Sustainable Culture & Community Engagement at First Republic

2020 Corporate Responsibility Report

James H. Herbert, II Profile Picture
Our business model of providing exceptional service to our colleagues, clients and communities is a reflection of our values and drives our consistent, sustainable growth. Doing the right thing and creating shareholder value are one and the same at First Republic.”
James H. Herbert, II
Founder, Chairman and CEO

To all our Stakeholders

Since 1985, our straightforward business model has focused on delighting our clients with exceptional service while always operating in a very safe and responsible manner. We treat each and every client with great care, and this level of care extends to all stakeholders, including our colleagues and communities. Our ability to consistently maintain this high standard of service, through a variety of environments, is the reason First Republic Bank has been successful for 35 years, including during this unprecedented pandemic.

Our colleagues are the heart of our business. They bring our values to life through their passion for serving our clients and communities. Many of the initiatives in this report were originated by our colleagues and we truly appreciate their dedication to First Republic. This entrepreneurial, inclusive way of working is the backbone of our unique culture which empowers colleagues to be their best. We have always believed that our business starts with empowered colleagues who care for and help build strong clients and communities, which ultimately leads to success for our shareholders. Creating shareholder value is the result of upholding our values and conducting business responsibly and ethically.

The events of the past year have brought us together to further reflect on our business and where we can harness our strengths to have an even greater positive impact on our colleagues, clients and communities. We have long believed that having a diverse team and inclusive culture have enabled us to deliver on our goal of providing extraordinary service. However, we recognize that we can and should do more. This has included partnering with Management Leadership for Tomorrow to take a more deliberate approach to diversity, equity and inclusion (DEI), expanding our diversity recruiting efforts and deepening our partnerships with community organizations dedicated to racial equity. Our enhanced focus will only strengthen our service culture and the creativity and teamwork of our colleagues.

Our 2020 Corporate Responsibility Report is focused around six key, long-term priorities which are core to our continued safe, sustainable growth. This year, we are pleased to provide a Sustainable Accounting Standards Board (SASB) index. We hope you find this helpful when learning about our responsible business practices.

Whether you are a colleague, a client or our neighbor, it is a privilege to serve you.

James H. Herbert, II

Founder, Chairman and CEO

Hafize Gaye Erkan

President and Board Member

Award Icon 2020

Corporate Social Responsibility Award

Foreign Policy Association

COVID-19: Caring for Our Stakeholders

Committed to serving our colleagues, clients and communities

We strive to be a source of stability, reliability, compassion and care for all of our stakeholders, at all times. By staying true to our client-centric model, being purposeful in executing our mission, and prioritizing safety and soundness, we aim to make a lasting impact on our clients, colleagues and communities.”

Hafize Gaye Erkan, President and Board Member

First Republic operates in a safe and sound manner at all times. In 2020, when faced with a sudden, unprecedented pandemic, this approach allowed us to respond to the needs of colleagues, clients and communities.

Our entrepreneurial team seamlessly transitioned to a remote working environment in less than one week without any interruption to service, and our Preferred Banking Offices remained open, with enhanced protocols to keep our colleagues and clients safe.

During the year, we supported our communities and clients by delivering over 11,500 Paycheck Protection Program (PPP) loans and making more than 4,000 client-friendly loan modifications, while also continuing to grow our business in a responsible manner. To further support our colleagues through this tireless effort, we enhanced our benefits with new services focused on health and well-being.

This past year provided further proof that extraordinary care is founded on trusted relationships rather than physical proximity.

Focusing on the health and well-being of our colleagues

  • Paid time off and paid sick leave for issues related to COVID-19
  • Three additional paid days off to recognize our colleagues’ exceptional work in 2020
  • COVID-19 testing covered at 100%
  • Bonus and ongoing remuneration for remote office setup and communications costs
  • Additional financial support for our frontline colleagues
  • Care packages containing healthy food and supplies sent to our Preferred Banking Offices
  • Employee Assistance Program offering employer-covered counseling sessions
  • Employer-paid One Medical membership for colleagues and dependents in addition to existing health plans
  • Employer-paid Calm app membership for mental health and well-being
  • Information and education sessions on constructive work-from-home methods and CARES Act legislation

Strengthening client relationships

  • Frequent client touchpoints and communications
  • Prudent, client-friendly modifications for clients experiencing hardship, typically deferring payments for six months¹
  • Participation in the Small Business Administration’s Paycheck Protection Program
  • Assistance with overdraft and late fees, and flexibility for early CD withdrawals
  • Epidemiologist-guided Preferred Banking Office strategy and dedicated hours for at-risk populations
  • Go Digital promotion to encourage clients to bank from home while social distancing practices are in place

¹Deferred payments may be included as a final balloon payment, reamortized over the remaining loan life, or repaid over the extended term utilizing the pre-modification monthly payments.

Supporting our communities during challenging times

  • First Republic COVID-19 Fund, including a Community Advisory Board donation program and matching gift program for colleague donations
  • Grants to support existing nonprofit clients in need
  • Sponsorship commitments honored for nonprofit partners regardless of whether events are being held
  • Digital resources for our nonprofit communities and virtual volunteering

Our Strategic Priorities

There are no businesses, only people.”
James H. Herbert, II, Founder, Chairman and CEO

As a people-centric organization, we have always believed that empowered colleagues build strong clients and communities — all of which lead to satisfied shareholders. Under this framework, we have six strategic priorities, which we view as being material to our long-term business performance:

First Republic our strategic priorities

2020 Highlights

Dedicated $3.7 billion in lending and investment capital to supporting historically underserved communities.

Deployed more than $1 billion to further home ownership for Black and Latinx individuals.1

Partnered with Management Leadership for Tomorrow to develop a comprehensive Diversity, Equity and Inclusion strategy.

Supported an estimated 250,000 jobs through 11,500 Paycheck Protection Program loans.

Volunteered 21,500 hours to support 710 nonprofits.

Supported 790 nonprofits with charitable contributions and grant awards.

Partnered with Corporate Citizenship to identify and focus our environmental impact initiatives.

Developing our Strategic Priorities

Our strategic priorities align with our core values and are critical to building a lasting business that serves the needs of our stakeholders — our colleagues, clients and communities, as well as our regulators and shareholders. These priorities are the outcome of:

Business Planning Process

Each year, we undertake a rigorous process that results in a long- term business plan approved by the Board of Directors.

Benchmarking and Research

We study peers and participate in industry events to identify topics that are material to our business and areas where we can enhance our business practices and communications.

Stakeholder Engagement

We strive to maintain honest, open lines of communication with our stakeholders through consistent, year-round engagement, which we believe is a cornerstone of strong corporate governance. Understanding our stakeholders’ priorities allows us to better serve them and create a sustainable path to success.

How We Engage Our Stakeholders

Colleagues

  • Our flat organizational structure enables two-way conversation between our colleagues and senior leadership. Two weekly companywide meetings, led by our executives, provide a forum for all colleagues to share their experiences.
  • Periodic employee engagement and Risk Mindset Survey results are communicated to the Board, executive and senior management, and colleagues as a way of identifying areas for improvement.

 

Clients

  • Our clients have a direct line of communication to their bankers and can now reach them more easily through our mobile banking app.
  • We established a formal outreach program to connect our largest client relationships with executive team members to gather feedback on our service.
  • Clients rate our service via our annual Net Promoter Score (NPS) survey. The results are incorporated in the compensation of our executives as well as more than 2,000 colleagues. As a service-oriented institution, we take complaints very seriously and have a process for resolving them in a timely manner.

 

Local Communities

  • We are active in supporting our local communities through our lending, investment, volunteering and giving.
  • Through engagement with our Community Advisory Board, we keep our priorities aligned with the needs of our communities.

 

Regulators

  • We proactively work with our regulators to monitor and enhance the strength and stability of the Bank.
  • We participate in regulatory exams, publish our financial results, respond to regulatory inquiries and work closely with representatives from our primary regulators.

 

Shareholders

  • Our executives and client service professionals meet with shareholders throughout the year to communicate company performance and environmental, social and governance matters. Shareholder feedback is reported to the Board of Directors.
  • During 2020, we held over 190 institutional investor meetings, phone calls and video conferences with shareholders, representing nearly two-thirds of our outstanding shares as of December 31, 2020.