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First Republic Bank Reports Record Annual And Quarterly Earnings

Stocks in this article: FRC

Asset Quality Remains Very Strong

The Bank’s credit quality remains strong. At December 31, 2012, nonperforming loans were only 14 basis points of total assets and the Bank had no other real estate owned.

During the fourth quarter of 2012, the Bank recorded an additional provision for loan losses of $17.2 million. This provision is related primarily to the growth in loans outstanding that have been originated since July 1, 2010. At December 31, 2012, the allowance related to these loans totaled $114.3 million, or 0.59%.

Net charge-offs were $315,000 for the fourth quarter of 2012 and $1.7 million (only 1 basis point of average loans) for the year ended December 31, 2012.

Continued Capital Strength

The Bank’s Tier 1 leverage ratio increased at December 31, 2012 to 9.32%, compared to 8.81% a year ago. The Bank issued $150 million of 5.625% Noncumulative Perpetual Series C Preferred Stock during the fourth quarter of 2012. During 2012, the Bank raised $500 million of noncumulative perpetual preferred stock with a weighted average rate of 6.23%.

Strong Book Value Growth

Book value per share was $22.08 at December 31, 2012, up 13.5% during 2012.

Continued Franchise Development


Total assets at December 31, 2012 were $34.4 billion. During 2012, loans increased $5.4 billion, of which 57% was in single family loans and related home equity lines of credit. Investment securities increased $686.1 million in 2012.

Deposit mix continues to improve

At December 31, 2012, checking and savings accounts were 89% of total deposits, compared to 82% a year ago. The contractual rate paid on all deposits averaged 0.24% for the fourth quarter of 2012, compared to 0.29% for the prior quarter, with the reduction in the average rate paid coming both from an improved deposit mix and reduced rates paid.

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