Business Wire | Jul 13, 2021 07:03AM EDT

First Republic Reports Second Quarter 2021 Results

Jul. 13, 2021

SAN FRANCISCO--(BUSINESS WIRE)--Jul. 13, 2021--First Republic Bank (NYSE: FRC) today announced financial results for the quarter ended June 30, 2021.

"First Republic had another very strong quarter of organic growth," said Jim Herbert, Founder, Chairman and Co-CEO of First Republic Bank. "First Republic's brand of exceptional client service resulted in significant growth in single family loans, deposits and wealth management assets."

"Our results this quarter were representative of how our service-focused business model continues to resonate strongly with clients," said Hafize Gaye Erkan, Co-CEO and President. "Providing exceptional service is a proven differentiator for First Republic."

Quarterly Highlights

Financial Results

- Year-over-year:

- Revenues were $1.2 billion, up 33.9%.

- Net interest income was $1.0 billion, up 27.5%.

- Net income was $373.1 million, up 45.3%.

- Diluted earnings per share of $1.95, up 39.3% (included $0.11 positive impact from tax benefits on vesting of stock awards).

- Tangible book value per share was $61.72, up 15.5%.

- Loan originations totaled $16.8 billion, our strongest quarter ever.

- Net interest margin was 2.68%, compared to 2.67% for the prior quarter.

- Efficiency ratio was 62.0%, compared to 63.5% for the prior quarter.

Continued Capital and Credit Strength

- Tier 1 leverage ratio was 8.05%.

- Nonperforming assets were at a very low 8 basis points of total assets.

- Net charge-offs were only $1.2 million, or less than 1 basis point of average loans.

Continued Franchise Growth

- Year-over-year:

- Loans totaled $123.1 billion, up 22.7%.

- Deposits were $134.7 billion, up 36.7%.

- Wealth management assets were $240.9 billion, up 54.6%.

- Wealth management revenues were $183.6 million, up 61.2%.

"We are quite pleased with the growth of revenue and net interest income during the second quarter," said Mike Roffler, Chief Financial Officer. "Credit quality remains excellent, further reflecting the safety and stability of First Republic."

Quarterly Cash Dividend of $0.22 per Share

The Bank declared a cash dividend for the second quarter of $0.22 per share of common stock, which is payable on August 12, 2021 to shareholders of record as of July 29, 2021.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were at a very low 8 basis points of total assets at June 30, 2021. The Bank had modest net loan charge-offs of only $1.2 million for the quarter.

During the second quarter, the Bank recorded a provision for credit losses of $16.1 million, which was primarily driven by loan growth.

Continued Book Value Growth and Capital Strength

Book value per common share at June 30, 2021 was $62.99, up 14.9% from a year ago. Tangible book value per common share at June 30, 2021 was $61.72, up 15.5% from a year ago.

The Bank's Tier 1 leverage ratio was 8.05% at June 30, 2021, compared to 8.32% at March 31, 2021.

Continued Franchise Growth

Loan Originations

Loan originations were our largest ever at $16.8 billion for the quarter, up 24.7% from the same quarter a year ago. This was primarily due to increases in single family and business lending, partially offset by a decrease in loan originations under the Small Business Administration's Paycheck Protection Program ("PPP").

Single family loan originations were 52% of the total volume for the quarter and had a weighted average loan-to-value ratio of 60%. Multifamily and commercial real estate loans originated were only 9% of total originations, and had a weighted average loan-to-value ratio of 49%.

Loans totaled $123.1 billion at June 30, 2021, up 22.7% compared to a year ago, primarily due to increases in single family loans, business, multifamily and stock secured loans, partially offset by a decrease in PPP loans.

COVID-19 Loan Modifications Continue to Decline

Remaining loan modifications to those borrowers experiencing financial challenges as a result of COVID-19 (not classified as troubled debt restructurings) totaled $634 million, and were only 0.5% of total loans as of June 30, 2021, down from a peak of approximately 4% of total loans as of June 30, 2020.

Deposit Growth

Total deposits increased to $134.7 billion, up 36.7% compared to a year ago, and had an average rate paid of 7 basis points during the quarter.

At June 30, 2021, checking deposit balances were 68.0% of total deposits.

Investments

Total investment securities at June 30, 2021 were $22.9 billion, a 5.6% increase compared to the prior quarter and a 19.9% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $23.2 billion at June 30, 2021, and represented 14.3% of quarterly average total assets.

Wealth Management

Total wealth management assets were $240.9 billion at June 30, 2021, up 10.0% compared to the prior quarter and up 54.6% compared to a year ago. The increases in wealth management assets were due to both net client inflow and market appreciation.

Wealth management revenues totaled $183.6 million for the quarter, up 61.2% compared to last year's second quarter. Such revenues represented 14.9% of the Bank's total revenues for the quarter.

Wealth management assets at June 30, 2021 included investment management assets of $99.5 billion, brokerage assets and money market mutual funds of $125.5 billion, and trust and custody assets of $15.9 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.2 billion for the quarter, up 33.9% compared to the second quarter a year ago.

Net Interest Income Growth

Net interest income was $1.0 billion for the quarter, up 27.5% compared to the second 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 increased to 2.68% in the second quarter, from 2.67% in the prior quarter.

Noninterest Income

Noninterest income was $226.6 million for the quarter, up 72.2% compared to the second quarter a year ago. The increase was primarily driven by higher wealth management fees, income from investments in life insurance and loan servicing fees.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $762.8 million for the quarter, up 33.9% compared to the second quarter a year ago. The increase was primarily due to increased salaries and benefits, information systems and occupancy costs from the continued investments in the expansion of the franchise, and higher professional fees and advertising and marketing costs.

The efficiency ratio was 62.0% for both the second quarter of 2021 and 2020.

Income Taxes

The Bank's effective tax rate for the second quarter of 2021 was 17.4%, compared to 21.9% for the prior quarter, and 19.4% for the second quarter a year ago. The decrease from the second quarter a year ago was primarily the result of higher excess tax benefits upon vesting of stock awards due to higher market valuation levels. For the first six months of 2021, the Bank's effective tax rate was 19.6%, compared to 19.4% a year ago.

Conference Call Details

First Republic Bank's second quarter 2021 earnings conference call is scheduled for July 13, 2021 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (800) 458-4148 and provide confirmation code 3341684 approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (856) 344-9290 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 the live presentation, a replay of the call will be available beginning July 13, 2021, at 11:00 a.m. PT / 2:00 p.m. ET, through July 20, 2021, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (888) 203-1112 and use confirmation code 3341684#. 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; 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; natural or other disasters, including earthquakes, wildfires, pandemics or acts of terrorism affecting the markets in which we operate; the negative impacts and disruptions resulting from COVID-19 on our colleagues and clients, the communities we serve and the domestic and global economy, which may have an adverse effect on our business, financial position and results of operations; interest rate risk and credit risk; our ability to maintain and follow high underwriting standards; economic and market conditions, including those affecting the valuation of our investment securities portfolio and credit losses on our loans and debt securities; real estate prices generally and in our markets; our geographic and product concentrations; demand for our products and services; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate and the 11th District Monthly Weighted Average Cost of Funds Index, as well as other alternative reference rates; the regulatory environment in which we operate, our regulatory compliance and future regulatory requirements; any future changes to regulatory capital requirements; legislative and regulatory actions affecting us and the financial services industry, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), including increased compliance costs, limitations on activities and requirements to hold additional capital, as well as changes to the Dodd-Frank Act pursuant to the Economic Growth, Regulatory Relief, and Consumer Protection Act; our ability to avoid litigation and its associated costs and liabilities; future Federal Deposit Insurance Corporation ("FDIC") special assessments or changes to regular assessments; fraud, cybersecurity and privacy risks; and custom technology preferences of our customers and our ability to successfully execute on initiatives relating to enhancements of our technology infrastructure, including client-facing systems and applications. For a discussion of these and other risks and uncertainties, see First Republic's FDIC filings, including, but not limited to, the risk factors in First Republic's Annual Report on Form 10-K 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.

CONSOLIDATED STATEMENTS OF INCOME

Quarter Ended Quarter Six Months Ended June 30, Ended June 30, March 31, (in thousands,except per 2021 2020 2021 2021 2020share amounts)

Interest income:

Loans $ 912,885 $ 791,286 $ 873,170 $ 1,786,055 $ 1,587,938

Investments 156,947 146,515 140,711 297,658 295,084

Other 5,103 5,059 5,189 10,292 12,019

Cash and cash 3,070 564 2,894 5,964 4,504 equivalents

Total interest 1,078,005 943,424 1,021,964 2,099,969 1,899,545 income



Interest expense:

Deposits 24,096 72,480 27,571 51,667 191,325

Borrowings 50,044 83,532 55,611 105,655 168,676

Total interest 74,140 156,012 83,182 157,322 360,001 expense



Net interest 1,003,865 787,412 938,782 1,942,647 1,539,544 income

Provision(reversal ofprovision) for 16,143 31,117 (14,608 ) 1,535 93,487 credit

losses

Net interestincome afterprovision(reversal of 987,722 756,295 953,390 1,941,112 1,446,057

provision) forcredit losses



Noninterest income:

Investmentmanagement 136,516 85,083 119,042 255,558 184,379 fees

Brokerage andinvestment 17,574 12,406 14,564 32,138 28,232 fees

Insurance fees 2,668 1,713 3,074 5,742 3,870

Trust fees 6,245 4,599 5,731 11,976 9,575

Foreignexchange fee 20,612 10,105 17,167 37,779 22,289 income

Deposit fees 6,618 5,248 6,169 12,787 11,845

Loan and 8,877 7,456 7,485 16,362 13,570 related fees

Loan servicing 1,057 (4,445 ) 1,488 2,545 (2,793 )fees, net

Gain (loss) on 58 (1,147 ) 309 367 778 sale of loans

Gain oninvestment 1,329 1,529 655 1,984 4,157 securities

Income frominvestments in 21,457 7,800 16,549 38,006 15,960 life insurance

Other income 3,597 1,222 3,618 7,215 3,751

Totalnoninterest 226,608 131,569 195,851 422,459 295,613 income



Noninterest expense:

Salaries andemployee 481,503 344,204 463,404 944,907 705,408 benefits

Information 88,980 74,037 83,516 172,496 144,752 systems

Occupancy 63,526 54,941 57,549 121,075 108,582

Professional 25,475 15,517 21,254 46,729 28,634 fees

Advertising 16,560 8,621 12,633 29,193 20,464 and marketing

FDIC 13,254 11,275 11,900 25,154 21,460 assessments

Other expenses 73,467 60,863 70,140 143,607 122,175

Totalnoninterest 762,765 569,458 720,396 1,483,161 1,151,475 expense



Income beforeprovision for 451,565 318,406 428,845 880,410 590,195 income taxes

Provision for 78,459 61,638 94,012 172,471 114,741 income taxes

Net income 373,106 256,768 334,833 707,939 475,454

Dividends onpreferred 23,655 14,817 18,525 42,180 27,837 stock

Net incomeavailable to $ 349,451 $ 241,951 $ 316,308 $ 665,759 $ 447,617 commonshareholders



Basic earningsper common $ 1.98 $ 1.41 $ 1.81 $ 3.79 $ 2.61 share

Dilutedearnings per $ 1.95 $ 1.40 $ 1.79 $ 3.74 $ 2.60 common share



Weightedaverage 176,419 171,627 174,820 175,624 171,231 shares-basic

Weightedaverage 178,864 172,659 176,951 177,913 172,343 shares-diluted

CONSOLIDATED BALANCE SHEETS

As of

($ in thousands)

June 30,2021

March 31,2021

December 31,2020

June 30,2020

ASSETS

Cash and cash equivalents

$

7,876,952

$

8,889,492

$

5,094,754

$

3,099,170

Debt securities available-for-sale

2,634,983

2,428,833

1,906,315

1,576,956

Debt securities held-to-maturity

20,244,705

19,240,358

16,610,212

17,513,211

Less: Allowance for credit losses

(8,407

)

(8,024

)

(6,902

)

(5,383

)

Debt securities held-to-maturity, net

20,236,298

19,232,334

16,603,310

17,507,828

Equity securities (fair value)

29,550

21,221

20,566

21,104

Loans:

Single family

69,908,787

65,178,442

61,370,246

52,435,246

Home equity lines of credit

2,441,034

2,392,314

2,449,533

2,419,359

Single family construction

877,548

841,962

787,854

733,909

Multifamily

14,803,219

14,141,208

13,768,957

13,187,857

Commercial real estate

8,234,934

8,065,262

8,018,158

7,793,137

Multifamily/commercial construction

2,060,980

2,101,119

2,024,420

1,966,292

Capital call lines of credit

8,127,473

8,653,802

8,149,946

6,173,992

Tax-exempt

3,566,385

3,454,471

3,365,572

3,186,066

Other business

3,656,598

3,679,420

3,340,048

3,179,023

PPP

1,374,765

2,142,253

1,841,376

2,092,307

Stock secured

2,965,857

2,519,637

2,518,338

1,924,107

Other secured

2,051,617

1,862,529

1,818,550

1,702,535

Unsecured

3,047,981

3,050,999

3,113,267

3,221,405

Total loans

123,117,178

118,083,418

112,566,265

100,015,235

Allowance for credit losses

(636,910

)

(620,825

)

(635,019

)

(583,997

)

Loans, net

122,480,268

117,462,593

111,931,246

99,431,238

Loans held for sale

3,169

-

20,679

313,655

Investments in life insurance

2,597,637

2,328,844

2,061,362

1,468,712

Tax credit investments

1,224,114

1,127,465

1,131,905

1,105,853

Premises, equipment and leasehold improvements, net

418,725

412,331

403,482

388,256

Goodwill and other intangible assets

224,497

225,925

227,512

230,975

Other real estate owned

-

1,334

-

1,071

Other assets

3,920,541

3,667,588

3,101,003

3,159,069

Total Assets

$

161,646,734

$

155,797,960

$

142,502,134

$

128,303,887

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing checking

$

59,449,158

$

53,806,762

$

46,281,112

$

37,586,940

Interest-bearing checking

32,165,327

32,542,600

30,603,221

23,833,458

Money market checking

20,373,535

19,210,069

16,778,884

14,639,069

Money market savings and passbooks

14,747,597

14,097,001

12,584,522

10,236,015

Certificates of deposit

7,921,218

8,250,521

8,681,061

12,238,479

Total Deposits

134,656,835

127,906,953

114,928,800

98,533,961

Short-term borrowings

-

-

-

5,000

Long-term FHLB advances

9,000,000

10,505,000

11,755,000

15,405,000

Senior notes

997,193

996,668

996,145

995,109

Subordinated notes

778,535

778,423

778,313

778,096

Other liabilities

2,939,444

2,669,186

2,293,230

2,010,793

Total Liabilities

148,372,007

142,856,230

130,751,488

117,727,959

Shareholders' Equity:

Preferred stock

2,142,500

2,142,500

1,545,000

1,145,000

Common stock

1,767

1,763

1,741

1,721

Additional paid-in capital

5,204,166

5,191,932

4,834,172

4,543,051

Retained earnings

5,936,669

5,626,958

5,346,355

4,858,965

Accumulated other comprehensive income (loss)

(10,375

)

(21,423

)

23,378

27,191

Total Shareholders' Equity

13,274,727

12,941,730

11,750,646

10,575,928

Total Liabilities and Shareholders' Equity

$

161,646,734

$

155,797,960

$

142,502,134

$

128,303,887

CONSOLIDATED BALANCE SHEETS

As of

($ in thousands) June 30, March 31, December 31, June 30, 2021 2021 2020 2020

ASSETS

Cash and cash $ 7,876,952 $ 8,889,492 $ 5,094,754 $ 3,099,170 equivalents

Debt securities 2,634,983 2,428,833 1,906,315 1,576,956 available-for-sale



Debt securities 20,244,705 19,240,358 16,610,212 17,513,211 held-to-maturity

Less: Allowance for (8,407 ) (8,024 ) (6,902 ) (5,383 )credit losses

Debt securitiesheld-to-maturity, 20,236,298 19,232,334 16,603,310 17,507,828 net



Equity securities 29,550 21,221 20,566 21,104 (fair value)



Loans:

Single family 69,908,787 65,178,442 61,370,246 52,435,246

Home equity lines 2,441,034 2,392,314 2,449,533 2,419,359 of credit

Single family 877,548 841,962 787,854 733,909 construction

Multifamily 14,803,219 14,141,208 13,768,957 13,187,857

Commercial real 8,234,934 8,065,262 8,018,158 7,793,137 estate

Multifamily/commercial 2,060,980 2,101,119 2,024,420 1,966,292 construction

Capital call lines 8,127,473 8,653,802 8,149,946 6,173,992 of credit

Tax-exempt 3,566,385 3,454,471 3,365,572 3,186,066

Other business 3,656,598 3,679,420 3,340,048 3,179,023

PPP 1,374,765 2,142,253 1,841,376 2,092,307

Stock secured 2,965,857 2,519,637 2,518,338 1,924,107

Other secured 2,051,617 1,862,529 1,818,550 1,702,535

Unsecured 3,047,981 3,050,999 3,113,267 3,221,405

Total loans 123,117,178 118,083,418 112,566,265 100,015,235

Allowance for (636,910 ) (620,825 ) (635,019 ) (583,997 )credit losses

Loans, net 122,480,268 117,462,593 111,931,246 99,431,238



Loans held for sale 3,169 - 20,679 313,655

Investments in life 2,597,637 2,328,844 2,061,362 1,468,712 insurance

Tax credit 1,224,114 1,127,465 1,131,905 1,105,853 investments

Premises, equipmentand leasehold 418,725 412,331 403,482 388,256 improvements, net

Goodwill and other 224,497 225,925 227,512 230,975 intangible assets

Other real estate - 1,334 - 1,071 owned

Other assets 3,920,541 3,667,588 3,101,003 3,159,069

Total Assets $ 161,646,734 $ 155,797,960 $ 142,502,134 $ 128,303,887



LIABILITIES ANDSHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing $ 59,449,158 $ 53,806,762 $ 46,281,112 $ 37,586,940 checking

Interest-bearing 32,165,327 32,542,600 30,603,221 23,833,458 checking

Money market 20,373,535 19,210,069 16,778,884 14,639,069 checking

Money marketsavings and 14,747,597 14,097,001 12,584,522 10,236,015 passbooks

Certificates of 7,921,218 8,250,521 8,681,061 12,238,479 deposit

Total Deposits 134,656,835 127,906,953 114,928,800 98,533,961



Short-term - - - 5,000 borrowings

Long-term FHLB 9,000,000 10,505,000 11,755,000 15,405,000 advances

Senior notes 997,193 996,668 996,145 995,109

Subordinated notes 778,535 778,423 778,313 778,096

Other liabilities 2,939,444 2,669,186 2,293,230 2,010,793

Total Liabilities 148,372,007 142,856,230 130,751,488 117,727,959



Shareholders' Equity:

Preferred stock 2,142,500 2,142,500 1,545,000 1,145,000

Common stock 1,767 1,763 1,741 1,721

Additional paid-in 5,204,166 5,191,932 4,834,172 4,543,051 capital

Retained earnings 5,936,669 5,626,958 5,346,355 4,858,965

Accumulated othercomprehensive (10,375 ) (21,423 ) 23,378 27,191 income (loss)

Total Shareholders' 13,274,727 12,941,730 11,750,646 10,575,928 Equity

Total Liabilitiesand Shareholders' $ 161,646,734 $ 155,797,960 $ 142,502,134 $ 128,303,887 Equity

Quarter Ended June 30,

Quarter Ended March 31,

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 thousands)

Assets:

Cash and cash equivalents

$

11,280,780

$

3,070

0.11

%

$

2,789,666

$

564

0.08

%

$

11,448,652

$

2,894

0.10

%

Investment securities:

U.S. Government-sponsored

agency securities

100,000

398

1.59

%

214,835

1,367

2.55

%

93,889

339

1.45

%

Agency residential and

commercial MBS

5,646,537

29,000

2.05

%

6,615,707

42,661

2.58

%

5,625,748

30,536

2.17

%

Other residential and

commercial MBS

30,297

154

2.04

%

27,499

182

2.65

%

32,992

154

1.87

%

Municipal securities

15,082,004

147,297

3.91

%

11,949,615

126,906

4.25

%

13,349,101

134,990

4.04

%

Other investment

securities (3)

1,375,557

9,800

2.85

%

43,800

309

2.83

%

429,289

2,568

2.39

%

Total investment securities

22,234,395

186,649

3.36

%

18,851,456

171,425

3.64

%

19,531,019

168,587

3.45

%

Loans:

Residential real estate (4)

69,853,517

491,229

2.81

%

53,737,207

404,691

3.01

%

65,458,977

469,010

2.87

%

Multifamily (5)

14,392,073

126,888

3.49

%

12,887,676

120,657

3.70

%

13,922,237

122,829

3.53

%

Commercial real estate

8,117,288

78,427

3.82

%

7,718,257

77,635

3.98

%

8,032,825

77,879

3.88

%

Multifamily/commercial

construction

2,969,059

37,522

5.00

%

2,632,682

29,468

4.43

%

2,867,284

31,100

4.34

%

Business (6)

15,894,165

128,914

3.21

%

13,069,640

115,666

3.50

%

15,076,564

123,741

3.28

%

PPP

1,842,716

15,476

3.32

%

1,620,772

7,659

1.87

%

1,989,987

15,766

3.17

%

Other (7)

7,652,991

41,518

2.15

%

6,658,487

42,116

2.50

%

7,347,624

39,685

2.16

%

Total loans

120,721,809

919,974

3.03

%

98,324,721

797,892

3.23

%

114,695,498

880,010

3.07

%

FHLB stock

312,647

5,103

6.55

%

491,938

5,059

4.14

%

344,990

5,189

6.10

%

Total interest-earning

assets

154,549,631

1,114,796

2.87

%

120,457,781

974,940

3.22

%

146,020,159

1,056,680

2.90

%

Noninterest-earning cash

385,537

425,440

413,625

Goodwill and other

intangibles

225,183

231,934

226,683

Other assets

6,724,321

4,905,493

6,091,492

Total noninterest-earning

assets

7,335,041

5,562,867

6,731,800

Total Assets

$

161,884,672

$

126,020,648

$

152,751,959

Liabilities and Shareholders'

Equity:

Deposits:

Checking

$

91,379,594

1,740

0.01

%

$

58,978,081

3,127

0.02

%

$

83,679,569

2,074

0.01

%

Money market checking

19,927,834

6,100

0.12

%

14,315,050

9,860

0.28

%

18,888,949

7,644

0.16

%

Money market savings and

passbooks

14,783,456

6,117

0.17

%

9,818,650

5,364

0.22

%

13,640,388

6,310

0.19

%

CDs

8,039,804

10,139

0.51

%

12,721,452

54,129

1.71

%

8,413,083

11,543

0.56

%

Total deposits

134,130,688

24,096

0.07

%

95,833,233

72,480

0.30

%

124,621,989

27,571

0.09

%

Borrowings:

Short-term borrowings

-

-

-

%

2,747

-

0.04

%

6

0

0.18

%

Long-term FHLB advances

10,062,253

34,892

1.39

%

15,868,682

68,391

1.73

%

11,321,666

40,463

1.45

%

Senior notes (8)

996,937

6,040

2.42

%

994,905

6,034

2.43

%

996,412

6,038

2.42

%

Subordinated notes (8)

778,480

9,112

4.68

%

778,044

9,107

4.68

%

778,369

9,110

4.68

%

Total borrowings

11,837,670

50,044

1.69

%

17,644,378

83,532

1.90

%

13,096,453

55,611

1.72

%

Total interest-bearing

liabilities

145,968,358

74,140

0.20

%

113,477,611

156,012

0.55

%

137,718,442

83,182

0.24

%

Noninterest-bearing liabilities

2,796,202

2,067,585

2,637,481

Preferred shareholders' equity

2,142,500

1,145,000

1,963,583

Common shareholders' equity

10,977,612

9,330,452

10,432,453

Total Liabilities and

Shareholders' Equity

$

161,884,672

$

126,020,648

$

152,751,959

Net interest spread (9)

2.67

%

2.67

%

2.65

%

Net interest income (fully

taxable-equivalent basis) and

net interest margin (10)

$

1,040,656

2.68

%

$

818,928

2.70

%

$

973,498

2.67

%

Reconciliation of tax-equivalent net interest

income to net interest income: (11)

Municipal securities tax-equivalent adjustment

(29,702

)

(24,909

)

(27,876

)

Business loans tax-equivalent adjustment

(7,089

)

(6,607

)

(6,840

)

Net interest income

$

1,003,865

$

787,412

$

938,782

Quarter Ended June 30, Quarter Ended March 31,

2021 2020 2021

Average Balances, Interest Yield/ Interest Yield/ Interest Yield/Yields Average Income/ Rates Average Income/ Rates Average Income/ Rates Balance Expense ^(2) Balance Expense ^(2) Balance Expense ^(2)and Rates ^(1) ^(1) ^(1)

($ in thousands)

Assets:

Cash and cash $ 11,280,780 $ 3,070 0.11 % $ 2,789,666 $ 564 0.08 % $ 11,448,652 $ 2,894 0.10 %equivalents

Investment securities:

U.S.Government-sponsored 100,000 398 1.59 % 214,835 1,367 2.55 % 93,889 339 1.45 %

agency securities

Agency residentialand 5,646,537 29,000 2.05 % 6,615,707 42,661 2.58 % 5,625,748 30,536 2.17 %

commercial MBS

Other residentialand 30,297 154 2.04 % 27,499 182 2.65 % 32,992 154 1.87 %

commercial MBS

Municipal securities 15,082,004 147,297 3.91 % 11,949,615 126,906 4.25 % 13,349,101 134,990 4.04 %

Other investment 1,375,557 9,800 2.85 % 43,800 309 2.83 % 429,289 2,568 2.39 %securities ^(3)

Total investment 22,234,395 186,649 3.36 % 18,851,456 171,425 3.64 % 19,531,019 168,587 3.45 %securities



Loans:

Residential real 69,853,517 491,229 2.81 % 53,737,207 404,691 3.01 % 65,458,977 469,010 2.87 %estate ^(4)

Multifamily ^(5) 14,392,073 126,888 3.49 % 12,887,676 120,657 3.70 % 13,922,237 122,829 3.53 %

Commercial real 8,117,288 78,427 3.82 % 7,718,257 77,635 3.98 % 8,032,825 77,879 3.88 %estate

Multifamily/commercial 2,969,059 37,522 5.00 % 2,632,682 29,468 4.43 % 2,867,284 31,100 4.34 %

construction

Business ^(6) 15,894,165 128,914 3.21 % 13,069,640 115,666 3.50 % 15,076,564 123,741 3.28 %

PPP 1,842,716 15,476 3.32 % 1,620,772 7,659 1.87 % 1,989,987 15,766 3.17 %

Other ^(7) 7,652,991 41,518 2.15 % 6,658,487 42,116 2.50 % 7,347,624 39,685 2.16 %

Total loans 120,721,809 919,974 3.03 % 98,324,721 797,892 3.23 % 114,695,498 880,010 3.07 %

FHLB stock 312,647 5,103 6.55 % 491,938 5,059 4.14 % 344,990 5,189 6.10 %

Totalinterest-earning 154,549,631 1,114,796 2.87 % 120,457,781 974,940 3.22 % 146,020,159 1,056,680 2.90 %

assets



Noninterest-earning 385,537 425,440 413,625 cash

Goodwill and other 225,183 231,934 226,683 intangibles

Other assets 6,724,321 4,905,493 6,091,492

Totalnoninterest-earning 7,335,041 5,562,867 6,731,800

assets

Total Assets $ 161,884,672 $ 126,020,648 $ 152,751,959



Liabilities andShareholders'

Equity:

Deposits:

Checking $ 91,379,594 1,740 0.01 % $ 58,978,081 3,127 0.02 % $ 83,679,569 2,074 0.01 %

Money market 19,927,834 6,100 0.12 % 14,315,050 9,860 0.28 % 18,888,949 7,644 0.16 %checking

Money market savingsand 14,783,456 6,117 0.17 % 9,818,650 5,364 0.22 % 13,640,388 6,310 0.19 %

passbooks

CDs 8,039,804 10,139 0.51 % 12,721,452 54,129 1.71 % 8,413,083 11,543 0.56 %

Total deposits 134,130,688 24,096 0.07 % 95,833,233 72,480 0.30 % 124,621,989 27,571 0.09 %



Borrowings:

Short-term - - - % 2,747 - 0.04 % 6 0 0.18 %borrowings

Long-term FHLB 10,062,253 34,892 1.39 % 15,868,682 68,391 1.73 % 11,321,666 40,463 1.45 %advances

Senior notes^ (8) 996,937 6,040 2.42 % 994,905 6,034 2.43 % 996,412 6,038 2.42 %

Subordinated notes ^ 778,480 9,112 4.68 % 778,044 9,107 4.68 % 778,369 9,110 4.68 %(8)

Total borrowings 11,837,670 50,044 1.69 % 17,644,378 83,532 1.90 % 13,096,453 55,611 1.72 %

Totalinterest-bearing 145,968,358 74,140 0.20 % 113,477,611 156,012 0.55 % 137,718,442 83,182 0.24 %

liabilities



Noninterest-bearing 2,796,202 2,067,585 2,637,481 liabilities

Preferred 2,142,500 1,145,000 1,963,583 shareholders' equity

Common shareholders' 10,977,612 9,330,452 10,432,453 equity

Total Liabilitiesand $ 161,884,672 $ 126,020,648 $ 152,751,959

Shareholders' Equity



Net interest spread 2.67 % 2.67 % 2.65 %^(9)

Net interest income(fully

taxable-equivalent $ 1,040,656 2.68 % $ 818,928 2.70 % $ 973,498 2.67 %basis) and

net interest margin^(10)



Reconciliation oftax-equivalent netinterest income to netinterest income: ^(11)

Municipal securitiestax-equivalent (29,702 ) (24,909 ) (27,876 ) adjustment

Business loanstax-equivalent (7,089 ) (6,607 ) (6,840 ) adjustment

Net interest income $ 1,003,865 $ 787,412 $ 938,782

Six Months Ended June 30,

2021

2020

Average Balances, Yields and Rates

Average Balance

Interest Income/Expense (1)

Yields/ Rates (2)

Average Balance

Interest Income/Expense (1)

Yields/ Rates (2)

($ in thousands)

Assets:

Cash and cash equivalents

$

11,364,252

$

5,964

0.11

%

$

2,321,623

$

4,504

0.39

%

Investment securities:

U.S. Government-sponsored agency securities

96,961

737

1.52

%

261,142

3,574

2.74

%

Agency residential and commercial MBS

5,636,200

59,537

2.11

%

6,681,185

89,846

2.69

%

Other residential and commercial MBS

31,637

309

1.95

%

15,667

214

2.73

%

Municipal securities

14,220,340

282,375

3.97

%

11,654,183

249,935

4.29

%

Other investment securities (3)

905,037

12,367

2.73

%

43,791

629

2.87

%

Total investment securities

20,890,175

355,325

3.40

%

18,655,968

344,198

3.69

%

Loans:

Residential real estate (4)

67,668,387

960,239

2.84

%

52,518,610

809,674

3.08

%

Multifamily (5)

14,158,453

249,718

3.51

%

12,726,699

239,601

3.72

%

Commercial real estate

8,075,290

156,306

3.85

%

7,646,415

156,244

4.04

%

Multifamily/commercial construction

2,918,453

68,622

4.68

%

2,591,664

59,753

4.56

%

Business (6)

15,487,623

252,666

3.24

%

12,730,013

238,698

3.71

%

PPP

1,915,944

31,242

3.24

%

810,386

7,659

1.87

%

Other (7)

7,501,151

81,201

2.15

%

6,555,772

89,687

2.71

%

Total loans

117,725,301

1,799,994

3.05

%

95,579,559

1,601,316

3.33

%

FHLB stock

328,729

10,292

6.31

%

449,455

12,019

5.38

%

Total interest-earning assets

150,308,457

2,171,575

2.88

%

117,006,605

1,962,037

3.34

%

Noninterest-earning cash

399,504

434,348

Goodwill and other intangibles

225,929

233,006

Other assets

6,409,654

4,813,403

Total noninterest-earning assets

7,035,087

5,480,757

Total Assets

$

157,343,544

$

122,487,362

Liabilities and Shareholders' Equity:

Deposits:

Checking

$

87,550,852

3,813

0.01

%

$

56,420,801

11,559

0.04

%

Money market checking

19,411,261

13,744

0.14

%

13,519,835

39,163

0.58

%

Money market savings and passbooks

14,215,079

12,427

0.18

%

9,784,569

20,931

0.43

%

CDs

8,225,414

21,683

0.53

%

13,453,699

119,672

1.79

%

Total deposits

129,402,606

51,667

0.08

%

93,178,904

191,325

0.41

%

Borrowings:

Short-term borrowings

3

-

0.18

%

617,287

4,700

1.53

%

Long-term FHLB advances

10,688,481

75,355

1.42

%

14,644,643

134,957

1.85

%

Senior notes (8)

996,676

12,078

2.42

%

880,106

10,807

2.46

%

Subordinated notes (8)

778,424

18,222

4.68

%

777,991

18,212

4.68

%

Total borrowings

12,463,584

105,655

1.71

%

16,920,027

168,676

2.00

%

Total interest-bearing liabilities

141,866,190

157,322

0.22

%

110,098,931

360,001

0.66

%

Noninterest-bearing liabilities

2,717,280

2,048,845

Preferred shareholders' equity

2,053,536

1,145,000

Common shareholders' equity

10,706,538

9,194,586

Total Liabilities and Shareholders' Equity

$

157,343,544

$

122,487,362

Net interest spread (9)

2.66

%

2.68

%

Net interest income (fully taxable-equivalent basis) and

net interest margin (10)

$

2,014,253

2.67

%

$

1,602,036

2.72

%

Reconciliation of tax-equivalent net interest income

to net interest income: (11)

Municipal securities tax-equivalent adjustment

(57,667)

(49,113)

Business loans tax-equivalent adjustment

(13,939)

(13,379)

Net interest income

$

1,942,647

$

1,539,544

Six Months Ended June 30,

2021 2020

Interest Yields Interest YieldsAverage Balances, Average Income/ / Average Income/ /Yields and Rates Balance Expense Rates Balance Expense Rates ^(1) ^(2) ^(1) ^(2)

($ in thousands)

Assets:

Cash and cash $ 11,364,252 $ 5,964 0.11 % $ 2,321,623 $ 4,504 0.39 %equivalents

Investment securities:

U.S.Government-sponsored 96,961 737 1.52 % 261,142 3,574 2.74 %agency securities

Agency residential 5,636,200 59,537 2.11 % 6,681,185 89,846 2.69 %and commercial MBS

Other residential 31,637 309 1.95 % 15,667 214 2.73 %and commercial MBS

Municipal securities 14,220,340 282,375 3.97 % 11,654,183 249,935 4.29 %

Other investment 905,037 12,367 2.73 % 43,791 629 2.87 %securities^ (3)

Total investment 20,890,175 355,325 3.40 % 18,655,968 344,198 3.69 %securities



Loans:

Residential real 67,668,387 960,239 2.84 % 52,518,610 809,674 3.08 %estate ^(4)

Multifamily ^(5) 14,158,453 249,718 3.51 % 12,726,699 239,601 3.72 %

Commercial real 8,075,290 156,306 3.85 % 7,646,415 156,244 4.04 %estate

Multifamily/commercial 2,918,453 68,622 4.68 % 2,591,664 59,753 4.56 %construction

Business ^(6) 15,487,623 252,666 3.24 % 12,730,013 238,698 3.71 %

PPP 1,915,944 31,242 3.24 % 810,386 7,659 1.87 %

Other ^(7) 7,501,151 81,201 2.15 % 6,555,772 89,687 2.71 %

Total loans 117,725,301 1,799,994 3.05 % 95,579,559 1,601,316 3.33 %

FHLB stock 328,729 10,292 6.31 % 449,455 12,019 5.38 %

Totalinterest-earning 150,308,457 2,171,575 2.88 % 117,006,605 1,962,037 3.34 %assets



Noninterest-earning 399,504 434,348 cash

Goodwill and other 225,929 233,006 intangibles

Other assets 6,409,654 4,813,403

Totalnoninterest-earning 7,035,087 5,480,757 assets

Total Assets $ 157,343,544 $ 122,487,362



Liabilities andShareholders' Equity:

Deposits:

Checking $ 87,550,852 3,813 0.01 % $ 56,420,801 11,559 0.04 %

Money market 19,411,261 13,744 0.14 % 13,519,835 39,163 0.58 %checking

Money market savings 14,215,079 12,427 0.18 % 9,784,569 20,931 0.43 %and passbooks

CDs 8,225,414 21,683 0.53 % 13,453,699 119,672 1.79 %

Total deposits 129,402,606 51,667 0.08 % 93,178,904 191,325 0.41 %



Borrowings:

Short-term 3 - 0.18 % 617,287 4,700 1.53 %borrowings

Long-term FHLB 10,688,481 75,355 1.42 % 14,644,643 134,957 1.85 %advances

Senior notes ^(8) 996,676 12,078 2.42 % 880,106 10,807 2.46 %

Subordinated notes ^ 778,424 18,222 4.68 % 777,991 18,212 4.68 %(8)

Total borrowings 12,463,584 105,655 1.71 % 16,920,027 168,676 2.00 %

Totalinterest-bearing 141,866,190 157,322 0.22 % 110,098,931 360,001 0.66 %liabilities



Noninterest-bearing 2,717,280 2,048,845 liabilities

Preferred 2,053,536 1,145,000 shareholders' equity

Common shareholders' 10,706,538 9,194,586 equity

Total Liabilitiesand Shareholders' $ 157,343,544 $ 122,487,362 Equity



Net interest spread 2.66 % 2.68 %^(9)

Net interest income(fullytaxable-equivalentbasis) and $ 2,014,253 2.67 % $ 1,602,036 2.72 %

net interest margin^(10)



Reconciliation oftax-equivalent netinterest income

to net interestincome: ^(11)

Municipal securitiestax-equivalent (57,667) (49,113) adjustment

Business loanstax-equivalent (13,939) (13,379) adjustment

Net interest income $ 1,942,647 $ 1,539,544

_____________________(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)

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

(5)

Includes multifamily loans held for sale.

(6)

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

(7)

Includes stock secured, other secured and unsecured loans.

(8)

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

(9)

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

(10)

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

(11)

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

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

^(5) Includes multifamily loans held for sale.

^(6) Includes capital call lines of credit, tax-exempt and other business loans.

^(7) Includes stock secured, other secured and unsecured loans.

^(8) Average balances include unamortized issuance discounts and costs. Interest expense includes amortization of issuance discounts and costs.

^(9) Net interest spread represents the average yield on interest-earning assets less the average rate on interest-bearing liabilities.

^ Net interest margin represents net interest income on a fully(10) taxable-equivalent basis divided by total average interest-earning assets.

^ Fully taxable-equivalent net interest income is considered a non-GAAP(11) financial measure, and is reconciled to GAAP net interest income in this table.

Quarter Ended June 30,

Quarter Ended March 31,

Six Months Ended June 30,

Selected Financial Data and Ratios

2021

2020

2021

2021

2020

($ in thousands, except per share amounts)

Return on average assets (1), (2)

0.92

%

0.82

%

0.89

%

0.91

%

0.78

%

Return on average common shareholders' equity (1)

12.77

%

10.43

%

12.30

%

12.54

%

9.79

%

Return on average tangible common shareholders'

equity (1), (3)

13.04

%

10.70

%

12.57

%

12.81

%

10.04

%

Average total equity to average total assets

8.10

%

8.31

%

8.12

%

8.11

%

8.44

%

Dividends per common share

$

0.22

$

0.20

$

0.20

$

0.42

$

0.39

Dividend payout ratio

11.3

%

14.3

%

11.2

%

11.2

%

15.0

%

Book value per common share

$

62.99

$

54.80

$

61.26

$

62.99

$

54.80

Tangible book value per common share (4)

$

61.72

$

53.46

$

59.98

$

61.72

$

53.46

Efficiency ratio (5)

62.0

%

62.0

%

63.5

%

62.7

%

62.7

%

Net loan charge-offs

$

1,219

$

1,098

$

487

$

1,706

$

1,300

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

0.00

%

0.00

%

0.00

%

0.00

%

0.00

%

Allowance for loan credit losses to:

Total loans

0.52

%

0.58

%

0.53

%

0.52

%

0.58

%

Nonaccrual loans

479.3

%

354.1

%

359.3

%

479.3

%

354.1

%

Quarter Ended Quarter Six Months Ended June 30, Ended June 30, March 31,

Selected Financial 2021 2020 2021 2021 2020Data and Ratios

($ in thousands,except per share amounts)

Return on average 0.92 % 0.82 % 0.89 % 0.91 % 0.78 %assets ^(1), (2)

Return on averagecommon 12.77 % 10.43 % 12.30 % 12.54 % 9.79 %shareholders'equity ^(1)

Return on averagetangible commonshareholders' 13.04 % 10.70 % 12.57 % 12.81 % 10.04 %

equity ^(1), (3)

Average totalequity to average 8.10 % 8.31 % 8.12 % 8.11 % 8.44 %total assets

Dividends per $ 0.22 $ 0.20 $ 0.20 $ 0.42 $ 0.39 common share

Dividend payout 11.3 % 14.3 % 11.2 % 11.2 % 15.0 %ratio

Book value per $ 62.99 $ 54.80 $ 61.26 $ 62.99 $ 54.80 common share

Tangible book valueper common share ^ $ 61.72 $ 53.46 $ 59.98 $ 61.72 $ 53.46 (4)

Efficiency ratio ^ 62.0 % 62.0 % 63.5 % 62.7 % 62.7 %(5)



Net loan $ 1,219 $ 1,098 $ 487 $ 1,706 $ 1,300 charge-offs

Net loancharge-offs to 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %average total loans^(1)



Allowance for loan credit losses to:

Total loans 0.52 % 0.58 % 0.53 % 0.52 % 0.58 %

Nonaccrual loans 479.3 % 354.1 % 359.3 % 479.3 % 354.1 %

_____________________(1)

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)

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.

(5)

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

_____________________^ Ratios are annualized.(1)

^ Return on average assets is the ratio of net income to average assets.(2)

Refer to "Return on Average Common Shareholders' Equity and Return on^ Average Tangible Common Shareholders' Equity" table in this document for a(3) reconciliation of this non-GAAP financial measure to the most comparable GAAP measure.

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(4) financial

measure to the most comparable GAAP measure.

^ Efficiency ratio is the ratio of noninterest expense to the sum of net(5) interest income and noninterest income.

Quarter Ended June 30,

Quarter Ended March 31,

Six Months Ended June 30,

Effective Tax Rate

2021

2020

2021

2021

2020

Effective tax rate, prior to excess tax benefits-stock

awards

21.7

%

22.5

%

22.6

%

22.1

%

21.9

%

Excess tax benefits-stock awards

(4.3

)

(3.1

)

(0.7

)

(2.5

)%

(2.5

)%

Effective tax rate

17.4

%

19.4

%

21.9

%

19.6

%

19.4

%

Quarter Six Months Quarter Ended Ended Ended June 30, March June 30, 31,

Effective Tax Rate 2021 2020 2021 2021 2020

Effective tax rate, prior toexcess tax benefits-stock 21.7 % 22.5 % 22.6 % 22.1 % 21.9 %

awards

Excess tax benefits-stock awards (4.3 ) (3.1 ) (0.7 ) (2.5 ) (2.5 ) % %

Effective tax rate 17.4 % 19.4 % 21.9 % 19.6 % 19.4 %



Provision (Reversal of Provision) for Credit Losses

Quarter EndedJune 30,

Quarter EndedMarch 31,

Six Months EndedJune 30,

2021

2020

2021

2021

2020

($ in thousands)

Debt securities held-to-maturity

$

383

$

296

$

1,122

$

1,505

$

714

Loans

17,304

43,189

(13,707

)

3,597

90,868

Unfunded loan commitments

(1,544

)

(12,368

)

(2,023

)

(3,567

)

1,905

Total provision (reversal of provision)

$

16,143

$

31,117

$

(14,608

)

$

1,535

$

93,487

Provision Quarter Ended Quarter Six Months Ended(Reversal of June 30, Ended June 30,Provision) for March 31,Credit Losses 2021 2020 2021 2021 2020

($ in thousands)

Debt securities $ 383 $ 296 $ 1,122 $ 1,505 $ 714held-to-maturity

Loans 17,304 43,189 (13,707 ) 3,597 90,868

Unfunded loan (1,544 ) (12,368 ) (2,023 ) (3,567 ) 1,905commitments

Total provision(reversal of $ 16,143 $ 31,117 $ (14,608 ) $ 1,535 $ 93,487provision)

Quarter EndedJune 30,

Quarter EndedMarch 31,

Six Months EndedJune 30,

Mortgage Loan Sales

2021

2020

2021

2021

2020

($ in thousands)

Loans sold:

Flow sales:

Agency

$

4,315

$

10,810

$

42,402

$

46,717

$

36,584

Non-agency

-

-

1,073

1,073

31,870

Total flow sales

4,315

10,810

43,475

47,790

68,454

Bulk sales:

Non-agency

-

-

-

-

437,669

Securitizations

-

300,116

-

-

300,116

Total loans sold

$

4,315

$

310,926

$

43,475

$

47,790

$

806,239

Gain (loss) on sale of loans:

Amount

$

58

$

(1,147)

$

309

$

367

$

778

Gain (loss) as a percentage of loans sold

1.34

%

(0.37)

%

0.71

%

0.77

%

0.10

%

Quarter Ended Quarter Six Months Ended June 30, Ended June 30, March 31,

Mortgage Loan 2021 2020 2021 2021 2020Sales

($ in thousands)

Loans sold:

Flow sales:

Agency $ 4,315 $ 10,810 $ 42,402 $ 46,717 $ 36,584

Non-agency - - 1,073 1,073 31,870

Total flow 4,315 10,810 43,475 47,790 68,454 sales



Bulk sales:

Non-agency - - - - 437,669



Securitizations - 300,116 - - 300,116



Total loans $ 4,315 $ 310,926 $ 43,475 $ 47,790 $ 806,239 sold



Gain (loss) on sale of loans:

Amount $ 58 $ (1,147) $ 309 $ 367 $ 778

Gain (loss) asa percentage of 1.34 % (0.37) % 0.71 % 0.77 % 0.10 %loans sold

Quarter EndedJune 30,

Quarter EndedMarch 31,

Six Months EndedJune 30,

Loan Originations

2021

2020

2021

2021

2020

($ in thousands)

Single family

$

8,661,680

$

5,875,184

$

6,902,192

$

15,563,872

$

9,394,520

Home equity lines of credit

610,658

457,737

623,661

1,234,319

853,245

Single family construction

215,014

119,318

224,504

439,518

228,480

Multifamily

1,101,450

946,820

791,070

1,892,520

1,728,123

Commercial real estate

458,196

330,683

313,991

772,187

782,541

Multifamily/commercial construction

272,145

131,414

310,824

582,969

752,335

Capital call lines of credit

2,921,192

1,405,347

3,131,317

6,052,509

3,790,576

Tax-exempt

208,327

184,054

213,967

422,294

284,073

Other business

520,394

914,257

1,025,154

1,545,548

1,534,036

PPP

35,586

1,981,797

688,948

724,534

1,981,797

Stock secured

775,795

519,416

710,038

1,485,833

1,111,976

Other secured

598,630

358,730

438,989

1,037,619

772,554

Unsecured

372,192

203,270

345,848

718,040

526,158

Total loans originated

$

16,751,259

$

13,428,027

$

15,720,503

$

32,471,762

$

23,740,414

Quarter Ended Quarter Ended Six Months Ended June 30, March 31, June 30,

Loan 2021 2020 2021 2021 2020Originations

($ in thousands)

Single $ 8,661,680 $ 5,875,184 $ 6,902,192 $ 15,563,872 $ 9,394,520 family

Home equitylines of 610,658 457,737 623,661 1,234,319 853,245 credit

Singlefamily 215,014 119,318 224,504 439,518 228,480 construction

Multifamily 1,101,450 946,820 791,070 1,892,520 1,728,123

Commercial 458,196 330,683 313,991 772,187 782,541 real estate

Multifamily/commercial 272,145 131,414 310,824 582,969 752,335 construction

Capital calllines of 2,921,192 1,405,347 3,131,317 6,052,509 3,790,576 credit

Tax-exempt 208,327 184,054 213,967 422,294 284,073

Other 520,394 914,257 1,025,154 1,545,548 1,534,036 business

PPP 35,586 1,981,797 688,948 724,534 1,981,797

Stock 775,795 519,416 710,038 1,485,833 1,111,976 secured

Other 598,630 358,730 438,989 1,037,619 772,554 secured

Unsecured 372,192 203,270 345,848 718,040 526,158

Total loans $ 16,751,259 $ 13,428,027 $ 15,720,503 $ 32,471,762 $ 23,740,414 originated

As of

Asset Quality Information

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

($ in thousands)

Nonperforming assets:

Nonaccrual loans

$

132,880

$

172,794

$

184,132

$

164,247

$

164,930

Other real estate owned

-

1,334

-

-

1,071

Total nonperforming assets

$

132,880

$

174,128

$

184,132

$

164,247

$

166,001

Nonperforming assets to total assets

0.08

%

0.11

%

0.13

%

0.12

%

0.13

%

Accruing loans 90 days or more past due

$

-

$

851

$

-

$

935

$

3,764

Restructured accruing loans

$

11,407

$

11,658

$

11,253

$

11,378

$

11,501

As of

Asset Quality June 30, March 31, December September June 30,Information 2021 2021 31, 30, 2020 2020 2020

($ in thousands)

Nonperforming assets:

Nonaccrual $ 132,880 $ 172,794 $ 184,132 $ 164,247 $ 164,930 loans

Other real - 1,334 - - 1,071 estate owned

Totalnonperforming $ 132,880 $ 174,128 $ 184,132 $ 164,247 $ 166,001 assets



Nonperformingassets to 0.08 % 0.11 % 0.13 % 0.12 % 0.13 %total assets



Accruingloans 90 days $ - $ 851 $ - $ 935 $ 3,764 or more pastdue



Restructuredaccruing $ 11,407 $ 11,658 $ 11,253 $ 11,378 $ 11,501 loans

June 30, 2021

COVID-19 Loan Modifications (1), (2), (3), (4), (5)

Unpaid Principal Balance

LTV (6)

Average Loan Size

Number of Loans

($ in millions)

Single family

$

124

60%

$

1.1

116

Home equity lines of credit

2

64%

$

0.3

6

Single family construction

2

75%

$

2.4

1

Multifamily

161

51%

$

6.4

25

Commercial real estate

157

47%

$

5.2

30

Multifamily/commercial construction

9

45%

$

8.9

1

Capital call lines of credit

-

n/a

$

-

-

Tax-exempt

141

n/a

$

23.5

6

Other business

30

n/a

$

2.5

12

Stock secured

-

n/a

$

-

-

Other secured

2

n/a

$

0.4

6

Unsecured (7)

6

n/a

$

0.1

60

Total

$

634

263

June 30, 2021

COVID-19 Loan Modifications ^(1), Unpaid LTV ^ Average Number(2), (3), (4), (5) Principal (6) Loan of Balance Size Loans

($ in millions)

Single family $ 124 60% $ 1.1 116

Home equity lines of credit 2 64% $ 0.3 6

Single family construction 2 75% $ 2.4 1

Multifamily 161 51% $ 6.4 25

Commercial real estate 157 47% $ 5.2 30

Multifamily/commercial construction 9 45% $ 8.9 1

Capital call lines of credit - n/a $ - -

Tax-exempt 141 n/a $ 23.5 6

Other business 30 n/a $ 2.5 12

Stock secured - n/a $ - -

Other secured 2 n/a $ 0.4 6

Unsecured ^(7) 6 n/a $ 0.1 60

Total $ 634 263

_____________________(1)

COVID-19 loan modifications are not classified as troubled debt restructurings.

(2)

Includes 62 loans totaling $274 million that have completed their deferral period, but for which a regular payment is not yet due.

(3)

Includes 136 loans totaling $328 million that received additional relief beyond their initial modification period.

(4)

Excludes loans that have completed their deferral period and returned to a regular payment schedule or are no longer outstanding. As of June 30, 2021,

$3.4 billion of loans have completed their deferral period or are no longer outstanding, and 99% of the outstanding loans were current.

(5)

Loan modifications requested by borrowers that were in process but not yet completed as of June 30, 2021 totaled $7 million for initial relief, and

$2 million for additional relief beyond the initial modification period.

(6)

Weighted average loan-to-value ("LTV") ratios for real estate secured loans are based on appraised value at the time of origination.

(7)

Consists of household debt refinance loans.

_____________________^ COVID-19 loan modifications are not classified as troubled debt(1) restructurings.

^ Includes 62 loans totaling $274 million that have completed their(2) deferral period, but for which a regular payment is not yet due.

^ Includes 136 loans totaling $328 million that received additional relief(3) beyond their initial modification period.

Excludes loans that have completed their deferral period and returned to a regular payment schedule or are no longer outstanding. As of June 30,^ 2021,(4) $3.4 billion of loans have completed their deferral period or are no longer outstanding, and 99% of the outstanding loans were current.

Loan modifications requested by borrowers that were in process but not^ yet completed as of June 30, 2021 totaled $7 million for initial relief,(5) and

$2 million for additional relief beyond the initial modification period.

^ Weighted average loan-to-value ("LTV") ratios for real estate secured(6) loans are based on appraised value at the time of origination.

^ Consists of household debt refinance loans.(7)

June 30, 2021

Loan Industry Information

Unpaid Principal Balance

LTV

Average Loan Size

Number of Loans

Personal Guarantee %

($ in millions)

Retail

$

1,859

49

%

$

2.6

729

78

%

Hotel

468

48

%

$

7.3

66

76

%

Restaurant (1)

210

49

%

$

1.1

199

95

%

Total (2)

$

2,537

994

June 30, 2021

Loan Industry Unpaid Average Number PersonalInformation Principal LTV Loan of Guarantee Balance Size Loans %

($ in millions)

Retail $ 1,859 49 % $ 2.6 729 78 %

Hotel 468 48 % $ 7.3 66 76 %

Restaurant ^(1) 210 49 % $ 1.1 199 95 %

Total ^(2) $ 2,537 994

_____________________(1)

Approximately 74% of loans to restaurants are real estate secured.

(2)

Amounts in the table above exclude $50 million of loans to hotels and $214 million of loans to restaurants under the PPP.

_____________________^ Approximately 74% of loans to restaurants are real estate secured.(1)

^ Amounts in the table above exclude $50 million of loans to hotels and(2) $214 million of loans to restaurants under the PPP.

As of

Loan Servicing Portfolio

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

($ in millions)

Loans serviced for investors

$

5,640

$

6,314

$

7,094

$

7,799

$

8,316

As of

Loan Servicing June 30, March 31, December September June 30,Portfolio 2021 2021 31, 30, 2020 2020 2020

($ in millions)

Loans serviced for $ 5,640 $ 6,314 $ 7,094 $ 7,799 $ 8,316 investors

Return on Average Common Shareholders' Equity

and Return on Average Tangible Common

Shareholders' Equity (1), (2)

Quarter EndedJune 30,

Quarter EndedMarch 31,

Six Months EndedJune 30,

2021

2020

2021

2021

2020

($ in thousands)

Average common shareholders' equity (a)

$

10,977,612

$

9,330,452

$

10,432,453

$

10,706,538

$

9,194,586

Less: Average goodwill and other intangible assets

225,183

231,934

226,683

225,929

233,006

Average tangible common shareholders' equity (b)

$

10,752,429

$

9,098,518

$

10,205,770

$

10,480,609

$

8,961,580

Net income available to common shareholders (c)

$

349,451

$

241,951

$

316,308

$

665,759

$

447,617

Return on average common shareholders'

equity (c) / (a)

12.77

%

10.43

%

12.30

%

12.54

%

9.79

%

Return on average tangible common shareholders'

equity (c) / (b)

13.04

%

10.70

%

12.57

%

12.81

%

10.04

%

Return onAverageCommon Quarter Ended Quarter Ended Six Months EndedShareholders' June 30, March 31, June 30,Equity

and Return onAverageTangibleCommon 2021 2020 2021 2021 2020Shareholders'Equity ^(1),(2)

($ in thousands)



Averagecommon $ 10,977,612 $ 9,330,452 $ 10,432,453 $ 10,706,538 $ 9,194,586 shareholders'equity (a)

Less: Averagegoodwill andother 225,183 231,934 226,683 225,929 233,006 intangibleassets

Averagetangiblecommon $ 10,752,429 $ 9,098,518 $ 10,205,770 $ 10,480,609 $ 8,961,580 shareholders'equity (b)



Net incomeavailable tocommon $ 349,451 $ 241,951 $ 316,308 $ 665,759 $ 447,617 shareholders(c)



Return onaveragecommonshareholders' 12.77 % 10.43 % 12.30 % 12.54 % 9.79 %

equity (c) /(a)

Return onaveragetangiblecommon 13.04 % 10.70 % 12.57 % 12.81 % 10.04 %shareholders'

equity (c) /(b)

_____________________(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)

Ratios are annualized.

_____________________ Return on average tangible common shareholders' equity is considered a^ non-GAAP financial measure, and is reconciled to GAAP return on average(1) common

shareholders' equity in this table.

^ Ratios are annualized.(2)

As of

Book Value per Common Share and Tangible

Book Value per Common Share (1)

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

(in thousands, except per share amounts)

Total shareholders' equity

$

13,274,727

$

12,941,730

$

11,750,646

$

11,344,609

$

10,575,928

Less: Preferred stock

2,142,500

2,142,500

1,545,000

1,645,000

1,145,000

Total common shareholders' equity (a)

11,132,227

10,799,230

10,205,646

9,699,609

9,430,928

Less: Goodwill and other intangible assets

224,497

225,925

227,512

229,185

230,975

Total tangible common shareholders' equity (b)

$

10,907,730

$

10,573,305

$

9,978,134

$

9,470,424

$

9,199,953

Number of shares of common stock outstanding (c)

176,742

176,287

174,124

172,188

172,094

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

$

62.99

$

61.26

$

58.61

$

56.33

$

54.80

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

$

61.72

$

59.98

$

57.30

$

55.00

$

53.46

As of

Book Valueper CommonShare andTangible June 30, March 31, December 31, September 30, June 30, 2021 2021 2020 2020 2020Book Valueper CommonShare ^(1)

(inthousands,except per shareamounts)



Totalshareholders' $ 13,274,727 $ 12,941,730 $ 11,750,646 $ 11,344,609 $ 10,575,928 equity

Less:Preferred 2,142,500 2,142,500 1,545,000 1,645,000 1,145,000 stock

Total commonshareholders' 11,132,227 10,799,230 10,205,646 9,699,609 9,430,928 equity (a)

Less:Goodwill andother 224,497 225,925 227,512 229,185 230,975 intangibleassets

Totaltangiblecommon $ 10,907,730 $ 10,573,305 $ 9,978,134 $ 9,470,424 $ 9,199,953 shareholders'equity (b)



Number ofshares ofcommon stock 176,742 176,287 174,124 172,188 172,094 outstanding(c)



Book valueper common $ 62.99 $ 61.26 $ 58.61 $ 56.33 $ 54.80 share (a) /(c)

Tangible bookvalue per $ 61.72 $ 59.98 $ 57.30 $ 55.00 $ 53.46 common share(b) / (c)

_____________________(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.

_____________________^ Tangible book value per common share is considered a non-GAAP financial(1) measure, and is reconciled to GAAP book value per common share in this table.

As of

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

June 30,2021 (3)

March 31,2021

December 31,2020

September 30,2020

June 30,2020

($ in thousands)

Capital Ratios:

Tier 1 leverage ratio (Tier 1 capital to average

assets)

8.05

%

8.32

%

8.14

%

8.38

%

8.15

%

Common Equity Tier 1 capital to risk-weighted

assets

9.51

%

9.64

%

9.67

%

9.78

%

9.80

%

Tier 1 capital to risk-weighted assets

11.38

%

11.60

%

11.18

%

11.50

%

11.04

%

Total capital to risk-weighted assets

12.60

%

12.87

%

12.55

%

12.94

%

12.49

%

Regulatory Capital:

Common Equity Tier 1 capital

$

10,875,436

$

10,548,615

$

9,894,870

$

9,375,688

$

9,103,771

Tier 1 capital

$

13,017,936

$

12,691,115

$

11,439,870

$

11,020,688

$

10,248,771

Total capital

$

14,420,504

$

14,082,378

$

12,842,344

$

12,396,304

$

11,604,141

Assets:

Average assets

$

161,636,891

$

152,465,399

$

140,493,283

$

131,517,445

$

125,690,830

Risk-weighted assets

$

114,404,874

$

109,413,168

$

102,321,489

$

95,823,385

$

92,870,859

As of

RegulatoryCapital June 30, March 31, December 31, September 30, June 30,Ratios and 2021 ^(3) 2021 2020 2020 2020Components ^(1), (2)

($ in thousands)



Capital Ratios:

Tier 1leverageratio (Tier 1capital to 8.05 % 8.32 % 8.14 % 8.38 % 8.15 %average

assets)

Common EquityTier 1capital to 9.51 % 9.64 % 9.67 % 9.78 % 9.80 %risk-weighted

assets

Tier 1capital to 11.38 % 11.60 % 11.18 % 11.50 % 11.04 %risk-weightedassets

Total capitalto 12.60 % 12.87 % 12.55 % 12.94 % 12.49 %risk-weightedassets



Regulatory Capital:

Common EquityTier 1 $ 10,875,436 $ 10,548,615 $ 9,894,870 $ 9,375,688 $ 9,103,771 capital

Tier 1 $ 13,017,936 $ 12,691,115 $ 11,439,870 $ 11,020,688 $ 10,248,771 capital

Total capital $ 14,420,504 $ 14,082,378 $ 12,842,344 $ 12,396,304 $ 11,604,141



Assets:

Average $ 161,636,891 $ 152,465,399 $ 140,493,283 $ 131,517,445 $ 125,690,830 assets

Risk-weighted $ 114,404,874 $ 109,413,168 $ 102,321,489 $ 95,823,385 $ 92,870,859 assets

_____________________(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 June 30, 2021 are preliminary.

_____________________^ As defined by regulatory capital rules.(1)

Beginning in 2020, ratios and amounts reflect the Bank's election to delay the estimated impact of the Current Expected Credit Losses ("CECL")^ allowance(2) methodology on its regulatory capital, average assets and risk-weighted assets over a five-year transition period ending December 31, 2024.

^ Ratios and amounts as of June 30, 2021 are preliminary.(3)

As of

Wealth Management Assets

June 30,2021

March 31,2021

December 31,2020

September 30,2020

June 30,2020

($ in millions)

First Republic Investment Management

$

99,459

$

90,819

$

83,596

$

74,661

$

68,124

Brokerage and investment:

Brokerage

112,359

101,478

88,059

76,769

70,178

Money market mutual funds

13,109

11,435

9,003

4,416

5,933

Total brokerage and investment

125,468

112,913

97,062

81,185

76,111

Trust Company:

Trust

11,496

10,986

9,910

8,687

7,905

Custody

4,439

4,216

3,889

3,651

3,646

Total Trust Company

15,935

15,202

13,799

12,338

11,551

Total Wealth Management Assets

$

240,862

$

218,934

$

194,457

$

168,184

$

155,786

View source version on businesswire.com: https://www.businesswire.com/news/home/20210713005427/en/

CONTACT: Investors: Andrew Greenebaum / Lasse Glassen Addo Investor Relations agreenebaum@addoir.com lglassen@addoir.com (310) 829-5400

CONTACT: Media: Greg Berardi Blue Marlin Partners gberardi@firstrepublic.com (415) 239-7826