First Republic Bank Reports Record Quarterly Earnings

  First Republic Bank Reports Record Quarterly Earnings

                           Cash Dividend Increases

Business Wire

SAN FRANCISCO -- April 15, 2013

First Republic Bank (NYSE: FRC) today announced record financial results for
the quarter ended March 31, 2013.

“We had an excellent first quarter. Year-over-year core earnings per share
increased 47%,” said Jim Herbert, Chairman and Chief Executive Officer. “Loan
origination volume was our highest ever first quarter and earnings benefitted
from a much higher-than-average level of loan sales and gains.”

Quarterly Cash Dividend Increases to $0.12 per Share

The Bank announced an increase in its quarterly dividend to $0.12 per share of
common stock, from $0.10 per share. The first quarter cash dividend of $0.12
per common share is payable on May 15, 2013 to shareholders of record on May
1, 2013.

Financial Highlights

- Net income was $122.3 million, compared to $91.8 million for last year’s
first quarter. Diluted earnings per share (“EPS”) were $0.85, compared to
$0.67 for last year’s first quarter.

- Excluding the impact of purchase accounting, core net income was $105.3
million, up 55% from last year’s first quarter. On this non-GAAP basis, core
diluted EPS were $0.72, up 47% year-over-year. ^(1)

- Book value per share increased by 4% during the quarter and 14%
year-over-year to $22.96.

- Asset quality remains very strong; nonperforming assets were only 14 basis
points of total assets.

- Net interest margin was 3.87%, compared to 4.02% for the prior quarter.

- Excluding the impact of purchase accounting, the core net interest margin
was 3.42%, compared to 3.46% for the prior quarter. ^(1)

- The efficiency ratio was 53.3%, compared to 51.2% for the prior quarter.

- Excluding the impact of purchase accounting, the core efficiency ratio was
57.3%, compared to 56.2% for the prior quarter. ^(1)

- Loan originations were $3.5 billion, up 12% compared to last year’s first
quarter and our highest first quarter ever.

- Loans sold were an unusually high $1.2 billion, two times the average 2012
quarterly volume of $608 million.

- Pre-tax net gains on loan sales were $26.0 million, or 2.13% of loans sold.

- Loans outstanding were $28.7 billion at March31, 2013, up 20% compared to a
year ago and up 1% compared to the prior quarter, net of loans sold.

- Deposits were $26.9 billion at March31, 2013, up 15% compared to a year ago
and down 1% from the prior quarter.

- Wealth management assets were $35.3 billion at March31, 2013, up 60%
compared to a year ago and up 11% from the prior quarter.

- Wealth management fees were up 71% year-over-year and 37% compared to the
prior quarter.

“During the quarter, we saw continued economic strength in our markets as
clients shifted back into real estate and equities,” said Katherine
August-deWilde, President and Chief Operating Officer. “This elevated activity
led to strong loan originations and robust growth of wealth management assets.
We took advantage of continued strong secondary market demand for high-quality
home loans and sold a record level of longer-term, fixed-rate mortgages at
very profitable levels.”

Asset Quality Remains Very Strong

The Bank’s credit quality remains strong. At March31, 2013, nonperforming
assets were only 14 basis points of total assets.

During the first quarter of 2013, the Bank recorded a provision for loan
losses of $6.5 million. This provision is related primarily to the growth in
loans outstanding that have been originated since July 1, 2010. At March31,
2013, the allowance related to these loans totaled $121.0 million, or 0.60%.

Net charge-offs were $267,000 for the first quarter of 2013 (less than 1 basis
point, annualized, of average loans).

Continued Capital Strength

The Bank’s Tier 1 leverage ratio at March31, 2013 was 9.35%, compared to
9.32% at year-end.

Strong Book Value Growth

Book value per share was $22.96 at March31, 2013, up 14% from a year ago and
up 4% for the quarter.

Continued Franchise Development

Assets - modest net expansion

Total assets at March31, 2013 were $35.1 billion, up 2% for the quarter.
Loans increased $4.7 billion, up 20% compared to a year ago and up 1% compared
to the prior quarter. Investment securities increased $1.1 billion from a year
ago.

Deposits - mix strong, period-end balances down slightly

At March31, 2013, checking and savings accounts were 89% of total deposits,
compared to 85% a year ago. The contractual rate paid on all deposits averaged
0.22% for the first quarter of 2013, compared to 0.24% for the prior quarter.
Total deposits were up 15% compared to a year ago and declined 1% compared to
the prior quarter.

At March31, 2013, 97% of deposits were core deposits. ^(2)

Wealth management expansion

Total wealth management assets were $35.3 billion at March31, 2013, up 11%
from the prior quarter. Wealth management assets include investment management
assets of $18.6 billion, brokerage assets and money market mutual funds of
$11.2 billion, and trust and custody assets of $5.5 billion.

Wealth management fees earned, including investment advisory, trust and
brokerage fees, for the first quarter of 2013 totaled $29.6 million and were
up 37% compared to the prior quarter and 71% compared to last year’s first
quarter. The increased fees reflect both growth in assets under management
along with fees following the December 2012 Luminous Capital Holdings, LLC
(“Luminous”) asset purchase.

Mortgage banking activity unusually strong

The Bank sold $1.2 billion of primarily longer-term, fixed-rate home loans
during the first quarter of 2013 and recorded net gains of $26.0 million. By
comparison, during the prior quarter, the Bank sold $671 million of loans and
recorded net gains of $17.7 million.

At March31, 2013, the carrying value of mortgage servicing rights (“MSRs”)
was $23.1 million, or 43 basis points of such loans serviced.

Loans serviced for investors totaled $5.4 billion at March31, 2013, up 49%
from a year ago.

Income Statement and Key Ratio Summary

Strong core revenue growth

Total revenues were $370.3 million for the first quarter of 2013, compared to
$357.9 million for the prior quarter and $313.9 million for last year’s first
quarter, an 18% increase from a year ago.

Excluding the impact of purchase accounting, revenues were $336.0 million for
the first quarter of 2013, compared to $316.9 million for the prior quarter
and $267.6 million for the first quarter of 2012, a 26% increase from a year
ago. ^(1)

Core net interest income growth

Net interest income was $298.0 million for the first quarter of 2013, compared
to $302.3 million for the prior quarter and $281.3 million for last year’s
first quarter, a 6% increase from the first quarter a year ago.

Excluding the impact of purchase accounting, net interest income (core net
interest income) was $263.8 million for the first quarter of 2013, compared to
$261.2 million for the prior quarter and $235.0 million for the first quarter
of 2012, up 12% from a year ago. The increase in core net interest income was
primarily due to increases in the average balances of loans and investment
securities as well as lower deposit costs. ^(1)

Net interest margin

The Bank’s net interest margin was 3.87% for the first quarter of 2013,
compared to 4.02% for the prior quarter and 4.39% for the first quarter a year
ago.

Excluding the impact of purchase accounting, the net interest margin (core net
interest margin) was 3.42% for the first quarter of 2013, compared to 3.46%
for the prior quarter and 3.64% for the first quarter a year ago. ^(1) The
core net interest margin declined slightly compared to the prior quarter,
primarily due to declines in contractual loan yields.

Noninterest income

Noninterest income for the first quarter of 2013 was $72.3 million, up $16.7
million, or 30%, from the prior quarter and up $39.6 million from the first
quarter a year ago. These increases were primarily due to increases in  wealth
management fees and gain on sale of loans.

Noninterest expense

Noninterest expense for the first quarter of 2013 was $197.4 million, compared
to $183.1 million for the prior quarter and $164.8 million for the first
quarter a year ago, an 8% increase over the prior quarter and a 20% increase
year-over-year.

Noninterest expense has grown primarily due to increased personnel costs,
increased expenses related to tax credit investments and initiation of the
amortization of intangibles from the Luminous asset purchase.

Efficiency ratio

The Bank’s efficiency ratio was 53.3% for the first quarter of 2013, compared
to 51.2% for the prior quarter and 52.5% for the first quarter a year ago.

Excluding the impact of purchase accounting, the Bank’s core efficiency ratio
was 57.3% for the first quarter of 2013, compared to 56.2% for the prior
quarter and 59.6% for the first quarter a year ago. ^ (1)

Income tax rate

The Bank’s effective tax rate for 2013 is expected to be 26.5%, compared to
30.4% for 2012. The decline in the effective tax rate results from the steady
increase in tax-exempt securities, bank-owned life insurance, tax credit
investments and tax-advantaged loans.

_________

^(1) See non-GAAP reconciliation under section “Use of Non-GAAP Financial
Measures.”

^(2) Core deposits exclude CDs greater than $250,000.

Conference Call Details

First Republic Bank’s first quarter 2013 earnings conference call is scheduled
for April15, 2013 at 11:00 a.m. PT / 2:00 p.m. ET. To listen to the live call
by telephone, please dial (855) 224-3902 approximately 10 minutes prior to the
start time (to allow time for registration) and use conference ID #29911559.
International callers should dial (734) 823-3244. 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 www.firstrepublic.com. To listen to the
live webcast, please visit the site at least 15 minutes prior to the start of
the call to register, download and install any necessary audio software. A
replay of the call will also be available for 90 days on the website. For
those unable to participate in the live presentation, a replay will be
available beginning April15, 2013, at 2:00 p.m. PT / 5:00 p.m. ET, through
April 22, 2013, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial
(855) 859-2056 (U.S.) and use conference ID #29911559. International callers
should dial (404) 537-3406 and enter the same conference ID number. The Bank’s
press releases are available after release on the Bank’s website at
www.firstrepublic.com.

About First Republic Bank

First Republic Bank (“First Republic” or the “Bank”) and its subsidiaries
provide private banking, private business banking and private wealth
management. Founded in 1985, First Republic specializes in exceptional,
relationship-based service offered through preferred banking or wealth
management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa
Barbara, Newport Beach, San Diego, Portland, Palm Beach, Boston, Greenwich and
New York City. First Republic offers a complete line of banking products for
individuals and businesses, including deposit services, as well as
residential, commercial and personal loans. First Republic is a component of
the S&P Total Market Index, the Wilshire 5000 Total Market Index^SM, the
Russell 1000^®, Russell 3000^® and Russell Global indices and six Dow Jones
indices. More information is available on the Bank’s website at
www.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. Any statements about our
expectations, beliefs, plans, predictions, forecasts, objectives, assumptions
or future events or performance are not historical facts and may be
forward-looking. These statements are often, but not always, made through the
use of words or phrases such as “anticipates,” “believes,” “can,” “could,”
“may,” “predicts,” “potential,” “should,” “will,” “estimates,” “plans,”
“projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or
phrases and include statements about economic performance in our markets,
growth in our loan originations and wealth management assets, and our
projected tax rate. Accordingly, these statements are only predictions and
involve estimates, known and unknown risks, assumptions and uncertainties that
could cause actual results to differ materially from those expressed in them.
Factors that could cause actual results to differ from those discussed in the
forward-looking statements include, but are not limited to: our ability to
compete for banking and wealth management customers; earthquakes and other
natural disasters in our markets; changes in interest rates; our ability to
maintain high underwriting standards; economic conditions in our markets;
conditions in financial markets and economic conditions generally; regulatory
restrictions on our operations  and current or  future legislative or
regulatory changes affecting the banking and investment management industries.
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 Quarterly Reports on Form
10-Q. 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. 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 STATEMENT OF INCOME
                                                                  
                                  Three Months                    Three Months
                                  Ended                           Ended
                                  March 31,                       December 31,
(in thousands, except per         2013          2012            2012
share amounts)
Interest income:
Loans                             $ 288,093       $ 279,674       $   294,763
Investments                       35,479          28,859          33,278
Cash equivalents                  174            623            546
Total interest income             323,746        309,156        328,587
                                                                  
Interest expense:
Deposits                          11,010          14,987          11,732
Borrowings                        14,687         12,901         14,521
Total interest expense            25,697         27,888         26,253
                                                                  
Net interest income               298,049         281,268         302,334
Provision for loan losses         6,478          14,852         17,204
Net interest income after         291,571        266,416        285,130
provision for loan losses
                                                                  
Noninterest income:
Investment advisory fees          25,099          12,699          16,305
Brokerage and investment          2,391           2,765           2,904
fees
Trust fees                        2,060           1,773           2,381
Foreign exchange fee income       3,087           2,421           3,147
Deposit customer fees             4,644           3,281           3,746
Gain on sale of loans             25,990          3,809           17,721
Loan servicing fees, net          336             (1,904    )     217
Loan and related fees             1,912           1,483           1,829
Income from investments in        5,884           5,371           6,212
life insurance
Other income                      865            947            1,149
Total noninterest income          72,268         32,645         55,611
                                                                  
Noninterest expense:
Salaries and related              101,884         82,507          88,412
benefits
Occupancy                         22,088          19,895          21,834
Information systems               17,823          16,174          19,745
Tax credit investments            10,900          5,250           5,754
Amortization of intangibles       6,856           5,288           4,927
FDIC and other deposit            6,827           5,400           6,684
assessments
Advertising and marketing         5,803           5,962           6,061
Professional fees                 3,713           4,278           4,854
Other expenses                    21,540         20,001         24,873
Total noninterest expense         197,434        164,755        183,144
                                                                  
Income before provision for       166,405         134,306         157,597
income taxes
Provision for income taxes        44,097         41,635         47,486
Net income before                 122,308         92,671          110,111
noncontrolling interests
Less: Net income from             —              913            —
noncontrolling interests
First Republic Bank net           122,308         91,758          110,111
income
Dividends on preferred            7,776          2,451          6,534
stock
Net income available to           $ 114,532      $ 89,307       $   103,577
common shareholders
                                                                  
Basic earnings per common         $ 0.88         $ 0.69         $   0.79
share
Diluted earnings per common       $ 0.85         $ 0.67         $   0.77
share
Dividends per common share        $ —            $ —            $   0.20
                                                                  
Weighted average shares -         130,846        129,498        130,614
basic
Weighted average shares -         135,252        133,621        134,731
diluted
                                                                  

                         
CONSOLIDATED BALANCE SHEET
                             
                             As of
                             March 31,        December 31,     March 31,
($ in thousands)             2013               2012               2012
ASSETS
Cash and cash                $ 552,837          $ 602,264          $ 1,429,286
equivalents
Securities purchased
under agreements to          100                30,901             12,973
resell
Investment securities        1,382,138          960,433            682,835
available-for-sale
Investment securities        2,624,120          2,545,189          2,209,463
held-to-maturity
                                                                   
Loans:
Single family (1-4           16,654,668         16,672,924         14,175,779
units)
Home equity lines of         1,795,775          1,887,604          1,826,061
credit
Multifamily (5+ units)       3,278,219          3,006,946          2,569,780
Commercial real estate       2,932,676          2,909,201          2,629,595
Single family                250,587            234,213            198,240
construction
Multifamily/commercial       166,027            171,268            110,193
construction
Commercial business          2,608,651          2,600,151          1,799,668
loans
Other secured                356,688            391,833            315,014
Unsecured loans and          246,198            279,515            177,643
lines of credit
Stock secured                151,156           145,460           79,005       
Total unpaid principal       28,440,645        28,299,115        23,880,978   
balance
Net unaccreted               (301,549     )     (332,404     )     (455,885     )
discount
Net deferred fees and        18,356             20,048             13,456
costs
Allowance for loan           (136,100     )     (129,889     )     (82,418      )
losses
Loans, net                   28,021,352        27,856,870        23,356,131   
                                                                   
Loans held for sale          230,578            204,631            53,184
Investments in life          707,775            701,672            591,397
insurance
Prepaid expenses and         650,296            575,741            695,575
other assets
Tax credit investments       478,616            484,548            389,000
Premises, equipment
and leasehold                153,365            142,201            123,439
improvements, net
Goodwill                     106,549            106,549            24,604
Other intangible             152,036            158,892            129,286
assets
Mortgage servicing           23,142             17,786             17,466
rights
Other real estate            —                 —                 4,348        
owned
Total Assets                 $ 35,082,904      $ 34,387,677      $ 29,718,987 
                                                                   
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Noninterest-bearing          $ 7,344,677        $ 8,544,472        $ 6,275,752
accounts
Interest-bearing             6,297,551          5,408,325          3,793,085
checking accounts
Money Market (MM)            4,145,038          4,104,791          3,583,467
checking accounts
MM savings and               6,242,098          6,064,629          6,030,096
passbooks
Certificates of              2,823,750         2,966,030         3,572,561    
deposit
Total deposits               26,853,114        27,088,247        23,254,961   
                                                                   
Short-term borrowings        810,000            75,000             —
Long-term debt               3,450,000          3,150,000          3,115,032
Debt related to
variable interest            53,143             56,450             60,030
entity
Other liabilities            398,741           619,436           425,491      
Total Liabilities            31,564,998        30,989,133        26,855,514   
                                                                   
Equity:
First Republic Bank
shareholders’ equity:
Preferred stock              499,525            499,525            199,525
Common stock                 1,315              1,313              1,302
Additional paid-in           2,035,558          2,027,578          2,019,194
capital
Retained earnings            953,284            838,752            583,757
Accumulated other            28,224            31,376            12,895       
comprehensive income
Total First Republic
Bank shareholders’           3,517,906          3,398,544          2,816,673
equity
Noncontrolling               —                 —                 46,800       
interests
Total Equity                 3,517,906         3,398,544         2,863,473    
Total Liabilities and        $ 35,082,904      $ 34,387,677      $ 29,718,987 
Equity
                                                                                

                                                           
                       Three Months                               Three Months
                       Ended                                      Ended
                       March 31,                                  December 31,
($ in thousands)       2013                 2012                2012
Operating
Information
Loans originated       $ 3,545,858            $ 3,156,526         $ 4,301,992
Net income to
average assets         1.42        %          1.29        %       1.30        %
^(3)
Net income
available to
common                 15.59       %          13.86       %       14.27       %
shareholders to
average common
equity ^(3)
Dividend payout        —           % ^(4)     —           %       26.0        % ^(4)
ratio
Efficiency ratio       53.3        %          52.5        %       51.2        %
^(5)
Efficiency ratio
(non-GAAP) ^(5),       57.3        %          59.6        %       56.2        %
(6)
                                                                                
Yields/Rates 
^(3)
Cash and cash          0.23        %          0.27        %       0.25        %
equivalents
Investment
securities ^(7),       5.07        %          5.61        %       5.46        %
(8)
Loans ^(7), (9)        4.11        %          4.88        %       4.34        %
                                                                                
Total
interest-earning       4.19        %          4.81        %       4.35        %
assets
                                                                                
Checking               0.01        %          0.02        %       0.01        %
Money market
checking and           0.11        %          0.21        %       0.12        %
savings
CDs ^(9)               1.09        %          1.04        %       1.08        %
Total deposits         0.17        %          0.26        %       0.18        %
                                                                                
Short-term             0.21        %          0.00        %       0.29        %
borrowings
Long-term FHLB         1.79        %          1.92        %       1.80        %
advances
Other long-term        1.73        %          2.62        %       1.85        %
debt ^(9)
Total borrowings       1.47        %          1.95        %       1.79        %
                                                                                
Total
interest-bearing       0.34        %          0.44        %       0.35        %
liabilities
                                                                                
Net interest           3.85        %          4.37        %       4.00        %
spread
                                                                                
Net interest           3.87        %          4.39        %       4.02        %
margin
                                                                                
Net interest
margin                 3.42        %          3.64        %       3.46        %
(non-GAAP) ^ (6)
                                                                                

^(3)    Ratios are annualized.
           The fourth quarter of 2012 dividend of $0.10 per share was declared
^(4)       and paid early in December, 2012, which resulted in no dividend
           payment during the first quarter of 2013.
^(5)       Efficiency ratio is the ratio of noninterest expense to the sum of
           net interest income and noninterest income.
^(6)       For a reconciliation of these ratios to the equivalent GAAP ratios,
           see “Use of Non-GAAP Financial Measures.”
^(7)       Yield is calculated on a tax-equivalent basis.
^(8)       Includes FHLB stock and securities purchased under agreements to
           resell.
^(9)       Yield includes accretion/amortization of purchase accounting
           discounts/premiums.
           

                                                            
The following table presents loans sold and gain on sale of loans for the
periods indicated:
                                                                  
                               Three Months                       Three Months
                               Ended                              Ended
                               March 31,                          December 31,
($ in thousands)               2013             2012            2012
Mortgage Loan Sales
Loans sold:
Agency                         $  165,281         $ 116,240       $  242,073
Non-agency                     1,052,859         435,810        429,241    
Total loans sold               $  1,218,140      $ 552,050      $  671,314 
                                                                  
Gain on sale of
loans:
Amount                         $  25,990          $ 3,809         $  17,721
Gain as a percentage           2.13         %     0.69      %     2.64       %
of loans sold
                                                                             
                                                                             

The following table separates our loan portfolio as of March31, 2013 between
loans acquired on July 1, 2010 and loans originated since July 1, 2010:

                          Composition of Loan Portfolio
                             Loans           Loans            Total loans at
                             acquired          originated
                             on July 1,        since July 1,      March 31,
($ in thousands)             2010              2010               2013
Single family (1-4           $ 4,826,175       $ 11,828,493       $ 16,654,668
units)
Home equity lines of         900,729           895,046            1,795,775
credit
Multifamily (5+ units)       724,382           2,553,837          3,278,219
Commercial real estate       1,152,621         1,780,055          2,932,676
Single family                10,870            239,717            250,587
construction
Multifamily/commercial       4,021             162,006            166,027
construction
Commercial business          430,048           2,178,603          2,608,651
loans
Other secured                48,784            307,904            356,688
Unsecured loans and          46,471            199,727            246,198
lines of credit
Stock secured                12,907           138,249           151,156      
Total unpaid principal       8,157,008        20,283,637        28,440,645   
balance
Net unaccreted               (300,888    )     (661         )     (301,549     )
discount
Net deferred fees and        (7,803      )     26,159             18,356
costs
Allowance for loan           (15,080     )     (121,020     )     (136,100     )
losses
Loans, net                   $ 7,833,237      $ 20,188,115      $ 28,021,352 
                                                                               

                       
                            As of
                            March 31,        December 31,     March 31,
(in thousands,
except per share            2013               2012               2012
amounts)
Book Value
Number of shares
of common stock             131,481           131,273           130,236   
outstanding
Book value per              $  22.96          $  22.08          $  20.10  
common share
Tangible book
value per common            $  20.99          $  20.06          $  18.91  
share
                                                                  
Capital Ratios
Tier 1 leverage             9.35      %        9.32      %        9.48      %
ratio
Tier 1 common               11.43     %        11.13     %        12.73     %
equity ratio ^(10)
Tier 1 risk-based           13.52     %        13.27     %        14.01     %
capital ratio
Total risk-based            14.13     %        13.86     %        14.47     %
capital ratio
                                                                  
^(10) Tier 1 common equity ratio represents common equity less goodwill and
intangible assets divided by risk-weighted assets.


                                 
                                     As of
                                     March 31,    December 31,   March 31,
($ in millions)                      2013           2012             2012
Assets Under Management
First Republic Investment            $ 18,573       $  17,000        $  8,955
Management
                                                                     
Brokerage and Investment:
Brokerage                            10,357         8,810            7,777
Money Market Mutual Funds            870           852             666
Total Brokerage and Investment       11,227        9,662           8,443
                                                                     
Trust Company:
Trust                                2,326          2,157            2,089
Custody                              3,148         2,863           2,565
Total Trust Company                  5,474         5,020           4,654
Total Wealth Management Assets       35,274        31,682          22,052
                                                                     
Loans serviced for investors         5,433         4,581           3,651
Total fee-based assets               $ 40,707      $  36,263       $  25,703
                                                                        

                                                            
Asset Quality Information
                                    As of
                                    March 31,      December 31,     March 31,
($ in thousands)                    2013           2012             2012
Nonperforming assets:
Nonaccrual loans                    $ 49,873       $  49,153        $ 27,480
Other real estate owned             —             —               4,348    
Total nonperforming assets          $ 49,873      $  49,153       $ 31,828 
                                                                    
Nonperforming assets to total       0.14     %     0.14       %     0.11     %
assets
                                                                    
Accruing loans 90 days or           $ 5,959        $  —             $ —
more past due
                                                                    
Restructured accruing loans         $ 18,223       $  12,398        $ 5,783
                                                                             

                                                             
                                            Three Months          Three Months
                                            Ended                 Ended
                                            March 31,             December 31,
($ in thousands)                            2013  2012   2012
Net loan charge-offs to allowance for       $  267     $  547     $   315
loan losses
Net loan charge-offs to average total       0.00   %   0.01   %   0.01      %
loans (annualized)
                                                                            

                        
                            Average Balance Sheet
                            Three Months                        Three Months
                            Ended                                 Ended
                            March 31,                             December 31,
($ in thousands)            2013             2012               2012
Assets:
Cash equivalents            $ 307,562          $ 912,075          $ 880,708
Investment securities       4,011,375          2,979,828          3,513,251
^(11)
Loans ^(12)                 28,439,583        22,996,300        27,232,372
Total
interest-earning            32,758,520         26,888,203         31,626,331
assets
                                                                  
Noninterest-earning         2,095,687         1,733,236         1,967,146
assets
Total Assets                $ 34,854,207      $ 28,621,439      $ 33,593,477
                                                                  
Liabilities and
Equity:
Checking                    $ 13,237,987       $ 9,749,583        $ 13,351,861
Money market checking       10,629,230         9,254,760          10,095,930
and savings
CDs ^(12)                   2,894,059         3,759,487         3,090,586
Total deposits              26,761,276        22,763,830        26,538,377
                                                                  
Short-term borrowings       832,200            2,197              10,804
Long-term FHLB              3,165,556          2,528,572          3,150,000
advances
Other long term-debt        55,406            127,788           59,257
^(12)
Total borrowings            4,053,162         2,658,557         3,220,061
                                                                  
Total
interest-bearing            30,814,438         25,422,387         29,758,438
liabilities
                                                                  
Noninterest-bearing         561,572            392,820            533,589
liabilities
Preferred equity            499,525            147,887            413,112
Common equity               2,978,672          2,591,806          2,888,338
Noncontrolling              —                 66,539            —
interests
Total Liabilities and       $ 34,854,207      $ 28,621,439      $ 33,593,477
Equity
                                                                  
^(11) Includes FHLB stock and securities purchased under agreements to resell.
^(12) Average balances are presented net of purchase accounting discounts or
premiums.



Purchase Accounting Accretion and Amortization

The following table presents the impact of purchase accounting from the Bank’s
re-establishment as an independent institution for the periods indicated:

                                                            
                                    Three Months                  Three Months
                                    Ended                         Ended
                                    March 31,                     December 31,
($ in thousands)                    2013         2012           2012
Accretion/amortization to net
interest income:
Loans                               $ 30,834       $ 38,153       $   36,746
Deposits                            3,440          7,458          4,342
Borrowings                          —             680           —
Total                               $ 34,274      $ 46,291      $   41,088
                                                                  
Noninterest income:
Loan commitments                    $ —           $ 69          $   —
                                                                  
Amortization to noninterest
expense:
Intangible assets                   $ 4,769       $ 5,288       $   4,927
                                                                      

Use of Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting
principles in the United States (“GAAP”) and the prevailing practices in the
banking industry. However, due to the application of purchase accounting from
the Bank’s re-establishment as an independent institution, management uses
certain non-GAAP measures and ratios that exclude the impact of these items to
evaluate our performance, including net income, earnings per share, net
interest margin and the efficiency ratio.

Our net income, earnings per share, net interest margin and efficiency ratio
were significantly impacted by accretion and amortization of the fair value
adjustments recorded in purchase accounting from the Bank’s re-establishment
as an independent institution. The accretion and amortization affect our net
income, earnings per share and certain operating ratios as we accrete loan
discounts to interest income; accrete discounts on loan commitments to
noninterest income; amortize premiums on liabilities such as CDs and
subordinated notes to interest expense; and amortize intangible assets to
noninterest expense.

In December 2012, First Republic completed the purchase of substantially all
of the assets of Luminous. The amortization of intangible assets from this
transaction is not an adjustment in the calculation of the Bank’s non-GAAP
measures in 2013.

We believe these non-GAAP measures and ratios, when taken together with the
corresponding GAAP measures and ratios, provide meaningful supplemental
information regarding our performance. Our management uses, and believes that
investors benefit from referring to, these non-GAAP measures and ratios in
assessing our operating results and related trends and when planning and
forecasting future periods. However, these non-GAAP measures and ratios should
be considered in addition to, and not as a substitute for or preferable to,
ratios prepared in accordance with GAAP. In the tables below, we have provided
a reconciliation of, where applicable, the most comparable GAAP financial
measures and ratios to the non-GAAP financial measures and ratios, or a
reconciliation of the non-GAAP calculation of the financial measure for the
periods indicated:

                                                            
                                   Three Months                   Three Months
                                   Ended                          Ended
                                   March 31,                      December 31,
(in thousands, except per          2013          2012           2012
share amounts)
Non-GAAP earnings
Net income                         $ 122,308       $ 91,758       $  110,111
Accretion / amortization           (34,274   )     (46,291  )     (41,088    )
added to net interest income
Accretion added to                 —               (69      )     —
noninterest income
Amortization of intangible         4,769           5,288          4,927
assets
Add back tax impact of the         12,540         17,456        15,368     
above items
Non-GAAP net income                105,343         68,142         89,318
Dividends on preferred stock       (7,776    )     (2,451   )     (6,534     )
Non-GAAP net income
available to common                $ 97,567       $ 65,691      $  82,784  
shareholders
                                                                  
GAAP earnings per common           $ 0.85          $ 0.67         $  0.77
share-diluted
Impact of purchase                 (0.13     )     (0.18    )     (0.16      )
accounting, net of tax
Non-GAAP earnings per common       $ 0.72         $ 0.49        $  0.61    
share-diluted
                                                                  
Weighted average diluted           135,252        133,621       134,731    
common shares outstanding
                                                                             

                                                          
                          Three Months                          Three Months
                          Ended                                 Ended
                          March 31,                             December 31,
($ in thousands)          2013             2012               2012
Net interest margin
Net interest income       $ 298,049          $ 281,268          $ 302,334
Add: Tax-equivalent       19,327            15,043            18,121       
adjustment
Net interest income
(tax-equivalent           317,376            296,311            320,455
basis)
Less: Accretion /         (34,274      )     (46,291      )     (41,088      )
amortization
Non-GAAP net
interest income           $ 283,102         $ 250,020         $ 279,367    
(tax-equivalent
basis)
                                                                
Average
interest-earning          $ 32,758,520       $ 26,888,203       $ 31,626,331
assets
Add: Average
unamortized loan          323,068           481,015           358,084      
discounts
Average
interest-earning          $ 33,081,588      $ 27,369,218      $ 31,984,415 
assets (non-GAAP)
                                                                
Net interest              3.87         %     4.39         %     4.02         %
margin–reported
                                                                
Net interest margin       3.42         %     3.64         %     3.46         %
(non-GAAP)
                                                                             

                                                            
                                  Three Months                    Three Months
                                  Ended                           Ended
                                  March 31,                       December 31,
($ in thousands)                  2013          2012            2012
Efficiency ratio
Net interest income               $ 298,049       $ 281,268       $  302,334
Less: Accretion /                 (34,274   )     (46,291   )     (41,088    )
amortization
Net interest income               $ 263,775      $ 234,977      $  261,246 
(non-GAAP)
                                                                  
Noninterest income                $ 72,268        $ 32,645        $  55,611
Less: Accretion of
discounts on loan                 —              (69       )     —          
commitments
Noninterest income                $ 72,268       $ 32,576       $  55,611  
(non-GAAP)
                                                                  
Total revenue                     $ 370,317       $ 313,913       $  357,945
                                                                  
Total revenue (non-GAAP)          $ 336,043       $ 267,553       $  316,857
                                                                  
Noninterest expense               $ 197,434       $ 164,755       $  183,144
Less: Intangible                  (4,769    )     (5,288    )     (4,927     )
amortization
Noninterest expense               $ 192,665      $ 159,467      $  178,217 
(non-GAAP)
                                                                  
Efficiency ratio                  53.3      %     52.5      %     51.2       %
                                                                  
Efficiency ratio (non-GAAP)       57.3      %     59.6      %     56.2       %
                                                                             

Contact:

Investor Contact:
Addo Communications
Andrew Greenebaum, 310-829-5400
andrewg@addocommunications.com
Lasse Glassen, 310-829-5400
lasseg@addocommunications.com
or
Media Contact:
Blue Marlin Partners
Greg Berardi, 415-239-7826
greg@bluemarlinpartners.com
 
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