First Republic Reports Third Quarter 2020 Results
First Republic Bank (NYSE: FRC) reported strong financial performance for the quarter ended September 30, 2020. Revenues reached $1.0 billion, a 19.6% increase year-over-year, with net income up 24.8% to $293.1 million. Diluted earnings per share rose to $1.61, supported by a notable quarter for loan originations totaling $12.2 billion. The bank's deposit base grew 21.8% to $104.4 billion. Additionally, the tangible book value per share increased by 12.6% to $55.00. The bank also declared a cash dividend of $0.20 per share, marking its ninth consecutive year of dividend increases.
- Revenues of $1.0 billion, up 19.6% year-over-year.
- Net income increased 24.8% to $293.1 million.
- Diluted EPS rose 22.9% to $1.61.
- Loan originations of $12.2 billion, the best quarter ever.
- Deposits grew 21.8% to $104.4 billion.
- Tangible book value per share increased 12.6% to $55.00.
- Cash dividend of $0.20 per share declared, ninth consecutive increase.
- Noninterest expense rose 13.9% to $608.2 million.
- Provision for credit losses was $28.5 million due to economic outlook concerns.
SAN FRANCISCO--(BUSINESS WIRE)--First Republic Bank (NYSE: FRC) today announced financial results for the quarter ended September 30, 2020.
“First Republic’s client-centric business model delivered another quarter of safe, consistent growth,” said Jim Herbert, Founder, Chairman and CEO of First Republic. “Lending, deposits and wealth management all continued to grow strongly due to our focus on exceptional, differentiated client service.”
Quarterly Highlights
Financial Results
-
Year-over-year:
-
Revenues were
$1.0 billion , up19.6% . -
Net interest income was
$830.3 million , up19.5% . -
Net income was
$293.1 million , up24.8% . -
Diluted earnings per share of
$1.61 , up22.9% (included$0.09 positive impact from discounts on loans sold, insurance proceeds and an amended tax return refund). -
Tangible book value per share was
$55.00 , up12.6% .
-
Revenues were
-
Loan originations totaled
$12.2 billion , our best quarter ever. -
Net interest margin was
2.71% , compared to2.70% for the prior quarter. -
Efficiency ratio was
60.7% , compared to62.0% for the prior quarter.
Continued Capital and Credit Strength
-
Tier 1 leverage ratio was
8.38% . - Nonperforming assets remained at a low 12 basis points of total assets.
-
Net charge-offs were only
$1.7 million , or less than 1 basis point of average loans.
Continued Franchise Development
-
Year-over-year:
-
Loans totaled
$102.7 billion , up19.0% (excluding SBA Paycheck Protection Program (“PPP”) and for sale loans). -
Deposits were
$104.4 billion , up21.8% . -
Wealth management assets were
$168.2 billion , up19.9% . -
Wealth management revenues were
$126.8 million , up10.5% .
-
Loans totaled
“We’re very pleased with the double-digit growth of revenue, net interest income and earnings per share, both this quarter and year to date,” said Mike Roffler, Chief Financial Officer. “Credit quality, capital and liquidity remain strong. We’re pleased to have raised
Quarterly Cash Dividend of
The Bank declared a cash dividend for the third quarter of
Strong Asset Quality
Credit quality remains strong. Nonperforming assets were only 12 basis points of total assets at September 30, 2020.
The provision for credit losses for the quarter was
Continued Capital Strength
The Bank’s Tier 1 leverage ratio was
During the third quarter, the Bank issued
The Bank has not and does not engage in common stock buybacks.
Tangible Book Value Growth
Tangible book value per common share at September 30, 2020 was
Continued Franchise Development
Loan Originations
Loan originations were
Single family loan originations were
Loans, excluding PPP loans and loans held for sale, totaled
COVID-19 Loan Modifications
Loan modifications to those borrowers experiencing financial challenges as a result of COVID-19 (not classified as troubled debt restructurings) totaled
The Bank has limited exposure to several of the areas most directly impacted by COVID-19, such as the retail, hotel and restaurant industries, which totaled
Deposit Growth
Total deposits increased to
At September 30, 2020, checking deposit balances were
Investments
Total investment securities at September 30, 2020 were
High-quality liquid assets, including eligible cash, totaled
Wealth Management
Total wealth management assets were
Wealth management revenues totaled
Wealth management assets at September 30, 2020 included investment management assets of
Income Statement and Key Ratios
Revenue Growth
Total revenues were
Net Interest Income Growth
Net interest income was
Net Interest Margin
The net interest margin increased to
Noninterest Income
Noninterest income was
Noninterest Expense and Efficiency Ratio
Noninterest expense was
The efficiency ratio was
Income Taxes
The Bank’s effective tax rate for the third quarter of 2020 was
Conference Call Details
First Republic Bank’s third quarter 2020 earnings conference call is scheduled for October 13, 2020 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (800) 353-6461 and use confirmation code 2953562# approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (334) 323-0501 and enter 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 firstrepublic.com. 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, 2020, at 11:00 a.m. PT / 2:00 p.m. ET, through October 20, 2020, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 2953562#. 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 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 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 the COVID-19 pandemic (collectively referred to as “COVID-19” herein); 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; the possibility of earthquakes, fires and other natural disasters 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, Quarterly Reports on Form 10-Q 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.
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||||||
|
Quarter Ended
|
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||||||||||
(in thousands, except per share amounts) |
|
2020 |
|
2019 |
|
2020 |
2020 |
|
2019 |
|||||||||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans |
|
$ |
811,708 |
|
|
$ |
764,468 |
|
|
$ |
791,286 |
|
|
$ |
2,399,646 |
|
|
$ |
2,205,884 |
|
Investments |
|
142,971 |
|
|
134,099 |
|
|
146,515 |
|
|
438,055 |
|
|
401,908 |
|
|||||
Other |
|
6,116 |
|
|
5,779 |
|
|
5,059 |
|
|
18,135 |
|
|
15,767 |
|
|||||
Cash and cash equivalents |
|
1,181 |
|
|
5,430 |
|
|
564 |
|
|
5,685 |
|
|
18,966 |
|
|||||
Total interest income |
|
961,976 |
|
|
909,776 |
|
|
943,424 |
|
|
2,861,521 |
|
|
2,642,525 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits |
|
54,355 |
|
|
134,917 |
|
|
72,480 |
|
|
245,680 |
|
|
371,852 |
|
|||||
Borrowings |
|
77,341 |
|
|
79,874 |
|
|
83,532 |
|
|
246,017 |
|
|
226,624 |
|
|||||
Total interest expense |
|
131,696 |
|
|
214,791 |
|
|
156,012 |
|
|
491,697 |
|
|
598,476 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest income |
|
830,280 |
|
|
694,985 |
|
|
787,412 |
|
|
2,369,824 |
|
|
2,044,049 |
|
|||||
Provision for credit losses |
|
28,538 |
|
|
16,711 |
|
|
31,117 |
|
|
122,025 |
|
|
52,111 |
|
|||||
Net interest income after provision for credit losses |
|
801,742 |
|
|
678,274 |
|
|
756,295 |
|
|
2,247,799 |
|
|
1,991,938 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment management fees |
|
96,638 |
|
|
83,582 |
|
|
85,083 |
|
|
281,017 |
|
|
262,226 |
|
|||||
Brokerage and investment fees |
|
10,796 |
|
|
12,673 |
|
|
12,406 |
|
|
39,028 |
|
|
28,619 |
|
|||||
Insurance fees |
|
2,216 |
|
|
2,712 |
|
|
1,713 |
|
|
6,086 |
|
|
8,522 |
|
|||||
Trust fees |
|
4,543 |
|
|
4,105 |
|
|
4,599 |
|
|
14,118 |
|
|
12,221 |
|
|||||
Foreign exchange fee income |
|
12,575 |
|
|
11,685 |
|
|
10,105 |
|
|
34,864 |
|
|
30,661 |
|
|||||
Deposit fees |
|
5,753 |
|
|
6,563 |
|
|
5,248 |
|
|
17,598 |
|
|
19,462 |
|
|||||
Loan and related fees |
|
7,171 |
|
|
5,341 |
|
|
7,456 |
|
|
20,741 |
|
|
13,644 |
|
|||||
Loan servicing fees, net |
|
144 |
|
|
2,347 |
|
|
(4,445) |
|
|
(2,649) |
|
|
9,560 |
|
|||||
Gain (loss) on sale of loans |
|
13,797 |
|
|
122 |
|
|
(1,147) |
|
|
14,575 |
|
|
466 |
|
|||||
Gain (loss) on investment securities |
|
(405) |
|
|
(683) |
|
|
1,529 |
|
|
3,752 |
|
|
(1,895) |
|
|||||
Income from investments in life insurance |
|
20,546 |
|
|
12,152 |
|
|
7,800 |
|
|
36,506 |
|
|
31,536 |
|
|||||
Other income (loss) |
|
(2,791) |
|
|
1,608 |
|
|
1,222 |
|
|
960 |
|
|
4,853 |
|
|||||
Total noninterest income |
|
170,983 |
|
|
142,207 |
|
|
131,569 |
|
|
466,596 |
|
|
419,875 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries and employee benefits |
|
373,225 |
|
|
309,655 |
|
|
344,204 |
|
|
1,078,633 |
|
|
920,432 |
|
|||||
Information systems |
|
74,549 |
|
|
66,612 |
|
|
74,037 |
|
|
219,301 |
|
|
204,059 |
|
|||||
Occupancy |
|
55,543 |
|
|
50,722 |
|
|
54,941 |
|
|
164,125 |
|
|
142,204 |
|
|||||
Professional fees |
|
19,845 |
|
|
17,507 |
|
|
15,517 |
|
|
48,479 |
|
|
45,623 |
|
|||||
Advertising and marketing |
|
8,909 |
|
|
15,912 |
|
|
8,621 |
|
|
29,373 |
|
|
48,346 |
|
|||||
FDIC assessments |
|
11,003 |
|
|
9,748 |
|
|
11,275 |
|
|
32,463 |
|
|
27,847 |
|
|||||
Other expenses |
|
65,136 |
|
|
63,794 |
|
|
60,863 |
|
|
187,311 |
|
|
199,105 |
|
|||||
Total noninterest expense |
|
608,210 |
|
|
533,950 |
|
|
569,458 |
|
|
1,759,685 |
|
|
1,587,616 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income before provision for income taxes |
|
364,515 |
|
|
286,531 |
|
|
318,406 |
|
|
954,710 |
|
|
824,197 |
|
|||||
Provision for income taxes |
|
71,378 |
|
|
51,687 |
|
|
61,638 |
|
|
186,119 |
|
|
140,198 |
|
|||||
Net income |
|
293,137 |
|
|
234,844 |
|
|
256,768 |
|
|
768,591 |
|
|
683,999 |
|
|||||
Dividends on preferred stock |
|
14,816 |
|
|
12,787 |
|
|
14,817 |
|
|
42,653 |
|
|
38,362 |
|
|||||
Net income available to common shareholders |
|
$ |
278,321 |
|
|
$ |
222,057 |
|
|
$ |
241,951 |
|
|
$ |
725,938 |
|
|
$ |
645,637 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic earnings per common share |
|
$ |
1.62 |
|
|
$ |
1.32 |
|
|
$ |
1.41 |
|
|
$ |
4.23 |
|
|
$ |
3.85 |
|
Diluted earnings per common share |
|
$ |
1.61 |
|
|
$ |
1.31 |
|
|
$ |
1.40 |
|
|
$ |
4.21 |
|
|
$ |
3.81 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Weighted average shares—basic |
|
172,142 |
|
|
168,272 |
|
|
171,627 |
|
|
171,537 |
|
|
167,694 |
|
|||||
Weighted average shares—diluted |
|
172,932 |
|
|
169,346 |
|
|
172,659 |
|
|
172,514 |
|
|
169,449 |
|
CONSOLIDATED BALANCE SHEETS |
||||||||||||||||
|
As of |
|||||||||||||||
($ in thousands) |
|
September 30,
|
|
June 30,
|
|
December 31,
|
|
September 30,
|
||||||||
ASSETS |
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents |
|
$ |
3,691,149 |
|
|
$ |
3,099,170 |
|
|
$ |
1,699,557 |
|
|
$ |
2,181,600 |
|
Debt securities available-for-sale |
|
1,711,202 |
|
|
1,576,956 |
|
|
1,282,169 |
|
|
1,401,105 |
|
||||
|
|
|
|
|
|
|
|
|||||||||
Debt securities held-to-maturity |
|
16,929,422 |
|
|
17,513,211 |
|
|
17,147,633 |
|
|
16,002,722 |
|
||||
Less: Allowance for credit losses |
|
(5,716) |
|
|
(5,383) |
|
|
— |
|
|
— |
|
||||
Debt securities held-to-maturity, net |
|
16,923,706 |
|
|
17,507,828 |
|
|
17,147,633 |
|
|
16,002,722 |
|
||||
|
|
|
|
|
|
|
|
|||||||||
Equity securities (fair value) |
|
20,478 |
|
|
21,104 |
|
|
19,586 |
|
|
19,736 |
|
||||
|
|
|
|
|
|
|
|
|||||||||
Loans: (1) |
|
|
|
|
|
|
|
|
||||||||
Single family (1-4 units) |
|
56,628,359 |
|
|
52,435,246 |
|
|
47,985,651 |
|
|
44,882,363 |
|
||||
Home equity lines of credit |
|
2,431,991 |
|
|
2,419,359 |
|
|
2,501,432 |
|
|
2,530,740 |
|
||||
Single family construction |
|
739,091 |
|
|
733,909 |
|
|
761,589 |
|
|
743,699 |
|
||||
Multifamily (5+ units) |
|
13,392,531 |
|
|
13,187,857 |
|
|
12,353,359 |
|
|
11,672,916 |
|
||||
Commercial real estate |
|
7,781,797 |
|
|
7,793,137 |
|
|
7,449,058 |
|
|
7,415,677 |
|
||||
Multifamily/commercial construction |
|
2,038,949 |
|
|
1,966,292 |
|
|
1,695,954 |
|
|
1,583,968 |
|
||||
Capital call lines of credit |
|
6,203,877 |
|
|
6,173,992 |
|
|
5,570,322 |
|
|
5,568,342 |
|
||||
Tax-exempt |
|
3,276,705 |
|
|
3,186,066 |
|
|
3,042,193 |
|
|
3,042,765 |
|
||||
Other business |
|
2,982,532 |
|
|
3,179,023 |
|
|
3,034,301 |
|
|
2,953,756 |
|
||||
PPP |
|
2,091,102 |
|
|
2,092,307 |
|
|
— |
|
|
— |
|
||||
Stock secured |
|
2,311,754 |
|
|
1,924,107 |
|
|
1,897,511 |
|
|
1,610,914 |
|
||||
Other secured |
|
1,780,652 |
|
|
1,702,535 |
|
|
1,433,399 |
|
|
1,293,084 |
|
||||
Unsecured |
|
3,102,311 |
|
|
3,221,405 |
|
|
3,072,062 |
|
|
3,006,586 |
|
||||
Total loans |
|
104,761,651 |
|
|
100,015,235 |
|
|
90,796,831 |
|
|
86,304,810 |
|
||||
Allowance for credit losses |
|
(604,747) |
|
|
(583,997) |
|
|
(496,104) |
|
|
(485,465) |
|
||||
Loans, net |
|
104,156,904 |
|
|
99,431,238 |
|
|
90,300,727 |
|
|
85,819,345 |
|
||||
|
|
|
|
|
|
|
|
|||||||||
Loans held for sale |
|
33,655 |
|
|
313,655 |
|
|
23,304 |
|
|
31,693 |
|
||||
Investments in life insurance |
|
1,949,360 |
|
|
1,468,712 |
|
|
1,434,642 |
|
|
1,425,057 |
|
||||
Tax credit investments |
|
1,099,713 |
|
|
1,105,853 |
|
|
1,100,509 |
|
|
1,039,061 |
|
||||
Premises, equipment and leasehold improvements, net |
|
390,241 |
|
|
388,256 |
|
|
386,841 |
|
|
373,693 |
|
||||
Goodwill and other intangible assets |
|
229,185 |
|
|
230,975 |
|
|
235,269 |
|
|
264,658 |
|
||||
Other real estate owned |
|
— |
|
|
1,071 |
|
|
— |
|
|
— |
|
||||
Other assets |
|
3,020,178 |
|
|
3,159,069 |
|
|
2,633,397 |
|
|
2,470,065 |
|
||||
Total Assets |
|
$ |
133,225,771 |
|
|
$ |
128,303,887 |
|
|
$ |
116,263,634 |
|
|
$ |
111,028,735 |
|
|
|
|
|
|
|
|
|
|||||||||
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
||||||||
Liabilities: |
|
|
|
|
|
|
|
|
||||||||
Deposits: |
|
|
|
|
|
|
|
|
||||||||
Noninterest-bearing checking |
|
$ |
41,538,676 |
|
|
$ |
37,586,940 |
|
|
$ |
33,124,265 |
|
|
$ |
32,720,317 |
|
Interest-bearing checking |
|
26,081,189 |
|
|
23,833,458 |
|
|
19,696,859 |
|
|
17,438,402 |
|
||||
Money market checking |
|
15,868,769 |
|
|
14,639,069 |
|
|
12,790,707 |
|
|
11,242,205 |
|
||||
Money market savings and passbooks |
|
11,419,289 |
|
|
10,236,015 |
|
|
10,586,355 |
|
|
10,277,249 |
|
||||
Certificates of deposit |
|
9,495,453 |
|
|
12,238,479 |
|
|
13,935,060 |
|
|
14,042,346 |
|
||||
Total Deposits |
|
104,403,376 |
|
|
98,533,961 |
|
|
90,133,246 |
|
|
85,720,519 |
|
||||
|
|
|
|
|
|
|
|
|||||||||
Short-term borrowings |
|
5,000 |
|
|
5,000 |
|
|
800,000 |
|
|
775,000 |
|
||||
Long-term FHLB advances |
|
13,505,000 |
|
|
15,405,000 |
|
|
12,200,000 |
|
|
10,900,000 |
|
||||
Senior notes |
|
995,626 |
|
|
995,109 |
|
|
497,719 |
|
|
497,494 |
|
||||
Subordinated notes |
|
778,204 |
|
|
778,096 |
|
|
777,885 |
|
|
777,781 |
|
||||
Other liabilities |
|
2,193,956 |
|
|
2,010,793 |
|
|
2,003,677 |
|
|
2,926,735 |
|
||||
Total Liabilities |
|
121,881,162 |
|
|
117,727,959 |
|
|
106,412,527 |
|
|
101,597,529 |
|
||||
|
|
|
|
|
|
|
|
|||||||||
Shareholders’ Equity: |
|
|
|
|
|
|
|
|
||||||||
Preferred stock |
|
1,645,000 |
|
|
1,145,000 |
|
|
1,145,000 |
|
|
940,000 |
|
||||
Common stock |
|
1,722 |
|
|
1,721 |
|
|
1,686 |
|
|
1,685 |
|
||||
Additional paid-in capital |
|
4,571,499 |
|
|
4,543,051 |
|
|
4,214,915 |
|
|
4,198,442 |
|
||||
Retained earnings |
|
5,102,229 |
|
|
4,858,965 |
|
|
4,484,375 |
|
|
4,281,249 |
|
||||
Accumulated other comprehensive income |
|
24,159 |
|
|
27,191 |
|
|
5,131 |
|
|
9,830 |
|
||||
Total Shareholders’ Equity |
|
11,344,609 |
|
|
10,575,928 |
|
|
9,851,107 |
|
|
9,431,206 |
|
||||
Total Liabilities and Shareholders’ Equity |
|
$ |
133,225,771 |
|
|
$ |
128,303,887 |
|
|
$ |
116,263,634 |
|
|
$ |
111,028,735 |
|
____________ |
|
|
|
|
|
|
|
|
||||||||
(1) For comparability, the Bank has adjusted certain prior period loan amounts to conform to the current period presentation under the Current Expected Credit Losses (“CECL”) methodology. |
|
Quarter Ended September 30, |
|
Quarter Ended June 30, |
||||||||||||||||||||||||||||||
|
2020 |
|
2019 (4) |
|
2020 |
||||||||||||||||||||||||||||
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 |
|
$ |
4,427,985 |
|
|
$ |
1,181 |
|
|
0.11 |
% |
|
$ |
1,161,441 |
|
|
$ |
5,430 |
|
|
1.86 |
% |
|
$ |
2,789,666 |
|
|
$ |
564 |
|
|
0.08 |
% |
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Government-sponsored agency securities |
|
202,174 |
|
|
1,186 |
|
|
2.35 |
% |
|
740,893 |
|
|
5,375 |
|
|
2.90 |
% |
|
214,835 |
|
|
1,367 |
|
|
2.55 |
% |
||||||
Agency residential and commercial MBS |
|
6,250,577 |
|
|
37,437 |
|
|
2.40 |
% |
|
6,593,422 |
|
|
46,762 |
|
|
2.84 |
% |
|
6,615,707 |
|
|
42,661 |
|
|
2.58 |
% |
||||||
Other residential and commercial MBS |
|
37,860 |
|
|
201 |
|
|
2.13 |
% |
|
4,473 |
|
|
43 |
|
|
3.84 |
% |
|
27,499 |
|
|
182 |
|
|
2.65 |
% |
||||||
Municipal securities |
|
12,309,647 |
|
|
129,097 |
|
|
4.19 |
% |
|
9,184,274 |
|
|
101,154 |
|
|
4.41 |
% |
|
11,949,615 |
|
|
126,906 |
|
|
4.25 |
% |
||||||
Other investment securities (3) |
|
44,782 |
|
|
309 |
|
|
2.76 |
% |
|
24,977 |
|
|
156 |
|
|
2.49 |
% |
|
43,800 |
|
|
309 |
|
|
2.83 |
% |
||||||
Total investment securities |
|
18,845,040 |
|
|
168,230 |
|
|
3.57 |
% |
|
16,548,039 |
|
|
153,490 |
|
|
3.71 |
% |
|
18,851,456 |
|
|
171,425 |
|
|
3.64 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans: (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Residential real estate (5) |
|
56,906,612 |
|
|
421,545 |
|
|
2.96 |
% |
|
45,754,902 |
|
|
374,690 |
|
|
3.27 |
% |
|
53,737,207 |
|
|
404,691 |
|
|
3.01 |
% |
||||||
Multifamily (6) |
|
13,312,631 |
|
|
124,759 |
|
|
3.67 |
% |
|
11,391,573 |
|
|
111,727 |
|
|
3.84 |
% |
|
12,887,676 |
|
|
120,657 |
|
|
3.70 |
% |
||||||
Commercial real estate |
|
7,801,603 |
|
|
78,412 |
|
|
3.93 |
% |
|
7,280,053 |
|
|
77,654 |
|
|
4.17 |
% |
|
7,718,257 |
|
|
77,635 |
|
|
3.98 |
% |
||||||
Multifamily/commercial construction |
|
2,739,717 |
|
|
30,608 |
|
|
4.37 |
% |
|
2,294,560 |
|
|
29,055 |
|
|
4.95 |
% |
|
2,632,682 |
|
|
29,468 |
|
|
4.43 |
% |
||||||
Business (7) |
|
12,538,201 |
|
|
110,487 |
|
|
3.45 |
% |
|
11,551,439 |
|
|
129,314 |
|
|
4.38 |
% |
|
13,069,640 |
|
|
115,666 |
|
|
3.50 |
% |
||||||
PPP |
|
2,091,580 |
|
|
10,825 |
|
|
2.03 |
% |
|
— |
|
|
— |
|
|
— |
% |
|
1,620,772 |
|
|
7,659 |
|
|
1.87 |
% |
||||||
Other (8) |
|
6,995,592 |
|
|
41,735 |
|
|
2.33 |
% |
|
5,704,872 |
|
|
48,746 |
|
|
3.34 |
% |
|
6,658,487 |
|
|
42,116 |
|
|
2.50 |
% |
||||||
Total loans |
|
102,385,936 |
|
|
818,371 |
|
|
3.16 |
% |
|
83,977,399 |
|
|
771,186 |
|
|
3.63 |
% |
|
98,324,721 |
|
|
797,892 |
|
|
3.23 |
% |
||||||
FHLB stock |
|
457,808 |
|
|
6,116 |
|
|
5.31 |
% |
|
321,778 |
|
|
5,779 |
|
|
7.13 |
% |
|
491,938 |
|
|
5,059 |
|
|
4.14 |
% |
||||||
Total interest-earning assets |
|
126,116,769 |
|
|
993,898 |
|
|
3.12 |
% |
|
102,008,657 |
|
|
935,885 |
|
|
3.63 |
% |
|
120,457,781 |
|
|
974,940 |
|
|
3.22 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Noninterest-earning cash |
|
433,852 |
|
|
|
|
|
|
335,648 |
|
|
|
|
|
|
425,440 |
|
|
|
|
|
||||||||||||
Goodwill and other intangibles |
|
230,051 |
|
|
|
|
|
|
266,032 |
|
|
|
|
|
|
231,934 |
|
|
|
|
|
||||||||||||
Other assets |
|
5,074,504 |
|
|
|
|
|
|
4,409,665 |
|
|
|
|
|
|
4,905,493 |
|
|
|
|
|
||||||||||||
Total noninterest-earning assets |
|
5,738,407 |
|
|
|
|
|
|
5,011,345 |
|
|
|
|
|
|
5,562,867 |
|
|
|
|
|
||||||||||||
Total Assets |
|
$ |
131,855,176 |
|
|
|
|
|
|
$ |
107,020,002 |
|
|
|
|
|
|
$ |
126,020,648 |
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities and Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Checking |
|
$ |
64,895,753 |
|
|
2,413 |
|
|
0.01 |
% |
|
$ |
48,666,948 |
|
|
8,501 |
|
|
0.07 |
% |
|
$ |
58,978,081 |
|
|
3,127 |
|
|
0.02 |
% |
|||
Money market checking and savings |
|
26,220,043 |
|
|
13,675 |
|
|
0.21 |
% |
|
20,536,777 |
|
|
53,046 |
|
|
1.02 |
% |
|
24,133,700 |
|
|
15,224 |
|
|
0.25 |
% |
||||||
CDs |
|
11,334,100 |
|
|
38,267 |
|
|
1.34 |
% |
|
13,170,046 |
|
|
73,370 |
|
|
2.21 |
% |
|
12,721,452 |
|
|
54,129 |
|
|
1.71 |
% |
||||||
Total deposits |
|
102,449,896 |
|
|
54,355 |
|
|
0.21 |
% |
|
82,373,771 |
|
|
134,917 |
|
|
0.65 |
% |
|
95,833,233 |
|
|
72,480 |
|
|
0.30 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Short-term borrowings |
|
5,030 |
|
|
0 |
|
|
0.00 |
% |
|
2,204,262 |
|
|
12,520 |
|
|
2.25 |
% |
|
2,747 |
|
|
0 |
|
|
0.04 |
% |
||||||
Long-term FHLB advances |
|
14,739,238 |
|
|
62,201 |
|
|
1.68 |
% |
|
9,796,739 |
|
|
54,901 |
|
|
2.22 |
% |
|
15,868,682 |
|
|
68,391 |
|
|
1.73 |
% |
||||||
Senior notes (9) |
|
995,373 |
|
|
6,032 |
|
|
2.42 |
% |
|
497,384 |
|
|
3,350 |
|
|
2.69 |
% |
|
994,905 |
|
|
6,034 |
|
|
2.43 |
% |
||||||
Subordinated notes (9) |
|
778,151 |
|
|
9,108 |
|
|
4.68 |
% |
|
777,730 |
|
|
9,103 |
|
|
4.68 |
% |
|
778,044 |
|
|
9,107 |
|
|
4.68 |
% |
||||||
Total borrowings |
|
16,517,792 |
|
|
77,341 |
|
|
1.86 |
% |
|
13,276,115 |
|
|
79,874 |
|
|
2.39 |
% |
|
17,644,378 |
|
|
83,532 |
|
|
1.90 |
% |
||||||
Total interest-bearing liabilities |
|
118,967,688 |
|
|
131,696 |
|
|
0.44 |
% |
|
95,649,886 |
|
|
214,791 |
|
|
0.89 |
% |
|
113,477,611 |
|
|
156,012 |
|
|
0.55 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Noninterest-bearing liabilities |
|
2,082,793 |
|
|
|
|
|
|
2,037,177 |
|
|
|
|
|
|
2,067,585 |
|
|
|
|
|
||||||||||||
Preferred equity |
|
1,226,522 |
|
|
|
|
|
|
940,000 |
|
|
|
|
|
|
1,145,000 |
|
|
|
|
|
||||||||||||
Common equity |
|
9,578,173 |
|
|
|
|
|
|
8,392,939 |
|
|
|
|
|
|
9,330,452 |
|
|
|
|
|
||||||||||||
Total Liabilities and Equity |
|
$ |
131,855,176 |
|
|
|
|
|
|
$ |
107,020,002 |
|
|
|
|
|
|
$ |
126,020,648 |
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net interest spread (10) |
|
|
|
|
|
2.68 |
% |
|
|
|
|
|
2.74 |
% |
|
|
|
|
|
2.67 |
% |
||||||||||||
Net interest income (fully taxable-equivalent basis) and net interest margin (11) |
|
|
|
$ |
862,202 |
|
|
2.71 |
% |
|
|
|
$ |
721,094 |
|
|
2.80 |
% |
|
|
|
$ |
818,928 |
|
|
2.70 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Reconciliation of tax-equivalent net interest income to reported net interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Tax-equivalent adjustment |
|
(31,922) |
|
|
|
|
|
|
(26,109) |
|
|
|
|
|
|
(31,516) |
|
|
|
||||||||||||||
Net interest income, as reported |
|
$ |
830,280 |
|
|
|
|
|
|
$ |
694,985 |
|
|
|
|
|
|
$ |
787,412 |
|
|
|
|
Nine Months Ended September 30, |
|||||||||||||||||||||
|
2020 |
|
2019 (4) |
|||||||||||||||||||
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 |
|
$ |
3,028,868 |
|
|
$ |
5,685 |
|
|
0.25 |
% |
|
$ |
1,231,578 |
|
|
$ |
18,966 |
|
|
2.06 |
% |
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government-sponsored agency securities |
|
241,343 |
|
|
4,760 |
|
|
2.63 |
% |
|
938,081 |
|
|
20,827 |
|
|
2.96 |
% |
||||
Agency residential and commercial MBS |
|
6,536,601 |
|
|
127,283 |
|
|
2.60 |
% |
|
6,705,085 |
|
|
144,106 |
|
|
2.87 |
% |
||||
Other residential and commercial MBS |
|
23,118 |
|
|
415 |
|
|
2.40 |
% |
|
4,508 |
|
|
131 |
|
|
3.88 |
% |
||||
Municipal securities |
|
11,874,265 |
|
|
379,182 |
|
|
4.26 |
% |
|
8,624,534 |
|
|
293,060 |
|
|
4.53 |
% |
||||
Other investment securities (3) |
|
44,125 |
|
|
939 |
|
|
2.83 |
% |
|
21,121 |
|
|
403 |
|
|
2.54 |
% |
||||
Total investment securities |
|
18,719,452 |
|
|
512,579 |
|
|
3.65 |
% |
|
16,293,329 |
|
|
458,527 |
|
|
3.75 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loans: (4) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential real estate (5) |
|
53,991,954 |
|
|
1,231,219 |
|
|
3.04 |
% |
|
43,212,352 |
|
|
1,073,950 |
|
|
3.31 |
% |
||||
Multifamily (6) |
|
12,923,436 |
|
|
364,360 |
|
|
3.70 |
% |
|
10,980,052 |
|
|
320,977 |
|
|
3.85 |
% |
||||
Commercial real estate |
|
7,698,522 |
|
|
234,655 |
|
|
4.00 |
% |
|
6,978,946 |
|
|
223,602 |
|
|
4.22 |
% |
||||
Multifamily/commercial construction |
|
2,641,375 |
|
|
90,361 |
|
|
4.49 |
% |
|
2,286,710 |
|
|
85,971 |
|
|
4.96 |
% |
||||
Business (7) |
|
12,665,609 |
|
|
349,205 |
|
|
3.62 |
% |
|
11,216,470 |
|
|
382,143 |
|
|
4.49 |
% |
||||
PPP |
|
1,240,568 |
|
|
18,484 |
|
|
1.96 |
% |
|
— |
|
|
— |
|
|
— |
% |
||||
Other (8) |
|
6,703,449 |
|
|
131,423 |
|
|
2.58 |
% |
|
5,382,125 |
|
|
139,274 |
|
|
3.41 |
% |
||||
Total loans |
|
97,864,913 |
|
|
2,419,707 |
|
|
3.27 |
% |
|
80,056,655 |
|
|
2,225,917 |
|
|
3.69 |
% |
||||
FHLB stock |
|
452,260 |
|
|
18,135 |
|
|
5.36 |
% |
|
310,758 |
|
|
15,768 |
|
|
6.78 |
% |
||||
Total interest-earning assets |
|
120,065,493 |
|
|
2,956,106 |
|
|
3.26 |
% |
|
97,892,320 |
|
|
2,719,178 |
|
|
3.69 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Noninterest-earning cash |
|
434,181 |
|
|
|
|
|
|
341,984 |
|
|
|
|
|
||||||||
Goodwill and other intangibles |
|
232,014 |
|
|
|
|
|
|
269,246 |
|
|
|
|
|
||||||||
Other assets |
|
4,901,072 |
|
|
|
|
|
|
4,306,791 |
|
|
|
|
|
||||||||
Total noninterest-earning assets |
|
5,567,267 |
|
|
|
|
|
|
4,918,021 |
|
|
|
|
|
||||||||
Total Assets |
|
$ |
125,632,760 |
|
|
|
|
|
|
$ |
102,810,341 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Checking |
|
$ |
59,266,405 |
|
|
13,972 |
|
|
0.03 |
% |
|
$ |
47,006,632 |
|
|
21,541 |
|
|
0.06 |
% |
||
Money market checking and savings |
|
24,283,378 |
|
|
73,769 |
|
|
0.41 |
% |
|
19,714,378 |
|
|
146,900 |
|
|
1.00 |
% |
||||
CDs |
|
12,742,008 |
|
|
157,939 |
|
|
1.66 |
% |
|
12,457,649 |
|
|
203,411 |
|
|
2.18 |
% |
||||
Total deposits |
|
96,291,791 |
|
|
245,680 |
|
|
0.34 |
% |
|
79,178,659 |
|
|
371,852 |
|
|
0.63 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings |
|
411,712 |
|
|
4,700 |
|
|
1.52 |
% |
|
2,016,744 |
|
|
36,832 |
|
|
2.44 |
% |
||||
Long-term FHLB advances |
|
14,676,405 |
|
|
197,158 |
|
|
1.79 |
% |
|
9,149,268 |
|
|
147,669 |
|
|
2.16 |
% |
||||
Senior notes (9) |
|
918,809 |
|
|
16,839 |
|
|
2.44 |
% |
|
741,731 |
|
|
14,818 |
|
|
2.66 |
% |
||||
Subordinated notes (9) |
|
778,045 |
|
|
27,320 |
|
|
4.68 |
% |
|
777,629 |
|
|
27,305 |
|
|
4.68 |
% |
||||
Total borrowings |
|
16,784,971 |
|
|
246,017 |
|
|
1.96 |
% |
|
12,685,372 |
|
|
226,624 |
|
|
2.39 |
% |
||||
Total interest-bearing liabilities |
|
113,076,762 |
|
|
491,697 |
|
|
0.58 |
% |
|
91,864,031 |
|
|
598,476 |
|
|
0.87 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Noninterest-bearing liabilities |
|
2,060,245 |
|
|
|
|
|
|
1,780,107 |
|
|
|
|
|
||||||||
Preferred equity |
|
1,172,372 |
|
|
|
|
|
|
940,000 |
|
|
|
|
|
||||||||
Common equity |
|
9,323,381 |
|
|
|
|
|
|
8,226,203 |
|
|
|
|
|
||||||||
Total Liabilities and Equity |
|
$ |
125,632,760 |
|
|
|
|
|
|
$ |
102,810,341 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest spread (10) |
|
|
|
|
|
2.68 |
% |
|
|
|
|
|
2.82 |
% |
||||||||
Net interest income (fully taxable-equivalent basis) and net interest margin (11) |
|
|
|
$ |
2,464,409 |
|
|
2.72 |
% |
|
|
|
$ |
2,120,702 |
|
|
2.87 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation of tax-equivalent net interest income to reported net interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tax-equivalent adjustment |
|
|
|
(94,585) |
|
|
|
|
|
|
(76,653) |
|
|
|
||||||||
Net interest income, as reported |
|
|
|
$ |
2,369,824 |
|
|
|
|
|
|
$ |
2,044,049 |
|
|
|
__________ |
(1) Interest income is presented on a fully taxable-equivalent basis. |
(2) Yields/rates are annualized. |
(3) Includes corporate debt securities, mutual funds and marketable equity securities. |
(4) For comparability, the Bank has adjusted certain prior period loan amounts to conform to the current period presentation under CECL. |
(5) Includes single family, home equity lines of credit, and single family construction loans. Also includes single family loans held for sale. |
(6) Includes multifamily loans held for sale. |
(7) Includes capital call lines of credit, tax-exempt and other business loans. |
(8) Includes stock secured, other secured and unsecured loans. |
(9) Average balances include unamortized issuance discounts and costs. Interest expense includes amortization of issuance discounts and costs. |
(10) Net interest spread represents the average yield on interest-earning assets less the average rate on interest-bearing liabilities. |
(11) Net interest margin represents net interest income on a fully taxable-equivalent basis divided by total average interest-earning assets. |
|
|
|
Quarter Ended
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||||
Operating Information |
|
2020 |
|
2019 |
|
2020 |
|
2020 |
|
2019 |
||||||||||
($ in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income to average assets (1) |
|
0.88 |
% |
|
0.87 |
% |
|
0.82 |
% |
|
0.82 |
% |
|
0.89 |
% |
|||||
Net income available to common shareholders to average common equity (1) |
|
11.56 |
% |
|
10.50 |
% |
|
10.43 |
% |
|
10.40 |
% |
|
10.49 |
% |
|||||
Net income available to common shareholders to average tangible common equity (1) |
|
11.84 |
% |
|
10.84 |
% |
|
10.70 |
% |
|
10.67 |
% |
|
10.85 |
% |
|||||
Dividends per common share |
|
$ |
0.20 |
|
|
$ |
0.19 |
|
|
$ |
0.20 |
|
|
$ |
0.59 |
|
|
$ |
0.56 |
|
Dividend payout ratio |
|
12.4 |
% |
|
14.5 |
% |
|
14.3 |
% |
|
14.0 |
% |
|
14.7 |
% |
|||||
Efficiency ratio (2), (3) |
|
60.7 |
% |
|
63.8 |
% |
|
62.0 |
% |
|
62.0 |
% |
|
64.4 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loan charge-offs |
|
$ |
1,687 |
|
|
$ |
4,341 |
|
|
$ |
1,098 |
|
|
$ |
2,987 |
|
|
$ |
5,694 |
|
Net loan charge-offs to average total loans (1) |
|
0.01 |
% |
|
0.02 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.01 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan credit losses to: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Total loans |
|
0.58 |
% |
|
0.56 |
% |
|
0.58 |
% |
|
0.58 |
% |
|
0.56 |
% |
|||||
Nonaccrual loans |
|
368.2 |
% |
|
354.5 |
% |
|
354.1 |
% |
|
368.2 |
% |
|
354.5 |
% |
|||||
__________ |
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) Ratios are annualized. |
||||||||||||||||||||
(2) Efficiency ratio is the ratio of noninterest expense to the sum of net interest income and noninterest income. |
||||||||||||||||||||
(3) The provision for unfunded loan commitments is included in the provision for credit losses for 2020 periods. For 2019 periods, the provision for unfunded loan commitments is included in other noninterest expense. |
|
|
Quarter Ended
|
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||||
Effective Tax Rate |
|
2020 |
|
2019 |
|
2020 |
|
2020 |
|
2019 |
|||||
Effective tax rate, prior to excess tax benefits and tax refund from an amended tax return |
|
21.1 |
% |
|
21.4 |
% |
|
22.5 |
% |
|
21.6 |
% |
|
21.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||
Excess tax benefits—stock options |
|
(0.1) |
|
|
(3.3) |
|
|
(1.0) |
|
|
(0.8) |
|
|
(3.6) |
|
Excess tax benefits—other stock awards |
|
(0.1) |
|
|
(0.1) |
|
|
(2.1) |
|
|
(0.8) |
|
|
(0.8) |
|
Total excess tax benefits |
|
(0.2) |
|
|
(3.4) |
|
|
(3.1) |
|
|
(1.6) |
|
|
(4.4) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tax refund from an amended tax return |
|
(1.3) |
|
— |
|
— |
|
(0.5) |
|
— |
|||||
Effective tax rate |
|
19.6 |
% |
|
18.0 |
% |
|
19.4 |
% |
|
19.5 |
% |
|
17.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Provision for Credit Losses |
|
Quarter Ended
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2020 |
|
2019 |
|||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities held-to-maturity |
|
$ |
333 |
|
|
$ |
— |
|
|
$ |
296 |
|
|
$ |
1,047 |
|
|
$ |
— |
|
Loans |
|
22,437 |
|
|
16,711 |
|
|
43,189 |
|
|
113,305 |
|
|
52,111 |
|
|||||
Unfunded loan commitments (1) |
|
5,768 |
|
|
— |
|
|
(12,368) |
|
|
7,673 |
|
|
— |
|
|||||
Total provision |
|
$ |
28,538 |
|
|
$ |
16,711 |
|
|
$ |
31,117 |
|
|
$ |
122,025 |
|
|
$ |
52,111 |
|
__________ |
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) The provision for unfunded loan commitments is included in the provision for credit losses for 2020 periods. For 2019 periods, the provision for unfunded loan commitments is included in other noninterest expense, which is not presented in this table. |
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||||
Allowance for Credit Losses |
|
Debt Securities Held-to-Maturity |
|
Loans |
|
Unfunded Loan Commitments (1) |
|
Total |
|
Debt Securities Held-to-Maturity |
|
Loans |
|
Unfunded Loan Commitments (1) |
|
Total |
||||||||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at beginning of period (2) |
|
$ |
5,383 |
|
|
$ |
583,997 |
|
|
$ |
17,602 |
|
|
$ |
606,982 |
|
|
$ |
4,669 |
|
|
$ |
494,429 |
|
|
$ |
15,697 |
|
|
$ |
514,795 |
|
Provision for credit losses |
|
333 |
|
|
22,437 |
|
|
5,768 |
|
|
28,538 |
|
|
1,047 |
|
|
113,305 |
|
|
7,673 |
|
|
122,025 |
|
||||||||
Net charge-offs |
|
— |
|
|
(1,687) |
|
|
— |
|
|
(1,687) |
|
|
— |
|
|
(2,987) |
|
|
— |
|
|
(2,987) |
|
||||||||
Balance at end of period |
|
$ |
5,716 |
|
|
$ |
604,747 |
|
|
$ |
23,370 |
|
|
$ |
633,833 |
|
|
$ |
5,716 |
|
|
$ |
604,747 |
|
|
$ |
23,370 |
|
|
$ |
633,833 |
|
__________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(1) The allowance for credit losses on unfunded loan commitments is included in other liabilities. |
||||||||||||||||||||||||||||||||
(2) For the nine months ended September 30, 2020, represents the balance after the cumulative effect adjustment from the adoption of CECL. |
|
Quarter Ended
|
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||||||||||
Mortgage Loan Sales |
|
2020 |
|
2019 |
|
2020 |
|
2020 |
|
2019 |
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans sold: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Flow sales: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency |
|
$ |
44,118 |
|
|
$ |
25,214 |
|
|
$ |
10,810 |
|
|
$ |
80,702 |
|
|
$ |
51,426 |
|
Non-agency |
|
— |
|
|
11,932 |
|
|
— |
|
|
31,870 |
|
|
43,266 |
|
|||||
Total flow sales |
|
44,118 |
|
|
37,146 |
|
|
10,810 |
|
|
112,572 |
|
|
94,692 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Bulk sales: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-agency |
|
235,732 |
|
|
— |
|
|
— |
|
|
673,401 |
|
|
152,119 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securitizations |
|
— |
|
|
— |
|
|
300,116 |
|
|
300,116 |
|
|
— |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans sold |
|
$ |
279,850 |
|
|
$ |
37,146 |
|
|
$ |
310,926 |
|
|
$ |
1,086,089 |
|
|
$ |
246,811 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gain (loss) on sale of loans: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Amount (1) |
|
$ |
13,797 |
|
|
$ |
122 |
|
|
$ |
(1,147) |
|
|
$ |
14,575 |
|
|
$ |
466 |
|
Gain (loss) as a percentage of loans sold (1) |
|
4.93 |
% |
|
0.33 |
% |
|
(0.37) |
% |
|
1.34 |
% |
|
0.19 |
% |
|||||
__________ |
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) The gain for the quarter and nine months ended September 30, 2020 included |
|
Quarter Ended
|
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||||||||||
Loan Originations |
|
2020 |
|
2019 (1) |
|
2020 (2) |
|
2020 |
|
2019 (1) |
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Single family (1-4 units) |
|
$ |
6,813,850 |
|
|
$ |
4,872,598 |
|
|
$ |
5,875,184 |
|
|
$ |
16,208,370 |
|
|
$ |
11,129,819 |
|
Home equity lines of credit |
|
432,443 |
|
|
359,154 |
|
|
457,737 |
|
|
1,285,688 |
|
|
1,067,881 |
|
|||||
Single family construction |
|
186,833 |
|
|
175,361 |
|
|
119,318 |
|
|
415,313 |
|
|
455,061 |
|
|||||
Multifamily (5+ units) |
|
955,951 |
|
|
710,183 |
|
|
946,820 |
|
|
2,684,074 |
|
|
2,105,764 |
|
|||||
Commercial real estate |
|
193,228 |
|
|
543,964 |
|
|
330,683 |
|
|
975,769 |
|
|
1,309,736 |
|
|||||
Multifamily/commercial construction |
|
245,220 |
|
|
387,144 |
|
|
131,414 |
|
|
997,555 |
|
|
835,272 |
|
|||||
Capital call lines of credit |
|
1,803,907 |
|
|
2,337,530 |
|
|
1,405,347 |
|
|
5,594,483 |
|
|
5,463,704 |
|
|||||
Tax-exempt |
|
328,711 |
|
|
48,125 |
|
|
184,054 |
|
|
612,784 |
|
|
234,470 |
|
|||||
Other business |
|
243,788 |
|
|
428,533 |
|
|
914,257 |
|
|
1,777,824 |
|
|
1,108,712 |
|
|||||
PPP |
|
— |
|
|
— |
|
|
1,981,797 |
|
|
1,981,797 |
|
|
— |
|
|||||
Stock secured |
|
685,250 |
|
|
443,691 |
|
|
519,416 |
|
|
1,797,226 |
|
|
1,119,145 |
|
|||||
Other secured |
|
189,386 |
|
|
218,831 |
|
|
358,730 |
|
|
961,940 |
|
|
841,001 |
|
|||||
Unsecured |
|
159,379 |
|
|
438,278 |
|
|
203,270 |
|
|
685,537 |
|
|
1,068,959 |
|
|||||
Total loans originated |
|
$ |
12,237,946 |
|
|
$ |
10,963,392 |
|
|
$ |
13,428,027 |
|
|
$ |
35,978,360 |
|
|
$ |
26,739,524 |
|
__________ |
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) For comparability, the Bank has adjusted certain prior period amounts to conform to the current period presentation under CECL. |
||||||||||||||||||||
(2) Excluding PPP loan originations, total loan originations were |
|
As of |
|||||||||||||||||||
Asset Quality Information |
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonperforming assets: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonaccrual loans |
|
$ |
164,247 |
|
|
$ |
164,930 |
|
|
$ |
125,418 |
|
|
$ |
143,181 |
|
|
$ |
136,928 |
|
Other real estate owned |
|
— |
|
|
1,071 |
|
|
1,071 |
|
|
— |
|
|
— |
|
|||||
Total nonperforming assets |
|
$ |
164,247 |
|
|
$ |
166,001 |
|
|
$ |
126,489 |
|
|
$ |
143,181 |
|
|
$ |
136,928 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonperforming assets to total assets |
|
0.12 |
% |
|
0.13 |
% |
|
0.10 |
% |
|
0.12 |
% |
|
0.12 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accruing loans 90 days or more past due |
|
$ |
935 |
|
|
$ |
3,764 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restructured accruing loans |
|
$ |
11,378 |
|
|
$ |
11,501 |
|
|
$ |
13,418 |
|
|
$ |
13,287 |
|
|
$ |
14,964 |
|
|
September 30, 2020 |
|||||||||||||||||
COVID-19 Loan Modifications (1), (2), (3), (4) |
|
Unpaid Principal Balance |
|
Deferred Interest (5) |
|
LTV (6) |
|
Average Loan Size |
|
Number of Loans |
||||||||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||
Single family (1-4 units) |
|
$ |
1,780 |
|
|
$ |
25 |
|
|
60 |
% |
|
$ |
1.0 |
|
|
1,788 |
|
Home equity lines of credit |
|
71 |
|
|
1 |
|
|
57 |
% |
|
$ |
0.4 |
|
|
174 |
|
||
Single family construction |
|
10 |
|
|
— |
|
|
55 |
% |
|
$ |
1.4 |
|
|
7 |
|
||
Multifamily (5+ units) |
|
548 |
|
|
7 |
|
|
52 |
% |
|
$ |
3.1 |
|
|
179 |
|
||
Commercial real estate |
|
1,004 |
|
|
13 |
|
|
48 |
% |
|
$ |
3.7 |
|
|
275 |
|
||
Multifamily/commercial construction |
|
68 |
|
|
2 |
|
|
41 |
% |
|
$ |
6.8 |
|
|
10 |
|
||
Capital call lines of credit |
|
— |
|
|
— |
|
|
n/a |
|
$ |
— |
|
|
— |
|
|||
Tax-exempt |
|
72 |
|
|
1 |
|
|
n/a |
|
$ |
17.9 |
|
|
4 |
|
|||
Other business |
|
176 |
|
|
2 |
|
|
n/a |
|
$ |
1.3 |
|
|
138 |
|
|||
Stock secured |
|
— |
|
|
— |
|
|
n/a |
|
$ |
— |
|
|
— |
|
|||
Other secured |
|
5 |
|
|
— |
|
|
n/a |
|
$ |
0.5 |
|
|
12 |
|
|||
Unsecured (7) |
|
131 |
|
|
— |
|
|
n/a |
|
$ |
0.1 |
|
|
985 |
|
|||
Total |
|
$ |
3,865 |
|
|
$ |
51 |
|
|
|
|
|
|
3,572 |
|
|||
__________ |
|
|
|
|
|
|
|
|
|
|
||||||||
(1) COVID-19 loan modifications are not classified as troubled debt restructurings. |
||||||||||||||||||
(2) Includes 936 loans totaling |
||||||||||||||||||
(3) Includes 10 loans totaling |
||||||||||||||||||
(4) Excludes 395 loans totaling |
||||||||||||||||||
(5) Represents interest payments not made during the deferral period through September 30, 2020. |
||||||||||||||||||
(6) Weighted average loan-to-value (“LTV”) ratios for real estate secured loans are based on appraised value at the time of origination. |
||||||||||||||||||
(7) Includes |
|
September 30, 2020 |
||||||||||||||||
Loan Industry Information |
|
Unpaid Principal Balance |
|
LTV |
|
Average Loan Size |
|
Number of Loans |
|
Personal Guarantee % |
|||||||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||
Retail |
|
$ |
1,774 |
|
|
49 |
% |
|
$ |
2.7 |
|
|
682 |
|
|
76 |
% |
Hotel |
|
430 |
|
|
48 |
% |
|
$ |
6.8 |
|
|
65 |
|
|
74 |
% |
|
Restaurant (1) |
|
231 |
|
|
51 |
% |
|
$ |
1.1 |
|
|
215 |
|
|
94 |
% |
|
Total (2) |
|
$ |
2,435 |
|
|
|
|
|
|
962 |
|
|
|
||||
__________ |
|
|
|
|
|
|
|
|
|
|
|||||||
(1) Approximately |
|||||||||||||||||
(2) Amounts in the table above exclude |
|
As of |
|||||||||||||||||||
Loan Servicing Portfolio |
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans serviced for investors |
|
$ |
7,799 |
|
|
$ |
8,316 |
|
|
$ |
9,203 |
|
|
$ |
9,298 |
|
|
$ |
10,080 |
|
Common Shares, Book Value per Common Share and Tangible Book Value per Common Share |
|
As of |
||||||||||||||||||
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|||||||||||
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of shares of common stock outstanding |
|
172,188 |
|
|
172,094 |
|
|
171,395 |
|
|
168,621 |
|
|
168,450 |
|
|||||
Book value per common share |
|
$ |
56.33 |
|
|
$ |
54.80 |
|
|
$ |
53.76 |
|
|
$ |
51.63 |
|
|
$ |
50.41 |
|
Tangible book value per common share |
|
$ |
55.00 |
|
|
$ |
53.46 |
|
|
$ |
52.40 |
|
|
$ |
50.24 |
|
|
$ |
48.84 |
|
|
As of |
|||||||||||||||||||
Capital Ratios |
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
Tier 1 leverage ratio (Tier 1 capital to average assets) |
|
8.38 |
% |
|
8.15 |
% |
|
8.46 |
% |
|
8.39 |
% |
|
8.50 |
% |
|||||
Common Equity Tier 1 capital to risk-weighted assets |
|
9.78 |
% |
|
9.80 |
% |
|
9.87 |
% |
|
9.86 |
% |
|
9.91 |
% |
|||||
Tier 1 capital to risk-weighted assets |
|
11.50 |
% |
|
11.04 |
% |
|
11.14 |
% |
|
11.21 |
% |
|
11.05 |
% |
|||||
Total capital to risk-weighted assets |
|
12.94 |
% |
|
12.49 |
% |
|
12.62 |
% |
|
12.73 |
% |
|
12.61 |
% |
|||||
Regulatory Capital (3) |
|
|
|
|
|
|
|
|
|
|
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Common Equity Tier 1 capital |
|
$ |
9,375,688 |
|
|
$ |
9,103,771 |
|
|
$ |
8,887,905 |
|
|
$ |
8,371,192 |
|
|
$ |
8,124,179 |
|
Tier 1 capital |
|
$ |
11,020,688 |
|
|
$ |
10,248,771 |
|
|
$ |
10,032,905 |
|
|
$ |
9,516,192 |
|
|
$ |
9,064,179 |
|
Total capital |
|
$ |
12,396,304 |
|
|
$ |
11,604,141 |
|
|
$ |
11,365,654 |
|
|
$ |
10,802,209 |
|
|
$ |
10,340,902 |
|
Assets (3) |
|
|
|
|
|
|
|
|
|
|
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Average assets |
|
$ |
131,517,445 |
|
|
$ |
125,690,830 |
|
|
$ |
118,626,842 |
|
|
$ |
113,403,507 |
|
|
$ |
106,659,003 |
|
Risk-weighted assets |
|
$ |
95,823,385 |
|
|
$ |
92,870,859 |
|
|
$ |
90,072,400 |
|
|
$ |
84,885,943 |
|
|
$ |
81,994,651 |
|
__________ |
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) Ratios and amounts as of September 30, 2020 are preliminary. |
||||||||||||||||||||
(2) In accordance with the CECL Interim Final Rule, the Bank elected to delay the estimated impact of CECL on its regulatory capital and risk-weighted assets over a five-year transition period ending December 31, 2024. Ratios and amounts for 2020 periods have been adjusted to exclude the following impacts attributed to the adoption of CECL: decreases in retained earnings, increases in allowance for credit losses on loans, held-to-maturity debt securities and unfunded loan commitments, decreases in average assets, and increases in risk-weighted assets. |
||||||||||||||||||||
(3) As defined by regulatory capital rules. |
|
As of |
|||||||||||||||||||
Wealth Management Assets |
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||
First Republic Investment Management |
|
$ |
74,661 |
|
|
$ |
68,124 |
|
|
$ |
60,056 |
|
|
$ |
66,029 |
|
|
$ |
61,204 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Brokerage and investment: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Brokerage |
|
76,769 |
|
|
70,178 |
|
|
60,189 |
|
|
68,807 |
|
|
63,053 |
|
|||||
Money market mutual funds |
|
4,416 |
|
|
5,933 |
|
|
6,893 |
|
|
4,268 |
|
|
4,402 |
|
|||||
Total brokerage and investment |
|
81,185 |
|
|
76,111 |
|
|
67,082 |
|
|
73,075 |
|
|
67,455 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Trust Company: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Trust |
|
8,687 |
|
|
7,905 |
|
|
7,288 |
|
|
7,121 |
|
|
6,366 |
|
|||||
Custody |
|
3,651 |
|
|
3,646 |
|
|
3,461 |
|
|
4,818 |
|
|
5,210 |
|
|||||
Total Trust Company |
|
12,338 |
|
|
11,551 |
|
|
10,749 |
|
|
11,939 |
|
|
11,576 |
|
|||||
Total Wealth Management Assets |
|
$ |
168,184 |
|
|
$ |
155,786 |
|
|
$ |
137,887 |
|
|
$ |
151,043 |
|
|
$ |
140,235 |
|