First Republic Reports 2021 Results

Rhea-AI Summary

First Republic Bank (FRC) reported impressive financial results for the quarter and year ending December 31, 2021. Revenues increased 28.5% year-over-year to $5.0 billion, with net interest income at $4.1 billion, up 26.1%. The bank's net income rose 38.9% to $1.5 billion, driving diluted earnings per share to $7.68, up 32.2%. Loan originations reached a record $64.8 billion for the year. Tangible book value per share rose 17.1% to $67.10, reflecting strong franchise growth in loans, deposits, and wealth management assets, which grew 43.7% to $279.4 billion.

Positive

• Revenues increased 28.5% year-over-year to $5.0 billion.
• Net interest income rose 26.1% to $4.1 billion.
• Net income increased 38.9% to $1.5 billion, pushing EPS up 32.2% to $7.68.
• Loan originations reached a record $64.8 billion, up 23% year-over-year.
• Tangible book value per share grew 17.1% to $67.10.
• Deposits increased 36% to $156.3 billion.

Negative

• Efficiency ratio increased to 63.3%, up from 61.6% due to higher compensation costs.
• Net interest margin decreased to 2.67% from 2.72% year-over-year.

Net Interest Income Increased 26% Year-Over-Year

Tangible Book Value Per Share Increased 17% Year-Over-Year

SAN FRANCISCO--(BUSINESS WIRE)-- First Republic Bank (NYSE: FRC) today announced financial results for the quarter and year ended December 31, 2021.

“This was a terrific year for First Republic,” said Mike Roffler, Co-CEO (Acting) and President. “Loans, deposits and wealth management assets all grew nicely for both the fourth quarter and the full year. First Republic continues to succeed by executing a client-centric business model focused on exceptional service.”

Full Year Highlights

Financial Results

– Revenues were $5.0 billion, up 28.5%.

– Net interest income was $4.1 billion, up 26.1%.

– Net income was $1.5 billion, up 38.9%.

– Diluted earnings per share (“EPS”) of $7.68, up 32.2%.

– Loan originations totaled $64.8 billion, our best year ever.

– Tangible book value per share was $67.10, up 17.1%.

– Efficiency ratio was 62.5%, compared to 61.9% last year.

Continued Capital and Credit Strength

– Tier 1 leverage ratio was 8.76%.

– Tier 1 capital raised of $2.8 billion, net.

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

– Net charge-offs were only $2.1 million, or less than 1 basis point of average loans.

Continued Franchise Growth

– Loans totaled $135.0 billion, up 19.9%.

– Deposits were $156.3 billion, up 36.0%.

– Wealth management assets were $279.4 billion, up 43.7%.

– Wealth management revenues were $760 million, up 44.4%.

Quarterly Highlights

– Compared to last year’s fourth quarter:

– Revenues were $1.4 billion, up 26.4%.

– Net interest income was $1.1 billion, up 25.4%.

– Net income was $400 million, up 35.5%.

– Diluted EPS of $2.02, up 26.3%.

– Loan originations were $16.9 billion, our best quarter ever.

– Net charge-offs were less than $100,000.

– Compared to the prior quarter:

– Net interest margin was 2.68%, compared to 2.65%.

– Efficiency ratio was 63.3%, compared to 61.3%.

– Wealth management assets were up 11.0%.

“Credit quality, liquidity and capital remain strong, and we’re pleased to have raised $2.8 billion in net new Tier 1 capital in 2021,” said Olga Tsokova, Chief Financial Officer (Acting) and Chief Accounting Officer. “Net interest income increased 26% and tangible book value per share rose 17% in 2021.”

Quarterly Cash Dividend of $0.22 per Share

The Bank declared a cash dividend for the fourth quarter of $0.22 per share of common stock, which is payable on February 10, 2022 to shareholders of record as of January 27, 2022.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were at a low 8 basis points of total assets at December 31, 2021.

The provision for credit losses for the full year was $59 million, with net loan charge-offs of only $2.1 million. For the quarter, the provision for credit losses was $24 million, which was primarily driven by loan growth.

Continued Book Value Growth and Capital Strength

Book value per common share at December 31, 2021 was $68.34, up 16.6% from a year ago. Tangible book value per common share at December 31, 2021 was $67.10, up 17.1% from a year ago.

The Bank’s Tier 1 leverage ratio was 8.76% at December 31, 2021, compared to 8.55% at September 30, 2021.

During the fourth quarter, the Bank issued $740 million of 4.500% Noncumulative Perpetual Series N Preferred Stock, which qualifies as Tier 1 capital.

Total common stock sold and preferred stock issued, net of preferred stock redeemed, added $2.8 billion of Tier 1 capital in 2021, and contributed to the 35.3% increase in total equity year-over-year.

Continued Franchise Growth

Loan Originations

Loan originations were $16.9 billion for the quarter, up slightly from the same quarter a year ago. For 2021, loan originations totaled $64.8 billion, up 23.0% compared to the prior year. The increase for the year was primarily due to increases in single family lending and capital call lines of credit.

Single family loan originations were 42% of the total loan origination volume for the quarter and 46% for the full year, and had a weighted average loan-to-value ratio of 59% for the full year. In addition, multifamily and commercial real estate loans originated were 14% of total originations for the quarter and 11% for the year, and had a weighted average loan-to-value ratio of 49% for the year.

Loans totaled $135.0 billion at December 31, 2021, up 19.9% compared to a year ago, primarily due to increases in single family, capital call lines of credit, multifamily and stock secured loans, partially offset by a decrease in PPP loans.

Deposit Growth

Total deposits increased to $156.3 billion, up 36.0% compared to a year ago, and had an average rate paid of 5 basis points during the quarter.

At December 31, 2021, checking deposit balances were 71.7% of total deposits.

Investments

Total investment securities at December 31, 2021 were $25.7 billion, a 6.3% increase compared to the prior quarter and a 38.7% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $30.4 billion at December 31, 2021, and represented 17.0% of quarterly average total assets.

Wealth Management

Total wealth management assets were $279.4 billion at December 31, 2021, up 11.0% compared to the prior quarter and up 43.7% compared to a year ago. The increases in wealth management assets were due to net client inflow and market appreciation.

Wealth management revenues totaled $207 million for the quarter, up 37.1% compared to last year’s fourth quarter. For 2021, wealth management revenues were $760 million, an increase of 44.4% compared to the prior year. Such revenues represented 15.2% of the Bank’s total revenues for the quarter and 15.1% of the Bank’s total revenues for the year.

Wealth management assets at December 31, 2021 included investment management assets of $109.1 billion, brokerage assets and money market mutual funds of $151.9 billion, and trust and custody assets of $18.4 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.4 billion for the quarter, up 26.4% compared to the fourth quarter a year ago, and were $5.0 billion for 2021, up 28.5% compared to the prior year.

Net Interest Income Growth

Net interest income was $1.1 billion for the quarter, up 25.4% compared to the fourth quarter a year ago, and was $4.1 billion for 2021, up 26.1% compared to the prior year. The increases in net interest income resulted primarily from growth in average interest-earning assets, modestly offset by decreases in net interest margin.

Net Interest Margin

The net interest margin increased to 2.68% in the fourth quarter, from 2.65% in the prior quarter. For 2021, the net interest margin was 2.67%, compared to 2.72% for the prior year. The increase for the quarter was primarily due to reduced interest expense that resulted from prepaid FHLB advances in the fourth quarter of 2021. The decline for the year was primarily due to significantly higher average cash balances during the year.

Noninterest Income

Noninterest income was $247 million for the quarter, up 31.6% compared to the fourth quarter a year ago, and was $920 million for 2021, up 40.6% compared to the prior year. The increases were primarily driven by higher wealth management fees and income from investments in life insurance.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $866 million for the quarter, up 29.9% compared to the fourth quarter a year ago, and was $3.1 billion for 2021, up 29.7% compared to the prior year, primarily due to continued investments in the expansion of the franchise, including hiring additional colleagues to support our growth and information systems initiatives.

The efficiency ratio was 63.3% for the quarter, compared to 61.6% for the fourth quarter a year ago. The increase was primarily due to higher compensation costs. For 2021, the efficiency ratio was 62.5%, compared to 61.9% for 2020.

Income Taxes

The Bank’s effective tax rate for the fourth quarter of 2021 was 16.1%, compared to 22.1% for the fourth quarter a year ago. The effective tax rate for 2021 was 19.1%, compared to 20.2% for 2020. The decreases were primarily due to research and development tax credits from prior years’ amended tax returns filed in the fourth quarter of 2021.

Conference Call Details

First Republic Bank’s fourth quarter 2021 earnings conference call is scheduled for January 14, 2022 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (888) 204-4368 and provide confirmation code 3634481 approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (856) 344-9299 and provide the same confirmation code.

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

For those unable to join for the live presentation, a replay of the call will be available beginning January 14, 2022 at 11:00 a.m. PT / 2:00 p.m. ET through January 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 3634481#. 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; 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 including in connection with the search for our next chief executive officer; natural or other disasters, including earthquakes, wildfires, pandemics or acts of terrorism affecting the markets in which we operate; the adverse effects of climate change on our business, clients and counterparties; the negative impacts and disruptions resulting from COVID-19 on our colleagues and clients, the communities we serve and the domestic and global economy, which may have an adverse effect on our business, financial position and results of operations; interest rate risk and credit risk; our ability to maintain and follow high underwriting standards; economic and market conditions, including those affecting the valuation of our investment securities portfolio and credit losses on our loans and debt securities; real estate prices generally and in our markets; our geographic and product concentrations; demand for our products and services; developments and uncertainty related to the future use and availability of some reference rates, 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.

Explanatory Note

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

CONSOLIDATED STATEMENTS OF INCOME
		Quarter Ended December 31,							Quarter Ended September 30,			Year Ended December 31,
(in millions, except per share amounts)		2021				2020			2021			2021			2020
Interest income:
Loans		$	992			$	845		$	947		$	3,725		$	3,245
Investments			165				138			161			624			576
Other			4				6			5			19			24
Cash and cash equivalents			6				2			5			17			8
Total interest income			1,167				991			1,118			4,385			3,853
Interest expense:
Deposits			20				30			22			95			276
Borrowings			27				68			44			176			315
Total interest expense			47				98			66			271			591
Net interest income			1,120				893			1,052			4,114			3,262
Provision for credit losses			24				35			34			59			157
Net interest income after provision for credit losses			1,096				858			1,018			4,055			3,105
Noninterest income:
Investment management fees			150				114			149			554			395
Brokerage and investment fees			19				11			23			74			51
Insurance fees			7				6			6			19			12
Trust fees			7				5			6			25			19
Foreign exchange fee income			24				15			26			88			50
Deposit fees			7				6			7			27			24
Loan and related fees			9				7			8			33			28
Gain (loss) on investment securities			(3	)			—			2			1			4
Income from investments in life insurance			27				18			20			85			53
Other income			—				6			4			14			19
Total noninterest income			247				188			251			920			655
Noninterest expense:
Salaries and employee benefits			544				416			514			2,003			1,495
Information systems			99				79			91			362			299
Occupancy			66				57			67			254			221
Professional fees			27				18			27			101			66
Advertising and marketing			21				14			14			64			43
FDIC assessments			13				12			14			52			44
Other expenses			96				71			71			311			258
Total noninterest expense			866				667			798			3,147			2,426
Income before provision for income taxes			477				379			471			1,828			1,334
Provision for income taxes			77				84			101			350			270
Net income			400				295			370			1,478			1,064
Dividends on preferred stock			32				16			25			99			59
Net income available to common shareholders		$	368			$	279		$	345		$	1,379		$	1,005
Basic earnings per common share		$	2.05			$	1.61		$	1.94		$	7.78		$	5.85
Diluted earnings per common share		$	2.02			$	1.60		$	1.91		$	7.68		$	5.81
Weighted average shares—basic			179				173			178			177			172
Weighted average shares—diluted			182				175			180			180			173

CONSOLIDATED BALANCE SHEETS
		As of
($ in millions)		December 31, 2021				September 30, 2021				December 31, 2020
ASSETS
Cash and cash equivalents		$	12,947			$	12,279			$	5,095
Debt securities available-for-sale			3,381				2,961				1,906
Debt securities held-to-maturity, net			22,292				21,192				16,603
Equity securities (fair value)			28				32				21
Loans:
Single family			76,793				73,491				61,370
Home equity lines of credit			2,584				2,429				2,450
Single family construction			993				985				788
Multifamily			15,966				15,417				13,769
Commercial real estate			8,531				8,486				8,018
Multifamily/commercial construction			1,927				2,064				2,024
Capital call lines of credit			10,999				9,088				8,150
Tax-exempt			3,680				3,578				3,366
Other business			3,961				3,554				3,340
PPP			545				876				1,841
Stock secured			3,435				3,120				2,518
Other secured			2,457				2,261				1,819
Unsecured			3,085				3,026				3,113
Total loans			134,956				128,375				112,566
Allowance for credit losses			(694	)			(668	)			(635	)
Loans, net			134,262				127,707				111,931
Loans held for sale			1				4				21
Investments in life insurance			2,650				2,628				2,061
Tax credit investments			1,220				1,181				1,132
Premises, equipment and leasehold improvements, net			454				431				403
Goodwill and other intangible assets			222				223				228
Other assets			3,630				3,933				3,101
Total Assets		$	181,087			$	172,571			$	142,502
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-bearing checking		$	70,840			$	65,833			$	46,281
Interest-bearing checking			41,248				34,089				30,603
Money market checking			20,303				21,861				16,779
Money market savings and passbooks			16,573				15,947				12,585
Certificates of deposit			7,357				7,596				8,681
Total Deposits			156,321				145,326				114,929
Long-term FHLB advances			3,700				7,700				11,755
Senior notes			998				998				996
Subordinated notes			779				779				778
Other liabilities			3,391				2,966				2,293
Total Liabilities			165,189				157,769				130,751
Shareholders’ Equity:
Preferred stock			3,633				2,893				1,545
Common stock			2				2				2
Additional paid-in capital			5,725				5,685				4,835
Retained earnings			6,569				6,242				5,346
Accumulated other comprehensive income (loss)			(31	)			(20	)			23
Total Shareholders’ Equity			15,898				14,802				11,751
Total Liabilities and Shareholders’ Equity		$	181,087			$	172,571			$	142,502

		Quarter Ended December 31,																			Quarter Ended September 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		$	15,342		$	6		0.15	%		$	6,966		$	2			0.10	%		$	13,384		$	5			0.15	%
Investment securities:
U.S. Government-sponsored agency securities			100			0		1.59	%			50			0			1.57	%			100			0			1.59	%
Agency residential and commercial MBS			7,011			29		1.65	%			5,786			32			2.23	%			6,200			28			1.84	%
Other residential and commercial MBS			25			0		1.82	%			35			0			2.08	%			28			0			2.25	%
Tax-exempt municipal securities			14,869			146		3.93	%			11,815			124			4.20	%			14,173			141			3.97	%
Taxable municipal securities			1,670			12		2.99	%			824			7			3.29	%			1,670			13			2.98	%
Other investment securities			1,405			10		2.86	%			76			1			2.68	%			1,405			10			2.86	%
Total investment securities			25,080			197		3.15	%			18,586			164			3.53	%			23,576			192			3.26	%
Loans:
Residential real estate			78,436			545		2.78	%			62,280			452			2.90	%			75,143			528			2.81	%
Multifamily			15,479			154		3.90	%			13,596			125			3.60	%			15,126			135			3.49	%
Commercial real estate			8,525			83		3.82	%			7,910			79			3.89	%			8,357			82			3.82	%
Multifamily/commercial construction			2,044			24		4.70	%			2,032			24			4.70	%			2,052			26			5.01	%
Business			17,210			139		3.15	%			13,383			116			3.39	%			15,928			129			3.17	%
PPP			732			9		4.65	%			2,004			14			2.82	%			1,123			11			4.01	%
Other			8,578			45		2.03	%			7,253			41			2.23	%			8,158			43			2.06	%
Total loans			131,004			999		3.02	%			108,458			851			3.11	%			125,887			954			3.00	%
FHLB stock			143			4		11.17	%			413			6			5.55	%			266			5			6.99	%
Total interest-earning assets			171,569			1,206		2.79	%			134,423			1,023			3.02	%			163,113			1,156			2.81	%
Noninterest-earning cash			426									453										391
Goodwill and other intangibles			223									228										224
Other assets			6,967									5,706										6,891
Total noninterest-earning assets			7,616									6,387										7,506
Total Assets		$	179,185								$	140,810									$	170,619
Liabilities and Shareholders’ Equity:
Deposits:
Interest-bearing checking		$	36,896			1		0.01	%		$	28,332			2			0.03	%		$	33,642			1			0.01	%
Money market checking			21,925			5		0.10	%			16,890			8			0.19	%			21,861			6			0.11	%
Money market savings and passbooks			16,935			6		0.15	%			12,259			6			0.19	%			15,831			6			0.16	%
CDs			7,482			8		0.42	%			8,814			14			0.63	%			7,779			9			0.46	%
Total interest-bearing deposits (3)			83,238			20		0.10	%			66,295			30			0.18	%			79,113			22			0.11	%
Borrowings:
Short-term borrowings			—			—		—	%			9			0			0.17	%			0			0			0.09	%
Long-term FHLB advances			4,582			12		1.06	%			13,298			53			1.58	%			8,545			28			1.29	%
Senior notes			998			6		2.42	%			996			6			2.42	%			997			6			2.42	%
Subordinated notes			779			9		4.68	%			778			9			4.68	%			779			10			4.68	%
Total borrowings			6,359			27		1.72	%			15,081			68			1.80	%			10,321			44			1.66	%
Total interest-bearing liabilities (4)			89,597			47		0.21	%			81,376			98			0.48	%			89,434			66			0.29	%
Noninterest-bearing checking			71,308									45,545										64,008
Other noninterest-bearing liabilities			3,044									2,341										2,904
Total noninterest-bearing liabilities			74,352									47,886										66,912
Preferred shareholders’ equity			3,158									1,552										2,730
Common shareholders’ equity			12,078									9,996										11,543
Total Liabilities and Shareholders’ Equity		$	179,185								$	140,810									$	170,619
Net interest spread (5)								2.58	%									2.54	%									2.52	%
Net interest income (fully taxable-equivalent basis) and net interest margin (6)					$	1,159		2.68	%					$	925			2.73	%					$	1,090			2.65	%
Reconciliation of tax-equivalent net interest income to net interest income: (7)
Municipal securities tax-equivalent adjustment						(32	)								(25	)									(31	)
Business loans tax-equivalent adjustment						(7	)								(7	)									(7	)
Net interest income					$	1,120								$	893									$	1,052
Supplemental information:
Total deposits (interest-bearing and noninterest-bearing)		$	154,546		$	20		0.05	%		$	111,840		$	30			0.11	%		$	143,121		$	22			0.06	%
Total deposits (interest-bearing and noninterest-bearing) and borrowings		$	160,905		$	47		0.12	%		$	126,921		$	98			0.31	%		$	153,442		$	66			0.17	%

		Year Ended December 31,
		2021										2020
Average Balances, Yields and Rates		Average Balance			Interest Income/ Expense (1)				Yields/ Rates			Average Balance			Interest Income/ Expense (1)				Yields/ Rates
($ in millions)
Assets:
Interest-bearing deposits with banks		$	12,876		$	17			0.13	%		$	4,018		$	8			0.19	%
Investment securities:
U.S. Government-sponsored agency securities			98			2			1.56	%			193			5			2.56	%
Agency residential and commercial MBS			6,125			117			1.91	%			6,348			160			2.51	%
Other residential and commercial MBS			29			1			2.00	%			26			1			2.29	%
Tax-exempt municipal securities			13,704			549			4.01	%			11,329			486			4.29	%
Taxable municipal securities			1,510			45			2.98	%			738			25			3.32	%
Other investment securities			1,157			32			2.80	%			52			1			2.77	%
Total investment securities			22,623			746			3.30	%			18,686			678			3.62	%
Loans:
Residential real estate			72,679			2,048			2.82	%			56,628			1,703			3.01	%
Multifamily			14,735			539			3.61	%			13,093			489			3.68	%
Commercial real estate			8,260			321			3.83	%			7,752			313			3.97	%
Multifamily/commercial construction			2,067			105			4.99	%			1,935			95			4.82	%
Business			16,033			520			3.20	%			12,846			465			3.56	%
PPP			1,418			51			3.58	%			1,432			33			2.26	%
Other			7,938			169			2.10	%			6,842			173			2.48	%
Total loans			123,130			3,753			3.03	%			100,528			3,271			3.23	%
FHLB stock			266			19			7.14	%			442			24			5.40	%
Total interest-earning assets			158,895			4,535			2.84	%			123,674			3,981			3.20	%
Noninterest-earning cash			404										439
Goodwill and other intangibles			225										231
Other assets			6,671										5,104
Total noninterest-earning assets			7,300										5,774
Total Assets		$	166,195									$	129,448
Liabilities and Shareholders’ Equity:
Deposits:
Interest-bearing checking		$	33,977			6			0.02	%		$	24,143			16			0.07	%
Money market checking			20,662			25			0.12	%			14,848			56			0.38	%
Money market savings and passbooks			15,308			25			0.17	%			10,659			32			0.30	%
CDs			7,926			39			0.49	%			11,754			172			1.46	%
Total interest-bearing deposits (3)			77,873			95			0.12	%			61,404			276			0.45	%
Borrowings:
Short-term borrowings			0			0			0.09	%			311			5			1.52	%
Long-term FHLB advances			8,609			116			1.34	%			14,330			250			1.74	%
Senior notes			997			24			2.42	%			938			23			2.44	%
Subordinated notes			779			36			4.68	%			778			37			4.68	%
Total borrowings			10,385			176			1.70	%			16,357			315			1.92	%
Total interest-bearing liabilities (4)			88,258			271			0.31	%			77,761			591			0.76	%
Noninterest-bearing checking			61,325										38,796
Other noninterest-bearing liabilities			2,847										2,131
Total noninterest-bearing liabilities			64,172										40,927
Preferred shareholders' equity			2,502										1,268
Common shareholders' equity			11,263										9,492
Total Liabilities and Shareholders’ Equity		$	166,195									$	129,448
Net interest spread (5)									2.53	%									2.44	%
Net interest income (fully taxable-equivalent basis) and net interest margin (6)					$	4,264			2.67	%					$	3,390			2.72	%
Reconciliation of tax-equivalent net interest income to net interest income: (7)
Municipal securities tax-equivalent adjustment						(122	)									(101	)
Business loans tax-equivalent adjustment						(28	)									(27	)
Net interest income					$	4,114									$	3,262
Supplemental information:
Total deposits (interest-bearing and noninterest-bearing)		$	139,198		$	95			0.07	%		$	100,200		$	276			0.28	%
Total deposits (interest-bearing and noninterest-bearing) and borrowings		$	149,583		$	271			0.18	%		$	116,557		$	591			0.51	%
__________

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.

		Quarter Ended December 31,								Quarter Ended September 30,				Year Ended December 31,
Selected Financial Data and Ratios		2021				2020				2021				2021				2020
($ in millions, except per share amounts)
Selected Financial Data and Ratios:
Return on average assets (1), (2)			0.89	%			0.84	%			0.86	%			0.89	%			0.82	%
Return on average common shareholders’ equity (1)			12.08	%			11.12	%			11.87	%			12.24	%			10.59	%
Return on average tangible common shareholders’ equity (1), (3)			12.31	%			11.38	%			12.10	%			12.49	%			10.86	%
Average equity to average assets			8.50	%			8.20	%			8.37	%			8.28	%			8.31	%
Dividends per common share		$	0.22			$	0.20			$	0.22			$	0.86			$	0.79
Dividend payout ratio			10.9	%			12.5	%			11.5	%			11.2	%			13.6	%
Efficiency ratio (4)			63.3	%			61.6	%			61.3	%			62.5	%			61.9	%
Net loan charge-offs (recoveries)		$	0.1			$	(0.6	)		$	0.3			$	2.1			$	2.4
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		$	68.34			$	58.61			$	66.44
Tangible book value per common share (5)		$	67.10			$	57.30			$	65.19
Allowance for loan credit losses to:
Total loans			0.51	%			0.56	%			0.52	%
Nonaccrual loans			500.5	%			344.9	%			524.4	%
__________

(1)		For periods less than a year, ratios are annualized.
(2)		Return on average assets is the ratio of net income to average assets.
(3)		Refer to “Return on Average Common Shareholders’ Equity and Return on Average Tangible Common Shareholders’ Equity” table in this document for a reconciliation of this non-GAAP financial measure to the most comparable GAAP measure.
(4)		Efficiency ratio is the ratio of noninterest expense to the sum of net interest income and noninterest income.
(5)		Refer to “Book Value per Common Share and Tangible Book Value per Common Share” table in this document for a reconciliation of this non-GAAP financial measure to the most comparable GAAP measure.

		Quarter Ended December 31,						Quarter Ended September 30,			Year Ended December 31,
Effective Tax Rate		2021			2020			2021			2021			2020
Effective tax rate, prior to excess tax benefits—stock awards and research and development tax credits from amended tax returns		22.0	%		22.5	%		23.2	%		22.3	%		21.5	%
Excess tax benefits—stock awards		(1.5	)		(0.4	)		(1.8	)		(2.1	)		(1.3	)
Research and development tax credits from amended tax returns		(4.4	)		—			—			(1.1	)		—
Effective tax rate		16.1	%		22.1	%		21.4	%		19.1	%		20.2	%

Provision (Reversal of Provision) for Credit Losses		Quarter Ended December 31,							Quarter Ended September 30,			Year Ended December 31,
		2021				2020			2021			2021				2020
($ in millions)
Debt securities held-to-maturity		$	—			$	1		$	—		$	2			$	2
Loans			26				29			32			61				143
Unfunded loan commitments			(2	)			5			2			(4	)			12
Total provision		$	24			$	35		$	34		$	59			$	157

		Quarter Ended December 31,								Quarter Ended September 30,				Year Ended December 31,
Mortgage Loan Sales		2021				2020				2021				2021				2020
($ in millions)
Loans sold:
Flow sales:
Agency		$	15			$	152			$	18			$	79			$	233
Non-agency			—				—				—				1				32
Total flow sales			15				152				18				80				265
Bulk sales:
Non-agency			—				—				—				—				673
Securitizations			—				—				—				—				300
Total loans sold		$	15			$	152			$	18			$	80			$	1,238
Gain on sale of loans:
Amount (1)		$	0.1			$	2.4			$	0.1			$	0.6			$	17.0
Gain as a percentage of loans sold			0.45	%			1.58	%			0.80	%			0.72	%			1.37	%
__________

(1)

Included in other noninterest income on the consolidated statements of income.

		Quarter Ended December 31,				Quarter Ended September 30,		Year Ended December 31,
Loan Originations		2021		2020		2021		2021		2020
($ in millions)
Single family		$ 7,013		$ 7,778		$ 6,998		$ 29,575		$ 23,986
Home equity lines of credit		617		619		589		2,440		1,905
Single family construction		245		224		283		968		639
Multifamily		1,723		1,017		1,199		4,815		3,701
Commercial real estate		597		438		725		2,094		1,414
Multifamily/commercial construction		190		304		356		1,129		1,301
Capital call lines of credit		3,690		3,854		3,129		12,871		9,448
Tax-exempt		130		306		38		590		919
Other business		650		771		533		2,729		2,549
PPP		—		—		—		725		1,982
Stock secured		966		670		753		3,205		2,467
Other secured		546		413		547		2,130		1,375
Unsecured		517		312		304		1,539		998
Total loans originated		$ 16,884		$ 16,706		$ 15,454		$ 64,810		$ 52,684

		As of
Asset Quality Information		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
($ in millions)
Nonperforming assets:
Nonaccrual loans		$	139			$	127			$	133			$	173			$	184
Other real estate owned			—				—				—				1				—
Total nonperforming assets		$	139			$	127			$	133			$	174			$	184
Nonperforming assets to total assets			0.08	%			0.07	%			0.08	%			0.11	%			0.13	%
Accruing loans 90 days or more past due		$	—			$	—			$	—			$	1			$	—
Restructured accruing loans		$	13			$	10			$	11			$	12			$	11

		As of
Loan Servicing Portfolio		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020
($ in millions)
Loans serviced for investors		$ 4,677		$ 5,117		$ 5,640		$ 6,314		$ 7,094

Return on Average Common Shareholders’ Equity and Return on Average Tangible Common Shareholders’ Equity (1), (2)		Quarter Ended December 31,								Quarter Ended September 30,				Year Ended December 31,
		2021				2020				2021				2021				2020
($ in millions)
Average common shareholders’ equity (a)		$	12,078			$	9,996			$	11,543			$	11,263			$	9,492
Less: Average goodwill and other intangible assets			(223	)			(228	)			(224	)			(225	)			(231	)
Average tangible common shareholders’ equity (b)		$	11,855			$	9,768			$	11,319			$	11,038			$	9,261
Net income available to common shareholders (c)		$	368			$	279			$	345			$	1,379			$	1,005
Return on average common shareholders’ equity (c) / (a)			12.08	%			11.12	%			11.87	%			12.24	%			10.59	%
Return on average tangible common shareholders’ equity (c) / (b)			12.31	%			11.38	%			12.10	%			12.49	%			10.86	%
__________

(1)		Return on average tangible common shareholders’ equity is considered a non-GAAP financial measure, and is reconciled to GAAP return on average common shareholders’ equity in this table.
(2)		For periods less than a year, ratios are annualized.

		As of
Book Value per Common Share and Tangible Book Value per Common Share (1)		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
(in millions, except per share amounts)
Total shareholders’ equity		$	15,898			$	14,802			$	13,275			$	12,942			$	11,751
Less: Preferred stock			(3,633	)			(2,893	)			(2,143	)			(2,143	)			(1,545	)
Total common shareholders’ equity (a)			12,265				11,909				11,132				10,799				10,206
Less: Goodwill and other intangible assets			(222	)			(223	)			(224	)			(226	)			(228	)
Total tangible common shareholders’ equity (b)		$	12,043			$	11,686			$	10,908			$	10,573			$	9,978
Number of shares of common stock outstanding (c)			179				179				177				176				174
Book value per common share (a) / (c)		$	68.34			$	66.44			$	62.99			$	61.26			$	58.61
Tangible book value per common share (b) / (c)		$	67.10			$	65.19			$	61.72			$	59.98			$	57.30
__________

(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)		December 31, 2021 (3)				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
($ in millions)
Capital Ratios:
Tier 1 leverage ratio (Tier 1 capital to average assets)			8.76	%			8.55	%			8.05	%			8.32	%			8.14	%
Common Equity Tier 1 capital to risk-weighted assets			9.65	%			9.81	%			9.51	%			9.64	%			9.67	%
Tier 1 capital to risk-weighted assets			12.56	%			12.25	%			11.38	%			11.60	%			11.18	%
Total capital to risk-weighted assets			13.72	%			13.45	%			12.60	%			12.87	%			12.55	%
Regulatory Capital:
Common Equity Tier 1 capital		$	12,045			$	11,674			$	10,875			$	10,549			$	9,895
Tier 1 capital		$	15,678			$	14,566			$	13,018			$	12,691			$	11,440
Total capital		$	17,124			$	15,994			$	14,421			$	14,082			$	12,842
Assets:
Average assets		$	178,969			$	170,373			$	161,637			$	152,465			$	140,493
Risk-weighted assets		$	124,820			$	118,941			$	114,406			$	109,413			$	102,321
__________

(1)		As defined by regulatory capital rules.
(2)		Beginning in 2020, ratios and amounts reflect the Bank's election to delay the estimated impact of the Current Expected Credit Losses (“CECL”) allowance methodology on its regulatory capital, average assets and risk-weighted assets over a five-year transition period ending December 31, 2024.
(3)		Ratios and amounts as of December 31, 2021 are preliminary.

		As of
Wealth Management Assets		December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
($ in millions)
First Republic Investment Management		$	109,130		$	101,105		$	99,459		$	90,819		$	83,596
Brokerage and investment:
Brokerage			128,258			115,793			112,359			101,478			88,059
Money market mutual funds			23,673			18,074			13,109			11,435			9,003
Total brokerage and investment			151,931			133,867			125,468			112,913			97,062
Trust Company:
Trust			13,695			12,220			11,496			10,986			9,910
Custody			4,687			4,533			4,439			4,216			3,889
Total Trust Company			18,382			16,753			15,935			15,202			13,799
Total Wealth Management Assets		$	279,443		$	251,725		$	240,862		$	218,934		$	194,457

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220114005074/en/

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

FAQ

What are First Republic Bank's recent financial results for Q4 2021?

In Q4 2021, First Republic Bank reported revenues of $1.4 billion, up 26.4%, net income of $400 million, up 35.5%, and diluted EPS of $2.02, up 26.3%.

How much did First Republic Bank's loan originations increase in 2021?

Loan originations for 2021 totaled $64.8 billion, an increase of 23% compared to the prior year.

What was the tangible book value per share for First Republic Bank as of December 31, 2021?

Tangible book value per share was $67.10, which represents a 17.1% increase year-over-year.

What is the net interest income for First Republic Bank in 2021?

Net interest income for 2021 was $4.1 billion, reflecting a 26.1% increase year-over-year.

How much did First Republic Bank declare for its quarterly cash dividend?

First Republic Bank declared a quarterly cash dividend of $0.22 per share for Q4 2021.