Net Interest Income Grew 17% Year-Over-Year

Tangible Book Value Per Share Increased 11% Year-Over-Year

First Republic Bank (NYSE:FRC) today announced financial results for the quarter and year ended December 31, 2022.

"2022 was another terrific year of safe, consistent and organic growth," said Mike Roffler, Chief Executive Officer and President. "We achieved our highest Net Promoter Score ever, which reflects our unwavering focus on exceptional client service."

Full Year Highlights

Financial Results

Revenues were $5.9 billion, up 16.5%.
Net interest income was $4.8 billion, up 17.5%.
Net income was $1.7 billion, up 12.7%.
Diluted earnings per share of $8.25, up 7.4%.
Loan originations totaled $73.4 billion, our best year ever.
Book value per share was $75.38, up 10.3%.
Tangible book value per share was $74.19, up 10.6%. ⁽¹⁾
Efficiency ratio was 61.7%, compared to 62.5% last year.

Continued Capital and Credit Strength

Tier 1 leverage ratio was 8.51%.
Nonperforming assets were a low 5 basis points of total assets.
Net charge-offs were only $2.9 million, or less than 1 basis point of average loans.

Continued Franchise Growth

Loans totaled $166.9 billion, up 23.6%.
Deposits were $176.4 billion, up 12.9%.
Wealth management assets were $271.2 billion, down 2.9%.
Wealth management revenues were $877 million, up 15.4%.

Quarterly Highlights

Financial Results

Compared to last year's fourth quarter:
- Revenues were $1.4 billion, up 5.2%.
- Net interest income was $1.2 billion, up 4.9%.
- Net income was $386 million, down 3.6%.
- Diluted earnings per share of $1.88, down 6.9%.
Loan originations totaled $15.6 billion.
Net charge-offs were $0.9 million.
Compared to the prior quarter:
- Net interest margin was 2.45%, compared to 2.71%.
- Efficiency ratio was 63.9%, compared to 60.3%.
- Wealth management assets were up 8.7%

"Revenue and net interest income growth were strong in 2022," said Neal Holland, Chief Financial Officer. "Credit quality remains excellent, with nonperforming assets near all-time lows. Tangible book value per share increased 11%."

Quarterly Cash Dividend of $0.27 per Share

The Bank declared a cash dividend for the fourth quarter of $0.27 per share of common stock, which is payable on February 9, 2023 to shareholders of record as of January 26, 2023.

Strong Asset Quality

Credit quality remains strong. Nonperforming assets were at a very low 5 basis points of total assets at December 31, 2022.

The provision for credit losses for the quarter was $30 million, with net loan charge-offs of only $0.9 million for the quarter. For the year, the provision for credit losses was $107 million, with net loan charge-offs of only $2.9 million.

Continued Book Value Growth

Book value per common share at December 31, 2022 was $75.38, up 10.3% from a year ago. Tangible book value per common share at December 31, 2022 was $74.19, up 10.6% from a year ago. ⁽¹⁾

Capital Strength

The Bank's Tier 1 leverage ratio was 8.51%at December 31, 2022, compared to 8.59% at September 30, 2022.

Continued Franchise Growth

Loan Originations

Loan originations were $15.6 billion for the quarter. This was down 7.5% from the same quarter a year ago. For 2022, loan originations totaled $73.4 billion, up 13.2% compared to the prior year. The decrease for the quarter was primarily due to decreases in capital call lines of credit and single family lending. The increase for the year was primarily due to increases in single family, multifamily and commercial real estate lending.

Single family loan originations were 38% of the total loan origination volume for the quarter and 43% for the year, and had a weighted average loan-to-value ratio of 61% for the year. Multifamily and commercial real estate loans originated were 16% of total originations for both the quarter and the year, and had a weighted average loan-to-value ratio of 51% for the year. In addition, capital call lines of credit originated were 16% of total originations for both the quarter and the year.

Loans totaled $166.9 billion at December 31, 2022, up 23.6% compared to a year ago. The increase was driven by growth in substantially all loan categories, partially offset by lower capital call lines of credit outstanding.

Investments

Total investment securities at December 31, 2022 were $31.7 billion, a slight increase compared to September 30, 2022 and a 23.4% increase compared to a year ago.

High-quality liquid assets, including eligible cash, totaled $26.0 billion at December 31, 2022, and represented 12.6% of quarterly average total assets.

Deposit Growth and Funding

Total deposits increased to $176.4 billion, up 12.9% compared to a year ago. Deposits were our primary source of funding at December 31, 2022, and represented 92% of our large funding base.

At December 31, 2022, our deposit base consisted of 58.8% checking deposits, 26.9% other liquid deposits including money market checking and money market savings and passbooks, and 14.3% CDs.

Other sources of funding at December 31, 2022 included short-term and long-term FHLB advances, which totaled $14.0 billion.

Deposits had an average rate paid of 99 basis points during the quarter, and average total funding costs were 112 basis points during the quarter.

Wealth Management

Total wealth management assets were $271.2 billion at December 31, 2022, up 8.7% compared to the prior quarter and down 2.9% compared to a year ago. The increase in wealth management assets for the quarter was due to net client inflow and market appreciation. The decrease in wealth management assets for the year was due to market decline, meaningfully offset by net client inflow. Wealth management assets at December 31, 2022 included investment management assets of $112.2 billion, brokerage assets and money market mutual funds of $138.9 billion, and trust and custody assets of $20.1 billion.

Wealth management fees, which consist of investment management, brokerage and investment, insurance, trust and foreign exchange fee income, totaled $210 million for the quarter, up slightly compared to last year's fourth quarter. For 2022, wealth management fees were $877 million, an increase of 15.4% compared to the prior year. Such revenues represented 14.6% of the Bank's total revenues for the quarter and 15.0% of the Bank's total revenues for the year.

Income Statement and Key Ratios

Revenue Growth

Total revenues were $1.4 billion for the quarter, up 5.2% compared to the fourth quarter a year ago and were $5.9 billion for 2022, up 16.5% compared to the prior year.

Net Interest Income Growth

Net interest income was $1.2 billion for the quarter, up 4.9% compared to the fourth quarter a year ago, and was $4.8 billion for 2022, up 17.5% compared to the prior year. The increases in net interest income for the quarter and the year resulted primarily from growth in average interest-earning assets, partially offset by decreases in net interest margin compared to a year ago.

Net Interest Margin

The net interest margin declined to 2.45% in the fourth quarter, from 2.71% in the prior quarter. For 2022, the net interest margin was 2.65%, compared to 2.67% for the prior year. The declines were due to average funding costs increasing more rapidly than the offsetting increases in the average yields on interest-earning assets.

Noninterest Income

Noninterest income was $263 million for the quarter, up 6.4% compared to the fourth quarter a year ago, and was $1.0 billion for 2022, up 12.1% compared to the prior year. The increase for the quarter was primarily driven by higher brokerage and investment fees and higher income from investments in life insurance, partially offset by lower investment management fees. The increase for the year was primarily driven by higher investment management fees and higher brokerage and investment fees.

Noninterest Expense and Efficiency Ratio

Noninterest expense for the quarter remained unchanged compared to the third quarter of 2022. Noninterest expense was $919 million for the quarter, up 6.2% compared to the fourth quarter a year ago, and was $3.6 billion for 2022, up 14.9% compared to the prior year. The increases were primarily due to continued investments in our business expansion, including hiring additional colleagues to support our growth, information systems initiatives and occupancy costs.

The efficiency ratio was 63.9% for the quarter, compared to 63.3% for last year's fourth quarter. For 2022, the efficiency ratio was 61.7%, compared to 62.5% in 2021.

Income Taxes

The Bank's effective tax rate for the fourth quarter of 2022 was 20.9%, compared to 16.1% for the fourth quarter a year ago. For 2022, the Bank's effective tax rate was 22.2%, compared to 19.1% a year ago. The increases were primarily the result of higher research and development tax credits claimed in the prior year and lower excess tax benefits recognized in the current year.

__________

⁽¹⁾Represents a non-GAAP financial measure. See reconciliation in "Book Value per Common Share and Tangible Book Value per Common Share" table in this document for additional details.

Conference Call Details

First Republic Bank's fourth quarter 2022 earnings conference call is scheduled for January 13, 2023 at 7:00 a.m. PT / 10:00 a.m. ET. To access the event by telephone, please dial (888) 204-4368 and provide confirmation code 7764494 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 for the live presentation, a replay of the webcast 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. First Republic specializes in delivering exceptional, relationship-based service and provides a complete line of products, including residential, commercial and personal loans, deposit services, and private wealth management, including investment, brokerage, insurance, trust and foreign exchange services. 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; Jackson, Wyoming; and Bellevue, Washington. 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, net interest income, net interest margin, capital expenditures, liquidity, dividends, capital structure, investments or other financial items; forecasts of future economic conditions generally and in our market areas in particular, including expectations relating to interest rates and inflation, which may affect our net interest margin, the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans; expectations regarding the banking and wealth management industries; descriptions of plans or objectives of management for future operations, products or services; 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; 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 the COVID-19 pandemic (collectively referred to as "COVID-19" herein); expectations regarding our executive transitions; 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: economic and market conditions, including volatility in the financial and securities markets, which may negatively impact the valuation of our investment securities portfolio, credit losses on our loans and debt securities, and the performance of our wealth management business; inflation; interest rate risk and credit risk; 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 adverse effects of climate change on our business, clients and counterparties; 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; our ability to maintain and follow high underwriting standards; 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; the regulatory environment in which we operate, our regulatory compliance and future regulatory requirements, which may result in costs, fees, penalties, business restrictions, reputational harm or other adverse consequences; any changes to liquidity and regulatory capital requirements applicable to us, including more stringent liquidity requirements and heightened capital requirements applicable if we become a Category III banking organization under the FDIC's regulations by reporting $250 billion or more in total consolidated assets or $75 billion or more in weighted short-term wholesale funding, nonbank assets or off-balance sheet exposure, based on a four quarter trailing average; 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; changes in federal, state or local tax laws; 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.

Explanatory Note

Some amounts presented within this document may not recalculate due to rounding.

CONSOLIDATED STATEMENTS OF INCOME

	Quarter Ended December 31,					Quarter Ended September 30,		Year Ended December 31,
(in millions, except per share amounts)	2022		2021			2022		2022		2021

Interest income:
Loans	$	1,438	$	992		$	1,269	$	4,803	$	3,725
Investments		231		165			219		839		624
Cash and cash equivalents		24		6			27		67		17
Other		6		4			3		13		19
Total interest income		1,699		1,167			1,518		5,722		4,385

Interest expense:
Deposits		428		20			169		654		95
Borrowings		97		27			80		234		176
Total interest expense		525		47			249		888		271

Net interest income		1,174		1,120			1,269		4,834		4,114
Provision for credit losses		30		24			36		107		59
Net interest income after provision for credit losses		1,144		1,096			1,233		4,727		4,055

Noninterest income:
Investment management fees		141		150			142		612		554
Brokerage and investment fees		29		19			34		118		74
Insurance fees		8		7			6		21		19
Trust fees		7		7			7		28		25
Foreign exchange fee income		25		24			25		98		88
Deposit fees		7		7			7		28		27
Loan and related fees		10		9			10		39		33
Income from investments in life insurance		34		27			23		82		85
Other income, net		2		(3	)		—		5		15
Total noninterest income		263		247			254		1,031		920

Noninterest expense:
Salaries and employee benefits		551		544			557		2,235		2,003
Information systems		123		99			124		468		362
Occupancy		73		66			73		285		254
Professional fees		27		27			31		108		101
Advertising and marketing		23		21			19		71		64
FDIC assessments		19		13			17		66		52
Other expenses		103		96			98		384		311
Total noninterest expense		919		866			919		3,617		3,147

Income before provision for income taxes		488		477			568		2,141		1,828
Provision for income taxes		102		77			123		476		350
Net income		386		400			445		1,665		1,478
Dividends on preferred stock		40		32			40		158		99
Net income available to common shareholders	$	346	$	368		$	405	$	1,507	$	1,379

Basic earnings per common share	$	1.89	$	2.05		$	2.23	$	8.32	$	7.78
Diluted earnings per common share	$	1.88	$	2.02		$	2.21	$	8.25	$	7.68

Weighted average shares—basic		183		179			182		181		177
Weighted average shares—diluted		184		182			183		183		180

CONSOLIDATED BALANCE SHEETS

	As of
($ in millions)	December 31, 2022			September 30, 2022			December 31, 2021

ASSETS
Cash and cash equivalents	$	4,283		$	5,532		$	12,947
Debt securities available-for-sale		3,347			3,348			3,381
Debt securities held-to-maturity, net		28,348			28,247			22,292
Equity securities (fair value)		24			22			28

Loans:
Single family		98,768			94,345			76,793
Home equity lines of credit		2,775			2,801			2,584
Single family construction		1,217			1,154			993
Multifamily		21,588			20,364			15,966
Commercial real estate		10,830			10,039			8,531
Multifamily/commercial construction		2,139			2,089			1,927
Capital call lines of credit		9,988			9,393			10,999
Tax-exempt		3,713			3,655			3,680
Other business		5,072			4,629			3,961
Paycheck Protection Program ("PPP")		20			30			545
Stock secured		4,553			4,251			3,435
Other secured		3,191			3,001			2,457
Unsecured		3,014			3,016			3,085
Total loans		166,868			158,767			134,956
Allowance for credit losses		(784	)		(760	)		(694	)
Loans, net		166,084			158,007			134,262

Investments in life insurance		3,435			3,409			2,650
Tax credit investments		1,383			1,285			1,220
Premises, equipment and leasehold improvements, net		483			483			454
Goodwill and other intangible assets		218			219			222
Other assets		5,034			4,557			3,631
Total Assets	$	212,639		$	205,109		$	181,087

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing checking	$	62,579		$	69,931		$	70,840
Interest-bearing checking		41,178			40,706			41,248
Money market checking		25,805			25,582			20,303
Money market savings and passbooks		21,663			20,231			16,573
Certificates of deposit		25,212			15,932			7,357
Total Deposits		176,437			172,382			156,321

Short-term FHLB advances		6,700			5,100			—
Long-term FHLB advances		7,300			5,900			3,700
Senior notes		500			500			998
Subordinated notes		779			779			779
Other liabilities		3,477			3,329			3,391
Total Liabilities		195,193			187,990			165,189

Shareholders' Equity:
Preferred stock		3,633			3,633			3,633
Common stock		2			2			2
Additional paid-in capital		6,256			6,230			5,725
Retained earnings		7,886			7,591			6,569
Accumulated other comprehensive loss		(331	)		(337	)		(31	)
Total Shareholders' Equity		17,446			17,119			15,898
Total Liabilities and Shareholders' Equity	$	212,639		$	205,109		$	181,087

	Quarter Ended December 31,														Quarter Ended September 30,
	2022							2021							2022
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	$	2,704	$	24		3.49	%	$	15,342	$	6		0.15	%	$	4,733	$	27		2.22	%
Investment securities:
U.S. Government-sponsored agency securities		165		1		2.05	%		100		0		1.59	%		165		1		2.05	%
Agency residential and commercial MBS		10,535		66		2.49	%		7,011		29		1.65	%		10,642		59		2.23	%
Other residential and commercial MBS		18		0		3.77	%		25		0		1.82	%		20		0		2.97	%
Tax-exempt municipal securities		17,697		175		3.97	%		14,869		146		3.93	%		17,389		169		3.91	%
Taxable municipal securities		1,774		13		3.13	%		1,670		12		2.99	%		1,773		14		3.09	%
Other investment securities		1,440		10		2.88	%		1,405		10		2.86	%		1,440		11		2.87	%
Total investment securities		31,629		265		3.37	%		25,080		197		3.15	%		31,429		254		3.24	%

Loans:
Residential real estate		100,645		772		3.07	%		78,436		545		2.78	%		95,588		701		2.93	%
Multifamily		20,856		192		3.60	%		15,479		154		3.90	%		19,139		171		3.48	%
Commercial real estate		10,401		107		4.02	%		8,525		83		3.82	%		9,558		94		3.84	%
Multifamily/commercial construction		2,105		31		5.77	%		2,044		24		4.70	%		2,062		26		5.05	%
Business		17,745		240		5.29	%		17,210		139		3.15	%		18,664		205		4.30	%
PPP		26		0		0.95	%		732		9		4.65	%		48		1		9.49	%
Other		10,479		103		3.86	%		8,578		45		2.03	%		9,957		77		3.02	%
Total loans		162,257		1,445		3.53	%		131,004		999		3.02	%		155,016		1,275		3.26	%
FHLB stock		353		6		7.27	%		143		4		11.17	%		366		3		3.26	%
Total interest-earning assets		196,943		1,740		3.51	%		171,569		1,206		2.79	%		191,544		1,559		3.23	%

Noninterest-earning cash		478							426							451
Goodwill and other intangibles		219							223							219
Other assets		8,464							6,967							8,199
Total noninterest-earning assets		9,161							7,616							8,869
Total Assets	$	206,104						$	179,185						$	200,413

Liabilities and Shareholders' Equity:
Deposits:
Interest-bearing checking	$	39,252		55		0.55	%	$	36,896		1		0.01	%	$	41,404		27		0.26	%
Money market checking		24,084		134		2.20	%		21,925		5		0.10	%		21,817		65		1.19	%
Money market savings and passbooks		20,423		100		1.95	%		16,935		6		0.15	%		18,616		47		1.01	%
CDs		20,546		139		2.69	%		7,482		8		0.42	%		9,607		30		1.26	%
Total interest-bearing deposits ⁽³⁾		104,305		428		1.63	%		83,238		20		0.10	%		91,444		169		0.74	%

Borrowings:
Federal funds purchased		419		5		4.00	%		—		—		—	%		371		2		2.31	%
Short-term FHLB advances		6,131		54		3.51	%		—		—		—	%		7,586		45		2.36	%
Long-term FHLB advances		6,004		26		1.79	%		4,582		12		1.06	%		5,308		21		1.49	%
Senior notes		500		3		2.15	%		998		6		2.42	%		499		3		2.15	%
Subordinated notes		779		9		4.68	%		779		9		4.68	%		779		9		4.68	%
Total borrowings		13,833		97		2.79	%		6,359		27		1.72	%		14,543		80		2.16	%
Total interest-bearing liabilities ⁽⁴⁾		118,138		525		1.76	%		89,597		47		0.21	%		105,987		249		0.93	%

Noninterest-bearing checking		67,067							71,308							73,851
Other noninterest-bearing liabilities		3,609							3,044							3,685
Total noninterest-bearing liabilities		70,676							74,352							77,536

Preferred shareholders' equity		3,633							3,158							3,633
Common shareholders' equity		13,657							12,078							13,257
Total Liabilities and Shareholders' Equity	$	206,104						$	179,185						$	200,413

Net interest spread ⁽⁵⁾						1.74	%						2.58	%						2.30	%
Net interest income (fully taxable-equivalent basis) and net interest margin⁽⁶⁾			$	1,215		2.45	%			$	1,159		2.68	%			$	1,310		2.71	%

Reconciliation of tax-equivalent net interest income to net interest income: ⁽⁷⁾
Municipal securities tax-equivalent adjustment				(34	)						(32	)						(34	)
Business loans tax-equivalent adjustment				(7	)						(7	)						(7	)
Net interest income			$	1,174						$	1,120						$	1,269

Supplemental information:
Total deposits (interest-bearing and noninterest-bearing)	$	171,372	$	428		0.99	%	$	154,546	$	20		0.05	%	$	165,295	$	169		0.41	%
Total deposits (interest-bearing and noninterest-bearing) and borrowings	$	185,205	$	525		1.12	%	$	160,905	$	47		0.12	%	$	179,838	$	249		0.55	%

	Year Ended December 31,
	2022							2021
Average Balances, Yields and Rates	Average Balance		Interest Income/ Expense ⁽¹⁾			Yield/ Rates		Average Balance		Interest Income/ Expense ⁽¹⁾			Yield/ Rates
($ in millions)

Assets:
Interest-bearing deposits with banks	$	6,095	$	67		1.10	%	$	12,876	$	17		0.13	%
Investment securities:
U.S. Government-sponsored agency securities		153		3		1.92	%		98		2		1.56	%
Agency residential and commercial MBS		10,251		220		2.14	%		6,125		117		1.91	%
Other residential and commercial MBS		21		0		2.72	%		29		1		2.00	%
Tax-exempt municipal securities		16,855		653		3.87	%		13,704		549		4.01	%
Taxable municipal securities		1,759		54		3.09	%		1,510		45		2.98	%
Other investment securities		1,434		41		2.87	%		1,157		32		2.80	%
Total investment securities		30,473		971		3.19	%		22,623		746		3.30	%

Loans:
Residential real estate		92,061		2,660		2.89	%		72,679		2,048		2.82	%
Multifamily		18,453		656		3.50	%		14,735		539		3.61	%
Commercial real estate		9,399		368		3.86	%		8,260		321		3.83	%
Multifamily/commercial construction		2,026		103		5.03	%		2,067		105		4.99	%
Business		18,366		750		4.03	%		16,033		520		3.20	%
PPP		147		11		7.65	%		1,418		51		3.58	%
Other		9,785		283		2.85	%		7,938		169		2.10	%
Total loans		150,237		4,831		3.20	%		123,130		3,753		3.03	%
FHLB stock		260		13		5.13	%		266		19		7.14	%
Total interest-earning assets		187,065		5,882		3.13	%		158,895		4,535		2.84	%

Noninterest-earning cash		455							404
Goodwill and other intangibles		220							225
Other assets		7,895							6,671
Total noninterest-earning assets		8,570							7,300
Total Assets	$	195,635						$	166,195

Liabilities and Shareholders' Equity:
Deposits:
Interest-bearing checking	$	40,732		88		0.21	%	$	33,977		6		0.02	%
Money market checking		22,114		217		0.98	%		20,662		25		0.12	%
Money market savings and passbooks		18,668		165		0.89	%		15,308		25		0.17	%
CDs		11,119		184		1.66	%		7,926		39		0.49	%
Total interest-bearing deposits ⁽³⁾		92,633		654		0.71	%		77,873		95		0.12	%

Borrowings:
Federal funds purchased		245		7		2.74	%		0		0		0.09	%
Short-term FHLB advances		4,193		108		2.58	%		0		0		0.15	%
Long-term FHLB advances		4,785		67		1.39	%		8,609		115		1.34	%
Senior notes		670		16		2.32	%		997		24		2.42	%
Subordinated notes		779		36		4.68	%		779		37		4.68	%
Total borrowings		10,672		234		2.19	%		10,385		176		1.70	%
Total interest-bearing liabilities ⁽⁴⁾		103,305		888		0.86	%		88,258		271		0.31	%

Noninterest-bearing checking		72,135							61,325
Other noninterest-bearing liabilities		3,566							2,847
Total noninterest-bearing liabilities		75,701							64,172

Preferred shareholders' equity		3,633							2,502
Common shareholders' equity		12,996							11,263
Total Liabilities and Shareholders' Equity	$	195,635						$	166,195

Net interest spread ⁽⁵⁾						2.27	%						2.53	%
Net interest income (fully taxable-equivalent basis) and net interest margin⁽⁶⁾			$	4,994		2.65	%			$	4,264		2.67	%

Reconciliation of tax-equivalent net interest income to net interest income: ⁽⁷⁾
Municipal securities tax-equivalent adjustment				(132	)						(122	)
Business loans tax-equivalent adjustment				(28	)						(28	)
Net interest income			$	4,834						$	4,114

Supplemental information:
Total deposits (interest-bearing and noninterest-bearing)

First Republic Reports 2022 Results