FORM 10-Q

             UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                 Quarterly Report Under Section 13 or 15(d)
                  of the Securities Exchange Act of 1934


For Quarter Ended                                         Commission
September 30, 1996                                      File No. 0-15882
------------------                                      ----------------

                         FIRST REPUBLIC BANCORP INC.
                         ---------------------------
                        (Exact name of registrant as
                           specified in its charter)


   Delaware                                                  94-2964497
   --------                                                  ----------
State or other jurisdiction                                (IRS Employer
of incorporation or organization                           Identification No.)

                              388 Market Street
                         San Francisco, California 94111
                         -------------------------------
               (Address of principal executive offices) (Zip Code)


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


                                Not Applicable
               (Former name, former address, and former fiscal year,
                           if changed since last report)




Indicate by check 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
                                      ---    ---

Common  Stock , par  value  $.01 per  share,  of  First  Republic  Bancorp  Inc.
outstanding at November 6, 1996, 7,424,218 shares.



<PAGE>




                         First Republic Bancorp Inc.
                                  Form 10-Q
                              September 30, 1996

                                     Index
                                                                           PAGE
                                                                           ----
PART I - FINANCIAL INFORMATION

    Item 1 - Financial Statements

               Consolidated Balance Sheet -
               September 30, 1996 and December 31, 1995                       3

               Consolidated Statement of Income - Nine Months and Quarter
               Ended September 30, 1996 and 1995                              5

               Consolidated Statement of Cash Flows -
               Nine Months Ended September 30, 1996 and 1995                  6

               Notes to Consolidated Financial
               Statements                                                     7

    Item 2 - Management's Discussion and
               Analysis of Financial Condition
               and Results of Operations                                      8

PART II - OTHER INFORMATION                                                  28

    Item 1 - Legal Proceedings

    Item 2 - Changes in Securities

    Item 3 - Defaults Upon Senior Securities

    Item 4 - Submission of Matters to a Vote of Security Holders

    Item 5 - Other Information

    Item 6 - Exhibits and Reports on Form 8-K

SIGNATURES                                                                   29


                                         2

<PAGE>




PART I.             FINANCIAL INFORMATION

ITEM 1.             FINANCIAL STATEMENTS

                    The following interim consolidated  financial statements are
unaudited.  However,  they reflect all  adjustments  (which included only normal
recurring adjustments) which 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 BANCORP INC.
    CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                  September 30,       December 31,
                                                                                       1996               1995
                                                                                       ----               ----
                                                                                   (Unaudited)

<S>                                                                           <C>                 <C>            
ASSETS
    Cash                                                                         $ 20,437,000        $ 15,918,000
    Federal funds sold and short term investments                                   3,800,000          15,000,000
    Interest bearing deposits at other financial institutions                         199,000             200,000
    Investment securities at cost                                                  54,625,000          33,974,000
    Investment securities at market                                               103,050,000         106,939,000
    Federal Home Loan Bank Stock, at cost                                          32,141,000          30,321,000
                                                                                  -----------         -----------

                                                                                  214,252,000         202,352,000

Loans
    Single family (1-4 unit) mortgages                                          1,187,724,000         977,220,000
    Multifamily (5+ units) mortgages                                              325,456,000         350,507,000
    Commercial real estate mortgages                                              285,045,000         286,824,000
    Commercial business loans                                                       2,614,000           3,663,000
    Single family construction                                                     13,510,000          19,349,000
    Multifamily/commercial construction                                            31,929,000           9,013,000
    Equity lines of credit                                                         29,760,000          26,572,000
    Leases, contracts and other                                                     1,706,000             933,000
    Loans held for sale                                                             7,258,000           8,182,000
                                                                              ---------------        ------------

                                                                                1,885,002,000       1,682,263,000

Less
    Unearned loan fee income                                                       (3,289,000)         (4,380,000)
    Reserve for possible losses                                                   (18,265,000)        (18,068,000)
                                                                              ---------------         -----------

       Net loans                                                                1,863,448,000       1,659,815,000

    Accrued interest receivable                                                    13,553,000          12,582,000
    Mortgage servicing rights                                                       1,171,000             449,000
    Prepaid expenses and other assets                                              12,828,000          14,677,000
    Premises, equipment and leasehold improvements,
       net of accumulated depreciation                                              4,109,000           4,180,000
    Real estate owned (REO)                                                        12,807,000          10,198,000
                                                                              ---------------       -------------

                                                                              $ 2,122,168,000     $ 1,904,253,000
                                                                              ===============     ===============
</TABLE>


                                                         3

<PAGE>



    FIRST REPUBLIC BANCORP INC.
    CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                         September 30,             December 31,
                                                                             1996                      1995
                                                                             ----                      ----
                                                                          (Unaudited)
<S>                                                                    <C>                       <C>           
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Customer deposits
    Passbook and MMA accounts                                          $  274,426,000            $  180,205,000
    Certificates of deposit                                             1,043,024,000               960,236,000
                                                                       --------------           ---------------

       Total customer deposits                                          1,317,450,000             1,140,441,000

    Interest payable                                                       13,131,000                14,813,000
    Other liabilities                                                       8,012,000                 6,156,000
    Federal Home Loan Bank advances                                       601,530,000               570,530,000
    Other borrowings                                                               --                        --
                                                                       --------------            --------------

       Total senior liabilities                                         1,940,123,000             1,731,940,000

    Senior subordinated debentures                                          9,966,000                 9,974,000
    Subordinated debentures                                                19,509,000                19,579,000
    Convertible subordinated debentures                                    34,500,000                34,500,000
                                                                       --------------           ---------------

       Total liabilities                                                2,004,098,000             1,795,993,000
                                                                       --------------           ---------------


Stockholders' equity
    Common stock                                                               78,000                    78,000
    Capital in excess of par value                                         75,384,000                74,919,000
    Retained earnings                                                      49,654,000                40,608,000
    Deferred compensation -- ESOP                                                  --                        --
    Treasury shares, at cost                                               (5,763,000)               (5,763,000)
    Unrealized loss-available for sale securities                          (1,283,000)               (1,582,000)
                                                                        -------------            --------------

       Total stockholders' equity                                         118,070,000               108,260,000
                                                                        -------------            --------------

                                                                       $2,122,168,000            $1,904,253,000
                                                                       ==============            ==============

</TABLE>

                                                         4

<PAGE>



    FIRST REPUBLIC BANCORP INC.
    CONSOLIDATED STATEMENT OF INCOME
    (unaudited)
<TABLE>
<CAPTION>


                                                              QUARTER ENDED                      NINE MONTHS ENDED
                                                              September 30,                        September 30,
                                                              -------------                        -------------

                                                        1996               1995                1996              1995
                                                     --------           --------             --------           ------
<S>                                               <C>                <C>                 <C>                <C>       
Interest income:
    Interest on real estate and other loans        $ 36,742,000       $ 32,890,000        $107,717,000      $ 93,211,000
    Interest on investments                           3,681,000          3,200,000          10,688,000         9,095,000
                                                   ------------       ------------         -----------       -----------

       Total interest income                         40,423,000         36,090,000         118,405,000       102,306,000
                                                   ------------       ------------         -----------       -----------

Interest expense:
    Interest on customer deposits                    18,336,000         16,424,000          52,887,000        45,052,000
    Interest on FHLB advances and borrowings          8,957,000          9,347,000          26,449,000        28,185,000
    Interest on debentures                            1,433,000          1,438,000           4,324,000         4,322,000
                                                   ------------        -----------          ----------       -----------

       Total interest expense                        28,726,000         27,209,000          83,660,000        77,559,000
                                                   ------------        -----------         -----------       -----------

Net interest income                                  11,697,000          8,881,000          34,745,000        24,747,000
Provision for losses                                  1,500,000          2,500,000           5,088,000        12,715,000
                                                    -----------       ------------        ------------       -----------

Net interest income after provision for losses       10,197,000          6,381,000          29,657,000        12,032,000
                                                    -----------       ------------         -----------      ------------

Non-interest income:
    Servicing fees, net                                 516,000            646,000           1,616,000         2,027,000
    Loan and related fees                               161,000            345,000             962,000           890,000
    Gain (loss) on sale of loans                        709,000              9,000             957,000           (36,000)
    Gain on investment securities                        28,000                 --              28,000           141,000
    Other income                                         56,000            198,000             120,000           231,000
                                                     ----------        -----------         -----------       -----------

       Total non-interest income                      1,470,000          1,198,000           3,683,000         3,253,000
                                                     ----------        -----------         -----------       -----------

Non-interest expense:
    Salaries and related benefits                     2,291,000          1,857,000           6,801,000         5,453,000
    Occupancy                                           834,000            774,000           2,459,000         2,272,000
    Advertising                                         610,000            345,000           1,650,000         1,128,000
    Professional fees                                   216,000            177,000             850,000           430,000
    FDIC insurance premiums                              84,000             99,000             244,000         1,159,000
    REO costs and losses                                 91,000            720,000             977,000         1,728,000
    Other general and administrative                  1,959,000          1,402,000           4,996,000         3,934,000
                                                     ----------         ----------          ----------       -----------

       Total non-interest expense                     6,085,000          5,374,000          17,977,000        16,104,000
                                                     ----------         ----------         -----------       -----------

Income (loss) before income taxes                     5,582,000          2,205,000          15,363,000          (819,000)
Provision for (benefit from) income taxes             2,307,000            884,000           6,317,000          (384,000)
                                                    -----------        -----------         -----------        ----------

Net income (loss)                                   $ 3,275,000        $ 1,321,000         $ 9,046,000        $ (435,000)
                                                    ===========        ===========         ===========        ==========

Net income adjusted for effect of convertible
    issue, used for fully diluted EPS               $ 3,671,000        $ 1,721,000         $10,234,000        $        --
                                                    ===========        ===========         ===========        ===========

Primary earnings per share                          $      0.43        $      0.17         $      1.19        $     (0.06)
                                                    ===========        ===========         ===========        ===========

Weighted average shares - primary                     7,641,793          7,605,648           7,630,995          7,594,484
                                                    ===========        ===========         ===========        ===========

Fully diluted earnings per share                    $      0.36        $      0.17         $      1.00        $     (0.06)
                                                    ===========        ===========         ===========        ===========

Weighted average shares - fully diluted              10,263,213         10,129,927          10,207,226         10,127,290
                                                    ===========        ===========         ===========        ===========


</TABLE>



                                                         5

<PAGE>



FIRST REPUBLIC BANCORP INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
                                                                                           Nine Months ended
                                                                                           -----------------
                                                                                              September 30,
                                                                                              -------------
                                                                                         1996             1995
                                                                                     -----------      -----------
<S>                                                                               <C>              <C>         
Operating Activities
    Net Income (loss)                                                              $   9,046,000    $    (435,000)
    Adjustments to reconcile net income (loss) to net
       cash provided by operating activities:
          Provision for losses                                                         5,088,000       12,715,000
          Provision for depreciation and amortization                                  2,989,000        3,002,000
          Amortization of loan fees                                                   (1,454,000)      (2,894,000)
          Amortization of loan servicing rights                                          397,000          257,000
          Amortization of investment securities discounts                                (40,000)         (33,000)
          Amortization of investment securities premiums                                 196,000          202,000
          Loans originated for sale                                                  (44,936,000)     (78,290,000)
          Loans sold into commitments                                                 49,273,000       77,356,000
          Increase in deferred taxes                                                    (307,000)             --
          Gain on sale of investment securities                                          (28,000)             --
          Net (gains) losses on sale of loans                                           (957,000)          36,000
          Increase in interest receivable                                             (2,271,000)      (3,109,000)
          Increase (decrease) in interest payable                                     (1,682,000)         966,000
          Increase in other assets                                                      (366,000)      (1,117,000)
          Increase (decrease) in other liabilities                                     1,963,000         (162,000)
                                                                                   -------------      -----------

          Net Cash Provided By Operating Activities                                   16,911,000        8,494,000

Investment Activities
          Loans originated                                                          (603,890,000)    (354,833,000)
          Loans purchased                                                                    --        (4,181,000)
          Other loans sold                                                            81,124,000              --
          Principal payments on loans                                                296,684,000      204,770,000
          Purchases of investment securities                                         (36,733,000)     (17,412,000)
          Sale of investment securities                                                4,558,000           15,000
          Repayments of investment securities                                         15,055,000        9,075,000
          Net decrease in short term investments                                             --           198,000
          Additions to fixed assets                                                     (748,000)      (1,053,000)
          Net proceeds from sale of real estate owned                                 12,059,000       11,804,000
                                                                                     -----------     ------------

          Net Cash Used by Investing Activities                                     (231,891,000)    (151,617,000)

Financing Activities
          Net increase in passbook and MMA accounts                                   94,221,000       23,831,000
          Issuance of certificates of deposit                                        321,981,000      328,402,000
          Repayments of certificates of deposit                                     (239,193,000)    (203,134,000)
          Increase (decrease) in long-term FHLB advances                              25,000,000      (44,000,000)
          Repayments of other long-term borrowings                                           --          (488,000)
          Net increase in short-term borrowings                                        6,000,000       30,000,000
          Decrease in deferred compensation - ESOP                                           --           488,000
          Repayments of subordinated debentures                                          (78,000)        (109,000)
          Proceeds from employee stock purchase plan                                     136,000           65,000
          Proceeds from common stock options exercised                                   232,000           84,000
          Purchase of treasury stock                                                         --        (1,198,000)
                                                                                    ------------     ------------

          Net Cash Provided by Financing Activities                                  208,299,000      133,941,000

          Decrease  in Cash and Cash Equivalents                                      (6,681,000)      (9,182,000)

          Cash and Cash Equivalents at Beginning of Period                            30,918,000       32,420,000
                                                                                    ------------     ------------

          Cash and Cash Equivalents at End of Period                                $ 24,237,000     $ 23,238,000
                                                                                    ============     ============
</TABLE>

                                                         6

<PAGE>



                             FIRST REPUBLIC BANCORP INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  BASIS OF PRESENTATION

The  consolidated  financial  statements of First Republic  Bancorp Inc. ("First
Republic")  include  its  subsidiaries,  First  Republic  Thrift & Loan  ("First
Thrift"),  and First Republic  Savings Bank. First Republic and its subsidiaries
are  collectively  referred  to as  the  "Company."  All  material  intercompany
transactions   and   balances   are   eliminated   in   consolidation.   Certain
reclassifications  have been made to the 1995 financial  statements in order for
them to conform with the 1996 presentation.

These  interim  financial  statements  should  be read in  conjunction  with the
Company's  1995  Annual  Report  to  Stockholders  and  Consolidated   Financial
Statements  and Notes  thereto.  Results for the  quarter and nine months  ended
September 30, 1996 should not be considered indicative of results to be expected
for the full year.

2.  RECENT ACCOUNTING PRONOUNCEMENTS

In June 1996,  the FASB  issued  Statement  of  Financial  Accounting  Standards
("SFAS") No. 125,  "Accounting  for Transfers and Servicing of Financial  Assets
and  Extinguishments  of  Liabilities."  SFAS  No.  125  provides  guidance  for
distinguishing  transfers  of financial  assets that are "sales" from  transfers
that are  "secured  borrowings."  This  Statement,  which  supersedes  or amends
numerous existing guidelines,  is effective January 1, 1997 and is to be applied
prospectively. Earlier implementation of SFAS No. 125 is not permitted.

Under  SFAS No.  125,  a  transfer  of  financial  assets  in which  control  is
surrendered  over those  assets is  accounted  for as a sale to the extent  that
consideration  other than  beneficial  interests  in the  transferred  assets is
received in the exchange.  Liabilities and  derivatives  incurred or obtained by
the transfer of financial  assets are required to be measured at fair value,  if
practicable.  Also,  any servicing  assets and other  retained  interests in the
transferred  assets must be measured by allocating  the previous  carrying value
between  the  asset  sold  and the  interest  retained,  if any,  based on their
relative  fair values at the date of transfer.  For each  servicing  contract in
existence  before January 1, 1997,  previously  recognized  servicing rights and
excess  servicing  receivables  that  do  not  exceed  contractually   specified
servicing  are  required  to be  combined,  net  of  any  previously  recognized
servicing  obligations  under that contract,  as a servicing asset or liability.
Previously recognized servicing receivables that exceed contractually  specified
servicing  fees  are  required  to  be  reclassified  as  interest-only   strips
receivable.

The Statement also requires an assessment of interest-only  strips, loans, other
receivables  or retained  interests in  securitizations.  If these assets can be
contractually  prepaid  or  otherwise  settled  such that the  holder  would not
recover substantially all of its recorded investment, the asset will be measured
like  available-for-sale  securities or trading securities,  under SFAS No. 115.
This  assessment  is required  for  financial  assets held on or acquired  after
January 1, 1997.

                                   7

<PAGE>




2.  RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

 In accordance with the above,  the Company will apply the  requirements of this
Statement  beginning  January 1, 1997. The Company has not historically  entered
into  transactions  which meet the new definitions of transfers that are secured
borrowings. However, the Company has not completed the complex analysis required
to determine the future impact on its financial  statements  related to existing
financial assets and servicing contracts.

Item 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS

GENERAL
-------

First  Republic is a financial  services  company  operating in  California  and
Nevada as a thrift and loan holding company and as a mortgage  banking  company,
originating,  holding or selling,  and servicing  mortgage loans. First Republic
owns and operates First Thrift, a California-chartered, FDIC-insured, thrift and
loan  subsidiary,   and  First  Republic   Savings  Bank,  a   Nevada-chartered,
FDIC-insured  thrift and loan subsidiary  (collectively,  the "Thrifts").  First
Thrift and First Republic  Savings Bank are members of the FDIC's Bank Insurance
Fund ("BIF"), not the Savings Association Insurance Fund ("SAIF").

On October 31, 1996, the Company completed the merger of its two thrift and loan
subsidiaries,  First Thrift and First Republic Savings Bank, in order to achieve
certain operational efficiencies.  During the third quarter of 1996, the Company
obtained all  regulatory  approvals  to merge First  Thrift into First  Republic
Savings  Bank.  Subsequent  to the  merger,  First  Republic  Savings  Bank will
be the surviving legal entity and will continue  to operate in  both  Nevada and
California  in  substantially  the  same  manner  as  each  subsidiary  has been
operating.

Additionally, the Company may in the future pursue a change in the legal charter
of First  Republic  Savings  Bank from a thrift and loan charter to a commercial
bank  charter.  Such a  charter  change  would  allow  the  Company  to  provide
additional services,  including traditional checking accounts, to its customers.
The  Company is also  considering  merging  the parent  company  into the merged
operating  subsidiary,  if such  subsidiary  is converted to a commercial  bank.
These remaining  potential  corporate  reorganizations are subject to regulatory
approval and the Company's review of various business considerations and federal
and state  laws;  the  holding  company  merger is also  subject to  stockholder
approval.   There  can  be  no  assurance   that  the   foregoing   contemplated
reorganizations will be accomplished.

The Company is primarily engaged in originating  residential real estate secured
loans on single family  residences.  The Company's  loan portfolio also contains
loans secured by commercial  properties and multifamily  properties.  Currently,
the Company's  strategy in California is to emphasize the  origination of single
family loans and to limit the  origination  of multifamily  and commercial  real
estate mortgage loans.  Lending activities in Las Vegas are primarily focused on
single family and multifamily

                                    8

<PAGE>


GENERAL (Continued)
-------------------

residential  construction  projects  and  permanent  mortgage  loans  on  income
properties.  The Company  emphasizes its real estate  lending  activities in San
Francisco, Los Angeles, Las Vegas, and San Diego because of the proximity of its
loan  offices and the  experience  of executive  management  with real estate in
these areas. In addition to the Company  performing an underwriting  analysis on
each borrower and obtaining  independent property appraisals,  an officer of the
Company  generally  visits each  property or project prior to the closing of new
loans.

During the first nine months of 1996, the Company  continued its focus on single
family lending, and the level of loan originations increased from the prior year
as a result of average interest rates being lower and improved  secondary market
conditions allowing the amount of loans sold or originated for sale to investors
to be higher.  Total loans of all types  originated  by the Company in 1995 were
$584.4  million,  and loan sales were $99.2 million in 1995. For the nine months
ended  September 30, 1996,  the Company  originated  $648.8 million of loans and
loan sales were  $130.4  million,  as compared  to loan  originations  of $433.1
million and loan sales of $77.4 million for the nine months ended  September 30,
1995.

The Company  either  retains the loans it  originates  in its loan  portfolio or
sells the loans to institutional  investors in the secondary market. The Company
has  retained  the  servicing  rights  for  substantially  all loans sold in the
secondary  market,  thereby  generating  ongoing  servicing  fees. The Company's
mortgage servicing  portfolio  consisted of $806.8 million in loans at September
30, 1996.

The  following  table  presents  certain   performance  ratios  and  share  data
information for the Company for the last periods indicated:
<TABLE>
<CAPTION>

                                                           At or for the nine months          At or for the Year
                                                             Ended September 30,              Ended December 31,
                                                             -------------------        ------------------------------
                                                             1996           1995        1995         1994         1993
                                                             ----           ----        ----         ----         ----
<S>                                                     <C>           <C>         <C>          <C>          <C>       
Performance Ratios:
   Return on average assets*                                  0.60%        (0.03)%      0.07%        0.47%        0.97%
   Return on average equity*                                 10.66         (0.54)       1.08         6.77        12.65
   Average equity to average assets                           5.61          6.06        6.00         6.94         7.63
   Leverage ratio                                             5.63          5.88        5.84         6.43         7.65
   Total risk-based capital ratio                            14.60         15.14       15.00        16.32        17.62
   Net interest margin*                                       2.33          1.90        1.97         2.47         3.25
   Non-interest expense to average assets*                    1.12          1.08        1.07         1.28         1.33
   Nonaccruing assets to total assets                         2.05          2.73        2.46         2.41         1.55
   Nonaccruing assets and performing restructured
     loans to total assets                                    2.39          3.60        3.13         3.43         2.00
   Net loan chargeoffs to average loans*                      0.36          0.82        0.69         0.58         0.44
   Reserve for possible losses to total loans                 0.97          1.07        1.07         0.96         1.01
   Reserve for possible losses to nonaccruing loans             60%           46%         49%          44%         109%

Share Data:

   Common shares outstanding                             7,361,488     7,350,446   7,330,400    7,444,703    7,718,791
   Tangible book value per common share                     $16.03        $14.56      $14.76       $14.40       $13.58

----------
*Nine months data is annualized

</TABLE>




                                                           9

<PAGE>


GENERAL (Continued)
-------------------

First  Thrift's  retail  deposits and FHLB advances are the Company's  principal
source of funds  with loan  principal  repayments,  sales of loans,  the  retail
deposits of First  Republic  Savings Bank, and the proceeds from debt and equity
financings as supplemental  sources.  The Company's deposit gathering activities
are conducted in the San Francisco Bay Area, Los Angeles,  and San Diego County,
California and in Las Vegas, Nevada.

First  Thrift is an approved  voluntary  member of the Federal Home Loan Bank of
San Francisco (FHLB).  First Thrift is currently  approved for approximately 40%
of its total assets or approximately  $802 million of FHLB advances at September
30, 1996.  Such advances are  collateralized  by real estate  mortgage loans and
$601.5 million has been advanced at September 30, 1996.  First Republic  Savings
Bank became a member of the FHLB on July 26, 1996 upon the  purchase of $540,000
of FHLB stock, and has been approved for  approximately  25% of its total assets
or  approximately  $25.1  million  of  FHLB  advances  at  September  30,  1996.
Membership in the FHLB provides the Thrifts with an  alternative  funding source
for its loans.

First Thrift, whose deposits are insured by the FDIC BIF, operates four branches
in San Francisco, a branch in San Rafael in Marin County north of San Francisco,
a branch in Los Angeles,  a branch in Beverly  Hills,  and three branches in San
Diego  County.  As of  September  30,  1996,  First  Thrift had total  assets of
$2,005,478,000,  tangible shareholder's equity of $136,570,000 and total capital
(consisting of tangible  shareholder's  equity,  subordinated  capital notes and
reserves) of  $163,638,000.  At  September  30, 1996,  First  Thrift's  tangible
shareholder's  equity as a  percentage  of total  assets was 6.81% and its total
capital as a percentage of risk adjusted  assets was 12.64%,  compared to a risk
adjusted capital ratio requirement of 8.0%. Under FDIC regulations, First Thrift
calculates its Leverage  Ratio at 6.88%,  using Tier 1 capital (as defined under
the FDIC's risk-based capital definitions) and average total assets for the most
recent quarter.

First  Republic  Savings Bank,  whose deposits are also insured by the FDIC BIF,
operates  one branch in Las  Vegas,  Nevada  and is  scheduled  to open a second
branch in the Las Vegas area during the fourth  quarter of 1996. As of September
30, 1996, First Republic Savings Bank had total assets of $100,477,000, tangible
shareholder's  equity of $8,958,000  and total capital  (consisting  of tangible
shareholder's equity and reserves) of $10,135,000.  At September 30, 1996, First
Republic Savings Bank's tangible  shareholder's  equity as a percentage of total
assets was 8.92% and its total capital as a percentage  of risk adjusted  assets
was 13.63%, compared to a risk adjusted capital ratio requirement of 8.0%. Under
FDIC  regulations,  First Republic Savings Bank calculates its Leverage Ratio at
9.39%,  using Tier 1 capital (as  defined  under the FDIC's  risk-based  capital
definitions) and average total assets for the most recent quarter.

LIQUIDITY
---------

Liquidity  refers  to the  ability  to  maintain  a cash flow  adequate  to fund
operations  and to meet  present and future  obligations  of the Company  either
through the sale or maturity of existing  assets or by the  acquisition of funds
through liability management. The Company maintains a portion of its assets in a

                                      10

<PAGE>


LIQUIDITY (Continued)
---------------------

diversified portfolio of marketable investment  securities,  which includes U.S.
Government securities and mortgage backed securities. At September 30, 1996, the
investment  securities  portfolio  of  $157,675,000,  plus cash and  short  term
investments of $24,436,000,  amounted to $182,111,000,  or 8.6% of total assets.
At September  30, 1996,  89% of the Company's  investments  mature within twelve
months or are  adjustable  rate in nature.  At September  30, 1996,  the Company
owned no investments of a trading nature.

Additional  sources of  liquidity  at  September  30,  1996 could be provided by
approximately $125,000,000 of borrowings collateralized by investment securities
and available  unused FHLB advances of  approximately  $224,000,000.  Management
believes  that the  sources of  available  liquidity  are  adequate  to meet the
Company's reasonably foreseeable short-term and long-term demands.

ASSET AND LIABILITY MANAGEMENT
------------------------------

The Company  seeks to manage its asset and  liability  portfolios to help reduce
any adverse  impact on its net interest  income caused by  fluctuating  interest
rates.  To achieve this  objective,  the Company  emphasizes the  origination of
adjustable  interest  rate or  short-term  fixed rate loans and the  matching of
adjustable rate asset  repricings with short- and  intermediate-term  investment
certificates and adjustable rate borrowings.  The Company's profitability may be
adversely  affected  by rapid  changes  in  interest  rates.  Institutions  with
long-term  assets  (both loans and  investments)  can  experience  a decrease in
profitability  and in the value of such assets if the general  level of interest
rates rises. While substantially all of the Company's assets are adjustable rate
mortgage loans and investments, at September 30, 1996 approximately 73% of these
assets which adjust  within one year were assets based on an interest rate index
which  generally lags increases and decreases in market rates (the 11th District
Cost of Funds  Index or  "COFI").  Additionally,  the  Company's  loans  contain
interim rate  increase  caps or  limitations  which can  contribute to a further
lagging of rates earned on loans.  At September 30, 1996,  approximately  88% of
the Company's  interest-earning  assets and 79% of interest-bearing  liabilities
will reprice within the next year and the Company's  one-year  cumulative GAP is
positive 13.2%. Despite the Company's positive repricing position, the Company's
net  interest  margin  decreased  in the first and second  quarters of 1995 as a
result of the rapid rise in rates in 1994. The Company's net interest margin has
increased  gradually  from the second  quarter of 1995 to the second  quarter of
1996, as a result of lower and relatively  more stable short term interest rates
and  increases  in  adjustable  rate loan yields  compared to  liability  costs.
Important   factors   affecting  the  Company's  net  interest   margin  include
competition and conditions in the home loan market which affect loan yields, the
cost of the Company's FHLB advances,  mortgage loan repricings  being subject to
interim limitations on asset repricings,  the Company's strategy to increase its
home loans which carry lower margins and the lagging nature of COFI.

The following table summarizes the differences between the Company's maturing or
rate adjusting assets and liabilities, or "GAP" position, at September 30, 1996.
Generally,  an excess of maturing or rate adjusting assets over maturing or rate
adjusting liabilities during a given period, will serve to enhance earnings in a
rising rate  environment  and inhibit  earnings when rates decline.  Conversely,
when maturing or rate adjusting  liabilities  exceed  maturing or rate adjusting
assets during a given period, a rising rate

                                     11

<PAGE>


ASSET AND LIABILITY MANAGEMENT (Continued)
------------------------------------------

environment  will  inhibit  earnings and  declining  rates will serve to enhance
earnings.  See  "-Results of  Operations"  for a discussion of the change in the
Company's  net interest  spread for the quarter and nine months ended  September
30, 1996. A portion of the Company's  adjustable  loans carry  minimum  interest
rates,  or floors,  which became the effective loan yield as rates declined from
the levels in prior periods and approximately  $170,719,000 of such loans remain
at these minimum  interest rates as of September 30, 1996.  The following  table
illustrates  projected  maturities or interest rate  adjustments  based upon the
contractual maturities or adjustment dates at September 30, 1996:


                                      12

<PAGE>

<TABLE>
<CAPTION>



                                                           FIRST REPUBLIC BANCORP
                                                   ASSET & LIABILITY REPRICING SENSITIVITY
                                                             September 30, 1996
                                                                   (000's)


                                      3 Months    3 to     6 to        1 to       2 to      Over    Non Interest
ASSETS:                    Immediate   or Less 6 Months  12 Months   2 Years    5 Years   5 Years    Sensitive      TOTAL
                           --------- --------- --------  --------    -------    -------   -------   ----------    ----------

<S>                         <C>      <C>       <C>      <C>        <C>         <C>       <C>        <C>         <C>
Loans (1)                         0    931,901  619,918   105,481     21,946    166,404    39,352            0     1,885,002

Securities                        0    142,391    9,145    14,081          0          0    24,199            0       189,816

Cash & short-term
  investments                20,436      4,000        0         0          0          0         0            0        24,436

Non-interest bearing
  assets, net                     0          0        0         0          0          0         0       22,914        22,914
                           --------  ---------  -------  --------    -------    -------   -------       ------   -----------

  TOTAL                      20,436  1,078,292  629,063   119,562     21,946    166,404    63,551       22,914     2,122,168



LIABILITIES AND
  STOCKHOLDERS' EQUITY:

Passbooks & MMA's                 0    234,642   23,699    11,291      4,794          0         0            0       274,426

Certificates of deposit:
  100K or greater                 0     19,432   13,541    17,615     13,884      4,133       100            0        68,705
  < 100K                          0    251,985  209,181   262,094    199,599     51,447        13            0       974,319

FHLB advances                     0    175,000  288,530    35,000      8,000     72,500    22,500            0       601,530

ESOP debt                         0          0        0         0          0          0         0            0             0

Other short-term debt             0          0        0         0          0          0         0            0             0

Other liabilities                 0          0        0         0          0          0         0       21,143        21,143

Subord debt                       0          0        0         0          0      1,482    62,493            0        63,975

Equity                            0          0        0         0          0          0         0      118,070       118,070
                            -------  ---------  -------   -------   --------    -------   -------      -------     ---------

  TOTAL                           0    681,059  534,951   326,000    226,277    129,562    85,106      139,213     2,122,168



Repricing Assets
  over (under) liab          20,436    397,233   94,112  (206,438)  (204,331)    36,842   (21,555)    (116,299)            0

Effect of swaps                   0     25,000        0         0          0    (25,000)        0            0             0
                             ------    -------  -------  --------    -------    -------   -------   ----------      --------


Hedged gap                   20,436    372,233   94,112  (206,438)  (204,331)    61,842   (21,555)    (116,299)            0
                             ======    =======  =======  ========   ========    =======   =======     ========      ========

Gap as % of
  Total assets                0.96%     17.54%    4.43%    -9.73%     -9.63%      2.91%    -1.02%       -5.48%         0.00%
                              =====    =======   ======  ========    =======    =======   =======       ======        ======

Cumulative gap               20,436    392,669  486,781   280,343     76,012    137,854   116,299            0             0
                             ======    =======  =======   =======    =======    =======   =======       ======        ======

Cumulative gap                0.96%     18.50%   22.94%    13.21%      3.58%      6.50%     5.48%        0.00%         0.00%
  as % of assets             ======    =======   ======   =======    =======    =======   =======       ======        ======
  
</TABLE>



(1)  Adjustable rate loans consist principally of real estate secured loans with
     a maximum term of 30 years.  Such loans are generally  adjustable  monthly,
     semiannually, or annually based upon changes in the FHLB 11th District Cost
     of Funds Index (COFI),  the One Year Treasury  Constant  Maturity Index, or
     the Prime rate,  subject generally to a maximum increase of 2% annually and
     5% over the lifetime of the loan.

(2)  Passbook and MMA account maturities and rate adjustments are allocated
     based  upon  management's   experience  of  historical  interest  rate
     volatility and erosion rates.  However,  all passbook and MMA accounts
     are contractually subject to immediate withdrawal.

                                      13

<PAGE>


ASSET AND LIABILITY MANAGEMENT (Continued)
------------------------------------------

In evaluating the Company's exposure to interest rate risk, certain  limitations
inherent  in the method of analysis  presented  in the  foregoing  table must be
considered.  For  example,  although  certain  assets and  liabilities  may have
similar  maturities  or  periods to  repricing,  they may react  differently  to
changes in market  interest rates.  Additionally,  the interest rates on certain
types of assets and  liabilities  may  fluctuate in advance of changes in market
interest  rates,  while  interest rates on other types may lag behind changes in
market rates.  Further,  certain  assets,  such as adjustable rate mortgages and
mortgage related  investments,  have features which restrict changes in interest
rates  on a  short-term  basis  and  over the  life of the  asset.  The  Company
considers the anticipated  effects of these various factors in implementing  its
interest rate risk management activities,  including the utilization of interest
rate caps.

The Company has entered into  interest  rate cap  transactions  in the aggregate
notional  principal amount of $1,185,000,000  which terminate in periods ranging
from March 1997 through  September 2000. Under the terms of these  transactions,
which  have been  entered  into with nine  unrelated  commercial  or  investment
banking  institutions  or  their  affiliates,  the  Company  will be  reimbursed
quarterly  for  increases  in  the  three-month  London  Inter-Bank  Offer  Rate
("LIBOR") for any quarter during the term of the applicable transaction in which
such rate  exceeds a rate  ranging  from  9.0% to 12.5% as  established  for the
applicable  transaction.  The interest rate cap transactions are intended to act
as hedges for the  interest  rate risk  created by  restrictions  on the maximum
yield of certain  variable  rate  loans and  investment  securities  held by the
Company which may, therefore,  at times be exposed to the effect of unrestricted
increases  in the  rates  paid  on the  liabilities  which  fund  these  assets.
Additionally,  at September 30, 1996   $37,400,000  of First  Thrift's  advances
with the FHLB contained interest  caps  of  12.0%  as  part of   the   borrowing
agreements.  At September 30, 1996,  First  Thrift  also  owned  $50,000,000  of
interest  rate  caps  which  carry  a  strike  rate  of  8%  until  maturity  in
December 1996. The cost of interest rate  cap  transactions  is  amortized  over
their lives and totaled $1,252,000 and  $1,278,000 for  the  nine  months  ended
September 30, 1996 and 1995,  respectively.  Although these costs reduce current
earnings,  the Company  believes  that the cost is justified  by  the protection
these interest rate cap transactions  provide  against  significantly  increased
interest  rates.    The  effect  of these interest rate  cap transactions is not
factored  into  the  determination  of interest rate adjustments provided in the
table above.

At September 30, 1996, the Company had entered into interest rate swaps with the
FHLB in the notional  principal  amount of $25,000,000 to convert the fixed rate
on certain long-term FHLB advances to semi-annual  adjustable  liabilities.  The
availability  of long-term FHLB advances,  with a weighted  average  maturity of
approximately  10 years  at  September  30,  1996,  has  reduced  the  Company's
dependence upon retail  deposits,  which generally have a shorter  maturity than
the contractual  life of mortgage  loans.  The Company will continue to consider
the  alternative of FHLB advances as an integral part of its asset and liability
management program.  The Company is exposed to market loss if the counterparties
to its  interest  rate cap and swap  agreements  fail to perform;  however,  the
Company does not anticipate such nonperformance.

Since 1990,  the Company has utilized  FHLB  advances as a supplement to deposit
gathering  to fund its  assets.  FHLB  advances  require  no  deposit  insurance
premiums  and  operational  overhead  costs  are less  than for  deposits.  FHLB
advances  must be  collateralized  by the  pledging of mortgage  loans which are
assets of First Thrift.  At September 30, 1996, total FHLB advances  outstanding
were $601,530,000.  Of this amount,  $503,330,000 had an original maturity of 10
years or more and $23,200,000 had an original maturity of two years subsequently
extended for a period of 8 years to 10 years.  The longer term advances  provide
the Company  with an assured  level of funding  for its term real estate  assets
with longer

                                        14
<PAGE>

ASSET AND LIABILITY MANAGEMENT (Continued)
------------------------------------------

lives.

Prior to the thrift merger, First Thrift had been subject to the  provisions  of
the California Industrial Loan Law, which limits the amount of customer  deposit
balances  which  may  be  raised  to  twenty  times  its  shareholder's  equity.
At September  30, 1996,  based on  the  amount  of deposits  outstanding,  First
Thrift was required to maintain  minimum shareholder's  equity  of approximately
$61,396,000,   compared  with   actual  shareholder's  equity  of  $136,570,000.
First  Republic  Savings  Bank  is  subject  to  the  provisions  of  the Nevada
Thrift  Companies  Act,  which  requires that  the  amount  of customer deposits
be in compliance with FDIC guidelines.

CAPITAL RESOURCES
-----------------

The Company  continues to maintain a strong capital base. At September 30, 1996,
the Company's total capital,  including total stockholders'  equity,  debentures
and reserves was $200,310,000.  Total stockholders' equity at September 30, 1996
has  increased by $9,810,000  since  December 31, 1995.  This  increase  results
primarily  from the net income of  $9,046,000  for the first nine months of 1996
and an increase of $299,000 in the market value of that portion of the Company's
portfolio of securities which are classified as available for sale.

First Republic is not a bank holding company,  and unlike First Thrift prior  to
its  merger  and  First  Republic  Savings  Bank,  is  not  directly   regulated
or  supervised  by  the  FDIC,  nor  is  it  regulated  by the  Federal  Reserve
Board  or  any  other  bank  regulatory agency.  Thus,  First  Republic  is  not
subject  to  the  risk-based   capital   or  leverage   requirements.   If  such
regulations   applied,   the   Company  calculates  that at  September  30, 1996
its  leverage  ratio  would  have  been  5.63%,   and  its   total  risk   based
capital  ratio would have been 14.6%,  as  calculated  by  management  assuming,
however,  all  of  the  Company's   subordinated  debentures  constitute  Tier 2
capital and are not limited to 50% of Tier 1 capital.

During the first quarter of 1995, the Company  acquired  53,603  treasury shares
which  completed  the  repurchase of 406,000  shares of common stock  previously
approved for repurchase by the Board of Directors.  In March 1995, the Company's
Board  of  Directors  authorized  for  repurchase  from  time  to  time up to an
additional  250,000  shares  of  common  stock.  There  were  repurchases  of an
aggregate  additional 80,000 shares of common stock in March, April and November
1995,  bringing  total treasury  shares  repurchased to 486,000 at September 30,
1996.

During the first nine months of 1996, First Republic  received from First Thrift
dividends  of  $2,824,000  representing  approximately  25%  of  First  Thrift's
earnings.  First Republic also received interest payments of $790,000 from First
Thrift for the nine months ended  September 30, 1996.  Also,  First Republic has
received dividends of $250,000 from First Republic Savings Bank, related to that
subsidiary's  earnings for the fourth quarter of 1995, the first quarter of 1996
and the second quarter of 1996;  dividends of $116,000,  or approximately 25% of
earnings  for the third  quarter of 1996,  will be paid in  November  1996.  The
ability of First  Republic to receive  future  dividends and other payments from
First Republic Savings Bank  depends  upon the  operating  results  and  capital
level of First Republic Savings Bank,  restrictions  upon such payments  imposed
by  creditors  of  First  Republic  Savings Bank,  FDIC  regulations  and  other
governmental regulations governing First Republic Savings Bank.


                                        15


<PAGE>



RESULTS OF OPERATIONS -  Quarter Ended September 30, 1996 Compared to Quarter
------------------------ ----------------------------------------------------
                         Ended September 30, 1995
                         ------------------------

The Company derives its income from three  principal areas of business:  (1) net
interest income which is the difference  between the interest income the Company
receives on  interest-earning  portfolio  loans and investments and the interest
expense it pays on  interest-bearing  liabilities such as customer  deposits and
borrowings;  (2) mortgage banking operations  involving the origination and sale
of real estate  secured  loans;  and (3) servicing fee income which results from
the ongoing  servicing of such loans for  investors  and the  servicing of other
loans pursuant to purchased servicing rights.

During  the  third  quarter  of 1996,  First  Republic's  total  assets  grew to
$2,122,168,000  at  September  30, 1996 from  $2,064,209,000  at June 30,  1996,
primarily  as a result of an  increase  in single  family  mortgage  loans.  The
Company's  loan  originations  for the third quarter of 1996 were  $229,106,000,
compared to $220,779,000 for the second quarter of 1996 and $154,567,000 for the
third quarter of 1995.  The amounts of single family loans,  construction  loans
and  commercial  real  estate  originated  in the  third  quarter  of 1996  were
consistent with those  originated in the second quarter of 1996, and there was a
$9.0 million  increase in  multifamily  lending from the prior  quarter.  Single
family loans  originated in the third quarter of 1996 were $175 million compared
to $108 million in the third quarter of 1995 and $413 million for all of 1995.

Mortgage banking  activity  resulted in the sale of $77,567,000 of single family
loans to secondary market  investors during the third quarter of 1996,  compared
with $41,979,000 in the third quarter of 1995. During the third quarter of 1996,
$68 million of single  family  loans were sold to two  specific  investors.  The
Company's portfolio of real estate loans serviced for secondary market investors
increased to  $806,778,000  at September 30, 1996 from  $804,856,000 at December
31, 1995. The level of future loan originations,  loan sales and loan repayments
is  dependent  in part on overall  credit  availability  and the  interest  rate
environment,  the  recovery in the general  economy  and housing  industry,  and
conditions in the secondary loan sale markets.

The Company  reported net income of $3,275,000  for the third quarter of 1996 as
compared to $1,321,000 in the same quarter of 1995.  Fully diluted  earnings per
share was $0.36 for the third quarter of 1996, compared to $0.17 for the similar
period in 1995. First Republic's  pretax operating results for the quarter ended
September 30, 1996 were higher than a year ago  primarily  because the Company's
net interest  income for the third  quarter was  $2,816,000  higher in 1996 than
1995, and the provision for loan losses was $1,000,000 lower.

Total interest  income  increased to  $40,423,000  for the third quarter of 1996
from  $36,090,000 for the third quarter of 1995.  Interest income on real estate
and other loans increased to $36,742,000 for the third quarter of 1996, compared
to  $32,890,000  in 1995.  The  average  yield on loans  was  7.86% in the third
quarter of 1996  compared to 8.04% for the second  quarter of 1996 and was 8.16%
for the third  quarter of 1995.  The  Company's  yield on loans is  affected  by
market  rates,  the level of  adjustable  rate loan  indexes,  the effect of new
single  family loans  earning  lower  initial rates of interest and the level of
nonaccrual  loans.  The Company's total loans receivable  outstanding  increased
from $1,834,407,000 at June 30, 1996 to $1,885,002,000 at September 30, 1996. As
a percentage of the

                                        16
<PAGE>


RESULTS OF OPERATIONS -  Quarter Ended September 30, 1996 Compared to Quarter
------------------------ ----------------------------------------------------
                         Ended September 30, 1995 (Continued)
                         ------------------------------------

Company's  permanent loan portfolio,  loans secured by single family  residences
increased to 65% at September 30, 1996 from 59% at September 30, 1995.

Interest  income  on cash,  short-term  investments  and  investment  securities
increased as a result of a higher  average  portfolio for the quarter  earning a
slightly  higher average rate.  Such interest income was $3,681,000 in the third
quarter of 1996 compared to  $3,200,000 in the same period of 1995.  The average
investment position was $205,361,000 during the third quarter of 1996 and earned
7.30% compared to an average  position of $188,242,000  earning 6.98% during the
third  quarter of 1995. To the extent that the  Company's  investment  portfolio
increases as a proportion of total assets,  there could be an adverse  effect on
the Company's net interest margin,  since rates earned on investments tend to be
lower than rates earned on loans.

Total  interest  expense for the third quarter has increased to  $28,726,000  in
1996 from $27,209,000 in 1995. Total interest expense consists of two components
- interest  expense on deposits and  interest  expense on FHLB  advances,  other
borrowings and debentures.  Interest expense on deposits  (comprised of passbook
and money  market  (MMA)  accounts and  certificates  of deposit),  increased to
$18,336,000  in the third quarter of 1996 from  $16,424,000 in the third quarter
of 1995.  The average rate paid on deposits  was 5.67% for the third  quarter of
1996,  compared to 5.72% for the second  quarter of 1996 and 6.05% for the third
quarter of 1995.  Interest expense on other borrowings  decreased to $10,390,000
in the third quarter of 1996 from $10,785,000 in the third quarter of 1995, as a
result of a lower average rate paid on a higher  average level of FHLB advances.
The average  rate paid on the  Company's  other  borrowings  and FHLB  advances,
excluding  longer  term  debentures,  was 5.84% for the third  quarter  of 1996,
compared  to 5.92%  for the  second  quarter  of 1996,  and  6.64% for the third
quarter of 1995; thus the average rate paid on these liabilities, primarily FHLB
advances, decreased 8 basis points (.08%) from the second quarter of 1996 to the
third  quarter of 1996 and 80 basis points (.80%) from the third quarter of 1995
to the third quarter of 1996.

The Company's net interest income was $11,697,000 for the third quarter of 1996,
compared to  $8,881,000  for the third quarter of 1995, as a result of earning a
higher spread on a higher average  balance of assets.  The net interest  margin,
calculated  as net interest  income  divided by total average  interest  earning
assets, was 2.30% for the third quarter of 1996, compared to 2.04% for the third
quarter of 1995 and 1.97% for all of 1995.  The  Company's  net interest  margin
gradually  increased  each quarter from the second  quarter of 1995 to 2.36% for
the second quarter of 1996.

From early 1994,  through March 31, 1995,  the cost of FHLB  advances  increased
more  rapidly  than the yield on the  Company's  loans and more rapidly than the
cost of the Company's deposits, due to rapidly rising short term interest rates.
The Company's  advances have interest rates which generally adjust  semiannually
and to a lesser extent  annually,  with repricing  points spread  throughout the
year.  There are no interim  caps on the amount that the  interest  rate on FHLB
advances  may  increase.  Thus,  at each  repricing  point,  the cost of an FHLB
advance fully reflects market rates. Most of the Company's  adjustable  mortgage
loans have  interim  rate  increase  limitations.  This  adverse  trend  began a
reversal  in the third  quarter of 1995,  as the  weighted  average  cost of the
Company's  FHLB  advances  decreased as a result of a general  decline in market
rates. The Company experienced increased yields on its ARM loans, as a result of
loan repricings, and during the first six months of

                                   17
<PAGE>


RESULTS OF OPERATIONS -  Quarter Ended September 30, 1996 Compared to Quarter
------------------------ ---------------------------------------------------
                         Ended September 30, 1995 (Continued)
                         ------------------------------------

1996, net interest margin has increased as liability costs moderated due to more
stable  interest rates. In the third quarter of 1996, the Company's net interest
margin  declined 6 basis points below the prior quarter as a result of a lagging
COFI index and increased new single family loans added to the loan portfolio.

Non-interest  income for the third quarter of 1996 increased to $1,470,000  from
$1,198,000  in the third quarter of 1995,  primarily  due to increased  gains on
sale of loans.  Service fee  revenue,  net of amortized  costs on the  Company's
mortgage  servicing rights,  was $516,000 for the third quarter of 1996 compared
to  $646,000  for the same  period  of 1995,  primarily  due to a lower  average
balance of mortgage servicing rights and higher  amortization costs. The average
balance of the  servicing  portfolio  decreased  to  $790,813,000  for the third
quarter of 1996 compared to  $823,725,000  for the third quarter of 1995.  Total
loans  serviced  were  $806,778,000  at September 30, 1996 and  $804,856,000  at
December 31, 1995. The  percentage of servicing  fees received  depends upon the
terms of the loans as originated  and  conditions  in the secondary  market when
loans are sold. The Company  receives  servicing fees, on the  outstanding  loan
balances  serviced,  which averaged  approximately  0.34% for the nine months of
1996 compared to 0.37% for all of 1995.

For the third  quarter,  loan and  related  fee income was  $161,000 in 1996 and
$345,000 in 1995. This income category  includes  miscellaneous  fees which vary
with market conditions,  late charge income which generally varies with the size
of the loan and servicing  portfolios  and economic  conditions,  and prepayment
penalty income which generally varies with loan activity and market conditions.

The Company sells whole loans and loan  participations  in the secondary  market
under  several  specific  programs.  The amount of loans sold is dependent  upon
conditions in both the mortgage  origination  and secondary  loan sales markets,
and the level of gains on loan sales will fluctuate. Loan sales were $77,567,000
for the third quarter of 1996 and $41,979,000 for the third quarter of 1995. The
Company  computes a gain or loss on sale at the time of sale by comparing  sales
proceeds with the carrying value of the loans and by calculating  the fair value
of servicing  rights  retained.  The gain on the sale of loans for 1996 includes
the value attributed to mortgage loan servicing rights under SFAS No. 122, which
was $743,000 for the third quarter of 1996.  Most of the loans sold in the third
quarter of 1996 were adjustable rate mortgages based on the COFI index. The sale
of loans  resulted  in net  gains of  $709,000  for the third  quarter  of 1996,
compared to $9,000 for the same period of 1995.

The Company's  mortgage  banking  activities  have been focused on entering into
formal  commitments  and informal  agreements  with  institutional  investors to
originate on a direct flow basis single  family  mortgages  which are priced and
underwritten to conform to previously agreed upon criteria prior to loan funding
and are delivered to the investor  shortly after funding.  Also, the Company has
historically identified,  from time to time, secondary market sources which have
particular  needs  which can be filled  primarily  with  adjustable  rate single
family loans held in its portfolio.

Non-interest  expense totaled $6,085,000 for the third quarter of 1996, compared
to $5,374,000 for the same period in 1995. In 1996, the Company  reported higher
personnel   costs   related  to  higher   loan   volume  and  higher   corporate
profitability,  increased  advertising and  professional  costs from operating a
large  company and higher other  operating  costs,  including  the accrual for a
corporate

                                        18
<PAGE>


RESULTS OF OPERATIONS -  Quarter Ended September 30, 1996 Compared to Quarter
------------------------ ----------------------------------------------------
                         Ended September 30, 1995 (Continued)
                         ------------------------------------

image and identity consulting project.  The Company's  non-interest  expense for
the third quarter of 1996 included  $91,000  related to results of operating REO
properties and losses on disposition or changes in value of REO properties,  net
of gains on sold REO,  compared to $720,000 of REO related expenses in the third
quarter of 1995.

As a percentage of total assets,  recurring general and administrative expenses,
excluding REO related costs, was 1.14% for the second and third quarter of 1996,
compared to 1.02% for the third quarter of 1995, and 1.07% for all of 1995.

RESULTS OF OPERATIONS -  Nine Months Ended September 30, 1996 Compared to Nine
------------------------ -----------------------------------------------------
                         Months Ended September 30, 1995
                         -------------------------------

The following comments are made regarding the results of operations for the nine
months ended  September 30, 1996 compared to the nine months ended September 30,
1995.  The trend in income and expense  items is generally  consistent  with the
comparison of the third quarter of 1996 with the same quarter of 1995, including
a decrease in the provision  for losses and an increase in net interest  income.
Total  interest  income and interest  expense have  increased on a  year-to-date
basis, primarily  as  a  result  of  an  increased   average  balance  sheet, as
presented in the  following table. Net interest  income has increased due to the
increased  level  of  assets  earning  a  higher  interest  rate spread, as  the
rates paid on  liabilities  has decreased 0.33% while yields earned on loans has
increased 0.13%.

Non-interest income was $3,683,000 for the first nine months of 1996 as compared
to $3,253,000  for the same period in 1995.  Gain on sale of loans was higher by
$993,000,  offset in part by a  decrease  of  $411,000  in net  servicing  fees.
Non-interest  expense increased 11.6% from $16,104,000 in 1995 to $17,977,000 in
1996.  A decrease in REO related  costs to  $977,000  for the nine months  ended
September  30,  1996 from  $1,728,000  in the same  period 1995 was offset by an
increase in general and  administrative  expenses.  As a  percentage  of average
assets,  noninterest  expenses  increased  to 1.12% for the first nine months of
1996 from 1.08% for the first nine months of 1995.

The  following  table  presents for the first nine months of 1996 and 1995,  the
distribution of  consolidated  average assets,  liabilities,  and  stockholders'
equity  as  well  as the  total  dollar  amounts  of  interest  income,  average
interest-earning  assets and the  resultant  yields,  and the dollar  amounts of
interest  expense,  average  interest-bearing   liabilities,   and  rates  paid.
Nonaccrual  loans are  included in the  calculation  of the average  balances of
loans and interest on nonaccrual loans is included only to the extent recognized
on a cash basis. The yield on short-term investments has been adjusted upward to
reflect  the effects of certain  income  thereon  which is exempt  from  federal
income tax, assuming an effective rate of 35%.

                                        19
<PAGE>


RESULTS OF OPERATIONS -  Nine Months Ended September 30, 1996 Compared to Nine
------------------------ -----------------------------------------------------
                         Months Ended September 30, 1995
                         -------------------------------

<TABLE>
<CAPTION>


                                                                            Nine months Ended September 30,
                                                           ------------------------------------------------------------------
                                                                        1996                                1995
                                                           ----------------------------          ----------------------------
                                                           Average               Yields/         Average               Yields/
                                                           Balance    Interest    Rates          Balance    Interest    Rates
                                                           -------    --------    -----          -------    --------    -----
                                                                                    (In thousands)
<S>                                                     <C>          <C>         <C>          <C>          <C>         <C>
Assets:
Interest-bearing deposits with other institutions        $    1,938   $     64     4.41%       $    1,311   $     51     5.20%
Short-term investments                                       20,452        876     5.63            20,211        960     6.26
Investment securities                                       185,327      9,962     7.17           164,106      8,379     6.81
Loans                                                     1,787,592    107,718     8.03         1,573,032     93,211     7.90
                                                          ---------    -------                  ---------     ------

   Total earning assets                                   1,995,309    118,620     7.93         1,758,660    102,601     7.78
                                                                       -------                               -------

Non interest-earning assets                                  20,002                                18,639
                                                            -------                               -------

   Total average assets                                  $2,015,311                            $1,777,299
                                                          =========                             =========


Liabilities and Stockholders' Equity:
Passbooks & MMA's                                          $229,667    $ 8,288     4.82%         $141,065    $ 5,210     4.94%
Certificates of deposit                                     996,852     44,599     5.98           883,360     39,842     6.03
                                                            -------     ------                    -------     ------

   Total customer deposits                                1,226,519     52,887     5.76         1,024,425     45,052     5.88

Other borrowings                                            592,711     26,449     5.96           566,431     28,185     6.65
Subordinated debentures                                      64,002      4,324     9.01            64,136      4,322     8.99
                                                            -------     ------                    -------     ------

   Total interest-bearing liabilities                     1,883,232     83,660     5.93         1,654,992     77,559     6.26
                                                                        ------                                ------

Non interest-bearing liabilities                             18,934                                14,564
Stockholders' equity                                        113,145                               107,743
                                                            -------                               -------

   Total average liabilities and stockholders' equity    $2,015,311                            $1,777,299
                                                          =========                             =========

Net interest spread                                                                1.99%                                 1.51%
Net interest income and net interest margin                           $ 34,960     2.33%                     $25,042     1.88%
                                                                       =======                                ======
</TABLE>


The Company's  balance  sheet at September  30, 1996 is generally  comparable to
that  at  December  31,  1995.  Total  assets  have  increased  $217,915,000  to
$2,122,168,000,  while there was a net increase in the Company's  loan portfolio
of  $203,663,000,  including  an  increase  of  $210,504,000  in  single  family
mortgages.  Funds were  raised  primarily  by retail  deposits  which  increased
$177,009,000  and by an increase of $31,000,000 in FHLB advances.  The Company's
reserve for possible  losses was  $18,265,000  at September 30, 1996,  and there
were thirteen  foreclosed real estate properties  resulting in other real estate
owned with a net book value of $12,807,000.

ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES
-----------------------------------------------

The levels of the  Company's  provision  for losses and  reserve  for losses are
related to the size and  composition  of the loan  portfolio,  general  economic
conditions,  and  conditions  affecting  the real  estate  markets  in which the
Company conducts lending activities.  The following table sets forth by category
the total loan  portfolio  of the Company at the dates  indicated.  As indicated
below,  the Company has increased  primarily the dollar amount and proportion of
its loans secured by single family  residences in 1995 and the first nine months
of 1996.  All of the  Company's  net loan  growth  since  December  31,  1994 is
represented by growth in single family home loans.

                                   20


<PAGE>


ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES (Continued)
-----------------------------------------------------------
<TABLE>
<CAPTION>

                                                            September 30,                     December 31,
                                                                                         ----------------------
                                                                  1996                 1995                  1994
                                                            -------------        -------------         -------------
<S>                                                       <C>                  <C>                   <C>
Loans:
Single family (1-4 units)                                  $1,193,223,000         $983,331,000          $820,078,000
Multifamily (5+ units)                                        325,456,000          350,507,000           367,750,000
Commercial real estate                                        285,045,000          286,824,000           249,119,000
Multifamily/commercial construction                            13,510,000            9,013,000            10,658,000
Single family construction                                     31,929,000           19,349,000            14,227,000
Home equity credit lines                                       29,760,000           26,572,000            28,137,000
                                                            -------------        -------------         -------------

   Real estate mortgages subtotal                           1,878,923,000        1,675,596,000         1,489,969,000
                                                            -------------        -------------         -------------

Commercial business and other                                   6,079,000            6,667,000             8,694,000
                                                            -------------        -------------         -------------

   Total loans                                              1,885,002,000        1,682,263,000         1,498,663,000

Unearned fee income                                            (3,289,000)          (4,380,000)           (6,816,000)
Reserve for possible losses                                   (18,265,000)         (18,068,000)          (14,355,000)
                                                            -------------       --------------          ------------


   Loans, net                                              $1,863,448,000       $1,659,815,000        $1,477,492,000
                                                            =============        =============         =============
</TABLE>

The  following  table  presents an analysis of the Company's  loan  portfolio at
September 30, 1996 by property type and geographic location:

<TABLE>
<CAPTION>
                          San Francisco Los Angeles  San Diego   Other CA   Las Vegas,                          Percent
$ in thousands                 Bay Area   County      County      Areas       Nevada      Other       Total      By Type
                          --------------  ---------  ---------  ---------  ----------   -------    ---------    --------
<S>                           <C>         <C>        <C>        <C>        <C>         <C>       <C>           <C>
Property Type:
Single family (1-4 units)(1)    $774,057  $255,772    $39,703    $100,155    $11,096    $42,200   $1,222,983     64.9%
Multifamily (5+ units)           141,611    67,771        441      17,434     98,199        ---      325,456     17.3%
Commercial real estate           195,343    30,308      1,063      13,480     42,454      2,396      285,044     15.1%
Construction loans                10,326    10,009        ---       1,650     23,455        ---       45,440      2.4%
Business loans                       ---     2,317      1,770         286        ---        ---        4,373      0.2%
CD backed loans/other                498       366         19         300        107        416        1,706      0.1%
                               ---------  --------   --------    --------   --------     ------    ---------    -----

   Total                      $1,121,835  $366,543    $42,996    $133,305   $175,311    $45,012   $1,885,002    100.0%
                               =========   =======     ======     =======    =======     ======    =========    =====

Percent by location                59.5%     19.4%       2.3%        7.1%       9.3%       2.4%       100.0%
</TABLE>

(1) Includes  equity lines of credit  secured by single  family  residences  and
    single family loans held for sale.

The  Company  places  an asset on  nonaccrual  status  when any  installment  of
principal  or  interest  is 90 days or more past due (except for loans which are
judged by  management  to be well  secured  and in the  process  of  collection,
generally   applicable  to  single  family  loans),  or  earlier  if  management
determines  the  ultimate  collection  of all  contractually  due  principal  or
interest to be  unlikely.  Additionally,  loans  restructured  to defer or waive
amounts due are placed on nonaccrual  status and generally will continue in this
status until a satisfactory  payment history is achieved (generally at least six
payments).

                                        21


<PAGE>


ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES (Continued)
-----------------------------------------------------------

The following table presents  nonaccruing  loans, REO,  performing  restructured
loans  and  accruing  single  family  loans  over 90 days  past due at the dates
indicated.
<TABLE>
<CAPTION>


                                                                    September 30,              December 31,
                                                                                       ---------------------------
                                                                        1996                1995          1994
                                                                        ----                ----          ----
<S>                                                              <C>                  <C>            <C>
Nonaccruing loans:
   Single family                                                  $     231,000        $       ---    $        ---
   Multifamily                                                       24,851,000         23,664,000      29,049,000
   Commercial real estate                                             5,461,000         12,555,000       3,400,000
   Other                                                                 86,000            331,000         174,000
                                                                    -----------       ------------     -----------
     Total nonaccruing loans                                         30,629,000         36,550,000      32,623,000
Real estate owned ("REO")                                            12,807,000         10,198,000       8,500,000
                                                                    -----------       ------------     -----------

     Total nonaccruing assets                                        43,436,000         46,748,000      41,123,000
Performing restructured loans                                         7,377,000         12,795,000      17,489,000
                                                                    -----------        -----------    ------------

     Total nonaccruing assets and performing restructured loans     $50,813,000        $59,543,000     $58,612,000
                                                                    ===========        ===========     ===========


Accruing single family loans more than 90 days past due            $  3,638,000         $3,747,000     $ 2,587,000

Percent of Total Assets:
   Nonaccruing assets                                                     2.05%              2.46%           2.41%
   Nonaccruing assets and performing restructured loans                   2.39%              3.13%           3.43%
Ratio of reserve for possible losses to nonaccruing loans                   60%                49%             44%
</TABLE>

At September 30, 1996, the dollar amount of the Company's  nonaccruing loans and
REO after chargeoffs was $43,436,000  compared to $42,879,000,  at June 30, 1996
and  $46,748,000 at December 31, 1995.  The Northridge earthquake had a previous
adverse impact on 49% of the Company's nonaccruing assets at September 30, 1996,
or  approximately  $17,467,000  of loans and  $3,623,000  of REO.

On January 17, 1994,  the  Northridge  earthquake  struck the Los Angeles  area,
causing  significant  damage  to the  freeway  system  and  real  estate  values
throughout  the area.  The  Company's  loans  secured by low to moderate  income
multifamily  properties were primarily affected by this event,  either by direct
property damage, loss of tenants, or economic difficulties  resulting from lower
rental revenues and higher vacancies.  Certain earthquake  affected loans remain
on nonaccrual status because of uncertainty about their ultimate collectability,
even  though  the loans may have been  paying for as much as twelve  months.  In
1994,  1995 and  continuing  into 1996,  the Company has  experienced  increased
delinquencies,   additional   loan  loss  provisions  and  higher  partial  loan
chargeoffs  as a result  of this  substantial  natural  disaster.  Additionally,
certain  loans in  Northern  California  have been placed on  nonaccrual  status
because of changes in the borrower's  condition,  the  property's  status or the
loan's terms.


                                        22



<PAGE>


ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES (Continued)
-----------------------------------------------------------

The following  table  summarizes the changes in the Company's  nonaccrual  loans
during  the third  quarter  of 1996.  Nonaccrual  loans are  segmented  by major
geographical region and activity.
<TABLE>
<CAPTION>

CHANGE IN NONACCRUAL
LOANS BY REGION
                                             Los Angeles             Northern
                                               County               California         Nevada             Total
                                               ------               ----------         ------             -----
<S>                                      <C>                    <C>             <C>               <C>
Balance June 30, 1996                      $ 18,572,000           $10,006,000     $       ---       $ 28,578,000

Additions to nonaccrual loans:
   New nonaccrual loans                       3,260,000             5,820,000             ---          9,080,000

Deductions from nonaccrual loans:
   Chargeoffs to reserves                    (1,867,000)             (300,000)            ---         (2,167,000)
   Transfer to foreclosed assets             (1,625,000)           (2,600,000)            ---         (4,225,000)
   Cash proceeds received                      (556,000)              (81,000)            ---           (637,000)
                                           ------------           -----------      ----------       ------------

Balance September 30, 1996                 $ 17,784,000           $12,845,000     $       ---       $ 30,629,000
                                           ============           ===========      ==========       ============

</TABLE>

Additions to  nonaccrual  loans during the third quarter of 1996 were related to
five apartment loans  ($3,029,000) in Los Angeles County which had been impacted
by the earthquake and one single family loan ($231,000).  Also, there were three
apartment loans ($5,820,000) secured by properties in Northern California placed
on nonaccrual as a result of increased delinquency or deteriorating performance.

Deductions from nonaccrual  loans during the third quarter of 1996 resulted from
chargeoffs to the Company's  reserve for possible losses and  foreclosures  upon
properties. Also, cash proceeds of $637,000 received during the third quarter of
1996 were used to reduce the carrying basis of nonaccrual  loans.  Chargeoffs on
nonaccrual loans occur when the Company  determines that the collateral value is
reduced to other than temporary levels. Chargeoffs recorded in the third quarter
of 1996 related both to loans which were on  nonaccrual  status at June 30, 1996
and to loans which were placed on nonaccrual status or transferred to REO during
the third quarter.  While the future  collateral  value of these  properties may
change,  the Company  recorded  chargeoffs  to reduce the carrying  basis of its
nonaccrual loans to the estimated current collateral value, net of selling costs
(See "Impaired Loans").

As of September 30, 1996, the amounts reported for REO,  nonaccruing  loans, and
performing  restructured  loans have been  reduced  by  previous  chargeoffs  of
$6,972,000, $8,058,000 and $328,000, respectively.

The Company's  nonaccrual loans included  $16,830,000 of loans on which interest
payments were received  during the quarter at an average payment rate of 8.4% on
their  recorded  investment.  As a result of the terms of these  restructurings,
such loans will be reported as  nonaccrual  loans until a  satisfactory  payment
history is achieved  and the Company  believes its  recorded  investment  in the
loans is secure.

As of  September  30,  1996,  $7,377,000  of  modified  loans  are  reported  as
performing  restructured loans.  Additional loan  modifications,  including loan
restructurings,  have been completed in 1996 and additional modifications may be
entered into with the Company's borrowers in future quarters.

                                        23
<PAGE>


ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES (Continued)
-----------------------------------------------------------

During  the  third  quarter  of  1996,  four  loans  totaling   $4,225,000  were
transferred to REO. Six REO properties and one loan (prior to foreclosure)  with
a  remaining  June 30,  1996 book value  totaling  $4,532,000  were sold and the
Company  recovered  proceeds  in  excess  of the  written  down  basis  of these
properties  by  $1,093,000.  At  September  30,  1996,  the Company  held as REO
properties seven apartment buildings, two commercial real estate properties, two
single family homes, one partially completed single family construction  project
and one parcel of land.  The Company's  policy is to attempt to resolve  problem
assets reasonably  quickly,  including the aggressive  pursuit of foreclosure or
other workout procedures.  It has been the Company's general policy to sell such
problem assets when acquired as promptly as possible at prices  available in the
prevailing market. For certain properties,  including those acquired as a result
of  the  Northridge  earthquake,  the  Company  has  made  repairs  and  engaged
management  companies to reach  stabilized  levels of  occupancy  prior to asset
disposition.  At  September  30,  1996,  the  Company is actively  marketing  or
preparing its REO properties for sale and expects to sell certain REO properties
and to foreclose upon additional loans in the fourth quarter of 1996.

At the time each loan is originated,  the Company  establishes a reserve for the
inherent  risk of  potential  future  losses,  based  on  established  criteria,
including  the  type of loan  and  loan-to-value  or cash  flow-to-debt  service
ratios.  Management  believes that such policy enables the Company's reserves to
increase commensurate with growth in the size of the Company's loan portfolio.

The Company's  reserve for possible losses is maintained at a level estimated by
management  to be  adequate  to  provide  for  losses  that  can  be  reasonably
anticipated  based  upon  specific  conditions  at the  time  as  determined  by
management, including past loss experience, the results of the Company's ongoing
loan  grading  process,   the  amount  of  past  due  and  nonperforming  loans,
observations of auditors, legal requirements, recommendations or requirements of
regulatory  authorities,  current and  expected  economic  conditions  and other
factors.

Since  inception  through  September  30, 1996,  the Company has  experienced  a
relatively  low  level  of  losses  on its  single  family  loans in each of its
geographic  market  areas.  The  Company's  cumulative  single  family loan loss
experience is 0.06% on all loans originated. For the most recent eleven quarters
from January 1, 1994 to September  30, 1996,  net  chargeoffs  on single  family
loans as a percentage of average single family loans was 0.02%.  As of September
30,  1996,  the Company has not  experienced  any losses on its  permanent  loan
portfolio secured by real estate located in the Las Vegas market.  Collectively,
the single family loan and Las Vegas permanent loan categories  represented  74%
of the Company's total loans at September 30, 1996.

As a percentage of nonaccruing loans, the reserve for possible losses was 49% at
December  31,  1995  and 60% at  September  30,  1996.  Management's  continuing
evaluation of the loan  portfolio and  assessment  of economic  conditions  will
dictate future reserve  levels.  The adequacy of the Company's total reserves is
reviewed  quarterly.  Management  closely monitors all past due and restructured
loans in assessing the adequacy of its total reserves. In addition,  the Company
follows  procedures for reviewing and grading all of the larger income  property
loans in its  portfolio  on a  periodic  basis.  Based  predominately  upon that
continuous  review and grading process,  the Company will determine  appropriate
levels of total  reserves in response to its assessment of the potential risk of
loss inherent in its loan portfolio. Management will provide additional reserves
when the results of its problem loan  assessment  methodology or overall reserve
adequacy test indicate additional  reserves are required.  The review of problem
loans  is an  ongoing  process,  during  which  management  may  determine  that
additional  chargeoffs  are  required or  additional  loans  should be placed on
nonaccrual status.

                                   24
<PAGE>


ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES (Continued)
-----------------------------------------------------------

Although  substantially  all  nonaccrual  loans  and loans  that were  adversely
affected  by the  earthquake  have been  reduced  to their  currently  estimated
collateral fair value (net of selling costs) at September 30, 1996, there can be
no assurance that additional  reserves or chargeoffs will not be required in the
event that the properties  securing the Company's existing problem loans fail to
maintain their values or that new problem loans arise.

The following table provides  certain  information with respect to the Company's
reserve  position and  provisions  for losses as well as chargeoff  and recovery
activity for the periods indicated.
<TABLE>
<CAPTION>

                                                           Nine Months Ended                  Year Ended
                                                             September 30,                    December 31,
                                                                                   --------------------------------
                                                                 1996                  1995                 1994
                                                             ------------          ------------         -----------
<S>                                                       <C>                   <C>                 <C>
Reserve for Possible Losses:
Balance beginning of period                                  $ 18,068,000          $ 14,355,000        $ 12,657,000

Provision charged to expense                                    5,088,000            14,765,000           9,720,000

Reserve from purchased loans                                          ---                   ---              34,000

Chargeoffs on originated loans:
   Single family                                                 (277,000)              (14,000)           (210,000)
   Multifamily                                                 (5,265,000)           (9,314,000)         (7,177,000)
   Commercial real estate                                        (406,000)           (2,163,000)           (695,000)
   Commercial business and other loans                            (21,000)              (48,000)            (79,000)
   Construction loans                                                ---               (353,000)                ---

Recoveries on originated loans:
   Single family                                                     ---                  3,000              11,000
   Multifamily                                                    206,000               765,000             119,000
   Commercial real estate                                         824,000                30,000                 ---
   Commercial business and other loans                             46,000                54,000              15,000

Acquired loans:
   Chargeoffs                                                         ---               (22,000)            (47,000)
   Recoveries                                                       2,000                10,000               7,000
                                                             ------------          ------------         -----------

Total chargeoffs, net of recoveries                            (4,891,000)          (11,052,000)         (8,056,000)
                                                             ------------          ------------         ------------

Balance end of period                                      $   18,265,000        $   18,068,000        $ 14,355,000
                                                            =============         =============         ===========


Average loans for the period                               $1,787,592,000        $1,591,827,000      $1,379,640,000
Total loans at period end                                   1,885,002,000         1,682,263,000       1,498,663,000

Ratios of reserve for possible losses to:
   Total loans                                                      0.97%                 1.07%               0.96%
   Nonaccruing loans                                                  60%                   49%                 44%
   Nonaccruing loans and performing restructured loans                48%                   37%                 29%
   Net chargeoffs to average loans                                  0.36%*                0.69%               0.58%

</TABLE>

----------
*Annualized


                                        25


<PAGE>


IMPAIRED LOANS
--------------

Effective  January 1, 1995,  the Company  adopted  SFAS No. 114,  Accounting  by
Creditors for  Impairment  of a Loan,  as amended by SFAS No. 118  (collectively
referred to as SFAS No. 114). These statements address the accounting  treatment
of certain  impaired loans and amend SFAS No. 5 and SFAS No. 15. However,  these
statements do not address the overall adequacy of the allowance for losses.

A loan within the scope of SFAS No. 114 is considered  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,  including  scheduled  interest  payments.  For a loan  that has been
restructured  subsequent  to the January 1, 1995 adoption of SFAS No. 114 by the
Company, the relevant contractual terms refer to the contractual terms specified
by the original  loan  agreement,  not the  contractual  terms  specified by the
restructuring  agreement.  Subsequent  to  the  adoption  of  SFAS  No.  114,  a
restructured  loan may be excluded from the impairment  assessment and may cease
to be reported as an  impaired  loan in the  calendar  years  subsequent  to the
restructuring if the loan is not impaired based on the modified terms.

For loans that are  impaired  within the  meaning of SFAS No.  114,  the Company
makes an assessment of impairment when and while such loans are on nonaccrual or
the loans have been restructured.  The measurement of impairment may be based on
(I) the present  value of the expected  future cash flows of the  impaired  loan
discounted at the loan's original  effective  interest rate, (ii) the observable
market price of the impaired  loan, or (iii) the fair value of the collateral of
a collateral  dependent  loan.  The Company's  loans are  primarily  real estate
secured; therefore the Company primarily bases the measurement of impaired loans
on the fair value of the collateral, reduced by costs to sell.

If the measurement of the impaired loan is less than the recorded  investment in
the loan,  impairment  is  recognized  by  creating  or  adjusting  an  existing
allocation  of the allowance  for losses.  Cash  receipts on impaired  loans not
performing  according  to  contractual  terms are  generally  used to reduce the
carrying  value of the loan  unless the  Company  believes  it will  recover the
remaining principal balance of the loan.

In  accordance  with the  disclosures  guidelines of SFAS No. 114, the following
table shows the recorded  investment in impaired  loans and any related SFAS No.
114  allowance for losses at September 30, 1996. An impaired loan has a specific
amount of the Company's reserves  (allowance for losses) assigned to it whenever
the  collateral's  fair value,  net of selling costs, is less than the Company's
recorded  investment  in the loan,  after  amounts  charged off to reserves  are
deducted. Generally, impaired loans not requiring a special allowance under SFAS
No. 114 have already been written down or have a net collateral fair value which
exceeds the loan balance.


                                        26

<PAGE>


IMPAIRED LOANS (Continued)
--------------------------
<TABLE>
<CAPTION>

                                                                                                           Related
                                                                               Recorded               SFAS No. 114
                                                                          Investment in              Allowance for
                                                                         Impaired Loans                     Losses
                                                                         --------------              -------------
<S>                                                                       <C>                        <C>
Impaired loans requiring a SFAS No. 114 allowance:
   Single Family                                                            $   231,000                $    23,000
   Multifamily                                                                6,644,000                    359,000
   Commercial Real Estate                                                     1,149,000                    258,000
   Other                                                                        103,000                     17,000
                                                                            -----------                -----------


                                                                            $ 8,127,000                $   657,000
                                                                            -----------                ===========

Impaired loans not requiring a SFAS No. 114 allowance:
   Multifamily                                                               21,819,000
   Commercial Real Estate                                                     8,060,000
   Other                                                                            ---
                                                                            -----------

                                                                             29,879,000
                                                                             ----------

Total                                                                       $38,006,000
                                                                            ===========
</TABLE>

The $29,879,000 of loans reported as impaired loans not requiring a SFAS No. 114
allowance are classified in this manner  because,  as of September 30, 1996, the
recorded  investments in these loans have been reduced to their  collateral fair
value,  net of selling  costs,  by  $8,386,000  of  specific  chargeoffs  to the
Company's reserves. At September 30, 1996, the Company has designated $57,000 of
its  reserves  to protect  against  contingent  liabilities  on certain of these
impaired  loans,  while  the  ultimate  amount  of  payment,  if any,  is  being
contested.

Total interest income  recognized on loans  designated as impaired for the third
quarter and nine months  ended  September  30, 1996 was  $266,000  and  $878,000
respectively,  all of which was recorded  using the cash  received  method.  The
average  recorded  investment in impaired loans during the third quarter of 1996
was approximately $37,000,000.


                                        27




<PAGE>



PART II - OTHER INFORMATION


Item 1.             Legal Proceedings
                    -----------------

                    Not Applicable

Item 2.             Changes in Securities
                    ---------------------

                    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.  Exhibit 11  Statement  of  Computation of  Earnings  Per
                        Share.

                    B.  On  October  18,  1996,  the  Company  filed a Form  8-K
                        relating to Item 5 therein,  covering  the  registrant's
                        release on October 17, 1996 to the business community of
                        its  earnings  for the  quarter  and nine  months  ended
                        September 30, 1996.

                    C.  On  November  4,  1996,  the  Company  filed a form  8-K
                        relating to Item 5 therein,  covering the completion, as
                        planned,  on  October  31,  1996 of the  merger of First
                        Republic Thrift & Loan, a wholly owned subsidiary,  into
                        First  Republic   Savings  Bank,  also  a  wholly  owned
                        subsidiary.

                                             28

<PAGE>




                                   SIGNATURES



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




                           FIRST REPUBLIC BANCORP INC.



Date:       November 13, 1996
                                                  /s/KATHERINE AUGUST-DEWILDE
                                                  ---------------------------
                                                     KATHERINE AUGUST-DEWILDE
                                                     Executive Vice President





Date:       November 13, 1996                     /s/WILLIS H. NEWTON, JR.
                                                  ------------------------
                                                     WILLIS H. NEWTON, JR.
                                                     Sr. Vice President and
                                                     Chief Financial Officer
                                                   (Principal Financial Officer)





                                        29