First Republic 1Q17 Earnings Call Notes

First Republic’s (FRC) CEO Jim Herbert on Q1 2017 Results

Later in the credit cycle but credit excellent

“At the current point in time, we consider ourselves to be somewhat later in the credit cycle and we’re paying even additional attention to prudent lending and credit quality. To that point, our credit quality continues to be excellent. Non-performing assets were at a very low 7 basis points. Net charge-offs for the quarter totaled only $0.5 million or a single basis point.”

Mike Selfridge

Loan growth 17%

“Loan volume was up 17% compared to the first quarter of last year. Single-family residential lending volume was 40% purchase and 60% refinance during the quarter. While loan demand is strong, loan pricing remains very competitive.”

Economic activity in regions strong

“Turning to geographic markets, economic conditions are very good across our footprint and our clients are quite active. In our largest market, the San Francisco Bay Area, the diverse and very dynamic economy continues to be quite strong. Residential real estate prices are stable, with the market that remains supply constraint. While the San Francisco Bay Area represents just under half of our total loan portfolio, our markets in New York, Southern California, Boston, Portland and Palm Beach also continue to perform very well. Economic activity in our regions overall tends to be stronger than the rest of the United States as a whole and we continue to benefit from this strength”

Pipeline is strong

“I would — let me just say, overall, the pipeline is strong and it’s about where it was at the end of last quarter. It’s hard to say on commercial and multifamily. Those tend to be a little bit volatile. I will say, as I mentioned in my remarks, half our growth is coming from existing clients. They are quite active. It’s still call it inventory constrain. So it’s hard to find good deals. But they are out they are working hard and finding them. So we — I would say we feel good about our future prospects in multifamily and commercial real estate.”