##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



---



FORM 10-Q



---



QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2004



Commission File Number: 000-33461



---



FIRST REPUBLIC PREFERRED CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)



---



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 91-1971389                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|111 Pine Street, 2nd Floor, San Francisco, California          |  | 94111                               
|(Address of principal executive offices)                       |  | (Zip Code)                          



Registrants
telephone number, including area code: (415) 392-1400



---



Securities registered pursuant to Section 12(b) of the Act:

None



Securities registered pursuant to Section 12(g) of the Act:

8.875% Noncumulative Perpetual Series B Preferred Stock

7.25% Noncumulative Perpetual Series D Preferred Stock



---



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No ̈



The number of shares outstanding of the registrants common stock, par value $0.01 per share, as of May 3, 2004 was
29,362,633.



---



---

##### Table of Contents

FIRST REPUBLIC PREFERRED CAPITAL CORPORATION



TABLE OF CONTENTS



|                               |  |                                                                                           |  |   
|------------------------------ |  | ----------------------------------------------------------------------------------------- |  | --
|PART I  FINANCIAL INFORMATION
|                               |  |                                                                                          
|Item 1.                        |  | Financial Statements (Unaudited)                                                          |  |   
|                               |  |                                                                                          
|                               |  | Balance Sheet  March 31, 2004 and December 31, 2003                                      |  | 3 
|                               |  |                                                                                          
|                               |  | Statement of Income  Three Months Ended March 31, 2004 and 2003                          |  | 4 
|                               |  |                                                                                          
|                               |  | Statement of Changes in Stockholders Equity  Three Months Ended March 31, 2004 and 2003 |  | 5 
|                               |  |                                                                                          
|                               |  | Statement of Cash Flows  Three Months Ended March 31, 2004 and 2003                      |  | 6 
|                               |  |                                                                                          
|                               |  | Notes to Financial Statements                                                             |  | 7 
|                               |  |                                                                                          
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations     |  | 11
|                               |  |                                                                                          
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                |  | 14
|                               |  |                                                                                          
|Item 4.                        |  | Controls and Procedures                                                                   |  | 16
|                              
|PART II  OTHER INFORMATION   
|                               |  |                                                                                          
|Item 1.                        |  | Legal Proceedings                                                                         |  | 17
|                               |  |                                                                                          
|Item 2.                        |  | Changes in Securities and Use of Proceeds                                                 |  | 17
|                               |  |                                                                                          
|Item 3.                        |  | Defaults Upon Senior Securities                                                           |  | 17
|                               |  |                                                                                          
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                       |  | 17
|                               |  |                                                                                          
|Item 5.                        |  | Other Information                                                                         |  | 17
|                               |  |                                                                                          
|Item 6.                        |  | Exhibits and Reports on Form 8-K                                                          |  | 17
|                              
|SIGNATURES                    



2



---

##### Table of Contents

PART 1 - FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



The
following interim financial statements are unaudited. However, the financial statements reflect all adjustments (which include only normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of financial
position, results of operations and cash flows for the interim periods presented.



FIRST REPUBLIC PREFERRED CAPITAL CORPORATION

(A Majority Owned Subsidiary of First Republic Bank)



Balance Sheet

(Unaudited)



|                                                                                                                                                                               |  |                |             |   |                  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                                                               |  | March 31, 2004 |             |   | December 31,2003 |  
|ASSETS                                                                                                                                                                         |  |                |             |   |                  |   |             |  
|Cash and short-term investments on deposit with First Republic Bank                                                                                                            |  | $              | 12,433,000  |   |                  | $ | 6,766,000   |  
|                                                                                                                                                                               |  |               
|Single family mortgage loans                                                                                                                                                   |  |                | 291,909,000 |   |                  |   | 296,051,000 |  
|Multifamily mortgage loans                                                                                                                                                     |  |                | 25,704,000  |   |                  |   | 26,454,000  |  
|Less: Allowance for loan losses                                                                                                                                                |  |                | (481,000    | ) |                  |   | (481,000    | )
|                                                                                                                                                                               |  |                |             |   |                  |   |             |  
|Net loans                                                                                                                                                                      |  |                | 317,132,000 |   |                  |   | 322,024,000 |  
|                                                                                                                                                                               |  |               
|Accrued interest receivable                                                                                                                                                    |  |                | 1,543,000   |   |                  |   | 1,593,000   |  
|Prepaid expenses                                                                                                                                                               |  |                | 22,000      |   |                  |   | 14,000      |  
|                                                                                                                                                                               |  |                |             |   |                  |   |             |  
|Total assets                                                                                                                                                                   |  | $              | 331,130,000 |   |                  | $ | 330,397,000 |  
|                                                                                                                                                                               |  |                |             |   |                  |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                           |  |                |             |   |                  |   |             |  
|Liabilities:                                                                                                                                                                   |  |                |             |   |                  |   |             |  
|Dividends payable on common stock                                                                                                                                              |  | $              |            |   |                  | $ | 1,255,000   |  
|Dividends payable on preferred stock                                                                                                                                           |  |                | 1,543,000   |   |                  |   |            |  
|Payable to First Republic Bank                                                                                                                                                 |  |                | 21,000      |   |                  |   | 19,000      |  
|Other payables                                                                                                                                                                 |  |                | 37,000      |   |                  |   | 29,000      |  
|                                                                                                                                                                               |  |                |             |   |                  |   |             |  
|Total liabilities                                                                                                                                                              |  |                | 1,601,000   |   |                  |   | 1,303,000   |  
|                                                                                                                                                                               |  |                |             |   |                  |   |             |  
|Stockholders equity:                                                                                                                                                          |  |                |             |   |                  |   |             |  
|Preferred stock, $0.01 par value per share; 10,000,000 shares authorized:                                                                                                      |  |                |             |   |                  |   |             |  
|10.50% perpetual, exchangeable, noncumulative Series A preferred stock; $1,000 liquidation value per share; 55,000 shares authorized, issued
and outstanding                   |  |                | 55,000,000  |   |                  |   | 55,000,000  |  
|8.875% perpetual, exchangeable, noncumulative Series B preferred stock; $25 liquidation value per share; 1,840,000 shares authorized,
1,680,000 shares issued and outstanding  |  |                | 42,000,000  |   |                  |   | 42,000,000  |  
|5.70% perpetual, convertible, exchangeable, noncumulative Series C preferred stock; $1,000 liquidation value per share; 10,000 shares
authorized, 7,000 issued and outstanding |  |                | 7,000,000   |   |                  |   | 7,000,000   |  
|7.25% perpetual, exchangeable, noncumulative Series D preferred stock; $25 liquidation value per share; 2,400,000 shares authorized, issued
and outstanding                    |  |                | 60,000,000  |   |                  |   | 60,000,000  |  
|Common stock, $0.01 par value, 50,000,000 shares authorized, 29,362,633 shares issued and outstanding at March 31, 2004 and December 31, 2003,
respectively                    |  |                | 294,000     |   |                  |   | 294,000     |  
|Additional paid-in capital                                                                                                                                                     |  |                | 165,000,000 |   |                  |   | 165,000,000 |  
|Retained earnings                                                                                                                                                              |  |                | 235,000     |   |                  |   |            |  
|Dividends in excess of retained earnings                                                                                                                                       |  |                |            |   |                  |   | (200,000    | )
|                                                                                                                                                                               |  |                |             |   |                  |   |             |  
|Total stockholders equity                                                                                                                                                     |  |                | 329,529,000 |   |                  |   | 329,094,000 |  
|                                                                                                                                                                               |  |                |             |   |                  |   |             |  
|Total liabilities and stockholders equity                                                                                                                                     |  | $              | 331,130,000 |   |                  | $ | 330,397,000 |  
|                                                                                                                                                                               |  |                |             |   |                  |   |             |  



See accompanying notes
to financial statements.



3



---

##### Table of Contents

FIRST REPUBLIC PREFERRED CAPITAL CORPORATION

(A Majority Owned Subsidiary of First Republic Bank)



Statement of Income

(Unaudited)



|                                                      |  |                              |           |      |   |          
|----------------------------------------------------- |  | ---------------------------- | --------- | ---- | - | ---------
|                                                      |  | Three Months Ended March 31,
|                                                      |  | 2004                         |           | 2003
|Interest income:                                      |  |                              |           |      |   |          
|Interest on loans                                     |  | $                            | 4,053,000 |      | $ | 2,811,000
|Interest on short-term investments                    |  |                              | 17,000    |      |   | 44,000   
|                                                      |  |                              |           |      |   |          
|Total interest income                                 |  |                              | 4,070,000 |      |   | 2,855,000
|                                                      |  |                             
|Provision for loan losses                             |  |                              |          |      |   |         
|                                                      |  |                              |           |      |   |          
|Total interest income after provision for loan losses |  |                              | 4,070,000 |      |   | 2,855,000
|                                                      |  |                              |           |      |   |          
|Operating expense:                                    |  |                              |           |      |   |          
|Advisory fees payable to First Republic Bank          |  |                              | 19,000    |      |   | 19,000   
|General and administrative                            |  |                              | 53,000    |      |   | 54,000   
|                                                      |  |                              |           |      |   |          
|Total operating expense                               |  |                              | 72,000    |      |   | 73,000   
|                                                      |  |                              |           |      |   |          
|Net income before preferred stock dividends           |  |                              | 3,998,000 |      |   | 2,782,000
|                                                      |  |                             
|Dividends on preferred stock                          |  |                              | 3,563,000 |      |   | 2,475,000
|                                                      |  |                              |           |      |   |          
|Net income available to common stockholders           |  | $                            | 435,000   |      | $ | 307,000  
|                                                      |  |                              |           |      |   |          



See accompanying notes
to financial statements.



4



---

##### Table of Contents

FIRST REPUBLIC PREFERRED CAPITAL CORPORATION

(A Majority Owned Subsidiary of First Republic Bank)



Statement of Changes in Stockholders Equity

(Unaudited)



|                                            |  |                 |             |             |   |                           |  |                  |             |  |       |            |   |  |   |             |  
|------------------------------------------- |  | --------------- | ----------- | ----------- | - | ------------------------- |  | ---------------- | ----------- |  | ----- | ---------- | - |  | - | ----------- | -
|                                            |  | Preferred Stock |             | CommonStock |   | AdditionalPaid-in Capital |  | RetainedEarnings |             |  | Total |           
|Balance as of January 1, 2003               |  | $               | 104,000,000 |             | $ | 187,000                   |  | $                | 105,107,000 |  | $     | (200,000   | ) |  | $ | 209,094,000 |  
|Net income before preferred stock dividends |  |                 |            |             |   |                          |  |                  |            |  |       | 2,782,000  |   |  |   | 2,782,000   |  
|Dividends on preferred stock                |  |                 |            |             |   |                          |  |                  |            |  |       | (2,475,000 | ) |  |   | (2,475,000  | )
|                                            |  |                 |             |             |   |                           |  |                  |             |  |       |            |   |  |   |             |  
|Balance as of March 31, 2003                |  | $               | 104,000,000 |             | $ | 187,000                   |  | $                | 105,107,000 |  | $     | 107,000    |   |  | $ | 209,401,000 |  
|                                            |  |                 |             |             |   |                           |  |                  |             |  |       |            |   |  |   |             |  
|Balance as of January 1, 2004               |  | $               | 164,000,000 |             | $ | 294,000                   |  | $                | 165,000,000 |  | $     | (200,000   | ) |  | $ | 329,094,000 |  
|Net income before preferred stock dividends |  |                 |            |             |   |                          |  |                  |            |  |       | 3,998,000  |   |  |   | 3,998,000   |  
|Dividends on preferred stock                |  |                 |            |             |   |                          |  |                  |            |  |       | (3,563,000 | ) |  |   | (3,563,000  | )
|                                            |  |                 |             |             |   |                           |  |                  |             |  |       |            |   |  |   |             |  
|Balance as of March 31, 2004                |  | $               | 164,000,000 |             | $ | 294,000                   |  | $                | 165,000,000 |  | $     | 235,000    |   |  | $ | 329,529,000 |  
|                                            |  |                 |             |             |   |                           |  |                  |             |  |       |            |   |  |   |             |  



See accompanying notes
to consolidated financial statements.



5



---

##### Table of Contents

FIRST REPUBLIC PREFERRED CAPITAL CORPORATION

(A Majority Owned Subsidiary of First Republic Bank)



Statement of Cash Flows

(Unaudited)



|                                                                                  |  |                              |             |   |      |   |             |  
|--------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                                                  |  | Three Months Ended March 31, |            
|                                                                                  |  | 2004                         |             |   | 2003 |  
|Operating Activities:                                                             |  |                              |             |   |      |   |             |  
|Net income before preferred stock dividends                                       |  | $                            | 3,998,000   |   |      | $ | 2,782,000   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                              |             |   |      |   |             |  
|Amortization of premium on loans                                                  |  |                              | 147,000     |   |      |   | 39,000      |  
|Changes in operating assets and liabilities:                                      |  |                              |             |   |      |   |             |  
|Accrued interest receivable                                                       |  |                              | 50,000      |   |      |   | 6,000       |  
|Prepaid expenses                                                                  |  |                              | (8,000      | ) |      |   | (11,000     | )
|Payable to First Republic Bank                                                    |  |                              | 2,000       |   |      |   | 6,000       |  
|Other payables                                                                    |  |                              | 8,000       |   |      |   |            |  
|                                                                                  |  |                              |             |   |      |   |             |  
|Net cash provided by operating activities                                         |  |                              | 4,197,000   |   |      |   | 2,822,000   |  
|                                                                                  |  |                              |             |   |      |   |             |  
|Investing Activities:                                                             |  |                              |             |   |      |   |             |  
|Loans acquired from First Republic Bank                                           |  |                              | (14,207,000 | ) |      |   | (45,095,000 | )
|Principal payments on loans                                                       |  |                              | 18,952,000  |   |      |   | 37,928,000  |  
|                                                                                  |  |                              |             |   |      |   |             |  
|Net cash provided (used) by investing activities                                  |  |                              | 4,745,000   |   |      |   | (7,167,000  | )
|                                                                                  |  |                              |             |   |      |   |             |  
|Financing Activities:                                                             |  |                              |             |   |      |   |             |  
|Dividends paid on preferred stock                                                 |  |                              | (2,020,000  | ) |      |   | (932,000    | )
|Dividends paid on common stock                                                    |  |                              | (1,255,000  | ) |      |   | (2,044,000  | )
|                                                                                  |  |                              |             |   |      |   |             |  
|Net cash used by financing activities                                             |  |                              | (3,275,000  | ) |      |   | (2,976,000  | )
|                                                                                  |  |                              |             |   |      |   |             |  
|Increase (decrease) in cash and cash equivalents                                  |  |                              | 5,667,000   |   |      |   | (7,321,000  | )
|Cash and cash equivalents at beginning of year                                    |  |                              | 6,766,000   |   |      |   | 22,296,000  |  
|                                                                                  |  |                              |             |   |      |   |             |  
|Cash and cash equivalents at end of period                                        |  | $                            | 12,433,000  |   |      | $ | 14,975,000  |  
|                                                                                  |  |                              |             |   |      |   |             |  
|Supplemental disclosure of cash flow information:                                 |  |                              |             |   |      |   |             |  
|Preferred stock dividend payable                                                  |  | $                            | 1,543,000   |   |      | $ | 1,543,000   |  



See accompanying notes
to financial statements.



6



---

##### Table of Contents

FIRST REPUBLIC PREFERRED CAPITAL CORPORATION

(A Majority Owned Subsidiary of First Republic Bank)



Notes to Financial Statements

March 31, 2004



Note 1. Organization and Basis of Presentation



First Republic Preferred Capital Corporation (the Company) is a Nevada corporation formed by First Republic Bank (the Bank) in
April 1999 for the purpose of raising capital for the Bank. The Companys principal business is acquiring, holding, financing and managing assets secured by real estate mortgages and other obligations secured by real property, as well as
certain other qualifying real estate investment trust (REIT) assets (collectively, the Mortgage Assets). The Mortgage Assets presently held by the Company are loans secured by single family and multifamily real estate
properties (Mortgage Loans) that were acquired from the Bank. The Company expects that all, or substantially all, of its Mortgage Assets will continue to be Mortgage Loans acquired from the Bank. The Company has elected to be taxed as a
REIT and intends to make distributions to its shareholders such that the Company is relieved of substantially all income taxes relating to ordinary income under applicable tax regulations. Accordingly, no provision for income taxes is included in
the accompanying financial statements. To date, the Company has issued 29,362,633 shares of common stock, par value $0.01 per share. The Bank owns all of the common stock, except for 9,840 shares held by certain of the Banks employees and
directors. Earnings per share data is not presented, as the Companys common stock is not publicly traded.



These interim statements are intended to be read in conjunction with the financial statements presented in First Republic Preferred Capital
Corporations Annual Report on Form 10-K as of and for the year ended December 31, 2003. Interim results are not necessarily indicative of results to be expected for the entire year.



The results and operations of the Company and the Bank are subject to various risks, including business, economic, legal and
regulatory conditions and factors. Additional information is included in the Companys Annual Report on Form 10-K under the caption Risk Factors.



Note 2. Summary of Significant Accounting Policies



Mortgage Loans



Mortgage Loans are carried at the principal amount outstanding, net of purchase discounts and premiums. Discounts or premiums on Mortgage Loans are
accreted or amortized as yield adjustments over the expected lives of the loans using the interest method. Unaccreted or unamortized discounts or premiums on loans sold or paid in full are recognized in income at the time of sale or payoff.



The Company has purchased Mortgage Loans from the Bank at the
Banks carrying amount, which generally has approximated the fair values of the loans purchased. If a significant difference were to exist between the Banks carrying amount and the fair value of loans at the date of purchase from the
Company, the difference would be recorded as a capital contribution by the Bank or a capital distribution to the Bank and would not be an adjustment to the basis of the loans.



Mortgage Loans consisted entirely of single family mortgages through the first quarter of 2003. Beginning in the second
quarter of 2003, the Company acquired multifamily mortgages with the proceeds of the Series D preferred stock offering. At March 31, 2004, Mortgage Loans totaled $317.6 million, of which $291.9 million were single family mortgages and $25.7 million
were multifamily mortgages. At December 31, 2003, Mortgage Loans totaled $322.5 million, of which $296.1 million were single family mortgages and $26.4 million were multifamily mortgages.



Interest income from loans is recognized in the month earned and is net of service fees paid to the Bank. Interest income is
not recorded on loans when they become more than 90 days delinquent, except for single family loans that are well secured and in the process of collection, or at such earlier time as management determined that the collectibility of interest is
unlikely. When a loan is placed on nonaccrual status, interest income may be recorded



7



---

##### Table of Contents

when cash is received if the Companys recorded investment in such loans is deemed collectible. When, in
managements judgment, the borrowers ability to make periodic interest and principal payments resumes, the loan is returned to accrual status. There were no nonaccrual or impaired loans as of March 31, 2004 or December 31, 2003. The
Company classifies a loan as impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.



Allowance for Loan Losses



In 2002, the Company established an allowance for loan losses of $200,000.
In 2003, the Company increased its allowance for loan losses by $281,000, which was the amount of the Banks allowance for loan losses associated with the loans the Company acquired using the proceeds from the issuance of the Series D Preferred
Shares. The Company maintains an allowance for loan losses that can be reasonably anticipated based upon specific conditions at the time. The Company considers a number of factors, including the Companys and the Banks past loss
experience, the Banks underwriting policies, the amount of past due and nonperforming loans, legal requirements, recommendations or requirements of regulatory authorities, current economic conditions and other factors. If the Company
determines that an additional provision is required, the Company would provide for loan losses by charging current income.



Other Real Estate Owned



Real estate acquired through foreclosure is recorded at the lower of cost or fair value minus estimated costs to sell. Costs related to holding real
estate are recorded as expenses when incurred. The Company has not owned any real estate since inception.



Statement of Cash Flows



For the purpose of reporting cash flows, cash and cash equivalents include cash on hand and short-term investments on deposit at the Bank. As a REIT making sufficient dividend distributions, the Company paid no income taxes for the three
months ended March 31, 2004 or 2003.



Use of Estimates



The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the
allowance for losses on loans and the rate at which purchased discounts or premiums are accreted or amortized and recognized in interest income.



Note 3. Related Party Transactions



Since inception in April 1999, the Company has acquired all of its loans from the Bank. The aggregate cost of these loans acquired by the Company during
the first quarter was approximately $14 million in 2004 and $45 million in 2003, including net premiums of $40,000 and $140,000, respectively. All purchases were at a price equal to the Banks carrying amount, which approximated the fair value
of the loans.



The Company has a loan purchase and servicing
agreement with the Bank pursuant to which the Bank performs, among other things, servicing of loans held by the Company in accordance with normal industry practice. The Bank charges an annual servicing fee of 0.25% of the outstanding principal
balances of the Mortgage Loans that the Bank services. The Company records the servicing fees as a reduction of interest income. Loan servicing fees were $192,000 and $104,000 for the first quarter ended March 31, 2004 and 2003, respectively. In its
capacity as servicer, the Bank receives Mortgage Loan payments on behalf of the Company and holds the payments in custodial accounts at the Bank.



8



---

##### Table of Contents

The Company entered into an advisory agreement with the Bank under which the Bank administers the
day-to-day operations of the Company. The Bank is responsible for: (i) monitoring the credit quality of the Mortgage Assets held by the Company; (ii) advising the Company with respect to the reinvestment of income from, and principal payments on,
the Mortgage Assets, and with respect to the acquisition, management, financing and disposition of the Mortgage Assets; and (iii) monitoring the Companys compliance with the requirements necessary to qualify as a REIT.



The advisory agreement is renewable on an annual basis. In 2003, the Board of
Directors of the Company, including a majority of our independent directors, approved an annual fee of $75,000, payable in equal quarterly installments. The Company had $19,000 payable to the Bank for advisory fees at March 31, 2004 and at December
31, 2003.



During 2001, the Bank purchased 13,500 shares of the
Companys outstanding Series A Preferred Shares, with a liquidation preference value of $13.5 million. During 2002, the Bank purchased 1,500 shares of outstanding Series A Preferred Shares, with a liquidation preference value of $1.5 million.
During 2003, the Bank purchased 10,260 shares of outstanding Series A Preferred Shares with a liquidation preference value of $10.3 million, and in March 2004, the Bank purchased 100 shares of outstanding Series A Preferred Shares with a liquidation
preference value of $100,000. Accordingly, at March 31, 2004, the Bank owned 25,360 shares of the Companys Series A Preferred Shares, with a liquidation preference value of $25.4 million.



Note 4. Preferred Stock



As of March 31, 2004, the Company was authorized to issue 10,000,000 shares of preferred stock. The Company has issued each
of the following series of preferred stock, par value $0.01 per share.



|                                                                         |  |                |             |                  |   |            
|------------------------------------------------------------------------ |  | -------------- | ----------- | ---------------- | - | -----------
|                                                                         |  | March 31, 2004 |             | December 31,2003
|Series A - 55,000 shares authorized, issued and outstanding              |  | $              | 55,000,000  |                  | $ | 55,000,000 
|Series B - 1,840,000 shares authorized, 1,680,000 issued and outstanding |  |                | 42,000,000  |                  |   | 42,000,000 
|Series C - 10,000 shares authorized, 7,000 issued and outstanding        |  |                | 7,000,000   |                  |   | 7,000,000  
|Series D - 2,400,000 shares authorized, issued and outstanding           |  |                | 60,000,000  |                  |   | 60,000,000 
|                                                                         |  |                |             |                  |   |            
|Total preferred stock                                                    |  | $              | 164,000,000 |                  | $ | 164,000,000
|                                                                         |  |                |             |                  |   |            



The Series A Preferred
Shares, Series B Preferred Shares, Series C Preferred Shares and Series D Preferred Shares are collectively referred to as the Preferred Shares.



In June 1999, the Company issued 55,000 shares of Series A Preferred Stock. Proceeds from this issuance were $55 million, including underwriting fees
contributed by the Bank. The Series A Preferred Shares are not redeemable prior to June 1, 2009. Holders of the Series A Preferred Shares are entitled to receive, if authorized and declared by the Board of Directors of the Company, noncumulative
dividends at a rate of 10.5% per annum or $105 per annum per share. Dividends on the Series A Preferred Shares, if authorized and declared, are payable semiannually in arrears on June 30 and December 30 of each year.



In June 2001, the Company issued 7,000 Series C Preferred Shares. Proceeds
from this issuance were $7 million, including issuance costs contributed by the Bank. The Series C Preferred Shares are not redeemable prior to June 16, 2007. The Series C Preferred Shares are convertible into common stock of the Bank at a price of
$30.56 per share. The single holder of the Series C Preferred Shares is entitled to receive, if authorized and declared by the Board of Directors of the Company, noncumulative dividends at a rate of 5.7% per annum or $57 per annum per share.
Dividends on the Series C Preferred Shares, if authorized and declared, are payable semiannually in arrears on June 30 and December 30 of each year.



In January 2002, the Company issued 1,680,000 Series B Preferred Shares. Proceeds from this issuance were $42 million, including underwriting fees
contributed by the Bank. The Series B Preferred Shares are not redeemable prior to December 30, 2006. Holders of the Series B Preferred Shares are entitled to receive, if authorized and declared by the Board of Directors of the Company,
noncumulative dividends at a rate of 8.875% per annum or $2.21875 per annum per share. Dividends on the Series B Preferred Shares are payable quarterly in arrears on March 30, June 30, September 30, and December 30 of each year.



9



---

##### Table of Contents

In June 2003, the Company issued 2,400,000 Series D Preferred Shares. Proceeds from this issuance were
$60 million, including underwriting fees contributed by the Bank. The Series D Preferred Shares are not redeemable prior to June 27, 2008. Holders of the Series D Preferred Shares are entitled to receive, if authorized and declared by the Board of
Directors of the Company, noncumulative dividends at a rate of 7.25% per annum or $1.8125 per annum per share. Dividends on the Series D Preferred Shares are payable quarterly in arrears on March 30, June 30, September 30, and December 30 of each
year.



Upon the occurrence of an adverse change in relevant tax
laws, the Company will have the right to redeem the Preferred Shares, in whole (but not in part). The liquidation preference for both the Series A Preferred Shares and the Series C Preferred Shares is $1,000 per share plus the semiannual dividend
thereon accrued through the date of redemption for the dividend period in which the redemption occurs. The liquidation preference for each of the Series B Preferred Shares and the Series D Preferred Share is $25 per share plus the quarterly dividend
thereon accrued through the date of redemption for the dividend period in which the redemption occurs. The Preferred Shares will be exchanged into preferred shares of the Bank upon the occurrence of certain events. The exchange rate for both the
Series A Preferred Shares and the Series C Preferred Shares is 1:1. The exchange rate for each of the Series B Preferred Shares and Series D Preferred Shares is 1:1/40. Except under certain limited circumstances, the holders of the Preferred Shares
have no voting rights.



Note 5. Common Stock



As of March 31, 2004, the Company was authorized to issue 50,000,000 shares
of common stock with a par value of $0.01 per share. At March 31, 2004, there were 29,362,633 shares outstanding. The Company initially issued 10,000,000 shares to the Bank. In June 2003, January 2002, and June 2001, the Company issued 10,658,330,
7,460,831 and 1,243,472 shares of common stock, respectively, and used the proceeds to acquire Mortgage Assets from the Bank.



Holders of common stock are entitled to receive dividends if and when authorized and declared by the Board of Directors, out of funds legally available
therefor after all preferred dividends have been paid for the full year. As of March 31, 2004, no common stock dividends have been declared for the year 2004.



Note 6. Dividends on Preferred Stock and Common Stock



Dividends on the Preferred Shares, are payable if, when and as authorized by the Companys Board of Directors. If the Board of Directors does not
authorize a dividend on any of the Preferred Shares for any respective dividend period, holders of each class of Preferred Shares will not be entitled to be paid that dividend later or to recover any unpaid dividend whether or not funds are, or
subsequently become, available. The Board of Directors, in its business judgment, may determine that it would be in the best interest of the Company to pay less than the full amount of the stated dividend on each series of Preferred Shares for any
dividend period. However, to remain qualified as a REIT, the Company must distribute annually at least 90% of its REIT taxable income (excluding deductions for any dividends paid and any capital gains) to stockholders, and, generally,
the Company cannot pay dividends on the common stock for periods in which less than full dividends are paid on each series of Preferred Shares.



For the quarter ended March 31, 2004, the Company paid quarterly dividends of $932,000 to holders of the Series B Preferred Shares and $1,088,000 to the
holders of the Series D Preferred Shares. For the same quarter, the Company accrued dividends payable of $1,443,000 and $100,000 for the Series A and Series C Preferred Shares, respectively.



The Company expects to pay the holders of common stock an amount of dividends
that when aggregated with the dividends paid to holders of the Preferred Shares is not less than 90% of the Companys REIT taxable income (excluding deductions for any dividends paid and any net capital gains) in order to remain
qualified as a REIT. The Company has not declared dividends to the holders of its common stock for the periods from January 1 to March 31 of 2004 or 2003.



10



---

##### Table of Contents

Note 7. Concentration of Credit Risk



The Company presently holds Mortgage Loans secured primarily by real estate properties located in the state of California
(70% in total). Future economic, political, or other developments in the state could adversely affect the value of the Mortgage Loans.



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Introduction



This discussion summarizes the significant factors affecting the financial condition and results of operations of the Company during the three months
ended March 31, 2004. This discussion is provided to increase the understanding of, and should be read in conjunction with, the unaudited financial statements, accompanying notes, and tables included in this quarterly report.



Information Regarding Forward-Looking Statements



This Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results,
performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to the following:



| | business strategy;
|- | ------------------



| | estimates regarding our capital requirements and our need for additional financing; and
|- | ---------------------------------------------------------------------------------------



| | plans, objectives, expectations and intentions contained in this report that are not historical facts.
|- | ------------------------------------------------------------------------------------------------------



You can identify forward-looking statements by terms such as may, will, should,
could, expect, anticipate, believe, estimate, project, predict, intend, potential, continue, and similar expressions intended to
identify forward-looking statements. Statements that contain these words should be read carefully because they discuss future expectations, contain projections of future results of operations or of financial condition or state other
forward-looking information. There may be events in the future, however, that cannot be accurately predicted or controlled, and that may cause actual results to differ materially from the expectations described in the forward-looking
statements. The reader is cautioned that all forward-looking statements involve risks and uncertainties, and actual results may differ materially from those discussed as a result of various factors, including, but not limited to, competitive
pressure in the mortgage lending industry; changes in the interest rate environment that reduce margins; general economic conditions, either nationally or regionally, that are less favorable than expected, resulting in, among other things, a
deterioration in credit quality and an increase in the provision for possible loan losses; changes in the regulatory environment; changes in business conditions, particularly in San Francisco and Los Angeles counties and in the home mortgage lending
industry; and changes in the securities markets. Other risks, uncertainties and factors are discussed elsewhere in this report, in other First Republic Preferred Capital Corporations filings with the SEC or in materials incorporated therein by
reference.



Throughout this document, Company,
we, our, and us refers to First Republic Preferred Capital Corporation and Bank refers to First Republic Bank.



Results of Operations



Overview



Net income before preferred stock dividends was $3,998,000 for the first quarter of 2004, compared with $2,782,000 for the first quarter of 2003. The
increase was primarily due to an increase in average interest-earning assets, resulting in higher total interest income. However, the drop in interest rates during the past year resulted in lower average yields compared with the first quarter of
2003. The ratio of earnings to fixed charges was 1.12x for each quarter ended March 31, 2004 and 2003. Dividend payments were 100% of fixed charges.



11



---

##### Table of Contents

Total Interest Income



The following table presents the average balances and yields on the Companys interest-earning assets for the periods indicated:



|                              |  |                              |         |                |      |       |  |      |                |  |                |         |       |   |       |  |      |  
|----------------------------- |  | ---------------------------- | ------- | -------------- | ---- | ----- |  | ---- | -------------- |  | -------------- | ------- | ----- | - | ----- |  | ---- | -
|                              |  | Three Months Ended March 31, |        
|                              |  | 2004                         |         |                | 2003 |      
|(Dollars in thousands)        |  | AverageBalance               |         | InterestIncome |      | Yield |  |      | AverageBalance |  | InterestIncome |         | Yield |  
|Loans                         |  | $                            | 322,289 |                | $    | 4,053 |  | 5.03 | %              |  | $              | 197,062 |       | $ | 2,811 |  | 5.71 | %
|Short-term investments        |  |                              | 7,702   |                |      | 17    |  | 0.87 | %              |  |                | 12,647  |       |   | 44    |  | 1.38 | %
|                              |  |                              |         |                |      |       |  |      |                |  |                |         |       |   |       |  |      |  
|Total interest-earning assets |  | $                            | 329,991 |                | $    | 4,070 |  | 4.93 | %              |  | $              | 209,709 |       | $ | 2,855 |  | 5.45 | %
|                              |  |                              |         |                |      |       |  |      |                |  |                |         |       |   |       |  |      |  



The Bank retains an
annual servicing fee of 25 basis points on the gross average outstanding principal balance of the Companys loan portfolio that the Bank services, which reduces the interest income that the Company receives. For the quarter ended March 31, 2004
and 2003, loan servicing fees were $192,000 and $104,000, respectively.



The average yield on interest-earning assets declined to 4.93% for the first quarter of 2004, compared with 5.45% for the first quarter of 2003. Loan portfolio yields were 5.03% and 5.71%, respectively. The declines in yields reflect the
decline in the overall rate environment over the last several years.



The average balance of short-term investments was $7.7 million and $12.6 million for the first quarter of 2004 and 2003, respectively. The average yield on the interest-bearing money market account dropped to 0.87% for the first quarter of
2004 from 1.38% for the first quarter of 2003.



Operating Expense



The Company incurs advisory fee expenses payable to the
Bank. The Company has an advisory agreement with the Bank for services that the Bank renders on its behalf for which it is paid $75,000 per annum. Advisory fees for each quarter ended March 31, 2004 and 2003 were $19,000.



Other operating expenses were primarily related to exchange listings and
other shareholder costs, audit fees and rating agency fees. Collectively, these fees and other operating expenses were $53,000 and $54,000 for the first quarter ended March 31, 2004 and 2003, respectively.



Financial Condition



Interest-bearing Deposits with the Bank



At March 31, 2004 and December 31, 2003, interest-bearing deposits consisted entirely of a money market account held at the Bank. Generally, the balance
in this account reflects principal and interest received on the mortgage loan portfolio.



Mortgage Loans



The
loan portfolio at March 31, 2004 and December 31, 2003 consisted of both single family and multifamily mortgage loans acquired from the Bank. The Company anticipates that in the future it will continue to acquire all of its loans from the Bank.



A loan is placed on nonaccrual status when any installment of
principal or interest is over 90 days past due, except for single family loans that are well secured and in the process of collection, or when the Company determines that the ultimate collection of all contractually due principal or interest is
unlikely.



12



---

##### Table of Contents

As of March 31, 2004 and December 31, 2003, there were no nonaccrual loans, impaired loans, or loans that
were troubled debt restructurings. In addition, at March 31, 2004 and December 31, 2003, there were no accruing loans that were contractually past due more than 90 days.



The following table presents information with respect to the Companys allowance for loan losses:



|                                                  |  |                              |             |   |                             |   |             |   |  |   |             |  
|------------------------------------------------- |  | ---------------------------- | ----------- | - | --------------------------- | - | ----------- | - |  | - | ----------- | -
|                                                  |  | Three Months Ended March 31, |             |   | Year EndedDecember 31, 2003 |  
|                                                  |  | 2004                         |             |   | 2003                        |   |            
|Allowance for Loan Losses:                        |  |                              |             |   |                             |   |             |   |  |   |             |  
|Balance, beginning of period                      |  | $                            | 481,000     |   |                             | $ | 200,000     |   |  | $ | 200,000     |  
|Transfer from the Bank                            |  |                              |            |   |                             |   |            |   |  |   | 281,000     |  
|Chargeoffs                                        |  |                              |            |   |                             |   |            |   |  |   |            |  
|Recoveries                                        |  |                              |            |   |                             |   |            |   |  |   |            |  
|                                                  |  |                              |             |   |                             |   |             |   |  |   |             |  
|Balance, end of period                            |  | $                            | 481,000     |   |                             | $ | 200,000     |   |  | $ | 481,000     |  
|                                                  |  |                              |             |   |                             |   |             |   |  |   |             |  
|Average loans for the period                      |  | $                            | 322,289,000 |   |                             | $ | 197,062,000 |   |  | $ | 272,541,000 |  
|Total loans at period end                         |  | $                            | 317,613,000 |   |                             | $ | 195,007,000 |   |  | $ | 322,505,000 |  
|                                                  |  |                              |            
|Ratio of allowance for loan losses to total loans |  |                              | 0.15        | % |                             |   | 0.10        | % |  |   | 0.15        | %



During 2003, the
Company recorded a transfer to the allowance for loan losses of $281,000, which was the amount of the Banks allowance for loan losses associated with the loans that the Company acquired upon the issuance of the Series D Preferred Shares. As of
March 31, 2004, the Companys allowance for loan losses was 0.15% of total loans.



Significant Concentration of Credit Risk



Concentration of credit risk generally arises with respect to the loan portfolio when a number of borrowers engage in similar business activities or activities in the same geographical region. Concentration of credit risk indicates the
relative sensitivity of the Companys performance to both positive and negative developments affecting a particular industry. The balance sheet exposure to geographic concentrations directly affects the credit risk of the loans within the loan
portfolio.



At March 31, 2004, 53% of the Companys loans
were secured by properties located in the San Francisco Bay Area, 20% in New York and contiguous states, 10% in Los Angeles County, 7% in other parts of California, and 10% in other parts of the United States. At March 31, 2004, the weighted average
loan-to-value ratio on the Mortgage Loans was approximately 55%, based on the appraised values of the properties at the time the loans were originated.



The following table presents an analysis of Mortgage Loans at March 31, 2004 by major geographic location:



|                       |  |                       |         |   |                          |   |        |                   |  |   |                      |   |  |                 |        |   |       |   |       |       |  |   |        |   |  |   |         |  
|---------------------- |  | --------------------- | ------- | - | ------------------------ | - | ------ | ----------------- |  | - | -------------------- | - |  | --------------- | ------ | - | ----- | - | ----- | ----- |  | - | ------ | - |  | - | ------- | -
|(Dollars in thousands) |  | San FranciscoBay Area |         |   | GreaterNew YorkCity Area |   |        | Los AngelesCounty |  |   | OtherCaliforniaAreas |   |  | Las VegasNevada |        |   | Other |   |       | Total | 
|Single family loans    |  | $                     | 147,697 |   |                          | $ | 61,287 |                   |  | $ | 31,331               |   |  | $               | 20,633 |   |       | $ | 650   |       |  | $ | 30,311 |   |  | $ | 291,909 |  
|Multifamily loans      |  |                       | 20,614  |   |                          |   | 857    |                   |  |   | 1,787                |   |  |                 | 2,034  |   |       |   | 412   |       |  |   |       |   |  |   | 25,704  |  
|                       |  |                       |         |   |                          |   |        |                   |  |   |                      |   |  |                 |        |   |       |   |       |       |  |   |        |   |  |   |         |  
|Total                  |  | $                     | 168,311 |   |                          | $ | 62,144 |                   |  | $ | 33,118               |   |  | $               | 22,667 |   |       | $ | 1,062 |       |  | $ | 30,311 |   |  | $ | 317,613 |  
|                       |  |                       |         |   |                          |   |        |                   |  |   |                      |   |  |                 |        |   |       |   |       |       |  |   |        |   |  |   |         |  
|Percent by location    |  |                       | 53      | % |                          |   | 20     | %                 |  |   | 10                   | % |  |                 | 7      | % |       |   |      | %     |  |   | 10     | % |  |   | 100     | %



Liquidity and Capital Resources



The Companys principal liquidity needs are to pay
dividends and to fund the acquisition of additional Mortgage Assets as borrowers repay Mortgage Loans. The Company will continue to fund the acquisition of additional Mortgage Loans with the proceeds of principal repayments on its current portfolio
of Mortgage Loans. Proceeds



13



---

##### Table of Contents

from interest payments will be reinvested until used for the payment of operating expenses and dividends. The Company
does not anticipate that it will have any other material capital expenditures. The cash generated from interest and principal payments on Mortgage Assets will provide sufficient funds for operating requirements and dividends payments in accordance
with the requirements to be taxed as a REIT for the foreseeable future.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Interest Rate Risk Management



The Company services fixed-rate dividend obligations to preferred stockholders and operating expenses by the collection of interest income from its Mortgage Loans. To facilitate meeting dividend payments, the Company
has maintained an average interest-earning asset balance of approximately two times the liquidation preference of outstanding preferred shares. The Companys earnings to fixed charges ratio was 1.12x for the first quarter of 2004, compared with
1.10x for 2003 and 1.12x for the first quarter of 2003.



With
the interest rate environment declining over the last year to 40-year historical lows, the yields on average interest-earning assets have dropped. The declines in yields are primarily the result of increased prepayment of higher-yielding assets with
the proceeds of the prepaid Mortgage Loans reinvested in lower-yielding Mortgage Loans. The weighted average yield on average interest-earning assets was 4.93% for the first quarter of 2004, compared with 5.01% for 2003 and 5.45% for the first
quarter of 2003.



At March 31, 2004, 27% of the Mortgage Loans
were adjustable rate loans, 53% were intermediate fixed rate loans and 20% were fixed rate loans. The weighted average coupon rate for each loan type was 4.64%, 5.43% and 5.83%, respectively, and the weighted average remaining maturity was 24.2
years. At March 31, 2003, 34% were adjustable rate loans, 45% were intermediate fixed rate loans and 21% were fixed rate loans. The weighted average coupon rate for each loan type was 4.70%, 6.46% and 6.93%, respectively, and the weighted average
remaining maturity was 24.2 years.



For adjustable rate
Mortgage Loans, the timing of changes in average yields depends on the underlying interest rate index, the timing of changes in the index, and the frequency of adjustments to the loan rate. The drop in the weighted average coupon rate of adjustable
rate loans slowed to 6 basis points from 4.70% at March 31, 2003 to 4.64% at March 31, 2004. The decline in adjustable rate loan yields was mitigated by a significant volume of adjustable rate loans indexed to the 11thDistrict Cost of Funds Index (COFI). COFI is a lagging index that tends to respond more slowly to changes in the
general interest rate environment than a market rate index. At March 31, 2004, adjustable rate loans indexed to COFI were 55% of total adjustable rate mortgages (ARM), or 15% of total Mortgage Loans.



For intermediate fixed and fixed rate loans, the gross principal outstanding
at March 31, 2004 was $232.0 million, or 73% of total loans. The weighted average coupon rate for intermediate fixed rate loans declined 103 basis points to 5.43% at March 31, 2004 from 6.46% at March 31, 2003. The weighted average coupon rate for
fixed rate loans declined 110 basis points to 5.83% at March 31, 2004 from 6.93% at March 31, 2003. Repayments of intermediate fixed and fixed rate loans during the past year were a significant portion of the total repayment proceeds. The high level
of repayments was the result of low interest rates. The Company reinvested these repayment proceeds in lower-yielding Mortgage Loans.



14



---

##### Table of Contents

The following table presents the outstanding loan portfolio at March 31, 2004 by interest rate type:



|                            |  |         |         |                   |      |   |                          |    |                         |     |  
|--------------------------- |  | ------- | ------- | ----------------- | ---- | - | ------------------------ | -- | ----------------------- | --- | -
|(Dollars in thousands)      |  | Balance |         | Net Coupon (1)(2) |      |   | Months to Next Reset (1) |    | Percentage of Portfolio |    
|                            |  |         |        
|ARM loans:                  |  |         |         |                   |      |   |                          |    |                         |     |  
|COFI                        |  | $       | 47,033  |                   | 4.54 | % |                          | 2  |                         | 15  | %
|CMT                         |  |         | 30,375  |                   | 4.62 |   |                          | 6  |                         | 10  |  
|Prime                       |  |         | 6,065   |                   | 6.00 |   |                          | 1  |                         | 2   |  
|LIBOR                       |  |         | 2,120   |                   | 3.59 |   |                          | 3  |                         |    |  
|                            |  |         |         |                   |      |   |                          |    |                         |     |  
|Total ARMs                  |  |         | 85,593  |                   | 4.64 |   |                          | 3  |                         | 27  |  
|                            |  |         |         |                   |      |   |                          |    |                         |     |  
|Intermediate fixed:         |  |         |         |                   |      |   |                          |    |                         |     |  
|12 months to 36 months      |  |         | 27,857  |                   | 6.25 |   |                          | 26 |                         | 9   |  
|37 months to 60 months      |  |         | 114,343 |                   | 5.26 |   |                          | 45 |                         | 36  |  
|Greater than 60 months      |  |         | 27,186  |                   | 5.30 |   |                          | 89 |                         | 8   |  
|                            |  |         |         |                   |      |   |                          |    |                         |     |  
|Total intermediate fixed    |  |         | 169,386 |                   | 5.43 |   |                          | 49 |                         | 53  |  
|                            |  |         |         |                   |      |   |                          |    |                         |     |  
|Total adjustable rate loans |  |         | 254,979 |                   | 5.16 |   |                          | 33 |                         | 80  |  
|                            |  |         |         |                  
|Fixed rate loans            |  |         | 62,634  |                   | 5.83 |   |                          |    |                         | 20  |  
|                            |  |         |         |                   |      |   |                          |    |                         |     |  
|Total loans                 |  | $       | 317,613 |                   | 5.29 | % |                          |    |                         | 100 | %
|                            |  |         |         |                   |      |   |                          |    |                         |     |  

---

|(1) | Weighted average.
|--- | -----------------

|(2) | Net of servicing fees retained by the Bank.
|--- | -------------------------------------------



The following table presents principal balances outstanding, net of amortized principal payments, by maturity dates or interest rate adjustments as of
March 31, 2004:



|                                  |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        
|--------------------------------- |  | ---------- | ------ | - | ----------- | - | ------- | --------- |  | - | --------- | - |  | ------------ | ------- | - | ------------------ | - | ------- | ----- |  | - | -------- | - |  | - | -------
|(Dollars in thousands)            |  | 0-6 Months |        |   | 7-12 Months |   |         | 1-3 Years |  |   | 3-5 Years |   |  | Over 5 Years |         |   | Not Rate Sensitive |   |         | Total
|Cash and investments              |  | $          | 12,433 |   |             | $ |        |           |  | $ |          |   |  | $            |        |   |                    | $ |        |       |  | $ |         |   |  | $ | 12,433 
|Loans                             |  |            | 77,115 |   |             |   | 15,027  |           |  |   | 41,409    |   |  |              | 108,584 |   |                    |   | 75,478  |       |  |   |         |   |  |   | 317,613
|Other assets                      |  |            |       |   |             |   |        |           |  |   |          |   |  |              |        |   |                    |   |        |       |  |   | 1,084    |   |  |   | 1,084  
|                                  |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        
|Total assets                      |  | $          | 89,548 |   |             | $ | 15,027  |           |  | $ | 41,409    |   |  | $            | 108,584 |   |                    | $ | 75,478  |       |  | $ | 1,084    |   |  | $ | 331,130
|                                  |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        
|Other liabilities                 |  | $          |       |   |             | $ |        |           |  | $ |          |   |  | $            |        |   |                    | $ |        |       |  | $ | 1,601    |   |  | $ | 1,601  
|Stockholders equity              |  |            |       |   |             |   |        |           |  |   |          |   |  |              |        |   |                    |   |        |       |  |   | 329,529  |   |  |   | 329,529
|                                  |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        
|Total liabilities and equity      |  | $          |       |   |             | $ |        |           |  | $ |          |   |  | $            |        |   |                    | $ |        |       |  | $ | 331,130  |   |  | $ | 331,130
|                                  |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        
|Repricing GAP-positive (negative) |  | $          | 89,548 |   |             | $ | 15,027  |           |  | $ | 41,409    |   |  | $            | 108,584 |   |                    | $ | 75,478  |       |  | $ | (330,046 | ) |  |   |        
|                                  |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        
|Cumulative repricing GAP:         |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        
|Dollar amount                     |  | $          | 89,548 |   |             | $ | 104,575 |           |  | $ | 145,984   |   |  | $            | 254,568 |   |                    | $ | 330,046 |       |  |   |          |   |  |   |        
|                                  |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        
|Percent of total assets           |  |            | 27.0   | % |             |   | 31.6    | %         |  |   | 44.1      | % |  |              | 76.9    | % |                    |   | 99.7    | %     |  |   |          |   |  |   |        
|                                  |  |            |        |   |             |   |         |           |  |   |           |   |  |              |         |   |                    |   |         |       |  |   |          |   |  |   |        



The Company has not
engaged in business activities related to foreign currency transactions or commodity-based instruments and has not made any investments in equity securities subject to price fluctuations.



15



---

##### Table of Contents

ITEM 4. CONTROLS AND PROCEDURES



Evaluation of
Disclosure Controls and Procedures



The Companys
chief executive officer and chief financial officer, in connection with Bank personnel, have evaluated the effectiveness of the Companys disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the
end of the period covered by the Quarterly Report on Form 10Q and have concluded that, based on such evaluation, the Companys disclosure controls and procedures were adequate and effective to ensure the material information relating to the
company was made known to them by others within those entities, particularly during the period in which this Quarterly Report on Form 10-Q was being prepared.



Changes in Internal Controls



There were no changes in the Companys internal controls over financial reporting identified in connection with the evaluation of such internal
controls that occurred during the Companys last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial reporting.



16



---

##### Table of Contents

PART II - OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



Not Applicable



ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS



Not Applicable



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



Not Applicable



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



Not Applicable



ITEM 5. OTHER INFORMATION



Not Applicable



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|   |  |                     |  |                                                                                                                        
|-- |  | ------------------- |  | -----------------------------------------------------------------------------------------------------------------------
|a. |  | Exhibits            |  |                                                                                                                        
|   |  |                    
|   |  | 12                  |  | Statement regarding calculation of earnings to fixed charges.                                                          
|   |  |                    
|   |  | 31.1                |  | Certification pursuant to 15 U.S.C. 7m(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.       
|   |  |                    
|   |  | 31.2                |  | Certification pursuant to 15 U.S.C. 7m(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.       
|   |  |                    
|   |  | 32.1                |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|   |  |                    
|   |  | 32.2                |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|   | 
|b. |  | Reports on Form 8-K
|   | 
|   |  | Not Applicable.    



17



---

##### Table of Contents

SIGNATURES



Pursuant to the
requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



FIRST REPUBLIC PREFERRED CAPITAL CORPORATION



|                  |  |     |  |                              
|----------------- |  | --- |  | -----------------------------
|Date: May 6, 2004 |  | By: |  | /s/ JAMES J. BAUMBERGER      
|                  |  |     |  | James J. Baumberger          
|                  |  |     |  | President and Director       
|                  |  |     |  | (Principal Executive Officer)
|                  |  |    
|Date: May 6, 2004 |  | By: |  | /s/ WILLIS H. NEWTON, JR.    
|                  |  |     |  | Willis H. Newton, Jr.        
|                  |  |     |  | Vice President,              
|                  |  |     |  | Chief Financial Officer,     
|                  |  |     |  | Treasurer and Director       
|                  |  |     |  | (Principal Financial Officer)



18



---

##### Table of Contents

INDEX TO EXHIBITS



|               |  |                                                                                                                        
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Exhibit Title                                                                                                          
|12             |  | Statement regarding calculation of earnings to fixed charges.                                                          
|               | 
|31.1           |  | Certification pursuant to 15 U.S.C. 7m(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.       
|               | 
|31.2           |  | Certification pursuant to 15 U.S.C. 7m(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.       
|               | 
|32.1           |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|               | 
|32.2           |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





19