First Republic Bank : Second Quarter 2022 Basel III Regulatory Capital Disclosures

FIRST REPUBLIC BANK

Basel III Regulatory Capital Disclosures

June 30, 2022

First Republic Bank
Basel III Regulatory Capital Disclosures
June 30, 2022
	TABLE OF CONTENTS
Glossary of Acronyms and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
3.	Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4.	Capital Conservation Buffer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
5.	Credit Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
6.	Counterparty Credit Risk-RelatedExposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
7.	Credit Risk Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
8.	Securitization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
9.	Equity Exposures not Subject to Market Risk Capital Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
10. Interest Rate Risk for Non-TradingActivities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Information Regarding Forward-LookingStatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Exhibit A: Cross-ReferenceTable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19

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First Republic Bank

Basel III Regulatory Capital Disclosures

June 30, 2022

GLOSSARY OF ACRONYMS AND TERMS

The following listing provides a reference to common acronyms and terms used throughout this report:

ACL . . . . . . . . . . . . . .	Allowance for Credit Losses
AOCI . . . . . . . . . . . . .	Accumulated Other Comprehensive Income
Board . . . . . . . . . . . .	Board of Directors
CECL . . . . . . . . . . . .	Current Expected Credit Losses
CECL Capital Rule	Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses
	Methodology for Allowances
CET1 . . . . . . . . . . . . .	Common Equity Tier 1
COVID-19 . . . . . . . .	COVID-19 Pandemic
Dodd-Frank Act . . .	Dodd-Frank Wall Street Reform and Consumer Protection Act
DTA . . . . . . . . . . . . . .	Deferred Tax Asset
DTL . . . . . . . . . . . . . .	Deferred Tax Liability
FDIC . . . . . . . . . . . . .	Federal Deposit Insurance Corporation
FHLB . . . . . . . . . . . .	Federal Home Loan Bank
GAAP . . . . . . . . . . . .	Accounting Principles Generally Accepted in the United States of America
GSE . . . . . . . . . . . . . .	Government-Sponsored Enterprise
HVCRE . . . . . . . . . . .	High Volatility Commercial Real Estate
LIHTC . . . . . . . . . . . .	Low Income Housing Tax Credit
MBS . . . . . . . . . . . . .	Mortgage-Backed Securities
PPP . . . . . . . . . . . . . .	SBA's Paycheck Protection Program
PSE . . . . . . . . . . . . . .	Public Sector Entity
RWA . . . . . . . . . . . . .	Risk-Weighted Asset
SBA . . . . . . . . . . . . . .	U.S. Small Business Administration
SPE . . . . . . . . . . . . . .	Special Purpose Entity
SSFA . . . . . . . . . . . . .	Simplified Supervisory Formula Approach

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First Republic Bank

Basel III Regulatory Capital Disclosures

June 30, 2022

1. Introduction

Explanatory Note

As used throughout this document, the terms "First Republic," the "Bank," "we," "our" and "us" mean, except as the context indicates otherwise, First Republic Bank, a California-chartered commercial bank including all of its subsidiaries.

For references to disclosures contained within this report and in the Bank's other regulatory disclosures and public filings, refer to "Exhibit A: Cross-Reference Table." Included in Exhibit A are references to the Bank's Annual Report on Form 10-K for the year ended December 31, 2021 ("2021 Form 10-K"), the Bank's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 ("Q2 2022 Form 10-Q"), and the Bank's Consolidated Reports of Condition and Income as of June 30, 2022 ("6/30/2022 Call Report").

Company Overview

Founded in 1985, First Republic Bank is a California-chartered commercial bank and trust company

headquartered in San Francisco with deposits insured by the FDIC. 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. As of June 30, 2022, we had total assets of $197.9 billion, total deposits of $165.6 billion, total equity of $16.4 billion and wealth management assets under management or administration of $246.8 billion.

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. We have been continuously headquartered in San Francisco since our inception.

Basis of Consolidation

The basis of consolidation used for regulatory reporting is the same as that used under GAAP. There are no subsidiaries that are deconsolidated or deducted from total capital.

See "Basis of Presentation and Organization" in Note 1, "Summary of Significant Accounting Policies" in "Item 1. Financial Statements" in the Q2 2022 Form 10-Q for more information on the basis of consolidation.

Restrictions on the Transfer of Funds or Regulatory Capital

There are no material restrictions or other major impediments on transfer of funds or total capital within the consolidated group.

Capital of Insurance Subsidiaries

The Bank does not have any insurance subsidiaries.

Compliance with Capital Requirements

As of June 30, 2022, First Republic had capital levels in excess of the minimum regulatory capital requirements and met all capital ratio requirements to be "well-capitalized" under the prompt corrective action requirements currently in effect. For further detail on capital ratios, see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources- Regulatory Capital Components and Ratios" in the Q2 2022 Form 10-Q.

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First Republic Bank

Basel III Regulatory Capital Disclosures

June 30, 2022

2. Capital Structure

Common equity (i.e., common stock, capital surplus, and retained earnings) is the primary component of the Bank's capital structure. Common equity allows for the absorption of losses on an ongoing basis and is available for this purpose. Further, common equity allows for the conservation of resources during periods of stress, as it provides First Republic with discretion on the amount and timing of dividends and other distributions. Regulators and rating agencies also include forms of capital other than common equity (e.g., preferred stock and subordinated debt) in their calculations of capital adequacy. Such forms of capital are included in the Bank's Tier 1 capital and Total capital.

The terms and conditions of the Bank's capital instruments are described in the following sections of the Bank's Q2 2022 Form 10-Q:

• CET1 capital - Common stock terms and conditions are described in Note 14, "Common Stock and Stock Plans" in "Item 1. Financial Statements."
• Additional Tier 1 capital - Preferred stock terms and conditions are described in Note 13, "Preferred Stock" in "Item 1. Financial Statements."
• Tier 2 capital - Subordinated notes terms and conditions are described in Note 9, "Borrowings" in "Item 1. Financial Statements."

The following table presents the components of First Republic's regulatory capital:

Table 2.1: Capital Structure

($ in millions)

Shareholders' equity:

Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional paid-incapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CECL Capital Rule retained earnings adjustments (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CET1 capital adjustments and deductions:

Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Goodwill and other intangible assets, net of DTLs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DTAs that arise from tax credit carryforwards, net of DTLs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CET1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tier 2 capital instruments-subordinatednotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying ACL (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CECL Capital Rule ACL adjustments (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tier 2 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total risk-basedcapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

__________

June 30,

2022

• 3,633
  2

5,782

7,236

(227)

16,426

43

(3,633)

(189)

(83)

227

12,791

3,633

3,633

16,424

779

766

(45)

1,500

• 17,924

1. Beginning in 2020, amounts reflect the Bank's election to delay the estimated impact of the CECL ACL methodology on its regulatory capital over a five-year transition period ending December 31, 2024.
2. Includes the ACL on loans, held-to-maturity debt securities and unfunded loan commitments.

5