FRC
$135.19
First Republic Bank
$.38
.28%
Earnings Details
2nd Quarter June 2022
Thursday, July 14, 2022 7:00:00 AM
Tweet Share Watch
Summary

First Republic Bank Misses

First Republic Bank (FRC) reported 2nd Quarter June 2022 earnings of $2.16 per share on revenue of $1.6 billion. The consensus earnings estimate was $2.05 per share on revenue of $1.5 billion. The Earnings Whisper number was $2.17 per share. Revenue grew 21.0% 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
$2.16
Earnings Whisper
$2.17
Consensus Estimate
$2.05
Reported Revenue
$1.58 Bil
Revenue Estimate
$1.47 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

First Republic Reports Second Quarter 2022 Results

Year-Over-Year Revenues Increased 23% and Earnings Per Share Increased 11%

Tangible Book Value Per Share Increased 13% Year-Over-Year

SAN FRANCISCO--(BUSINESS WIRE)--First Republic Bank (NYSE: FRC) today announced financial results for the quarter ended June 30, 2022.

“First Republic had an excellent quarter, reflecting the consistency of our client-focused model and culture,” said Mike Roffler, Chief Executive Officer and President. “Loan growth was very strong, and credit quality remains excellent.”

Quarterly Highlights

Financial Results

– Year-over-year:

– Revenues were $1.5 billion, up 22.6%.

– Net interest income was $1.2 billion, up 24.1%.

– Net income was $433 million, up 16.0%.

– Diluted earnings per share of $2.16, up 10.8%.

– Tangible book value per share was $69.81, up 13.1%.

– Loan originations totaled $22.0 billion, our best quarter ever.

– Net interest margin was 2.80%, compared to 2.68% for the prior quarter.

– Efficiency ratio was 60.5%, compared to 62.0% for the prior quarter.

Continued Capital and Credit Strength

– Tier 1 leverage ratio was 8.59%.

– Nonperforming assets remained at a low 7 basis points of total assets.

– Net charge-offs were only $1.3 million, or less than 1 basis point of average loans.

Continued Franchise Growth

– Year-over-year:

– Loans totaled $151.5 billion, up 23.1%.

– Deposits were $165.6 billion, up 23.0%.

– Wealth management assets were $246.8 billion, up 2.5%.

– Wealth management revenues were $232 million, up 26.4%.

“We are pleased to see growth in total revenue of 23% and net interest income of 24% during the second quarter,” said Olga Tsokova, Chief Financial Officer (Acting) and Chief Accounting Officer. “Tangible book value per share increased 13% year-over-year, to just under $70, and our capital remains strong.”

Quarterly Cash Dividend of $0.27 per Share

The Bank declared a cash dividend for the second quarter of $0.27 per share of common stock, which is payable on August 11, 2022 to shareholders of record as of July 28, 2022.

Strong Asset Quality

Credit quality remains very strong. Nonperforming assets were at a very low 7 basis points of total assets at June 30, 2022. The Bank had modest net loan charge-offs of only $1.3 million for the quarter.

During the second quarter, the Bank recorded a provision for credit losses of $31 million, which was primarily driven by loan growth.

Continued Book Value Growth

Book value per common share at June 30, 2022 was $71.03, up 12.8% from a year ago. Tangible book value per common share at June 30, 2022 was $69.81, up 13.1% from a year ago.

Capital Strength

The Bank’s Tier 1 leverage ratio was 8.59% at June 30, 2022, compared to 8.70% at March 31, 2022.

Continued Franchise Growth

Loan Originations

Loan originations were $22.0 billion for the quarter, our best quarter ever. This was up 31.1% from the same quarter a year ago, primarily due to increases in single family and multifamily lending.

Single family loan originations were 48% of the total loan origination volume for the quarter and had a weighted average loan-to-value ratio of 61%. In addition, multifamily and commercial real estate loans originated were 14% of total originations and had a weighted average loan-to-value ratio of 52%.

Loans totaled $151.5 billion at June 30, 2022, up 23.1% compared to a year ago. Our loan growth was primarily due to increases in single family, multifamily, stock secured and capital call lines of credit, partially offset by a decrease in loans under the Small Business Administration’s Paycheck Protection Program (“PPP”).

Investments

Total investment securities at June 30, 2022 were $31.2 billion, a 2.9% increase compared to the prior quarter and a 36.1% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $28.2 billion at June 30, 2022, and represented 14.7% of quarterly average total assets.

Deposit Growth and Funding

Total deposits increased to $165.6 billion, up 23.0% compared to a year ago. Deposits were our primary source of funding at June 30, 2022, and represented 93% of our funding base.

At June 30, 2022, checking deposit balances were 71.6% of total deposits.

Other sources of funding at June 30, 2022 included short-term and long-term FHLB advances, which totaled $11.0 billion, up 22.2% compared to a year ago.

Deposits had an average rate paid of 9 basis points during the quarter, and average total funding costs were 16 basis points during the quarter.

Wealth Management

Total wealth management assets were $246.8 billion at June 30, 2022, down 10.0% compared to the prior quarter and up 2.5% compared to a year ago. The decrease in wealth management assets for the quarter was due to market decline. The increase in wealth management assets for the year was due to net client inflow, partially offset by market decline.

Wealth management revenues totaled $232 million for the quarter, up 26.4% compared to last year’s second quarter. Such revenues represented 15.4% of the Bank’s total revenues for the quarter.

Wealth management assets at June 30, 2022 included investment management assets of $100.2 billion, brokerage assets and money market mutual funds of $127.5 billion, and trust and custody assets of $19.1 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.5 billion for the quarter, up 22.6% compared to the second quarter a year ago.

Net Interest Income Growth

Net interest income was $1.2 billion for the quarter, up 24.1% compared to the second quarter a year ago. The increase in net interest income resulted primarily from growth in average interest-earning assets and the increase in net interest margin.

Net Interest Margin

The net interest margin increased to 2.80% in the second quarter, from 2.68% in the prior quarter. The increase was due to lower average cash balances, as well as average yields on interest-earning assets increasing more than the offsetting increase in average funding costs.

Noninterest Income

Noninterest income was $263 million for the quarter, up 16.0% compared to the second quarter a year ago. The increase was primarily driven by higher wealth management fees, partially offset by a decrease in income from investments in life insurance.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $913 million for the quarter, up 19.7% compared to the second quarter a year ago, primarily due to continued investments in our business expansion, including hiring additional colleagues to support our growth and information systems initiatives, as well as higher travel and entertainment.

The efficiency ratio was 60.5% for the quarter, compared to 62.0% for last year’s second quarter.

Income Taxes

The Bank’s effective tax rate for the second quarter of 2022 was 23.4%, compared to 17.4% for the second quarter a year ago. The increase was primarily the result of lower excess tax benefits upon vesting of stock awards.

Conference Call Details

First Republic Bank’s second quarter 2022 earnings conference call is scheduled for July 14, 2022 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (800) 458-4148 and provide confirmation code 2688216 approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (856) 344-9290 and provide the same confirmation code.

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

For those unable to join for the live presentation, a replay of the call will be available beginning July 14, 2022 at 11:00 a.m. PT / 2:00 p.m. ET through July 21, 2022 at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 2688216#. 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; 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, 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; inflation; 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
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

(in millions, except per share amounts)

 

2022

 

2021

 

2022

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,094

 

 

$

913

 

 

$

1,002

 

 

$

2,096

 

 

$

1,786

 

Investments

 

 

209

 

 

 

157

 

 

 

180

 

 

 

389

 

 

 

298

 

Other

 

 

2

 

 

 

5

 

 

 

2

 

 

 

4

 

 

 

10

 

Cash and cash equivalents

 

 

11

 

 

 

3

 

 

 

5

 

 

 

16

 

 

 

6

 

Total interest income

 

 

1,316

 

 

 

1,078

 

 

 

1,189

 

 

 

2,505

 

 

 

2,100

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

37

 

 

 

24

 

 

 

20

 

 

 

57

 

 

 

52

 

Borrowings

 

 

33

 

 

 

51

 

 

 

24

 

 

 

57

 

 

 

106

 

Total interest expense

 

 

70

 

 

 

75

 

 

 

44

 

 

 

114

 

 

 

158

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

1,246

 

 

 

1,003

 

 

 

1,145

 

 

 

2,391

 

 

 

1,942

 

Provision for credit losses

 

 

31

 

 

 

16

 

 

 

10

 

 

 

41

 

 

 

1

 

Net interest income after provision for credit losses

 

 

1,215

 

 

 

987

 

 

 

1,135

 

 

 

2,350

 

 

 

1,941

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

164

 

 

 

136

 

 

 

165

 

 

 

329

 

 

 

255

 

Brokerage and investment fees

 

 

33

 

 

 

17

 

 

 

22

 

 

 

55

 

 

 

32

 

Insurance fees

 

 

3

 

 

 

3

 

 

 

4

 

 

 

7

 

 

 

6

 

Trust fees

 

 

7

 

 

 

6

 

 

 

7

 

 

 

14

 

 

 

12

 

Foreign exchange fee income

 

 

25

 

 

 

21

 

 

 

23

 

 

 

48

 

 

 

38

 

Deposit fees

 

 

8

 

 

 

7

 

 

 

6

 

 

 

14

 

 

 

13

 

Loan and related fees

 

 

10

 

 

 

9

 

 

 

9

 

 

 

19

 

 

 

16

 

Income from investments in life insurance

 

 

11

 

 

 

21

 

 

 

14

 

 

 

25

 

 

 

38

 

Other income, net

 

 

2

 

 

 

6

 

 

 

1

 

 

 

3

 

 

 

12

 

Total noninterest income

 

 

263

 

 

 

226

 

 

 

251

 

 

 

514

 

 

 

422

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

567

 

 

 

482

 

 

 

560

 

 

 

1,127

 

 

 

945

 

Information systems

 

 

114

 

 

 

88

 

 

 

107

 

 

 

221

 

 

 

172

 

Occupancy

 

 

70

 

 

 

63

 

 

 

69

 

 

 

139

 

 

 

121

 

Professional fees

 

 

27

 

 

 

26

 

 

 

23

 

 

 

50

 

 

 

47

 

Advertising and marketing

 

 

17

 

 

 

16

 

 

 

13

 

 

 

30

 

 

 

29

 

FDIC assessments

 

 

15

 

 

 

13

 

 

 

15

 

 

 

30

 

 

 

25

 

Other expenses

 

 

103

 

 

 

74

 

 

 

79

 

 

 

182

 

 

 

144

 

Total noninterest expense

 

 

913

 

 

 

762

 

 

 

866

 

 

 

1,779

 

 

 

1,483

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

565

 

 

 

451

 

 

 

520

 

 

 

1,085

 

 

 

880

 

Provision for income taxes

 

 

132

 

 

 

78

 

 

 

119

 

 

 

251

 

 

 

172

 

Net income

 

 

433

 

 

 

373

 

 

 

401

 

 

 

834

 

 

 

708

 

Dividends on preferred stock

 

 

41

 

 

 

23

 

 

 

37

 

 

 

78

 

 

 

42

 

Net income available to common shareholders

 

$

392

 

 

$

350

 

 

$

364

 

 

$

756

 

 

$

666

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

2.18

 

 

$

1.98

 

 

$

2.03

 

 

$

4.21

 

 

$

3.79

 

Diluted earnings per common share

 

$

2.16

 

 

$

1.95

 

 

$

2.00

 

 

$

4.17

 

 

$

3.74

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares—basic

 

 

180

 

 

 

176

 

 

 

180

 

 

 

180

 

 

 

176

 

Weighted average shares—diluted

 

 

181

 

 

 

179

 

 

 

182

 

 

 

182

 

 

 

178

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

As of

($ in millions)

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

June 30,
2021

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,237

 

 

$

7,756

 

 

$

12,947

 

 

$

7,877

 

Debt securities available-for-sale

 

 

3,438

 

 

 

3,446

 

 

 

3,381

 

 

 

2,635

 

Debt securities held-to-maturity, net

 

 

27,710

 

 

 

26,831

 

 

 

22,292

 

 

 

20,236

 

Equity securities (fair value)

 

 

23

 

 

 

25

 

 

 

28

 

 

 

30

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

Single family

 

 

89,295

 

 

 

81,833

 

 

 

76,793

 

 

 

69,909

 

Home equity lines of credit

 

 

2,699

 

 

 

2,597

 

 

 

2,584

 

 

 

2,441

 

Single family construction

 

 

1,117

 

 

 

1,041

 

 

 

993

 

 

 

878

 

Multifamily

 

 

18,346

 

 

 

16,953

 

 

 

15,966

 

 

 

14,803

 

Commercial real estate

 

 

9,182

 

 

 

8,753

 

 

 

8,531

 

 

 

8,235

 

Multifamily/commercial construction

 

 

2,019

 

 

 

1,955

 

 

 

1,927

 

 

 

2,061

 

Capital call lines of credit

 

 

10,727

 

 

 

10,970

 

 

 

10,999

 

 

 

8,127

 

Tax-exempt

 

 

3,605

 

 

 

3,656

 

 

 

3,680

 

 

 

3,566

 

Other business

 

 

4,638

 

 

 

4,081

 

 

 

3,961

 

 

 

3,657

 

PPP

 

 

82

 

 

 

232

 

 

 

545

 

 

 

1,375

 

Stock secured

 

 

4,041

 

 

 

3,651

 

 

 

3,435

 

 

 

2,966

 

Other secured

 

 

2,774

 

 

 

2,623

 

 

 

2,457

 

 

 

2,052

 

Unsecured

 

 

2,994

 

 

 

2,968

 

 

 

3,085

 

 

 

3,048

 

Total loans

 

 

151,519

 

 

 

141,313

 

 

 

134,956

 

 

 

123,118

 

Allowance for credit losses

 

 

(729

)

 

 

(701

)

 

 

(694

)

 

 

(637

)

Loans, net

 

 

150,790

 

 

 

140,612

 

 

 

134,262

 

 

 

122,481

 

 

 

 

 

 

 

 

 

 

Investments in life insurance

 

 

3,340

 

 

 

2,682

 

 

 

2,650

 

 

 

2,598

 

Tax credit investments

 

 

1,304

 

 

 

1,231

 

 

 

1,220

 

 

 

1,224

 

Premises, equipment and leasehold improvements, net

 

 

474

 

 

 

467

 

 

 

454

 

 

 

419

 

Goodwill and other intangible assets

 

 

220

 

 

 

221

 

 

 

222

 

 

 

224

 

Other assets

 

 

4,372

 

 

 

3,850

 

 

 

3,631

 

 

 

3,923

 

Total Assets

 

$

197,908

 

 

$

187,121

 

 

$

181,087

 

 

$

161,647

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

$

75,208

 

 

$

72,424

 

 

$

70,840

 

 

$

59,449

 

Interest-bearing checking

 

 

43,421

 

 

 

41,589

 

 

 

41,248

 

 

 

32,165

 

Money market checking

 

 

21,235

 

 

 

21,846

 

 

 

20,303

 

 

 

20,374

 

Money market savings and passbooks

 

 

18,796

 

 

 

19,159

 

 

 

16,573

 

 

 

14,748

 

Certificates of deposit

 

 

6,987

 

 

 

7,042

 

 

 

7,357

 

 

 

7,921

 

Total Deposits

 

 

165,647

 

 

 

162,060

 

 

 

156,321

 

 

 

134,657

 

 

 

 

 

 

 

 

 

 

Short-term FHLB advances

 

 

6,300

 

 

 

 

 

 

 

 

 

 

Long-term FHLB advances

 

 

4,700

 

 

 

3,700

 

 

 

3,700

 

 

 

9,000

 

Senior notes

 

 

499

 

 

 

999

 

 

 

998

 

 

 

997

 

Subordinated notes

 

 

779

 

 

 

779

 

 

 

779

 

 

 

779

 

Other liabilities

 

 

3,557

 

 

 

3,429

 

 

 

3,391

 

 

 

2,939

 

Total Liabilities

 

 

181,482

 

 

 

170,967

 

 

 

165,189

 

 

 

148,372

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

3,633

 

 

 

3,633

 

 

 

3,633

 

 

 

2,143

 

Common stock

 

 

2

 

 

 

2

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

5,782

 

 

 

5,763

 

 

 

5,725

 

 

 

5,203

 

Retained earnings

 

 

7,236

 

 

 

6,893

 

 

 

6,569

 

 

 

5,937

 

Accumulated other comprehensive loss

 

 

(227

)

 

 

(137

)

 

 

(31

)

 

 

(10

)

Total Shareholders’ Equity

 

 

16,426

 

 

 

16,154

 

 

 

15,898

 

 

 

13,275

 

Total Liabilities and Shareholders’ Equity

 

$

197,908

 

 

$

187,121

 

 

$

181,087

 

 

$

161,647

 

 

 

 

Quarter Ended June 30,

 

Quarter Ended March 31,

 

 

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

 

$

5,713

 

 

$

11

 

 

0.80

%

 

$

11,281

 

 

$

3

 

 

0.11

%

 

$

11,342

 

 

$

5

 

 

0.18

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency securities

 

 

165

 

 

 

1

 

 

2.05

%

 

 

100

 

 

 

1

 

 

1.59

%

 

 

117

 

 

 

0

 

 

1.37

%

Agency residential and commercial MBS

 

 

10,667

 

 

 

56

 

 

2.10

%

 

 

5,646

 

 

 

29

 

 

2.05

%

 

 

9,142

 

 

 

39

 

 

1.70

%

Other residential and commercial MBS

 

 

22

 

 

 

0

 

 

2.37

%

 

 

30

 

 

 

0

 

 

2.04

%

 

 

24

 

 

 

0

 

 

2.04

%

Tax-exempt municipal securities

 

 

16,711

 

 

 

161

 

 

3.86

%

 

 

13,470

 

 

 

136

 

 

4.02

%

 

 

15,595

 

 

 

151

 

 

3.87

%

Taxable municipal securities

 

 

1,774

 

 

 

14

 

 

3.18

%

 

 

1,612

 

 

 

12

 

 

3.00

%

 

 

1,715

 

 

 

13

 

 

2.97

%

Other investment securities

 

 

1,440

 

 

 

10

 

 

2.87

%

 

 

1,376

 

 

 

9

 

 

2.85

%

 

 

1,416

 

 

 

10

 

 

2.85

%

Total investment securities

 

 

30,779

 

 

 

242

 

 

3.15

%

 

 

22,234

 

 

 

187

 

 

3.36

%

 

 

28,009

 

 

 

213

 

 

3.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

89,358

 

 

 

620

 

 

2.78

%

 

 

69,854

 

 

 

491

 

 

2.81

%

 

 

82,416

 

 

 

567

 

 

2.75

%

Multifamily

 

 

17,480

 

 

 

153

 

 

3.46

%

 

 

14,392

 

 

 

127

 

 

3.49

%

 

 

16,281

 

 

 

140

 

 

3.45

%

Commercial real estate

 

 

8,983

 

 

 

85

 

 

3.77

%

 

 

8,117

 

 

 

78

 

 

3.82

%

 

 

8,633

 

 

 

82

 

 

3.77

%

Multifamily/commercial construction

 

 

2,004

 

 

 

24

 

 

4.60

%

 

 

2,969

 

 

 

38

 

 

5.00

%

 

 

1,929

 

 

 

22

 

 

4.62

%

Business

 

 

18,469

 

 

 

160

 

 

3.43

%

 

 

15,894

 

 

 

129

 

 

3.21

%

 

 

18,590

 

 

 

145

 

 

3.12

%

PPP

 

 

138

 

 

 

3

 

 

8.46

%

 

 

1,843

 

 

 

15

 

 

3.32

%

 

 

381

 

 

 

7

 

 

7.59

%

Other

 

 

9,628

 

 

 

56

 

 

2.31

%

 

 

7,653

 

 

 

42

 

 

2.15

%

 

 

9,058

 

 

 

47

 

 

2.06

%

Total loans

 

 

146,060

 

 

 

1,101

 

 

3.00

%

 

 

120,722

 

 

 

920

 

 

3.03

%

 

 

137,288

 

 

 

1,010

 

 

2.94

%

FHLB stock

 

 

201

 

 

 

2

 

 

3.40

%

 

 

312

 

 

 

5

 

 

6.55

%

 

 

115

 

 

 

2

 

 

7.60

%

Total interest-earning assets

 

 

182,753

 

 

 

1,356

 

 

2.96

%

 

 

154,549

 

 

 

1,115

 

 

2.87

%

 

 

176,754

 

 

 

1,230

 

 

2.78

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

 

442

 

 

 

 

 

 

 

386

 

 

 

 

 

 

 

449

 

 

 

 

 

Goodwill and other intangibles

 

 

220

 

 

 

 

 

 

 

225

 

 

 

 

 

 

 

221

 

 

 

 

 

Other assets

 

 

7,759

 

 

 

 

 

 

 

6,725

 

 

 

 

 

 

 

7,142

 

 

 

 

 

Total noninterest-earning assets

 

 

8,421

 

 

 

 

 

 

 

7,336

 

 

 

 

 

 

 

7,812

 

 

 

 

 

Total Assets

 

$

191,174

 

 

 

 

 

 

$

161,885

 

 

 

 

 

 

$

184,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$

41,878

 

 

 

5

 

 

0.05

%

 

$

33,329

 

 

 

2

 

 

0.02

%

 

$

40,400

 

 

 

1

 

 

0.01

%

Money market checking

 

 

20,873

 

 

 

13

 

 

0.25

%

 

 

19,928

 

 

 

6

 

 

0.12

%

 

 

21,659

 

 

 

5

 

 

0.09

%

Money market savings and passbooks

 

 

17,682

 

 

 

11

 

 

0.25

%

 

 

14,783

 

 

 

6

 

 

0.17

%

 

 

17,925

 

 

 

7

 

 

0.15

%

CDs

 

 

6,975

 

 

 

8

 

 

0.43

%

 

 

8,040

 

 

 

10

 

 

0.51

%

 

 

7,217

 

 

 

7

 

 

0.40

%

Total interest-bearing deposits (3)

 

 

87,408

 

 

 

37

 

 

0.17

%

 

 

76,080

 

 

 

24

 

 

0.13

%

 

 

87,201

 

 

 

20

 

 

0.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased

 

 

186

 

 

 

0

 

 

0.73

%

 

 

 

 

 

 

 

%

 

 

 

 

 

 

 

%

Short-term FHLB advances

 

 

2,953

 

 

 

9

 

 

1.20

%

 

 

 

 

 

 

 

%

 

 

 

 

 

 

 

%

Long-term FHLB advances

 

 

4,097

 

 

 

11

 

 

1.09

%

 

 

10,062

 

 

 

36

 

 

1.39

%

 

 

3,700

 

 

 

9

 

 

0.95

%

Senior notes

 

 

691

 

 

 

4

 

 

2.38

%

 

 

997

 

 

 

6

 

 

2.42

%

 

 

998

 

 

 

6

 

 

2.42

%

Subordinated notes

 

 

779

 

 

 

9

 

 

4.68

%

 

 

778

 

 

 

9

 

 

4.68

%

 

 

779

 

 

 

9

 

 

4.68

%

Total borrowings

 

 

8,706

 

 

 

33

 

 

1.54

%

 

 

11,837

 

 

 

51

 

 

1.69

%

 

 

5,477

 

 

 

24

 

 

1.75

%

Total interest-bearing liabilities (4)

 

 

96,114

 

 

 

70

 

 

0.29

%

 

 

87,917

 

 

 

75

 

 

0.34

%

 

 

92,678

 

 

 

44

 

 

0.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

 

75,411

 

 

 

 

 

 

 

58,051

 

 

 

 

 

 

 

72,251

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

3,354

 

 

 

 

 

 

 

2,796

 

 

 

 

 

 

 

3,613

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

78,765

 

 

 

 

 

 

 

60,847

 

 

 

 

 

 

 

75,864

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders’ equity

 

 

3,633

 

 

 

 

 

 

 

2,143

 

 

 

 

 

 

 

3,633

 

 

 

 

 

Common shareholders’ equity

 

 

12,662

 

 

 

 

 

 

 

10,978

 

 

 

 

 

 

 

12,391

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

191,174

 

 

 

 

 

 

$

161,885

 

 

 

 

 

 

$

184,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

2.66

%

 

 

 

 

 

2.54

%

 

 

 

 

 

2.59

%

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

 

 

 

$

1,286

 

 

2.80

%

 

 

 

$

1,040

 

 

2.68

%

 

 

 

$

1,186

 

 

2.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent adjustment

 

 

(33

)

 

 

 

 

 

 

(30

)

 

 

 

 

 

 

(34

)

 

 

Business loans tax-equivalent adjustment

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

Net interest income

 

$

1,246

 

 

 

 

 

 

$

1,003

 

 

 

 

 

 

$

1,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and noninterest-bearing)

 

$

162,819

 

 

$

37

 

 

0.09

%

 

$

134,131

 

 

$

24

 

 

0.07

%

 

$

159,452

 

 

$

20

 

 

0.05

%

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

 

$

171,525

 

$

70

 

 

0.16

%

 

$

145,968

 

$

75

 

 

0.20

%

 

$

164,929

 

$

44

 

 

0.11

%

 

 

 

Six Months Ended June 30,

 

 

2022

 

2021

Average Balances, Yields and Rates

 

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

 

$

8,512

 

 

$

16

 

 

0.39

%

 

$

11,364

 

 

$

6

 

 

0.11

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency securities

 

 

141

 

 

 

1

 

 

1.76

%

 

 

97

 

 

 

1

 

 

1.52

%

Agency residential and commercial MBS

 

 

9,909

 

 

 

95

 

 

1.91

%

 

 

5,636

 

 

 

60

 

 

2.11

%

Other residential and commercial MBS

 

 

23

 

 

 

0

 

 

2.19

%

 

 

32

 

 

 

0

 

 

1.95

%

Tax-exempt municipal securities

 

 

16,156

 

 

 

309

 

 

3.83

%

 

 

12,874

 

 

 

263

 

 

4.08

%

Taxable municipal securities

 

 

1,744

 

 

 

27

 

 

3.07

%

 

 

1,347

 

 

 

20

 

 

2.98

%

Other investment securities

 

 

1,428

 

 

 

20

 

 

2.86

%

 

 

905

 

 

 

12

 

 

2.73

%

Total investment securities

 

 

29,401

 

 

 

452

 

 

3.08

%

 

 

20,891

 

 

 

356

 

 

3.40

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

85,906

 

 

 

1,187

 

 

2.76

%

 

 

67,668

 

 

 

960

 

 

2.84

%

Multifamily

 

 

16,884

 

 

 

293

 

 

3.45

%

 

 

14,159

 

 

 

250

 

 

3.51

%

Commercial real estate

 

 

8,808

 

 

 

167

 

 

3.77

%

 

 

8,075

 

 

 

156

 

 

3.85

%

Multifamily/commercial construction

 

 

1,967

 

 

 

46

 

 

4.61

%

 

 

2,918

 

 

 

69

 

 

4.68

%

Business

 

 

18,529

 

 

 

305

 

 

3.27

%

 

 

15,488

 

 

 

253

 

 

3.24

%

PPP

 

 

259

 

 

 

10

 

 

7.82

%

 

 

1,916

 

 

 

31

 

 

3.24

%

Other

 

 

9,345

 

 

 

103

 

 

2.19

%

 

 

7,501

 

 

 

81

 

 

2.15

%

Total loans

 

 

141,698

 

 

 

2,111

 

 

2.97

%

 

 

117,725

 

 

 

1,800

 

 

3.05

%

FHLB stock

 

 

158

 

 

 

4

 

 

4.92

%

 

 

329

 

 

 

10

 

 

6.31

%

Total interest-earning assets

 

 

179,769

 

 

 

2,583

 

 

2.87

%

 

 

150,309

 

 

 

2,172

 

 

2.88

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

 

446

 

 

 

 

 

 

 

400

 

 

 

 

 

Goodwill and other intangibles

 

 

221

 

 

 

 

 

 

 

226

 

 

 

 

 

Other assets

 

 

7,452

 

 

 

 

 

 

 

6,409

 

 

 

 

 

Total noninterest-earning assets

 

 

8,119

 

 

 

 

 

 

 

7,035

 

 

 

 

 

Total Assets

 

$

187,888

 

 

 

 

 

 

$

157,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$

41,143

 

 

 

6

 

 

0.03

%

 

$

32,664

 

 

 

4

 

 

0.02

%

Money market checking

 

 

21,264

 

 

 

18

 

 

0.17

%

 

 

19,411

 

 

 

14

 

 

0.14

%

Money market savings and passbooks

 

 

17,803

 

 

 

18

 

 

0.20

%

 

 

14,215

 

 

 

12

 

 

0.18

%

CDs

 

 

7,095

 

 

 

15

 

 

0.41

%

 

 

8,225

 

 

 

22

 

 

0.53

%

Total interest-bearing deposits (3)

 

 

87,305

 

 

 

57

 

 

0.13

%

 

 

74,515

 

 

 

52

 

 

0.14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased

 

 

93

 

 

 

0

 

 

0.73

%

 

 

0

 

 

 

0

 

 

0.26

%

Short-term FHLB advances

 

 

1,485

 

 

 

9

 

 

1.20

%

 

 

0

 

 

 

0

 

 

0.15

%

Long-term FHLB advances

 

 

3,899

 

 

 

20

 

 

1.02

%

 

 

10,689

 

 

 

76

 

 

1.42

%

Senior notes

 

 

844

 

 

 

10

 

 

2.41

%

 

 

997

 

 

 

12

 

 

2.42

%

Subordinated notes

 

 

779

 

 

 

18

 

 

4.68

%

 

 

778

 

 

 

18

 

 

4.68

%

Total borrowings

 

 

7,100

 

 

 

57

 

 

1.62

%

 

 

12,464

 

 

 

106

 

 

1.71

%

Total interest-bearing liabilities (4)

 

 

94,405

 

 

 

114

 

 

0.24

%

 

 

86,979

 

 

 

158

 

 

0.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

 

73,840

 

 

 

 

 

 

 

54,887

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

3,483

 

 

 

 

 

 

 

2,717

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

77,323

 

 

 

 

 

 

 

57,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders' equity

 

 

3,633

 

 

 

 

 

 

 

2,054

 

 

 

 

 

Common shareholders' equity

 

 

12,527

 

 

 

 

 

 

 

10,707

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

187,888

 

 

 

 

 

 

$

157,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

2.63

%

 

 

 

 

 

2.52

%

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

 

 

 

$

2,469

 

 

2.74

%

 

 

 

$

2,014

 

 

2.67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent adjustment

 

 

 

 

(64

)

 

 

 

 

 

 

(58

)

 

 

Business loans tax-equivalent adjustment

 

 

 

 

(14

)

 

 

 

 

 

 

(14

)

 

 

Net interest income

 

 

 

$

2,391

 

 

 

 

 

 

$

1,942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and noninterest-bearing)

 

$

161,145

 

 

$

57

 

 

0.07

%

 

$

129,402

 

 

$

52

 

 

0.08

%

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

 

$

168,245

 

$

114

 

 

0.14

%

 

$

141,866

 

$

158

 

 

0.22

%

__________
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
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2022

 

2021

($ in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Data and Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets (1), (2)

 

 

0.91

%

 

 

0.92

%

 

 

0.88

%

 

 

0.90

%

 

 

0.91

%

Return on average common shareholders’ equity (1)

 

 

12.43

%

 

 

12.77

%

 

 

11.91

%

 

 

12.17

%

 

 

12.54

%

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

 

 

12.65

%

 

 

13.04

%

 

 

12.12

%

 

 

12.39

%

 

 

12.81

%

Average equity to average assets

 

 

8.52

%

 

 

8.10

%

 

 

8.68

%

 

 

8.60

%

 

 

8.11

%

Dividends per common share

 

$

0.27

 

 

$

0.22

 

 

$

0.22

 

 

$

0.49

 

 

$

0.42

 

Dividend payout ratio

 

 

12.5

%

 

 

11.3

%

 

 

11.0

%

 

 

11.8

%

 

 

11.2

%

Efficiency ratio (4)

 

 

60.5

%

 

 

62.0

%

 

 

62.0

%

 

 

61.2

%

 

 

62.7

%

 

 

 

 

 

 

 

 

 

 

 

Selected Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

Net loan charge-offs (recoveries)

 

$

1.3

 

 

$

1.2

 

 

$

(0.3

)

 

$

1.0

 

 

$

1.7

 

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

 

 

0.00

%

 

 

0.00

%

 

 

(0.00

) %

 

 

0.00

%

 

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

Selected Ratios (period-end):

 

 

 

 

 

 

 

 

 

 

Book value per common share

 

$

71.03

 

 

$

62.99

 

 

$

69.70

 

 

 

 

 

Tangible book value per common share (5)

 

$

69.81

 

 

$

61.72

 

 

$

68.47

 

 

 

 

 

__________

(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
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

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

 

24.0

%

 

21.7

%

 

23.4

%

 

23.7

%

 

22.1

%

Excess tax benefits—stock awards

 

(0.6

)

 

(4.3

)

 

(0.5

)

 

(0.6

)

 

(2.5

)

Effective tax rate

 

23.4

%

 

17.4

%

 

22.9

%

 

23.1

%

 

19.6

%

 

 

 

 

 

 

 

 

 

 

 

Provision (Reversal of Provision) for Credit Losses

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2022

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities held-to-maturity

 

$

1

 

 

$

1

 

 

$

1

 

 

$

2

 

 

$

2

 

Loans

 

 

29

 

 

 

17

 

 

 

7

 

 

 

36

 

 

 

3

 

Unfunded loan commitments

 

 

1

 

 

 

(2

)

 

 

2

 

 

 

3

 

 

 

(4

)

Total provision

 

$

31

 

$

16

 

 

$

10

 

$

41

 

$

1

 

 

Loan Originations

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2022

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family

 

$

10,638

 

 

$

8,662

 

 

$

8,376

 

 

$

19,014

 

 

$

15,564

 

Home equity lines of credit

 

 

744

 

 

 

610

 

 

 

689

 

 

 

1,433

 

 

 

1,234

 

Single family construction

 

 

540

 

 

 

215

 

 

 

267

 

 

 

807

 

 

 

440

 

Multifamily

 

 

2,330

 

 

 

1,102

 

 

 

1,709

 

 

 

4,039

 

 

 

1,893

 

Commercial real estate

 

 

816

 

 

 

458

 

 

 

566

 

 

 

1,382

 

 

 

772

 

Multifamily/commercial construction

 

 

492

 

 

 

272

 

 

 

384

 

 

 

876

 

 

 

583

 

Capital call lines of credit

 

 

3,096

 

 

 

2,921

 

 

 

3,020

 

 

 

6,116

 

 

 

6,052

 

Tax-exempt

 

 

92

 

 

 

208

 

 

 

90

 

 

 

182

 

 

 

422

 

Other business

 

 

1,078

 

 

 

521

 

 

 

538

 

 

 

1,616

 

 

 

1,546

 

PPP

 

 

 

 

 

36

 

 

 

 

 

 

 

 

 

725

 

Stock secured

 

 

915

 

 

 

776

 

 

 

1,136

 

 

 

2,051

 

 

 

1,486

 

Other secured

 

 

815

 

 

 

598

 

 

 

666

 

 

 

1,481

 

 

 

1,037

 

Unsecured

 

 

413

 

 

 

372

 

 

 

369

 

 

 

782

 

 

 

718

 

Total loans originated

 

$

21,969

 

 

$

16,751

 

 

$

17,810

 

 

$

39,779

 

 

$

32,472

 

 

 

 

As of

Asset Quality Information

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

137

 

 

$

140

 

 

$

139

 

 

$

127

 

 

$

133

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

137

 

 

$

140

 

 

$

139

 

 

$

127

 

 

$

133

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans to total loans

 

 

0.09

%

 

 

0.10

%

 

 

0.10

%

 

 

0.10

%

 

 

0.11

%

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.07

%

 

 

0.08

%

 

 

0.08

%

 

 

0.07

%

 

 

0.08

%

 

 

 

 

 

 

 

 

 

 

 

Accruing loans 90 days or more past due

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Restructured accruing loans

 

$

12

 

 

$

12

 

 

$

13

 

 

$

10

 

 

$

11

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan credit losses to:

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

0.48

%

 

 

0.50

%

 

 

0.51

%

 

 

0.52

%

 

 

0.52

%

Nonaccrual loans

 

 

531.2

%

 

 

498.8

%

 

 

500.5

%

 

 

524.4

%

 

 

479.3

%

 

 

 

As of

Loan Servicing Portfolio

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans serviced for investors

 

$

3,919

 

$

4,298

 

$

4,677

 

$

5,117

 

$

5,640

 

Return on Average Common Shareholders’ Equity and Return on Average Tangible Common Shareholders’ Equity (1), (2)

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended
June 30,

 

Quarter Ended
March 31,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2022

 

2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shareholders’ equity (a)

 

$

12,662

 

 

$

10,978

 

 

$

12,391

 

 

$

12,527

 

 

$

10,707

 

Less: Average goodwill and other intangible assets

 

 

(220

)

 

 

(225

)

 

 

(221

)

 

 

(221

)

 

 

(226

)

Average tangible common shareholders’ equity (b)

 

$

12,442

 

 

$

10,753

 

 

$

12,170

 

 

$

12,306

 

 

$

10,481

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders (c)

 

$

392

 

 

$

350

 

 

$

364

 

 

$

756

 

 

$

666

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

12.43

%

 

 

12.77

%

 

 

11.91

%

 

 

12.17

%

 

 

12.54

%

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

 

 

12.65

%

 

 

13.04

%

 

 

12.12

%

 

 

12.39

%

 

 

12.81

%

__________

(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

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

(in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

$

16,426

 

 

$

16,154

 

 

$

15,898

 

 

$

14,802

 

 

$

13,275

 

Less: Preferred stock

 

 

(3,633

)

 

 

(3,633

)

 

 

(3,633

)

 

 

(2,893

)

 

 

(2,143

)

Total common shareholders’ equity (a)

 

 

12,793

 

 

 

12,521

 

 

 

12,265

 

 

 

11,909

 

 

 

11,132

 

Less: Goodwill and other intangible assets

 

 

(220

)

 

 

(221

)

 

 

(222

)

 

 

(223

)

 

 

(224

)

Total tangible common shareholders’ equity (b)

 

$

12,573

 

 

$

12,300

 

 

$

12,043

 

 

$

11,686

 

 

$

10,908

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares of common stock outstanding (c)

 

 

180

 

 

 

180

 

 

 

179

 

 

 

179

 

 

 

177

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

71.03

 

 

$

69.70

 

 

$

68.34

 

 

$

66.44

 

 

$

62.99

 

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

 

$

69.81

 

 

$

68.47

 

 

$

67.10

 

 

$

65.19

 

 

$

61.72

__________

(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

 

June 30,
2022 (3)

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

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

 

 

8.59

%

 

 

8.70

%

 

 

8.76

%

 

 

8.55

%

 

 

8.05

%

Common Equity Tier 1 capital to risk-weighted assets

 

 

9.15

%

 

 

9.48

%

 

 

9.65

%

 

 

9.81

%

 

 

9.51

%

Tier 1 capital to risk-weighted assets

 

 

11.75

%

 

 

12.25

%

 

 

12.56

%

 

 

12.25

%

 

 

11.38

%

Total capital to risk-weighted assets

 

 

12.82

%

 

 

13.37

%

 

 

13.72

%

 

 

13.45

%

 

 

12.60

%

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital:

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 capital

 

$

12,791

 

 

$

12,418

 

 

$

12,045

 

 

$

11,674

 

 

$

10,875

 

Tier 1 capital

 

$

16,424

 

 

$

16,051

 

 

$

15,678

 

 

$

14,566

 

 

$

13,018

 

Total capital

 

$

17,924

 

 

$

17,521

 

 

$

17,124

 

 

$

15,994

 

 

$

14,421

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

Average assets

 

$

191,202

 

 

$

184,410

 

 

$

178,969

 

 

$

170,373

 

 

$

161,637

 

Risk-weighted assets

 

$

139,811

 

 

$

131,024

 

 

$

124,820

 

 

$

118,941

 

 

$

114,406

 

__________

(1)

As defined by regulatory capital rules.

(2)

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

(3)

Ratios and amounts as of June 30, 2022 are preliminary.

 

 

As of

Wealth Management Assets

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Republic Investment Management

 

$

100,204

 

 

$

108,771

 

 

$

109,130

 

 

$

101,105

 

 

$

99,459

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and investment:

 

 

 

 

 

 

 

 

 

 

Brokerage

 

 

116,979

 

 

 

128,129

 

 

 

128,258

 

 

 

115,793

 

 

 

112,359

 

Money market mutual funds

 

 

10,510

 

 

 

18,543

 

 

 

23,673

 

 

 

18,074

 

 

 

13,109

 

Total brokerage and investment

 

 

127,489

 

 

 

146,672

 

 

 

151,931

 

 

 

133,867

 

 

 

125,468

 

 

 

 

 

 

 

 

 

 

 

 

Trust Company:

 

 

 

 

 

 

 

 

 

 

Trust

 

 

14,994

 

 

 

14,344

 

 

 

13,695

 

 

 

12,220

 

 

 

11,496

 

Custody

 

 

4,099

 

 

 

4,408

 

 

 

4,687

 

 

 

4,533

 

 

 

4,439

 

Total Trust Company

 

 

19,093

 

 

 

18,752

 

 

 

18,382

 

 

 

16,753

 

 

 

15,935

 

Total Wealth Management Assets

 

$

246,786

 

$

274,195

 

$

279,443

 

$

251,725

 

$

240,862

 

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