First Republic Bank (FRC) 2023 Q1 法說會逐字稿

Greetings, and welcome to First Republic Bank's First Quarter 2023 Earnings Conference Call. Today's conference is being recorded. (Operator Instructions). I would now like to turn the call over to Mike Ioanilli, Vice President and Director of Investor Relations. Please go ahead.

您好，歡迎參加第一共和銀行 2023 年第一季財報電話會議。今天的會議正在錄製。 （操作員指令）。現在，我想將電話轉給副​​總裁兼投資者關係總監 Mike Ioanilli。請繼續。

Thank you. Before we begin, please note that our remarks include forward-looking statements. Information about these statements are available in the earnings press release and the Bank's FDIC filings, all available on the Bank's website. The forward-looking statements reflect our current views about future events and financial performance and are subject to risks, uncertainties, assumptions and changes in circumstances: a number of which have increased as a result of recent developments that may cause our actual results to differ materially from historical results and those expressed or implied in any forward-looking statements.

謝謝。在我們開始之前，請注意我們的評論包括前瞻性陳述。有關這些聲明的資訊可在收益新聞稿和銀行的 FDIC 文件中找到，所有這些都可以在銀行的網站上找到。前瞻性陳述反映了我們目前對未來事件和財務表現的看法，並受風險、不確定性、假設和情況變化的影響：其中一些風險由於最近的發展而增加，可能導致我們的實際結果與歷史結果以及任何前瞻性陳述中表達或暗示的結果存在重大差異。

Forward-looking statements made on this call speak only as of today and will not be updated. Given the events of March, we are withdrawing all previously communicated financial guidance. Please note that there will be no question-and-answer session following our prepared remarks. And now I would like to turn the call over to Mike Roffler, CEO and President.

本次電話會議所作的前瞻性陳述僅代表今日的觀點，不會更新。鑑於三月發生的事件，我們將撤回所有先前傳達的財務指導。請注意，我們準備好的發言之後將不會有問答環節。現在我想將電話轉給執行長兼總裁 Mike Roffler。

Thank you, Mike. On today's call, we'll discuss the events in March, actions to strengthen our business and first quarter results. Since our founding, First Republic has been fully committed to serving our clients and communities. Over the past 7 weeks, as we were impacted by industry events, our commitment to delivering exceptional client service has not wavered. We continue to meet our clients' banking and wealth management needs as we always have.

謝謝你，麥克。在今天的電話會議上，我們將討論三月的事件、加強業務的行動和第一季的表現。自成立以來，第一共和一直致力於服務我們的客戶和社區。在過去的 7 周里，儘管我們受到行業事件的影響，但我們提供卓越客戶服務的承諾並未動搖。我們一如既往地繼續滿足客戶的銀行和財富管理需求。

I'd like to take a moment to thank our colleagues for their commitment to First Republic and their uninterrupted service of our clients and communities throughout this challenging period. Their dedication is inspiring. I would also like to reiterate our appreciation for the group of America's largest banks who placed $30 billion in uninsured deposits with us, as well as for our state and federal regulators who have continued to provide us with expert support.

我想花點時間感謝我們的同事對第一共和國的承諾以及在這段充滿挑戰的時期對我們的客戶和社區的不間斷服務。他們的奉獻精神令人鼓舞。我還要再次對美國最大的幾家銀行向我們存入 300 億美元無保險存款表示感謝，也對我們的州和聯邦監管機構繼續為我們提供專業支持表示感謝。

Lastly, I would also like to thank our clients for their ongoing advocacy. Despite the uncertainty of the past 2 months and while average account sizes have decreased, we have retained over 97% of client relationships that banked with us at the start of the first quarter. We are grateful for our clients who continue to place their trust in First Republic.

最後，我還要感謝我們的客戶一直以來的支持。儘管過去 2 個月存在不確定性，且平均帳戶規模有所下降，但我們仍保留了第一季初 97% 以上的客戶關係。我們感謝客戶對第一共和國的持續信任。

Let me now discuss our current funding. As the industry events unfolded in March, we experienced unprecedented deposit outflows. Beginning the week of March 27, our deposits stabilized and they have remained stable since that time. As of March 31, and excluding deposits from the large banks, insured deposits were $54.6 billion or 73% of total deposits. Uninsured deposits were $19.8 billion or 27% of total deposits.

現在讓我討論一下我們目前的資金狀況。隨著3月產業事件的展開，我們經歷了前所未有的存款外流。從 3 月 27 日那一周開始，我們的存款開始穩定下來，並且從那時起一直保持穩定。截至 3 月 31 日，不包括大型銀行的存款，保險存款為 546 億美元，佔總存款的 73%。未保險存款為 198 億美元，佔總存款的 27%。

Consumer deposits represented 52% of total deposits. Total deposits as of April 21, including the $30 billion received from the large banks were $102.7 billion, down only 1.7% from the end of the first quarter. This slight decline from March 31 reflects seasonal client tax payments that occur each April. In response to the unprecedented deposit outflows we experienced toward the middle of March 2023, we accessed additional liquidity to ensure we could serve client needs. Our ability to do so swiftly was supported by the outstanding credit quality of our loan portfolio.

消費者存款佔總存款的52%。截至4月21日，包括從大型銀行收到的300億美元在內，總存款為1,027億美元，僅比第一季末下降1.7%。自 3 月 31 日以來的輕微下降反映了每年 4 月發生的季節性客戶納稅。為了因應 2023 年 3 月中旬出現的前所未有的存款外流，我們獲得了額外的流動性以確保能夠滿足客戶的需求。我們之所以能夠迅速採取行動，得益於我們貸款組合的優異信用品質。

Total borrowings peaked on March 15 at $138.1 billion.

總借款額在 3 月 15 日達到高峰 1,381 億美元。

At that time, we had $34 billion of cash and cash equivalents available on our balance sheet. We have since repaid a portion of our borrowings. As of March 31, total borrowings have declined to $106.7 billion, and we had $13.2 billion of cash and cash equivalents available on our balance sheet. Importantly, as of April 21, we had $45.1 billion of unused available borrowing capacity and cash on hand. This available liquidity is more than 2x our uninsured deposits, excluding the $30 billion of uninsured deposits received from the large banks.

當時，我們的資產負債表上有 340 億美元的現金和現金等價物。我們現在已償還部分借款。截至 3 月 31 日，總借款已下降至 1,067 億美元，我們的資產負債表上有 132 億美元的現金和現金等價物。重要的是，截至 4 月 21 日，我們有 451 億美元未使用的可用借貸能力和現金。這種可用流動性是我們的無保險存款的兩倍多，不包括從大型銀行收到的 300 億美元無保險存款。

Turning to credit. Strong credit quality has been a pillar of First Republic, and the strength of our portfolio was demonstrated again this quarter. During the first quarter, we had net recoveries of approximately $200,000. Nonperforming assets ended the quarter at only 6 basis points of total assets. Given the current industry focus on commercial real estate, I want to note that our total commercial real estate portfolio represents only 6% of total loans and has some average loan-to-value ratio of just 46%.

轉向信用。強大的信用品質一直是第一共和銀行的支柱，本季我們投資組合的實力再次得到體現。第一季度，我們的淨回收金額約為 20 萬美元。截至本季末，不良資產僅佔總資產的 6 個基點。鑑於當前行業重點關注商業房地產，我想指出的是，我們的商業房地產投資組合僅佔總貸款的 6%，平均貸款價值比僅為 46%。

Turning to capital. We remain well capitalized with a Tier 1 leverage ratio of 8.25%, a common equity Tier 1 ratio of 9.32% and a total risk-based capital ratio of 12.71% at quarter end. As previously announced and as a matter of prudent capital management, we have suspended dividends on all common and preferred stock.

轉向資本。我們的資本仍然充足，季度末的一級槓桿率為 8.25%，普通股一級資本比率為 9.32%，總風險資本比率為 12.71%。正如先前宣布的那樣，作為審慎的資本管理，我們已暫停所有普通股和優先股的股息。

Turning to Wealth Management. During the quarter, assets under management increased 7%, including $11 billion of net client inflows. Following recent industry events, wealth management assets from teams that have departed were responsible for less than 20% of total wealth management assets as of March 31, 2023. However, we anticipate retaining a portion of the wealth management assets associated with departing teams.

轉向財富管理。本季度，管理資產成長了 7%，其中包括 110 億美元的淨客戶流入。在最近的產業事件之後，截至 2023 年 3 月 31 日，已離職團隊的財富管理資產佔總財富管理資產的不到 20%。但是，我們預計將保留與離職團隊相關的部分財富管理資產。

As of April 21, 2023, First Republic has retained nearly 90% of wealth professionals. This is a testament to the terrific wealth management franchise, our talented teams have built over the years. We remain fully committed to our integrated banking and wealth management model and the unique benefits it provides to clients. Though we face challenges and uncertainties, with the stabilization of our deposit base and the strength of our credit quality and capital position, we continue to take steps to strengthen our business.

截至 2023 年 4 月 21 日，第一共和銀行已留住近 90% 的財富專業人士。這證明了我們的優秀團隊多年來建立的卓越財富管理特許經營權。我們始終致力於我們的綜合銀行和財富管理模式及其為客戶提供的獨特優勢。儘管我們面臨挑戰和不確定性，但隨著存款基礎的穩定以及信貸品質和資本狀況的強勁，我們將繼續採取措施加強業務。

First, we are focusing on increasing our deposits. We are doing so by focusing on insured deposits from new consumers, small businesses and nonprofit organizations. We are also focused on serving our existing clients by providing off-balance sheet liquidity solutions as well as educating on and optimizing their FDIC insurance options. And we are leveraging our preferred banking offices which remain an important channel for driving deposit growth. Going forward, uninsured deposits will remain a much smaller percentage of total deposits than in the past.

首先，我們致力於增加存款。我們透過專注於來自新消費者、小型企業和非營利組織的保險存款來實現這一目標。我們也致力於為現有客戶提供表外流動性解決方案以及指導和優化他們的 FDIC 保險選擇。我們正在利用我們首選的銀行辦事處，這仍然是推動存款成長的重要管道。展望未來，無保險存款在總存款中所佔的比例仍將比過去小得多。

Second, we are working to decrease our loan balances to correspond with our reduced reliance on uninsured deposits. We are doing so by moderating our loan volumes, and we are focusing on originating loans to sell in the secondary market. We intend to retain servicing on these loans as we always have, so that we remain the primary point of contact for our clients. Through these actions, we intend to reduce the size of our balance sheet, reduce our reliance on short-term borrowings and address the challenges we continue to face.

其次，我們正在努力減少貸款餘額，以減少對無保險存款的依賴。我們透過控制貸款量來實現這一目標，並專注於發放貸款在二級市場上銷售。我們打算像往常一樣繼續為這些貸款提供服務，以便我們仍然是客戶的主要聯絡點。透過這些行動，我們旨在減少資產負債表規模，減少對短期借款的依賴，並應對我們繼續面臨的挑戰。

Third, we are taking steps to meaningfully reduce our expenses to align with our focus on reducing the size of the balance sheet. These expense reductions are designed in a way that supports our continued focus on client service and does not affect our regulatory and risk-related support and controls.

第三，我們正在採取措施大幅削減開支，以符合我們縮減資產負債表規模的重點。這些費用削減旨在支持我們繼續專注於客戶服務，並且不會影響我們的監管和與風險相關的支援和控制。

Actions underway include: significant reductions to executive officer compensation as previously disclosed, condensing corporate office space within our markets and reducing nonessential projects and activities. With reductions in projects, activities, and loan volume, we expect to reduce the size of our workforce by approximately 20% to 25% during the second quarter.

正在進行的行動包括：大幅削減高階主管薪酬（如前所述）、壓縮我們市場內的公司辦公空間並減少非必要的項目和活動。隨著專案、活動和貸款量的減少，我們預計第二季員工規模將減少約 20% 至 25%。

This will be an incredibly difficult decision to make, and we are committed to doing so with respect and care for our colleagues. In addition to the actions I've outlined, we are pursuing strategic options to expedite our progress while reinforcing our capital position. I also want to underscore the key aspects of our business that will remain unchanged. These include operating a simple and straightforward business model focused on delivering exceptional client service, working collaboratively to meet the banking and wealth management needs of our clients, maintaining consistently high credit quality and serving and creating opportunity within our communities.

這將是一個極其艱難的決定，我們致力於在尊重和關心同事的情況下做出這項決定。除了我所概述的行動之外，我們還在尋求策略選擇，以加快我們的進展，同時鞏固我們的資本地位。我還想強調一下我們業務中保持不變的關鍵方面。這些包括經營一個簡單而直接的商業模式，專注於提供卓越的客戶服務，協同工作以滿足客戶的銀行和財富管理需求，保持持續的高信用品質以及為我們的社區提供服務和創造機會。

During 2022, First Republic dedicated $4.8 billion in lending and investment capital to support underserved and underrepresented communities. It is a privilege to serve our clients and help drive economic growth within our communities. We are grateful for the continued support and thank everyone for joining today's call.

2022 年，第一共和銀行投入 48 億美元的貸款和投資資本來支持服務不足和代表性不足的社區。我們很榮幸能夠為客戶服務並幫助推動社區的經濟成長。我們感謝大家一直以來的支持，並感謝大家參加今天的電話會議。

This concludes today's call, and thank you for your participation. You may now disconnect.

今天的電話會議到此結束，感謝您的參與。您現在可以斷開連線。