Business Wire | Oct 13, 2021 07:02AM EDT

First Republic Reports Third Quarter 2021 Results

Oct. 13, 2021

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

"First Republic had another strong quarter of growth in loans, deposits and wealth management assets," said Jim Herbert, Founder, Chairman and Co-CEO. "Our client-centric business model continues to perform very well across all our segments and markets."

"This was another successful quarter for First Republic," said Hafize Gaye Erkan, Co-CEO and President. "Credit quality remains excellent, further reflecting the safety and stability of First Republic."

Quarterly Highlights

Financial Results

- Year-over-year:

- Revenues were $1.3 billion, up 30.1%.

- Net interest income was $1.1 billion, up 26.7%.

- Net income was $369.7 million, up 26.1%.

- Diluted earnings per share of $1.91, up 18.6%.

- Tangible book value per share was $65.19, up 18.5%.

- Loan originations totaled $15.5 billion, our strongest third quarter ever.

- Net interest margin was 2.65%, compared to 2.68% for the prior quarter.

- Efficiency ratio was 61.3%, compared to 62.0% for the prior quarter.

Continued Capital and Credit Strength

- Tier 1 leverage ratio was 8.55%.

- Nonperforming assets were at a very low 7 basis points of total assets.

- Net charge-offs were only $292,000, or less than 1 basis point of average loans.

Continued Franchise Growth

- Year-over-year:

- Loans totaled $128.4 billion, up 22.5%.

- Deposits were $145.3 billion, up 39.2%.

- Wealth management assets were $251.7 billion, up 49.7%.

- Wealth management revenues were $209.3 million, up 65.1%.

"Revenue and net interest income growth were very strong during the third quarter," said Mike Roffler, Chief Financial Officer. "We're also pleased to have accessed the capital markets twice during the quarter, raising $1.2 billion."

Quarterly Cash Dividend of $0.22 per Share

The Bank declared a cash dividend for the third quarter of $0.22 per share of common stock, which is payable on November 12, 2021 to shareholders of record as of October 28, 2021.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were at a very low 7 basis points of total assets at September 30, 2021. The Bank had modest net loan charge-offs of only $292,000 for the quarter.

During the third quarter, the Bank recorded a provision for credit losses of $34.0 million, which was primarily driven by loan growth.

Continued Book Value Growth and Capital Strength

Book value per common share at September 30, 2021 was $66.44, up 17.9% from a year ago. Tangible book value per common share at September 30, 2021 was $65.19, up 18.5% from a year ago.

The Bank's Tier 1 leverage ratio was 8.55%at September 30, 2021, compared to 8.05% at June 30, 2021.

During the third quarter, the Bank issued $750.0 million of 4.000% Noncumulative Perpetual Series M Preferred Stock, which qualifies as Tier 1 capital.

In addition, the Bank sold 2,300,000 new shares of common stock in an underwritten public offering, which added approximately $443.9 million to common equity.

Total common stock sold and preferred stock issued, net of preferred stock redeemed, added approximately $1.2 billion and $2.1 billion of Tier 1 capital in the third quarter and first nine months of 2021, respectively, and contributed to the 30.5% increase in total equity year-over-year.

Continued Franchise Growth

Loan Originations

Loan originations were $15.5 billion for the quarter, up 26.3% from the same quarter a year ago. This was primarily due to increases in capital call lines of credit and commercial real estate lending.

Single family loan originations were 45% 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 12% of total originations for the quarter and had a weighted average loan-to-value ratio of 47%.

Loans totaled $128.4 billion at September 30, 2021, up 22.5% compared to a year ago, primarily due to increases in single family, capital call lines of credit and multifamily loans, partially offset by a decrease in loans under the Small Business Administration's Paycheck Protection Program ("PPP").

Deposit Growth

Total deposits increased to $145.3 billion, up 39.2% compared to a year ago, and had an average rate paid of 6 basis points during the quarter.

At September 30, 2021, checking deposit balances were 68.8% of total deposits.

Investments

Total investment securities at September 30, 2021 were $24.2 billion, a 5.6% increase compared to the prior quarter and a 29.6% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $28.6 billion at September 30, 2021, and represented 16.7% of quarterly average total assets.

Wealth Management

Total wealth management assets were $251.7 billion at September 30, 2021, up 4.5% compared to the prior quarter and up 49.7% compared to a year ago. The increases in wealth management assets were due to net client inflow and market appreciation.

Wealth management revenues totaled $209.3 million for the quarter, up 65.1% compared to last year's third quarter. Such revenues represented 16.1% of the Bank's total revenues for the quarter.

Wealth management assets at September 30, 2021 included investment management assets of $101.1 billion, brokerage assets and money market mutual funds of $133.9 billion, and trust and custody assets of $16.8 billion.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.3 billion for the quarter, up 30.1% compared to the third quarter a year ago.

Net Interest Income Growth

Net interest income was $1.1 billion for the quarter, up 26.7% compared to the third quarter a year ago. The increase in net interest income resulted primarily from growth in average interest-earning assets, modestly offset by a decrease in net interest margin.

Net Interest Margin

The net interest margin declined to 2.65% in the third quarter, from 2.68% in the prior quarter. The modest decline was primarily due to higher average cash balances during the quarter.

Noninterest Income

Noninterest income was $250.4 million for the quarter, up 46.4% compared to the third quarter a year ago. The increase was primarily driven by higher wealth management fees, partially offset by lower gain on sale of loans. Such gain was elevated in the third quarter a year ago due to realized discounts on previously purchased loans when these loans were sold.

Noninterest Expense and Efficiency Ratio

Noninterest expense was $798.5 million for the quarter, up 31.3% compared to the third quarter a year ago. The increase was primarily due to increased salaries, incentive compensation and benefits, information systems and occupancy costs from the continued investments in the expansion of the franchise, and higher professional fees.

The efficiency ratio was 61.3% for the quarter, compared to 60.7% for the third quarter a year ago. For the first nine months of 2021, the efficiency ratio was 62.2%, compared to 62.0% for the first nine months of 2020.

Income Taxes

The Bank's effective tax rate for the third quarter of 2021 was 21.4%, compared to 19.6% for the third quarter a year ago. The increase was primarily due to the prior year including a tax refund from an amended tax return.

Conference Call Details

First Republic Bank's third quarter 2021 earnings conference call is scheduled for October 13, 2021 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (888) 394-8218 and provide confirmation code 9610366 approximately 15 minutes prior to the start time (to allow time for registration). International callers should dial +1 (856) 344-9221 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 October 13, 2021 at 11:00 a.m. PT / 2:00 p.m. ET through October 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 9610366#. 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 Ended Nine Months Ended September 30, June 30, September 30, (in thousands,except per 2021 2020 2021 2021 2020share amounts)

Interest income:

Loans $ 946,846 $ 811,708 $ 912,885 $ 2,732,901 $ 2,399,646

Investments 161,017 142,971 156,947 458,675 438,055

Other 4,677 6,116 5,103 14,969 18,135

Cash and cash 5,131 1,181 3,070 11,095 5,685 equivalents

Total interest 1,117,671 961,976 1,078,005 3,217,640 2,861,521 income



Interest expense:

Deposits 22,410 54,355 24,096 74,077 245,680

Borrowings 42,977 77,341 50,044 148,632 246,017

Total interest 65,387 131,696 74,140 222,709 491,697 expense



Net interest 1,052,284 830,280 1,003,865 2,994,931 2,369,824 income

Provision for 34,025 28,538 16,143 35,560 122,025 credit losses

Net interestincome afterprovision for 1,018,259 801,742 987,722 2,959,371 2,247,799 credit

losses



Noninterest income:

Investmentmanagement 148,491 96,638 136,516 404,049 281,017 fees

Brokerage andinvestment 22,644 10,796 17,574 54,782 39,028 fees

Insurance fees 5,918 2,216 2,668 11,660 6,086

Trust fees 6,231 4,543 6,245 18,207 14,118

Foreignexchange fee 26,032 12,575 20,612 63,811 34,864 income

Deposit fees 6,849 5,753 6,618 19,636 17,598

Loan and 8,336 7,171 8,877 24,698 20,741 related fees

Loan servicing 548 144 1,057 3,093 (2,649 )fees, net

Gain on sale 140 13,797 58 507 14,575 of loans

Gain (loss) oninvestment 2,139 (405 ) 1,329 4,123 3,752 securities

Income frominvestments in 20,328 20,546 21,457 58,334 36,506 life insurance

Other income 2,702 (2,791 ) 3,597 9,917 960 (loss)

Totalnoninterest 250,358 170,983 226,608 672,817 466,596 income



Noninterest expense:

Salaries andemployee 514,499 373,225 481,503 1,459,406 1,078,633 benefits

Information 90,941 74,549 88,980 263,437 219,301 systems

Occupancy 66,953 55,543 63,526 188,028 164,125

Professional 27,911 19,845 25,475 74,640 48,479 fees

Advertising 13,620 8,909 16,560 42,813 29,373 and marketing

FDIC 13,368 11,003 13,254 38,522 32,463 assessments

Other expenses 71,239 65,136 73,467 214,846 187,311

Totalnoninterest 798,531 608,210 762,765 2,281,692 1,759,685 expense



Income beforeprovision for 470,086 364,515 451,565 1,350,496 954,710 income taxes

Provision for 100,399 71,378 78,459 272,870 186,119 income taxes

Net income 369,687 293,137 373,106 1,077,626 768,591

Dividends onpreferred 24,427 14,816 23,655 66,607 42,653 stock

Net incomeavailable to $ 345,260 $ 278,321 $ 349,451 $ 1,011,019 $ 725,938 commonshareholders



Basic earningsper common $ 1.94 $ 1.62 $ 1.98 $ 5.73 $ 4.23 share

Dilutedearnings per $ 1.91 $ 1.61 $ 1.95 $ 5.66 $ 4.21 common share



Weightedaverage 178,065 172,142 176,419 176,446 171,537 shares-basic

Weightedaverage 180,420 172,932 178,864 178,757 172,514 shares-diluted

CONSOLIDATED BALANCE SHEETS

As of

($ in thousands)

September 30,2021

June 30,2021

December 31,2020

September 30,2020

ASSETS

Cash and cash equivalents

$

12,279,447

$

7,876,952

$

5,094,754

$

3,691,149

Debt securities available-for-sale

2,960,571

2,634,983

1,906,315

1,711,202

Debt securities held-to-maturity, net

21,192,537

20,236,298

16,603,310

16,923,706

Equity securities (fair value)

31,682

29,550

20,566

20,478

Loans:

Single family

73,490,788

69,908,787

61,370,246

56,628,359

Home equity lines of credit

2,429,152

2,441,034

2,449,533

2,431,991

Single family construction

984,835

877,548

787,854

739,091

Multifamily

15,416,780

14,803,219

13,768,957

13,392,531

Commercial real estate

8,486,124

8,234,934

8,018,158

7,781,797

Multifamily/commercial construction

2,064,107

2,060,980

2,024,420

2,038,949

Capital call lines of credit

9,088,424

8,127,473

8,149,946

6,203,877

Tax-exempt

3,577,586

3,566,385

3,365,572

3,276,705

Other business

3,553,875

3,656,598

3,340,048

2,982,532

PPP

876,487

1,374,765

1,841,376

2,091,102

Stock secured

3,120,176

2,965,857

2,518,338

2,311,754

Other secured

2,261,224

2,051,617

1,818,550

1,780,652

Unsecured

3,025,536

3,047,981

3,113,267

3,102,311

Total loans

128,375,094

123,117,178

112,566,265

104,761,651

Allowance for credit losses

(668,186

)

(636,910

)

(635,019

)

(604,747

)

Loans, net

127,706,908

122,480,268

111,931,246

104,156,904

Loans held for sale

3,782

3,169

20,679

33,655

Investments in life insurance

2,627,940

2,597,637

2,061,362

1,949,360

Tax credit investments

1,180,690

1,224,114

1,131,905

1,099,713

Premises, equipment and leasehold improvements, net

430,675

418,725

403,482

390,241

Goodwill and other intangible assets

223,183

224,497

227,512

229,185

Other assets

3,933,088

3,920,541

3,101,003

3,020,178

Total Assets

$

172,570,503

$

161,646,734

$

142,502,134

$

133,225,771

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing checking

$

65,833,005

$

59,449,158

$

46,281,112

$

41,538,676

Interest-bearing checking

34,089,265

32,165,327

30,603,221

26,081,189

Money market checking

21,860,807

20,373,535

16,778,884

15,868,769

Money market savings and passbooks

15,946,902

14,747,597

12,584,522

11,419,289

Certificates of deposit

7,596,366

7,921,218

8,681,061

9,495,453

Total Deposits

145,326,345

134,656,835

114,928,800

104,403,376

Short-term borrowings

-

-

-

5,000

Long-term FHLB advances

7,700,000

9,000,000

11,755,000

13,505,000

Senior notes

997,722

997,193

996,145

995,626

Subordinated notes

778,648

778,535

778,313

778,204

Other liabilities

2,965,994

2,939,444

2,293,230

2,193,956

Total Liabilities

157,768,709

148,372,007

130,751,488

121,881,162

Shareholders' Equity:

Preferred stock

2,892,500

2,142,500

1,545,000

1,645,000

Common stock

1,793

1,767

1,741

1,722

Additional paid-in capital

5,685,384

5,204,166

4,834,172

4,571,499

Retained earnings

6,241,963

5,936,669

5,346,355

5,102,229

Accumulated other comprehensive income (loss)

(19,846

)

(10,375

)

23,378

24,159

Total Shareholders' Equity

14,801,794

13,274,727

11,750,646

11,344,609

Total Liabilities and Shareholders' Equity

$

172,570,503

$

161,646,734

$

142,502,134

$

133,225,771

CONSOLIDATED BALANCE SHEETS

As of

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

ASSETS

Cash and cash $ 12,279,447 $ 7,876,952 $ 5,094,754 $ 3,691,149 equivalents

Debt securities 2,960,571 2,634,983 1,906,315 1,711,202 available-for-sale

Debt securitiesheld-to-maturity, 21,192,537 20,236,298 16,603,310 16,923,706 net

Equity securities 31,682 29,550 20,566 20,478 (fair value)



Loans:

Single family 73,490,788 69,908,787 61,370,246 56,628,359

Home equity lines 2,429,152 2,441,034 2,449,533 2,431,991 of credit

Single family 984,835 877,548 787,854 739,091 construction

Multifamily 15,416,780 14,803,219 13,768,957 13,392,531

Commercial real 8,486,124 8,234,934 8,018,158 7,781,797 estate

Multifamily/commercial 2,064,107 2,060,980 2,024,420 2,038,949 construction

Capital call lines 9,088,424 8,127,473 8,149,946 6,203,877 of credit

Tax-exempt 3,577,586 3,566,385 3,365,572 3,276,705

Other business 3,553,875 3,656,598 3,340,048 2,982,532

PPP 876,487 1,374,765 1,841,376 2,091,102

Stock secured 3,120,176 2,965,857 2,518,338 2,311,754

Other secured 2,261,224 2,051,617 1,818,550 1,780,652

Unsecured 3,025,536 3,047,981 3,113,267 3,102,311

Total loans 128,375,094 123,117,178 112,566,265 104,761,651

Allowance for (668,186 ) (636,910 ) (635,019 ) (604,747 )credit losses

Loans, net 127,706,908 122,480,268 111,931,246 104,156,904



Loans held for sale 3,782 3,169 20,679 33,655

Investments in life 2,627,940 2,597,637 2,061,362 1,949,360 insurance

Tax credit 1,180,690 1,224,114 1,131,905 1,099,713 investments

Premises, equipmentand leasehold 430,675 418,725 403,482 390,241 improvements, net

Goodwill and other 223,183 224,497 227,512 229,185 intangible assets

Other assets 3,933,088 3,920,541 3,101,003 3,020,178

Total Assets $ 172,570,503 $ 161,646,734 $ 142,502,134 $ 133,225,771



LIABILITIES ANDSHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing $ 65,833,005 $ 59,449,158 $ 46,281,112 $ 41,538,676 checking

Interest-bearing 34,089,265 32,165,327 30,603,221 26,081,189 checking

Money market 21,860,807 20,373,535 16,778,884 15,868,769 checking

Money marketsavings and 15,946,902 14,747,597 12,584,522 11,419,289 passbooks

Certificates of 7,596,366 7,921,218 8,681,061 9,495,453 deposit

Total Deposits 145,326,345 134,656,835 114,928,800 104,403,376



Short-term - - - 5,000 borrowings

Long-term FHLB 7,700,000 9,000,000 11,755,000 13,505,000 advances

Senior notes 997,722 997,193 996,145 995,626

Subordinated notes 778,648 778,535 778,313 778,204

Other liabilities 2,965,994 2,939,444 2,293,230 2,193,956

Total Liabilities 157,768,709 148,372,007 130,751,488 121,881,162



Shareholders' Equity:

Preferred stock 2,892,500 2,142,500 1,545,000 1,645,000

Common stock 1,793 1,767 1,741 1,722

Additional paid-in 5,685,384 5,204,166 4,834,172 4,571,499 capital

Retained earnings 6,241,963 5,936,669 5,346,355 5,102,229

Accumulated othercomprehensive (19,846 ) (10,375 ) 23,378 24,159 income (loss)

Total Shareholders' 14,801,794 13,274,727 11,750,646 11,344,609 Equity

Total Liabilitiesand Shareholders' $ 172,570,503 $ 161,646,734 $ 142,502,134 $ 133,225,771 Equity

Quarter Ended September 30,

Quarter Ended June 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

$

13,384

$

5

0.15

%

$

4,428

$

1

0.11

%

$

11,281

$

3

0.11

%

Investment securities:

U.S. Government-sponsored agency

securities

100

0

1.59

%

202

1

2.35

%

100

0

1.59

%

Agency residential and commercial MBS

6,200

28

1.84

%

6,251

37

2.40

%

5,647

29

2.05

%

Other residential and commercial MBS

28

0

2.25

%

38

0

2.13

%

30

0

2.04

%

Tax-exempt municipal securities

14,174

141

3.97

%

11,551

123

4.26

%

13,470

135

4.02

%

Taxable municipal securities

1,670

12

2.98

%

758

6

3.26

%

1,612

12

3.00

%

Other investment securities

1,405

10

2.86

%

45

0

2.76

%

1,376

10

2.85

%

Total investment securities

23,576

192

3.26

%

18,845

168

3.57

%

22,234

187

3.36

%

Loans:

Residential real estate

74,233

520

2.80

%

56,907

422

2.96

%

69,854

491

2.81

%

Multifamily

15,126

135

3.49

%

13,313

125

3.67

%

14,392

127

3.49

%

Commercial real estate

8,357

82

3.82

%

7,802

78

3.93

%

8,117

78

3.82

%

Multifamily/commercial construction

2,963

34

4.54

%

2,740

31

4.37

%

2,969

38

5.00

%

Business

15,928

129

3.17

%

12,538

110

3.45

%

15,894

129

3.21

%

PPP

1,123

12

4.01

%

2,092

11

2.03

%

1,843

15

3.32

%

Other

8,158

43

2.06

%

6,996

42

2.33

%

7,653

42

2.15

%

Total loans

125,887

954

3.00

%

102,386

818

3.16

%

120,722

920

3.03

%

FHLB stock

266

5

6.99

%

458

6

5.31

%

313

5

6.55

%

Total interest-earning assets

163,113

1,156

2.81

%

126,117

994

3.12

%

154,550

1,115

2.87

%

Noninterest-earning cash

392

434

386

Goodwill and other intangibles

224

230

225

Other assets

6,891

5,075

6,724

Total noninterest-earning assets

7,506

5,738

7,335

Total Assets

$

170,619

$

131,855

$

161,885

Liabilities and Shareholders' Equity:

Deposits:

Interest-bearing checking

$

33,642

1

0.01

%

$

25,539

2

0.04

%

$

33,329

2

0.02

%

Money market checking

21,861

6

0.11

%

15,432

8

0.21

%

19,928

6

0.12

%

Money market savings and passbooks

15,831

6

0.16

%

10,788

5

0.20

%

14,783

6

0.17

%

CDs

7,779

9

0.46

%

11,334

38

1.34

%

8,040

10

0.51

%

Total interest-bearing deposits (3)

79,114

22

0.11

%

63,093

54

0.34

%

76,080

24

0.13

%

Borrowings:

Short-term borrowings

0

0

0.09

%

5

0

0.00

%

-

-

-

%

Long-term FHLB advances

8,545

28

1.29

%

14,739

62

1.68

%

10,062

35

1.39

%

Senior notes

997

6

2.42

%

995

6

2.42

%

997

6

2.42

%

Subordinated notes

779

9

4.68

%

778

9

4.68

%

778

9

4.68

%

Total borrowings

10,321

43

1.66

%

16,518

77

1.86

%

11,838

50

1.69

%

Total interest-bearing liabilities (4)

89,434

65

0.29

%

79,611

132

0.66

%

87,918

74

0.34

%

Noninterest-bearing checking

64,008

39,357

58,051

Other noninterest-bearing liabilities

2,904

2,083

2,796

Total noninterest-bearing liabilities

66,912

41,440

60,847

Preferred shareholders' equity

2,729

1,227

2,143

Common shareholders' equity

11,543

9,578

10,978

Total Liabilities and Shareholders' Equity

$

170,619

$

131,855

$

161,885

Net interest spread (5)

2.52

%

2.47

%

2.54

%

Net interest income (fully taxable-equivalent

basis) and net interest margin (6)

$

1,090

2.65

%

$

862

2.71

%

$

1,041

2.68

%

Reconciliation of tax-equivalent net

interest income to net interest income: (7)

Municipal securities tax-equivalent

adjustment

(31

)

(25

)

(30

)

Business loans tax-equivalent adjustment

(7

)

(7

)

(7

)

Net interest income

$

1,052

$

830

$

1,004

Supplemental information:

Total deposits (interest-bearing and

noninterest-bearing)

$

143,122

$

22

0.06

%

$

102,450

$

54

0.21

%

$

134,131

$

24

0.07

%

Total deposits (interest-bearing and

noninterest-bearing) and borrowings

$

153,442

$

65

0.17

%

$

118,968

$

132

0.44

%

$

145,968

$

74

0.20

%

Quarter Ended September 30, Quarter Ended June 30,

2021 2020 2021

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

($ in millions)

Assets:

Interest-bearing $ 13,384 $ 5 0.15 % $ 4,428 $ 1 0.11 % $ 11,281 $ 3 0.11 %deposits with banks

Investment securities:

U.S.Government-sponsoredagency 100 0 1.59 % 202 1 2.35 % 100 0 1.59 %

securities

Agency residential 6,200 28 1.84 % 6,251 37 2.40 % 5,647 29 2.05 %and commercial MBS

Other residential 28 0 2.25 % 38 0 2.13 % 30 0 2.04 %and commercial MBS

Tax-exempt municipal 14,174 141 3.97 % 11,551 123 4.26 % 13,470 135 4.02 %securities

Taxable municipal 1,670 12 2.98 % 758 6 3.26 % 1,612 12 3.00 %securities

Other investment 1,405 10 2.86 % 45 0 2.76 % 1,376 10 2.85 %securities

Total investment 23,576 192 3.26 % 18,845 168 3.57 % 22,234 187 3.36 %securities



Loans:

Residential real 74,233 520 2.80 % 56,907 422 2.96 % 69,854 491 2.81 %estate

Multifamily 15,126 135 3.49 % 13,313 125 3.67 % 14,392 127 3.49 %

Commercial real 8,357 82 3.82 % 7,802 78 3.93 % 8,117 78 3.82 %estate

Multifamily/commercial 2,963 34 4.54 % 2,740 31 4.37 % 2,969 38 5.00 %construction

Business 15,928 129 3.17 % 12,538 110 3.45 % 15,894 129 3.21 %

PPP 1,123 12 4.01 % 2,092 11 2.03 % 1,843 15 3.32 %

Other 8,158 43 2.06 % 6,996 42 2.33 % 7,653 42 2.15 %

Total loans 125,887 954 3.00 % 102,386 818 3.16 % 120,722 920 3.03 %

FHLB stock 266 5 6.99 % 458 6 5.31 % 313 5 6.55 %

Totalinterest-earning 163,113 1,156 2.81 % 126,117 994 3.12 % 154,550 1,115 2.87 %assets



Noninterest-earning 392 434 386 cash

Goodwill and other 224 230 225 intangibles

Other assets 6,891 5,075 6,724

Totalnoninterest-earning 7,506 5,738 7,335 assets

Total Assets $ 170,619 $ 131,855 $ 161,885



Liabilities andShareholders' Equity:

Deposits:

Interest-bearing $ 33,642 1 0.01 % $ 25,539 2 0.04 % $ 33,329 2 0.02 %checking

Money market 21,861 6 0.11 % 15,432 8 0.21 % 19,928 6 0.12 %checking

Money market savings 15,831 6 0.16 % 10,788 5 0.20 % 14,783 6 0.17 %and passbooks

CDs 7,779 9 0.46 % 11,334 38 1.34 % 8,040 10 0.51 %

Totalinterest-bearing 79,114 22 0.11 % 63,093 54 0.34 % 76,080 24 0.13 %deposits ^(3)



Borrowings:

Short-term 0 0 0.09 % 5 0 0.00 % - - - %borrowings

Long-term FHLB 8,545 28 1.29 % 14,739 62 1.68 % 10,062 35 1.39 %advances

Senior notes 997 6 2.42 % 995 6 2.42 % 997 6 2.42 %

Subordinated notes 779 9 4.68 % 778 9 4.68 % 778 9 4.68 %

Total borrowings 10,321 43 1.66 % 16,518 77 1.86 % 11,838 50 1.69 %

Totalinterest-bearing 89,434 65 0.29 % 79,611 132 0.66 % 87,918 74 0.34 %liabilities ^(4)



Noninterest-bearing 64,008 39,357 58,051 checking

Othernoninterest-bearing 2,904 2,083 2,796 liabilities

Totalnoninterest-bearing 66,912 41,440 60,847 liabilities



Preferred 2,729 1,227 2,143 shareholders' equity

Common shareholders' 11,543 9,578 10,978 equity

Total Liabilitiesand Shareholders' $ 170,619 $ 131,855 $ 161,885 Equity



Net interest spread 2.52 % 2.47 % 2.54 %^(5)

Net interest income(fullytaxable-equivalent $ 1,090 2.65 % $ 862 2.71 % $ 1,041 2.68 %

basis) and netinterest margin^ (6)



Reconciliation oftax-equivalent net interest income tonet interest income:^(7)

Municipal securitiestax-equivalent (31 ) (25 ) (30 )

adjustment

Business loanstax-equivalent (7 ) (7 ) (7 ) adjustment

Net interest income $ 1,052 $ 830 $ 1,004



Supplemental information:

Total deposits(interest-bearingand $ 143,122 $ 22 0.06 % $ 102,450 $ 54 0.21 % $ 134,131 $ 24 0.07 %

noninterest-bearing)

Total deposits(interest-bearingand $ 153,442 $ 65 0.17 % $ 118,968 $ 132 0.44 % $ 145,968 $ 74 0.20 %

noninterest-bearing)and borrowings

Nine Months Ended September 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 millions)

Assets:

Interest-bearing deposits with banks

$

12,045

$

11

0.12

%

$

3,029

$

6

0.25

%

Investment securities:

U.S. Government-sponsored agency securities

98

1

1.54

%

241

5

2.63

%

Agency residential and commercial MBS

5,826

88

2.01

%

6,537

127

2.60

%

Other residential and commercial MBS

30

0

2.04

%

23

0

2.40

%

Tax-exempt municipal securities

13,312

403

4.04

%

11,165

361

4.32

%

Taxable municipal securities

1,456

32

2.98

%

709

18

3.34

%

Other investment securities

1,074

22

2.78

%

44

1

2.83

%

Total investment securities

21,795

548

3.35

%

18,719

513

3.65

%

Loans:

Residential real estate

69,880

1,480

2.82

%

53,992

1,231

3.04

%

Multifamily

14,484

385

3.50

%

12,923

364

3.70

%

Commercial real estate

8,170

238

3.84

%

7,699

235

4.00

%

Multifamily/commercial construction

2,933

103

4.63

%

2,641

90

4.49

%

Business

15,636

382

3.22

%

12,666

349

3.62

%

PPP

1,649

43

3.42

%

1,241

18

1.96

%

Other

7,722

124

2.12

%

6,703

131

2.58

%

Total loans

120,476

2,754

3.03

%

97,865

2,420

3.27

%

FHLB stock

307

15

6.51

%

452

18

5.36

%

Total interest-earning assets

154,623

3,328

2.86

%

120,065

2,956

3.26

%

Noninterest-earning cash

397

434

Goodwill and other intangibles

225

232

Other assets

6,572

4,901

Total noninterest-earning assets

7,194

5,567

Total Assets

$

161,817

$

125,633

Liabilities and Shareholders' Equity:

Deposits:

Interest-bearing checking

$

32,993

5

0.02

%

$

22,736

14

0.08

%

Money market checking

20,237

20

0.13

%

14,162

47

0.45

%

Money market savings and passbooks

14,760

19

0.17

%

10,122

26

0.35

%

CDs

8,075

31

0.51

%

12,742

158

1.66

%

Total interest-bearing deposits (3)

76,065

74

0.13

%

59,762

246

0.55

%

Borrowings:

Short-term borrowings

0

0

0.09

%

412

5

1.52

%

Long-term FHLB advances

9,966

103

1.38

%

14,676

197

1.79

%

Senior notes

997

18

2.42

%

919

17

2.44

%

Subordinated notes

778

27

4.68

%

778

27

4.68

%

Total borrowings

11,741

149

1.69

%

16,785

246

1.96

%

Total interest-bearing liabilities (4)

87,806

223

0.34

%

76,547

492

0.86

%

Noninterest-bearing checking

57,961

36,530

Other noninterest-bearing liabilities

2,780

2,060

Total noninterest-bearing liabilities

60,741

38,590

Preferred shareholders' equity

2,281

1,172

Common shareholders' equity

10,989

9,323

Total Liabilities and Shareholders' Equity

$

161,817

$

125,633

Net interest spread (5)

2.52

%

2.41

%

Net interest income (fully taxable-equivalent basis) and

net interest margin (6)

$

3,105

2.67

%

$

2,464

2.72

%

Reconciliation of tax-equivalent net interest income

to net interest income: (7)

Municipal securities tax-equivalent adjustment

(89

)

(75

)

Business loans tax-equivalent adjustment

(21

)

(20

)

Net interest income

$

2,995

$

2,370

Supplemental information:

Total deposits (interest-bearing and noninterest-bearing)

$

134,026

$

74

0.07

%

$

96,292

$

246

0.34

%

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

borrowings

$

145,767

$

223

0.20

%

$

113,077

$

492

0.58

%

Nine Months Ended September 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 millions)

Assets:

Interest-bearing $ 12,045 $ 11 0.12 % $ 3,029 $ 6 0.25 %deposits with banks

Investment securities:

U.S.Government-sponsored 98 1 1.54 % 241 5 2.63 %agency securities

Agency residential 5,826 88 2.01 % 6,537 127 2.60 %and commercial MBS

Other residential 30 0 2.04 % 23 0 2.40 %and commercial MBS

Tax-exempt municipal 13,312 403 4.04 % 11,165 361 4.32 %securities

Taxable municipal 1,456 32 2.98 % 709 18 3.34 %securities

Other investment 1,074 22 2.78 % 44 1 2.83 %securities

Total investment 21,795 548 3.35 % 18,719 513 3.65 %securities



Loans:

Residential real 69,880 1,480 2.82 % 53,992 1,231 3.04 %estate

Multifamily 14,484 385 3.50 % 12,923 364 3.70 %

Commercial real 8,170 238 3.84 % 7,699 235 4.00 %estate

Multifamily/commercial 2,933 103 4.63 % 2,641 90 4.49 %construction

Business 15,636 382 3.22 % 12,666 349 3.62 %

PPP 1,649 43 3.42 % 1,241 18 1.96 %

Other 7,722 124 2.12 % 6,703 131 2.58 %

Total loans 120,476 2,754 3.03 % 97,865 2,420 3.27 %

FHLB stock 307 15 6.51 % 452 18 5.36 %

Totalinterest-earning 154,623 3,328 2.86 % 120,065 2,956 3.26 %assets



Noninterest-earning 397 434 cash

Goodwill and other 225 232 intangibles

Other assets 6,572 4,901

Totalnoninterest-earning 7,194 5,567 assets

Total Assets $ 161,817 $ 125,633



Liabilities andShareholders' Equity:

Deposits:

Interest-bearing $ 32,993 5 0.02 % $ 22,736 14 0.08 %checking

Money market 20,237 20 0.13 % 14,162 47 0.45 %checking

Money market savings 14,760 19 0.17 % 10,122 26 0.35 %and passbooks

CDs 8,075 31 0.51 % 12,742 158 1.66 %

Totalinterest-bearing 76,065 74 0.13 % 59,762 246 0.55 %deposits ^(3)



Borrowings:

Short-term 0 0 0.09 % 412 5 1.52 %borrowings

Long-term FHLB 9,966 103 1.38 % 14,676 197 1.79 %advances

Senior notes 997 18 2.42 % 919 17 2.44 %

Subordinated notes 778 27 4.68 % 778 27 4.68 %

Total borrowings 11,741 149 1.69 % 16,785 246 1.96 %

Totalinterest-bearing 87,806 223 0.34 % 76,547 492 0.86 %liabilities ^(4)



Noninterest-bearing 57,961 36,530 checking

Othernoninterest-bearing 2,780 2,060 liabilities

Totalnoninterest-bearing 60,741 38,590 liabilities



Preferred 2,281 1,172 shareholders' equity

Common shareholders' 10,989 9,323 equity

Total Liabilitiesand Shareholders' $ 161,817 $ 125,633 Equity



Net interest spread 2.52 % 2.41 %^(5)

Net interest income(fullytaxable-equivalentbasis) and $ 3,105 2.67 % $ 2,464 2.72 %

net interest margin^(6)



Reconciliation oftax-equivalent netinterest income

to net interestincome: ^(7)

Municipal securitiestax-equivalent (89 ) (75 ) adjustment

Business loanstax-equivalent (21 ) (20 ) adjustment

Net interest income $ 2,995 $ 2,370



Supplemental information:

Total deposits(interest-bearing $ 134,026 $ 74 0.07 % $ 96,292 $ 246 0.34 %andnoninterest-bearing)

Total deposits(interest-bearingandnoninterest-bearing) $ 145,767 $ 223 0.20 % $ 113,077 $ 492 0.58 %and

borrowings

____________________Note:

Amounts presented in the tables above may not add due to rounding. 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.

____________________ Amounts presented in the tables above may not add due to rounding.Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

Interest income on tax-exempt securities and loans has been adjusted to^(1) the fully taxable-equivalent basis using the statutory federal income tax rate in effect for each respective period presented.

^(2) Yields/rates are annualized.

Refer to supplemental information in this table for average balances,^(3) interest expense and rates for total deposits (interest-bearing and noninterest-bearing).

Refer to supplemental information in this table for average balances,^(4) 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.

Net interest margin represents net interest income on a fully^(6) taxable-equivalent basis divided by total average interest-earning assets.

Fully taxable-equivalent net interest income is considered a non-GAAP^(7) financial measure, and is reconciled to GAAP net interest income in this table.

Quarter Ended September 30,

Quarter Ended June 30,

Nine Months Ended September 30,

Selected Financial Data and Ratios

2021

2020

2021

2021

2020

($ in thousands, except per share amounts)

Return on average assets (1), (2)

0.86

%

0.88

%

0.92

%

0.89

%

0.82

%

Return on average common shareholders' equity (1)

11.87

%

11.56

%

12.77

%

12.30

%

10.40

%

Return on average tangible common shareholders'

equity (1), (3)

12.10

%

11.84

%

13.04

%

12.56

%

10.67

%

Average equity to average assets

8.37

%

8.19

%

8.10

%

8.20

%

8.35

%

Dividends per common share

$

0.22

$

0.20

$

0.22

$

0.64

$

0.59

Dividend payout ratio

11.5

%

12.4

%

11.3

%

11.3

%

14.0

%

Book value per common share

$

66.44

$

56.33

$

62.99

$

66.44

$

56.33

Tangible book value per common share (4)

$

65.19

$

55.00

$

61.72

$

65.19

$

55.00

Efficiency ratio (5)

61.3

%

60.7

%

62.0

%

62.2

%

62.0

%

Net loan charge-offs

$

292

$

1,687

$

1,219

$

1,998

$

2,987

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

0.00

%

0.01

%

0.00

%

0.00

%

0.00

%

Allowance for loan credit losses to:

Total loans

0.52

%

0.58

%

0.52

%

0.52

%

0.58

%

Nonaccrual loans

524.4

%

368.2

%

479.3

%

524.4

%

368.2

%

Quarter Ended Quarter Nine Months Ended September 30, Ended September 30, June 30,

Selected Financial 2021 2020 2021 2021 2020Data and Ratios

($ in thousands,except per share amounts)

Return on average 0.86 % 0.88 % 0.92 % 0.89 % 0.82 %assets ^(1), (2)

Return on averagecommon 11.87 % 11.56 % 12.77 % 12.30 % 10.40 %shareholders'equity ^(1)

Return on averagetangible commonshareholders' 12.10 % 11.84 % 13.04 % 12.56 % 10.67 %

equity ^(1), (3)

Average equity to 8.37 % 8.19 % 8.10 % 8.20 % 8.35 %average assets

Dividends per $ 0.22 $ 0.20 $ 0.22 $ 0.64 $ 0.59 common share

Dividend payout 11.5 % 12.4 % 11.3 % 11.3 % 14.0 %ratio

Book value per $ 66.44 $ 56.33 $ 62.99 $ 66.44 $ 56.33 common share

Tangible book valueper common share ^ $ 65.19 $ 55.00 $ 61.72 $ 65.19 $ 55.00 (4)

Efficiency ratio ^ 61.3 % 60.7 % 62.0 % 62.2 % 62.0 %(5)



Net loan $ 292 $ 1,687 $ 1,219 $ 1,998 $ 2,987 charge-offs

Net loancharge-offs to 0.00 % 0.01 % 0.00 % 0.00 % 0.00 %average total loans^(1)



Allowance for loan credit losses to:

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

Nonaccrual loans 524.4 % 368.2 % 479.3 % 524.4 % 368.2 %

____________________(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(3) a 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(4) Share" table in this document for a reconciliation of this non-GAAP 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 September 30,

Quarter Ended June 30,

Nine Months Ended September 30,

Effective Tax Rate

2021

2020

2021

2021

2020

Effective tax rate, prior to excess tax benefits-stock

awards and tax refund from an amended tax return

23.2

%

21.1

%

21.7

%

22.5

%

21.6

%

Excess tax benefits-stock awards

(1.8

)

(0.2

)

(4.3

)

(2.3

)

(1.6

)

Tax refund from an amended tax return

-

(1.3

)

-

-

(0.5

)

Effective tax rate

21.4

%

19.6

%

17.4

%

20.2

%

19.5

%

Quarter Ended Quarter Nine Months September 30, Ended Ended June 30, September 30,

Effective Tax Rate 2021 2020 2021 2021 2020

Effective tax rate, prior toexcess tax benefits-stock 23.2 % 21.1 % 21.7 % 22.5 % 21.6 %awards and tax refund from anamended tax return

Excess tax benefits-stock awards (1.8 ) (0.2 ) (4.3 ) (2.3 ) (1.6 )

Tax refund from an amended tax - (1.3 ) - - (0.5 )return

Effective tax rate 21.4 % 19.6 % 17.4 % 20.2 % 19.5 %

Provision (Reversal of Provision) for Credit Losses

Quarter Ended September 30,

Quarter Ended June 30,

Nine Months Ended September 30,

2021

2020

2021

2021

2020

($ in thousands)

Debt securities held-to-maturity

$

296

$

333

$

383

$

1,801

$

1,047

Loans

31,568

22,437

17,304

35,165

113,305

Unfunded loan commitments

2,161

5,768

(1,544

)

(1,406

)

7,673

Total provision

$

34,025

$

28,538

$

16,143

$

35,560

$

122,025

Provision Quarter Ended Quarter Nine Months Ended(Reversal of September 30, Ended September 30,Provision) for June 30,Credit Losses 2021 2020 2021 2021 2020

($ in thousands)

Debt securities $ 296 $ 333 $ 383 $ 1,801 $ 1,047held-to-maturity

Loans 31,568 22,437 17,304 35,165 113,305

Unfunded loan 2,161 5,768 (1,544 ) (1,406 ) 7,673 commitments

Total provision $ 34,025 $ 28,538 $ 16,143 $ 35,560 $ 122,025

Quarter Ended September 30,

Quarter Ended June 30,

Nine Months Ended September 30,

Mortgage Loan Sales

2021

2020

2021

2021

2020

($ in thousands)

Loans sold:

Flow sales:

Agency

$

17,544

$

44,118

$

4,315

$

64,261

$

80,702

Non-agency

-

-

-

1,073

31,870

Total flow sales

17,544

44,118

4,315

65,334

112,572

Bulk sales:

Non-agency

-

235,732

-

-

673,401

Securitizations

-

-

-

-

300,116

Total loans sold

$

17,544

$

279,850

$

4,315

$

65,334

$

1,086,089

Gain on sale of loans:

Amount (1)

$

140

$

13,797

$

58

$

507

$

14,575

Gain as a percentage of loans sold

0.80

%

4.93

%

1.34

%

0.78

%

1.34

%

Quarter Ended Quarter Nine Months Ended September 30, Ended September 30, June 30,

Mortgage Loan 2021 2020 2021 2021 2020Sales

($ in thousands)

Loans sold:

Flow sales:

Agency $ 17,544 $ 44,118 $ 4,315 $ 64,261 $ 80,702

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

Total flow 17,544 44,118 4,315 65,334 112,572 sales



Bulk sales:

Non-agency - 235,732 - - 673,401



Securitizations - - - - 300,116



Total loans $ 17,544 $ 279,850 $ 4,315 $ 65,334 $ 1,086,089 sold



Gain on sale of loans:

Amount ^(1) $ 140 $ 13,797 $ 58 $ 507 $ 14,575

Gain as apercentage of 0.80 % 4.93 % 1.34 % 0.78 % 1.34 %loans sold

____________________(1)

The gain for the quarter and nine months ended September 30, 2020 included $10.3 million related to realized discounts on previously purchased loans when these loans were sold.

____________________^ The gain for the quarter and nine months ended September 30, 2020(1) included $10.3 million related to realized discounts on previously purchased loans when these loans were sold.

Quarter Ended September 30,

Quarter Ended June 30,

Nine Months Ended September 30,

Loan Originations

2021

2020

2021

2021

2020

($ in thousands)

Single family

$

6,998,315

$

6,813,850

$

8,661,680

$

22,562,187

$

16,208,370

Home equity lines of credit

588,488

432,443

610,658

1,822,807

1,285,688

Single family construction

283,278

186,833

215,014

722,796

415,313

Multifamily

1,199,660

955,951

1,101,450

3,092,180

2,684,074

Commercial real estate

724,777

193,228

458,196

1,496,964

975,769

Multifamily/commercial construction

355,981

245,220

272,145

938,950

997,555

Capital call lines of credit

3,128,180

1,803,907

2,921,192

9,180,689

5,594,483

Tax-exempt

38,100

328,711

208,327

460,394

612,784

Other business

533,709

243,788

520,394

2,079,257

1,777,824

PPP

-

-

35,586

724,534

1,981,797

Stock secured

753,409

685,250

775,795

2,239,242

1,797,226

Other secured

546,286

189,386

598,630

1,583,905

961,940

Unsecured

303,916

159,379

372,192

1,021,956

685,537

Total loans originated

$

15,454,099

$

12,237,946

$

16,751,259

$

47,925,861

$

35,978,360

Quarter Ended Quarter Ended Nine Months Ended September 30, June 30, September 30,

Loan 2021 2020 2021 2021 2020Originations

($ in thousands)

Single $ 6,998,315 $ 6,813,850 $ 8,661,680 $ 22,562,187 $ 16,208,370 family

Home equitylines of 588,488 432,443 610,658 1,822,807 1,285,688 credit

Singlefamily 283,278 186,833 215,014 722,796 415,313 construction

Multifamily 1,199,660 955,951 1,101,450 3,092,180 2,684,074

Commercial 724,777 193,228 458,196 1,496,964 975,769 real estate

Multifamily/commercial 355,981 245,220 272,145 938,950 997,555 construction

Capital calllines of 3,128,180 1,803,907 2,921,192 9,180,689 5,594,483 credit

Tax-exempt 38,100 328,711 208,327 460,394 612,784

Other 533,709 243,788 520,394 2,079,257 1,777,824 business

PPP - - 35,586 724,534 1,981,797

Stock 753,409 685,250 775,795 2,239,242 1,797,226 secured

Other 546,286 189,386 598,630 1,583,905 961,940 secured

Unsecured 303,916 159,379 372,192 1,021,956 685,537

Total loans $ 15,454,099 $ 12,237,946 $ 16,751,259 $ 47,925,861 $ 35,978,360 originated

As of

Asset Quality Information

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

($ in thousands)

Nonperforming assets:

Nonaccrual loans

$

127,430

$

132,880

$

172,794

$

184,132

$

164,247

Other real estate owned

-

-

1,334

-

-

Total nonperforming assets

$

127,430

$

132,880

$

174,128

$

184,132

$

164,247

Nonperforming assets to total assets

0.07

%

0.08

%

0.11

%

0.13

%

0.12

%

Accruing loans 90 days or more past due

$

-

$

-

$

851

$

-

$

935

Restructured accruing loans

$

10,197

$

11,407

$

11,658

$

11,253

$

11,378

As of

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

($ in thousands)

Nonperforming assets:

Nonaccrual $ 127,430 $ 132,880 $ 172,794 $ 184,132 $ 164,247 loans

Other real - - 1,334 - - estate owned

Totalnonperforming $ 127,430 $ 132,880 $ 174,128 $ 184,132 $ 164,247 assets



Nonperformingassets to 0.07 % 0.08 % 0.11 % 0.13 % 0.12 %total assets



Accruingloans 90 days $ - $ - $ 851 $ - $ 935 or more pastdue



Restructuredaccruing $ 10,197 $ 11,407 $ 11,658 $ 11,253 $ 11,378 loans

September 30, 2021

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

Unpaid Principal Balance

LTV (5)

Average Loan Size

Number of Loans

($ in millions)

Single family

$

64

61

%

$

1.2

54

Home equity lines of credit

0

60

%

$

0.2

1

Single family construction

3

75

%

$

2.6

1

Multifamily

30

63

%

$

30.4

1

Commercial real estate

91

48

%

$

4.6

20

Multifamily/commercial construction

-

n/a

$

-

-

Capital call lines of credit

-

n/a

$

-

-

Tax-exempt

7

n/a

$

3.3

2

Other business

6

n/a

$

1.6

4

Stock secured

-

n/a

$

-

-

Other secured

2

n/a

$

0.3

6

Unsecured (6)

3

n/a

$

0.1

26

Total

$

206

115

September 30, 2021

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

($ in millions)

Single family $ 64 61 % $ 1.2 54

Home equity lines of credit 0 60 % $ 0.2 1

Single family construction 3 75 % $ 2.6 1

Multifamily 30 63 % $ 30.4 1

Commercial real estate 91 48 % $ 4.6 20

Multifamily/commercial construction - n/a $ - -

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

Tax-exempt 7 n/a $ 3.3 2

Other business 6 n/a $ 1.6 4

Stock secured - n/a $ - -

Other secured 2 n/a $ 0.3 6

Unsecured ^(6) 3 n/a $ 0.1 26

Total $ 206 115

____________________(1)

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

(2)

Includes 23 loans totaling $23 million that have completed their deferral period, but for which a regular payment is not yet due.

(3)

Includes 83 loans totaling $177 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 September 30, 2021, $3.6 billion of loans have completed their deferral period or are no longer outstanding, and 99% of the outstanding loans were current.

(5)

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

(6)

Consists of household debt refinance loans.

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

^ Includes 23 loans totaling $23 million that have completed their deferral(2) period, but for which a regular payment is not yet due.

^ Includes 83 loans totaling $177 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 September(4) 30, 2021, $3.6 billion of loans have completed their deferral period or are no longer outstanding, and 99% of the outstanding loans were current.

^ Weighted average loan-to-value ("LTV") ratios for real estate secured(5) loans are based on appraised value at the time of origination.

^ Consists of household debt refinance loans.(6)

September 30, 2021

Loan Industry Information

Unpaid Principal Balance

LTV

Average Loan Size

Number of Loans

Personal Guarantee %

($ in millions)

Retail

$

1,903

49

%

$

2.6

744

80

%

Hotel

523

46

%

$

7.9

68

78

%

Restaurant (1)

174

48

%

$

0.9

205

94

%

Total (2)

$

2,600

1,017

September 30, 2021

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

($ in millions)

Retail $ 1,903 49 % $ 2.6 744 80 %

Hotel 523 46 % $ 7.9 68 78 %

Restaurant ^(1) 174 48 % $ 0.9 205 94 %

Total ^(2) $ 2,600 1,017

____________________(1)

Approximately 78% of loans to restaurants are real estate secured.

(2)

Amounts in the table above exclude $36 million of loans to hotels and $170 million of loans to restaurants under the PPP.

____________________^ Approximately 78% of loans to restaurants are real estate secured.(1)

^ Amounts in the table above exclude $36 million of loans to hotels and $170(2) million of loans to restaurants under the PPP.

As of

Loan Servicing Portfolio

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

($ in millions)

Loans serviced for investors

$

5,117

$

5,640

$

6,314

$

7,094

$

7,799

As of

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

($ in millions)

Loans serviced for $ 5,117 $ 5,640 $ 6,314 $ 7,094 $ 7,799 investors

Return on Average Common Shareholders' Equity

and Return on Average Tangible Common

Shareholders' Equity (1), (2)

Quarter Ended September 30,

Quarter Ended June 30,

Nine Months Ended September 30,

2021

2020

2021

2021

2020

($ in thousands)

Average common shareholders' equity (a)

$

11,543,395

$

9,578,173

$

10,977,612

$

10,988,556

$

9,323,381

Less: Average goodwill and other intangible assets

223,816

230,051

225,183

225,217

232,014

Average tangible common shareholders' equity (b)

$

11,319,579

$

9,348,122

$

10,752,429

$

10,763,339

$

9,091,367

Net income available to common shareholders (c)

$

345,260

$

278,321

$

349,451

$

1,011,019

$

725,938

Return on average common shareholders'

equity (c) / (a)

11.87

%

11.56

%

12.77

%

12.30

%

10.40

%

Return on average tangible common shareholders'

equity (c) / (b)

12.10

%

11.84

%

13.04

%

12.56

%

10.67

%

Return onAverageCommon Quarter Ended Quarter Ended Nine Months EndedShareholders' September 30, June 30, September 30,Equity

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

($ in thousands)



Averagecommon $ 11,543,395 $ 9,578,173 $ 10,977,612 $ 10,988,556 $ 9,323,381 shareholders'equity (a)

Less: Averagegoodwill andother 223,816 230,051 225,183 225,217 232,014 intangibleassets

Averagetangiblecommon $ 11,319,579 $ 9,348,122 $ 10,752,429 $ 10,763,339 $ 9,091,367 shareholders'equity (b)



Net incomeavailable tocommon $ 345,260 $ 278,321 $ 349,451 $ 1,011,019 $ 725,938 shareholders(c)



Return onaveragecommonshareholders' 11.87 % 11.56 % 12.77 % 12.30 % 10.40 %

equity (c) /(a)

Return onaveragetangiblecommon 12.10 % 11.84 % 13.04 % 12.56 % 10.67 %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(1) non-GAAP financial measure, and is reconciled to GAAP return on average 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)

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

(in thousands, except per share amounts)

Total shareholders' equity

$

14,801,794

$

13,274,727

$

12,941,730

$

11,750,646

$

11,344,609

Less: Preferred stock

2,892,500

2,142,500

2,142,500

1,545,000

1,645,000

Total common shareholders' equity (a)

11,909,294

11,132,227

10,799,230

10,205,646

9,699,609

Less: Goodwill and other intangible assets

223,183

224,497

225,925

227,512

229,185

Total tangible common shareholders' equity (b)

$

11,686,111

$

10,907,730

$

10,573,305

$

9,978,134

$

9,470,424

Number of shares of common stock outstanding (c)

179,261

176,742

176,287

174,124

172,188

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

$

66.44

$

62.99

$

61.26

$

58.61

$

56.33

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

$

65.19

$

61.72

$

59.98

$

57.30

$

55.00

As of

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

(inthousands,except per shareamounts)



Totalshareholders' $ 14,801,794 $ 13,274,727 $ 12,941,730 $ 11,750,646 $ 11,344,609 equity

Less:Preferred 2,892,500 2,142,500 2,142,500 1,545,000 1,645,000 stock

Total commonshareholders' 11,909,294 11,132,227 10,799,230 10,205,646 9,699,609 equity (a)

Less:Goodwill andother 223,183 224,497 225,925 227,512 229,185 intangibleassets

Totaltangiblecommon $ 11,686,111 $ 10,907,730 $ 10,573,305 $ 9,978,134 $ 9,470,424 shareholders'equity (b)



Number ofshares ofcommon stock 179,261 176,742 176,287 174,124 172,188 outstanding(c)



Book valueper common $ 66.44 $ 62.99 $ 61.26 $ 58.61 $ 56.33 share (a) /(c)

Tangible bookvalue per $ 65.19 $ 61.72 $ 59.98 $ 57.30 $ 55.00 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)

September 30, 2021 (3)

June 30,2021

March 31,2021

December 31,2020

September 30,2020

($ in thousands)

Capital Ratios:

Tier 1 leverage ratio (Tier 1 capital to average

assets)

8.55

%

8.05

%

8.32

%

8.14

%

8.38

%

Common Equity Tier 1 capital to risk-weighted

assets

9.61

%

9.51

%

9.64

%

9.67

%

9.78

%

Tier 1 capital to risk-weighted assets

11.99

%

11.38

%

11.60

%

11.18

%

11.50

%

Total capital to risk-weighted assets

13.16

%

12.60

%

12.87

%

12.55

%

12.94

%

Regulatory Capital:

Common Equity Tier 1 capital

$

11,673,889

$

10,875,436

$

10,548,615

$

9,894,870

$

9,375,688

Tier 1 capital

$

14,566,389

$

13,017,936

$

12,691,115

$

11,439,870

$

11,020,688

Total capital

$

15,994,370

$

14,420,504

$

14,082,378

$

12,842,344

$

12,396,304

Assets:

Average assets

$

170,373,171

$

161,636,891

$

152,465,399

$

140,493,283

$

131,517,445

Risk-weighted assets

$

121,515,782

$

114,405,537

$

109,413,168

$

102,321,489

$

95,823,385

As of

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

($ in thousands)



Capital Ratios:

Tier 1leverageratio (Tier 1capital to 8.55 % 8.05 % 8.32 % 8.14 % 8.38 %average

assets)

Common EquityTier 1capital to 9.61 % 9.51 % 9.64 % 9.67 % 9.78 %risk-weighted

assets

Tier 1capital to 11.99 % 11.38 % 11.60 % 11.18 % 11.50 %risk-weightedassets

Total capitalto 13.16 % 12.60 % 12.87 % 12.55 % 12.94 %risk-weightedassets



Regulatory Capital:

Common EquityTier 1 $ 11,673,889 $ 10,875,436 $ 10,548,615 $ 9,894,870 $ 9,375,688 capital

Tier 1 $ 14,566,389 $ 13,017,936 $ 12,691,115 $ 11,439,870 $ 11,020,688 capital

Total capital $ 15,994,370 $ 14,420,504 $ 14,082,378 $ 12,842,344 $ 12,396,304



Assets:

Average $ 170,373,171 $ 161,636,891 $ 152,465,399 $ 140,493,283 $ 131,517,445 assets

Risk-weighted $ 121,515,782 $ 114,405,537 $ 109,413,168 $ 102,321,489 $ 95,823,385 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 September 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")(2) allowance 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 September 30, 2021 are preliminary.(3)

As of

Wealth Management Assets

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

($ in millions)

First Republic Investment Management

$

101,105

$

99,459

$

90,819

$

83,596

$

74,661

Brokerage and investment:

Brokerage

115,793

112,359

101,478

88,059

76,769

Money market mutual funds

18,074

13,109

11,435

9,003

4,416

Total brokerage and investment

133,867

125,468

112,913

97,062

81,185

Trust Company:

Trust

12,220

11,496

10,986

9,910

8,687

Custody

4,533

4,439

4,216

3,889

3,651

Total Trust Company

16,753

15,935

15,202

13,799

12,338

Total Wealth Management Assets

$

251,725

$

240,862

$

218,934

$

194,457

$

168,184

View source version on businesswire.com: https://www.businesswire.com/news/home/20211013005361/en/

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

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