Market Overview

First Republic Reports Strong Third Quarter 2017 Results

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Year-Over-Year Revenues Increased 20%

Wealth Management Assets Surpassed $100 Billion

First Republic Bank (NYSE:FRC) today announced financial results for
the quarter ended September 30, 2017.

"First Republic had another very good quarter," said Jim Herbert,
Chairman and CEO. "Wealth management assets reached a significant
milestone, now exceeding $100 billion. This was also our best third
quarter loan origination volume ever."

Quarterly Highlights

Financial Results

– Year-over-year:

– Revenues were $670.3 million, up 20.1%.

– Net interest income was $551.0 million, up 19.6%.

– Net income was $200.0 million, up 16.4%.

– Diluted earnings per share of $1.14, up 14.0%.

– Tangible book value per share was $38.90, up 16.4%.

– Loan originations totaled $7.2 billion, our best third quarter ever.

– Loans sold totaled $822.4 million.

– Loans held for sale totaled $716.0 million, up from $202.3 million at
prior quarter-end.

– Net interest margin was 3.09%, compared to 3.16% for the prior quarter.

– Efficiency ratio was 62.4%.

Continued Capital and Credit Strength

– Total regulatory capital has grown 20.1% from a year ago.

– Common Equity Tier 1 ratio was 10.58%, compared to 10.52% a year ago.

– Nonperforming assets remained very low at 4 basis points of total
assets.

– Net charge-offs were less than 1 basis point of average loans.

– Provision for loan losses totaled $10.1 million for the quarter,
reflecting continued loan growth.

Continued Franchise Development

– Year-over-year:

– Loans, excluding loans held for sale, totaled $59.5 billion, up 19.3%.

– Deposits were $65.4 billion, up 18.8%.

– Wealth management assets were $101.3 billion, up 26.4%.

– Wealth management revenues were $88.4 million, up 22.9%.

"Both net interest income and revenues were up 20% year-over-year," said
Mike Roffler, Chief Financial Officer. "Tangible book value per share
increased more than 16%, and the Bank's credit quality and capital
remain strong."

Quarterly Cash Dividend Declared

The Bank declared a cash dividend for the third quarter of $0.17 per
share of common stock, which is payable on November 9, 2017 to
shareholders of record as of October 26, 2017.

Very Strong Asset Quality

Credit quality remains very strong. Nonperforming assets were only 4
basis points of total assets at September 30, 2017.

The Bank had net charge-offs for the quarter of only $655,000, or less
than 1 basis point of average loans, while adding $10.1 million to its
allowance for loan losses due to continued loan growth. For the nine
months ended September 30, 2017, the Bank has had net charge-offs of
only $1.8 million, while adding $43.1 million to its allowance for loan
losses.

Continued Capital Strength

Total regulatory capital has grown 20.1% from a year ago.

The Bank's Common Equity Tier 1 ratio was 10.58% at
September 30, 2017, compared to 10.52% a year ago.

Tangible Book Value Growth

Tangible book value per common share at September 30, 2017 was $38.90,
up 16.4% from a year ago.

Continued Franchise Development

Strong Loan Originations

Loan originations were $7.2 billion for the quarter, our best third
quarter ever for loan volume. Loan originations were up 11.9% compared
to the third quarter a year ago primarily due to increases in business,
multifamily and single family lending.

Loans, excluding loans held for sale, totaled $59.5 billion at
September 30, 2017, up 19.3% compared to a year ago.

Deposit Growth

Total deposits increased to $65.4 billion, up 18.8% compared to a year
ago.

At September 30, 2017, checking accounts totaled 60.5% of deposits.

The average rate paid on deposits was 0.25% during the quarter, compared
to 0.18% for the prior quarter.

Investments

Total investment securities at September 30, 2017 were $17.5 billion, up
20.9% annualized, for the first nine months of 2017.

High-quality liquid assets, including eligible cash, totaled $10.6
billion at September 30, 2017, and represented 13.0% of average total
assets.

Mortgage Banking Activity

During the third quarter, the Bank sold $822.4 million of loans and
recorded a gain on sale of $2.0 million, compared to loan sales of
$948.0 million and a gain of $1.8 million during the third quarter of
last year.

Loans held for sale at quarter-end totaled $716.0 million, compared to
$202.3 million at the end of the prior quarter and $514.3 million a year
ago.

Loans serviced for investors at quarter-end totaled $12.1 billion, up
5.4% from a year ago. Net loan servicing fees for the quarter were $3.5
million, up 10.6% from a year ago.

Continued Expansion of Wealth Management

Wealth management revenues totaled $88.4 million for the quarter, up
22.9% compared to last year's third quarter. Such revenues represented
13.2% of the Bank's total revenues for the quarter.

Total wealth management assets were $101.3 billion at September 30,
2017, up 26.4% compared to a year ago. The growth in wealth management
assets was due to both net new assets from existing and new clients and
market appreciation.

Wealth management assets included investment management assets of $50.3
billion, brokerage assets and money market mutual funds of $41.9
billion, and trust and custody assets of $9.2 billion.

Income Statement and Key Ratios

Highlights

Strong Revenue Growth

Total revenues were $670.3 million for the quarter, up 20.1% compared to
the third quarter a year ago.

Strong Net Interest Income Growth

Net interest income was $551.0 million for the quarter, up 19.6%
compared to the third quarter a year ago. The increase in net interest
income resulted primarily from growth in average earning assets.

Net Interest Margin

The Bank's net interest margin was 3.09% for the third quarter, compared
to 3.16% for the prior quarter. The decrease from the prior quarter was
primarily due to higher deposit and borrowing costs.

Noninterest Income

Noninterest income was $119.3 million for the quarter, up 22.7% compared
to the third quarter a year ago. The increase was primarily from growth
in wealth management revenues.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $418.4 million for the quarter, up 23.9%
compared to the third quarter a year ago. The increase was primarily due
to increased salaries and benefits, information systems and other costs
from the continued investments in the expansion of the franchise,
including investments in Gradifi.

The efficiency ratio was 62.4% for the quarter, compared to 61.9% for
the prior quarter and 60.5% for the third quarter a year ago.

Income Tax Rate

The Bank's effective tax rate for the third quarter of 2017 was 17.3%,
compared to 15.3% for the prior quarter. The increase in the effective
tax rate during the quarter resulted from lower tax benefits from
vesting of share-based awards.

Conference Call Details

First Republic Bank's third quarter 2017 earnings conference call is
scheduled for October 13, 2017 at 7:00 a.m. PT / 10:00 a.m. ET. To
access the event by telephone, please dial (877) 407-0792 approximately
10 minutes prior to the start time (to allow time for registration).
International callers should dial (201) 689-8263.

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 firstrepublic.com.
To listen to the live webcast, please visit the site at least 10 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, 2017, at 10:00 a.m. PT / 1:00
p.m. ET, through October 20, 2017, at 8:59 p.m. PT / 11:59 p.m. ET. To
access the replay, dial (844) 512-2921 and use conference ID #13670890.
International callers should dial (412) 317-6671 and enter the same
conference ID number. A replay of the webcast also will be available for
90 days following the call, accessible in the Investor Relations section
of First Republic Bank's website at firstrepublic.com.

The Bank's press releases are available after release in the 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, with
a solid commitment to responsiveness and action. 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; and New York, New York. First Republic
offers a complete line of banking products for individuals and
businesses, including deposit services, as well as residential,
commercial and personal loans. 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. 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 and include statements about economic performance in
our markets, growth in our loan originations and wealth management
assets, our progress in preparing for, and our compliance with, any
enhanced regulatory requirements, and our projected tax rate.
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.

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 nontraditional financial
services and technology companies; our ability to recruit and retain key
managers, employees and board members; the possibility of earthquakes
and other natural disasters affecting the markets in which we operate;
interest rate risk and credit risk; our ability to maintain and follow
high underwriting standards; economic and market conditions affecting
the valuation of our investment securities portfolio, which could result
in other-than-temporary impairment if the general economy deteriorates,
credit ratings decline, the financial condition of issuers deteriorates,
interest rates increase or the liquidity for securities is limited; real
estate prices generally and in our markets; our geographic and product
concentrations; demand for our products and services; the regulatory
environment in which we operate, our regulatory compliance and future
regulatory requirements; the phase-in of the final capital rules
regarding the Basel III framework, changes to the definitions and
components of regulatory capital and a new approach for risk-weighted
assets; legislative and regulatory actions affecting us and the
financial services industry, such as the Dodd-Frank Wall Street Reform
and Consumer Protection Act, including increased compliance costs,
limitations on activities and requirements to hold additional capital;
our ability to avoid litigation and its associated costs and
liabilities; the impact of new accounting standards; future 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. 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 in our Annual Report on Form 10-K and any subsequent reports
filed by First Republic with the FDIC. 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.

 

CONSOLIDATED STATEMENTS OF INCOME

 
     

Quarter Ended
September 30,

   

Quarter Ended
June 30,

   

Nine Months Ended
September 30,

(in thousands, except per share amounts) 2017     2016 2017 2017     2016
Interest income:
Loans $ 497,162 $ 403,299 $ 462,810 $ 1,388,370 $ 1,154,980
Investments 132,948 94,684 130,435 381,441 271,725
Other 3,864 3,701 2,784 10,019 9,447
Cash and cash equivalents 3,193   2,630   3,126   8,987   7,127
Total interest income 637,167   504,314   599,155   1,788,817   1,443,279
 
Interest expense:
Deposits 40,260 19,661 26,355 88,666 52,559
Borrowings 45,954   24,049   40,836   117,549   64,183
Total interest expense 86,214   43,710   67,191   206,215   116,742
 
Net interest income 550,953 460,604 531,964 1,582,602 1,326,537
Provision for loan losses 10,113   18,000   23,938   43,139   36,692
Net interest income after provision for loan losses 540,840   442,604   508,026   1,539,463   1,289,845
 
Noninterest income:
Investment management fees 70,796 56,843 68,819 200,510 164,771
Brokerage and investment fees 7,843 6,627 6,965 22,847 21,717
Trust fees 3,246 3,015 3,448 9,896 8,991
Foreign exchange fee income 6,551 5,460 7,081 19,493 16,022
Deposit fees 5,736 5,278 5,655 16,763 15,358
Loan and related fees 3,270 3,709 3,375 9,911 10,447
Loan servicing fees, net 3,520 3,182 3,577 9,868 10,443
Gain on sale of loans 1,963 1,785 841 6,168 4,010
Gain (loss) on investment securities, net 1,204 (663 ) (602 ) (833 ) 2,418
Income from investments in life insurance 8,865 12,065 9,538 28,038 30,604
Other income (loss) 6,339   (30 ) 675   7,503   1,197
Total noninterest income 119,333   97,271   109,372   330,164   285,978
 
Noninterest expense:
Salaries and employee benefits 236,996 193,340 221,929 680,832 562,538
Information systems 53,663 38,917 51,053 150,486 110,124
Occupancy 34,129 30,945 33,631 101,126 86,862
Professional fees 17,573 12,466 12,236 40,974 37,942
FDIC assessments 14,197 11,800 13,601 40,948 31,200
Advertising and marketing 10,639 7,169 11,560 31,225 22,616
Amortization of intangibles 5,019 6,116 5,293 15,879 19,163
Other expenses 46,143   36,983   47,797   132,528   106,567
Total noninterest expense 418,359   337,736   397,100   1,193,998   977,012
 
Income before provision for income taxes 241,814 202,139 220,298 675,629 598,811
Provision for income taxes 41,805   30,321   33,698   112,246   104,501
Net income 200,009 171,818 186,600 563,383 494,310
Dividends on preferred stock 14,272   17,377   14,344   43,768   51,213
Net income available to common shareholders $ 185,737   $ 154,441   $ 172,256   $ 519,615   $ 443,097
 
Basic earnings per common share $ 1.18   $ 1.03   $ 1.10   $ 3.32   $ 3.00
Diluted earnings per common share $ 1.14   $ 1.00   $ 1.06   $ 3.21   $ 2.90
Dividends per common share $ 0.17   $ 0.16   $ 0.17   $ 0.50   $ 0.47
 
Weighted average shares—basic 157,752   149,800   157,302   156,699   147,665
Weighted average shares—diluted 162,377   154,824   162,335   161,725   153,038
 
 

CONSOLIDATED BALANCE SHEETS

 
      As of
($ in thousands)

September 30,
2017

   

June 30,
2017

   

September 30,
2016

ASSETS

Cash and cash equivalents $ 2,681,599 $ 2,295,125 $ 1,386,967
Investment securities available-for-sale 2,312,218 2,235,923 1,710,571
Investment securities held-to-maturity 15,218,615 14,642,402 11,094,535
 
Loans:
Single family (1-4 units) 29,799,762 29,078,735 24,940,843
Home equity lines of credit 2,668,604 2,681,502 2,586,875
Multifamily (5+ units) 8,060,467 7,453,388 6,214,940
Commercial real estate 5,879,437 5,809,698 5,184,184
Single family construction 549,978 523,478 494,427
Multifamily/commercial construction 1,053,708 987,712 841,021
Business 7,952,335 7,981,609 7,113,369
Stock secured 1,029,463 994,413 872,392
Other secured 974,933 837,423 684,712
Unsecured 1,504,263   1,412,117   926,052  
Total loans 59,472,950   57,760,075   49,858,815  
Allowance for loan losses (347,765 ) (338,307 ) (296,105 )
Loans, net 59,125,185   57,421,768   49,562,710  
 
Loans held for sale 716,046 202,348 514,291
Investments in life insurance 1,320,775 1,292,238 1,266,194
Tax credit investments 1,126,647 1,113,378 1,071,255
Prepaid expenses and other assets 1,183,044 1,146,712 845,329
Premises, equipment and leasehold improvements, net 277,809 260,308 190,213
Goodwill 198,447 203,177 171,616
Other intangible assets 96,520 101,539 118,238
Mortgage servicing rights 63,191 61,383 60,432
Other real estate owned   1,930   1,196  
Total Assets $ 84,320,096   $ 80,978,231   $ 67,993,547  
 

LIABILITIES AND EQUITY

Liabilities:
Deposits:
Noninterest-bearing checking $ 25,122,856 $ 25,769,912 $ 20,965,249
Interest-bearing checking 14,457,910 14,374,273 12,747,952
Money market checking 9,895,827 9,019,626 8,381,381
Money market savings and passbooks 8,843,432 8,099,880 8,126,741
Certificates of deposit 7,116,298   6,030,015   4,840,374  
Total Deposits 65,436,323   63,293,706   55,061,697  
 
Short-term borrowings 450,000 150,000 200,000
Long-term FHLB advances 8,300,000 7,550,000 4,600,000
Senior notes 894,304 893,865 397,755
Subordinated notes 776,989 776,895 387,329
Debt related to variable interest entities 22,519 26,981
Other liabilities 1,034,534   1,031,163   875,287  
Total Liabilities 76,892,150   73,718,148   61,549,049  
 
Shareholders' Equity:
Preferred stock 990,000 990,000 1,139,525
Common stock 1,579 1,577 1,501
Additional paid-in capital 3,536,400 3,525,283 2,962,355
Retained earnings 2,899,417 2,741,041 2,322,296
Accumulated other comprehensive income 550   2,182   18,821  
Total Shareholders' Equity 7,427,946   7,260,083   6,444,498  
Total Liabilities and Shareholders' Equity $ 84,320,096   $ 80,978,231   $ 67,993,547  
 
      Quarter Ended September 30,     Quarter Ended June 30,
2017     2016 2017

Average Balances, Yields
and Rates

Average
Balance

   

Interest
Income/
Expense (1)

   

Yields/
Rates (2)

Average
Balance

   

Interest
Income/
Expense (1)

   

Yields/
Rates (2)

Average
Balance

   

Interest
Income/
Expense (1)

   

Yields/
Rates (2)

($ in thousands)
Assets:
Cash and cash equivalents $ 1,121,328 $ 3,193 1.13 % $ 2,162,287 $ 2,630 0.48 % $ 1,321,995 $ 3,126 0.95 %
Investment securities 17,172,684 174,515 4.07 % 12,082,727 127,614 4.22 % 16,522,412 171,954 4.17 %
Loans 58,965,714 509,222 3.41 % 49,030,453 414,812 3.35 % 55,752,697 474,401 3.39 %
FHLB stock 274,424   3,864   5.59 % 173,543   3,701   8.48 % 221,393   2,784   5.04 %
Total interest-earning

assets

77,534,150   690,794   3.53 % 63,449,010   548,757   3.43 % 73,818,497   652,265   3.52 %
 
Noninterest-earning cash 315,592 277,963 333,651

Goodwill and other intangibles

301,823 292,824 307,275
Other assets 3,280,800   3,002,133   3,258,671  

Total noninterest-earning assets

3,898,215   3,572,920   3,899,597  
Total Assets $ 81,432,365   $ 67,021,930   $ 77,718,094  
 
Liabilities and Equity:
Checking $ 39,109,681 3,585 0.04 % $ 33,276,648 1,387 0.02 % $ 38,014,639 1,435 0.02 %

Money market checking and savings

17,641,318 16,156 0.36 % 15,921,781 4,667 0.12 % 16,336,980 7,130 0.18 %
CDs 6,327,378   20,519   1.29 % 4,688,438   13,607   1.15 % 5,774,830   17,790   1.24 %
Total deposits 63,078,377   40,260   0.25 % 53,886,867   19,661   0.15 % 60,126,449   26,355   0.18 %
 
Short-term borrowings 653,263 1,968 1.20 % 174,205 515 1.18 % 1,433,516 3,698 1.03 %
Long-term FHLB advances 7,558,696 28,828 1.51 % 4,794,022 17,924 1.49 % 6,541,209 24,439 1.50 %
Senior notes (3) 894,086 5,918 2.65 % 397,657 2,575 2.59 % 534,418 3,469 2.60 %
Subordinated notes (3) 776,943 9,094 4.68 % 256,805 2,951 4.60 % 776,850 9,093 4.68 %
Other borrowings 20,123   146   2.90 % 27,557   84   1.23 % 25,147   137   2.20 %
Total borrowings 9,903,111   45,954   1.85 % 5,650,246   24,049   1.70 % 9,311,140   40,836   1.76 %

Total interest-bearing liabilities

72,981,488   86,214   0.47 % 59,537,113   43,710   0.29 % 69,437,589   67,191   0.39 %
 
Noninterest-bearing liabilities 1,029,656 1,055,656 1,036,242
Preferred equity 990,000 1,139,525 966,374
Common equity 6,431,221   5,289,636   6,277,889  

Total Liabilities and Equity

$ 81,432,365   $ 67,021,930   $ 77,718,094  
 
Net interest spread (4) 3.06 % 3.14 % 3.13 %

Net interest income (fully taxable-equivalent basis) and net
interest margin (5)

$ 604,580   3.09 % $ 505,047   3.16 % $ 585,074   3.16 %
 

Reconciliation of tax-equivalent net interest income to
reported net interest income:

Tax-equivalent adjustment (53,627 ) (44,443 ) (53,110 )

Net interest income, as reported

$ 550,953   $ 460,604   $ 531,964  

 

 

(1)

   

Interest income is presented on a fully taxable-equivalent basis.

(2)

Yields/rates are annualized.

(3)

Average balances include unamortized issuance discounts and costs.
Interest expense includes amortization of issuance discounts and
costs.

(4)

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

(5)

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

 

      Nine Months Ended September 30,
2017     2016
Average Balances, Yields and Rates

Average Balance

   

Interest
Income/
Expense (1)

   

Yields/
Rates (2)

Average Balance    

Interest
Income/
Expense (1)

   

Yields/
Rates (2)

($ in thousands)
Assets:
Cash and cash equivalents $ 1,296,152 $ 8,987 0.93 % $ 1,960,525 $ 7,127 0.49 %
Investment securities 16,382,720 501,874 4.08 % 11,443,730 364,324 4.24 %
Loans 55,957,670 1,423,277 3.37 % 46,839,497 1,188,112 3.36 %
FHLB stock 219,457   10,019   6.10 % 156,165   9,447   8.08 %
Total interest-earning assets 73,855,999   1,944,157   3.50 % 60,399,917   1,569,010   3.44 %
 
Noninterest-earning cash 318,898 273,545
Goodwill and other intangibles 307,202 299,126
Other assets 3,236,300   2,971,873  
Total noninterest-earning assets 3,862,400   3,544,544  
Total Assets $ 77,718,399   $ 63,944,461  
 
Liabilities and Equity:
Checking $ 38,165,057 6,146 0.02 % $ 32,346,408 2,499 0.01 %
Money market checking and savings 16,764,072 28,275 0.23 % 14,385,197 9,738 0.09 %
CDs 5,819,803   54,245   1.25 % 4,552,188   40,322   1.18 %
Total deposits 60,748,932   88,666   0.20 % 51,283,793   52,559   0.14 %
 
Short-term borrowings 738,187 6,185 1.12 % 632,215 2,844 0.60 %
Long-term FHLB advances 6,635,165 73,882 1.49 % 4,294,161 50,314 1.57 %
Senior notes (3) 610,671 11,964 2.61 % 397,459 7,720 2.59 %
Subordinated notes (3) 715,510 25,102 4.68 % 86,227 2,951 4.56 %
Other borrowings 23,694   416   2.34 % 28,535   354   1.65 %
Total borrowings 8,723,227   117,549   1.80 % 5,438,597   64,183   1.58 %
Total interest-bearing liabilities 69,472,159   206,215   0.40 % 56,722,390   116,742   0.27 %
 
Noninterest-bearing liabilities 1,035,590 1,057,461
Preferred equity 986,836 1,117,627
Common equity 6,223,814   5,046,983  
Total Liabilities and Equity $ 77,718,399   $ 63,944,461  
 
Net interest spread (4) 3.10 % 3.17 %

Net interest income (fully taxable-equivalent basis) and net
interest margin (5)

$ 1,737,942   3.12 % $ 1,452,268   3.19 %
 

Reconciliation of tax-equivalent net interest income to
reported net interest income:

Tax-equivalent adjustment (155,340 ) (125,731 )
Net interest income, as reported $ 1,582,602   $ 1,326,537  

 

(1)

   

Interest income is presented on a fully taxable-equivalent basis.

(2)

Yields/rates are annualized.

(3)

Average balances include unamortized issuance discounts and costs.
Interest expense includes amortization of issuance discounts and
costs.

(4)

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

(5)

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

 
 
     

Quarter Ended
September 30,

   

Quarter Ended
June 30,

   

Nine Months Ended
September 30,

Operating Information 2017     2016 2017 2017     2016
($ in thousands)
Net income to average assets (1) 0.97 % 1.02 % 0.96 % 0.97 % 1.03 %
Net income available to common shareholders to average common equity (1) 11.46 % 11.62 % 11.01 % 11.16 % 11.73 %
Net income available to common shareholders to average tangible
common equity (1)
12.02 % 12.30 % 11.57 % 11.74 % 12.47 %
Dividend payout ratio 14.9 % 16.0 % 16.0 % 15.6 % 16.2 %
Efficiency ratio (2) 62.4 % 60.5 % 61.9 % 62.4 % 60.6 %
 

Net loan charge-offs

$ 655 $ 626 $ 609 $ 1,772 $ 1,645

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

0.00 % 0.01 % 0.00 % 0.00 % 0.00 %

 

(1) Ratios are annualized.
(2) 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,

Mortgage Loan Sales 2017     2016 2017 2017     2016
($ in thousands)
Loans sold:
Flow sales:
Agency $ 26,152 $ 137,949 $ 34,261 $ 110,145 $ 253,906
Non-agency 88,534   92,750   72,829   217,565   190,439  
Total flow sales 114,686 230,699 107,090 327,710 444,345
 
Bulk sales:
Non-agency 707,669   717,256   332,735   1,580,225   1,902,075  
Total loans sold $ 822,355   $ 947,955   $ 439,825   $ 1,907,935   $ 2,346,420  
 
Gain on sale of loans:
Amount $ 1,963 $ 1,785 $ 841 $ 6,168 $ 4,010
Gain as a percentage of loans sold 0.24 % 0.19 % 0.19 % 0.32 % 0.17 %
 
 
      As of
Loan Servicing Portfolio

September 30,
2017

   

June 30,
2017

   

March 31,
2017

   

December 31,
2016

   

September 30,
2016

($ in millions)
Loans serviced for investors $ 12,111   $ 11,791   $ 11,838   $ 11,655   $ 11,494
 
 
     

Quarter Ended
September 30,

   

Quarter Ended
June 30,

   

Nine Months Ended
September 30,

Loan Originations 2017     2016 2017 2017     2016
($ in thousands)
Single family (1-4 units) $ 2,987,278 $ 2,805,361 $ 3,053,014 $ 8,556,966 $ 7,551,306
Home equity lines of credit 459,709 454,529 424,223 1,298,255 1,362,807
Multifamily (5+ units) 805,429 566,528 646,538 1,860,913 1,799,560
Commercial real estate 197,596 311,466 336,054 929,219 907,850
Construction 413,842 410,538 496,813 1,149,456 861,924
Business 1,879,393 1,529,400 1,654,184 4,486,005 3,434,861
Stock and other secured 320,952 207,241 450,674 1,255,148 1,073,454
Unsecured 179,686   190,836   236,884   647,444   794,810
Total loans originated $ 7,243,885   $ 6,475,899   $ 7,298,384   $ 20,183,406   $ 17,786,572
 
 
      As of
Asset Quality Information

September 30,
2017

   

June 30,
2017

   

March 31,
2017

   

December 31,
2016

   

September 30,
2016

($ in thousands)
Nonperforming assets:
Nonaccrual loans $ 37,922 $ 43,384 $ 51,694 $ 49,020 $ 52,759
Other real estate owned   1,930       1,196  
Total nonperforming assets $ 37,922   $ 45,314   $ 51,694   $ 49,020   $ 53,955  
 
Nonperforming assets to total assets 0.04 % 0.06 % 0.07 % 0.07 % 0.08 %
 
Accruing loans 90 days or more past due $ $ $ $ $ 3,083
 
Restructured accruing loans $ 18,242 $ 13,001 $ 14,224 $ 14,278 $ 13,968
 
 
      As of
Book Value Ratios

September 30,
2017

   

June 30,
2017

   

March 31,
2017

   

December 31,
2016

   

September 30,
2016

(in thousands, except per share amounts)
Number of shares of common stock outstanding 157,930   157,686   157,122   154,292   150,109
Book value per common share $ 40.76   $ 39.76   $ 39.13   $ 37.39   $ 35.34
Tangible book value per common share $ 38.90   $ 37.83   $ 37.16   $ 35.35   $ 33.41
 
 
      As of
2017     2016
September 30 (1)     June 30     March 31 December 31     September 30
Capital Ratios Actual    

Fully
Phased-in (2)

Actual

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

8.78 % 8.76 % 8.99 % 9.22 % 9.37 % 9.26 %

Common Equity Tier 1 capital to risk-weighted assets

10.58 % 10.48 % 10.72 % 11.15 % 10.83 % 10.52 %

Tier 1 capital to risk-weighted assets

12.27 % 12.18 % 12.49 % 12.94 % 13.07 % 12.88 %

Total capital to risk-weighted assets

14.23 % 14.13 % 14.51 % 15.04 % 14.46 % 14.33 %

Regulatory Capital (3)

($ in thousands)
Common Equity Tier 1 capital $ 6,140,330 $ 6,112,026 $ 5,975,457 $ 5,852,885 $ 5,496,582 $ 5,046,133
Tier 1 capital $ 7,121,330 $ 7,102,026 $ 6,960,057 $ 6,788,885 $ 6,631,383 $ 6,180,343
Total capital $ 8,259,581 $ 8,240,277 $ 8,087,714 $ 7,892,528 $ 7,337,725 $ 6,875,478
Assets (3)
($ in thousands)
Average assets $

81,125,539

$ 81,106,237 $ 77,419,255 $ 73,624,461 $ 70,779,188 $ 66,758,108
Risk-weighted assets $ 58,027,813 $ 58,325,800 $ 55,730,798 $ 52,476,984 $ 50,744,017 $ 47,969,927

 

(1)

   

Ratios and amounts as of September 30, 2017 are preliminary.

(2)

Certain adjustments required under the Basel III Capital Rules
will be phased in through the end of 2018. The ratios and amounts
shown in this column are calculated assuming a fully phased-in
basis of all such adjustments as if they were effective as of
September 30, 2017.

(3)

As defined by regulatory capital rules.

 
      As of
Wealth Management Assets

September 30,
2017

   

June 30,
2017

   

March 31,
2017

   

December 31,
2016

   

September 30,
2016

($ in millions)
First Republic Investment Management $ 50,318 $ 47,530 $ 44,573 $ 41,154 $ 40,103
 
Brokerage and investment:
Brokerage 40,652 37,658 35,397 32,218 31,058
Money market mutual funds 1,201   1,402   1,795   2,048   1,902
Total brokerage and investment 41,853   39,060   37,192   34,266   32,960
 
Trust Company:

Trust

4,441 4,276 3,929 3,754 3,171
Custody 4,734   4,559   4,438   4,406   3,954
Total Trust Company 9,175   8,835   8,367   8,160   7,125
Total Wealth Management Assets $ 101,346   $ 95,425   $ 90,132   $ 83,580   $ 80,188
 

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