred stock

 

 

(3,633

)

 

 

(3,633

)

 

 

(3,633

)

 

 

(3,633

)

 

 

(3,633

)

Total common shareholders’ equity (a)

 

 

13,813

 

 

 

13,486

 

 

 

12,793

 

 

 

12,521

 

 

 

12,265

 

Less: Goodwill and other intangible assets

 

 

(218

)

 

 

(219

)

 

 

(220

)

 

 

(221

)

 

 

(222

)

Total tangible common shareholders’ equity (b)

 

$

13,595

 

 

$

13,267

 

 

$

12,573

 

 

$

12,300

 

 

$

12,043

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares of common stock outstanding (c)

 

 

183

 

 

 

183

 

 

 

180

 

 

 

180

 

 

 

179

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

75.38

 

 

$

73.74

 

 

$

71.03

 

 

$

69.70

 

 

$

68.34

 

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

 

$

74.19

 

 

$

72.54

 

 

$

69.81

 

 

$

68.47

 

 

$

67.10

 

__________

(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.

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

 

As of

 

December 31,

2022 (3)

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

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

 

 

8.51

%

 

 

8.59

%

 

 

8.59

%

 

 

8.70

%

 

 

8.76

%

Common Equity Tier 1 capital to risk-weighted assets

 

 

8.99

%

 

 

9.28

%

 

 

9.15

%

 

 

9.48

%

 

 

9.65

%

Tier 1 capital to risk-weighted assets

 

 

11.34

%

 

 

11.76

%

 

 

11.75

%

 

 

12.25

%

 

 

12.56

%

Total capital to risk-weighted assets

 

 

12.35

%

 

 

12.81

%

 

 

12.82

%

 

 

13.37

%

 

 

13.72

%

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital:

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 capital

 

$

13,920

 

 

$

13,586

 

 

$

12,791

 

 

$

12,418

 

 

$

12,045

 

Tier 1 capital

 

$

17,553

 

 

$

17,219

 

 

$

16,424

 

 

$

16,051

 

 

$

15,678

 

Total capital

 

$

19,118

 

 

$

18,755

 

 

$

17,924

 

 

$

17,521

 

 

$

17,124

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

Average assets

 

$

206,371

 

 

$

200,486

 

 

$

191,202

 

 

$

184,410

 

 

$

178,969

 

Risk-weighted assets

 

$

154,789

 

 

$

146,444

 

 

$

139,811

 

 

$

131,024

 

 

$

124,820

__________

(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 December 31, 2022 are preliminary.

 

As of

Wealth Management Assets

 

December 31,
2022

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Republic Investment Management

 

$

112,176

 

$

100,125

 

$

100,204

 

$

108,771

 

$

109,130

 

 

 

 

 

 

 

 

 

 

 

Brokerage and investment:

 

 

 

 

 

 

 

 

 

 

Brokerage

 

 

130,844

 

 

119,299

 

 

116,979

 

 

128,129

 

 

128,258

Money market mutual funds

 

 

8,100

 

 

10,891

 

 

10,510

 

 

18,543

 

 

23,673

Total brokerage and investment

 

 

138,944

 

 

130,190

 

 

127,489

 

 

146,672

 

 

151,931

 

 

 

 

 

 

 

 

 

 

 

Trust Company:

 

 

 

 

 

 

 

 

 

 

Trust

 

 

16,318

 

 

15,270

 

 

14,994

 

 

14,344

 

 

13,695

Custody

 

 

3,806

 

 

3,943

 

 

4,099

 

 

4,408

 

 

4,687

Total Trust Company

 

 

20,124

 

 

19,213

 

 

19,093

 

 

18,752

 

 

18,382

Total Wealth Management Assets

 

$

271,244

 

$

249,528

 

$

246,786

 

$

274,195

 

$

279,443

 

Investors:
Andrew Greenebaum / Kimberly Esterkin
Addo Investor Relations
agreenebaum@addo.com
kesterkin@addo.com
(310) 829-5400

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

Source: First Republic Bank