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First Republic Reports 2021 Results

Net Interest Income Increased 26% Year-Over-Year

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

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

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

Full Year Highlights

Financial Results

– Revenues were $5.0 billion, up 28.5%.

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

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

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

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

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

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

Continued Capital and Credit Strength

– Tier 1 leverage ratio was 8.76%.

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

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

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

Continued Franchise Growth

– Loans totaled $135.0 billion, up 19.9%.

– Deposits were $156.3 billion, up 36.0%.

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

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

Quarterly Highlights

– Compared to last year’s fourth quarter:

– Revenues were $1.4 billion, up 26.4%.

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

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

– Diluted EPS of $2.02, up 26.3%.

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

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

– Compared to the prior quarter:

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

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

– Wealth management assets were up 11.0%.

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

Quarterly Cash Dividend of $0.22 per Share

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

Strong Asset Quality

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

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

Continued Book Value Growth and Capital Strength

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

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

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

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

Continued Franchise Growth

Loan Originations

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

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

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

Deposit Growth

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

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

Investments

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

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

Wealth Management

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

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

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

Income Statement and Key Ratios

Revenue Growth

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

Net Interest Income Growth

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

Net Interest Margin

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

Noninterest Income

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

Noninterest Expense and Efficiency Ratio

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

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

Income Taxes

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

Conference Call Details

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

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

For those unable to join for the live presentation, a replay of the call will be available beginning January 14, 2022 at 11:00 a.m. PT / 2:00 p.m. ET through January 21, 2022 at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 3634481#. International callers should dial +1 (719) 457-0820 and enter the same confirmation code. A replay of the webcast also will be available for 90 days following, accessible in the Investor Relations section of First Republic Bank’s website at ir.firstrepublic.com/events-calendar.

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

About First Republic Bank

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

Forward-Looking Statements

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

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

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

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

Non-GAAP Financial Measures

Our management uses and believes that investors benefit from using certain non-GAAP measures of our financial performance, which include tangible book value per common share, return on average tangible common shareholders’ equity, and net interest income on a fully taxable-equivalent basis. Management believes that tangible book value per common share and return on average tangible common shareholders’ equity are useful additional measures to evaluate our performance and capital position without the impact of goodwill and other intangible assets and preferred stock. In addition, to facilitate relevant comparisons of net interest income from taxable and tax-exempt interest-earning assets, when calculating yields and net interest margin, we adjust interest income on tax-exempt securities and tax-advantaged loans so such amounts are fully equivalent to interest income on taxable sources. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information that is not otherwise required by GAAP or other applicable requirements. These non-GAAP financial measures should be considered in addition to, not as a substitute for, financial measures prepared in accordance with GAAP. A reconciliation of the non-GAAP calculation of the financial measure to the most comparable GAAP financial measure is presented in relevant tables in this document.

Explanatory Note

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

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Quarter Ended

December 31,

 

Quarter Ended

September 30,

 

Year Ended

December 31,

(in millions, except per share amounts)

 

2021

 

2020

 

2021

2021

 

2020

Interest income:

 

 

 

 

 

 

 

 

 

 

Loans

 

$

992

 

 

$

845

 

$

947

 

$

3,725

 

$

3,245

Investments

 

 

165

 

 

 

138

 

 

161

 

 

624

 

 

576

Other

 

 

4

 

 

 

6

 

 

5

 

 

19

 

 

24

Cash and cash equivalents

 

 

6

 

 

 

2

 

 

5

 

 

17

 

 

8

Total interest income

 

 

1,167

 

 

 

991

 

 

1,118

 

 

4,385

 

 

3,853

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

20

 

 

 

30

 

 

22

 

 

95

 

 

276

Borrowings

 

 

27

 

 

 

68

 

 

44

 

 

176

 

 

315

Total interest expense

 

 

47

 

 

 

98

 

 

66

 

 

271

 

 

591

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

1,120

 

 

 

893

 

 

1,052

 

 

4,114

 

 

3,262

Provision for credit losses

 

 

24

 

 

 

35

 

 

34

 

 

59

 

 

157

Net interest income after provision for credit losses

 

 

1,096

 

 

 

858

 

 

1,018

 

 

4,055

 

 

3,105

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

150

 

 

 

114

 

 

149

 

 

554

 

 

395

Brokerage and investment fees

 

 

19

 

 

 

11

 

 

23

 

 

74

 

 

51

Insurance fees

 

 

7

 

 

 

6

 

 

6

 

 

19

 

 

12

Trust fees

 

 

7

 

 

 

5

 

 

6

 

 

25

 

 

19

Foreign exchange fee income

 

 

24

 

 

 

15

 

 

26

 

 

88

 

 

50

Deposit fees

 

 

7

 

 

 

6

 

 

7

 

 

27

 

 

24

Loan and related fees

 

 

9

 

 

 

7

 

 

8

 

 

33

 

 

28

Gain (loss) on investment securities

 

 

(3

)

 

 

 

 

2

 

 

1

 

 

4

Income from investments in life insurance

 

 

27

 

 

 

18

 

 

20

 

 

85

 

 

53

Other income

 

 

 

 

 

6

 

 

4

 

 

14

 

 

19

Total noninterest income

 

 

247

 

 

 

188

 

 

251

 

 

920

 

 

655

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

544

 

 

 

416

 

 

514

 

 

2,003

 

 

1,495

Information systems

 

 

99

 

 

 

79

 

 

91

 

 

362

 

 

299

Occupancy

 

 

66

 

 

 

57

 

 

67

 

 

254

 

 

221

Professional fees

 

 

27

 

 

 

18

 

 

27

 

 

101

 

 

66

Advertising and marketing

 

 

21

 

 

 

14

 

 

14

 

 

64

 

 

43

FDIC assessments

 

 

13

 

 

 

12

 

 

14

 

 

52

 

 

44

Other expenses

 

 

96

 

 

 

71

 

 

71

 

 

311

 

 

258

Total noninterest expense

 

 

866

 

 

 

667

 

 

798

 

 

3,147

 

 

2,426

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

477

 

 

 

379

 

 

471

 

 

1,828

 

 

1,334

Provision for income taxes

 

 

77

 

 

 

84

 

 

101

 

 

350

 

 

270

Net income

 

 

400

 

 

 

295

 

 

370

 

 

1,478

 

 

1,064

Dividends on preferred stock

 

 

32

 

 

 

16

 

 

25

 

 

99

 

 

59

Net income available to common shareholders

 

$

368

 

 

$

279

 

$

345

 

$

1,379

 

$

1,005

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

2.05

 

 

$

1.61

 

$

1.94

 

$

7.78

 

$

5.85

Diluted earnings per common share

 

$

2.02

 

 

$

1.60

 

$

1.91

 

$

7.68

 

$

5.81

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares—basic

 

 

179

 

 

 

173

 

 

178

 

 

177

 

 

172

Weighted average shares—diluted

 

 

182

 

 

 

175

 

 

180

 

 

180

 

 

173

CONSOLIDATED BALANCE SHEETS

 

 

As of

($ in millions)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

12,947

 

 

$

12,279

 

 

$

5,095

 

Debt securities available-for-sale

 

 

3,381

 

 

 

2,961

 

 

 

1,906

 

Debt securities held-to-maturity, net

 

 

22,292

 

 

 

21,192

 

 

 

16,603

 

Equity securities (fair value)

 

 

28

 

 

 

32

 

 

 

21

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

Single family

 

 

76,793

 

 

 

73,491

 

 

 

61,370

 

Home equity lines of credit

 

 

2,584

 

 

 

2,429

 

 

 

2,450

 

Single family construction

 

 

993

 

 

 

985

 

 

 

788

 

Multifamily

 

 

15,966

 

 

 

15,417

 

 

 

13,769

 

Commercial real estate

 

 

8,531

 

 

 

8,486

 

 

 

8,018

 

Multifamily/commercial construction

 

 

1,927

 

 

 

2,064

 

 

 

2,024

 

Capital call lines of credit

 

 

10,999

 

 

 

9,088

 

 

 

8,150

 

Tax-exempt

 

 

3,680

 

 

 

3,578

 

 

 

3,366

 

Other business

 

 

3,961

 

 

 

3,554

 

 

 

3,340

 

PPP

 

 

545

 

 

 

876

 

 

 

1,841

 

Stock secured

 

 

3,435

 

 

 

3,120

 

 

 

2,518

 

Other secured

 

 

2,457

 

 

 

2,261

 

 

 

1,819

 

Unsecured

 

 

3,085

 

 

 

3,026

 

 

 

3,113

 

Total loans

 

 

134,956

 

 

 

128,375

 

 

 

112,566

 

Allowance for credit losses

 

 

(694

)

 

 

(668

)

 

 

(635

)

Loans, net

 

 

134,262

 

 

 

127,707

 

 

 

111,931

 

 

 

 

 

 

 

 

Loans held for sale

 

 

1

 

 

 

4

 

 

 

21

 

Investments in life insurance

 

 

2,650

 

 

 

2,628

 

 

 

2,061

 

Tax credit investments

 

 

1,220

 

 

 

1,181

 

 

 

1,132

 

Premises, equipment and leasehold improvements, net

 

 

454

 

 

 

431

 

 

 

403

 

Goodwill and other intangible assets

 

 

222

 

 

 

223

 

 

 

228

 

Other assets

 

 

3,630

 

 

 

3,933

 

 

 

3,101

 

Total Assets

 

$

181,087

 

 

$

172,571

 

 

$

142,502

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing checking

 

$

70,840

 

 

$

65,833

 

 

$

46,281

 

Interest-bearing checking

 

 

41,248

 

 

 

34,089

 

 

 

30,603

 

Money market checking

 

 

20,303

 

 

 

21,861

 

 

 

16,779

 

Money market savings and passbooks

 

 

16,573

 

 

 

15,947

 

 

 

12,585

 

Certificates of deposit

 

 

7,357

 

 

 

7,596

 

 

 

8,681

 

Total Deposits

 

 

156,321

 

 

 

145,326

 

 

 

114,929

 

 

 

 

 

 

 

 

Long-term FHLB advances

 

 

3,700

 

 

 

7,700

 

 

 

11,755

 

Senior notes

 

 

998

 

 

 

998

 

 

 

996

 

Subordinated notes

 

 

779

 

 

 

779

 

 

 

778

 

Other liabilities

 

 

3,391

 

 

 

2,966

 

 

 

2,293

 

Total Liabilities

 

 

165,189

 

 

 

157,769

 

 

 

130,751

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

Preferred stock

 

 

3,633

 

 

 

2,893

 

 

 

1,545

 

Common stock

 

 

2

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

5,725

 

 

 

5,685

 

 

 

4,835

 

Retained earnings

 

 

6,569

 

 

 

6,242

 

 

 

5,346

 

Accumulated other comprehensive income (loss)

 

 

(31

)

 

 

(20

)

 

 

23

 

Total Shareholders’ Equity

 

 

15,898

 

 

 

14,802

 

 

 

11,751

 

Total Liabilities and Shareholders’ Equity

 

$

181,087

 

 

$

172,571

 

 

$

142,502

 

 

 

Quarter Ended December 31,

 

Quarter Ended September 30,

 

 

2021

 

2020

 

2021

Average Balances, Yields and Rates

 

Average

Balance

 

Interest

Income/

Expense (1)

 

Yield/

Rates (2)

 

Average

Balance

 

Interest

Income/

Expense (1)

 

Yield/

Rates (2)

 

Average

Balance

 

Interest

Income/

Expense (1)

 

Yield/

Rates (2)

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

15,342

 

$

6

 

0.15

%

 

$

6,966

 

$

2

 

 

0.10

%

 

$

13,384

 

$

5

 

 

0.15

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency securities

 

 

100

 

 

0

 

1.59

%

 

 

50

 

 

0

 

 

1.57

%

 

 

100

 

 

0

 

 

1.59

%

Agency residential and commercial MBS

 

 

7,011

 

 

29

 

1.65

%

 

 

5,786

 

 

32

 

 

2.23

%

 

 

6,200

 

 

28

 

 

1.84

%

Other residential and commercial MBS

 

 

25

 

 

0

 

1.82

%

 

 

35

 

 

0

 

 

2.08

%

 

 

28

 

 

0

 

 

2.25

%

Tax-exempt municipal securities

 

 

14,869

 

 

146

 

3.93

%

 

 

11,815

 

 

124

 

 

4.20

%

 

 

14,173

 

 

141

 

 

3.97

%

Taxable municipal securities

 

 

1,670

 

 

12

 

2.99

%

 

 

824

 

 

7

 

 

3.29

%

 

 

1,670

 

 

13

 

 

2.98

%

Other investment securities

 

 

1,405

 

 

10

 

2.86

%

 

 

76

 

 

1

 

 

2.68

%

 

 

1,405

 

 

10

 

 

2.86

%

Total investment securities

 

 

25,080

 

 

197

 

3.15

%

 

 

18,586

 

 

164

 

 

3.53

%

 

 

23,576

 

 

192

 

 

3.26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

78,436

 

 

545

 

2.78

%

 

 

62,280

 

 

452

 

 

2.90

%

 

 

75,143

 

 

528

 

 

2.81

%

Multifamily

 

 

15,479

 

 

154

 

3.90

%

 

 

13,596

 

 

125

 

 

3.60

%

 

 

15,126

 

 

135

 

 

3.49

%

Commercial real estate

 

 

8,525

 

 

83

 

3.82

%

 

 

7,910

 

 

79

 

 

3.89

%

 

 

8,357

 

 

82

 

 

3.82

%

Multifamily/commercial construction

 

 

2,044

 

 

24

 

4.70

%

 

 

2,032

 

 

24

 

 

4.70

%

 

 

2,052

 

 

26

 

 

5.01

%

Business

 

 

17,210

 

 

139

 

3.15

%

 

 

13,383

 

 

116

 

 

3.39

%

 

 

15,928

 

 

129

 

 

3.17

%

PPP

 

 

732

 

 

9

 

4.65

%

 

 

2,004

 

 

14

 

 

2.82

%

 

 

1,123

 

 

11

 

 

4.01

%

Other

 

 

8,578

 

 

45

 

2.03

%

 

 

7,253

 

 

41

 

 

2.23

%

 

 

8,158

 

 

43

 

 

2.06

%

Total loans

 

 

131,004

 

 

999

 

3.02

%

 

 

108,458

 

 

851

 

 

3.11

%

 

 

125,887

 

 

954

 

 

3.00

%

FHLB stock

 

 

143

 

 

4

 

11.17

%

 

 

413

 

 

6

 

 

5.55

%

 

 

266

 

 

5

 

 

6.99

%

Total interest-earning assets

 

 

171,569

 

 

1,206

 

2.79

%

 

 

134,423

 

 

1,023

 

 

3.02

%

 

 

163,113

 

 

1,156

 

 

2.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

 

426

 

 

 

 

 

 

453

 

 

 

 

 

 

391

 

 

 

 

Goodwill and other intangibles

 

 

223

 

 

 

 

 

 

228

 

 

 

 

 

 

224

 

 

 

 

Other assets

 

 

6,967

 

 

 

 

 

 

5,706

 

 

 

 

 

 

6,891

 

 

 

 

Total noninterest-earning assets

 

 

7,616

 

 

 

 

 

 

6,387

 

 

 

 

 

 

7,506

 

 

 

 

Total Assets

 

$

179,185

 

 

 

 

 

$

140,810

 

 

 

 

 

$

170,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$

36,896

 

 

1

 

0.01

%

 

$

28,332

 

 

2

 

 

0.03

%

 

$

33,642

 

 

1

 

 

0.01

%

Money market checking

 

 

21,925

 

 

5

 

0.10

%

 

 

16,890

 

 

8

 

 

0.19

%

 

 

21,861

 

 

6

 

 

0.11

%

Money market savings and passbooks

 

 

16,935

 

 

6

 

0.15

%

 

 

12,259

 

 

6

 

 

0.19

%

 

 

15,831

 

 

6

 

 

0.16

%

CDs

 

 

7,482

 

 

8

 

0.42

%

 

 

8,814

 

 

14

 

 

0.63

%

 

 

7,779

 

 

9

 

 

0.46

%

Total interest-bearing deposits (3)

 

 

83,238

 

 

20

 

0.10

%

 

 

66,295

 

 

30

 

 

0.18

%

 

 

79,113

 

 

22

 

 

0.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

 

 

 

%

 

 

9

 

 

0

 

 

0.17

%

 

 

0

 

 

0

 

 

0.09

%

Long-term FHLB advances

 

 

4,582

 

 

12

 

1.06

%

 

 

13,298

 

 

53

 

 

1.58

%

 

 

8,545

 

 

28

 

 

1.29

%

Senior notes

 

 

998

 

 

6

 

2.42

%

 

 

996

 

 

6

 

 

2.42

%

 

 

997

 

 

6

 

 

2.42

%

Subordinated notes

 

 

779

 

 

9

 

4.68

%

 

 

778

 

 

9

 

 

4.68

%

 

 

779

 

 

10

 

 

4.68

%

Total borrowings

 

 

6,359

 

 

27

 

1.72

%

 

 

15,081

 

 

68

 

 

1.80

%

 

 

10,321

 

 

44

 

 

1.66

%

Total interest-bearing liabilities (4)

 

 

89,597

 

 

47

 

0.21

%

 

 

81,376

 

 

98

 

 

0.48

%

 

 

89,434

 

 

66

 

 

0.29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

 

71,308

 

 

 

 

 

 

45,545

 

 

 

 

 

 

64,008

 

 

 

 

Other noninterest-bearing liabilities

 

 

3,044

 

 

 

 

 

 

2,341

 

 

 

 

 

 

2,904

 

 

 

 

Total noninterest-bearing liabilities

 

 

74,352

 

 

 

 

 

 

47,886

 

 

 

 

 

 

66,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders’ equity

 

 

3,158

 

 

 

 

 

 

1,552

 

 

 

 

 

 

2,730

 

 

 

 

Common shareholders’ equity

 

 

12,078

 

 

 

 

 

 

9,996

 

 

 

 

 

 

11,543

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

179,185

 

 

 

 

 

$

140,810

 

 

 

 

 

$

170,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

2.58

%

 

 

 

 

 

2.54

%

 

 

 

 

 

2.52

%

Net interest income (fully taxable-equivalent basis) and net interest margin (6)

 

 

 

$

1,159

 

2.68

%

 

 

 

$

925

 

 

2.73

%

 

 

 

$

1,090

 

 

2.65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of tax-equivalent net interest income to net interest income: (7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent

adjustment

 

 

 

 

(32

 

 

 

 

 

(25

)

 

 

 

 

 

 

(31

)

 

 

Business loans tax-equivalent adjustment

 

 

 

 

(7

 

 

 

 

 

(7

)

 

 

 

 

 

 

(7

)

 

 

Net interest income

 

 

 

$

1,120

 

 

 

 

 

$

893

 

 

 

 

 

 

$

1,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and

noninterest-bearing)

 

$

154,546

 

$

20

 

0.05

%

 

$

111,840

 

$

30

 

 

0.11

%

 

$

143,121

 

$

22

 

 

0.06

%

Total deposits (interest-bearing and

noninterest-bearing) and borrowings

 

$

160,905

 

$

47

 

0.12

%

 

$

126,921

 

$

98

 

 

0.31

%

 

$

153,442

 

$

66

 

 

0.17

%

 

 

Year Ended December 31,

 

 

2021

 

2020

Average Balances, Yields and Rates

 

Average

Balance

 

Interest

Income/

Expense (1)

 

Yields/

Rates

 

Average

Balance

 

Interest

Income/

Expense (1)

 

Yields/

Rates

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

12,876

 

$

17

 

 

0.13

%

 

$

4,018

 

$

8

 

 

0.19

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government-sponsored agency securities

 

 

98

 

 

2

 

 

1.56

%

 

 

193

 

 

5

 

 

2.56

%

Agency residential and commercial MBS

 

 

6,125

 

 

117

 

 

1.91

%

 

 

6,348

 

 

160

 

 

2.51

%

Other residential and commercial MBS

 

 

29

 

 

1

 

 

2.00

%

 

 

26

 

 

1

 

 

2.29

%

Tax-exempt municipal securities

 

 

13,704

 

 

549

 

 

4.01

%

 

 

11,329

 

 

486

 

 

4.29

%

Taxable municipal securities

 

 

1,510

 

 

45

 

 

2.98

%

 

 

738

 

 

25

 

 

3.32

%

Other investment securities

 

 

1,157

 

 

32

 

 

2.80

%

 

 

52

 

 

1

 

 

2.77

%

Total investment securities

 

 

22,623

 

 

746

 

 

3.30

%

 

 

18,686

 

 

678

 

 

3.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

72,679

 

 

2,048

 

 

2.82

%

 

 

56,628

 

 

1,703

 

 

3.01

%

Multifamily

 

 

14,735

 

 

539

 

 

3.61

%

 

 

13,093

 

 

489

 

 

3.68

%

Commercial real estate

 

 

8,260

 

 

321

 

 

3.83

%

 

 

7,752

 

 

313

 

 

3.97

%

Multifamily/commercial construction

 

 

2,067

 

 

105

 

 

4.99

%

 

 

1,935

 

 

95

 

 

4.82

%

Business

 

 

16,033

 

 

520

 

 

3.20

%

 

 

12,846

 

 

465

 

 

3.56

%

PPP

 

 

1,418

 

 

51

 

 

3.58

%

 

 

1,432

 

 

33

 

 

2.26

%

Other

 

 

7,938

 

 

169

 

 

2.10

%

 

 

6,842

 

 

173

 

 

2.48

%

Total loans

 

 

123,130

 

 

3,753

 

 

3.03

%

 

 

100,528

 

 

3,271

 

 

3.23

%

FHLB stock

 

 

266

 

 

19

 

 

7.14

%

 

 

442

 

 

24

 

 

5.40

%

Total interest-earning assets

 

 

158,895

 

 

4,535

 

 

2.84

%

 

 

123,674

 

 

3,981

 

 

3.20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning cash

 

 

404

 

 

 

 

 

 

439

 

 

 

 

Goodwill and other intangibles

 

 

225

 

 

 

 

 

 

231

 

 

 

 

Other assets

 

 

6,671

 

 

 

 

 

 

5,104

 

 

 

 

Total noninterest-earning assets

 

 

7,300

 

 

 

 

 

 

5,774

 

 

 

 

Total Assets

 

$

166,195

 

 

 

 

 

$

129,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

 

$

33,977

 

 

6

 

 

0.02

%

 

$

24,143

 

 

16

 

 

0.07

%

Money market checking

 

 

20,662

 

 

25

 

 

0.12

%

 

 

14,848

 

 

56

 

 

0.38

%

Money market savings and passbooks

 

 

15,308

 

 

25

 

 

0.17

%

 

 

10,659

 

 

32

 

 

0.30

%

CDs

 

 

7,926

 

 

39

 

 

0.49

%

 

 

11,754

 

 

172

 

 

1.46

%

Total interest-bearing deposits (3)

 

 

77,873

 

 

95

 

 

0.12

%

 

 

61,404

 

 

276

 

 

0.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

0

 

 

0

 

 

0.09

%

 

 

311

 

 

5

 

 

1.52

%

Long-term FHLB advances

 

 

8,609

 

 

116

 

 

1.34

%

 

 

14,330

 

 

250

 

 

1.74

%

Senior notes

 

 

997

 

 

24

 

 

2.42

%

 

 

938

 

 

23

 

 

2.44

%

Subordinated notes

 

 

779

 

 

36

 

 

4.68

%

 

 

778

 

 

37

 

 

4.68

%

Total borrowings

 

 

10,385

 

 

176

 

 

1.70

%

 

 

16,357

 

 

315

 

 

1.92

%

Total interest-bearing liabilities (4)

 

 

88,258

 

 

271

 

 

0.31

%

 

 

77,761

 

 

591

 

 

0.76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

 

61,325

 

 

 

 

 

 

38,796

 

 

 

 

Other noninterest-bearing liabilities

 

 

2,847

 

 

 

 

 

 

2,131

 

 

 

 

Total noninterest-bearing liabilities

 

 

64,172

 

 

 

 

 

 

40,927

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders' equity

 

 

2,502

 

 

 

 

 

 

1,268

 

 

 

 

Common shareholders' equity

 

 

11,263

 

 

 

 

 

 

9,492

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

166,195

 

 

 

 

 

$

129,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

2.53

%

 

 

 

 

 

2.44

%

Net interest income (fully taxable-equivalent basis) and net interest margin (6)

 

 

 

$

4,264

 

 

2.67

%

 

 

 

$

3,390

 

 

2.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of tax-equivalent net interest income to net interest income: (7)

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities tax-equivalent adjustment

 

 

 

 

(122

)

 

 

 

 

 

 

(101

)

 

 

Business loans tax-equivalent adjustment

 

 

 

 

(28

)

 

 

 

 

 

 

(27

)

 

 

Net interest income

 

 

 

$

4,114

 

 

 

 

 

 

$

3,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits (interest-bearing and noninterest-bearing)

 

$

139,198

 

$

95

 

 

0.07

%

 

$

100,200

 

$

276

 

 

0.28

%

Total deposits (interest-bearing and noninterest-bearing) and

borrowings

 

$

149,583

 

$

271

 

 

0.18

%

 

$

116,557

 

$

591

 

 

0.51

%

__________

 
Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

(1)

 

 

Interest income on tax-exempt securities and loans has been adjusted to the fully taxable-equivalent basis using the statutory federal income tax rate in effect for each respective period presented.

(2)

 

Yields/rates are annualized.

(3)

 

Refer to supplemental information in this table for average balances, interest expense and rates for total deposits (interest-bearing and noninterest-bearing).

(4)

 

Refer to supplemental information in this table for average balances, interest expense and rates for total deposits (interest-bearing and noninterest-bearing) and borrowings.

(5)

 

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

(6)

 

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

(7)

 

Fully taxable-equivalent net interest income is considered a non-GAAP financial measure, and is reconciled to GAAP net interest income in this table.

 

 

Quarter Ended

December 31,

 

Quarter Ended

September 30,

 

Year Ended

December 31,

Selected Financial Data and Ratios

 

2021

 

2020

 

2021

 

2021

 

2020

($ in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

Selected Financial Data and Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets (1), (2)

 

 

0.89

%

 

 

0.84

%

 

 

0.86

%

 

 

0.89

%

 

 

0.82

%

Return on average common shareholders’ equity (1)

 

 

12.08

%

 

 

11.12

%

 

 

11.87

%

 

 

12.24

%

 

 

10.59

%

Return on average tangible common shareholders’ equity (1), (3)

 

 

12.31

%

 

 

11.38

%

 

 

12.10

%

 

 

12.49

%

 

 

10.86

%

Average equity to average assets

 

 

8.50

%

 

 

8.20

%

 

 

8.37

%

 

 

8.28

%

 

 

8.31

%

Dividends per common share

 

$

0.22

 

 

$

0.20

 

 

$

0.22

 

 

$

0.86

 

 

$

0.79

 

Dividend payout ratio

 

 

10.9

%

 

 

12.5

%

 

 

11.5

%

 

 

11.2

%

 

 

13.6

%

Efficiency ratio (4)

 

 

63.3

%

 

 

61.6

%

 

 

61.3

%

 

 

62.5

%

 

 

61.9

%

 

 

 

 

 

 

 

 

 

 

 

Net loan charge-offs (recoveries)

 

$

0.1

 

 

$

(0.6

)

 

$

0.3

 

 

$

2.1

 

 

$

2.4

 

Net loan charge-offs (recoveries) to average total loans (1)

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

Selected Ratios (period-end):

 

 

 

 

 

 

 

 

 

 

Book value per common share

 

$

68.34

 

 

$

58.61

 

 

$

66.44

 

 

 

 

 

Tangible book value per common share (5)

 

$

67.10

 

 

$

57.30

 

 

$

65.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan credit losses to:

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

0.51

%

 

 

0.56

%

 

 

0.52

%

 

 

 

 

Nonaccrual loans

 

 

500.5

%

 

 

344.9

%

 

 

524.4

%

 

 

 

 

__________

 

 

 

 

 

 

 

 

 

 

(1)

 

For periods less than a year, ratios are annualized.

(2)

 

Return on average assets is the ratio of net income to average assets.

(3)

 

Refer to “Return on Average Common Shareholders’ Equity and Return on Average Tangible Common Shareholders’ Equity” table in this document for a reconciliation of this non-GAAP financial measure to the most comparable GAAP measure.

(4)

 

Efficiency ratio is the ratio of noninterest expense to the sum of net interest income and noninterest income.

(5)

 

Refer to “Book Value per Common Share and Tangible Book Value per Common Share” table in this document for a reconciliation of this non-GAAP financial measure to the most comparable GAAP measure.

 

 

Quarter Ended

December 31,

 

Quarter Ended

September 30,

 

Year Ended

December 31,

Effective Tax Rate

 

2021

 

2020

 

2021

 

2021

 

2020

Effective tax rate, prior to excess tax benefits—stock awards and research and development tax credits from amended tax returns

 

22.0

%

 

22.5

%

 

23.2

%

 

22.3

%

 

21.5

%

Excess tax benefits—stock awards

 

(1.5

)

 

(0.4

)

 

(1.8

)

 

(2.1

)

 

(1.3

)

Research and development tax credits from amended tax returns

 

(4.4

)

 

 

 

 

 

(1.1

)

 

 

Effective tax rate

 

16.1

%

 

22.1

%

 

21.4

%

 

19.1

%

 

20.2

%

Provision (Reversal of Provision) for Credit Losses

 

Quarter Ended

December 31,

 

Quarter Ended

September 30,

 

Year Ended

December 31,

 

2021

 

2020

 

2021

 

2021

 

2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

Debt securities held-to-maturity

 

$

 

 

$

1

 

$

 

$

2

 

 

$

2

Loans

 

 

26

 

 

 

29

 

 

32

 

 

61

 

 

 

143

Unfunded loan commitments

 

 

(2

)

 

 

5

 

 

2

 

 

(4

)

 

 

12

Total provision

 

$

24

 

 

$

35

 

$

34

 

$

59

 

 

$

157

 

 

Quarter Ended

December 31,

 

Quarter Ended

September 30,

 

Year Ended

December 31,

Mortgage Loan Sales

 

2021

 

2020

 

2021

 

2021

 

2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

Loans sold:

 

 

 

 

 

 

 

 

 

 

Flow sales:

 

 

 

 

 

 

 

 

 

 

Agency

 

$

15

 

 

$

152

 

 

$

18

 

 

$

79

 

 

$

233

 

Non-agency

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

32

 

Total flow sales

 

 

15

 

 

 

152

 

 

 

18

 

 

 

80

 

 

 

265

 

 

 

 

 

 

 

 

 

 

 

 

Bulk sales:

 

 

 

 

 

 

 

 

 

 

Non-agency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

673

 

 

 

 

 

 

 

 

 

 

 

 

Securitizations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

Total loans sold

 

$

15

 

 

$

152

 

 

$

18

 

 

$

80

 

 

$

1,238

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans:

 

 

 

 

 

 

 

 

 

 

Amount (1)

 

$

0.1

 

 

$

2.4

 

 

$

0.1

 

 

$

0.6

 

 

$

17.0

 

Gain as a percentage of loans sold

 

 

0.45

%

 

 

1.58

%

 

 

0.80

%

 

 

0.72

%

 

 

1.37

%

__________

 

 

 

 

 

 

 

 

 

 

(1)

 

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

 

 

Quarter Ended

December 31,

 

Quarter Ended

September 30,

 

Year Ended

December 31,

Loan Originations

 

2021

 

2020

 

2021

 

2021

 

2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

Single family

 

$ 7,013

 

$ 7,778

 

$ 6,998

 

$ 29,575

 

$ 23,986

Home equity lines of credit

 

617

 

619

 

589

 

2,440

 

1,905

Single family construction

 

245

 

224

 

283

 

968

 

639

Multifamily

 

1,723

 

1,017

 

1,199

 

4,815

 

3,701

Commercial real estate

 

597

 

438

 

725

 

2,094

 

1,414

Multifamily/commercial construction

 

190

 

304

 

356

 

1,129

 

1,301

Capital call lines of credit

 

3,690

 

3,854

 

3,129

 

12,871

 

9,448

Tax-exempt

 

130

 

306

 

38

 

590

 

919

Other business

 

650

 

771

 

533

 

2,729

 

2,549

PPP

 

 

 

 

725

 

1,982

Stock secured

 

966

 

670

 

753

 

3,205

 

2,467

Other secured

 

546

 

413

 

547

 

2,130

 

1,375

Unsecured

 

517

 

312

 

304

 

1,539

 

998

Total loans originated

 

$ 16,884

 

$ 16,706

 

$ 15,454

 

$ 64,810

 

$ 52,684

 

 

As of

Asset Quality Information

 

December 31,

2021

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

139

 

 

$

127

 

 

$

133

 

 

$

173

 

 

$

184

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

Total nonperforming assets

 

$

139

 

 

$

127

 

 

$

133

 

 

$

174

 

 

$

184

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.08

%

 

 

0.07

%

 

 

0.08

%

 

 

0.11

%

 

 

0.13

%

 

 

 

 

 

 

 

 

 

 

 

Accruing loans 90 days or more past due

 

$

 

 

$

 

 

$

 

 

$

1

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Restructured accruing loans

 

$

13

 

 

$

10

 

 

$

11

 

 

$

12

 

 

$

11

 

 

 

As of

Loan Servicing Portfolio

 

December 31,

2021

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

Loans serviced for investors

 

$ 4,677

 

$ 5,117

 

$ 5,640

 

$ 6,314

 

$ 7,094

Return on Average Common Shareholders’ Equity and

Return on Average Tangible Common Shareholders’

Equity (1), (2)

 

Quarter Ended

December 31,

 

Quarter Ended

September 30,

 

Year Ended

December 31,

 

2021

 

2020

 

2021

 

2021

 

2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shareholders’ equity (a)

 

$

12,078

 

 

$

9,996

 

 

$

11,543

 

 

$

11,263

 

 

$

9,492

 

Less: Average goodwill and other intangible assets

 

 

(223

)

 

 

(228

)

 

 

(224

)

 

 

(225

)

 

 

(231

)

Average tangible common shareholders’ equity (b)

 

$

11,855

 

 

$

9,768

 

 

$

11,319

 

 

$

11,038

 

 

$

9,261

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders (c)

 

$

368

 

 

$

279

 

 

$

345

 

 

$

1,379

 

 

$

1,005

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common shareholders’ equity (c) / (a)

 

 

12.08

%

 

 

11.12

%

 

 

11.87

%

 

 

12.24

%

 

 

10.59

%

Return on average tangible common shareholders’ equity (c) / (b)

 

 

12.31

%

 

 

11.38

%

 

 

12.10

%

 

 

12.49

%

 

 

10.86

%

__________

 

 

 

 

 

 

 

 

 

 

(1)

 

Return on average tangible common shareholders’ equity is considered a non-GAAP financial measure, and is reconciled to GAAP return on average common shareholders’ equity in this table.

(2)

 

For periods less than a year, ratios are annualized.

 

 

As of

Book Value per Common Share and Tangible Book

Value per Common Share (1)

 

December 31,

2021

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

(in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

$

15,898

 

 

$

14,802

 

 

$

13,275

 

 

$

12,942

 

 

$

11,751

 

Less: Preferred stock

 

 

(3,633

)

 

 

(2,893

)

 

 

(2,143

)

 

 

(2,143

)

 

 

(1,545

)

Total common shareholders’ equity (a)

 

 

12,265

 

 

 

11,909

 

 

 

11,132

 

 

 

10,799

 

 

 

10,206

 

Less: Goodwill and other intangible assets

 

 

(222

)

 

 

(223

)

 

 

(224

)

 

 

(226

)

 

 

(228

)

Total tangible common shareholders’ equity (b)

 

$

12,043

 

 

$

11,686

 

 

$

10,908

 

 

$

10,573

 

 

$

9,978

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares of common stock outstanding (c)

 

 

179

 

 

 

179

 

 

 

177

 

 

 

176

 

 

 

174

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share (a) / (c)

 

$

68.34

 

 

$

66.44

 

 

$

62.99

 

 

$

61.26

 

 

$

58.61

 

Tangible book value per common share (b) / (c)

 

$

67.10

 

 

$

65.19

 

 

$

61.72

 

 

$

59.98

 

 

$

57.30

 

__________

 

 

 

 

 

 

 

 

 

 

(1)

 

Tangible book value per common share is considered a non-GAAP financial measure, and is reconciled to GAAP book value per common share in this table.

 

 

As of

Regulatory Capital Ratios and Components (1), (2)

 

December 31,

2021 (3)

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio (Tier 1 capital to average assets)

 

 

8.76

%

 

 

8.55

%

 

 

8.05

%

 

 

8.32

%

 

 

8.14

%

Common Equity Tier 1 capital to risk-weighted assets

 

 

9.65

%

 

 

9.81

%

 

 

9.51

%

 

 

9.64

%

 

 

9.67

%

Tier 1 capital to risk-weighted assets

 

 

12.56

%

 

 

12.25

%

 

 

11.38

%

 

 

11.60

%

 

 

11.18

%

Total capital to risk-weighted assets

 

 

13.72

%

 

 

13.45

%

 

 

12.60

%

 

 

12.87

%

 

 

12.55

%

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital:

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 capital

 

$

12,045

 

 

$

11,674

 

 

$

10,875

 

 

$

10,549

 

 

$

9,895

 

Tier 1 capital

 

$

15,678

 

 

$

14,566

 

 

$

13,018

 

 

$

12,691

 

 

$

11,440

 

Total capital

 

$

17,124

 

 

$

15,994

 

 

$

14,421

 

 

$

14,082

 

 

$

12,842

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

Average assets

 

$

178,969

 

 

$

170,373

 

 

$

161,637

 

 

$

152,465

 

 

$

140,493

 

Risk-weighted assets

 

$

124,820

 

 

$

118,941

 

 

$

114,406

 

 

$

109,413

 

 

$

102,321

 

__________

 

 

 

 

 

 

 

 

 

 

(1)

 

As defined by regulatory capital rules.

(2)

 

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

(3)

 

Ratios and amounts as of December 31, 2021 are preliminary.

 

 

As of

Wealth Management Assets

 

December 31,

2021

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

First Republic Investment Management

 

$

109,130

 

$

101,105

 

$

99,459

 

$

90,819

 

$

83,596

 

 

 

 

 

 

 

 

 

 

 

Brokerage and investment:

 

 

 

 

 

 

 

 

 

 

Brokerage

 

 

128,258

 

 

115,793

 

 

112,359

 

 

101,478

 

 

88,059

Money market mutual funds

 

 

23,673

 

 

18,074

 

 

13,109

 

 

11,435

 

 

9,003

Total brokerage and investment

 

 

151,931

 

 

133,867

 

 

125,468

 

 

112,913

 

 

97,062

 

 

 

 

 

 

 

 

 

 

 

Trust Company:

 

 

 

 

 

 

 

 

 

 

Trust

 

 

13,695

 

 

12,220

 

 

11,496

 

 

10,986

 

 

9,910

Custody

 

 

4,687

 

 

4,533

 

 

4,439

 

 

4,216

 

 

3,889

Total Trust Company

 

 

18,382

 

 

16,753

 

 

15,935

 

 

15,202

 

 

13,799

Total Wealth Management Assets

 

$

279,443

 

$

251,725

 

$

240,862

 

$

218,934

 

$

194,457

 

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