First Republic Bank Reports First Quarter 2001 Results

Apr 18, 2001, 01:00 ET from First Republic Bank

    SAN FRANCISCO, April 18 /PRNewswire/ -- First Republic Bank (NYSE:   FRC)
 reports net income of $5,357,000, or $0.37 per share for the first quarter
 ended March 31, 2001.  The Bank also reported a continued strong level of
 capital and asset quality with total risk based capital of 13.1% and
 nonperforming assets of less than 0.06% of total assets.  All share and per
 share amounts presented herein have been adjusted to reflect a three-for-two
 stock split distributed by the Bank on March 22, 2001.
     "We continue to make steady progress toward our basic goals of reducing
 our cost of funds, growing our deposit franchise and diversifying fee revenues
 while maintaining a very high quality asset portfolio," said
 James H. Herbert, II, President and CEO.  "The first quarter has been a
 challenging one due to the rapid changes in interest rates and the volatile
 equity markets."
     For the quarter ended March 31, 2001, net income was $5,357,000 compared
 with $6,019,000 for the same quarter at March 31, 2000.  Diluted EPS was
 $0.37 for the quarter ended March 31, 2001, versus $0.43 for the same period
 in 2000.  The Bank adopted the provisions of SFAS No. 133 "Accounting for
 Derivative Instruments and Hedging Activities" effective October 1, 2000.  As
 more fully discussed below, the effect of this new pronouncement was to reduce
 the Bank's first quarter earnings in 2001 by $442,000 net of tax or
 $0.03 diluted EPS.  Additionally, in the first quarter of 2000, the Bank
 recorded nonrecurring net income of $413,000, or $0.03 diluted EPS, related to
 the gain from early retirement of subordinated notes.
     The Bank continues to maintain a high level of asset quality and low level
 of nonaccruing assets.  At March 31, 2001, there was one nonaccruing loan of
 $912,000 and one foreclosed REO property of $1,204,000, collectively
 representing less than 0.06% of total assets.  There were no performing
 restructured loans.  There was one single family mortgage loan of
 $865,000 which was past due 90 days on accrual status.  At March 31, 2001, the
 Bank's allowance for loan losses totaled $22,417,000, or 0.70% of loans net of
 loans held for sale and over 20 times the balance of nonaccruing loans.  For
 the quarter, the Bank recorded no chargeoffs or recoveries and provided an
 additional $250,000 to its allowance for loan losses.
     The Bank has maintained its traditionally high underwriting standards,
 including low loan-to-value ("LTV") ratios for real estate secured loans.
 Beginning over a year ago, the Bank tightened its credit guidelines.  At
 March 31, 2001, the weighted average LTV, at origination, for the
 $1.8 billion of single family loans (including home equity lines) in the
 Bank's loan portfolio was approximately 58%.
     Total assets of First Republic Bank were $3.76 billion at
 March 31, 2001, an increase of 3% for the quarter as the Bank continued to
 accomplish its stated goal of moderate balance sheet growth.  During 2000 and
 continuing into 2001, the Bank is following a strategy of moderate balance
 sheet growth and increasing core deposits while lowering outstanding
 borrowings from the Federal Home Loan Bank (the "FHLB").  For the first
 quarter of 2001, the Bank's permanent loan portfolio grew approximately
 $57 million while deposits increased by $200 million and FHLB advances were
 reduced by $97 million, or 13%.  In the last twelve months, FHLB advances have
 been reduced by $413,920,000, or 38% and replaced primarily by core deposits.
     The Bank's transaction deposits consisting of checking, money market and
 passbook accounts now represent 60% of total deposits.  Over the past twelve
 months, balances in these transaction accounts grew by $306 million, an
 increase of 23%.  Overall deposits grew by 16% in the same twelve months.
 This continued growth in core deposits and favorable shift in the mix of
 deposits results from the Bank's successful cross-selling efforts, the focus
 on full service private banking and consumer oriented promotions in our retail
 branches.
     The Bank's quarter-end ratio of capital to risk-adjusted assets was
 13.1% versus 12.9% in the first quarter of 2000.  At March 31, 2001, total
 capital, including preferred stock, subordinated debentures and allowance for
 loan losses, was $358,490,000.  Book value per share was $15.50 at
 March 31, 2001.
     First Republic's investment advisory subsidiary, Trainer Wortham, founded
 in 1924, manages approximately $3.6 billion of assets.  Trainer Wortham's
 investment advisory fee income was $5,204,000 for the first quarter of
 2001, compared to $5,340,000 for the first quarter of 2000.  These fees vary
 with assets under management, which have been adversely affected by the recent
 volatility of the equity markets.  In the first quarter of 2001, investment
 advisory fees and assets under management at Trainer Wortham further declined;
 since most revenues are billed quarterly in advance, a further decrease in
 investment advisory fees can be expected for the second quarter of 2001.
     In order to meet its customers' service needs and to diversify its fee
 revenue base, the Bank began to provide trust and high net worth brokerage
 services during 2000.  The Bank offers personal trust services to its private
 banking customers through First Republic Trust Company.  At
 March 31, 2001, this group was administering over $867 million of trust and
 custody assets, as well as assets in accounts directed by customers, gathered
 since January 2000.  In the second quarter of 2001, the Bank will perform all
 brokerage functions through a broker dealer subsidiary licensed by the NASD.
     For the first quarter of 2001, the Bank recorded a higher level of total
 interest income as a result of a larger average asset base earning a higher
 average yield, compared to the first quarter of 2000.  Total interest income
 in the first quarter of 2001 increased 8% to $72,852,000 from $67,614,000 in
 the same quarter of 2000.  Net interest income increased 18% to $28,340,000 in
 2001, compared to $23,964,000 for 2000.  The Bank's margin on earning assets
 was 3.11% for the first quarter of 2001, compared to 2.65% for the first
 quarter of 2000 and 2.99% for the fourth quarter of 2000.  The Bank's net
 interest margin has benefited from an increase in the average balances of low
 cost checking accounts and a substantial reduction in FHLB borrowings.  FHLB
 borrowings were $663 million at March 31, 2001 versus $1,076 million at
 March 31, 2000, a decline of 38%.  During the first quarter of 2001, the
 Federal Reserve took action to cut interest rates by 1.50%.  This can be
 expected to result in lower average yields on the Bank's earning assets for
 the second quarter of 2001.
     The Bank's noninterest expense totaled $23,872,000 in the first quarter of
 2001, compared to $19,007,000 for the same period in 2000 and $22,437,000 for
 the fourth quarter of 2000.  Personnel costs have continued to increase due to
 the high cost of attracting and retaining key employees who have advanced and
 supported the Bank's franchise development, originated high levels of loans
 and achieved strong deposit growth.  Advertising expense was unusually high
 during the quarter due to heavy promotion of a deposit program.  Occupancy
 costs have also increased as the Bank has expanded its corporate facilities
 and branch locations.  Goodwill amortization, mostly related to the purchase
 of Trainer Wortham, was $314,000 for the quarter ($0.02 per diluted share).
 The Bank's operating efficiency ratio, or recurring noninterest expense as a
 percentage of net interest income and recurring noninterest income, was
 66.4% for the first quarter of 2001 as compared to 61.3% for the first quarter
 of 2000, with the increase primarily reflecting the higher costs of personnel
 related to new products and services, increased occupancy expenses, above
 average advertising costs, and increased expenses in the Trainer Wortham
 subsidiary in the face of declining revenues.
     For the first quarter of 2001, the Bank originated $518 million of loans,
 compared with $463 million for the same period in 2000.  The Bank sold
 $85 million of loans during the first quarter of 2001 and recorded net gains
 of $399,000, compared to sales of $106 million during the same quarter in
 2000 and gains of $317,000.  Loans serviced for investors totaled $2.1 billion
 at March 31, 2001, compared to $1.2 billion at March 31, 2000, a 64% increase.
     The complex provisions of SFAS No. 133 "Accounting for Derivative
 Instruments and Hedging Activities," which the Bank adopted last quarter,
 affect the Bank's results in two ways.  The Bank has historically purchased
 interest rate cap agreements as interest rate protection and amortized their
 fixed, up-front costs on a straight-line basis over the lives of the
 agreements.  SFAS No. 133 now requires that these instruments be carried at
 market value with fluctuations in market value recorded in the Bank's income
 statement as a change in the value of the derivative.  Due to the rapid and
 continuing decline in market rates of interest during the first quarter of
 2001, the Bank recorded a pretax charge of $516,000 to further mark its
 interest rate caps to their remaining market value at March 31, 2001.  At
 March 31, 2001, the market value of the Bank's remaining $1.1 billion of
 notional/value interest rate cap agreements was approximately $312,000.  Also,
 the conversion features of a $5.0 million investment grade convertible
 security is deemed a derivative under SFAS No. 133 which must be marked to
 market.  In the first quarter of 2001, the Bank recorded a mark to market
 pretax loss of $252,000 in the gain on sale of investment securities line.
 The aggregate impact of following SFAS No. 133 was to reduce net income by
 $442,000 in the first quarter of 2001, or $0.03 diluted EPS.
     The Bank's total off-balance sheet, fee-based assets managed by
 Trainer Wortham, the Trust Company, the Investment Division and loans serviced
 for investors totaled $6.5 billion at March 31, 2001, compared to $6.0 billion
 as of March 31, 2000, with increases in all other areas offset by a decline in
 assets managed by Trainer Wortham due to several quarters of declining equity
 prices.
     Additionally, the Bank owns approximately 18% of the holding company of
 Froley Revy Investment Company and has an option to purchase the company's
 remaining shares, under certain conditions, after January 2002.  Founded in
 1975, Froley Revy is one of the oldest and largest investment firms dedicated
 exclusively to the management of convertible securities.  Froley Revy had
 approximately $2.3 billion in assets under management at March 31, 2001.
     First Republic Bank's first quarter 2001 earnings conference call is
 scheduled for April 18, 2001 at 11:00 a.m. PDT.  Investors have the
 opportunity to listen to the conference call live on the Internet at
 http://www.firstrepublic.com.  It may be necessary to download audio software
 to hear the conference call.  To do so, investors should click on
 "Click here for webcast" link and follow directions.  A replay of the webcast
 will be available on First Republic Bank's Web site for 90 days.  A replay of
 the conference call will also be available for one week by calling
 719-457-0820 for domestic and international participants.  The reservation
 number is 511296.  The Bank's press releases are available after release on
 the Bank's Web site at www.firstrepublic.com.
     First Republic Bank is a NYSE traded commercial bank.  The Bank
 specializes in providing outstanding relationship-based service in private
 banking, investment management, trust, brokerage services and real estate
 lending.  First Republic Bank provides its services online as well as through
 branch offices in five major metropolitan markets including
 San Francisco/Silicon Valley, Los Angeles/Beverly Hills/Newport Beach,
 San Diego, Las Vegas and New York City.
     The Bank wishes to take advantage of the "safe-harbor" provisions of the
 Securities Litigation Reform Act:
 
     This press release may include forward-looking statements that involve
 inherent risks and uncertainties.  A number of important factors could cause
 actual results to differ materially from those in the forward-looking
 statements.  Those factors include fluctuations in interest rates, inflation,
 government regulations, and economic conditions and competition in the
 geographic and business areas in which the Bank conducts its operations.
     Additional information, including the Bank's most recent filings on
 Forms 10-K and 10-Q, is available at www.firstrepublic.com.
 
 
                                                             Three Months
                                                            Ended March 31,
     Income Statement                                    2001           2000
     ($ in thousands except per share amounts)
     Interest Income
       Interest on loans                              $66,410        $62,343
       Interest on investments                          6,442          5,271
        Total interest income                          72,852         67,614
     Interest Expense
       Interest on customer deposits                   32,525         26,811
       Interest on FHLB advances                       10,574         15,408
        and other borrowings
     Interest on debentures and notes                   1,413          1,431
       Total interest expense                          44,512         43,650
     Net interest income                               28,340         23,964
     Provision for loan losses                            250            250
     Net interest income after
      provision for loan losses                        28,090         23,714
     Noninterest Income
       Investment advisory fees                         5,204          5,340
       Loan servicing fees, net                           208            363
       Loan and related fees                              543            451
       Other customer fees                                593            195
       Gain on sale of loans                              399            317
       Gain on sale of investment securities              119             --
       Decrease in value of derivatives                 (618)             --
       Other income                                       381            877
       Total noninterest income                         6,829          7,543
     Noninterest Expense
       Salaries and related benefits                   12,163          9,506
       Occupancy                                        3,115          2,364
       Advertising                                      1,707          1,248
       Data processing                                  1,153          1,083
       Professional fees                                  699            409
       REO costs and losses                                27             57
       Goodwill amortization                              314            267
       Other expenses                                   4,694          4,073
        Total noninterest expense                      23,872         19,007
     Income before taxes                               11,047         12,250
     Provision for income taxes                         4,806          5,329
     Income before minority interest                    6,241          6,921
     Minority interest                                    884            902
     Net income                                        $5,357         $6,019
     Other Comprehensive Income (Loss), net of tax:
       Unrealized net gain (loss) on securities        $2,032         $(471)
       Gain on securities
        included in net income                           (67)             --
       Comprehensive Income                            $7,322         $5,548
 
     Basic EPS                                          $0.40          $0.45
 
     Diluted EPS                                        $0.37          $0.43
 
     Weighted Average Shares:
       Basic                                       13,402,548     13,482,885
       Diluted                                     14,372,477     14,015,937
 
                                                           As of March 31,
     Balance Sheet                                       2001           2000
 
     ($ in thousands except per share amounts)
     Assets
     Cash and short term investments                  $54,412        $49,377
     Investment securities at cost                         --          8,302
     Investment securities at market                  301,580        247,536
     Total cash and investments                       355,992        305,215
 
     Single family mortgages                        1,567,390      1,728,585
     Multifamily mortgages                            396,088        359,538
     Commercial mortgages                             623,318        559,447
     Construction loans                               177,191        114,428
     Equity lines of credit                           267,803        136,353
     Stock secured loans                               32,704         13,259
     Other secured loans                                7,700         10,698
     Commercial business loans                         74,841         31,633
     Unsecured loans and lines                         47,673          6,803
     Loans held for sale                               67,482        304,462
     Net deferred loan (fees) costs                       671            830
     Allowances for loan losses                      (22,417)       (21,229)
       Net loans                                    3,240,444      3,299,807
     Other assets                                      85,491         77,007
     FHLB stock                                        47,890         56,496
     Goodwill                                          28,176         29,433
     Real estate owned (REO)                            1,204             --
       Total Assets                                $3,759,197     $3,767,958
 
     Liabilities and Stockholders' Equity
     Noninterest-bearing demand accounts             $122,602        $86,218
     Checking accounts                                162,395        107,338
     MMA and passbook accounts                      1,350,530      1,136,235
     Certificates of deposit                        1,095,182      1,017,589
     Total deposits                                 2,730,709      2,347,380
     Interest payable                                  13,287         13,638
     Other liabilities                                 16,568         13,172
     FHLB advances                                    662,560      1,076,480
     Subordinated debentures and notes                 70,256         70,268
     Minority interest in subsidiary                   55,000         55,000
     Total stockholders' equity                       210,817        192,020
 
 
       Total Liabilities and Stockholders'
        Equity                                     $3,759,197     $3,767,958
 
     Number of Shares of
      Common Stock Outstanding                     13,596,737     14,040,154
 
     Book Value per Share                              $15.50         $13.67
 
     Capital Ratios
 
     Leverage Ratio                                     6.41%          6.07%
     Tier 1 Risk-based Capital Ratio                    9.43%          9.14%
     Total Risk-based Capital Ratio                    13.10%         12.94%
 
     ($ in thousands)                                        Three Months
                                                            Ended March 31,
     Operating Information                               2001           2000
 
     Loan Origination Volume                         $518,404       $463,337
 
     Bank Assets per Employee                          $8,420        $10,680
 
     Total Assets under Management                    $23,653        $26,440
      per Employee
 
     Return on Average Assets*                          0.58%          0.66%
 
     Return on Average Common Equity*                  10.40%         12.83%
 
     Efficiency Ratio*                                  66.4%          61.3%
 
     Rates Earned/Paid*
     Yield on Investments                               7.17%          6.88%
 
     Yield on Loans                                     8.29%          7.67%
 
     Earning Assets Yield                               8.18%          7.60%
 
     Cost of Deposits                                   5.03%          4.81%
 
     Cost of Borrowings                                 6.36%          6.06%
 
     Liability Costs                                    5.33%          5.22%
 
     Net Interest Spread                                2.85%          2.38%
 
     Margin on Earning Assets                           3.11%          2.65%
 
     * Quarterly data is annualized.
 
     Other Information
                                                          As of March 31,
                                                       2001             2000
 
     Investment assets under management
     -- Trainer Wortham                            $3,571,886     $4,351,215
     Assets administered by First Republic
      Trust Company                                   617,412        357,909
     Assets in Investment Division accounts           249,905             --
     Loans serviced for investors                   2,050,490      1,249,632
     Total off balance sheet assets managed by
      First Republic & subsidiaries                $6,489,693     $5,958,756
 
     Investment assets managed by Froley Revy,
      an unconsolidated entity                     $2,288,326     $3,166,895
 
     Nonperforming assets:
       Nonaccrual loans                                  $912         $3,129
       REO                                              1,204             --
        Total nonperforming assets:                    $2,116         $3,129
 
        % of Total Assets                               0.06%          0.08%
 
     Loans past due 90 days or more on
      accrual status                                     $865         $1,239
 
     Performing restructured loans                        $--            $--
 
     ($ in thousands)                                         Three Months
                                                             Ended March 31,
     Average Balances                                    2001           2000
 
     Assets
     Interest-earning deposits with
      other institutions                               $5,367         $2,721
     Short-term investments                            37,727         15,992
     Investment securities                            317,269        287,788
     Subtotal                                         360,363        306,501
 
     Loans                                          3,204,691      3,235,498
 
     Total interest-earning assets                  3,565,054      3,541,999
 
     Noninterest-earning assets                       117,846         89,219
 
     Total average assets                          $3,682,900      3,631,218
 
 
     Liabilities and Stockholders' Equity
     Noninterest-bearing demand accounts             $117,010        $70,120
     Checking accounts                                151,878         89,211
     MMA accounts                                     576,453        436,367
     Passbook accounts                                639,867        646,347
     Certificates of deposit                        1,136,989      1,000,618
 
     Total customer deposits                        2,622,197      2,242,663
 
     FHLB advances and other borrowings               692,886      1,045,637
     Subordinated debentures and notes                 70,256         71,090
 
     Total borrowings                                 763,142      1,116,727
 
 
     Total interest-bearing liabilities             3,385,339      3,359,390
 
     Noninterest-bearing liabilities                   91,537         84,211
     Stockholders' equity                             206,024        187,617
 
     Total average liabilities
     and stockholders' equity                      $3,682,900     $3,631,218
 
 

SOURCE First Republic Bank
    SAN FRANCISCO, April 18 /PRNewswire/ -- First Republic Bank (NYSE:   FRC)
 reports net income of $5,357,000, or $0.37 per share for the first quarter
 ended March 31, 2001.  The Bank also reported a continued strong level of
 capital and asset quality with total risk based capital of 13.1% and
 nonperforming assets of less than 0.06% of total assets.  All share and per
 share amounts presented herein have been adjusted to reflect a three-for-two
 stock split distributed by the Bank on March 22, 2001.
     "We continue to make steady progress toward our basic goals of reducing
 our cost of funds, growing our deposit franchise and diversifying fee revenues
 while maintaining a very high quality asset portfolio," said
 James H. Herbert, II, President and CEO.  "The first quarter has been a
 challenging one due to the rapid changes in interest rates and the volatile
 equity markets."
     For the quarter ended March 31, 2001, net income was $5,357,000 compared
 with $6,019,000 for the same quarter at March 31, 2000.  Diluted EPS was
 $0.37 for the quarter ended March 31, 2001, versus $0.43 for the same period
 in 2000.  The Bank adopted the provisions of SFAS No. 133 "Accounting for
 Derivative Instruments and Hedging Activities" effective October 1, 2000.  As
 more fully discussed below, the effect of this new pronouncement was to reduce
 the Bank's first quarter earnings in 2001 by $442,000 net of tax or
 $0.03 diluted EPS.  Additionally, in the first quarter of 2000, the Bank
 recorded nonrecurring net income of $413,000, or $0.03 diluted EPS, related to
 the gain from early retirement of subordinated notes.
     The Bank continues to maintain a high level of asset quality and low level
 of nonaccruing assets.  At March 31, 2001, there was one nonaccruing loan of
 $912,000 and one foreclosed REO property of $1,204,000, collectively
 representing less than 0.06% of total assets.  There were no performing
 restructured loans.  There was one single family mortgage loan of
 $865,000 which was past due 90 days on accrual status.  At March 31, 2001, the
 Bank's allowance for loan losses totaled $22,417,000, or 0.70% of loans net of
 loans held for sale and over 20 times the balance of nonaccruing loans.  For
 the quarter, the Bank recorded no chargeoffs or recoveries and provided an
 additional $250,000 to its allowance for loan losses.
     The Bank has maintained its traditionally high underwriting standards,
 including low loan-to-value ("LTV") ratios for real estate secured loans.
 Beginning over a year ago, the Bank tightened its credit guidelines.  At
 March 31, 2001, the weighted average LTV, at origination, for the
 $1.8 billion of single family loans (including home equity lines) in the
 Bank's loan portfolio was approximately 58%.
     Total assets of First Republic Bank were $3.76 billion at
 March 31, 2001, an increase of 3% for the quarter as the Bank continued to
 accomplish its stated goal of moderate balance sheet growth.  During 2000 and
 continuing into 2001, the Bank is following a strategy of moderate balance
 sheet growth and increasing core deposits while lowering outstanding
 borrowings from the Federal Home Loan Bank (the "FHLB").  For the first
 quarter of 2001, the Bank's permanent loan portfolio grew approximately
 $57 million while deposits increased by $200 million and FHLB advances were
 reduced by $97 million, or 13%.  In the last twelve months, FHLB advances have
 been reduced by $413,920,000, or 38% and replaced primarily by core deposits.
     The Bank's transaction deposits consisting of checking, money market and
 passbook accounts now represent 60% of total deposits.  Over the past twelve
 months, balances in these transaction accounts grew by $306 million, an
 increase of 23%.  Overall deposits grew by 16% in the same twelve months.
 This continued growth in core deposits and favorable shift in the mix of
 deposits results from the Bank's successful cross-selling efforts, the focus
 on full service private banking and consumer oriented promotions in our retail
 branches.
     The Bank's quarter-end ratio of capital to risk-adjusted assets was
 13.1% versus 12.9% in the first quarter of 2000.  At March 31, 2001, total
 capital, including preferred stock, subordinated debentures and allowance for
 loan losses, was $358,490,000.  Book value per share was $15.50 at
 March 31, 2001.
     First Republic's investment advisory subsidiary, Trainer Wortham, founded
 in 1924, manages approximately $3.6 billion of assets.  Trainer Wortham's
 investment advisory fee income was $5,204,000 for the first quarter of
 2001, compared to $5,340,000 for the first quarter of 2000.  These fees vary
 with assets under management, which have been adversely affected by the recent
 volatility of the equity markets.  In the first quarter of 2001, investment
 advisory fees and assets under management at Trainer Wortham further declined;
 since most revenues are billed quarterly in advance, a further decrease in
 investment advisory fees can be expected for the second quarter of 2001.
     In order to meet its customers' service needs and to diversify its fee
 revenue base, the Bank began to provide trust and high net worth brokerage
 services during 2000.  The Bank offers personal trust services to its private
 banking customers through First Republic Trust Company.  At
 March 31, 2001, this group was administering over $867 million of trust and
 custody assets, as well as assets in accounts directed by customers, gathered
 since January 2000.  In the second quarter of 2001, the Bank will perform all
 brokerage functions through a broker dealer subsidiary licensed by the NASD.
     For the first quarter of 2001, the Bank recorded a higher level of total
 interest income as a result of a larger average asset base earning a higher
 average yield, compared to the first quarter of 2000.  Total interest income
 in the first quarter of 2001 increased 8% to $72,852,000 from $67,614,000 in
 the same quarter of 2000.  Net interest income increased 18% to $28,340,000 in
 2001, compared to $23,964,000 for 2000.  The Bank's margin on earning assets
 was 3.11% for the first quarter of 2001, compared to 2.65% for the first
 quarter of 2000 and 2.99% for the fourth quarter of 2000.  The Bank's net
 interest margin has benefited from an increase in the average balances of low
 cost checking accounts and a substantial reduction in FHLB borrowings.  FHLB
 borrowings were $663 million at March 31, 2001 versus $1,076 million at
 March 31, 2000, a decline of 38%.  During the first quarter of 2001, the
 Federal Reserve took action to cut interest rates by 1.50%.  This can be
 expected to result in lower average yields on the Bank's earning assets for
 the second quarter of 2001.
     The Bank's noninterest expense totaled $23,872,000 in the first quarter of
 2001, compared to $19,007,000 for the same period in 2000 and $22,437,000 for
 the fourth quarter of 2000.  Personnel costs have continued to increase due to
 the high cost of attracting and retaining key employees who have advanced and
 supported the Bank's franchise development, originated high levels of loans
 and achieved strong deposit growth.  Advertising expense was unusually high
 during the quarter due to heavy promotion of a deposit program.  Occupancy
 costs have also increased as the Bank has expanded its corporate facilities
 and branch locations.  Goodwill amortization, mostly related to the purchase
 of Trainer Wortham, was $314,000 for the quarter ($0.02 per diluted share).
 The Bank's operating efficiency ratio, or recurring noninterest expense as a
 percentage of net interest income and recurring noninterest income, was
 66.4% for the first quarter of 2001 as compared to 61.3% for the first quarter
 of 2000, with the increase primarily reflecting the higher costs of personnel
 related to new products and services, increased occupancy expenses, above
 average advertising costs, and increased expenses in the Trainer Wortham
 subsidiary in the face of declining revenues.
     For the first quarter of 2001, the Bank originated $518 million of loans,
 compared with $463 million for the same period in 2000.  The Bank sold
 $85 million of loans during the first quarter of 2001 and recorded net gains
 of $399,000, compared to sales of $106 million during the same quarter in
 2000 and gains of $317,000.  Loans serviced for investors totaled $2.1 billion
 at March 31, 2001, compared to $1.2 billion at March 31, 2000, a 64% increase.
     The complex provisions of SFAS No. 133 "Accounting for Derivative
 Instruments and Hedging Activities," which the Bank adopted last quarter,
 affect the Bank's results in two ways.  The Bank has historically purchased
 interest rate cap agreements as interest rate protection and amortized their
 fixed, up-front costs on a straight-line basis over the lives of the
 agreements.  SFAS No. 133 now requires that these instruments be carried at
 market value with fluctuations in market value recorded in the Bank's income
 statement as a change in the value of the derivative.  Due to the rapid and
 continuing decline in market rates of interest during the first quarter of
 2001, the Bank recorded a pretax charge of $516,000 to further mark its
 interest rate caps to their remaining market value at March 31, 2001.  At
 March 31, 2001, the market value of the Bank's remaining $1.1 billion of
 notional/value interest rate cap agreements was approximately $312,000.  Also,
 the conversion features of a $5.0 million investment grade convertible
 security is deemed a derivative under SFAS No. 133 which must be marked to
 market.  In the first quarter of 2001, the Bank recorded a mark to market
 pretax loss of $252,000 in the gain on sale of investment securities line.
 The aggregate impact of following SFAS No. 133 was to reduce net income by
 $442,000 in the first quarter of 2001, or $0.03 diluted EPS.
     The Bank's total off-balance sheet, fee-based assets managed by
 Trainer Wortham, the Trust Company, the Investment Division and loans serviced
 for investors totaled $6.5 billion at March 31, 2001, compared to $6.0 billion
 as of March 31, 2000, with increases in all other areas offset by a decline in
 assets managed by Trainer Wortham due to several quarters of declining equity
 prices.
     Additionally, the Bank owns approximately 18% of the holding company of
 Froley Revy Investment Company and has an option to purchase the company's
 remaining shares, under certain conditions, after January 2002.  Founded in
 1975, Froley Revy is one of the oldest and largest investment firms dedicated
 exclusively to the management of convertible securities.  Froley Revy had
 approximately $2.3 billion in assets under management at March 31, 2001.
     First Republic Bank's first quarter 2001 earnings conference call is
 scheduled for April 18, 2001 at 11:00 a.m. PDT.  Investors have the
 opportunity to listen to the conference call live on the Internet at
 http://www.firstrepublic.com.  It may be necessary to download audio software
 to hear the conference call.  To do so, investors should click on
 "Click here for webcast" link and follow directions.  A replay of the webcast
 will be available on First Republic Bank's Web site for 90 days.  A replay of
 the conference call will also be available for one week by calling
 719-457-0820 for domestic and international participants.  The reservation
 number is 511296.  The Bank's press releases are available after release on
 the Bank's Web site at www.firstrepublic.com.
     First Republic Bank is a NYSE traded commercial bank.  The Bank
 specializes in providing outstanding relationship-based service in private
 banking, investment management, trust, brokerage services and real estate
 lending.  First Republic Bank provides its services online as well as through
 branch offices in five major metropolitan markets including
 San Francisco/Silicon Valley, Los Angeles/Beverly Hills/Newport Beach,
 San Diego, Las Vegas and New York City.
     The Bank wishes to take advantage of the "safe-harbor" provisions of the
 Securities Litigation Reform Act:
 
     This press release may include forward-looking statements that involve
 inherent risks and uncertainties.  A number of important factors could cause
 actual results to differ materially from those in the forward-looking
 statements.  Those factors include fluctuations in interest rates, inflation,
 government regulations, and economic conditions and competition in the
 geographic and business areas in which the Bank conducts its operations.
     Additional information, including the Bank's most recent filings on
 Forms 10-K and 10-Q, is available at www.firstrepublic.com.
 
 
                                                             Three Months
                                                            Ended March 31,
     Income Statement                                    2001           2000
     ($ in thousands except per share amounts)
     Interest Income
       Interest on loans                              $66,410        $62,343
       Interest on investments                          6,442          5,271
        Total interest income                          72,852         67,614
     Interest Expense
       Interest on customer deposits                   32,525         26,811
       Interest on FHLB advances                       10,574         15,408
        and other borrowings
     Interest on debentures and notes                   1,413          1,431
       Total interest expense                          44,512         43,650
     Net interest income                               28,340         23,964
     Provision for loan losses                            250            250
     Net interest income after
      provision for loan losses                        28,090         23,714
     Noninterest Income
       Investment advisory fees                         5,204          5,340
       Loan servicing fees, net                           208            363
       Loan and related fees                              543            451
       Other customer fees                                593            195
       Gain on sale of loans                              399            317
       Gain on sale of investment securities              119             --
       Decrease in value of derivatives                 (618)             --
       Other income                                       381            877
       Total noninterest income                         6,829          7,543
     Noninterest Expense
       Salaries and related benefits                   12,163          9,506
       Occupancy                                        3,115          2,364
       Advertising                                      1,707          1,248
       Data processing                                  1,153          1,083
       Professional fees                                  699            409
       REO costs and losses                                27             57
       Goodwill amortization                              314            267
       Other expenses                                   4,694          4,073
        Total noninterest expense                      23,872         19,007
     Income before taxes                               11,047         12,250
     Provision for income taxes                         4,806          5,329
     Income before minority interest                    6,241          6,921
     Minority interest                                    884            902
     Net income                                        $5,357         $6,019
     Other Comprehensive Income (Loss), net of tax:
       Unrealized net gain (loss) on securities        $2,032         $(471)
       Gain on securities
        included in net income                           (67)             --
       Comprehensive Income                            $7,322         $5,548
 
     Basic EPS                                          $0.40          $0.45
 
     Diluted EPS                                        $0.37          $0.43
 
     Weighted Average Shares:
       Basic                                       13,402,548     13,482,885
       Diluted                                     14,372,477     14,015,937
 
                                                           As of March 31,
     Balance Sheet                                       2001           2000
 
     ($ in thousands except per share amounts)
     Assets
     Cash and short term investments                  $54,412        $49,377
     Investment securities at cost                         --          8,302
     Investment securities at market                  301,580        247,536
     Total cash and investments                       355,992        305,215
 
     Single family mortgages                        1,567,390      1,728,585
     Multifamily mortgages                            396,088        359,538
     Commercial mortgages                             623,318        559,447
     Construction loans                               177,191        114,428
     Equity lines of credit                           267,803        136,353
     Stock secured loans                               32,704         13,259
     Other secured loans                                7,700         10,698
     Commercial business loans                         74,841         31,633
     Unsecured loans and lines                         47,673          6,803
     Loans held for sale                               67,482        304,462
     Net deferred loan (fees) costs                       671            830
     Allowances for loan losses                      (22,417)       (21,229)
       Net loans                                    3,240,444      3,299,807
     Other assets                                      85,491         77,007
     FHLB stock                                        47,890         56,496
     Goodwill                                          28,176         29,433
     Real estate owned (REO)                            1,204             --
       Total Assets                                $3,759,197     $3,767,958
 
     Liabilities and Stockholders' Equity
     Noninterest-bearing demand accounts             $122,602        $86,218
     Checking accounts                                162,395        107,338
     MMA and passbook accounts                      1,350,530      1,136,235
     Certificates of deposit                        1,095,182      1,017,589
     Total deposits                                 2,730,709      2,347,380
     Interest payable                                  13,287         13,638
     Other liabilities                                 16,568         13,172
     FHLB advances                                    662,560      1,076,480
     Subordinated debentures and notes                 70,256         70,268
     Minority interest in subsidiary                   55,000         55,000
     Total stockholders' equity                       210,817        192,020
 
 
       Total Liabilities and Stockholders'
        Equity                                     $3,759,197     $3,767,958
 
     Number of Shares of
      Common Stock Outstanding                     13,596,737     14,040,154
 
     Book Value per Share                              $15.50         $13.67
 
     Capital Ratios
 
     Leverage Ratio                                     6.41%          6.07%
     Tier 1 Risk-based Capital Ratio                    9.43%          9.14%
     Total Risk-based Capital Ratio                    13.10%         12.94%
 
     ($ in thousands)                                        Three Months
                                                            Ended March 31,
     Operating Information                               2001           2000
 
     Loan Origination Volume                         $518,404       $463,337
 
     Bank Assets per Employee                          $8,420        $10,680
 
     Total Assets under Management                    $23,653        $26,440
      per Employee
 
     Return on Average Assets*                          0.58%          0.66%
 
     Return on Average Common Equity*                  10.40%         12.83%
 
     Efficiency Ratio*                                  66.4%          61.3%
 
     Rates Earned/Paid*
     Yield on Investments                               7.17%          6.88%
 
     Yield on Loans                                     8.29%          7.67%
 
     Earning Assets Yield                               8.18%          7.60%
 
     Cost of Deposits                                   5.03%          4.81%
 
     Cost of Borrowings                                 6.36%          6.06%
 
     Liability Costs                                    5.33%          5.22%
 
     Net Interest Spread                                2.85%          2.38%
 
     Margin on Earning Assets                           3.11%          2.65%
 
     * Quarterly data is annualized.
 
     Other Information
                                                          As of March 31,
                                                       2001             2000
 
     Investment assets under management
     -- Trainer Wortham                            $3,571,886     $4,351,215
     Assets administered by First Republic
      Trust Company                                   617,412        357,909
     Assets in Investment Division accounts           249,905             --
     Loans serviced for investors                   2,050,490      1,249,632
     Total off balance sheet assets managed by
      First Republic & subsidiaries                $6,489,693     $5,958,756
 
     Investment assets managed by Froley Revy,
      an unconsolidated entity                     $2,288,326     $3,166,895
 
     Nonperforming assets:
       Nonaccrual loans                                  $912         $3,129
       REO                                              1,204             --
        Total nonperforming assets:                    $2,116         $3,129
 
        % of Total Assets                               0.06%          0.08%
 
     Loans past due 90 days or more on
      accrual status                                     $865         $1,239
 
     Performing restructured loans                        $--            $--
 
     ($ in thousands)                                         Three Months
                                                             Ended March 31,
     Average Balances                                    2001           2000
 
     Assets
     Interest-earning deposits with
      other institutions                               $5,367         $2,721
     Short-term investments                            37,727         15,992
     Investment securities                            317,269        287,788
     Subtotal                                         360,363        306,501
 
     Loans                                          3,204,691      3,235,498
 
     Total interest-earning assets                  3,565,054      3,541,999
 
     Noninterest-earning assets                       117,846         89,219
 
     Total average assets                          $3,682,900      3,631,218
 
 
     Liabilities and Stockholders' Equity
     Noninterest-bearing demand accounts             $117,010        $70,120
     Checking accounts                                151,878         89,211
     MMA accounts                                     576,453        436,367
     Passbook accounts                                639,867        646,347
     Certificates of deposit                        1,136,989      1,000,618
 
     Total customer deposits                        2,622,197      2,242,663
 
     FHLB advances and other borrowings               692,886      1,045,637
     Subordinated debentures and notes                 70,256         71,090
 
     Total borrowings                                 763,142      1,116,727
 
 
     Total interest-bearing liabilities             3,385,339      3,359,390
 
     Noninterest-bearing liabilities                   91,537         84,211
     Stockholders' equity                             206,024        187,617
 
     Total average liabilities
     and stockholders' equity                      $3,682,900     $3,631,218
 
 SOURCE  First Republic Bank