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，歡迎來到 First Republic Bank 的 2023 年第一季度收益電話會議。今天的會議正在錄製中。 （操作員說明）。我現在想把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含前瞻性陳述。有關這些報表的信息可在收益新聞稿和銀行的 FDIC 文件中找到，所有這些都可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業績的看法，並受風險、不確定性、假設和情況變化的影響，其中一些因最近的發展而增加，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明示或暗示的結果。

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.

此次電話會議上的前瞻性陳述僅在今天發表，不會更新。鑑於 3 月份的事件，我們將撤回之前傳達的所有財務指導。請注意，在我們準備好的發言之後將不會有問答環節。現在我想把電話轉給首席執行官兼總裁 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，邁克。在今天的電話會議上，我們將討論 3 月份發生的事件、加強業務的行動和第一季度業績。自成立以來，First Republic 一直致力於為我們的客戶和社區提供服務。在過去的 7 周里，由於我們受到行業事件的影響，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在這個充滿挑戰的時期對第一共和國的承諾以及他們為我們的客戶和社區提供的不間斷服務。他們的奉獻精神令人鼓舞。我還想重申，我們感謝美國最大的銀行集團向我們存放了 300 億美元的無保險存款，也感謝我們的州和聯邦監管機構繼續為我們提供專家支持。

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，而且平均賬戶規模有所下降，但在第一季度初，我們保留了 97% 以上的客戶關係。我們感謝繼續信任 First Republic 的客戶。

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。隨著 3 月份行業事件的展開，我們經歷了前所未有的存款外流。從 3 月 27 日那週開始，我們的存款趨於穩定，自那時以來一直保持穩定。截至 3 月 31 日，不包括來自大型銀行的存款，受保存款為 546 億美元，佔存款總額的 73%。未投保存款為 198 億美元，佔存款總額的 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 億美元的存款總額為 1027 億美元，比第一季度末僅下降 1.7%。與 3 月 31 日相比的這種小幅下降反映了每年 4 月發生的季節性客戶稅款支付。為了應對我們在 2023 年 3 月中旬經歷的前所未有的存款外流，我們獲得了額外的流動性以確保我們能夠滿足客戶的需求。我們迅速做到這一點的能力得到了我們貸款組合出色信用質量的支持。

Total borrowings peaked on March 15 at $138.1 billion.

總借款在 3 月 15 日達到 1381 億美元的峰值。

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。我們已經償還了部分借款。截至 3 月 31 日，總借款已降至 1067 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，我們手頭有 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未保險存款的 2 倍多，不包括從大型銀行收到的 300 億美元未保險存款。

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%.

轉向信貸。強大的信貸質量一直是 First Republic 的支柱，本季度我們的投資組合實力再次得到體現。第一季度，我們的淨回收額約為 200,000 美元。不良資產在本季度末僅佔總資產的 6 個基點。鑑於當前行業對商業房地產的關注，我想指出的是，我們的商業房地產投資組合總額僅佔貸款總額的 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。截至季度末，我們的一級槓桿比率為 8.25%，普通股一級比率為 9.32%，基於風險的總資本比率為 12.71%，我們的資本充足。正如之前宣布的那樣，出於審慎的資本管理，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，管理資產增長 7%，其中包括 110 億美元的客戶淨流入。在最近的行業事件之後，截至 2023 年 3 月 31 日，已離職團隊的財富管理資產佔財富管理資產總額的比例不到 20%。但是，我們預計會保留一部分與離職團隊相關的財富管理資產。

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，First Republic 保留了近 90% 的財富專業人士。這證明了我們才華橫溢的團隊多年來建立的卓越財富管理特許經營權。我們仍然完全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利益。儘管我們面臨挑戰和不確定性，但隨著我們存款基礎的穩定以及我們信貸質量和資本狀況的增強，我們繼續採取措施加強我們的業務。

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.

一是著力增加存款。為此，我們專注於新消費者、小型企業和非營利組織的受保存款。我們還專注於通過提供表外流動性解決方案以及教育和優化他們的 FDIC 保險選擇來為現有客戶提供服務。我們正在利用我們首選的銀行辦事處，這仍然是推動存款增長的重要渠道。展望未來，未投保存款佔總存款的比例將比過去小得多。

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，我們正在努力減少我們的貸款餘額，以配合我們減少對未投保存款的依賴。我們通過降低貸款量來做到這一點，並且我們專注於發放貸款以在二級市場上出售。我們打算一如既往地為這些貸款提供服務，因此我們仍然是客戶的主要聯繫點。通過這些行動，我們打算縮減資產負債表規模，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，我們正在採取措施有意義地減少開支，以配合我們對縮減資產負債表規模的關注。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風險相關支持和控制。

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：如前所述，大幅削減執行官薪酬，壓縮我們市場內的公司辦公空間，並減少不必要的項目和活動。隨著項目、活動和貸款量的減少，我們預計第二季度的員工人數將減少約 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，我們承諾在尊重和關心我們的同事的情況下做出決定。除了我概述的行動之外，我們還在尋求戰略選擇，以加快我們的進步，同時加強我們的資本狀況。我還想強調我們業務的關鍵方面將保持不變。其中包括運營一個簡單直接的商業模式，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，保持始終如一的高信用質量，並在我們的社區內服務和創造機會。

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，First Republic 投入了 48 億美元的貸款和投資資金，以支持服務不足和代表性不足的社區。能夠為我們的客戶提供服務並幫助推動我們社區的經濟增長是一種榮幸。我們感謝一直以來的支持，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。您現在可以斷開連接。