First Republic Bank 4Q16 Earnings Call Notes

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First Republic Bank’s (FRC) CEO Jim Herbert on Q4 2016 Results

We’re coming up to the spring purchase season for homes

“I would add to that. It’s Jim. Let me add to that, the second. As long as the economies are strong in our markets, the purchase activity is currently strong and it will remain so. I will just remind everybody, we are coming now slowly towards the spring purchase season, which usually picks up quite a lot. So I don’t think we are in a rate – level that will of real estate activity very much at all, except the incremental refinance activity.”

Mike Selfridge

Economic conditions are very good in our geographic markets

“Economic conditions in our geographic markets are very good and our clients are active. In our largest market, the San Francisco Bay Area, as we stated last quarter, residential real estate prices have moderated and current loan demand is strong.”

Credit quality excellent

“credit quality continues to be excellent. Non-performing assets remain low at just 7 basis points. During the quarter and for the full year, net charge-offs were less than 1 basis point of average loans. We added $10.5 million to our loan loss reserves in the fourth quarter and $47.2 million during the year to support loan growth.”4

Mike Roffler

Mid-teens loan growth is right for 2017

Yes. I think, Steve, I would expect going forward, that refi, if rates continue to rise will subside as I said in my remarks. And with the backup in rates in Q4, there was a bit of a rush to refi that we saw and so that increased the activity. And as I said, we wouldn’t expect origination volume to have the percentage increase year-over-year that we indicated in Q4. But going into the first quarter, the pipeline is strong and we still think that mid-teens loan growth is right for 2017.