First Republic Reports First Quarter 2020 Results

First Republic Bank (NYSE: FRC) today announced financial results for the quarter ended March 31, 2020.

“Results for the first quarter were strong,” said Jim Herbert, Founder, Chairman and CEO of First Republic. “In these very unusual times, our strength and durability, coupled with a time-tested culture of service, enable us to take great care of our colleagues, communities, and clients.”

Quarterly Highlights

Financial Results

– Year-over year:

– Revenues were $916.2 million, up 13.5%.

– Net interest income was $752.1 million, up 11.4%.

– Provision for credit losses and unfunded loan commitments was $62.4 million, compared to $14.0 million for the first quarter of 2019.

– Net income was $218.7 million, down 3.5%.

– Diluted earnings per share of $1.20, down 4.8%.

– Tangible book value per share was $52.40, up 11.9%.

– Loan originations totaled $10.3 billion.

– Net interest margin was 2.74%, compared to 2.73% for the prior quarter.

– Efficiency ratio was 65.1%, compared to 65.0% for the first quarter of 2019.

Continued Capital and Credit Strength

– Tier 1 leverage ratio was 8.46%, compared to 8.39% for the prior quarter.

– Increased quarterly dividend to $0.20 per share in April 2020.

– Nonperforming assets remained at a low 10 basis points of total assets.

– Net charge-offs were only $202,000, or less than 1 basis point of average loans.

Continued Franchise Development

– Year-over-year:

– Loans, excluding loans held for sale, totaled $95.3 billion, up 23.3%.

– Deposits were $93.7 billion, up 14.8%.

– Wealth management assets were $137.9 billion, down 1.4%.

– Wealth management revenues were $134.4 million, up 25.4%.

“Credit quality, capital strength and liquidity remained strong,” said Mike Roffler, Chief Financial Officer. “Loans and deposits grew nicely and we’re pleased with 11.4% growth in net interest income and a stable net interest margin.”

Recent Developments

The COVID-19 pandemic has caused substantial disruptions to the global economy and the communities we serve. In response to the pandemic, we have implemented our contingency plans, which include company-wide remote working arrangements, modified hours in our preferred banking offices, and promoting social distancing. In addition, we are focused on supporting our clients who may be experiencing a financial hardship due to COVID-19, including deferrals as needed and participation in the Small Business Administration’s Paycheck Protection Program.

We are closely monitoring the rapid developments and uncertainties regarding the pandemic. We remain confident in our long-term underlying strength and stability, and our ability to navigate these challenging conditions.

Quarterly Cash Dividend of $0.20 per Share

The Bank announced an increase of $0.01 in its quarterly cash dividend to $0.20 per share of common stock. This first quarter dividend is payable on May 14, 2020 to shareholders of record as of April 30, 2020.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were only 10 basis points of total assets at March 31, 2020. The Bank had net loan charge-offs of $202,000 for the quarter.

Beginning in the first quarter, the Bank fully adopted the Current Expected Credit Losses (“CECL”) methodology under Accounting Standards Codification (“ASC”) 326, in which the allowance for credit losses reflects expected credit losses over the life of loans and held-to-maturity debt securities, and incorporates macroeconomic forecasts as well as historical loss rates. The allowance for expected credit losses at the end of the first quarter incorporates a change in the economic forecast late in the first quarter of 2020, to reflect the pandemic conditions, as compared to our initial adoption of CECL.

During the first quarter, the Bank recorded a total provision for credit losses and unfunded loan commitments of $62.4 million, which included a provision for credit losses of $48.1 million for loans and held-to-maturity debt securities, and an additional provision of $14.3 million included in noninterest expense for unfunded loan commitments. In the first quarter of 2019, the total provision for loans and unfunded loan commitments was $14.0 million.

Continued Capital Strength and Access to Capital Markets

The Bank’s Tier 1 leverage ratio was 8.46%at March 31, 2020, compared to 8.39% at December 31, 2019.

During the first quarter, the Bank sold 2,500,000 new shares of common stock in an underwritten public offering, which added approximately $290.6 million to common equity. This common stock and the Tier 1 qualified preferred stock issued in the fourth quarter of 2019, net of preferred stock redeemed in the fourth quarter of 2019, added $483.1 million of Tier 1 capital in the last six months.

The Bank has not and does not engage in common stock buybacks.

Tangible Book Value Growth

Tangible book value per common share at March 31, 2020 was $52.40, up 11.9% from a year ago.

Continued Franchise Development

Loan Originations

Loan originations were $10.3 billion for the quarter, up 59.2% from the same quarter a year ago primarily due to increases in single family, business, multifamily/commercial construction and stock secured lending. Single family loan originations were 34% of the total for the quarter, and had a weighted average loan-to-value ratio of 57%. Multifamily and commercial real estate loans originated during the quarter, 12% of the total, had a weighted average loan-to-value ratio of 52%.

Loans, excluding loans held for sale, totaled $95.3 billion at March 31, 2020, up 23.3% compared to a year ago primarily due to increases in single family, multifamily and commercial real estate loans, along with an increase in capital call lines of credit outstanding.

Deposit Growth

Total deposits increased to $93.7 billion, up 14.8% compared to a year ago.

At March 31, 2020, checking deposit balances were 61.8% of total deposits.

Investments

Total investment securities at March 31, 2020 were $18.8 billion, a 16.9% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $17.6 billion at March 31, 2020, and represented 14.8% of average total assets.

Wealth Management

Wealth management revenues totaled $134.4 million for the quarter, up 25.4% compared to last year’s first quarter. Such revenues represented 14.7% of the Bank’s total revenues for the quarter.

Total wealth management assets were $137.9 billion at March 31, 2020, down 8.7% for the quarter and down 1.4% compared to a year ago. The decrease in wealth management assets for the quarter was primarily due to market decline, partially offset by net new assets from existing and new clients.

Wealth management assets included investment management assets of $60.1 billion, brokerage assets and money market mutual funds of $67.1 billion, and trust and custody assets of $10.7 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $916.2 million for the quarter, up 13.5% compared to the first quarter a year ago.

Net Interest Income Growth

Net interest income was $752.1 million for the quarter, up 11.4% compared to the first quarter a year ago. The increase in net interest income resulted primarily from growth in average interest-earning assets.

Net Interest Margin

The net interest margin was 2.74% for the first quarter, compared to 2.73% for the prior quarter.

Noninterest Income

Noninterest income was $164.0 million for the quarter, up 24.0% compared to the first quarter a year ago. The increase was primarily from growth in wealth management fees and a gain on investment securities for the quarter.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $596.3 million for the quarter, up 13.6% compared to the first quarter a year ago. The increase was primarily due to increased salaries and benefits and occupancy expenses from the continued investments in the expansion of the franchise, along with an increase in the provision for unfunded loan commitments.

The efficiency ratio was 65.1% for the quarter, compared to 65.0% for the first quarter a year ago.

Income Taxes

The Bank’s effective tax rate for the first quarter of 2020 was 19.5%, compared to 20.3% for the prior quarter, and 15.6% for the first quarter a year ago. The increase from a year ago was primarily the result of lower tax benefits due to a decrease in stock options exercised by employees.

Conference Call Details

First Republic Bank’s first quarter 2020 earnings conference call is scheduled for April 14, 2020 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (800) 458-4148 and use confirmation code 1291711# approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (720) 543-0206 and enter the same confirmation code.

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

For those unable to join the live presentation, a replay of the call will be available beginning April 14, 2020, at 11:00 a.m. PT / 2:00 p.m. ET, through April 21, 2020, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 1291711#. International callers should dial +1 (719) 457-0820 and enter the same confirmation code. A replay of the webcast also will be available for 90 days following, accessible in the Investor Relations section of First Republic Bank’s website at firstrepublic.com.

The Bank’s press releases are available after release in the Investor Relations section of First Republic Bank’s website at firstrepublic.com.

About First Republic Bank

Founded in 1985, First Republic and its subsidiaries offer private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic specializes in delivering exceptional, relationship-based service and offers a complete line of products, including residential, commercial and personal loans, deposit services, and wealth management. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach and San Diego, California; Portland, Oregon; Boston, Massachusetts; Palm Beach, Florida; Greenwich, Connecticut; New York, New York; and Jackson, Wyoming. First Republic is a constituent of the S&P 500 Index and KBW Nasdaq Bank Index. For more information, visit firstrepublic.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this press release that are not historical facts are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimates,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them.

Forward-looking statements involving such risks and uncertainties include, but are not limited to, statements regarding: projections of loans, assets, deposits, liabilities, revenues, expenses, tax liabilities, net income, capital expenditures, liquidity, dividends, capital structure, investments or other financial items; expectations regarding the banking and wealth management industries; descriptions of plans or objectives of management for future operations, products or services; forecasts of future economic conditions generally and in our market areas in particular, which may affect the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans; our opportunities for growth and our plans for expansion (including opening new offices); expectations about the performance of any new offices; projections about the amount and the value of intangible assets, as well as amortization of recorded amounts; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; expectations regarding the impact of COVID-19; projections about future levels of loan originations or loan repayments; projections regarding costs, including the impact on our efficiency ratio; and descriptions of assumptions underlying or relating to any of the foregoing.

Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: significant competition to attract and retain banking and wealth management customers, from both traditional and non-traditional financial services and technology companies; our ability to recruit and retain key managers, employees and board members; the possibility of earthquakes, fires and other natural disasters affecting the markets in which we operate; the negative impacts and disruptions resulting from the COVID-19 pandemic on our colleagues, the communities we serve and the domestic and global economy, which may have an adverse effect on our business, financial position and results of operations; interest rate risk and credit risk; our ability to maintain and follow high underwriting standards; economic and market conditions, including those affecting the valuation of our investment securities portfolio and credit losses on our loans and debt securities; real estate prices generally and in our markets; our geographic and product concentrations; demand for our products and services; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate and the 11th District Monthly Weighted Average Cost of Funds Index, as well as other alternative reference rates; the regulatory environment in which we operate, our regulatory compliance and future regulatory requirements; any future changes to regulatory capital requirements; legislative and regulatory actions affecting us and the financial services industry, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), including increased compliance costs, limitations on activities and requirements to hold additional capital, as well as changes to the Dodd-Frank Act pursuant to the Economic Growth, Regulatory Relief, and Consumer Protection Act; our ability to avoid litigation and its associated costs and liabilities; future Federal Deposit Insurance Corporation (“FDIC”) special assessments or changes to regular assessments; fraud, cybersecurity and privacy risks; and custom technology preferences of our customers and our ability to successfully execute on initiatives relating to enhancements of our technology infrastructure, including client-facing systems and applications. For a discussion of these and other risks and uncertainties, see First Republic’s FDIC filings, including, but not limited to, the risk factors in First Republic’s Annual Report on Form 10-K and any subsequent reports filed by First Republic with the FDIC. These filings are available in the Investor Relations section of our website.

All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout our public filings under the Exchange Act. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

CONSOLIDATED STATEMENTS OF INCOME
		Quarter Ended March 31,								Quarter Ended December 31,
(in thousands, except per share amounts)		2020				2019				2019
Interest income:
Loans		$	796,652			$	700,088			$	780,326
Investments		148,569				133,765				146,080
Other		6,960				5,175				5,679
Cash and cash equivalents		3,940				7,989				4,869
Total interest income		956,121				847,017				936,954
Interest expense:
Deposits		118,845				107,747				128,705
Borrowings		85,144				64,232				88,131
Total interest expense		203,989				171,979				216,836
Net interest income		752,132				675,038				720,118
Provision for credit losses		48,097				14,200				9,579
Net interest income after provision for credit losses		704,035				660,838				710,539
Noninterest income:
Investment management fees		99,296				84,924				97,106
Brokerage and investment fees		15,826				7,659				12,416
Insurance fees		2,157				2,114				4,186
Trust fees		4,976				3,889				4,328
Foreign exchange fee income		12,184				8,631				10,365
Deposit fees		6,597				6,320				6,609
Loan and related fees		6,114				4,007				6,175
Loan servicing fees, net		1,652				3,788				1,788
Gain on sale of loans		1,925				359				69
Gain (loss) on investment securities		2,628				(149)				(1,541)
Income from investments in life insurance		8,160				9,335				14,034
Other income		2,529				1,441				1,810
Total noninterest income		164,044				132,318				157,345
Noninterest expense:
Salaries and employee benefits		361,204				313,253				325,094
Information systems		70,715				67,170				69,278
Occupancy		53,641				43,895				50,474
Professional fees		13,117				11,681				22,476
Advertising and marketing		11,843				15,734				17,615
FDIC assessments		10,185				8,903				10,912
Other expenses		75,585				64,176				62,996
Total noninterest expense		596,290				524,812				558,845
Income before provision for income taxes		271,789				268,344				309,039
Provision for income taxes		53,103				41,753				62,709
Net income		218,686				226,591				246,330
Dividends on preferred stock		13,020				12,787				10,708
Net income available to common shareholders		$	205,666			$	213,804			$	235,622
Basic earnings per common share		$	1.20			$	1.28			$	1.40
Diluted earnings per common share		$	1.20			$	1.26			$	1.39
Weighted average shares—basic		170,835				167,112				168,544
Weighted average shares—diluted		172,039				169,410				169,776

CONSOLIDATED BALANCE SHEETS
		As of
($ in thousands)		March 31, 2020				December 31, 2019 (1)				March 31, 2019 (1)
ASSETS
Cash and cash equivalents		$	3,949,378			$	1,699,557			$	3,693,396
Debt securities available-for-sale		1,243,798				1,282,169				1,624,970
Debt securities held-to-maturity		17,534,920				17,147,633				14,442,876
Less: Allowance for credit losses		(5,087)				—				—
Debt securities held-to-maturity, net		17,529,833				17,147,633				14,442,876
Equity securities (fair value)		19,575				19,586				19,386
Loans: (1)
Single family (1-4 units)		49,063,193				47,985,651				39,134,534
Home equity lines of credit		2,703,919				2,501,432				2,502,837
Single family construction		779,239				761,589				690,370
Multifamily (5+ units)		12,823,392				12,353,359				10,755,210
Commercial real estate		7,715,266				7,449,058				6,763,664
Multifamily/commercial construction		1,839,445				1,695,954				1,604,996
Capital call lines of credit		7,512,231				5,570,322				4,524,749
Tax-exempt		3,087,751				3,042,193				3,046,352
Other business		3,094,922				3,034,301				3,044,943
Stock secured		1,919,971				1,897,511				1,375,454
Other secured		1,531,705				1,433,399				1,135,170
Student loan refinance		2,659,674				2,570,356				2,328,751
Other unsecured		554,354				501,706				358,067
Total loans		95,285,062				90,796,831				77,265,097
Allowance for credit losses		(541,906)				(496,104)				(453,121)
Loans, net		94,743,156				90,300,727				76,811,976
Loans held for sale		354,873				23,304				9,878
Investments in life insurance		1,460,909				1,434,642				1,404,083
Tax credit investments		1,106,693				1,100,509				1,040,924
Premises, equipment and leasehold improvements, net		392,953				386,841				339,745
Goodwill and other intangible assets		232,985				235,269				270,594
Other real estate owned		1,071				—				—
Other assets		2,879,705				2,633,397				2,189,400
Total Assets		$	123,914,929			$	116,263,634			$	101,847,228
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Noninterest-bearing checking		$	36,920,635			$	33,124,265			$	31,362,112
Interest-bearing checking		20,941,790				19,696,859				16,912,529
Money market checking		12,636,674				12,790,707				10,559,521
Money market savings and passbooks		9,052,690				10,586,355				9,858,736
Certificates of deposit		14,140,550				13,935,060				12,919,219
Total Deposits		93,692,339				90,133,246				81,612,117
Short-term borrowings		—				800,000				—
Long-term FHLB advances		16,250,000				12,200,000				8,000,000
Senior notes		994,742				497,719				896,866
Subordinated notes		777,990				777,885				777,576
Other liabilities		1,840,093				2,003,677				1,514,685
Total Liabilities		113,555,164				106,412,527				92,801,244
Shareholders’ Equity:
Preferred stock		1,145,000				1,145,000				940,000
Common stock		1,714				1,686				1,674
Additional paid-in capital		4,543,650				4,214,915				4,203,473
Retained earnings		4,652,089				4,484,375				3,914,294
Accumulated other comprehensive income (loss)		17,312				5,131				(13,457)
Total Shareholders’ Equity		10,359,765				9,851,107				9,045,984
Total Liabilities and Shareholders’ Equity		$	123,914,929			$	116,263,634			$	101,847,228
____________
(1) For comparability, the Bank has adjusted certain prior period loan amounts to conform to the current period presentation under CECL.

		Quarter Ended March 31,																						Quarter Ended December 31,
		2020											2019 (4)											2019 (4)
Average Balances, Yields and Rates		Average Balance				Interest Income/ Expense (1)				Yields/ Rates (2)			Average Balance				Interest Income/ Expense (1)				Yields/ Rates (2)			Average Balance				Interest Income/ Expense (1)				Yields/ Rates (2)
($ in thousands)
Assets:
Cash and cash equivalents		$	1,853,579			$	3,940			0.85	%		$	1,445,058			$	7,989			2.24	%		$	1,377,686			$	4,869			1.40	%
Investment securities:
U.S. Government-sponsored agency securities		307,449				2,207				2.87	%		1,044,894				7,776				2.98	%		461,671				3,239				2.81	%
Mortgage-backed securities:
Agency residential and commercial MBS		6,746,664				47,186				2.80	%		6,854,838				49,620				2.90	%		6,826,144				47,764				2.80	%
Other residential and commercial MBS		3,834				32				3.33	%		4,528				46				4.03	%		4,276				39				3.66	%
Municipal securities		11,358,749				122,542				4.32	%		8,180,654				94,501				4.62	%		10,981,068				116,245				4.23	%
Other investment securities (3)		43,783				320				2.92	%		18,989				120				2.52	%		43,840				322				2.94	%
Total investment securities		18,460,479				172,287				3.73	%		16,103,903				152,063				3.78	%		18,316,999				167,609				3.66	%
Loans: (4)
Residential real estate (5)		51,300,013				404,982				3.16	%		40,973,253				341,784				3.34	%		48,938,892				391,415				3.20	%
Multifamily (6)		12,565,723				118,944				3.74	%		10,534,919				99,701				3.79	%		12,043,858				118,431				3.85	%
Commercial real estate		7,574,573				78,609				4.11	%		6,702,263				71,947				4.29	%		7,414,885				78,229				4.13	%
Multifamily/commercial construction		2,550,647				30,285				4.70	%		2,278,294				28,244				4.96	%		2,415,923				28,931				4.69	%
Business (7)		12,390,386				122,971				3.93	%		10,678,134				121,044				4.53	%		11,556,437				121,665				4.12	%
Other (8)		6,453,056				47,572				2.92	%		5,088,348				43,946				3.45	%		6,085,084				48,261				3.10	%
Total loans		92,834,398				803,363				3.44	%		76,255,211				706,666				3.71	%		88,455,079				786,932				3.52	%
FHLB stock		406,974				6,960				6.88	%		278,805				5,175				7.53	%		394,487				5,678				5.71	%
Total interest-earning assets		113,555,430				986,550				3.46	%		94,082,977				871,893				3.71	%		108,544,251				965,088				3.52	%
Noninterest-earning cash		443,255											345,237											362,139
Goodwill and other intangibles		234,078											272,371											256,614
Other assets		4,721,313											4,196,071											4,581,436
Total noninterest-earning assets		5,398,646											4,813,679											5,200,189
Total Assets		$	118,954,076										$	98,896,656										$	113,744,440
Liabilities and Equity:
Deposits:
Checking		$	53,863,519			8,432				0.06	%		$	46,516,109			6,094				0.05	%		$	51,333,186			8,777				0.07	%
Money market checking and savings		22,475,109				44,869				0.80	%		19,268,808				42,317				0.89	%		21,298,741				49,682				0.93	%
CDs		14,185,945				65,544				1.86	%		11,384,085				59,336				2.11	%		13,694,721				70,246				2.04	%
Total deposits		90,524,573				118,845				0.53	%		77,169,002				107,747				0.57	%		86,326,648				128,705				0.59	%
Borrowings:
Short-term borrowings		1,231,827				4,700				1.53	%		956,670				6,030				2.56	%		3,056,545				13,530				1.76	%
Long-term FHLB advances		13,420,604				66,566				1.99	%		8,503,889				43,167				2.06	%		11,488,043				62,146				2.15	%
Senior notes (9)		765,308				4,773				2.49	%		896,654				5,934				2.65	%		497,610				3,351				2.69	%
Subordinated notes (9)		777,938				9,105				4.68	%		777,526				9,101				4.68	%		777,834				9,104				4.68	%
Total borrowings		16,195,677				85,144				2.11	%		11,134,739				64,232				2.33	%		15,820,032				88,131				2.21	%
Total interest-bearing liabilities		106,720,250				203,989				0.77	%		88,303,741				171,979				0.79	%		102,146,680				216,836				0.84	%
Noninterest-bearing liabilities		2,030,107											1,564,278											2,093,561
Preferred equity		1,145,000											940,000											899,728
Common equity		9,058,719											8,088,637											8,604,471
Total Liabilities and Equity		$	118,954,076										$	98,896,656										$	113,744,440
Net interest spread (10)										2.69	%										2.92	%										2.68	%
Net interest income (fully taxable-equivalent basis) and net interest margin (11)						$	782,561			2.74	%						$	699,914			2.97	%						$	748,252			2.73	%
Reconciliation of tax-equivalent net interest income to reported net interest income:
Tax-equivalent adjustment						(30,429)											(24,876)											(28,134)
Net interest income, as reported						$	752,132										$	675,038										$	720,118

____________________

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

(2) Yields/rates are annualized.

(3) Includes corporate debt securities, mutual funds and marketable equity securities.

(4) For comparability, the Bank has adjusted certain prior period loan amounts to conform to the current period presentation under CECL.

(5) Includes single family, home equity lines of credit, and single family construction loans. Also includes single family loans held for sale.

(6) Includes multifamily loans held for sale.

(7) Includes capital call lines of credit, tax-exempt loans and other business loans.

(8) Includes stock secured, other secured, student loan refinance and other unsecured loans.

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

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

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

		Quarter Ended March 31,								Quarter Ended December 31,
Operating Information		2020				2019				2019
($ in thousands, except per share amounts)
Net income to average assets (1)		0.74		%		0.93		%		0.86		%
Net income available to common shareholders to average common equity (1)		9.13		%		10.72		%		10.86		%
Net income available to common shareholders to average tangible common equity (1)		9.37		%		11.09		%		11.20		%
Dividends per common share		$	0.19			$	0.18			$	0.19
Dividend payout ratio		15.9		%		14.3		%		13.7		%
Efficiency ratio (2)		65.1		%		65.0		%		63.7		%
Net loan charge-offs (recoveries)		$	202			$	127			$	(1,060)
Net loan charge-offs (recoveries) to average total loans (1)		0.00		%		0.00		%		(0.00)		%
Allowance for loan credit losses to:
Total loans		0.57		%		0.59		%		0.55		%
Nonaccrual loans		432.1		%		887.1		%		346.5		%
__________
(1) Ratios are annualized.
(2) Efficiency ratio is the ratio of noninterest expense to the sum of net interest income and noninterest income.

		Quarter Ended March 31,						Quarter Ended December 31,
Effective Tax Rate		2020			2019			2019
Effective tax rate, prior to excess tax benefits		21.3	%		21.9	%		21.6	%
Excess tax benefits—stock options		(1.5)			(6.2)			(1.2)
Excess tax benefits—other stock awards		(0.3)			(0.1)			(0.1)
Total excess tax benefits		(1.8)			(6.3)			(1.3)
Effective tax rate		19.5	%		15.6	%		20.3	%

		Quarter Ended March 31,								Quarter Ended December 31,
Provision for Credit Losses and Unfunded Loan Commitments		2020				2019				2019
($ in thousands)
Debt securities held-to-maturity		$	418			$	—			$	—
Loans		47,679				14,200				9,579
Provision for credit losses		48,097				14,200				9,579
Provision (reversal of provision) for unfunded loan commitments (1)		14,273				(217)				(1,449)
Total provision		$	62,370			$	13,983			$	8,130

Allowance for Credit Losses		Debt Securities Held-to-Maturity				Loans				Unfunded Loan Commitments				Total
($ in thousands)
Balance at 12/31/2019 (pre-CECL)		$	—			$	496,104			$	12,029			$	508,133
Cumulative adjustment (2)		4,669				(1,675)				3,668				6,662
Balance at 1/1/2020 (CECL)		4,669				494,429				15,697				514,795
Provision for credit losses		418				47,679				—				48,097
Provision for unfunded loan commitments		—				—				14,273			(1)	14,273
Total provision		418				47,679				14,273				62,370
Net charge-offs		—				(202)				—				(202)
Balance at 3/31/2020 (CECL)		$	5,087			$	541,906			$	29,970		(3)	$	576,963
__________
(1) Included in other noninterest expense.
(2) Cumulative effect adjustment recorded on January 1, 2020.
(3) Included in other liabilities.

		Quarter Ended March 31,								Quarter Ended December 31,
Mortgage Loan Sales		2020				2019				2019
($ in thousands)
Loans sold:
Flow sales:
Agency		$	25,774			$	11,679			$	34,519
Non-agency		31,870				16,831				7,717
Total flow sales		57,644				28,510				42,236
Bulk sales:
Non-agency		437,669				152,119				—
Total loans sold		$	495,313			$	180,629			$	42,236
Gain on sale of loans:
Amount		$	1,925			$	359			$	69
Gain as a percentage of loans sold		0.39		%		0.20		%		0.16		%

		Quarter Ended March 31,								Quarter Ended December 31,
Loan Originations		2020				2019 (1)				2019 (1)
($ in thousands)
Single family (1-4 units)		$	3,519,336			$	2,189,895			$	5,275,965
Home equity lines of credit		395,508				352,138				456,150
Single family construction		109,162				124,269				133,368
Multifamily (5+ units)		781,303				582,943				1,214,394
Commercial real estate		451,858				246,528				401,084
Multifamily/commercial construction		620,921				130,113				340,650
Capital call lines of credit (2)		2,385,229				1,702,723				1,708,006
Tax-exempt		100,019				84,425				52,550
Other business		619,779				255,999				512,954
Stock secured		592,560				206,713				650,240
Other secured		413,824				266,749				170,231
Student loan refinance		236,882				271,268				218,596
Other unsecured		86,006				63,040				89,764
Total loans originated		$	10,312,387			$	6,476,803			$	11,223,952
__________
(1) For comparability, the Bank has adjusted certain prior period amounts to conform to the current period presentation under CECL.
(2) Origination amounts for certain business lines of credit (i.e., capital call lines of credit) reflect the Bank's contractual obligations in effect during the reporting period, and exclude amounts that are contingent upon future credit approvals.

		As of
Loan Servicing Portfolio		March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019
($ in millions)
Loans serviced for investors		$	9,203			$	9,298			$	10,080			$	10,746			$	11,326

		As of
Asset Quality Information		March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019
($ in thousands)
Nonperforming assets:
Nonaccrual loans		$	125,418			$	143,181			$	136,928			$	144,993			$	51,081
Other real estate owned		1,071				—				—				—				—
Total nonperforming assets		$	126,489			$	143,181			$	136,928			$	144,993			$	51,081
Nonperforming assets to total assets		0.10		%		0.12		%		0.12		%		0.14		%		0.05		%
Accruing loans 90 days or more past due		$	—			$	—			$	—			$	—			$	—
Restructured accruing loans		$	13,418			$	13,287			$	14,964			$	12,176			$	10,208

		As of
Book Value and Capital Ratios		March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019
(in thousands, except per share amounts)
Number of shares of common stock outstanding		171,395				168,621				168,450				168,176				167,393
Book value per common share		$	53.76			$	51.63			$	50.41			$	49.23			$	48.42
Tangible book value per common share		$	52.40			$	50.24			$	48.84			$	47.64			$	46.81

		As of
Capital Ratios		March 31, 2020 (1),(2)				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019
Tier 1 leverage ratio (Tier 1 capital to average assets)		8.46		%		8.39		%		8.50		%		8.69		%		8.84		%
Common Equity Tier 1 capital to risk-weighted assets		9.87		%		9.86		%		9.91		%		10.19		%		10.54		%
Tier 1 capital to risk-weighted assets		11.14		%		11.21		%		11.05		%		11.39		%		11.82		%
Total capital to risk-weighted assets		12.62		%		12.73		%		12.61		%		13.02		%		13.50		%
Regulatory Capital (3)
($ in thousands)
Common Equity Tier 1 capital		$	8,887,905			$	8,371,192			$	8,124,179			$	7,934,602			$	7,776,620
Tier 1 capital		$	10,032,905			$	9,516,192			$	9,064,179			$	8,874,602			$	8,716,620
Total capital		$	11,365,654			$	10,802,209			$	10,340,902			$	10,138,375			$	9,960,317
Assets (3)
($ in thousands)
Average assets		$	118,626,842			$	113,403,507			$	106,659,003			$	102,097,363			$	98,582,697
Risk-weighted assets		$	90,072,911			$	84,885,943			$	81,994,651			$	77,889,111			$	73,753,991
__________
(1) Ratios and amounts as of March 31, 2020 are preliminary.
(2) In accordance with regulatory capital rules, the Bank elected an option to delay the estimated impact of CECL on its regulatory capital over a five-year transition period ending December 31, 2024. As a result, capital ratios and amounts as of March 31, 2020 exclude the impact of the increased allowance for credit losses on loans, held-to-maturity debt securities and unfunded loan commitments attributed to the adoption of CECL.
(3) As defined by regulatory capital rules.

		As of
Wealth Management Assets		March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019
($ in millions)
First Republic Investment Management		$	60,056			$	66,029			$	61,204			$	61,192			$	66,675
Brokerage and investment:
Brokerage		60,189				68,807				63,053				61,583				59,391
Money market mutual funds		6,893				4,268				4,402				3,312				2,818
Total brokerage and investment		67,082				73,075				67,455				64,895				62,209
Trust Company:
Trust		7,288				7,121				6,366				6,319				5,955
Custody		3,461				4,818				5,210				5,225				5,060
Total Trust Company		10,749				11,939				11,576				11,544				11,015
Total Wealth Management Assets		$	137,887			$	151,043			$	140,235			$	137,631			$	139,899

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