First Republic Bank (FRCB) 13 Oct 202020 Q3 Earnings call transcript

Greetings and welcome to First Republic Bank’s Third Quarter 2020 Earnings Conference Call. Today’s conference is being recorded.

During today’s call, the lines will be in a listen-only mode.

Following the presentation, the conference will be opened for questions. [Operator Instructions] I’d now like to turn the call over to Shannon Houston, Senior Vice President and Chief Marketing and Communications Officer. ahead. go Please

welcome conference and Republic third Bank’s Thank to XXXX call. quarter you First

will the Chief Speaking and Jim be today Herbert, Erkan, and CEO; Bank’s President; Mike Officer. Roffler, Financial Gaye Chairman Founder,

may risks, the hand call Jim, that during over Before assumptions. make subject I statements to call forward-looking are and please to note we uncertainties that today’s

see filings, materially risks over cause actual could the a For from forward-looking filed are uncertainties any and today, more FDIC the now, Herbert. complete Bank’s available discussion that like the statements, X-K Form on call please to to Jim turn including website. of differ Bank’s I’d the all to results And the

Shannon. you, Thank

capitalized also recovered strong credit, assets demonstrate This was third continues very grew of organic remain Loan and our a strongly. Deposits performance so The of quarter. have very year and consistent liquidity far growth Wealth well service and This are year's consistent management well, and quite continuous volume the nicely strength as was overall our XXth client growing profitability. to fully business strong. conservative, origination quarter very capital is another record. quarterly model.

third were results. Wealth loans. XX% interest board XX.X% the volatility net quarter book to across performance. to total loans were Year-over-year, grew up increased for tangible outstanding assets drive revenues continues year-over-year shares This year-over-year. growth period. management turn me deposits the grew during Let has year-over-year, value grown the despite and financial Total income XX.X% our up market extraordinary the PPP excluding year-over-year. XX%, strong Total XX% XX% year-over-year,

end assets for year-to-date. and $X.X $X been our points. million very so basis quarter credit XX have charge-offs Non-performing the were quarter only remains were modest million Importantly, strong. quite only far at a Net

at at preferred. to capital a strong X end issued ratio X This of raise Tier pleased fixed-for-life-perpetual September $XXX successfully leverage dividend X.XXXXX% rate in X.XX%. qualified of were Tier was We was [ph]. very very a attractive million quarter Our

by a fact, last In is a the this for bank rate ever fixed-for-life-perpetual achieved preferred. ever done

our terms study and very the XX% we net -- the The or very such and results market moment, of at is a of that's XX% Capgemini prior study. households the penetration growth one representative that This during of our many which released grew is serve acceleration segments and number XXXX that of study we per for received enterprise within but In growth household worth household -- strong year share XXXX. the our household X-year X-year XX% period. looks to every we rate. serve, recently compares is a performance X-year overall. recently per year, it acquisition segment, of Overall, we growth This between in high a

growth nicely reflects of doing share our that model we the represents us with XX% model. nearly The and market was overall power strong share continues growth. account their this all very our the period organic First growing continuously, grow our sustainable a utilize care Overall, of It's services clients is X-year service drive a time quarter. take result, years. in increase a XXXX. has referrals. short, growth compounding since very household turn, existing to rate This it gain differentiated X%. the strong to in very As position Republic's over an segment strong just share this of X in our market we In sizes proven, continued study This largest very began very in additional who good provide effect share

continued growth very actually immediately opportunities for plan we excited As we're the ahead. the future, about

Erkan, over call the our turn me President. let to Now, Gaye

excellent across the Thank franchise. an client strong with you, indeed quarter Jim. It activity was

and performance quarter's We this are delighted with strong our growth. household

successfully model our things, have high service our has to Among XX% we to increasing other selectively past presence; for model community risk scaled preferred our by of management to in enhance service to safety. soundness. new included and workforce, compromising household standards scale without clients service and the very banking and and manage offices several greater service this and growth service investing in provide opening our and our year-to-date; culture linchpin about of years, an growing rate and investing to options technology model our Over infrastructure talented maintain safety the diverse our

Clients trusted one customized touch For clients. our mobile by platform digital service seamlessly bankers, human digital hand-in-hand works for app. access technology the banking our delivered experience team yet their to connection banking with personalized example, a enabled, can our our at providing with through

to client to from also options have enhanced controls. account digitally self-serve prefer, if accounts select they transactions We and opening

was volume in growth. We organic fields drive that new turn our our which overall at More repetitive satisfaction, automating $X.X record quarter. tasks. the colleagues by client excellence, on continued are our an a volume also delight to strong lending. access time existing mind, in set third also and dedicated our to deepen giving me turn billion, in best and bankers let $XX.X the more and quarter origination ever. streamlining quarter to service clients Loan update relationships continued With billion Single-family greater customization, for residential

also comes acquire and significantly finance volume, from to up We our single-family Refinance last of accounted opportunity be activity refinance institutions. are an to home clients new at provides previously for activity households. The purchase quarter. XX% excellent majority very residential continues from pleased that other XX% of strong

XX%. to during The value third In old to for quarter terms the was conservative estate continue real average originated underwriting just loans we of credit, ratio standards. maintain loan our

business Program, commitments, Protection were XX% banking, loans the line year-over-year. Paycheck up and Turning excluding to

line high with XXs. consistent business utilization remain XX%. This utilizations to the During range line in quarter, historical is of mid at our

As fourth loan up quarter. very we begin overall from our last the remains strong, meaningfully pipeline quarter,

of loan the modifications on amount COVID Let totaled a dollar At me portfolio. total provide our the brief modifications. quarter X.X% loan of update related end,

an in with X May Therefore modifications As expire deferrals of months. a during quarter. were initial and fourth scheduled April of are the the duration to made reminder, most our

normal return at and positive. of to expect indications clients We time, the quite payment majority are vast to that our early

deposits, XX% In than low deposits by terms time from billion and Business year-ago. rates, quarter. excellent by service and highly soundness in ever increased valued over XX% clients differentiated was our an represent it third from before. up now Total deposits and more total of $X our slightly a of Checking X% safety, the In this X% of were of quarter funding, are prior deposits. to quarter. uncertainty deposits up represent total the

came of Importantly, over quarter from XX% total funding deposits. end at

management, quarter. a increased this X% plus Republic. strong Overall, due welcomed a client third we was by since under it last call, strong $X.X very management quarter. wealth quarter First teams This billion. to net to $XXX wealth billion of three Turning new our the Also, assets to during was to growth appreciation market inflow management

I over Now the turn would to to like Chief Roffler, Mike call Financial Officer.

Thank you, Gaye.

Earnings by insurance amended quarterly items, billion, share record one-time a return $X.XX. are XX% revenues were with approximately year-over-year. loans proceeds $X including of share per pleased quarterly also $X.XX did refund. tax sold, and We record on per an up benefit from discounts the of Earnings

in strong terms sheet remains balance liquidity. quite of capital Our and credit,

contrast, million than quarter. million. credit second during Our slightly provision the was $X.X $XX.X In losses less charge-offs were the net for only quarter

reserves, have XXXX, far have the million to added period for only charge-offs same while $X our over $XXX been million. net we in So

raise Let $XXX With was strength. retired me September, In Series pleased raise ever. the our X.XXXXX%. $XXX attractive discuss equity at perpetual the of X.X% we successfully million stock. million a in F historically our continued largest the preferred This to we were stock capital of fixed-for-life-perpetual-preferred of proceeds portion rate October,

As of million XXXX. in quarterly stock dividends a first quarter capital we actions, result preferred these of be the to $XX.X beginning expect

as pleased does this share per in buybacks. engage a First of stock. quarter's $X.XX dividend Xth year are common increases. declare We to reminder, Republic's Republic First share our consecutive on not XXXX of marks dividend Also

Our liquidity of billion quarter, the $X.X strong. XX.X% cash. HQLA position remains including eligible in average of third total assets was

$X.X strong next Net two year-over-year. increased and prepaid which over liquidity income we quarters. were deposit due interest the Given of growth FHLB our advances, coming position, approximately billion XX.X%

grow margin. stable our and growth Our such a of ability assets consistent to power interest a earning strong at the pace, net reflects NII of

We which Driven quarter. more XX leaving are X.XX% basis our investments. than instead course for earning of deposit lending growth strong funding points, point the interest into and of of prior a by real deposit to asset those deposit with up the of This in by declined strong offset X dollars decline from the quarter, basis secured the well yields. margin third net XX estate particularly reflects cost deploy in point basis growth, pleased cash our short-term checking ability

full range year margin interest to to to continue We our XXX the be of the XXX expect for in net XXXX.

for ratio was third XX.X%. quarter efficiency Our the

the Our previously basis benefit about on sold a by insurance XXX from mentioned discounts one-time efficiency proceeds. loan did ratio points and

for year full ratio XXXX efficiency the be XX.X% our the expect to range end the XX.X%. lower of to of We near

tax effective XX.X%. third was rate the Our quarter for

year Given XX%. rate near the the good it XX% expect to of mentioned Overall, full range tax positive XXXX our we very the end refund was our for be above, lower tax quarter. of a to

Jim. to the Now back I'll call turn over

very Thank an franchise. was It the high quarter you, overall growth Mike. strong across and with Gaye quality

growth. supports continue we and to infrastructure, grow, our people, we continuing in further and on our technology. combination focused investing model As by scale to very sustainable model are This service

be any take we'd Now to questions. Thank you. pleased

first from our Alexopoulos Steven JP take [Operator Instructions] with question We'll Morgan.

Steven. good morning, morning, Good everybody. Hey,

relatively get do getting XQ? Maybe hold range, is the like to consistent, just NIM the I in NIM range guidance the on start that on you think Mike provided. the this and follow-up can into X.XX% but steady

we're strong new right pretty given in that And reduced yield. costs. Steve the X.XX% funding and like it a good importantly, Yes. able credits that a doing are the we're to resilient earning some we're for it's decent And range feels business this remarkably deploy deposit place into growth the been X.XX%, our year. of around in

real concerns maybe then on investors of number that of concerns. cycles are so New we hear major for Okay. York, That's and San helpful. Francisco banks commercial for one all the have the on Jim, credit, two one, estate number And

understood cycle better real classes either see real on somewhat losing you which do risk? will here, you up Francisco? end money commercial New in deals Now or And commercial asset estate at is think San estate York that do most within the banks

multifamily focus for Well, minute. I let's out a leave estate, commercial think choice your of the real on

just banks. real really at Let's other I on and office other commercial can't and areas the retail estate. sort versions of knowledgeably comment, probably of Those very on are focus risk. most true

are Our million. south lending XX% non-multifamily, are about commercial ratios size $X and in of on all Francisco divide pretty of New [indiscernible] the so deals San in the York the loan and actually real portfolios average the they estate

much very going lot there's be not think tenants plus of under a actual a of of is office which got or are tenants loss don't buildings properties well-run number them ranging know has I retail, we pressure problems. in Those our as So to a a credit taken. to lot all from

compare New lot Jim, would new York And, to more view? It how San a you your pressure. What's under seems York's Francisco? like

bigger it leasing certainly press, differently. It's it's heavy are and those space because several hard Yards space we that where online market getting coming and -- mostly the commitment town in credit more tell, of but of Well, New just are press. there. a I actually. markets, of The the those it a markets amount a will tenants be this in well. in in of seems obviously. more think And fair Midtown, is. type larger and are And very have Downtown, I'm newest say functioning know getting Hudson up I there office not we as to it's slightly the course lot and it's is -- Hudson Yards, to York,

I that lot. incremental Vacancy a down incremental rates once rents every because and I Francisco, Francisco are in while. to up would Francisco XX% the through [indiscernible] think the are down down Francisco San rents it's goes rates kind in -- San is but are say And a this are San XX%. rates, meaningfully the commercial not of in probably the down San high, that down

a final question. That's And then helpful. Okay. for

sheet. is it when But think balance building really deposits it's consistent. are doing have balance phenomenon pull sustainable favorable or Is the If loans changing do the So recent to on grew you temporary been like clients and at be that. backfill on your a for a basis, to bank business starting more which of And see something I Thanks. [indiscernible] deposits. a this historically XX%, basis the fairly would trends, which sheet would then liquidity, primary NIM? year-over-year the the looks look assets obviously tied more driver balance with I sheet of you

our to made the referrals me -- then XX% element. with year loans XX% Actually, and its let remember, But then on been start growth and [indiscernible] XX ability XX%. lending XX%, biggest clients, bank are all every it our our for has of to answer the and are of stay to driver years, their that's Gaye. pass -- And existing direct another that

And much our diving balance a of let the Gaye liquidity been and of And to over sheet, Fed driver been. without that into the so has turn do able deposit years kind. that's Only around, the side. anyway. too me obviously always its entirely with but there's didn't lot wholesale Recently on a we it to we've recently, increasing any for it fund markets

growth a -- especially growth done the back in PE the includes their loans as who growth, compared Yes. It’s account billion seeing necessarily And those those Steve, of consumer Protection year very in active, new to the on Program, professional the that from pleased quarter-over-quarter over and we're and coming estate of Paycheck to $X deposit even is ago. well sources we non-profits balances. are XX% services, higher also and business giving being very our been the more addition us annualized. with a as haven't sizes diversified result households, deposit balance in increasing even the real referrals, has -- strong checking us are with the

service with So we the are safety. to the pleased flight really and

all my for questions. taking Thanks Great.

Bill Research. Wolfe Carcache from our with next question take We'll

indication on of idiosyncratic Good give your and you. rate that bit growth, over of business the that do see the of your and wanted risk confidence growth stand the you the you those question loan the to if level any margin little continuing repeatability even against of revenue is I start and durability, out. sustainability now, with off and a any drivers see growth backdrop model the And time? weak there being that idiosyncratic even pressuring not if color of on a persist? low away tailwinds morning. Thank Can rates your to growth more environment low competed pressures you of growth banking in rest industry,

the the measuring simple a Well, the That's kind of which in our just industry promoter is XXs, average. growth net is, said satisfaction. is driven answer is last twice by the I which banking in of client just score, way

with the fact the we many in that growth year. lose So bank very starts every don't the clients

banking about to We about have a X% attrition. Most tends the industry of run X%. at

so now the grows, -- you keeping the home satisfying to you if et in that's number with you clients So area, do them. keep checking them, growth they grow continued more because the and account Their cetera. is have lending key one

they driver the they of growth. are And And so and very then other that's refer clients. the happy

and maintain historically loan a We're would, it were -- is but for pressure said through line our the would think clear negative. tenure If The thick macro -- -- thin. successful been our a although has quality we it to be subject maintained, has to bit is being as years Mike years. model see of holding growth I not our sustainability compounded XX% the indicated the is recently of The a it's will projections is quality. But maintained. very is about than the lot here. been up job little I note at more is service XX to slightly there's to service XX% we because that year-out had So conditions. has up complicated hoped, just better year-in XX we and for probably margin

programs you're I you're by hedges their since competitors source support on have Can roll SERP served as off, at you've to disadvantaged whether hedging future a a today, any Thanks, edges. felt also any as but face appreciate Jim. of margins, on dynamics have believe particularly hedging to briefly follow-up, I you not place ever we we've not edging interest receiving overall. pandemic just competitively And after that those going guys hedging you're your the put putting as not but on for some net of If headwinds and philosophy in any thoughts your like on your you seen touch all may, as don't move hit, would benefits hedges.

we is not interesting -- No, conversation. hedge. My do this

Our but don't take hedge we we've is clients basically good with out and years. ideas, a hedging good them. resisted done we've over business with presented the of times spread been just Many

that They over wrong extended go or very them can of period increase it. the volatility decrease is time Our go wrong. than experience accounting rather hedges can a for sometimes

add of earning as modest is can assets to -- growth to long NIM. hedge offset clients The that organic Republic a referrals get we fluctuations comments, earning more is just we the coming and Jim's -- And as fluctuation, growth happy, they're asset the from more the within. First in have, largely small

NIR growth as our to So with service Jim client driven continues be by growth and organic explained. strong the

you. Thank helpful. Very

Ken Zerbe We'll with take question our from Morgan Stanley. next

Okay. Good Thanks. morning.

Good morning, Ken.

us just the you the and can quarter you stuff that Mike, tell actually security in your were yields new put on on? where loan

So and new high loans, around around multi-family X.XX. X.XX at loans, if home you Xs; CRE look

just blend shy you when together, sort of of X%. all So it we’re

And around government then X.XX. that's agency, TY, is security around munis and X.XX X.XX, side, HQLA the it's X.XX to on

Got it.

to asset go on guess [indiscernible], repriced? Is that much you easily could higher, And XX, see Okay. just lower you're the are know, then your assume the is and just [indiscernible] all yields that security equal I in that I call but don't XX, yields just you're it, sort and of longer depending yields duration, I'm X.XX, of fair to the know X.XX, guess presumably if it I what slowly lower like XXXX, as security have things terms XXXX, kind [indiscernible]. of, like creep putting fair? basis certainly it you XX when I to I numbers on, at points, looking continue

don't for our relatively around XXXX the guidance mid range. NIM we so -- for Yes, X.XX, X.XX is

are general. We for the not given in year, next guidance uncertainty the giving

that typically in new around I coming funding we the X% we is say So cost in points. marginal. overall, on around in that fourth basis would And at yields but just are lending just the looked marginal do new call, quarter it XX the -- -- the the around way

a you cut. take rough If that as

then the Republic. of strong First for And offsetting fluctuations middle the growth, I is one also just as largely in right The modest of that's add is range equation we part for NIM. So NIM NIR in would NIM. said,

Got it.

really in terms does NIM Okay. the I that loan include accelerated And just the guidance, call quick, of the of roughly it from benefit PPV amortization guess, XXX, forgiveness?

does don't XX, it but that think have this, point approval. we include of to it, I much less SBA expect submitted At So we their XXXX. I'll than this say until for the

early it's the So process. in on

early 'XX a I think dynamic. that's more of

Okay, great. you. Thank

John We'll next take Evercore. our Pancari question from with

Good morning.

Good morning, John.

indicate losses at Jim, topic just this that don't real On time? portfolio in the commercial expect you estate confirm, to to I want again, that take did you

on starts have high low is loan loan as means actually it cavalier are we they time. If I the of side. loan quite. to going very to portfolio, going we have quite value cash the and which to a know at that portfolio a flow strong going be It's losses, coverage be that don't -- other wouldn't ratios, group out yet. one because it to be about We reasonably -- course be they’re hit

Right.

Okay.

also of retail? portfolio and impacted areas, in the it. and commercial front, since estate on office estate is including the percentage And more us Okay. hospitality what those commercial remind can real you then just your real Got

Manhattan. is Commercial XX% San and XX% commercial is -- in the in of Francisco about space, office

XX% less have X.X%, that less, cases. total And grade in that retail is we just those collateralization than around hotel, add of within guarantees we roughly impacted -- within And and the restaurants about loan are and even personal modifications are million, estate real overall X.X% portfolio. to backed our COVID over $XXX seeing a

in in implied is I as Okay. charge-off really that the or we by credit Got loss [indiscernible], loan fair then fair to quarters. how we were it I the to the couple provided that declines? trajectory already losses know impacted could here? up slightly start your follow-up it. Gaye. on And third in to if quarter. think guess, that about pandemic we Thanks, to assume And just next reserve for net been see Is should well, losses loss accordingly your reserve, has assume ratio content it and so, see the loss

unpack … to think what there, So seen I there's a lot But you've of John.

Yes, sorry.

banks have what a … the the no, I okay. What I and to than also other to which seen CECL early had of they bit when been us with lower think things intended provisions mean, morning, it's this was are the you've is part year, improve. start happen

very done low. it's the You're good in fourth We've of be XXXX COVID quarter. right, come the our that likely out the any losses have something here calendar and that portfolio going a scrub been that, may pops versus losses of in to period

and the largely things our I in One done May. modifications mentioned that of April that Gaye was think, were

so status. off payments thus it now to XX%, come at their we're status. And payment back modification regular about looks they're far onto already have regular and back like And coming

in us conclude. regular home very be confidence mentioned of payments, or that to low whatnot, it'll be the but just their COVID point, to XXXX in and but come when at resuming has that which relatively So looked already been Jim still a people this gives the good book right sort October start [indiscernible] it'll now, losses they're

it. Got

thank Okay, you. Mike,

our from take Jefferies. Haire with We'll question next Casey

Thanks. of ups Mike, follow a Good NIM. Yes. morning, guys. the couple on

rate? XXX is on funding low and rollover to to to XXX. those, then a obviously things, for pay FHLB at you the CD the this of bit rate? lower little that meaningfully -- advances going quarter. is guys continue What the the that down And Are also the what book, versus side opportunity Just continue repriced

guidance. I on and then overall NIM will start the to side me Let turn deposit it for Mike

for rate And I would that. tools the That'd XX back for in I dynamic of terms low points. teens. dynamically will for it overall toolkit. there's quarterly a But the lot basis turn year our deposits, there's room total to liability, spot funding the of costs, go average costs, so feel The we be some the in -- the funding -- the in optimized, overall with improvement. comfortable XXX, the was to XXX Mike On is rate

see your Yes. a we FHLB, won't on lot not so stay if probably you'll there on our year, next comfortable this you are year, for said, rest movement And we're maturities some do have FHLB comment just is funding back margin less cost a where for next lot sort opportunity what XXXX. to of see of of the there, they why of outlook until which us Gaye leads the of year, rates

efficient just And a things, record an of great. -- next but the quarter. guys we question side tease like like do you that what you run giving learning overage out little under to XX% efficiency guys was it we it run If the origination year, on on ratio there's historical more efficiency looks is the Okay, I guidance the the ratios? sounds in on on know next came aren't are efficiency. expectation fee or could you a back

a be those up. a tick XXXX that bit a under advertising lack X that client to sort from of just a benefited So off one-off, There travel see will months, the start and point costs for for you'll or and of XX.X%, any XX% in you we're I client right, and tease of I And quarter. you're of the has sort when lack event. think think just we're activity under marketing

I margin, the is think have given a at I of sort talk margin the the the of avoided has also do will we stability But about benefit update at next the had that in look come another efficiency start lot, pandemic is flow think this year some stability ratio back through it a which the of to to of January. and ratio. we'll why these point, been costs some the

there And client on adding opportunities, especially and service a we in are this thinkers view the long-term we business, Mike, right take great moment. long-term and are to

organic the So is the continue for business now time to in strong to growth. us invest

Understood.

a loan growth, the color some activity, drove of you City? provide on insights? just you in some guys there's geography, us question provide mortgage you New growth what's given I there geography. by New just Could last resi the to little quarter lot York Like loan York of on on City XX% a last color bit the referenced, suburb about think Just of that going the give can just

very strong. Yes,

That seen total market, activity So strong of quarter been that activity The billion. two the strong refi Los that activity New XX% up specifically of all total third also single-family regions majority and residential and and strong quite at that has suburbs has And in the especially quite the continues too. across key representing last our originations activity is quarter-over-quarter. our strong in to York, quarters. picked about And we've year-over-year. market were quite Angeles New be great been now of consistent quarter-over-quarter Across all of including in purchase over regions York $X.X was well. as the purchase

Great. Thank you.

question Chris We will take KBW. McGratty our from with next

about XX% bit -- that level could and XX% would to ratio Is date. about sheet going question. the anything about year? assets of the the XX% into at the dynamic, to or margin of size number, there for a mix couple balance look last given in you back come need years, just a drift Thanks liquidity which to you as the lower, have the support Great. proportion down of Mike, from next magical securities liquidity little

of we're above assets about XX% and things of is average there. focused our we're that one So going every very to on we quarter talk be our HQLA always levels, and

such. municipals don't as qualify We securities that do also have some largely

that know XX% don't I So below from a here. you go lot

it as hold for I instruments. much client it for or given some recently have cash lending client is our where to think it into We just and newer deploy would serve demand, bought assume of yields portfolio the in we now agency type really the for have not activity. been need focus that's client because

are items a with out, great. And a kind the election, other regulation. being one That's Okay. rates press. getting of One couple tax being maybe two of lot of and weeks

quarter asked any I sensitivity the last refinance in potential then business, any this proposals are ballot? some also the think and thoughts with from -- the either about given victory, I on student the Biden Biden with taxes thoughts question of to that lending Thanks. or credit your growth

to fairly Well, California mostly were move or if another loan bit really out people in student I we are movement have ready a Northeast there's macro mean the the refinance, and the up probably out in impacting I of candidate already. to your don't markets question impact actually on one by taxes very, of well. obviously, little but taxes, lower The based say very the among that our think that taxes but of of States, would you comment it's tax on terms of a -- holding a,

a that in over with delinquency credit much lending, quite of shifted we've actually volumes, Our The to as product and is to line base single-family it's the broader well. doing low, our consistent up is with our pleasure. consistent running personal and loan, good portfolios

with our we'll question UBS. from Vandervliet And take next Brock

these a deferrals. end very with wanted bit the to I game on to respect just much. Thanks hone in

XX% So rate. billion you've cure $X.X a got roughly

TDRs happens back million, go not or to payments, $XXX What modified under So million for P&I say, becomes those example, are what of $XXX those, normal those XXXX? may there?

CARES as CARES -- out a be Act. if do run ability back at would we'd loan cases that a end. Act then in which modification under to they're carried you if the Brock, likely to Yes, to is, a challenge, relief it there coming due it the extent continued have it's is [indiscernible] that, request, And for short-term under year, short-term this so year another many an would the does be come

likely that, at migration a of And you more you to year point, after any your deferrals see in so if totality then then start need will that to cases. because up some a

in loan The this, that are while other is route, range. still go it thing mid down say I'd the may devalues XX% the

XX modest this still portfolio. So time. relatively again the points the that is in math content at about loan what point, from at loss of point the is total And basis using that seen we've

basis Are you about there? mortgage it describe been it like if to million could gears albeit gain historical that over line points just very levels the gain, looked shifting $XX.X that aside historically, Okay. where volatile. of XXX was one, mortgage, and kind And we with in from had to looked back that,

to the of a while that started Fannie have acceleration saw prices. the, will of standpoint. why earnings one-off, was securitization some which we you has the banks the this sales, did previously the did say do improve of on them loans by one a sold we delivered be buy since relatively dislocation of recovered, that's of been without the from an we that it. and that over So done to price, upon wanted markets we We're pleased market the that, to gain we pretty don't attractive during had into one-off way I sort quarter. market that had and dislocation do that X%, at more And conforming that an sort to a lot gain execute positive back market opportunity given

rate I declare all running quarters, bit. bounced know that than few way I consistent it's gain in around past which it it So don't a it but of back, the had a had more at maybe better the is that

Got it.

color. Thanks the Okay. for

question Rochester from our next take We'll with Point. Compass Dave

guys. Hey, good Nice quarter. morning

Good morning, Dave. Thanks.

with growth start the to wanted this deposit I quarter.

had really guys to hit normal you're seeing strong on and XQ since tax a some pretty at well. had continue? much quarter as you what pretty season, based And growth that was you I You point, are even in a normally it wondering, was momentum impressive is July. for solid you just this expecting more

Thank strong residential being the and given and most so the do from the and on activity would opportunity the both on institutions is gives expect side at you to refis activity to other that acquire refis you half bringing great coming purchase also on side, consumer momentum to strongest as single-family of the us And second trend that we expect continue. their side usually relationships households business a yes, origination over clients out, on And new continue so the both the to the and you. us. actually because are pointed that

Yes.

case which I loan I is in about and then quarter from this pipeline, rates would last obviously that as I in meaningfully like guess call growth. banking was the Okay, capital you're up talked looks the if said capital earlier on that hear you fairly by there. business seeing loan still you resi, business was comment still also primarily great. that like, wondering the remaining you but it a great continuing, about business to just quarter call stable, just imagine driven curious mix that momentum sounded just was you're some and of made well, the what as well? And was had you And utilization the it sounded like on what

Yes.

compared let for of last when And -- at log quarter the me meaningfully one. same and last The look double is year So time the volumes the in with example, in first year. strong the residential, rate to X-week we pipeline both terms last volumes. single-family it's start

very are strong pipeline and pleased we with the client So activity.

very have are monetization XXs type equity great multifamily and in In a XXs. as We and space. mid year-over-year single-family continues well. attractive we valuations, XXs Capital mid rates that type seeing PE coverage high ratios of And mid is low with a speaking, given grew value to the remains being terms XX% PE volume. loan both strong utilizations for be tailwind and relatively we're and in the debt to XXs, call specs continues that rich commitments -- refi, and of and range. expect would of cautious PS, activity the slower purchase low The CRE service the of around on strong in to

also service from with the the services the professional including end side would on nonprofits. well, deposit sectors and has professional nonfinancial diversification I come addition, as In services,

guys. it. Thanks, right. All Great. Appreciate

Thank you.

Andrew our next with Piper question We'll take Sandler. from Liesch

morning, Good Hi. everyone.

Andrew. morning, Good

taking for the question. Thanks

is seemed end very but strong safe growth your the is to So, initial going the mid-teen of so the the with pipeline thoughts? into the obviously at you year year this far pace, that strong heading you're like than loan it Previously discussing fourth were guys growth. assume quarter, a to be stronger

some don't our the rates. of chain certainly quite continue if it'll mid-teens. have was which that's of -- closing busy XX% the as year-to-date the you we're fallout at closing What in pieces and know be persist We're closing Well, in to challenges least is that be to out. be of and take we to about closing. it well, obviously year, eliminating But should in careful PPP the

high think probably teens. we're I teens, mid mid

then you new does in pipeline management look clients some in And for Thanks. client How new there? growth adding it good Okay. business. the wealth the like sounds had inflows

just to is cycle in different wealth estimate The they quite harder sales a wealth the -- pipeline because little lending. than is management

have already and new don't adding the both slowest that managers us of comes of growing by existing clients necessarily have You that is Obviously, analysis lending. clients, on The year pipeline wealth in are last generally. advisors the new teams. and wealth part growth with of from you kind of teams, our bringing part hiring of new the

rate substantially. Okay. Understood. around level, for That's And gain The [indiscernible] forward? or of a just the or should backing good even Is housekeeping out follow-up December the this run very or going fee the on how still quarter, bounce a helpful. up side. questions couple this income should income was how

rate. that roughly so And just out better one probably One year to with our Yes, the policies was then in proceeds, that $X it. benefit had would so a each get from to have $X of things quarter, pull third run the the call annual we we that's million. million, claim be I there's over two an

you going probably rate if that a normalized out, gets better took those forward. run back you So to

Okay. taking questions. Thanks for my

We'll from Cyganovich take with question our Citi. next Arren Instructions] [Operator

Thanks.

about what you said, On maybe a a to guys. the talk It's to pretty for environment? XX% kind little lending almost can the of continues elevated have this residential in good elevated obviously be refi bit low purchase volumes refi still side, we you rate for just the runway low is would the somewhat from of the remain but rates. How long you

advisors So the there refi, relationships. our Republic sides are type clients trusted the first more in two client -- to see the client provides environment refi the deepen and is over an the these time we refinance to trial do opportunity the there's giving is -- so. And us and do There there of non-First the refi. rate of all, and

So to some although over given New space. coast price we would that as time. brings continue which origination that see in there that discovery, activity complete Francisco, meaningfully yet, in is the San And would We picking trend. quite not trend quarter-over-quarter, well including is activity the up purchase as to York then West also more additional continue

you. Thank Okay.

year's as it now very pipeline volumes. right stands we're So the strong the well pleased as volume rate is as last lock double quite is

Thanks.

Thank you.

David next James. We'll Long take question our Raymond with from

everyone. morning, Good

morning. Good

[indiscernible]. Mike Sorry.

Two worries. No things.

hand. get year? deposits your you The that last and level be off, know could a back I the had pandemic over on of to want picks simply a up trying portion at if cash of in risk on guess first next you of normalcy deposits the bit to is economy to the think say that of because one we your if string degree running taken there may I the just keep of was some and I there a that has quarter Is of deposit you've been little your side. to, customers

Yes.

both our and side, we've that as the side, PPP, sizes start the well relationships, the on see that consumer of out business as as -- clients up we me deepening the the the average on slightly have seen we’ve year-over-year So addressing, do a the of given on let the we account on because the referrals program lot service, gotten their back on gotten back of well. of business

these the the deposits are I underestimate in those of service safety grade We attracting and of our soundness to relationships stable, given the be also the And with also expect wouldn't coming the deposits in. bankers. times bank addition type to of in deepening the more service, and

checking so lot from and of checking the be money perspective, perspective, do are not barbell client continue and rate dynamic but client In that from they the business the attractive more given to we to a CDs that from strong market part our and acquisition. a a there's addition, rate CD environment optimization when you in given deposit of the as switched of we funding look that, the part toolkit, alternatives, at a non the of tools

more Got bit Maybe of second Slide on you you business detail. types exposures XX, just then that the of Just break it. bit exactly your a on service And provide higher clubs question, aviation, for Thank areas. those of loans the and in down color. but and some in what you buckets? can carry what are included those professional membership a about the in talking they risk, maybe little curious like you're the seem color

to airplane I'll finance guaranteed. worth take mostly is The our mostly higher private that. aviation clients net

facilities of course market of I know -- accounting Professional service on tend be credit firms, have there's determinable. guaranteed but sort -- occasional of then then type aren't firms, would some probably lending, that of be thing. there and the to clubs partner value we first to And there -- loan So firm, lines trust that those, improvement guaranteed would and be deed. of very is law many their don't with those actually assets aviation quite and

Thanks. I that Thanks. appreciate it. Got That's all color. had. I additional

Thanks.

next Jared Wells from Shaw question our take We'll with Fargo.

morning. Good Hi.

Jared. morning, Good

disruption deferrals, flow and is that loan are risk origination, impact value continued CRE guess. the you the it's office to on and back the comment of going at more assuming the impact valuations, any cash or through at to hospitality? Have whether at of through seen reappraisals? on is retail some Just I'm what those Can on you sales I that CRE categories

I Well, a yet not good would of say that's this you -- accurate. determined know, to are, be course clearly there is And question. the

They're that the non-branded cash On a also would interest they however, are sell catching but buildings, and price call. to it, mount of and space, office more The form as come now the office inner properties they this a it's hand, there clearly, XX% maybe free haven't on at the some many transactions, discovery discovery kind noticing drop, and higher, on price we on well deals hotels in beginning down. hotel city it's But up be facility. what hard -- is rate rates it's range to the and down hotels, is retail other are very will of rate flow. there the The anecdotal, sell been as this slightly beginning and them. properties cap indicate, to cap in in so

at is forgetting gross buildings And revenues from is everybody's so, down substantially, the carry think I these overlooked too. looking what's well, being on cost debt that the and

half So I loan but very case. more have of case XX%, in a on don't transactions we I to And XX% in in. overly it's device conservative it. discover it, -- the order don't really guarantees about exposed our We're each in below on portfolio think getting and more feel going we're given of below Manhattan, actually

That's changed great [indiscernible] color. does thoughts your from is I and the Thanks. home working And of that? bank. with Hudson Yards other space office potentially of maybe for how then on change looking And like environment the guess your the that, thoughts that need bigger at for projects

holding to the is reasonably rental kind then ask we on specifics, activity, activity, overall up Hudson and -- leasing enough, me Yards take that surprisingly Gaye well. Let but of speak

a delayed that's I aware a feet. yet, They think Yards the They've the a by going original obviously obviously. in its not lease, before this from We're it about it optimization, square done. high XX% in XX% part negotiations, other about is at high than year know as but were and don't about whole time and of Yards really, Hudson leasing it we're general you of they appreciating is it's buildings concerned a XX% enterprise. tech, probably Regular to and the is entire was not recently negotiation down slower know, about tech in took proceeding actually. XX%. because building. are those the was, actually signed XXX,XXX delivery, rates station, everybody's down It's COVID Moynihan out to Hudson hit. Facebook We to And in be taking of the all delayed its

to turn own our our of terms we're own thinking of terms In in use, Gaye me let on what offices.

is focus and primary So clients of our colleagues. COVID, during safety

with they're from colleagues that the XX% offices about preferred open on obviously our And campus of So the the two where banking exception of home. program. our employers in rotational fully is -- they're are are of also working

the to area. on There the and the in just office the four with PBO fully in the in ahead opened go expect in next would branches. York openings our in are quarter. new in XX openings. our the PBOs, office Hudson for So City mean, we're in Yards plan do And we we business I months we next XX about to X third open to Portland XX expect the New offices, months

are And those offices. looking clients to we in our serving forward so

Great. Thank you.

Thanks.

Chiaverini David next from our question We'll Wedbush with Securities. take

question Had thanks. tax the Hi, on rates. a

from tax XXXX, tax to change if election, rate tax that increase rate corporate the was XX% the Republic's tax First Republic's to extent So the after reduced to really First impact I were corporate could when XX%, what back XX%, wondering, rate didn't much. in to was rate?

Dave, So for question. the thanks

You're right about back in XXXX.

a low pretty bank optimized municipal life efficient securities, income had portfolio housing, the So insurance. between has on tax bank

a And perspective so be let's yield about when X% looking if new say at were have would rate, those investments would our as in because our would value XX% the a corporate the X% result, tax up a increase that overall greater federal rate, rate from go taxes.

That's Great. Thank I had. all you.

session. closing this the Herbert question-and-answer At to for today's concludes Jim remarks. will back time, conference turn That I

everyone. Thank much you very

We are you to today. on have delighted

Have expect very a We continue are of rest to business. a we strong have to and good year. the Backlog strong the much. delighted is you of day. with flow Thank

call. Thank for you your participation. today's concludes This

may now You disconnect.