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First Republic Reports Strong Second Quarter Results

At June 30, 2012, checking and savings accounts were 86% of total deposits, compared to 82% at year-end. Such accounts increased 13% since year-end, from $18.5 billion to $20.8 billion.

The contractual rate paid on all deposits averaged 0.38% during the second quarter of 2012, compared to 0.40% for the first quarter of 2012 and 0.73% during the second quarter a year ago, with the reduction in the average rate paid coming both from an improved deposit mix and lower market rates of interest.

At June 30, 2012, 96% of deposits were core deposits (excluding CDs greater than $250,000 and any brokered deposits).

Wealth management expansion

Total wealth management assets were $23.3 billion at June 30, 2012, up 6% for the quarter and 14% since year-end. Fees earned on wealth management assets, including investment advisory, trust and brokerage fees, were up 25% in the second quarter of 2012 compared to last year’s second quarter.

The Bank offers investment management services for individuals, endowments, businesses and 401(k) plans through First Republic Investment Management. At June 30, 2012, clients had $9.9 billion of assets under management, up 11% for the quarter and 25% since year-end.

Client assets held at First Republic Securities Company and in money market mutual funds were $8.4 billion at June 30, 2012, flat compared to the prior quarter and up 8% since year-end.

The Bank also offers personal trust and custody services through First Republic Trust Company. At June 30, 2012, First Republic Trust Company administered $4.9 billion of trust and custody assets, up 6% for the quarter and 7% since year-end.

Mortgage banking and servicing activity

The Bank sold $436 million of longer-term, fixed-rate home loans during the second quarter of 2012 and recorded net gains of $4.8 million. By comparison, during the second quarter a year ago, the Bank sold $266 million of loans and recorded net gains of $427,000. The higher level of gain on sales was driven primarily by improving secondary market conditions for the Bank’s single family loans.

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