Consolidated Statements of Income

in thousands, except per share amounts

YEAR ENDED DECEMBER 31 2019 2018 2017

Interest income:

Loans  $ 2,986,210 $ 2,442,469 $ 1,903,070
Investments 547,988 540,753 521,837
Other 21,446 25,187 14,861
Cash and cash equivalents 23,835 23,197 11,850
Total interest income 3,579,479 3,031,606 2,451,618

Interest expense:

Deposits 500,557 290,040 134,786
Borrowings 314,755 240,458 165,369
Total interest expense 815,312 530,498 300,155

Net interest income

2,764,167 2,501,108 2,151,463
Provision for loan losses 61,690 76,092 60,181
Net interest income after provision for loan losses 2,702,477 2,425,016 2,091,282

Noninterest income:

Investment management fees 359,332 341,539 282,868
Brokerage and investment fees 41,035 31,867 26,666
Insurance fees 12,708 10,090 5,555
Trust fees 16,549 14,633 13,658
Foreign exchange fee income 41,026 35,606 27,691
Deposit fees 26,071 24,974 22,633
Loan and related fees 19,819 15,713 13,012
Loan servicing fees, net 11,348 13,302 13,800
Gain on sale of loans 535 5,616 9,233
Gain (loss) on investment securities (3,436) 5,202 (833)
Income from investments in life insurance 45,570 40,670 37,874
Other income 6,663 4,233 8,304
Total noninterest income 577,220 543,445 460,461

Noninterest expense:

Salaries and employee benefits 1,245,526 1,109,228 930,908
Information systems 273,337 241,752 208,625
Occupancy 192,678 152,258 136,746
Professional fees 68,099 60,058 56,950
Advertising and marketing 65,961 60,463 48,398
FDIC assessments 38,759 58,122 55,792
Other expenses 262,101 234,838 202,122
Total noninterest expense 2,146,461 1,916,719 1,639,541
Income before provision for income taxes 1,133,236 1,051,742 912,202
Provision for income taxes 202,907 197,914 154,542
Net income 930,329 853,828 757,660
Dividends on preferred stock 49,070 57,725 58,040
Net income available to common shareholders $ 881,259 $ 796,103 $ 699,620
Basic earnings per common share $ 5.25 $ 4.89 $ 4.44
Diluted earnings per common share $ 5.20 $ 4.81 $ 4.31
Dividends per common share $ 0.75 $ 0.71 $ 0.67
Weighted average shares — basic 167,908 162,948 157,624
Weighted average shares — diluted 169,551 165,612 162,340
See notes to consolidated financial statements in our Annual Report on Form 10-K.

Consolidated Balance Sheets

in thousands, except per share amounts

Assets
AS OF DECEMBER 31 2019 2018
Cash and cash equivalents $ 1,699,557 $ 2,811,159

Investment securities:

Debt securities available-for-sale 1,282,169 1,779,116
Debt securities held-to-maturity 17,147,633 14,436,973
Equity securities (fair value) 19,586 18,719
Total investment securities 18,449,388 16,234,808

Loans:

Single family (1–4 units) 47,985,651 37,955,252
Home equity lines of credit 2,501,432 2,542,713
Multifamily (5+ units) 12,428,452 10,357,839
Commercial real estate 7,537,085 6,677,440
Single family construction 761,589 645,924
Multifamily/commercial construction 1,532,834 1,576,582
Business 11,646,816 10,998,503
Stock secured 1,897,511 1,432,911
Other secured 1,433,399 1,105,751
Unsecured 3,072,062 2,572,367
Total loans 90,796,831 75,865,282

Allowance for loan losses

(496,104) (439,048)
Loans, net 90,300,727 75,426,234
Loans held for sale 23,304 98,985
Investments in life insurance 1,434,642 1,376,579
Tax credit investments 1,100,509 1,057,541
Premises, equipment and leasehold improvements, net 386,841 332,483
Goodwill and other intangible assets 235,269 273,974
Other assets 2,633,397 1,593,441
Total Assets $ 116,263,634 $ 99,205,204
Liabilities and Equity
AS OF DECEMBER 31 2019 2018

Liabilities:

Deposits:

Noninterest-bearing checking $ 33,124,265 $ 30,033,658
Interest-bearing checking 19,696,859 17,089,520
Money market checking 12,790,707 10,317,436
Money market savings and passbooks 10,586,355 10,245,107
Certificates of deposit 13,935,060 11,377,515
Total deposits 90,133,246 79,063,236
Short-term borrowings 800,000 100,000
Long-term FHLB advances 12,200,000 8,700,000
Senior notes 497,719 896,432
Subordinated notes 777,885 777,475
Other liabilities 2,003,677 990,284
Total Liabilities 106,412,527 90,527,427

Shareholders' Equity:

Preferred stock, $0.01 par value per share;
1,145,000 and 940,000 shares issued and outstanding 1,145,000 940,000
Common stock, $0.01 par value per share;
168,620,708 and 164,901,950 shares issued and outstanding 1,686 1,649
Additional paid-in capital 4,214,915 4,024,306
Retained earnings 4,484,375 3,731,205
Accumulated other comprehensive income (loss) 5,131 (19,383)
Total Shareholders’ Equity 9,851,107 8,677,777
Total Liabilities and Shareholders’ Equity $ 116,263,634 $ 99,205,204
See notes to consolidated financial statements in our Annual Report on Form 10-K.

First Republic Common and Preferred Stock
First Republic Bank’s Common Stock is traded on the New York Stock Exchange (“NYSE”) under the symbol FRC. At December 31, 2019, the Bank believes that its shares are held beneficially by approximately 175,000 shareholders.

First Republic Bank’s issues of Preferred Stock trade as depositary shares on NYSE under the symbols FRCPrF for the Series F, FRCPrG for the Series G, FRCPrH for the Series H, FRCPrI for the Series I and FRCPrJ for the Series J.

Additional Information and Where to Find It
In accordance with the Securities Exchange Act of 1934 (the “Exchange Act”), First Republic files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements for the annual meeting of shareholders and other information with the Federal Deposit Insurance Corporation (“FDIC”), copies of which are available on the FDIC website at https://efr.fdic.gov/fcxweb/efr/index.html, in the Investor Relations section of our website at firstrepublic.com or upon written or telephone request to us at: First Republic Bank Investor Relations, 111 Pine Street, San Francisco, CA 94111, (415) 392-1400.

Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this document that are not historical facts are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Exchange Act. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimates,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those expressed or anticipated in such forward-looking statements as a result of risks and uncertainties more fully described in the risk factors in our 2019 Annual Report on Form 10-K.

Forward-looking statements involving such risks and uncertainties include, but are not limited to, statements regarding: projections of loans, assets, deposits, liabilities, revenues, expenses, tax liabilities, net income, capital expenditures, liquidity, dividends, capital structure, investments or other financial items; expectations regarding the banking and wealth management industries; descriptions of plans or objectives of management for future operations, products or services; forecasts of future economic conditions generally and in our market areas in particular, which may affect the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans; our opportunities for growth and our plans for expansion (including opening new offices); expectations about the performance of any new offices; projections about the amount and the value of intangible assets, as well as amortization of recorded amounts; future provisions for credit losses on loans and debt securities, as well as for unfunded loan commitments; changes in nonperforming assets; expectations regarding the impact of the COVID-19 pandemic; projections about future levels of loan originations or loan repayments; projections regarding costs, including the impact on our efficiency ratio; and descriptions of assumptions underlying or relating to any of the foregoing. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: significant competition to attract and retain banking and wealth management customers, from both traditional and non-traditional financial services and technology companies; our ability to recruit and retain key managers, employees and board members; the possibility of earthquakes, fires and other natural disasters affecting the markets in which we operate; the negative impact and disruptions resulting from the COVID-19 pandemic on our colleagues and clients, the communities we serve and the domestic and global economy, which may have an adverse effect on our business, financial position and results of operations; interest rate risk and credit risk; our ability to maintain and follow high underwriting standards; economic and market conditions, including those affecting the valuation of our investment securities portfolio and credit losses on our loans and debt securities; real estate prices generally and in our markets; our geographic and product concentrations; demand for our products and services; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate and the 11th District Monthly Weighted Average Cost of Funds Index, as well as other alternative reference rates; the regulatory environment in which we operate, our regulatory compliance and future regulatory requirements; any future changes to regulatory capital requirements; legislative and regulatory actions affecting us and the financial services industry, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), including increased compliance costs, limitations on activities and requirements to hold additional capital, as well as changes to the Dodd-Frank Act pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act; our ability to avoid litigation and its associated costs and liabilities; future FDIC special assessments or changes to regular assessments; fraud, cybersecurity and privacy risks; and custom technology preferences of our customers and our ability to successfully execute on initiatives relating to enhancements of our technology infrastructure, including client-facing systems and applications.

For a discussion of these and other risks and uncertainties, see the risk factors in our 2019 Annual Report on Form 10-K and any subsequent reports filed by First Republic under the Exchange Act. These filings are available in the Investor Relations section of our website. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document and in our 2019 Annual Report on Form 10-K and our other public filings under the Exchange Act. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.