SAN FRANCISCO, Oct. 15, 2015 /PRNewswire/ -- First Republic Bank (NYSE: FRC) today announced financial results for the quarter ended September 30, 2015.
"Third quarter results were very strong," said CEO Jim Herbert. "Credit quality remains excellent. Our simple and client-focused banking model continues to deliver consistent, across-the-board growth."
Quarterly Highlights
Financial Results
- Core revenues were up 14.9% compared to last year's third quarter. (1)
- Net income was $134.8 million.
- Diluted earnings per share ("EPS") of $0.82.
- Core net income was $131.1 million. (1)
- Core diluted EPS of $0.79, up 11.3% over the third quarter a year ago. (1)
- Loan originations totaled $4.9 billion for the quarter, up 2.5% over last year's third quarter.
- Loans sold totaled $599.7 million, compared to $887.2 million for the prior quarter.
- Core net interest margin was 3.09%. (1)
- Core efficiency ratio was 59.4%. (1)
Continued Financial and Credit Strength
- Tier 1 leverage ratio was 9.29%. (2)
- Common Equity Tier 1 ratio was 10.51%. (2)
- Book value per share was $30.84, up 12.2% from a year ago.
- Nonperforming assets were low, at 10 basis points of total assets.
- Credit quality remains strong, with net recoveries of $39,000 for the quarter.
Franchise Development
- Loans outstanding, excluding loans held for sale, totaled $42.4 billion, up 15.7% from a year ago.
- Deposits were $44.3 billion, up 24.5% from a year ago.
- Checking balances represented 60.9% of total deposits.
- Wealth management assets were $58.8 billion, up 14.5% from a year ago.
- Wealth management revenues were $50.7 million for the quarter, up 13.4% from the same quarter a year ago.
"Wealth management had a good quarter, despite market volatility," said President Katherine August-deWilde. "We continue to attract very accomplished advisors to our platform and are pleased to welcome the Constellation team to First Republic."
Quarterly Cash Dividend Declared
The Bank declared a cash dividend for the third quarter of $0.15 per share of common stock, which is payable on November 12, 2015 to shareholders of record as of October 29, 2015.
Strong Asset Quality
Credit quality remains very strong. Nonperforming assets were 10 basis points of total assets at September 30, 2015.
The Bank had net recoveries for the quarter of $39,000, while adding $14.5 million to its allowance for loan losses during the quarter due to continued loan growth.
Continued Capital Strength
The Bank's Tier 1 leverage ratio was 9.29% and Common Equity Tier 1 ratio was 10.51% at September 30, 2015. (2)
Book Value Growth
Book value per common share was $30.84 at September 30, 2015, up 12.2% from a year ago.
Continued Franchise Development
Loan Originations
Loan originations totaled $4.9 billion for the quarter, compared to $4.7 billion for the third quarter a year ago. For the first nine months of 2015, loan originations totaled $15.0 billion, compared to $12.7 billion for the same period a year ago, up 18.2%. Single family originations were $2.3 billion for the quarter, of which 50% were for purchases.
Loans outstanding, excluding loans held for sale, totaled $42.4 billion at September 30, 2015, up 15.7% compared to a year ago.
Deposit Growth
Total deposits increased to $44.3 billion, up 5.9% for the quarter and up 24.5% compared to a year ago. At September 30, 2015, checking accounts totaled 60.9% of deposits. The Bank is almost entirely deposit-funded, with deposits representing over 88% of total liabilities at September 30, 2015.
The average contractual rate paid on all deposits declined slightly to 0.14% for the quarter, compared to 0.15% for the prior quarter.
Mortgage Banking Activity
During the third quarter, the Bank sold $599.7 million of loans and recorded a gain on sale of $3.0 million, compared to loan sales of $1.8 billion and a gain on sale of $13.7 million during the third quarter of last year. The margin on this quarter's loan sales was 0.49%.
The Bank utilizes loan sales in the ordinary course of business in order to provide a full range of lending options for its clients, while also managing asset growth and interest rate risk. The Bank retains all loan servicing.
Loans serviced for investors at quarter-end totaled $10.5 billion, up 19.1% from a year ago. Net loan servicing fees for the quarter were $3.1 million, up from $2.5 million a year ago.
Investments
Total investments at September 30, 2015 were $8.2 billion, up 5.0% for the quarter and 44.5% compared to a year ago.
Our holdings of assets that are considered high-quality liquid assets, including eligible cash, totaled $4.8 billion at September 30, 2015, up 16.5% from $4.1 billion at June 30, 2015.
Continued Expansion of Wealth Management
Wealth management revenues totaled $50.7 million for the quarter, up 13.4% compared to last year's third quarter.
Total wealth management assets were $58.8 billion at September 30, 2015, up 2.2% for the quarter and up 14.5% compared to a year ago. The growth in wealth management assets in the quarter was primarily due to net new assets from both existing and new clients, partially offset by market declines. Wealth management assets include investment management assets of $29.0 billion, brokerage assets and money market mutual funds of $22.8 billion, and trust and custody assets of $7.1 billion.
To further expand wealth management, First Republic Investment Management, Inc., a wholly-owned subsidiary of the Bank, completed the previously announced purchase of substantially all of the assets of Constellation Wealth Advisors LLC ("Constellation") on October 1, 2015. Constellation had assets under management of approximately $5.9 billion as of September 30, 2015.
Income Statement and Key Ratios
Highlights
Strong Core Revenue Growth
Total revenues were $468.6 million for the quarter and $1.3 billion for the first nine months of 2015.
Core revenues were $459.0 million for the quarter and $1.3 billion for the first nine months of 2015, up 14.9% compared to last year's third quarter and up 13.3% compared to the first nine months of 2014. (1)
Continued Core Net Interest Income Growth
Net interest income was $388.9 million for the quarter and $1.1 billion year-to-date.
Core net interest income was $379.2 million for the quarter, an 18.4% increase from the third quarter of last year. Core net interest income was $1.1 billion year-to-date, a 14.5% increase from the same period a year ago. (1)
Core Net Interest Margin
The Bank's net interest margin was 3.17% for the quarter, compared to 3.30% for the prior quarter.
The core net interest margin was 3.09% for the quarter, compared to 3.12% for the prior quarter. (1) The modest decrease was primarily the result of higher average cash balances.
Noninterest Income
Noninterest income was $79.7 million for the quarter and $234.9 million year-to-date.
Core noninterest income was $79.7 million for the quarter, relatively flat compared to the third quarter a year ago. Core noninterest income was $234.9 million year-to-date, up 8.1% compared to the same period a year ago. (1)
Steady Core Efficiency Ratio While Continuing Infrastructure Investment
Noninterest expense for the quarter was $275.9 million, a 15.7% increase from the third quarter of last year. The year-over-year increase in these expenses was significantly attributable to the Bank's ongoing investments in infrastructure build-out to address enhanced regulatory standards and to support ongoing business activities.
The Bank's efficiency ratio was 58.9% for the quarter, compared to 57.8% for the prior quarter and 54.1% for the third quarter a year ago.
The Bank's core efficiency ratio was 59.4% for the quarter, compared to 59.8% for the prior quarter and 58.7% for the third quarter a year ago. (1)
Income Tax Rate
The Bank's effective tax rate for the nine months ended September 30, 2015 was 24.9%. By comparison, the effective tax rate was 27.3% for 2014. The decrease in the effective tax rate results from the steady increase in tax credit investments, tax-exempt securities, tax-advantaged loans and bank-owned life insurance.
_________
(1) "Core" measures are non-GAAP financial measures that exclude the positive impact of purchase accounting. In addition, core measures also exclude other positive, but one-time, impacts from the special FHLB dividend in the second quarter of 2015, and the gain from repositioning of investment portfolio in the third quarter of 2014. See non-GAAP reconciliation under section "Use of Non-GAAP Financial Measures."
(2) Represents the ratios assuming that Basel III is fully phased-in. See "Capital Ratios" table for additional information.
Conference Call Details
First Republic Bank's third quarter 2015 earnings conference call is scheduled for October 15, 2015 at 7:00 a.m. PT / 10:00 a.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 #47819794. 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 October 15, 2015, at 10:00 a.m. PT / 1:00 p.m. ET, through October 22, 2015, 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 #47819794. 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
Founded in 1985, First Republic and its subsidiaries offer private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic specializes in delivering exceptional, relationship-based service, with a solid commitment to responsiveness and action. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland, Boston, Palm Beach, 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. For more information, visit 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, as amended. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipates," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimates," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases and include statements about economic performance in our markets, growth in our loan originations and wealth management assets, our progress in preparing for enhanced regulatory requirements, and our projected tax rate. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to: our ability to deal with significant competition for banking and wealth management customers; our projections for certain financial items, expectations concerning the bank and wealth management industries; earthquakes and other natural disasters in our markets; interest rate or credit risk; our plans or objectives for future operations, products or services; our ability to maintain and follow high underwriting standards; economic conditions generally and in our markets; our geographic concentration; our opportunities for growth; our future provisions for loan losses; our regulatory compliance and future regulatory requirements, including any requirements that have become applicable to us as a bank with a four-quarter average of total consolidated assets of at least $50 billion; any increased compliance costs; the phase-in of the Basel III Capital Rules; and new accounting standards. For a discussion of these and other risks and uncertainties, see First Republic's FDIC filings, including, but not limited to, the risk factors in First Republic's Annual Report on Form 10-K. These filings are available in the Investor Relations section of our website. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. 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
|
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
(in thousands, except per share amounts)
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
348,367
|
|
|
$
|
322,987
|
|
|
$
|
333,966
|
|
|
$
|
1,004,208
|
|
|
$
|
949,385
|
|
|
Investments
|
|
75,970
|
|
|
52,429
|
|
|
77,223
|
|
|
215,116
|
|
|
152,084
|
|
|
Cash and cash equivalents
|
|
1,691
|
|
|
980
|
|
|
766
|
|
|
3,562
|
|
|
2,541
|
|
|
Total interest income
|
|
426,028
|
|
|
376,396
|
|
|
411,955
|
|
|
1,222,886
|
|
|
1,104,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
15,903
|
|
|
15,935
|
|
|
14,543
|
|
|
44,434
|
|
|
45,984
|
|
|
Borrowings
|
|
21,244
|
|
|
24,472
|
|
|
22,348
|
|
|
66,488
|
|
|
68,121
|
|
|
Total interest expense
|
|
37,147
|
|
|
40,407
|
|
|
36,891
|
|
|
110,922
|
|
|
114,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
388,881
|
|
|
335,989
|
|
|
375,064
|
|
|
1,111,964
|
|
|
989,905
|
|
|
Provision for loan losses
|
|
14,502
|
|
|
13,515
|
|
|
17,005
|
|
|
43,394
|
|
|
42,410
|
|
|
Net interest income after provision for loan losses
|
|
374,379
|
|
|
322,474
|
|
|
358,059
|
|
|
1,068,570
|
|
|
947,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income:
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory fees
|
|
44,211
|
|
|
38,443
|
|
|
43,502
|
|
|
128,924
|
|
|
107,948
|
|
|
Brokerage and investment fees
|
|
3,899
|
|
|
3,665
|
|
|
4,407
|
|
|
12,005
|
|
|
10,063
|
|
|
Trust fees
|
|
2,600
|
|
|
2,604
|
|
|
2,501
|
|
|
7,486
|
|
|
7,883
|
|
|
Foreign exchange fee income
|
|
5,933
|
|
|
4,728
|
|
|
5,023
|
|
|
16,104
|
|
|
13,287
|
|
|
Deposit fees
|
|
4,898
|
|
|
4,653
|
|
|
4,870
|
|
|
14,397
|
|
|
13,834
|
|
|
Gain on sale of loans
|
|
2,957
|
|
|
13,713
|
|
|
3,476
|
|
|
8,245
|
|
|
31,408
|
|
|
Loan servicing fees, net
|
|
3,135
|
|
|
2,523
|
|
|
2,923
|
|
|
9,288
|
|
|
6,527
|
|
|
Loan and related fees
|
|
3,083
|
|
|
2,590
|
|
|
3,428
|
|
|
9,232
|
|
|
6,193
|
|
|
Income from investments in life insurance
|
|
8,555
|
|
|
7,770
|
|
|
8,451
|
|
|
26,185
|
|
|
21,169
|
|
|
Gain (loss) on investment securities, net
|
|
(76)
|
|
|
23,580
|
|
|
1,112
|
|
|
1,336
|
|
|
22,404
|
|
|
Other income
|
|
552
|
|
|
402
|
|
|
543
|
|
|
1,700
|
|
|
1,805
|
|
|
Total noninterest income
|
|
79,747
|
|
|
104,671
|
|
|
80,236
|
|
|
234,902
|
|
|
242,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense:
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
149,463
|
|
|
122,585
|
|
|
138,758
|
|
|
428,169
|
|
|
360,361
|
|
|
Occupancy
|
|
26,531
|
|
|
24,841
|
|
|
27,533
|
|
|
79,636
|
|
|
72,384
|
|
|
Information systems
|
|
31,564
|
|
|
24,445
|
|
|
28,282
|
|
|
85,698
|
|
|
69,027
|
|
|
Professional fees
|
|
16,974
|
|
|
18,355
|
|
|
20,048
|
|
|
56,535
|
|
|
36,387
|
|
|
FDIC and other deposit assessments
|
|
8,700
|
|
|
7,900
|
|
|
8,700
|
|
|
25,750
|
|
|
22,994
|
|
|
Advertising and marketing
|
|
6,167
|
|
|
6,204
|
|
|
6,564
|
|
|
17,945
|
|
|
20,219
|
|
|
Amortization of intangibles
|
|
4,731
|
|
|
5,580
|
|
|
4,941
|
|
|
14,827
|
|
|
17,376
|
|
|
Other expenses
|
|
31,767
|
|
|
28,467
|
|
|
28,289
|
|
|
86,125
|
|
|
79,848
|
|
|
Total noninterest expense
|
|
275,897
|
|
|
238,377
|
|
|
263,115
|
|
|
794,685
|
|
|
678,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
178,229
|
|
|
188,768
|
|
|
175,180
|
|
|
508,787
|
|
|
511,420
|
|
|
Provision for income taxes
|
|
43,387
|
|
|
52,757
|
|
|
43,835
|
|
|
126,688
|
|
|
139,873
|
|
|
Net income
|
|
134,842
|
|
|
136,011
|
|
|
131,345
|
|
|
382,099
|
|
|
371,547
|
|
|
Dividends on preferred stock
|
|
15,314
|
|
|
13,889
|
|
|
14,411
|
|
|
43,614
|
|
|
41,667
|
|
|
Net income available to common shareholders
|
|
$
|
119,528
|
|
|
$
|
122,122
|
|
|
$
|
116,934
|
|
|
$
|
338,485
|
|
|
$
|
329,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.84
|
|
|
$
|
0.89
|
|
|
$
|
0.82
|
|
|
$
|
2.40
|
|
|
$
|
2.43
|
|
|
Diluted earnings per common share
|
|
$
|
0.82
|
|
|
$
|
0.86
|
|
|
$
|
0.80
|
|
|
$
|
2.34
|
|
|
$
|
2.35
|
|
|
Dividends per common share
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
0.15
|
|
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares—basic
|
|
142,152
|
|
|
137,661
|
|
|
141,927
|
|
|
140,908
|
|
|
135,957
|
|
|
Weighted average shares—diluted
|
|
145,890
|
|
|
141,548
|
|
|
145,713
|
|
|
144,727
|
|
|
140,096
|
|
|
CONSOLIDATED BALANCE SHEET
|
|
|
|
As of
|
|
($ in thousands)
|
|
September 30,
2015
|
|
June 30,
2015
|
|
September 30,
2014
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,795,780
|
|
|
$
|
1,367,879
|
|
|
$
|
1,372,728
|
|
|
Securities purchased under agreements to resell
|
|
100
|
|
|
3,250
|
|
|
100
|
|
|
Investment securities available-for-sale
|
|
1,584,142
|
|
|
1,250,005
|
|
|
1,648,013
|
|
|
Investment securities held-to-maturity
|
|
6,572,289
|
|
|
6,516,374
|
|
|
3,995,007
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
Single family (1-4 units)
|
|
22,273,533
|
|
|
21,777,063
|
|
|
20,170,945
|
|
|
Home equity lines of credit
|
|
2,316,120
|
|
|
2,256,022
|
|
|
2,133,518
|
|
|
Multifamily (5+ units)
|
|
5,211,200
|
|
|
5,057,034
|
|
|
4,545,751
|
|
|
Commercial real estate
|
|
4,353,000
|
|
|
4,219,336
|
|
|
3,737,255
|
|
|
Single family construction
|
|
465,549
|
|
|
451,428
|
|
|
406,186
|
|
|
Multifamily/commercial construction
|
|
645,230
|
|
|
585,837
|
|
|
428,864
|
|
|
Commercial business
|
|
5,836,330
|
|
|
5,506,246
|
|
|
4,305,800
|
|
|
Other secured
|
|
546,407
|
|
|
538,836
|
|
|
459,105
|
|
|
Stock secured
|
|
421,084
|
|
|
371,720
|
|
|
250,378
|
|
|
Unsecured loans and lines of credit
|
|
361,351
|
|
|
293,634
|
|
|
225,542
|
|
|
Total unpaid principal balance
|
|
42,429,804
|
|
|
41,057,156
|
|
|
36,663,344
|
|
|
Net unaccreted discount
|
|
(118,567)
|
|
|
(128,928)
|
|
|
(166,756)
|
|
|
Net deferred fees and costs
|
|
40,308
|
|
|
37,625
|
|
|
28,570
|
|
|
Allowance for loan losses
|
|
(250,408)
|
|
|
(235,868)
|
|
|
(195,049)
|
|
|
Loans, net
|
|
42,101,137
|
|
|
40,729,985
|
|
|
36,330,109
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
250,494
|
|
|
162,841
|
|
|
339,680
|
|
|
Investments in life insurance
|
|
1,059,237
|
|
|
1,031,137
|
|
|
1,006,125
|
|
|
Tax credit investments
|
|
890,430
|
|
|
880,321
|
|
|
809,288
|
|
|
Prepaid expenses and other assets
|
|
702,125
|
|
|
753,886
|
|
|
746,259
|
|
|
Premises, equipment and leasehold improvements, net
|
|
161,634
|
|
|
163,758
|
|
|
162,991
|
|
|
Goodwill
|
|
106,549
|
|
|
106,549
|
|
|
106,549
|
|
|
Other intangible assets
|
|
95,174
|
|
|
99,905
|
|
|
115,369
|
|
|
Mortgage servicing rights
|
|
53,588
|
|
|
52,685
|
|
|
45,410
|
|
|
Other real estate owned
|
|
2,541
|
|
|
—
|
|
|
—
|
|
|
Total Assets
|
|
$
|
55,375,220
|
|
|
$
|
53,118,575
|
|
|
$
|
46,677,628
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
Noninterest-bearing checking accounts
|
|
$
|
17,546,255
|
|
|
$
|
16,306,078
|
|
|
$
|
11,949,000
|
|
|
Interest-bearing checking accounts
|
|
9,472,995
|
|
|
9,049,662
|
|
|
7,514,917
|
|
|
Money Market (MM) checking accounts
|
|
5,892,419
|
|
|
5,691,554
|
|
|
5,443,037
|
|
|
MM savings and passbooks
|
|
7,167,514
|
|
|
6,807,413
|
|
|
6,983,146
|
|
|
Certificates of deposit
|
|
4,263,761
|
|
|
4,032,859
|
|
|
3,717,307
|
|
|
Total Deposits
|
|
44,342,944
|
|
|
41,887,566
|
|
|
35,607,407
|
|
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
Long-term FHLB advances
|
|
4,350,000
|
|
|
4,725,000
|
|
|
5,275,000
|
|
|
Senior notes
|
|
396,964
|
|
|
396,769
|
|
|
396,194
|
|
|
Debt related to variable interest entities
|
|
30,716
|
|
|
31,108
|
|
|
38,199
|
|
|
Other liabilities
|
|
770,422
|
|
|
713,066
|
|
|
675,153
|
|
|
Total Liabilities
|
|
49,991,046
|
|
|
47,853,509
|
|
|
41,991,953
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
Preferred stock
|
|
989,525
|
|
|
989,525
|
|
|
889,525
|
|
|
Common stock
|
|
1,425
|
|
|
1,424
|
|
|
1,382
|
|
|
Additional paid-in capital
|
|
2,533,713
|
|
|
2,523,239
|
|
|
2,306,159
|
|
|
Retained earnings
|
|
1,846,604
|
|
|
1,748,750
|
|
|
1,488,846
|
|
|
Accumulated other comprehensive income (loss)
|
|
12,907
|
|
|
2,128
|
|
|
(237)
|
|
|
Total Shareholders' Equity
|
|
5,384,174
|
|
|
5,265,066
|
|
|
4,685,675
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
55,375,220
|
|
|
$
|
53,118,575
|
|
|
$
|
46,677,628
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Operating Information and Yields/Rates
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Operating Information
|
|
|
|
|
|
|
|
|
|
|
|
Net income to average assets (3)
|
|
0.96
|
%
|
|
1.14
|
%
|
|
1.01
|
%
|
|
0.97
|
%
|
|
1.10
|
%
|
|
Net income available to common shareholders to average common equity (3)
|
|
10.84
|
%
|
|
12.80
|
%
|
|
10.97
|
%
|
|
10.72
|
%
|
|
12.21
|
%
|
|
Dividend payout ratio
|
|
18.3
|
%
|
|
16.2
|
%
|
|
18.7
|
%
|
|
18.8
|
%
|
|
17.0
|
%
|
|
Efficiency ratio (4)
|
|
58.9
|
%
|
|
54.1
|
%
|
|
57.8
|
%
|
|
59.0
|
%
|
|
55.1
|
%
|
|
Core efficiency ratio (non-GAAP) (1), (4)
|
|
59.4
|
%
|
|
58.7
|
%
|
|
59.8
|
%
|
|
60.2
|
%
|
|
57.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs (recoveries)
|
|
$
|
(39)
|
|
|
$
|
(223)
|
|
|
$
|
353
|
|
|
$
|
327
|
|
|
$
|
366
|
|
|
Net loan charge-offs (recoveries) to average total loans (3)
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Yields/Rates (3)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
0.25
|
%
|
|
0.25
|
%
|
|
0.24
|
%
|
|
0.25
|
%
|
|
0.25
|
%
|
|
Investment securities (5), (6), (7)
|
|
4.96
|
%
|
|
5.05
|
%
|
|
5.11
|
%
|
|
4.94
|
%
|
|
5.13
|
%
|
|
Loans (5), (8)
|
|
3.36
|
%
|
|
3.52
|
%
|
|
3.41
|
%
|
|
3.41
|
%
|
|
3.60
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning assets
|
|
3.45
|
%
|
|
3.60
|
%
|
|
3.60
|
%
|
|
3.52
|
%
|
|
3.69
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Checking
|
|
0.00
|
%
|
|
0.01
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.01
|
%
|
|
Money market checking and savings
|
|
0.07
|
%
|
|
0.14
|
%
|
|
0.07
|
%
|
|
0.07
|
%
|
|
0.15
|
%
|
|
CDs (8)
|
|
1.27
|
%
|
|
1.17
|
%
|
|
1.24
|
%
|
|
1.25
|
%
|
|
1.10
|
%
|
|
Total deposits
|
|
0.14
|
%
|
|
0.18
|
%
|
|
0.14
|
%
|
|
0.14
|
%
|
|
0.18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term FHLB advances
|
|
1.55
|
%
|
|
1.56
|
%
|
|
1.58
|
%
|
|
1.57
|
%
|
|
1.56
|
%
|
|
Senior notes (9)
|
|
2.59
|
%
|
|
2.59
|
%
|
|
2.59
|
%
|
|
2.59
|
%
|
|
2.57
|
%
|
|
Other borrowings
|
|
1.35
|
%
|
|
1.68
|
%
|
|
0.46
|
%
|
|
0.79
|
%
|
|
1.71
|
%
|
|
Total borrowings
|
|
1.63
|
%
|
|
1.63
|
%
|
|
1.59
|
%
|
|
1.62
|
%
|
|
1.59
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities
|
|
0.30
|
%
|
|
0.38
|
%
|
|
0.32
|
%
|
|
0.32
|
%
|
|
0.38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread
|
|
3.15
|
%
|
|
3.22
|
%
|
|
3.28
|
%
|
|
3.20
|
%
|
|
3.31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
|
3.17
|
%
|
|
3.25
|
%
|
|
3.30
|
%
|
|
3.23
|
%
|
|
3.33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Core net interest margin (non-GAAP) (1)
|
|
3.09
|
%
|
|
3.09
|
%
|
|
3.12
|
%
|
|
3.10
|
%
|
|
3.14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Ratios are annualized.
|
|
(4)
|
Efficiency ratio is the ratio of noninterest expense to the sum of net interest income and noninterest income.
|
|
(5)
|
Yield is calculated on a tax-equivalent basis.
|
|
(6)
|
Includes FHLB stock and securities purchased under agreements to resell.
|
|
(7)
|
Yield on investment securities for the second quarter of 2015 and nine months ended September 30, 2015 include a $9.1 million one-time special FHLB dividend received in the second quarter of 2015 (47 basis point and 16 basis point positive impact to the second quarter of 2015 and the nine months ended September 30, 2015 investment yield, respectively).
|
|
(8)
|
Yield/rate includes accretion/amortization of purchase accounting discounts/premiums.
|
|
(9)
|
Rate includes amortization of issuance discounts and costs.
|
|
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Mortgage Loan Sales
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Loans sold:
|
|
|
|
|
|
|
|
|
|
|
|
Agency
|
|
$
|
71,923
|
|
|
$
|
45,319
|
|
|
$
|
91,366
|
|
|
$
|
199,884
|
|
|
$
|
106,362
|
|
|
Non-agency
|
|
527,814
|
|
|
1,751,630
|
|
|
795,882
|
|
|
1,861,773
|
|
|
3,311,886
|
|
|
Total loans sold
|
|
$
|
599,737
|
|
|
$
|
1,796,949
|
|
|
$
|
887,248
|
|
|
$
|
2,061,657
|
|
|
$
|
3,418,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of loans:
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
$
|
2,957
|
|
|
$
|
13,713
|
|
|
$
|
3,476
|
|
|
$
|
8,245
|
|
|
$
|
31,408
|
|
|
Gain as a percentage of loans sold (10)
|
|
0.49
|
%
|
|
0.76
|
%
|
|
0.39
|
%
|
|
0.40
|
%
|
|
0.92
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
For the quarter and nine months ended September 30, 2014, gain on sale of loans includes discounts established in purchase accounting, which increase gain on sale of loans. Excluding the impact of purchase accounting, the gain as a percentage of loans sold for the quarter and nine months ended September 30, 2014 would be 0.67% and 0.87%, respectively.
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Loan Originations
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Single family (1-4 units)
|
|
$
|
1,863,396
|
|
|
$
|
2,251,341
|
|
|
$
|
2,436,464
|
|
|
$
|
5,998,303
|
|
|
$
|
6,046,756
|
|
|
Home equity lines of credit
|
|
452,048
|
|
|
378,374
|
|
|
465,955
|
|
|
1,176,995
|
|
|
1,119,447
|
|
|
Multifamily (5+ units)
|
|
371,266
|
|
|
374,816
|
|
|
453,454
|
|
|
1,158,688
|
|
|
1,103,852
|
|
|
Commercial real estate
|
|
321,578
|
|
|
312,668
|
|
|
351,499
|
|
|
1,051,703
|
|
|
726,489
|
|
|
Construction
|
|
434,155
|
|
|
256,992
|
|
|
315,603
|
|
|
986,817
|
|
|
684,474
|
|
|
Commercial business
|
|
1,127,386
|
|
|
1,016,432
|
|
|
1,533,498
|
|
|
3,794,763
|
|
|
2,401,190
|
|
|
Other loans
|
|
295,589
|
|
|
155,306
|
|
|
291,570
|
|
|
795,222
|
|
|
581,418
|
|
|
Total loans originated
|
|
$
|
4,865,418
|
|
|
$
|
4,745,929
|
|
|
$
|
5,848,043
|
|
|
$
|
14,962,491
|
|
|
$
|
12,663,626
|
|
|
|
As of September 30, 2015
|
|
Composition of Loan Portfolio
|
|
Loans acquired
on July 1, 2010
|
|
Loans originated
since July 1, 2010
|
|
Total
Loans
|
|
($ in thousands)
|
|
|
|
|
|
|
|
Single family (1-4 units)
|
|
$
|
2,466,189
|
|
|
$
|
19,807,344
|
|
|
$
|
22,273,533
|
|
|
Home equity lines of credit
|
|
474,480
|
|
|
1,841,640
|
|
|
2,316,120
|
|
|
Multifamily (5+ units)
|
|
289,204
|
|
|
4,921,996
|
|
|
5,211,200
|
|
|
Commercial real estate
|
|
453,655
|
|
|
3,899,345
|
|
|
4,353,000
|
|
|
Single family construction
|
|
3,906
|
|
|
461,643
|
|
|
465,549
|
|
|
Multifamily/commercial construction
|
|
1,151
|
|
|
644,079
|
|
|
645,230
|
|
|
Commercial business
|
|
281,383
|
|
|
5,554,947
|
|
|
5,836,330
|
|
|
Other secured
|
|
17,234
|
|
|
529,173
|
|
|
546,407
|
|
|
Stock secured
|
|
4,312
|
|
|
416,772
|
|
|
421,084
|
|
|
Unsecured loans and lines of credit
|
|
33,172
|
|
|
328,179
|
|
|
361,351
|
|
|
Total unpaid principal balance
|
|
4,024,686
|
|
|
38,405,118
|
|
|
42,429,804
|
|
|
Net unaccreted discount
|
|
(118,299)
|
|
|
(268)
|
|
|
(118,567)
|
|
|
Net deferred fees and costs
|
|
(3,845)
|
|
|
44,153
|
|
|
40,308
|
|
|
Allowance for loan losses
|
|
(6,025)
|
|
|
(244,383)
|
|
|
(250,408)
|
|
|
Loans, net
|
|
$
|
3,896,517
|
|
|
$
|
38,204,620
|
|
|
$
|
42,101,137
|
|
|
|
As of
|
|
Asset Quality Information
|
|
September 30,
2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
December 31,
2014
|
|
September 30,
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets:
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
$
|
51,987
|
|
|
$
|
55,872
|
|
|
$
|
49,830
|
|
|
$
|
45,962
|
|
|
$
|
50,179
|
|
|
Other real estate owned
|
|
2,541
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total nonperforming assets
|
|
$
|
54,528
|
|
|
$
|
55,872
|
|
|
$
|
49,830
|
|
|
$
|
45,962
|
|
|
$
|
50,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets
|
|
0.10
|
%
|
|
0.11
|
%
|
|
0.10
|
%
|
|
0.10
|
%
|
|
0.11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing loans 90 days or more past due
|
|
$
|
698
|
|
|
$
|
2,118
|
|
|
$
|
202
|
|
|
$
|
4,380
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructured accruing loans
|
|
$
|
14,539
|
|
|
$
|
15,624
|
|
|
$
|
14,855
|
|
|
$
|
16,252
|
|
|
$
|
16,966
|
|
|
|
As of
|
|
Book Value Ratios
|
|
September 30,
2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
December 31,
2014
|
|
September 30,
2014
|
|
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares of common stock outstanding
|
|
142,477
|
|
|
142,389
|
|
|
142,105
|
|
|
138,269
|
|
|
138,155
|
|
|
Book value per common share
|
|
$
|
30.84
|
|
|
$
|
30.03
|
|
|
$
|
29.45
|
|
|
$
|
28.13
|
|
|
$
|
27.48
|
|
|
Tangible book value per common share
|
|
$
|
29.43
|
|
|
$
|
28.58
|
|
|
$
|
27.97
|
|
|
$
|
26.56
|
|
|
$
|
25.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
2015
|
|
2014
|
|
|
September 30, (11)
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
Capital Ratios
|
|
Actual (12)
|
|
Fully
Phased-in (13)
|
|
Actual (12)
|
|
Actual (12)
|
|
Tier 1 leverage ratio
|
|
9.38
|
%
|
|
9.29
|
%
|
|
9.86
|
%
|
|
9.90
|
%
|
|
9.43
|
%
|
|
9.51
|
%
|
|
Common Equity Tier 1 ratio (14)
|
|
10.66
|
%
|
|
10.51
|
%
|
|
10.87
|
%
|
|
11.25
|
%
|
|
n/a
|
|
|
n/a
|
|
|
Tier 1 common equity ratio (14)
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
10.90
|
%
|
|
11.07
|
%
|
|
Tier 1 risk-based capital ratio
|
|
13.14
|
%
|
|
12.99
|
%
|
|
13.47
|
%
|
|
13.73
|
%
|
|
13.55
|
%
|
|
13.83
|
%
|
|
Total risk-based capital ratio
|
|
13.80
|
%
|
|
13.65
|
%
|
|
14.13
|
%
|
|
14.37
|
%
|
|
14.20
|
%
|
|
14.47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11)
|
Ratios as of September 30, 2015 are preliminary.
|
|
(12)
|
Ratios for 2015 periods reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Ratios for 2014 periods represent the previous capital rules under Basel I.
|
|
(13)
|
Certain adjustments required under the Basel III Capital Rules will be phased in through the end of 2018. The ratios shown in this column are calculated assuming a fully phased-in basis of all such adjustments as if they were effective as of September 30, 2015.
|
|
(14)
|
Beginning in 2015, the Common Equity Tier 1 ratio is a new ratio requirement under the Basel III Capital Rules and represents common equity, less goodwill and intangible assets net of any associated deferred tax liabilities, divided by risk-weighted assets (subject to phase-in adjustments as indicated in footnote 13 above). In 2014 periods, the Tier 1 common equity ratio represents common equity, less goodwill and intangible assets, divided by risk-weighted assets.
|
|
|
As of
|
|
Fee-Based Assets
|
|
September 30,
2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
December 31,
2014
|
|
September 30,
2014
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
First Republic Investment Management
|
|
$
|
28,969
|
|
|
$
|
28,998
|
|
|
$
|
28,530
|
|
|
$
|
27,453
|
|
|
$
|
26,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage and Investment:
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage
|
|
19,746
|
|
|
19,852
|
|
|
18,973
|
|
|
17,653
|
|
|
17,184
|
|
|
Money Market Mutual Funds
|
|
3,012
|
|
|
1,732
|
|
|
2,100
|
|
|
2,025
|
|
|
1,796
|
|
|
Total Brokerage and Investment
|
|
22,758
|
|
|
21,584
|
|
|
21,073
|
|
|
19,678
|
|
|
18,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Company:
|
|
|
|
|
|
|
|
|
|
|
|
Trust
|
|
3,618
|
|
|
3,370
|
|
|
3,149
|
|
|
3,057
|
|
|
3,044
|
|
|
Custody
|
|
3,477
|
|
|
3,613
|
|
|
3,617
|
|
|
3,189
|
|
|
3,103
|
|
|
Total Trust Company
|
|
7,095
|
|
|
6,983
|
|
|
6,766
|
|
|
6,246
|
|
|
6,147
|
|
|
Total Wealth Management Assets
|
|
58,822
|
|
|
57,565
|
|
|
56,369
|
|
|
53,377
|
|
|
51,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans serviced for investors
|
|
10,550
|
|
|
10,305
|
|
|
9,840
|
|
|
9,590
|
|
|
8,859
|
|
|
Total fee-based assets
|
|
$
|
69,372
|
|
|
$
|
67,870
|
|
|
$
|
66,209
|
|
|
$
|
62,967
|
|
|
$
|
60,241
|
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Average Balance Sheet
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,682,142
|
|
|
$
|
1,547,482
|
|
|
$
|
1,269,880
|
|
|
$
|
1,921,569
|
|
|
$
|
1,341,957
|
|
|
Investment securities (15)
|
|
8,190,959
|
|
|
5,734,607
|
|
|
7,838,485
|
|
|
7,674,305
|
|
|
5,493,106
|
|
|
Loans (16)
|
|
42,143,922
|
|
|
37,197,470
|
|
|
40,058,305
|
|
|
40,163,701
|
|
|
35,833,363
|
|
|
Total interest-earning assets
|
|
53,017,023
|
|
|
44,479,559
|
|
|
49,166,670
|
|
|
49,759,575
|
|
|
42,668,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earning cash
|
|
257,826
|
|
|
247,101
|
|
|
255,702
|
|
|
255,516
|
|
|
231,065
|
|
|
Goodwill and other intangibles
|
|
204,021
|
|
|
224,630
|
|
|
208,846
|
|
|
208,886
|
|
|
230,339
|
|
|
Other assets
|
|
2,467,187
|
|
|
2,244,213
|
|
|
2,453,750
|
|
|
2,440,913
|
|
|
2,052,081
|
|
|
Total noninterest-earning assets
|
|
2,929,034
|
|
|
2,715,944
|
|
|
2,918,298
|
|
|
2,905,315
|
|
|
2,513,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
55,946,057
|
|
|
$
|
47,195,503
|
|
|
$
|
52,084,968
|
|
|
$
|
52,664,890
|
|
|
$
|
45,181,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Checking
|
|
$
|
27,208,451
|
|
|
$
|
19,211,769
|
|
|
$
|
24,099,157
|
|
|
$
|
24,579,377
|
|
|
$
|
17,857,530
|
|
|
Money market checking and savings
|
|
13,226,282
|
|
|
12,902,904
|
|
|
12,451,743
|
|
|
12,668,194
|
|
|
12,763,328
|
|
|
CDs (16)
|
|
4,162,188
|
|
|
3,698,444
|
|
|
3,893,313
|
|
|
3,951,941
|
|
|
3,659,391
|
|
|
Total deposits
|
|
44,596,921
|
|
|
35,813,117
|
|
|
40,444,213
|
|
|
41,199,512
|
|
|
34,280,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term FHLB advances
|
|
4,657,337
|
|
|
5,520,924
|
|
|
4,922,802
|
|
|
4,930,586
|
|
|
5,542,033
|
|
|
Senior notes (17)
|
|
396,869
|
|
|
396,155
|
|
|
396,675
|
|
|
396,677
|
|
|
153,861
|
|
|
Other borrowings
|
|
131,168
|
|
|
38,641
|
|
|
312,767
|
|
|
159,819
|
|
|
40,900
|
|
|
Total borrowings
|
|
5,185,374
|
|
|
5,955,720
|
|
|
5,632,244
|
|
|
5,487,082
|
|
|
5,736,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities
|
|
49,782,295
|
|
|
41,768,837
|
|
|
46,076,457
|
|
|
46,686,594
|
|
|
40,017,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities
|
|
797,627
|
|
|
752,674
|
|
|
804,458
|
|
|
820,078
|
|
|
662,362
|
|
|
Preferred equity
|
|
989,525
|
|
|
889,525
|
|
|
927,987
|
|
|
936,045
|
|
|
889,525
|
|
|
Common equity
|
|
4,376,610
|
|
|
3,784,467
|
|
|
4,276,066
|
|
|
4,222,173
|
|
|
3,612,981
|
|
|
Total Liabilities and Equity
|
|
$
|
55,946,057
|
|
|
$
|
47,195,503
|
|
|
$
|
52,084,968
|
|
|
$
|
52,664,890
|
|
|
$
|
45,181,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15)
|
Includes FHLB stock and securities purchased under agreements to resell.
|
|
|
(16)
|
Average balances are presented net of purchase accounting discounts or premiums.
|
|
|
(17)
|
Average balances include unamortized issuance discounts and costs.
|
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Purchase Accounting Accretion and Amortization (18)
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Accretion/amortization to net interest income:
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
9,663
|
|
|
$
|
14,332
|
|
|
$
|
11,708
|
|
|
$
|
33,493
|
|
|
$
|
51,561
|
|
|
Deposits
|
|
—
|
|
|
1,468
|
|
|
278
|
|
|
1,006
|
|
|
5,039
|
|
|
Total
|
|
$
|
9,663
|
|
|
$
|
15,800
|
|
|
$
|
11,986
|
|
|
$
|
34,499
|
|
|
$
|
56,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income:
|
|
|
|
|
|
|
|
|
|
|
|
Discounts recognized in gain on sale of loans
|
|
$
|
—
|
|
|
$
|
1,679
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization to noninterest expense:
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
$
|
3,170
|
|
|
$
|
3,808
|
|
|
$
|
3,327
|
|
|
$
|
9,986
|
|
|
$
|
11,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18)
|
Related to the Bank's re-establishment as an independent institution.
|
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, yield on average loans, cost of average deposits, net interest margin and the efficiency ratio.
Our net income, earnings per share, yield on average loans, cost of average deposits, 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; recognize discounts established in purchase accounting on the sale of loans, which increase gain on sale of loans; amortize premiums on CDs to interest expense; and amortize intangible assets to noninterest expense.
The Bank's non-GAAP measures also exclude the positive impact of certain nonrecurring items. In the second quarter of 2015, the Bank received a one-time special dividend of $9.1 million from the FHLB, which is excluded from non-GAAP net income, earnings per share, net interest income, net interest margin and efficiency ratio. In addition, in the third quarter of 2014, as a result of the restructuring of its investment securities portfolio, the Bank had a gain on sale of investments of $23.6 million, which is excluded from non-GAAP net income, earnings per share, noninterest income, revenue and efficiency ratio.
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. 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:
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Non-GAAP Earnings
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
134,842
|
|
|
$
|
136,011
|
|
|
$
|
131,345
|
|
|
$
|
382,099
|
|
|
$
|
371,547
|
|
|
Accretion/amortization added to net interest income
|
|
(9,663)
|
|
|
(15,800)
|
|
|
(11,986)
|
|
|
(34,499)
|
|
|
(56,600)
|
|
|
One-time special FHLB dividend
|
|
—
|
|
|
—
|
|
|
(9,134)
|
|
|
(9,134)
|
|
|
—
|
|
|
Discounts recognized in gain on sale of loans
|
|
—
|
|
|
(1,679)
|
|
|
—
|
|
|
—
|
|
|
(1,679)
|
|
|
One-time gain on sale of investments
|
|
—
|
|
|
(23,580)
|
|
|
—
|
|
|
—
|
|
|
(23,580)
|
|
|
Amortization of intangible assets
|
|
3,170
|
|
|
3,808
|
|
|
3,327
|
|
|
9,986
|
|
|
11,903
|
|
|
Add back tax impact of the above items
|
|
2,759
|
|
|
15,832
|
|
|
7,563
|
|
|
14,300
|
|
|
29,732
|
|
|
Core net income (non-GAAP)
|
|
131,108
|
|
|
114,592
|
|
|
121,115
|
|
|
362,752
|
|
|
331,323
|
|
|
Dividends on preferred stock
|
|
(15,314)
|
|
|
(13,889)
|
|
|
(14,411)
|
|
|
(43,614)
|
|
|
(41,667)
|
|
|
Core net income available to common shareholders (non-GAAP)
|
|
$
|
115,794
|
|
|
$
|
100,703
|
|
|
$
|
106,704
|
|
|
$
|
319,138
|
|
|
$
|
289,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per common share—diluted
|
|
$
|
0.82
|
|
|
$
|
0.86
|
|
|
$
|
0.80
|
|
|
$
|
2.34
|
|
|
$
|
2.35
|
|
|
Impact of purchase accounting, net of tax
|
|
(0.03)
|
|
|
(0.05)
|
|
|
(0.03)
|
|
|
(0.09)
|
|
|
(0.18)
|
|
|
Impact of one-time special FHLB dividend, net of tax
|
|
—
|
|
|
—
|
|
|
(0.04)
|
|
|
(0.04)
|
|
|
—
|
|
|
Impact of one-time gain on sale of investments, net of tax
|
|
—
|
|
|
(0.10)
|
|
|
—
|
|
|
—
|
|
|
(0.10)
|
|
|
Core earnings per common share—diluted (non-GAAP)
|
|
$
|
0.79
|
|
|
$
|
0.71
|
|
|
$
|
0.73
|
|
|
$
|
2.21
|
|
|
$
|
2.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares outstanding
|
|
145,890
|
|
|
141,548
|
|
|
145,713
|
|
|
144,727
|
|
|
140,096
|
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Yield on Average Loans
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Interest income on loans
|
|
$
|
348,367
|
|
|
$
|
322,987
|
|
|
$
|
333,966
|
|
|
$
|
1,004,208
|
|
|
$
|
949,385
|
|
|
Add: Tax-equivalent adjustment on loans
|
|
10,045
|
|
|
7,792
|
|
|
9,313
|
|
|
28,086
|
|
|
21,339
|
|
|
Interest income on loans (tax-equivalent basis)
|
|
358,412
|
|
|
330,779
|
|
|
343,279
|
|
|
1,032,294
|
|
|
970,724
|
|
|
Less: Accretion
|
|
(9,663)
|
|
|
(14,332)
|
|
|
(11,708)
|
|
|
(33,493)
|
|
|
(51,561)
|
|
|
Core interest income on loans (tax-equivalent basis) (non-GAAP)
|
|
$
|
348,749
|
|
|
$
|
316,447
|
|
|
$
|
331,571
|
|
|
$
|
998,801
|
|
|
$
|
919,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans
|
|
$
|
42,143,922
|
|
|
$
|
37,197,470
|
|
|
$
|
40,058,305
|
|
|
$
|
40,163,701
|
|
|
$
|
35,833,363
|
|
|
Add: Average unaccreted loan discounts
|
|
125,315
|
|
|
177,380
|
|
|
136,533
|
|
|
136,763
|
|
|
195,705
|
|
|
Average loans (non-GAAP)
|
|
$
|
42,269,237
|
|
|
$
|
37,374,850
|
|
|
$
|
40,194,838
|
|
|
$
|
40,300,464
|
|
|
$
|
36,029,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on average loans—reported (5)
|
|
3.36
|
%
|
|
3.52
|
%
|
|
3.41
|
%
|
|
3.41
|
%
|
|
3.60
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual yield on average loans (non-GAAP) (5)
|
|
3.26
|
%
|
|
3.35
|
%
|
|
3.28
|
%
|
|
3.29
|
%
|
|
3.39
|
%
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Cost of Average Deposits
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on deposits
|
|
$
|
15,903
|
|
|
$
|
15,935
|
|
|
$
|
14,543
|
|
|
$
|
44,434
|
|
|
$
|
45,984
|
|
|
Add: Amortization of CD premiums
|
|
—
|
|
|
1,468
|
|
|
278
|
|
|
1,006
|
|
|
5,039
|
|
|
Core interest expense on deposits (non-GAAP)
|
|
$
|
15,903
|
|
|
$
|
17,403
|
|
|
$
|
14,821
|
|
|
$
|
45,440
|
|
|
$
|
51,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average deposits
|
|
$
|
44,596,921
|
|
|
$
|
35,813,117
|
|
|
$
|
40,444,213
|
|
|
$
|
41,199,512
|
|
|
$
|
34,280,249
|
|
|
Less: Average unamortized CD premiums
|
|
—
|
|
|
(3,031)
|
|
|
(43)
|
|
|
(213)
|
|
|
(4,640)
|
|
|
Average deposits (non-GAAP)
|
|
$
|
44,596,921
|
|
|
$
|
35,810,086
|
|
|
$
|
40,444,170
|
|
|
$
|
41,199,299
|
|
|
$
|
34,275,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of average deposits—reported
|
|
0.14
|
%
|
|
0.18
|
%
|
|
0.14
|
%
|
|
0.14
|
%
|
|
0.18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual cost of average deposits (non-GAAP)
|
|
0.14
|
%
|
|
0.19
|
%
|
|
0.15
|
%
|
|
0.15
|
%
|
|
0.20
|
%
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Net Interest Margin
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
388,881
|
|
|
$
|
335,989
|
|
|
$
|
375,064
|
|
|
$
|
1,111,964
|
|
|
$
|
989,905
|
|
|
Add: Tax-equivalent adjustment
|
|
35,619
|
|
|
27,710
|
|
|
32,148
|
|
|
97,425
|
|
|
80,557
|
|
|
Net interest income (tax-equivalent basis)
|
|
424,500
|
|
|
363,699
|
|
|
407,212
|
|
|
1,209,389
|
|
|
1,070,462
|
|
|
Less: Accretion/amortization
|
|
(9,663)
|
|
|
(15,800)
|
|
|
(11,986)
|
|
|
(34,499)
|
|
|
(56,600)
|
|
|
Less: One-time special FHLB dividend
|
|
—
|
|
|
—
|
|
|
(9,134)
|
|
|
(9,134)
|
|
|
—
|
|
|
Core net interest income (tax-equivalent basis) (non-GAAP)
|
|
$
|
414,837
|
|
|
$
|
347,899
|
|
|
$
|
386,092
|
|
|
$
|
1,165,756
|
|
|
$
|
1,013,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average interest-earning assets
|
|
$
|
53,017,023
|
|
|
$
|
44,479,559
|
|
|
$
|
49,166,670
|
|
|
$
|
49,759,575
|
|
|
$
|
42,668,426
|
|
|
Add: Average unaccreted loan discounts
|
|
125,315
|
|
|
177,380
|
|
|
136,533
|
|
|
136,763
|
|
|
195,705
|
|
|
Average interest-earning assets (non-GAAP)
|
|
$
|
53,142,338
|
|
|
$
|
44,656,939
|
|
|
$
|
49,303,203
|
|
|
$
|
49,896,338
|
|
|
$
|
42,864,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin—reported
|
|
3.17
|
%
|
|
3.25
|
%
|
|
3.30
|
%
|
|
3.23
|
%
|
|
3.33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Core net interest margin (non-GAAP)
|
|
3.09
|
%
|
|
3.09
|
%
|
|
3.12
|
%
|
|
3.10
|
%
|
|
3.14
|
%
|
|
|
Quarter Ended
September 30,
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
September 30,
|
|
Efficiency Ratio
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
388,881
|
|
|
$
|
335,989
|
|
|
$
|
375,064
|
|
|
$
|
1,111,964
|
|
|
$
|
989,905
|
|
|
Less: Accretion/amortization
|
|
(9,663)
|
|
|
(15,800)
|
|
|
(11,986)
|
|
|
(34,499)
|
|
|
(56,600)
|
|
|
Less: One-time special FHLB dividend
|
|
—
|
|
|
—
|
|
|
(9,134)
|
|
|
(9,134)
|
|
|
—
|
|
|
Core net interest income (non-GAAP)
|
|
$
|
379,218
|
|
|
$
|
320,189
|
|
|
$
|
353,944
|
|
|
$
|
1,068,331
|
|
|
$
|
933,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income
|
|
$
|
79,747
|
|
|
$
|
104,671
|
|
|
$
|
80,236
|
|
|
$
|
234,902
|
|
|
$
|
242,521
|
|
|
Less: Discounts recognized in gain on sale of loans
|
|
—
|
|
|
(1,679)
|
|
|
—
|
|
|
—
|
|
|
(1,679)
|
|
|
Less: One-time gain on sale of investments
|
|
—
|
|
|
(23,580)
|
|
|
—
|
|
|
—
|
|
|
(23,580)
|
|
|
Core noninterest income (non-GAAP)
|
|
$
|
79,747
|
|
|
$
|
79,412
|
|
|
$
|
80,236
|
|
|
$
|
234,902
|
|
|
$
|
217,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
468,628
|
|
|
$
|
440,660
|
|
|
$
|
455,300
|
|
|
$
|
1,346,866
|
|
|
$
|
1,232,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total core revenue (non-GAAP)
|
|
$
|
458,965
|
|
|
$
|
399,601
|
|
|
$
|
434,180
|
|
|
$
|
1,303,233
|
|
|
$
|
1,150,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense
|
|
$
|
275,897
|
|
|
$
|
238,377
|
|
|
$
|
263,115
|
|
|
$
|
794,685
|
|
|
$
|
678,596
|
|
|
Less: Intangible amortization
|
|
(3,170)
|
|
|
(3,808)
|
|
|
(3,327)
|
|
|
(9,986)
|
|
|
(11,903)
|
|
|
Core noninterest expense (non-GAAP)
|
|
$
|
272,727
|
|
|
$
|
234,569
|
|
|
$
|
259,788
|
|
|
$
|
784,699
|
|
|
$
|
666,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
|
|
58.9
|
%
|
|
54.1
|
%
|
|
57.8
|
%
|
|
59.0
|
%
|
|
55.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Core efficiency ratio (non-GAAP)
|
|
59.4
|
%
|
|
58.7
|
%
|
|
59.8
|
%
|
|
60.2
|
%
|
|
57.9
|
%
|
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SOURCE First Republic Bank