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The year ending December 1, 2006 was a very successful one for First Republic. All areas of our business—Private Banking, Wealth Management, Trust and Brokerage—showed increased assets under management and substantially enlarged client bases.

Consistency of Service

Our philosophy of offering extraordinary service remains consistent, in every part of the Bank, year in and year out. The brand and franchise of First Republic are embodied in this commitment to exceptional service and client satisfaction. Such service promotes client stability and favorable word-of-mouth which, in turn, leads to the rapid expansion of our franchise.

During 2006, our assets grew 25% to $11.6 billion; our deposits grew 27% to $8.9 billion; and total wealth management assets grew 26% to $17.5 billion. Such strong rates of expansion reflect a very high level of client approval.

The world of private banking is wide-ranging and rapidly expanding. First Republic expects to be the very best for the clients we serve in our geographic regions, and we will continually strive to "raise the bar" on product and service delivery to ensure that expectations are exceeded and new, higher standards are set.

Our wealth management offerings expanded meaningfully during 2006. Importantly, we now offer financial consulting and asset allocation analysis in conjunction with our open architecture investment platform. This offering was well received by our clients during 2006 and was augmented by the hiring of a number of new investment advisory professionals.

Geographic Expansion

During the past year, we expanded into Boston, Greenwich, Portland, and Seattle. These were all new markets, and all are doing well. Additionally, we undertook our first Bank merger, acquiring the Bank of Walnut Creek, which expanded our presence in San Francisco's East Bay region. This merger is now complete including systems consolidation.