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First Republic Bank Reports Record Annual And Quarterly Earnings

First Republic Bank (NYSE: FRC) today announced strong financial results for the fourth quarter and the year ended December 31, 2012.

“First Republic had a terrific year by every performance measure,” said Jim Herbert, Chairman and Chief Executive Officer. “Core earnings per share increased 28% in 2012, while loans, deposits, business banking and wealth management assets all grew strongly. Credit quality and capital ratios are strong.”

2012 Full Year Highlights

  • Book value per share increased by 13.5% to $22.08.
  • Tier 1 leverage ratio increased to 9.32%, up from 8.81% a year ago.
  • Asset quality remains very strong; nonperforming assets were only 14 basis points of total assets.
  • Net income was a record $402.5 million, an increase of 14%, and diluted earnings per share (“EPS”) were $2.76.
  • Excluding the impact of purchase accounting, net income was $307.0 million, up 38%. (1)
  • Excluding the impact of purchase accounting and the one-time charge on redemption of preferred stock in the second quarter, core diluted EPS were $2.15, up 28%. (1)
  • Excluding the impact of purchase accounting, the net interest margin was 3.53% in 2012 and 2011. (1)
  • Loan originations were a record $15.5 billion.
  • Loans outstanding were $28.5 billion at December 31, 2012, up 23%.
  • Deposits were $27.1 billion at December 31, 2012, up 21%.
  • Wealth management assets were $31.7 billion, including $5.9 billion from the Luminous Capital Holdings, LLC (“Luminous”) acquisition, up 55%.
  • A dividend on our common stock was initiated in the third quarter of 2012.

Fourth Quarter Highlights

  • Net income was $110.1 million, up 21% from last year’s fourth quarter. Diluted EPS were $0.77, up 13% from last year’s fourth quarter.
  • Excluding the impact of purchase accounting, net income was $89.3 million, up 51% from last year’s fourth quarter and diluted EPS were $0.61, up 39% from last year’s fourth quarter. (1)
  • Net interest margin was 4.02%, compared to 4.13% for the prior quarter.
  • Excluding the impact of purchase accounting, the net interest margin was 3.46%, compared to 3.47% for the prior quarter. (1)
  • The efficiency ratio was 51.2%, compared to 52.1% for the prior quarter.
  • Excluding the impact of purchase accounting, the efficiency ratio was 56.2%, versus 58.6% for the prior quarter. (1)
  • Loan originations were $4.3 billion, our highest quarter ever.
  • Loans sold were $671 million for the quarter and pre-tax net gains on sales were $17.7 million, compared to sales of $774 million and pre-tax gains of $12.5 million for the prior quarter.

“First Republic’s success in 2012 was due to its intense focus on exceptional client service coupled with disciplined asset underwriting,” said Katherine August-deWilde, President and Chief Operating Officer. “We’re particularly pleased with the robust growth of business banking and wealth management assets, including those acquired in the Luminous transaction.”

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