THOMSON REUTERS STREETEVENTS EDITED TRANSCRIPT FRC - First Republic Bank Investor Day - Day 1 EVENT DATE/TIME: NOVEMBER 01, 2016 / 8:00PM GMT THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us ©2016 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. NOVEMBER 01, 2016 / 8:00PM, FRC - First Republic Bank Investor Day - Day 1 CORPORATE PARTICIPANTS Shannon Houston First Republic Bank - VP, Director of IR Jim Herbert First Republic Bank - Chairman & CEO (Founding) Ken Rosen Rosen Consulting Group - Chairman Gaye Erkan First Republic Bank - EVP, CIO and Chief Deposit Officer Jason Bender First Republic Bank - EVP & COO Mike Selfridge First Republic Bank - Senior EVP & Chief Banking Officer David Lichtman First Republic Bank - EVP & Chief Credit Officer Mary Deckebach First Republic Bank - Regional MD, Los Angeles Bill Dessoffy First Republic Bank - Regional MD, New York Kellie Abreu First Republic Bank - Regional MD, San Francisco Scott Dufresne First Republic Bank - Regional MD, Boston Nancy Segreto First Republic Bank - SVP, Head of Lending Services Dale Smith First Republic Bank - EVP & CIO Roberto Rivera First Republic Bank - MD, Relationship Manager Janice Jensen First Republic Bank - President & CEO, Habitat for Humanity East Bay/Silicon Valley Scott Finder First Republic Bank - SVP, Head of Digital Channels Gayatri Brar First Republic Bank - Relationship Manager-Eagle Lending Mollie Richardson First Republic Bank - SVP, Chief Administrative Officer Bill Ward First Republic Bank - EVP, Chief BSA/AML and Security Officer Crystal Bryant First Republic Bank - VP, Chief of Staff to the Chairman & CEO PRESENTATION Shannon Houston - First Republic Bank - VP, Director of IR Hi everyone, thank you very much for joining us today for First Republic Bank's Investor Day 2016. We appreciate the time you've taken to travel here and spend with us this afternoon and tomorrow. My name is Shannon Houston, I'm the Head of Investor Relations for First Republic Bank. A couple of quick housekeeping items first for those of us joining us in the room. (Conference Instructions) For those joining us via webcast, our presentations are available on the online portal. They can also be found in the filing section of First Republic Bank's website. Let me take just a moment to introduce in the room the kiosks that you'll see outlining the outside walls here. We hope that you'll take the time during the breaks to come visit these kiosks and learn even more about First Republic Bank. Over here on my right, we have [Maulee and Eiree]. They're sharing the all in one client experience workflow. We have the Deepak and Victoria to their right. They're providing a glimpse of our new online desktop and mobile banking experience. Over on this side, we have Mike O'Brien and Chris. We don't talk about technology without talking about safety and security, they're here joining us from our cyber security team. And next to them, we have [Tim, Meghan and Niery], they are sharing Eagle invest, our online investment management platform. With that, just a few notices. Please note that we may make forward-looking statements during this event that are subject to risks, uncertainties and assumptions. In addition, some of our discussion may include non-GAAP financial measures. For a more complete discussion of the risks and 2 THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us ©2016 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. NOVEMBER 01, 2016 / 8:00PM, FRC - First Republic Bank Investor Day - Day 1 uncertainties that could cause actual results to differ materially from any forward-looking statements and reconciliations of non-GAAP financial measures, see the Bank's FDIC filings and reports, all available on the Bank's website. Additionally, this event is being simultaneously audio webcast and the recording will be made available for replay following through the Bank's website. These sessions are not confidential and participants should have no expectation of privacy. Your participation in this event implies your consent to record these sessions for use in this webcast. And with that, before I turn it over to Jim Herbert, our Chairman and Chief Executive Officer, let us share with you a quick video. Thank you. (Video Playing) Jim Herbert - First Republic Bank - Chairman & CEO (Founding) Welcome. We're glad to have everybody here. Thanks very much. I'm Jim Herbert. I want to go over just a few things. And I want to introduce Ken Rosen. But let me start. You're going to see a lot of our management team that you just saw and others. There will be about 25 or 30 people that you'll see at different times, or be engaged with at dinner tonight. And I would encourage you, first and foremost, to get to know them, it's very important. It's a team, it's the way that the Bank has been built. And we're delighted to have everybody here. Thanks for the great attendance and coming along ways in many cases. So we appreciate that. The thoughts that I want to get across in this day and a half, or the team wants to get across is the team. That's first and foremost, is a very broad group of people leading and running and operating the Bank day to day, and that's very important. Also, let me back up and start with what Mike told me to start with -- Mike Roffler told me to start with. There are no surprises. You can read the charts and the filings and there are no surprises in here. We thought we'd try an Investor Day, we haven't done it for 30 years of being public and we're anxious to have your feedback on how it goes and what you'd like to see that you didn't see. The essence of the enterprise remains the same, it's not going to change; it's service for the client, it's efficiency of operation -- we'll talk about that in a little bit. We are very focused on the team and the support of each other, as well as the client. Our fundamental premise is very simple. We have happy employees, we'll have happy clients. We have happy clients, we're going to have happy shareholders. Let me go to this. I'm just going to do a couple of slides and I'll move on. But the measure that we care the most about, the one I care the most about is actually this one in here. If we take good care of the clients, they will continue to do more business with us. If they do more business with us and they're happy, they will tell their friends who will come over. And actually, if you think about it, that's the entire mantra of the enterprise. It's what we do and if you do it well, you win. And then the thing I don't normally talk about, that's a comparative activity, saw it in the absolute. The vast majority of the banking in the markets we operate in [coastal] is in the hands of four or five very large banks. So when you think about us and you say to yourself, can they keep this up, I would ask you to add to that, how are their big competitors doing? If they are not doing so well, the answer is yes. Even if they're doing well, then it gets a little tougher. But just so, when people say to us -- said to us years ago when we went into New York, how do you come into the Big Apple? The answer was, are you having a great experience at your local bank? And if the answer was anything other than yes, the opportunity was there. This leads to low client attrition. One of the keys to growth is not losing. The first rule is don't have to fight a riptide, don't have to fight a loss of client base. If you succeed in that, if you keep the clients that you have by saying to yourself every day, the best client is the one I already have. Take extremely good care of them, make them happy at the 66% -- 62% and 77% level. Then you can get new clients, and they will not -- the ones you have won't leave you. We have some charts later on that show the growth of some of the early cohorts of clients, it is quite stunning. Source of growth is 50% existing clients; that just all comes together. Let me just go to -- actually, we don't have one on here, I realize. That promoter score is in the -- standing here in the abstract, but that's more of -- the industry is 34, we should have put that on there, maybe. 3 THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us ©2016 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. NOVEMBER 01, 2016 / 8:00PM, FRC - First Republic Bank Investor Day - Day 1 Let me just go to the next slide here for a second.