FRC
$144.90
First Republic Bank
$.79
.55%
Earnings Details
1st Quarter March 2022
Wednesday, April 13, 2022 7:00:00 AM
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Summary

First Republic Bank (FRC) Recent Earnings

First Republic Bank (FRC) reported 1st Quarter March 2022 earnings of $2.00 per share on revenue of $1.4 billion. The consensus earnings estimate was $1.90 per share on revenue of $1.4 billion. Revenue grew 18.2% 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
$2.00
Earnings Whisper
-
Consensus Estimate
$1.90
Reported Revenue
$1.44 Bil
Revenue Estimate
$1.40 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

First Republic Reports First Quarter 2022 Results

Revenues Increased 23% Year-Over-Year

Tangible Book Value Per Share Rose 14% Year-Over-Year

Dividend Raised for 11th Consecutive Year

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

“The entire business continued to perform very well in the first quarter,” said Mike Roffler, Chief Executive Officer and President. “Loan originations were our best ever, client satisfaction reached an all-time high, and we successfully completed our core system conversion. It was a terrific quarter.”

Quarterly Highlights

Financial Results

– Year-over-year:

– Revenues were $1.4 billion, up 23.0%.

– Net interest income was $1.1 billion, up 22.0%.

– Net income was $401 million, up 19.9%.

– Diluted earnings per share of $2.00, up 11.7%.

– Tangible book value per share was $68.47, up 14.2%.

– Loan originations totaled $17.8 billion, our best quarter ever.

– Net interest margin was 2.68%, consistent with the prior quarter.

– Efficiency ratio was 62.0%, compared to 63.5% for the first quarter of 2021.

– Increased quarterly dividend to $0.27 per share.

Continued Capital and Credit Strength

– Tier 1 leverage ratio was 8.70%.

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

– Credit quality remained strong, with net recoveries of $0.3 million for the quarter.

Continued Business Growth

– Year-over-year:

– Loans totaled $141.3 billion, up 19.7%.

– Deposits were $162.1 billion, up 26.7%.

– Wealth management assets were $274.2 billion, up 25.2%.

– Wealth management revenues were $221 million, up 38.7%.

“Loans and deposits grew nicely during the first quarter, while credit quality, liquidity and capital all remained very strong,” said Olga Tsokova, Chief Financial Officer (Acting) and Chief Accounting Officer. “Total revenues rose 23% and tangible book value per share was up 14% compared to a year ago. We’re also pleased to have increased our dividend for the 11th consecutive year.”

Quarterly Cash Dividend of $0.27 per Share

The Bank announced an increase of $0.05 in its quarterly cash dividend to $0.27 per share of common stock, our 11th consecutive year of dividend increases. The first quarter dividend is payable on May 12, 2022 to shareholders of record as of April 28, 2022.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were at a low 8 basis points of total assets at March 31, 2022. The Bank had net loan recoveries of $0.3 million for the quarter.

During the first quarter, the Bank recorded a provision for credit losses of $10 million, which was primarily driven by loan growth.

Continued Book Value Growth

Book value per common share at March 31, 2022 was $69.70, up 13.8% from a year ago. Tangible book value per common share at March 31, 2022 was $68.47, up 14.2% from a year ago.

Capital Strength

The Bank’s Tier 1 leverage ratio was 8.70% at March 31, 2022, compared to 8.76% at December 31, 2021.

Since the beginning of 2021, the Bank has raised $2.8 billion in net additional Tier 1 capital to support our growth.

Continued Business Growth

Loan Originations

Loan originations were $17.8 billion for the quarter, our best quarter ever. This was up 13.3% from the same quarter a year ago, primarily due to increases in single family and multifamily lending.

Single family loan originations were 47% of the total loan origination volume for the quarter and had a weighted average loan-to-value ratio of 58%. In addition, multifamily and commercial real estate loans originated were 13% of total originations, and had a weighted average loan-to-value ratio of 53%.

Loans totaled $141.3 billion at March 31, 2022, up 19.7% compared to a year ago. Our loan growth was primarily due to increases in single family, multifamily, stock secured loans and capital call lines of credit, partially offset by a decrease in loans under the Small Business Administration’s Paycheck Protection Program (“PPP”).

Deposit Growth

Total deposits increased to $162.1 billion, up 26.7% compared to a year ago, and had an average rate paid of 5 basis points during the quarter.

At March 31, 2022, checking deposit balances were 70.4% of total deposits.

Investments

Total investment securities at March 31, 2022 were $30.3 billion, a 17.9% increase compared to year-end and a 39.7% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $29.9 billion at March 31, 2022, and represented 16.2% of quarterly average total assets.

Wealth Management

Total wealth management assets were $274.2 billion at March 31, 2022, down slightly compared to the prior quarter but up 25.2% compared to a year ago. The modest decline in wealth management assets for the quarter was due to market depreciation, significantly offset by net client inflow. The increase in wealth management assets for the year was due to net client inflow and market appreciation.

Wealth management revenues totaled $221 million for the quarter, up 38.7% compared to the first quarter a year ago. Such revenues represented 15.9% of the Bank’s total revenues for the quarter.

Wealth management assets at March 31, 2022 included investment management assets of $108.8 billion, brokerage assets and money market mutual funds of $146.7 billion, and trust and custody assets of $18.8 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.4 billion for the quarter, up 23.0% compared to the first quarter a year ago.

Net Interest Income Growth

Net interest income was $1.1 billion for the quarter, up 22.0% compared to the first 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 was 2.68% in the first quarter, consistent with the prior quarter.

Noninterest Income

Noninterest income was $251 million for the quarter, up 28.0% compared to the first quarter a year ago. The increase was primarily driven by higher wealth management fees.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $866 million for the quarter, up 20.2% compared to the first quarter a year ago, 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 62.0% for the quarter, compared to 63.5% for the first quarter a year ago.

Income Taxes

The Bank’s effective tax rate for the first quarter of 2022 was 22.9%, compared to 21.9% for the first quarter a year ago.

Conference Call Details

First Republic Bank’s first quarter 2022 earnings conference call is scheduled for April 13, 2022 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (888) 256-1007 and provide confirmation code 2134053 approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (856) 344-9299 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 call will be available beginning April 13, 2022 at 11:00 a.m. PT / 2:00 p.m. ET through April 20, 2022 at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 2134053#. International callers should dial +1 (719) 457-0820 and enter the same confirmation code. A replay of the webcast will also 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; 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; 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: 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; 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; 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.

Explanatory Note

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

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Quarter Ended

March 31,

 

Quarter Ended

December 31,

(in millions, except per share amounts)

 

2022

 

2021

 

 

2021

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

Loans

 

$ 1,002

 

$ 873

 

 

$ 992

 

Investments

 

180

 

141

 

 

165

 

Other

 

2

 

5

 

 

4

 

Cash and cash equivalents

 

5

 

3

 

 

6

 

Total interest income

 

1,189

 

1,022

 

 

1,167

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

Deposits

 

20

 

28

 

 

20

 

Borrowings

 

24

 

55

 

 

27

 

Total interest expense

 

44

 

83

 

 

47

 

 

 

 

 

 

 

 

Net interest income

 

1,145

 

939

 

 

1,120

 

Provision (reversal of provision) for credit losses

 

10

 

(15

)

 

24

 

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

 

1,135

 

954

 

 

1,096

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

Investment management fees

 

165

 

119

 

 

150

 

Brokerage and investment fees

 

22

 

15

 

 

19

 

Insurance fees

 

4

 

3

 

 

7

 

Trust fees

 

7

 

6

 

 

7

 

Foreign exchange fee income

 

23

 

17

 

 

24

 

Deposit fees

 

6

 

6

 

 

7

 

Loan and related fees

 

9

 

7

 

 

9

 

Income from investments in life insurance

 

14

 

17

 

 

27

 

Other income, net

 

1

 

6

 

 

(3

)

Total noninterest income

 

251

 

196

 

 

247

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

Salaries and employee benefits

 

560

 

463

 

 

544

 

Information systems

 

107

 

84

 

 

99

 

Occupancy

 

69

 

58

 

 

66

 

Professional fees

 

23

 

21

 

 

27

 

Advertising and marketing

 

13

 

13

 

 

21

 

FDIC assessments

 

15

 

12

 

 

13

 

Other expenses

 

79

 

70

 

 

96

 

Total noninterest expense

 

866

 

721

 

 

866

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

520

 

429

 

 

477

 

Provision for income taxes

 

119

 

94

 

 

77

 

Net income

 

401

 

335

 

 

400

 

Dividends on preferred stock

 

37

 

19

 

 

32

 

Net income available to common shareholders

 

$ 364

 

$ 316

 

 

$ 368

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$ 2.03

 

$ 1.81

 

 

$ 2.05

 

Diluted earnings per common share

 

$ 2.00

 

$ 1.79

 

 

$ 2.02

 

 

 

 

 

 

 

 

Weighted average shares—basic

 

180

 

175

 

 

179

 

Weighted average shares—diluted

 

182

 

177

 

 

182

 

CONSOLIDATED BALANCE SHEETS

 

 

 

As of

($ in millions)

 

March 31,
2022

 

December 31,
2021

 

March 31,
2021

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$ 7,756

 

 

$ 12,947

 

 

$ 8,889

 

Debt securities available-for-sale

 

3,446

 

 

3,381

 

 

2,429

 

Debt securities held-to-maturity, net

 

26,831

 

 

22,292

 

 

19,232

 

Equity securities (fair value)

 

25

 

 

28

 

 

21

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

Single family

 

81,833

 

 

76,793

 

 

65,179

 

Home equity lines of credit

 

2,597

 

 

2,584

 

 

2,392

 

Single family construction

 

1,041

 

 

993

 

 

842

 

Multifamily

 

16,953

 

 

15,966

 

 

14,141

 

Commercial real estate

 

8,753

 

 

8,531

 

 

8,065

 

Multifamily/commercial construction

 

1,955

 

 

1,927

 

 

2,101

 

Capital call lines of credit

 

10,970

 

 

10,999

 

 

8,654

 

Tax-exempt

 

3,656

 

 

3,680

 

 

3,455

 

Other business

 

4,081

 

 

3,961

 

 

3,679

 

PPP

 

232

 

 

545

 

 

2,142

 

Stock secured

 

3,651

 

 

3,435

 

 

2,520

 

Other secured

 

2,623

 

 

2,457

 

 

1,863

 

Unsecured

 

2,968

 

 

3,085

 

 

3,051

 

Total loans

 

141,313

 

 

134,956

 

 

118,084

 

Allowance for credit losses

 

(701

)

 

(694

)

 

(621

)

Loans, net

 

140,612

 

 

134,262

 

 

117,463

 

 

 

 

 

 

 

 

Investments in life insurance

 

2,682

 

 

2,650

 

 

2,329

 

Tax credit investments

 

1,231

 

 

1,220

 

 

1,127

 

Premises, equipment and leasehold improvements, net

 

467

 

 

454

 

 

412

 

Goodwill and other intangible assets

 

221

 

 

222

 

 

226

 

Other assets

 

3,850

 

 

3,631

 

 

3,670

 

Total Assets

 

$ 187,121

 

 

$ 181,087

 

 

$ 155,798

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing checking

 

$ 72,424

 

 

$ 70,840

 

 

$ 53,807

 

Interest-bearing checking

 

41,589

 

 

41,248

 

 

32,543

 

Money market checking

 

21,846

 

 

20,303

 

 

19,210

 

Money market savings and passbooks

 

19,159

 

 

16,573

 

 

14,097

 

Certificates of deposit

 

7,042

 

 

7,357

 

 

8,250

 

Total Deposits

 

162,060

 

 

156,321

 

 

127,907

 

 

 

 

 

 

 

 

Long-term FHLB advances

 

3,700

 

 

3,700

 

 

10,505

 

Senior notes

 

999

 

 

998

 

 

997

 

Subordinated notes

 

779

 

 

779

 

 

778

 

Other liabilities

 

3,429

 

 

3,391

 

 

2,669

 

Total Liabilities

 

170,967

 

 

165,189

 

 

142,856

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

Preferred stock

 

3,633

 

 

3,633

 

 

2,143

 

Common stock

 

2

 

 

2

 

 

2

 

Additional paid-in capital

 

5,763

 

 

5,725

 

 

5,191

 

Retained earnings

 

6,893

 

 

6,569

 

 

5,627

 

Accumulated other comprehensive loss

 

(137

)

 

(31

)

 

(21

)

Total Shareholders’ Equity

 

16,154

 

 

15,898

 

 

12,942

 

Total Liabilities and Shareholders’ Equity

 

$ 187,121

 

 

$ 181,087

 

 

$ 155,798

 

 

 

Quarter Ended March 31,

 

Quarter Ended December 31,

 

 

2022

 

2021

 

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 millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$ 11,342

 

$ 5

 

 

0.18

%

 

$ 11,449

 

$ 3

 

 

0.10

%

 

$ 15,342

 

$ 6

 

 

0.15

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency

securities

 

117

 

0

 

 

1.37

%

 

94

 

0

 

 

1.45

%

 

100

 

0

 

 

1.59

%

Agency residential and commercial MBS

 

9,142

 

39

 

 

1.70

%

 

5,626

 

31

 

 

2.17

%

 

7,011

 

29

 

 

1.65

%

Other residential and commercial MBS

 

24

 

0

 

 

2.04

%

 

33

 

0

 

 

1.87

%

 

25

 

0

 

 

1.82

%

Tax-exempt municipal securities

 

15,595

 

151

 

 

3.87

%

 

12,270

 

127

 

 

4.14

%

 

14,869

 

146

 

 

3.93

%

Taxable municipal securities

 

1,715

 

13

 

 

2.97

%

 

1,079

 

8

 

 

2.95

%

 

1,670

 

12

 

 

2.99

%

Other investment securities

 

1,416

 

10

 

 

2.85

%

 

429

 

3

 

 

2.39

%

 

1,405

 

10

 

 

2.86

%

Total investment securities

 

28,009

 

213

 

 

3.04

%

 

19,531

 

169

 

 

3.45

%

 

25,080

 

197

 

 

3.15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

82,416

 

567

 

 

2.75

%

 

65,459

 

469

 

 

2.87

%

 

78,436

 

545

 

 

2.78

%

Multifamily

 

16,281

 

140

 

 

3.45

%

 

13,922

 

123

 

 

3.53

%

 

15,479

 

154

 

 

3.90

%

Commercial real estate

 

8,633

 

82

 

 

3.77

%

 

8,033

 

78

 

 

3.88

%

 

8,525

 

83

 

 

3.82

%

Multifamily/commercial construction

 

1,929

 

22

 

 

4.62

%

 

2,867

 

31

 

 

4.34

%

 

2,044

 

24

 

 

4.70

%

Business

 

18,590

 

145

 

 

3.12

%

 

15,076

 

124

 

 

3.28

%

 

17,210

 

139

 

 

3.15

%

PPP

 

381

 

7

 

 

7.59

%

 

1,990

 

16

 

 

3.17

%

 

732

 

9

 

 

4.65

%

Other

 

9,058

 

47

 

 

2.06

%

 

7,348

 

39

 

 

2.16

%

 

8,578

 

45

 

 

2.03

%

Total loans

 

137,288

 

1,010

 

 

2.94

%

 

114,695

 

880

 

 

3.07

%

 

131,004

 

999

 

 

3.02

%

FHLB stock

 

115

 

2

 

 

7.60

%

 

345

 

5

 

 

6.10

%

 

143

 

4

 

 

11.17

%

Total interest-earning assets

 

176,754

 

1,230

 

 

2.78

%

 

146,020

 

1,057

 

 

2.90

%

 

171,569

 

1,206

 

 

2.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

449

 

 

 

 

 

414

 

 

 

 

 

426

 

 

 

 

Goodwill and other intangibles

 

221

 

 

 

 

 

227

 

 

 

 

 

223

 

 

 

 

Other assets

 

7,142

 

 

 

 

 

6,091

 

 

 

 

 

6,967

 

 

 

 

Total noninterest-earning assets

 

7,812

 

 

 

 

 

6,732

 

 

 

 

 

7,616

 

 

 

 

Total Assets

 

$ 184,566

 

 

 

 

 

$ 152,752

 

 

 

 

 

$ 179,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$ 40,400

 

1

 

 

0.01

%

 

$ 31,991

 

2

 

 

0.03

%

 

$ 36,896

 

1

 

 

0.01

%

Money market checking

 

21,659

 

5

 

 

0.09

%

 

18,889

 

8

 

 

0.16

%

 

21,925

 

5

 

 

0.10

%

Money market savings and passbooks

 

17,925

 

7

 

 

0.15

%

 

13,640

 

6

 

 

0.19

%

 

16,935

 

6

 

 

0.15

%

CDs

 

7,217

 

7

 

 

0.40

%

 

8,413

 

12

 

 

0.56

%

 

7,482

 

8

 

 

0.42

%

Total interest-bearing deposits (3)

 

87,201

 

20

 

 

0.09

%

 

72,933

 

28

 

 

0.15

%

 

83,238

 

20

 

 

0.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

 

 

%

 

0

 

0

 

 

0.18

%

 

 

 

 

%

Long-term FHLB advances

 

3,700

 

9

 

 

0.95

%

 

11,322

 

40

 

 

1.45

%

 

4,582

 

12

 

 

1.06

%

Senior notes

 

998

 

6

 

 

2.42

%

 

996

 

6

 

 

2.42

%

 

998

 

6

 

 

2.42

%

Subordinated notes

 

779

 

9

 

 

4.68

%

 

778

 

9

 

 

4.68

%

 

779

 

9

 

 

4.68

%

Total borrowings

 

5,477

 

24

 

 

1.75

%

 

13,096

 

55

 

 

1.72

%

 

6,359

 

27

 

 

1.72

%

Total interest-bearing liabilities (4)

 

92,678

 

44

 

 

0.19

%

 

86,029

 

83

 

 

0.39

%

 

89,597

 

47

 

 

0.21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

72,251

 

 

 

 

 

51,689

 

 

 

 

 

71,308

 

 

 

 

Other noninterest-bearing liabilities

 

3,613

 

 

 

 

 

2,638

 

 

 

 

 

3,044

 

 

 

 

Total noninterest-bearing liabilities

 

75,864

 

 

 

 

 

54,327

 

 

 

 

 

74,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders’ equity

 

3,633

 

 

 

 

 

1,964

 

 

 

 

 

3,158

 

 

 

 

Common shareholders’ equity

 

12,391

 

 

 

 

 

10,432

 

 

 

 

 

12,078

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$ 184,566

 

 

 

 

 

$ 152,752

 

 

 

 

 

$ 179,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

2.59

%

 

 

 

 

 

2.50

%

 

 

 

 

 

2.58

%

Net interest income (fully taxable-equivalent

basis) and net interest margin (6)

 

 

 

$ 1,186

 

 

2.68

%

 

 

 

$ 974

 

 

2.67

%

 

 

 

$ 1,159

 

 

2.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent

adjustment

 

 

 

(34

)

 

 

 

 

 

(28

)

 

 

 

 

 

(32

)

 

 

Business loans tax-equivalent adjustment

 

 

 

(7

)

 

 

 

 

 

(7

)

 

 

 

 

 

(7

)

 

 

Net interest income

 

 

 

$ 1,145

 

 

 

 

 

 

$ 939

 

 

 

 

 

 

$ 1,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and

noninterest-bearing)

 

$ 159,452

 

$ 20

 

 

0.05

%

 

$ 124,622

 

$ 28

 

 

0.09

%

 

$ 154,546

 

$ 20

 

 

0.05

%

Total deposits (interest-bearing and

noninterest-bearing) and borrowings

 

$ 164,929

 

$ 44

 

 

0.11

%

 

$ 137,718

 

$ 83

 

 

0.24

%

 

$ 160,905

 

$ 47

 

 

0.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

__________

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

March 31,

 

Quarter Ended

December 31,

 

2022

 

 

2021

 

 

2021

($ in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Data and Ratios:

 

 

 

 

 

 

Return on average assets (1), (2)

 

0.88

%

 

0.89

%

 

0.89

%

Return on average common shareholders’ equity (1)

 

11.91

%

 

12.30

%

 

12.08

%

Return on average tangible common shareholders’ equity (1), (3)

 

12.12

%

 

12.57

%

 

12.31

%

Average equity to average assets

 

8.68

%

 

8.12

%

 

8.50

%

Dividends per common share

 

$ 0.22

 

 

$ 0.20

 

 

$ 0.22

 

Dividend payout ratio

 

11.0

%

 

11.2

%

 

10.9

%

Efficiency ratio (4)

 

62.0

%

 

63.5

%

 

63.3

%

 

 

 

 

 

 

 

Selected Asset Quality Ratios:

 

 

 

 

 

 

Net loan charge-offs (recoveries)

 

$ (0.3

)

 

$ 0.5

 

 

$ 0.1

 

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

 

(0.00

)%

 

0.00

%

 

0.00

%

 

 

 

 

 

 

 

Selected Ratios (period-end):

 

 

 

 

 

 

Book value per common share

 

$ 69.70

 

 

$ 61.26

 

 

$ 68.34

 

Tangible book value per common share (5)

 

$ 68.47

 

 

$ 59.98

 

 

$ 67.10

 

__________

 

 

 

 

 

 

(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) 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

March 31,

 

Quarter Ended

December 31,

 

2022

 

2021

 

2021

 

 

 

 

 

 

 

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

development tax credits from amended tax returns

 

23.4

%

 

22.6

%

 

22.0

%

Excess tax benefits—stock awards

 

(0.5

)

 

(0.7

)

 

(1.5

)

Research and development tax credits from amended tax returns

 

 

 

 

 

(4.4

)

Effective tax rate

 

22.9

%

 

21.9

%

 

16.1

%

 

 

 

 

 

 

 

Provision (Reversal of Provision) for Credit Losses

 

Quarter Ended

March 31,

 

Quarter Ended

December 31,

 

2022

 

2021

 

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities held-to-maturity

 

$ 1

 

$ 1

 

 

$ —

 

Loans

 

7

 

(14

)

 

26

 

Unfunded loan commitments

 

2

 

(2

)

 

(2

)

Total provision (reversal of provision)

 

$ 10

 

$ (15

)

 

$ 24

 

Loan Originations

 

Quarter Ended

March 31,

 

Quarter Ended

December 31,

 

2022

 

2021

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family

 

$ 8,376

 

$ 6,902

 

$ 7,013

Home equity lines of credit

 

689

 

624

 

617

Single family construction

 

267

 

225

 

245

Multifamily

 

1,709

 

791

 

1,723

Commercial real estate

 

566

 

314

 

597

Multifamily/commercial construction

 

384

 

311

 

190

Capital call lines of credit

 

3,020

 

3,131

 

3,690

Tax-exempt

 

90

 

214

 

130

Other business

 

538

 

1,025

 

650

PPP

 

 

689

 

Stock secured

 

1,136

 

710

 

966

Other secured

 

666

 

439

 

546

Unsecured

 

369

 

346

 

517

Total loans originated

 

$ 17,810

 

$ 15,721

 

$ 16,884

 

 

As of

Asset Quality Information

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$ 140

 

 

$ 139

 

 

$ 127

 

 

$ 133

 

 

$ 173

 

Other real estate owned

 

 

 

 

 

 

 

 

 

1

 

Total nonperforming assets

 

$ 140

 

 

$ 139

 

 

$ 127

 

 

$ 133

 

 

$ 174

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans to total loans

 

0.10

%

 

0.10

%

 

0.10

%

 

0.11

%

 

0.15

%

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

0.08

%

 

0.08

%

 

0.07

%

 

0.08

%

 

0.11

%

 

 

 

 

 

 

 

 

 

 

 

Accruing loans 90 days or more past due

 

$ —

 

 

$ —

 

 

$ —

 

 

$ —

 

 

$ 1

 

 

 

 

 

 

 

 

 

 

 

 

Restructured accruing loans

 

$ 12

 

 

$ 13

 

 

$ 10

 

 

$ 11

 

 

$ 12

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan credit losses to:

 

 

 

 

 

 

 

 

 

 

Total loans

 

0.50

%

 

0.51

%

 

0.52

%

 

0.52

%

 

0.53

%

Nonaccrual loans

 

498.8

%

 

500.5

%

 

524.4

%

 

479.3

%

 

359.3

%

 

 

As of

Loan Servicing Portfolio

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans serviced for investors

 

$ 4,298

 

$ 4,677

 

$ 5,117

 

$ 5,640

 

$ 6,314

Return on Average Common Shareholders’ Equity and Return on

Average Tangible Common Shareholders’ Equity (1), (2)

 

Quarter Ended

March 31,

 

Quarter Ended

December 31,

 

2022

 

2021

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shareholders’ equity (a)

 

$ 12,391

 

 

$ 10,432

 

 

$ 12,078

 

Less: Average goodwill and other intangible assets

 

(221

)

 

(227

)

 

(223

)

Average tangible common shareholders’ equity (b)

 

$ 12,170

 

 

$ 10,205

 

 

$ 11,855

 

 

 

 

 

 

 

 

Net income available to common shareholders (c)

 

$ 364

 

 

$ 316

 

 

$ 368

 

 

 

 

 

 

 

 

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

 

11.91

%

 

12.30

%

 

12.08

%

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

 

12.12

%

 

12.57

%

 

12.31

%

__________

 

 

 

 

 

 

(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.

Book Value per Common Share and Tangible

Book Value per Common Share (1)

 

As of

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

(in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

$ 16,154

 

 

$ 15,898

 

 

$ 14,802

 

 

$ 13,275

 

 

$ 12,942

 

Less: Preferred stock

 

(3,633

)

 

(3,633

)

 

(2,893

)

 

(2,143

)

 

(2,143

)

Total common shareholders’ equity (a)

 

12,521

 

 

12,265

 

 

11,909

 

 

11,132

 

 

10,799

 

Less: Goodwill and other intangible assets

 

(221

)

 

(222

)

 

(223

)

 

(224

)

 

(226

)

Total tangible common shareholders’ equity (b)

 

$ 12,300

 

 

$ 12,043

 

 

$ 11,686

 

 

$ 10,908

 

 

$ 10,573

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares of common stock outstanding (c)

 

180

 

 

179

 

 

179

 

 

177

 

 

176

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$ 69.70

 

 

$ 68.34

 

 

$ 66.44

 

 

$ 62.99

 

 

$ 61.26

 

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

 

$ 68.47

 

 

$ 67.10

 

 

$ 65.19

 

 

$ 61.72

 

 

$ 59.98

 

__________

 

 

 

 

 

 

 

 

 

 

(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

 

March 31,

2022 (3)

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

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

 

8.70 %

 

8.76 %

 

8.55 %

 

8.05 %

 

8.32 %

Common Equity Tier 1 capital to risk-weighted assets

 

9.48 %

 

9.65 %

 

9.81 %

 

9.51 %

 

9.64 %

Tier 1 capital to risk-weighted assets

 

12.25 %

 

12.56 %

 

12.25 %

 

11.38 %

 

11.60 %

Total capital to risk-weighted assets

 

13.37 %

 

13.72 %

 

13.45 %

 

12.60 %

 

12.87 %

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital:

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 capital

 

$ 12,418

 

$ 12,045

 

$ 11,674

 

$ 10,875

 

$ 10,549

Tier 1 capital

 

$ 16,051

 

$ 15,678

 

$ 14,566

 

$ 13,018

 

$ 12,691

Total capital

 

$ 17,521

 

$ 17,124

 

$ 15,994

 

$ 14,421

 

$ 14,082

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

Average assets

 

$ 184,410

 

$ 178,969

 

$ 170,373

 

$ 161,637

 

$ 152,465

Risk-weighted assets

 

$ 131,020

 

$ 124,820

 

$ 118,941

 

$ 114,406

 

$ 109,413

__________

 

 

 

 

 

 

 

 

 

 

(1) As defined by regulatory capital rules.

(2) Beginning in 2020, ratios and amounts reflect the Bank's election to delay the estimated impact of the Current Expected Credit Losses (“CECL”)

allowance methodology on its regulatory capital, average assets and risk-weighted assets over a five-year transition period ending December 31,

2024.

(3) Ratios and amounts as of March 31, 2022 are preliminary.

 

 

As of

Wealth Management Assets

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Republic Investment Management

 

$ 108,771

 

$ 109,130

 

$ 101,105

 

$ 99,459

 

$ 90,819

 

 

 

 

 

 

 

 

 

 

 

Brokerage and investment:

 

 

 

 

 

 

 

 

 

 

Brokerage

 

128,129

 

128,258

 

115,793

 

112,359

 

101,478

Money market mutual funds

 

18,543

 

23,673

 

18,074

 

13,109

 

11,435

Total brokerage and investment

 

146,672

 

151,931

 

133,867

 

125,468

 

112,913

 

 

 

 

 

 

 

 

 

 

 

Trust Company:

 

 

 

 

 

 

 

 

 

 

Trust

 

14,344

 

13,695

 

12,220

 

11,496

 

10,986

Custody

 

4,408

 

4,687

 

4,533

 

4,439

 

4,216

Total Trust Company

 

18,752

 

18,382

 

16,753

 

15,935

 

15,202

Total Wealth Management Assets

 

$ 274,195

 

$ 279,443

 

$ 251,725

 

$ 240,862

 

$ 218,934

 

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

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

Source: First Republic Bank