FRC
$218.14
First Republic Bank
$3.29
1.53%
Earnings Details
3rd Quarter September 2021
Wednesday, October 13, 2021 7:00:00 AM
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Summary

First Republic Bank Beats

First Republic Bank (FRC) reported 3rd Quarter September 2021 earnings of $1.91 per share on revenue of $1.4 billion. The consensus earnings estimate was $1.83 per share on revenue of $1.3 billion. The Earnings Whisper number was $1.90 per share. Revenue grew 20.7% on a year-over-year basis.

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

Results
Reported Earnings
$1.91
Earnings Whisper
$1.90
Consensus Estimate
$1.83
Reported Revenue
$1.37 Bil
Revenue Estimate
$1.27 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

First Republic Reports Third Quarter 2021 Results

Net Interest Income Increased 26.7% Year-Over-Year

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

“First Republic had another strong quarter of growth in loans, deposits and wealth management assets,” said Jim Herbert, Founder, Chairman and Co-CEO. “Our client-centric business model continues to perform very well across all our segments and markets.”

“This was another successful quarter for First Republic,” said Hafize Gaye Erkan, Co-CEO and President. “Credit quality remains excellent, further reflecting the safety and stability of First Republic.”

Quarterly Highlights

Financial Results

– Year-over-year:

Revenues were $1.3 billion, up 30.1%.

– Net interest income was $1.1 billion, up 26.7%.

– Net income was $369.7 million, up 26.1%.

– Diluted earnings per share of $1.91, up 18.6%.

– Tangible book value per share was $65.19, up 18.5%.

– Loan originations totaled $15.5 billion, our strongest third quarter ever.

– Net interest margin was 2.65%, compared to 2.68% for the prior quarter.

– Efficiency ratio was 61.3%, compared to 62.0% for the prior quarter.

Continued Capital and Credit Strength

– Tier 1 leverage ratio was 8.55%.

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

– Net charge-offs were only $292,000, or less than 1 basis point of average loans.

Continued Franchise Growth

Year-over-year:

Loans totaled $128.4 billion, up 22.5%.

– Deposits were $145.3 billion, up 39.2%.

– Wealth management assets were $251.7 billion, up 49.7%.

– Wealth management revenues were $209.3 million, up 65.1%.

“Revenue and net interest income growth were very strong during the third quarter,” said Mike Roffler, Chief Financial Officer. “We’re also pleased to have accessed the capital markets twice during the quarter, raising $1.2 billion.”

Quarterly Cash Dividend of $0.22 per Share

The Bank declared a cash dividend for the third quarter of $0.22 per share of common stock, which is payable on November 12, 2021 to shareholders of record as of October 28, 2021.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were at a very low 7 basis points of total assets at September 30, 2021. The Bank had modest net loan charge-offs of only $292,000 for the quarter.

During the third quarter, the Bank recorded a provision for credit losses of $34.0 million, which was primarily driven by loan growth.

Continued Book Value Growth and Capital Strength

Book value per common share at September 30, 2021 was $66.44, up 17.9% from a year ago. Tangible book value per common share at September 30, 2021 was $65.19, up 18.5% from a year ago.

The Bank’s Tier 1 leverage ratio was 8.55% at September 30, 2021, compared to 8.05% at June 30, 2021.

During the third quarter, the Bank issued $750.0 million of 4.000% Noncumulative Perpetual Series M Preferred Stock, which qualifies as Tier 1 capital.

In addition, the Bank sold 2,300,000 new shares of common stock in an underwritten public offering, which added approximately $443.9 million to common equity.

Total common stock sold and preferred stock issued, net of preferred stock redeemed, added approximately $1.2 billion and $2.1 billion of Tier 1 capital in the third quarter and first nine months of 2021, respectively, and contributed to the 30.5% increase in total equity year-over-year.

Continued Franchise Growth

Loan Originations

Loan originations were $15.5 billion for the quarter, up 26.3% from the same quarter a year ago. This was primarily due to increases in capital call lines of credit and commercial real estate lending.

Single family loan originations were 45% of the total volume for the quarter and had a weighted average loan-to-value ratio of 60%. Multifamily and commercial real estate loans originated were 12% of total originations for the quarter and had a weighted average loan-to-value ratio of 47%.

Loans totaled $128.4 billion at September 30, 2021, up 22.5% compared to a year ago, primarily due to increases in single family, capital call lines of credit and multifamily loans, partially offset by a decrease in loans under the Small Business Administration’s Paycheck Protection Program (“PPP”).

Deposit Growth

Total deposits increased to $145.3 billion, up 39.2% compared to a year ago, and had an average rate paid of 6 basis points during the quarter.

At September 30, 2021, checking deposit balances were 68.8% of total deposits.

Investments

Total investment securities at September 30, 2021 were $24.2 billion, a 5.6% increase compared to the prior quarter and a 29.6% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $28.6 billion at September 30, 2021, and represented 16.7% of quarterly average total assets.

Wealth Management

Total wealth management assets were $251.7 billion at September 30, 2021, up 4.5% compared to the prior quarter and up 49.7% compared to a year ago. The increases in wealth management assets were due to net client inflow and market appreciation.

Wealth management revenues totaled $209.3 million for the quarter, up 65.1% compared to last year’s third quarter. Such revenues represented 16.1% of the Bank’s total revenues for the quarter.

Wealth management assets at September 30, 2021 included investment management assets of $101.1 billion, brokerage assets and money market mutual funds of $133.9 billion, and trust and custody assets of $16.8 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.3 billion for the quarter, up 30.1% compared to the third quarter a year ago.

Net Interest Income Growth

Net interest income was $1.1 billion for the quarter, up 26.7% compared to the third quarter a year ago. The increase in net interest income resulted primarily from growth in average interest-earning assets, modestly offset by a decrease in net interest margin.

Net Interest Margin

The net interest margin declined to 2.65% in the third quarter, from 2.68% in the prior quarter. The modest decline was primarily due to higher average cash balances during the quarter.

Noninterest Income

Noninterest income was $250.4 million for the quarter, up 46.4% compared to the third quarter a year ago. The increase was primarily driven by higher wealth management fees, partially offset by lower gain on sale of loans. Such gain was elevated in the third quarter a year ago due to realized discounts on previously purchased loans when these loans were sold.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $798.5 million for the quarter, up 31.3% compared to the third quarter a year ago. The increase was primarily due to increased salaries, incentive compensation and benefits, information systems and occupancy costs from the continued investments in the expansion of the franchise, and higher professional fees.

The efficiency ratio was 61.3% for the quarter, compared to 60.7% for the third quarter a year ago. For the first nine months of 2021, the efficiency ratio was 62.2%, compared to 62.0% for the first nine months of 2020.

Income Taxes

The Bank’s effective tax rate for the third quarter of 2021 was 21.4%, compared to 19.6% for the third quarter a year ago. The increase was primarily due to the prior year including a tax refund from an amended tax return.

Conference Call Details

First Republic Bank’s third quarter 2021 earnings conference call is scheduled for October 13, 2021 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (888) 394-8218 and provide confirmation code 9610366 approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (856) 344-9221 and provide the same confirmation code.

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

For those unable to join the live presentation, a replay of the call will be available beginning October 13, 2021 at 11:00 a.m. PT / 2:00 p.m. ET through October 20, 2021 at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 9610366#. International callers should dial +1 (719) 457-0820 and enter the same confirmation code. A replay of the webcast also will be available for 90 days following, accessible in the Investor Relations section of First Republic Bank’s website at ir.firstrepublic.com/events-calendar.

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

About First Republic Bank

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

Forward-Looking Statements

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

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

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

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

Non-GAAP Financial Measures

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

CONSOLIDATED STATEMENTS OF INCOME

 

 

Quarter Ended
September 30,

 

Quarter Ended
June 30,

 

Nine Months Ended
September 30,

(in thousands, except per share amounts)

 

2021

 

2020

 

2021

2021

 

2020

Interest income:

 

 

 

 

 

 

 

 

 

 

Loans

 

$

946,846

 

 

$

811,708

 

 

$

912,885

 

 

$

2,732,901

 

 

$

2,399,646

 

Investments

 

 

161,017

 

 

 

142,971

 

 

 

156,947

 

 

 

458,675

 

 

 

438,055

 

Other

 

 

4,677

 

 

 

6,116

 

 

 

5,103

 

 

 

14,969

 

 

 

18,135

 

Cash and cash equivalents

 

 

5,131

 

 

 

1,181

 

 

 

3,070

 

 

 

11,095

 

 

 

5,685

 

Total interest income

 

 

1,117,671

 

 

 

961,976

 

 

 

1,078,005

 

 

 

3,217,640

 

 

 

2,861,521

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

22,410

 

 

54,355

 

 

24,096

 

 

74,077

 

 

245,680

Borrowings

 

 

42,977

 

 

 

77,341

 

 

 

50,044

 

 

 

148,632

 

 

 

246,017

 

Total interest expense

 

 

65,387

 

 

 

131,696

 

 

 

74,140

 

 

 

222,709

 

 

 

491,697

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

1,052,284

 

 

 

830,280

 

 

 

1,003,865

 

 

 

2,994,931

 

 

 

2,369,824

 

Provision for credit losses

 

 

34,025

 

 

 

28,538

 

 

 

16,143

 

 

 

35,560

 

 

 

122,025

 

Net interest income after provision for credit

losses

 

 

1,018,259

 

 

 

801,742

 

 

 

987,722

 

 

 

2,959,371

 

 

 

2,247,799

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

148,491

 

 

 

96,638

 

 

 

136,516

 

 

 

404,049

 

 

 

281,017

 

Brokerage and investment fees

 

 

22,644

 

 

 

10,796

 

 

 

17,574

 

 

 

54,782

 

 

 

39,028

 

Insurance fees

 

 

5,918

 

 

 

2,216

 

 

 

2,668

 

 

 

11,660

 

 

 

6,086

 

Trust fees

 

 

6,231

 

 

 

4,543

 

 

 

6,245

 

 

 

18,207

 

 

 

14,118

 

Foreign exchange fee income

 

 

26,032

 

 

 

12,575

 

 

 

20,612

 

 

 

63,811

 

 

 

34,864

 

Deposit fees

 

 

6,849

 

 

 

5,753

 

 

 

6,618

 

 

 

19,636

 

 

 

17,598

 

Loan and related fees

 

 

8,336

 

 

 

7,171

 

 

 

8,877

 

 

 

24,698

 

 

 

20,741

 

Loan servicing fees, net

 

 

548

 

 

 

144

 

 

 

1,057

 

 

 

3,093

 

 

 

(2,649

)

Gain on sale of loans

 

 

140

 

 

 

13,797

 

 

 

58

 

 

 

507

 

 

 

14,575

 

Gain (loss) on investment securities

 

 

2,139

 

 

 

(405

)

 

 

1,329

 

 

 

4,123

 

 

 

3,752

 

Income from investments in life insurance

 

 

20,328

 

 

 

20,546

 

 

 

21,457

 

 

 

58,334

 

 

 

36,506

 

Other income (loss)

 

 

2,702

 

 

 

(2,791

)

 

 

3,597

 

 

 

9,917

 

 

 

960

 

Total noninterest income

 

 

250,358

 

 

 

170,983

 

 

 

226,608

 

 

 

672,817

 

 

 

466,596

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

514,499

 

 

 

373,225

 

 

 

481,503

 

 

 

1,459,406

 

 

 

1,078,633

 

Information systems

 

 

90,941

 

 

 

74,549

 

 

 

88,980

 

 

 

263,437

 

 

 

219,301

 

Occupancy

 

 

66,953

 

 

 

55,543

 

 

 

63,526

 

 

 

188,028

 

 

 

164,125

 

Professional fees

 

 

27,911

 

 

 

19,845

 

 

 

25,475

 

 

 

74,640

 

 

 

48,479

 

Advertising and marketing

 

 

13,620

 

 

 

8,909

 

 

 

16,560

 

 

 

42,813

 

 

 

29,373

 

FDIC assessments

 

 

13,368

 

 

 

11,003

 

 

 

13,254

 

 

 

38,522

 

 

 

32,463

 

Other expenses

 

 

71,239

 

 

 

65,136

 

 

 

73,467

 

 

 

214,846

 

 

 

187,311

 

Total noninterest expense

 

 

798,531

 

 

 

608,210

 

 

 

762,765

 

 

 

2,281,692

 

 

 

1,759,685

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

470,086

 

 

 

364,515

 

 

 

451,565

 

 

 

1,350,496

 

 

 

954,710

 

Provision for income taxes

 

 

100,399

 

 

 

71,378

 

 

 

78,459

 

 

 

272,870

 

 

 

186,119

 

Net income

 

 

369,687

 

 

 

293,137

 

 

 

373,106

 

 

 

1,077,626

 

 

 

768,591

 

Dividends on preferred stock

 

 

24,427

 

 

 

14,816

 

 

 

23,655

 

 

 

66,607

 

 

 

42,653

 

Net income available to common shareholders

 

$

345,260

 

 

$

278,321

 

 

$

349,451

 

 

$

1,011,019

 

 

$

725,938

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

1.94

 

 

$

1.62

 

 

$

1.98

 

 

$

5.73

 

 

$

4.23

 

Diluted earnings per common share

 

$

1.91

 

 

$

1.61

 

 

$

1.95

 

 

$

5.66

 

 

$

4.21

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares—basic

 

 

178,065

 

 

 

172,142

 

 

 

176,419

 

 

 

176,446

 

 

 

171,537

 

Weighted average shares—diluted

 

 

180,420

 

 

 

172,932

 

 

 

178,864

 

 

 

178,757

 

 

 

172,514

 

CONSOLIDATED BALANCE SHEETS

 

 

As of

($ in thousands)

 

September 30,
2021

 

June 30,
2021

 

December 31,
2020

 

September 30,
2020

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

12,279,447

 

 

$

7,876,952

 

 

$

5,094,754

 

 

$

3,691,149

 

Debt securities available-for-sale

 

 

2,960,571

 

 

 

2,634,983

 

 

 

1,906,315

 

 

 

1,711,202

 

Debt securities held-to-maturity, net

 

 

21,192,537

 

 

 

20,236,298

 

 

 

16,603,310

 

 

 

16,923,706

 

Equity securities (fair value)

 

 

31,682

 

 

 

29,550

 

 

 

20,566

 

 

 

20,478

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

Single family

 

 

73,490,788

 

 

 

69,908,787

 

 

 

61,370,246

 

 

 

56,628,359

 

Home equity lines of credit

 

 

2,429,152

 

 

 

2,441,034

 

 

 

2,449,533

 

 

 

2,431,991

 

Single family construction

 

 

984,835

 

 

 

877,548

 

 

 

787,854

 

 

 

739,091

 

Multifamily

 

 

15,416,780

 

 

 

14,803,219

 

 

 

13,768,957

 

 

 

13,392,531

 

Commercial real estate

 

 

8,486,124

 

 

 

8,234,934

 

 

 

8,018,158

 

 

 

7,781,797

 

Multifamily/commercial construction

 

 

2,064,107

 

 

 

2,060,980

 

 

 

2,024,420

 

 

 

2,038,949

 

Capital call lines of credit

 

 

9,088,424

 

 

 

8,127,473

 

 

 

8,149,946

 

 

 

6,203,877

 

Tax-exempt

 

 

3,577,586

 

 

 

3,566,385

 

 

 

3,365,572

 

 

 

3,276,705

 

Other business

 

 

3,553,875

 

 

 

3,656,598

 

 

 

3,340,048

 

 

 

2,982,532

 

PPP

 

 

876,487

 

 

 

1,374,765

 

 

 

1,841,376

 

 

 

2,091,102

 

Stock secured

 

 

3,120,176

 

 

 

2,965,857

 

 

 

2,518,338

 

 

 

2,311,754

 

Other secured

 

 

2,261,224

 

 

 

2,051,617

 

 

 

1,818,550

 

 

 

1,780,652

 

Unsecured

 

 

3,025,536

 

 

 

3,047,981

 

 

 

3,113,267

 

 

 

3,102,311

 

Total loans

 

 

128,375,094

 

 

 

123,117,178

 

 

 

112,566,265

 

 

 

104,761,651

 

Allowance for credit losses

 

 

(668,186

)

 

 

(636,910

)

 

 

(635,019

)

 

 

(604,747

)

Loans, net

 

 

127,706,908

 

 

 

122,480,268

 

 

 

111,931,246

 

 

 

104,156,904

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

 

3,782

 

 

 

3,169

 

 

 

20,679

 

 

 

33,655

 

Investments in life insurance

 

 

2,627,940

 

 

 

2,597,637

 

 

 

2,061,362

 

 

 

1,949,360

 

Tax credit investments

 

 

1,180,690

 

 

 

1,224,114

 

 

 

1,131,905

 

 

 

1,099,713

 

Premises, equipment and leasehold improvements, net

 

 

430,675

 

 

 

418,725

 

 

 

403,482

 

 

 

390,241

 

Goodwill and other intangible assets

 

 

223,183

 

 

 

224,497

 

 

 

227,512

 

 

 

229,185

 

Other assets

 

 

3,933,088

 

 

 

3,920,541

 

 

 

3,101,003

 

 

 

3,020,178

 

Total Assets

 

$

172,570,503

 

 

$

161,646,734

 

 

$

142,502,134

 

 

$

133,225,771

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

$

65,833,005

 

 

$

59,449,158

 

 

$

46,281,112

 

 

$

41,538,676

 

Interest-bearing checking

 

 

34,089,265

 

 

 

32,165,327

 

 

 

30,603,221

 

 

 

26,081,189

 

Money market checking

 

 

21,860,807

 

 

 

20,373,535

 

 

 

16,778,884

 

 

 

15,868,769

 

Money market savings and passbooks

 

 

15,946,902

 

 

 

14,747,597

 

 

 

12,584,522

 

 

 

11,419,289

 

Certificates of deposit

 

 

7,596,366

 

 

 

7,921,218

 

 

 

8,681,061

 

 

 

9,495,453

 

Total Deposits

 

 

145,326,345

 

 

 

134,656,835

 

 

 

114,928,800

 

 

 

104,403,376

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

 

 

 

 

 

 

 

 

 

5,000

 

Long-term FHLB advances

 

 

7,700,000

 

 

 

9,000,000

 

 

 

11,755,000

 

 

 

13,505,000

 

Senior notes

 

 

997,722

 

 

 

997,193

 

 

 

996,145

 

 

 

995,626

 

Subordinated notes

 

 

778,648

 

 

 

778,535

 

 

 

778,313

 

 

 

778,204

 

Other liabilities

 

 

2,965,994

 

 

 

2,939,444

 

 

 

2,293,230

 

 

 

2,193,956

 

Total Liabilities

 

 

157,768,709

 

 

 

148,372,007

 

 

 

130,751,488

 

 

 

121,881,162

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

2,892,500

 

 

 

2,142,500

 

 

 

1,545,000

 

 

 

1,645,000

 

Common stock

 

 

1,793

 

 

 

1,767

 

 

 

1,741

 

 

 

1,722

 

Additional paid-in capital

 

 

5,685,384

 

 

 

5,204,166

 

 

 

4,834,172

 

 

 

4,571,499

 

Retained earnings

 

 

6,241,963

 

 

 

5,936,669

 

 

 

5,346,355

 

 

 

5,102,229

 

Accumulated other comprehensive income (loss)

 

 

(19,846

)

 

 

(10,375

)

 

 

23,378

 

 

 

24,159

 

Total Shareholders’ Equity

 

 

14,801,794

 

 

 

13,274,727

 

 

 

11,750,646

 

 

 

11,344,609

 

Total Liabilities and Shareholders’ Equity

 

$

172,570,503

 

 

$

161,646,734

 

 

$

142,502,134

 

 

$

133,225,771

 

 

 

Quarter Ended September 30,

 

Quarter Ended June 30,

 

 

2021

 

2020

 

2021

Average Balances, Yields
and Rates

 

Average
Balance

 

Interest
Income/Expense
(1)

 

Yield/
Rates
(2)

 

Average
Balance

 

Interest
Income/Expense
(1)

 

Yield/
Rates
(2)

 

Average
Balance

 

Interest
Income/Expense
(1)

 

Yield/
Rates
(2)

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

13,384

 

 

$

5

 

 

0.15

%

 

$

4,428

 

 

$

1

 

 

0.11

%

 

$

11,281

 

 

$

3

 

 

0.11

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency

securities

 

 

100

 

 

 

0

 

 

1.59

%

 

 

202

 

 

 

1

 

 

2.35

%

 

 

100

 

 

 

0

 

 

1.59

%

Agency residential and commercial MBS

 

 

6,200

 

 

 

28

 

 

1.84

%

 

 

6,251

 

 

 

37

 

 

2.40

%

 

 

5,647

 

 

 

29

 

 

2.05

%

Other residential and commercial MBS

 

 

28

 

 

 

0

 

 

2.25

%

 

 

38

 

 

 

0

 

 

2.13

%

 

 

30

 

 

 

0

 

 

2.04

%

Tax-exempt municipal securities

 

 

14,174

 

 

 

141

 

 

3.97

%

 

 

11,551

 

 

 

123

 

 

4.26

%

 

 

13,470

 

 

 

135

 

 

4.02

%

Taxable municipal securities

 

 

1,670

 

 

 

12

 

 

2.98

%

 

 

758

 

 

 

6

 

 

3.26

%

 

 

1,612

 

 

 

12

 

 

3.00

%

Other investment securities

 

 

1,405

 

 

 

10

 

 

2.86

%

 

 

45

 

 

 

0

 

 

2.76

%

 

 

1,376

 

 

 

10

 

 

2.85

%

Total investment securities

 

 

23,576

 

 

 

192

 

 

3.26

%

 

 

18,845

 

 

 

168

 

 

3.57

%

 

 

22,234

 

 

 

187

 

 

3.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

74,233

 

 

 

520

 

 

2.80

%

 

 

56,907

 

 

 

422

 

 

2.96

%

 

 

69,854

 

 

 

491

 

 

2.81

%

Multifamily

 

 

15,126

 

 

 

135

 

 

3.49

%

 

 

13,313

 

 

 

125

 

 

3.67

%

 

 

14,392

 

 

 

127

 

 

3.49

%

Commercial real estate

 

 

8,357

 

 

 

82

 

 

3.82

%

 

 

7,802

 

 

 

78

 

 

3.93

%

 

 

8,117

 

 

 

78

 

 

3.82

%

Multifamily/commercial construction

 

 

2,963

 

 

 

34

 

 

4.54

%

 

 

2,740

 

 

 

31

 

 

4.37

%

 

 

2,969

 

 

 

38

 

 

5.00

%

Business

 

 

15,928

 

 

 

129

 

 

3.17

%

 

 

12,538

 

 

 

110

 

 

3.45

%

 

 

15,894

 

 

 

129

 

 

3.21

%

PPP

 

 

1,123

 

 

 

12

 

 

4.01

%

 

 

2,092

 

 

 

11

 

 

2.03

%

 

 

1,843

 

 

 

15

 

 

3.32

%

Other

 

 

8,158

 

 

 

43

 

 

2.06

%

 

 

6,996

 

 

 

42

 

 

2.33

%

 

 

7,653

 

 

 

42

 

 

2.15

%

Total loans

 

 

125,887

 

 

 

954

 

 

3.00

%

 

 

102,386

 

 

 

818

 

 

3.16

%

 

 

120,722

 

 

 

920

 

 

3.03

%

FHLB stock

 

 

266

 

 

 

5

 

 

6.99

%

 

 

458

 

 

 

6

 

 

5.31

%

 

 

313

 

 

 

5

 

 

6.55

%

Total interest-earning assets

 

 

163,113

 

 

 

1,156

 

 

2.81

%

 

 

126,117

 

 

 

994

 

 

3.12

%

 

 

154,550

 

 

 

1,115

 

 

2.87

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

 

392

 

 

 

 

 

 

 

434

 

 

 

 

 

 

 

386

 

 

 

 

 

Goodwill and other intangibles

 

 

224

 

 

 

 

 

 

 

230

 

 

 

 

 

 

 

225

 

 

 

 

 

Other assets

 

 

6,891

 

 

 

 

 

 

 

5,075

 

 

 

 

 

 

 

6,724

 

 

 

 

 

Total noninterest-earning assets

 

 

7,506

 

 

 

 

 

 

 

5,738

 

 

 

 

 

 

 

7,335

 

 

 

 

 

Total Assets

 

$

170,619

 

 

 

 

 

 

$

131,855

 

 

 

 

 

 

$

161,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$

33,642

 

 

 

1

 

 

0.01

%

 

$

25,539

 

 

 

2

 

 

0.04

%

 

$

33,329

 

 

 

2

 

 

0.02

%

Money market checking

 

 

21,861

 

 

 

6

 

 

0.11

%

 

 

15,432

 

 

 

8

 

 

0.21

%

 

 

19,928

 

 

 

6

 

 

0.12

%

Money market savings and passbooks

 

 

15,831

 

 

 

6

 

 

0.16

%

 

 

10,788

 

 

 

5

 

 

0.20

%

 

 

14,783

 

 

 

6

 

 

0.17

%

CDs

 

 

7,779

 

 

 

9

 

 

0.46

%

 

 

11,334

 

 

 

38

 

 

1.34

%

 

 

8,040

 

 

 

10

 

 

0.51

%

Total interest-bearing deposits (3)

 

 

79,114

 

 

 

22

 

 

0.11

%

 

 

63,093

 

 

 

54

 

 

0.34

%

 

 

76,080

 

 

 

24

 

 

0.13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

0

 

 

 

0

 

 

0.09

%

 

 

5

 

 

 

0

 

 

0.00

%

 

 

 

 

 

 

 

%

Long-term FHLB advances

 

 

8,545

 

 

 

28

 

 

1.29

%

 

 

14,739

 

 

 

62

 

 

1.68

%

 

 

10,062

 

 

 

35

 

 

1.39

%

Senior notes

 

 

997

 

 

 

6

 

 

2.42

%

 

 

995

 

 

 

6

 

 

2.42

%

 

 

997

 

 

 

6

 

 

2.42

%

Subordinated notes

 

 

779

 

 

 

9

 

 

4.68

%

 

 

778

 

 

 

9

 

 

4.68

%

 

 

778

 

 

 

9

 

 

4.68

%

Total borrowings

 

 

10,321

 

 

 

43

 

 

1.66

%

 

 

16,518

 

 

 

77

 

 

1.86

%

 

 

11,838

 

 

 

50

 

 

1.69

%

Total interest-bearing liabilities (4)

 

 

89,434

 

 

 

65

 

 

0.29

%

 

 

79,611

 

 

 

132

 

 

0.66

%

 

 

87,918

 

 

 

74

 

 

0.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

 

64,008

 

 

 

 

 

 

 

39,357

 

 

 

 

 

 

 

58,051

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

2,904

 

 

 

 

 

 

 

2,083

 

 

 

 

 

 

 

2,796

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

66,912

 

 

 

 

 

 

 

41,440

 

 

 

 

 

 

 

60,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders’ equity

 

 

2,729

 

 

 

 

 

 

 

1,227

 

 

 

 

 

 

 

2,143

 

 

 

 

 

Common shareholders’ equity

 

 

11,543

 

 

 

 

 

 

 

9,578

 

 

 

 

 

 

 

10,978

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

170,619

 

 

 

 

 

 

$

131,855

 

 

 

 

 

 

$

161,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

2.52

%

 

 

 

 

 

2.47

%

 

 

 

 

 

2.54

%

Net interest income (fully taxable-equivalent

basis) and net interest margin (6)

 

 

 

$

1,090

 

 

2.65

%

 

 

 

$

862

 

 

2.71

%

 

 

 

$

1,041

 

 

2.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of tax-equivalent net

interest income to net interest income: (7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent

adjustment

 

 

 

 

(31

)

 

 

 

 

 

 

(25

)

 

 

 

 

 

 

(30

)

 

 

Business loans tax-equivalent adjustment

 

 

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

Net interest income

 

 

 

$

1,052

 

 

 

 

 

 

$

830

 

 

 

 

 

 

$

1,004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and

noninterest-bearing)

 

$

143,122

 

 

$

22

 

 

0.06

%

 

$

102,450

 

 

$

54

 

 

0.21

%

 

$

134,131

 

 

$

24

 

 

0.07

%

Total deposits (interest-bearing and

noninterest-bearing) and borrowings

 

$

153,442

 

 

$

65

 

 

0.17

%

 

$

118,968

 

 

$

132

 

 

0.44

%

 

$

145,968

 

 

$

74

 

 

0.20

%

 

 

Nine Months Ended September 30,

 

 

2021

 

2020

Average Balances, Yields and Rates

 

Average
Balance

 

Interest
Income/Expense
(1)

 

Yields/
Rates (2)

 

Average
Balance

 

Interest
Income/Expense
(1)

 

Yields/
Rates (2)

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

12,045

 

$

11

 

 

0.12

%

 

$

3,029

 

$

6

 

 

0.25

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency securities

 

 

98

 

 

 

1

 

 

1.54

%

 

 

241

 

 

 

5

 

 

2.63

%

Agency residential and commercial MBS

 

 

5,826

 

 

 

88

 

 

2.01

%

 

 

6,537

 

 

 

127

 

 

2.60

%

Other residential and commercial MBS

 

 

30

 

 

 

0

 

 

2.04

%

 

 

23

 

 

 

0

 

 

2.40

%

Tax-exempt municipal securities

 

 

13,312

 

 

 

403

 

 

4.04

%

 

 

11,165

 

 

 

361

 

 

4.32

%

Taxable municipal securities

 

 

1,456

 

 

 

32

 

 

2.98

%

 

 

709

 

 

 

18

 

 

3.34

%

Other investment securities

 

 

1,074

 

 

 

22

 

 

2.78

%

 

 

44

 

 

 

1

 

 

2.83

%

Total investment securities

 

 

21,795

 

 

 

548

 

 

3.35

%

 

 

18,719

 

 

 

513

 

 

3.65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

69,880

 

 

 

1,480

 

 

2.82

%

 

 

53,992

 

 

 

1,231

 

 

3.04

%

Multifamily

 

 

14,484

 

 

 

385

 

 

3.50

%

 

 

12,923

 

 

 

364

 

 

3.70

%

Commercial real estate

 

 

8,170

 

 

 

238

 

 

3.84

%

 

 

7,699

 

 

 

235

 

 

4.00

%

Multifamily/commercial construction

 

 

2,933

 

 

 

103

 

 

4.63

%

 

 

2,641

 

 

 

90

 

 

4.49

%

Business

 

 

15,636

 

 

 

382

 

 

3.22

%

 

 

12,666

 

 

 

349

 

 

3.62

%

PPP

 

 

1,649

 

 

 

43

 

 

3.42

%

 

 

1,241

 

 

 

18

 

 

1.96

%

Other

 

 

7,722

 

 

 

124

 

 

2.12

%

 

 

6,703

 

 

 

131

 

 

2.58

%

Total loans

 

 

120,476

 

 

 

2,754

 

 

3.03

%

 

 

97,865

 

 

 

2,420

 

 

3.27

%

FHLB stock

 

 

307

 

 

 

15

 

 

6.51

%

 

 

452

 

 

 

18

 

 

5.36

%

Total interest-earning assets

 

 

154,623

 

 

 

3,328

 

 

2.86

%

 

 

120,065

 

 

 

2,956

 

 

3.26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

 

397

 

 

 

 

 

 

 

434

 

 

 

 

 

Goodwill and other intangibles

 

 

225

 

 

 

 

 

 

 

232

 

 

 

 

 

Other assets

 

 

6,572

 

 

 

 

 

 

 

4,901

 

 

 

 

 

Total noninterest-earning assets

 

 

7,194

 

 

 

 

 

 

 

5,567

 

 

 

 

 

Total Assets

 

$

161,817

 

 

 

 

 

 

$

125,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$

32,993

 

 

 

5

 

 

0.02

%

 

$

22,736

 

 

 

14

 

 

0.08

%

Money market checking

 

 

20,237

 

 

 

20

 

 

0.13

%

 

 

14,162

 

 

 

47

 

 

0.45

%

Money market savings and passbooks

 

 

14,760

 

 

 

19

 

 

0.17

%

 

 

10,122

 

 

 

26

 

 

0.35

%

CDs

 

 

8,075

 

 

 

31

 

 

0.51

%

 

 

12,742

 

 

 

158

 

 

1.66

%

Total interest-bearing deposits (3)

 

 

76,065

 

 

 

74

 

 

0.13

%

 

 

59,762

 

 

 

246

 

 

0.55

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

0

 

 

 

0

 

 

0.09

%

 

 

412

 

 

 

5

 

 

1.52

%

Long-term FHLB advances

 

 

9,966

 

 

 

103

 

 

1.38

%

 

 

14,676

 

 

 

197

 

 

1.79

%

Senior notes

 

 

997

 

 

 

18

 

 

2.42

%

 

 

919

 

 

 

17

 

 

2.44

%

Subordinated notes

 

 

778

 

 

 

27

 

 

4.68

%

 

 

778

 

 

 

27

 

 

4.68

%

Total borrowings

 

 

11,741

 

 

 

149

 

 

1.69

%

 

 

16,785

 

 

 

246

 

 

1.96

%

Total interest-bearing liabilities (4)

 

 

87,806

 

 

 

223

 

 

0.34

%

 

 

76,547

 

 

 

492

 

 

0.86

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

 

57,961

 

 

 

 

 

 

 

36,530

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

2,780

 

 

 

 

 

 

 

2,060

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

60,741

 

 

 

 

 

 

 

38,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders' equity

 

 

2,281

 

 

 

 

 

 

 

1,172

 

 

 

 

 

Common shareholders' equity

 

 

10,989

 

 

 

 

 

 

 

9,323

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

161,817

 

 

 

 

 

 

$

125,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

2.52

%

 

 

 

 

 

2.41

%

Net interest income (fully taxable-equivalent basis) and

net interest margin (6)

 

 

 

$

3,105

 

 

2.67

%

 

 

 

$

2,464

 

 

2.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of tax-equivalent net interest income

to net interest income: (7)

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent adjustment

 

 

 

 

(89

)

 

 

 

 

 

 

(75

)

 

 

Business loans tax-equivalent adjustment

 

 

 

 

(21

)

 

 

 

 

 

 

(20

)

 

 

Net interest income

 

 

 

$

2,995

 

 

 

 

 

 

$

2,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and noninterest-bearing)

 

$

134,026

 

 

$

74

 

 

0.07

%

 

$

96,292

 

 

$

246

 

 

0.34

%

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

borrowings

 

$

145,767

 

 

$

223

 

 

0.20

%

 

$

113,077

 

 

$

492

 

 

0.58

%

____________________

Note:

 

Amounts presented in the tables above may not add due to rounding. 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.

 

 

Quarter Ended
September 30,

 

Quarter Ended
June 30,

 

Nine Months Ended
September 30,

Selected Financial Data and Ratios

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

Return on average assets (1), (2)

 

0.86

%

 

0.88

%

 

0.92

%

 

0.89

%

 

0.82

%

Return on average common shareholders’ equity (1)

 

11.87

%

 

11.56

%

 

12.77

%

 

12.30

%

 

10.40

%

Return on average tangible common shareholders’

equity (1), (3)

 

12.10

%

 

11.84

%

 

13.04

%

 

12.56

%

 

10.67

%

Average equity to average assets

 

8.37

%

 

8.19

%

 

8.10

%

 

8.20

%

 

8.35

%

Dividends per common share

 

$

0.22

 

 

$

0.20

 

 

$

0.22

 

 

$

0.64

 

 

$

0.59

 

Dividend payout ratio

 

11.5

%

 

12.4

%

 

11.3

%

 

11.3

%

 

14.0

%

Book value per common share

 

$

66.44

 

 

$

56.33

 

 

$

62.99

 

 

$

66.44

 

 

$

56.33

 

Tangible book value per common share (4)

 

$

65.19

 

 

$

55.00

 

 

$

61.72

 

 

$

65.19

 

 

$

55.00

 

Efficiency ratio (5)

 

61.3

%

 

60.7

%

 

62.0

%

 

62.2

%

 

62.0

%

 

 

 

 

 

 

 

 

 

 

 

Net loan charge-offs

 

$

292

 

 

$

1,687

 

 

$

1,219

 

 

$

1,998

 

 

$

2,987

 

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

 

0.00

%

 

0.01

%

 

0.00

%

 

0.00

%

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan credit losses to:

 

 

 

 

 

 

 

 

 

 

Total loans

 

0.52

%

 

0.58

%

 

0.52

%

 

0.52

%

 

0.58

%

Nonaccrual loans

 

524.4

%

 

368.2

%

 

479.3

%

 

524.4

%

 

368.2

%

____________________

(1)

 

Ratios are annualized.

(2)

 

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

(3)

 

Refer to “Return on Average Common Shareholders’ Equity and Return on Average Tangible Common Shareholders’ Equity” table in this document for a reconciliation of this non-GAAP financial measure to the most comparable GAAP measure.

(4)

 

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

(5)

 

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

 

Quarter Ended
September 30,

 

Quarter Ended
June 30,

 

Nine Months Ended
September 30,

Effective Tax Rate

 

2021

 

2020

 

2021

 

2021

 

2020

Effective tax rate, prior to excess tax benefits—stock

awards and tax refund from an amended tax return

 

23.2

%

 

21.1

%

 

21.7

%

 

22.5

%

 

21.6

%

Excess tax benefits—stock awards

 

(1.8

)

 

(0.2

)

 

(4.3

)

 

(2.3

)

 

(1.6

)

Tax refund from an amended tax return

 

 

 

(1.3

)

 

 

 

 

 

(0.5

)

Effective tax rate

 

21.4

%

 

19.6

%

 

17.4

%

 

20.2

%

 

19.5

%

Provision (Reversal of Provision) for Credit Losses

 

Quarter Ended
September 30,

 

Quarter Ended
June 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Debt securities held-to-maturity

 

$

296

 

$

333

 

$

383

 

 

$

1,801

 

 

$

1,047

Loans

 

 

31,568

 

 

 

22,437

 

 

 

17,304

 

 

 

35,165

 

 

 

113,305

 

Unfunded loan commitments

 

 

2,161

 

 

 

5,768

 

 

 

(1,544

)

 

 

(1,406

)

 

 

7,673

 

Total provision

 

$

34,025

 

 

$

28,538

 

 

$

16,143

 

 

$

35,560

 

 

$

122,025

 

 

 

Quarter Ended
September 30,

 

Quarter Ended
June 30,

 

Nine Months Ended
September 30,

Mortgage Loan Sales

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Loans sold:

 

 

 

 

 

 

 

 

 

 

Flow sales:

 

 

 

 

 

 

 

 

 

 

Agency

 

$

17,544

 

 

$

44,118

 

 

$

4,315

 

 

$

64,261

 

 

$

80,702

 

Non-agency

 

 

 

 

 

 

 

1,073

 

 

31,870

 

Total flow sales

 

17,544

 

 

44,118

 

 

4,315

 

 

65,334

 

 

112,572

 

 

 

 

 

 

 

 

 

 

 

 

Bulk sales:

 

 

 

 

 

 

 

 

 

 

Non-agency

 

 

 

235,732

 

 

 

 

 

 

673,401

 

 

 

 

 

 

 

 

 

 

 

 

Securitizations

 

 

 

 

 

 

 

 

 

300,116

 

 

 

 

 

 

 

 

 

 

 

 

Total loans sold

 

$

17,544

 

 

$

279,850

 

 

$

4,315

 

 

$

65,334

 

 

$

1,086,089

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans:

 

 

 

 

 

 

 

 

 

 

Amount (1)

 

$

140

 

 

$

13,797

 

 

$

58

 

 

$

507

 

 

$

14,575

 

Gain as a percentage of loans sold

 

0.80

%

 

4.93

%

 

1.34

%

 

0.78

%

 

1.34

%

____________________

(1)

 

The gain for the quarter and nine months ended September 30, 2020 included $10.3 million related to realized discounts on previously purchased loans when these loans were sold.

 

Quarter Ended
September 30,

 

Quarter Ended
June 30,

 

Nine Months Ended
September 30,

Loan Originations

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Single family

 

$

6,998,315

 

 

$

6,813,850

 

 

$

8,661,680

 

 

$

22,562,187

 

 

$

16,208,370

 

Home equity lines of credit

 

588,488

 

 

432,443

 

 

610,658

 

 

1,822,807

 

 

1,285,688

 

Single family construction

 

283,278

 

 

186,833

 

 

215,014

 

 

722,796

 

 

415,313

 

Multifamily

 

1,199,660

 

 

955,951

 

 

1,101,450

 

 

3,092,180

 

 

2,684,074

 

Commercial real estate

 

724,777

 

 

193,228

 

 

458,196

 

 

1,496,964

 

 

975,769

 

Multifamily/commercial construction

 

355,981

 

 

245,220

 

 

272,145

 

 

938,950

 

 

997,555

 

Capital call lines of credit

 

3,128,180

 

 

1,803,907

 

 

2,921,192

 

 

9,180,689

 

 

5,594,483

 

Tax-exempt

 

38,100

 

 

328,711

 

 

208,327

 

 

460,394

 

 

612,784

 

Other business

 

533,709

 

 

243,788

 

 

520,394

 

 

2,079,257

 

 

1,777,824

 

PPP

 

 

 

 

 

35,586

 

 

724,534

 

 

1,981,797

 

Stock secured

 

753,409

 

 

685,250

 

 

775,795

 

 

2,239,242

 

 

1,797,226

 

Other secured

 

546,286

 

 

189,386

 

 

598,630

 

 

1,583,905

 

 

961,940

 

Unsecured

 

303,916

 

 

159,379

 

 

372,192

 

 

1,021,956

 

 

685,537

 

Total loans originated

 

$

15,454,099

 

 

$

12,237,946

 

 

$

16,751,259

 

 

$

47,925,861

 

 

$

35,978,360

 

 

 

As of

Asset Quality Information

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

127,430

 

 

$

132,880

 

 

$

172,794

 

 

$

184,132

 

 

$

164,247

 

Other real estate owned

 

 

 

 

 

1,334

 

 

 

 

 

Total nonperforming assets

 

$

127,430

 

 

$

132,880

 

 

$

174,128

 

 

$

184,132

 

 

$

164,247

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

0.07

%

 

0.08

%

 

0.11

%

 

0.13

%

 

0.12

%

 

 

 

 

 

 

 

 

 

 

 

Accruing loans 90 days or more past due

 

$

 

 

$

 

 

$

851

 

 

$

 

 

$

935

 

 

 

 

 

 

 

 

 

 

 

 

Restructured accruing loans

 

$

10,197

 

 

$

11,407

 

 

$

11,658

 

 

$

11,253

 

 

$

11,378

 

 

 

September 30, 2021

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

 

Unpaid
Principal
Balance

 

LTV (5)

 

Average Loan
Size

 

Number of
Loans

($ in millions)

 

 

 

 

 

 

 

 

Single family

 

$

64

 

 

61

%

 

$

1.2

 

 

54

 

Home equity lines of credit

 

0

 

 

60

%

 

$

0.2

 

 

1

 

Single family construction

 

3

 

 

75

%

 

$

2.6

 

 

1

 

Multifamily

 

30

 

 

63

%

 

$

30.4

 

 

1

 

Commercial real estate

 

91

 

 

48

%

 

$

4.6

 

 

20

 

Multifamily/commercial construction

 

 

 

n/a

 

$

 

 

 

Capital call lines of credit

 

 

 

n/a

 

$

 

 

 

Tax-exempt

 

7

 

 

n/a

 

$

3.3

 

 

2

 

Other business

 

6

 

 

n/a

 

$

1.6

 

 

4

 

Stock secured

 

 

 

n/a

 

$

 

 

 

Other secured

 

2

 

 

n/a

 

$

0.3

 

 

6

 

Unsecured (6)

 

3

 

 

n/a

 

$

0.1

 

 

26

 

Total

 

$

206

 

 

 

 

 

 

115

 

____________________

(1)

 

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

(2)

 

Includes 23 loans totaling $23 million that have completed their deferral period, but for which a regular payment is not yet due.

(3)

 

Includes 83 loans totaling $177 million that received additional relief beyond their initial modification period.

(4)

 

Excludes loans that have completed their deferral period and returned to a regular payment schedule or are no longer outstanding. As of September 30, 2021, $3.6 billion of loans have completed their deferral period or are no longer outstanding, and 99% of the outstanding loans were current.

(5)

 

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

(6)

 

Consists of household debt refinance loans.

 

September 30, 2021

Loan Industry Information

 

Unpaid
Principal
Balance

 

LTV

 

Average Loan
Size

 

Number of
Loans

 

Personal
Guarantee %

($ in millions)

 

 

 

 

 

 

 

 

 

 

Retail

 

$

1,903

 

 

49

%

 

$

2.6

 

 

744

 

 

80

%

Hotel

 

523

 

 

46

%

 

$

7.9

 

 

68

 

 

78

%

Restaurant (1)

 

174

 

 

48

%

 

$

0.9

 

 

205

 

 

94

%

Total (2)

 

$

2,600

 

 

 

 

 

 

1,017

 

 

 

____________________

(1)

Approximately 78% of loans to restaurants are real estate secured.

(2)

Amounts in the table above exclude $36 million of loans to hotels and $170 million of loans to restaurants under the PPP.

 

As of

Loan Servicing Portfolio

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

Loans serviced for investors

 

$

5,117

 

 

$

5,640

 

 

$

6,314

 

 

$

7,094

 

 

$

7,799

 

Return on Average Common Shareholders’ Equity

and Return on Average Tangible Common

Shareholders’ Equity (1), (2)

 

Quarter Ended
September 30,

 

Quarter Ended
June 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2021

 

2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shareholders’ equity (a)

 

$

11,543,395

 

 

$

9,578,173

 

 

$

10,977,612

 

 

$

10,988,556

 

 

$

9,323,381

 

Less: Average goodwill and other intangible assets

 

223,816

 

 

230,051

 

 

225,183

 

 

225,217

 

 

232,014

 

Average tangible common shareholders’ equity (b)

 

$

11,319,579

 

 

$

9,348,122

 

 

$

10,752,429

 

 

$

10,763,339

 

 

$

9,091,367

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders (c)

 

$

345,260

 

 

$

278,321

 

 

$

349,451

 

 

$

1,011,019

 

 

$

725,938

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common shareholders’

equity (c) / (a)

 

11.87

%

 

11.56

%

 

12.77

%

 

12.30

%

 

10.40

%

Return on average tangible common shareholders’

equity (c) / (b)

 

12.10

%

 

11.84

%

 

13.04

%

 

12.56

%

 

10.67

%

____________________

(1)

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

(2)

Ratios are annualized.

 

As of

Book Value per Common Share and Tangible

Book Value per Common Share (1)

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

$

14,801,794

 

 

$

13,274,727

 

 

$

12,941,730

 

 

$

11,750,646

 

 

$

11,344,609

 

Less: Preferred stock

 

2,892,500

 

 

2,142,500

 

 

2,142,500

 

 

1,545,000

 

 

1,645,000

 

Total common shareholders’ equity (a)

 

11,909,294

 

 

11,132,227

 

 

10,799,230

 

 

10,205,646

 

 

9,699,609

 

Less: Goodwill and other intangible assets

 

223,183

 

 

224,497

 

 

225,925

 

 

227,512

 

 

229,185

 

Total tangible common shareholders’ equity (b)

 

$

11,686,111

 

 

$

10,907,730

 

 

$

10,573,305

 

 

$

9,978,134

 

 

$

9,470,424

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares of common stock outstanding (c)

 

179,261

 

 

176,742

 

 

176,287

 

 

174,124

 

 

172,188

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

66.44

 

 

$

62.99

 

 

$

61.26

 

 

$

58.61

 

 

$

56.33

 

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

 

$

65.19

 

 

$

61.72

 

 

$

59.98

 

 

$

57.30

 

 

$

55.00

 

____________________

(1)

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

 

As of

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

 

September 30,
2021 (3)

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio (Tier 1 capital to average

assets)

 

8.55

%

 

8.05

%

 

8.32

%

 

8.14

%

 

8.38

%

Common Equity Tier 1 capital to risk-weighted

assets

 

9.61

%

 

9.51

%

 

9.64

%

 

9.67

%

 

9.78

%

Tier 1 capital to risk-weighted assets

 

11.99

%

 

11.38

%

 

11.60

%

 

11.18

%

 

11.50

%

Total capital to risk-weighted assets

 

13.16

%

 

12.60

%

 

12.87

%

 

12.55

%

 

12.94

%

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital:

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 capital

 

$

11,673,889

 

 

$

10,875,436

 

 

$

10,548,615

 

 

$

9,894,870

 

 

$

9,375,688

 

Tier 1 capital

 

$

14,566,389

 

 

$

13,017,936

 

 

$

12,691,115

 

 

$

11,439,870

 

 

$

11,020,688

 

Total capital

 

$

15,994,370

 

 

$

14,420,504

 

 

$

14,082,378

 

 

$

12,842,344

 

 

$

12,396,304

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

Average assets

 

$

170,373,171

 

 

$

161,636,891

 

 

$

152,465,399

 

 

$

140,493,283

 

 

$

131,517,445

 

Risk-weighted assets

 

$

121,515,782

 

 

$

114,405,537

 

 

$

109,413,168

 

 

$

102,321,489

 

 

$

95,823,385

 

____________________

(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 September 30, 2021 are preliminary.

 

As of

Wealth Management Assets

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

First Republic Investment Management

 

$

101,105

 

 

$

99,459

 

 

$

90,819

 

 

$

83,596

 

 

$

74,661

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and investment:

 

 

 

 

 

 

 

 

 

 

Brokerage

 

115,793

 

 

112,359

 

 

101,478

 

 

88,059

 

 

76,769

 

Money market mutual funds

 

18,074

 

 

13,109

 

 

11,435

 

 

9,003

 

 

4,416

 

Total brokerage and investment

 

133,867

 

 

125,468

 

 

112,913

 

 

97,062

 

 

81,185

 

 

 

 

 

 

 

 

 

 

 

 

Trust Company:

 

 

 

 

 

 

 

 

 

 

Trust

 

12,220

 

 

11,496

 

 

10,986

 

 

9,910

 

 

8,687

 

Custody

 

4,533

 

 

4,439

 

 

4,216

 

 

3,889

 

 

3,651

 

Total Trust Company

 

16,753

 

 

15,935

 

 

15,202

 

 

13,799

 

 

12,338

 

Total Wealth Management Assets

 

$

251,725

 

 

$

240,862

 

 

$

218,934

 

 

$

194,457

 

 

$

168,184

 

 

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