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
June 30, 1997                                    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 August 7, 1997, 9,496,245 shares.

<PAGE>



                   First Republic Bancorp Inc.
                            Form 10-Q

                          June 30, 1997

                              Index
                                                             PAGE
                                                             ----
PART I - FINANCIAL INFORMATION

  Item 1 - Financial Statements

           Consolidated Balance Sheet -
           June 30, 1997 and December 31, 1996                  3

           Consolidated Statement of Income - Six Months and
           Quarter Ended June 30, 1997 and 1996                 5

           Consolidated Statement of Cash Flows -
           Six Months Ended June 30, 1997 and 1996              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>

                                                              June 30,          December 31,
                                                               1997                 1996
                                                               ----                 ----
                                                            (Unaudited)
<S>                                                    <C>                  <C>            
ASSETS
  Cash                                                     $ 17,636,000         $ 26,398,000
  Federal funds sold and short term investments              52,215,000            2,900,000
  Investment securities at cost                              47,613,000           52,899,000
  Investment securities at market                            94,207,000          103,673,000
  Federal Home Loan Bank Stock, at cost                      33,663,000           32,649,000
                                                             ----------           ----------

                                                            245,334,000          218,519,000

Loans
  Single family (1-4 unit) mortgages                      1,231,044,000        1,224,542,000
  Multifamily (5+ units) mortgages                          322,836,000          320,715,000
  Commercial real estate mortgages                          292,199,000          285,141,000
  Commercial business loans                                   2,070,000            2,434,000
  Single family construction                                 37,655,000           36,686,000
  Multifamily/commercial construction                        17,624,000            7,347,000
  Equity lines of credit                                     48,259,000           35,497,000
  Other loans                                                17,309,000            2,651,000
  Loans held for sale                                        11,368,000            8,436,000
                                                             ----------            ---------

                                                          1,980,364,000        1,923,449,000

Less
  Unearned loan fee income                                   (3,016,000)          (3,116,000)
  Reserve for possible losses                               (18,501,000)         (17,520,000)
                                                            -----------          ----------- 

   Net loans                                              1,958,847,000        1,902,813,000

  Accrued interest receivable                                13,890,000           13,084,000
  Mortgage servicing rights                                   3,141,000            1,397,000
  Prepaid expenses and other assets                           9,757,000           11,964,000
  Premises, equipment and leasehold improvements,
   net of accumulated depreciation                            4,214,000            4,509,000
  Real estate owned (REO)                                     2,850,000            4,313,000
                                                              ---------            ---------

                                                        $ 2,238,033,000      $ 2,156,599,000
                                                        ===============      ===============
</TABLE>
See notes to financial statements.
                                       3
<PAGE>


  FIRST REPUBLIC BANCORP INC.
  CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>

                                                                 June 30,          December 31,
                                                                   1997                1996
                                                                   ----                ----
                                                                (Unaudited)
<S>                                                         <C>                  <C>           
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Customer deposits
  Passbook, MMA and NOW checking accounts                     $ 346,855,000      $   293,844,000
  Certificates of deposit                                     1,057,737,000        1,059,304,000
                                                              -------------        -------------

   Total customer deposits                                    1,404,592,000        1,353,148,000

  Interest payable                                               13,978,000           14,592,000
  Other liabilities                                               7,450,000           10,086,000
  Federal Home Loan Bank advances                               621,530,000          591,530,000
  Other borrowings                                                  500,000              667,000
                                                                    -------              -------

   Total senior liabilities                                   2,048,050,000        1,970,023,000

  Senior subordinated debentures                                  9,966,000            9,966,000
  Subordinated debentures                                        19,461,000           19,515,000
  Convertible subordinated debentures                                    --           30,685,000
                                                                 ----------           ----------

   Total liabilities                                          2,077,477,000        2,030,189,000
                                                              -------------        -------------


Stockholders' equity
  Common stock                                                      105,000               81,000
  Capital in excess of par value                                111,160,000           79,369,000
  Retained earnings                                              61,487,000           53,115,000
  Deferred compensation -- ESOP                                    (500,000)            (667,000)
  Treasury shares, at cost                                      (11,880,000)          (4,763,000)
  Unrealized gain (loss)-available for sale securities              184,000             (725,000)
                                                                    -------             -------- 

   Total stockholders' equity                                   160,556,000          126,410,000
                                                                -----------          -----------

                                                             $2,238,033,000       $2,156,599,000
                                                             ==============       ==============
</TABLE>
See notes to financial statements.
                                       4
<PAGE>


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


                                                             QUARTER ENDED                SIX MONTHS ENDED
                                                                June 30,                      June 30,
                                                                --------                      --------

                                                          1997          1996             1997          1996
                                                          ----          ----             ----          ----
<S>                                                  <C>           <C>               <C>           <C>        
Interest income:
  Interest on real estate and other loans             $39,007,000   $35,802,000      $ 77,087,000   $70,975,000
  Interest on investments                               3,826,000     3,522,000         7,201,000     7,007,000
                                                        ---------     ---------         ---------     ---------

   Total interest income                               42,833,000    39,324,000        84,288,000    77,982,000
                                                       ----------    ----------        ----------    ----------

Interest expense:
  Interest on customer deposits                        19,457,000    17,391,000        38,448,000    34,551,000
  Interest on FHLB advances and borrowings              8,888,000     8,692,000        17,517,000    17,492,000
  Interest on debentures                                  751,000     1,449,000         1,577,000     2,891,000
                                                          -------     ---------         ---------     ---------

   Total interest expense                              29,096,000    27,532,000        57,542,000    54,934,000
                                                       ----------    ----------        ----------    ----------

Net interest income                                    13,737,000    11,792,000        26,746,000    23,048,000
Provision for losses                                           --     1,815,000           500,000     3,588,000
                                                       ----------     ---------           -------     ---------

Net interest income after provision for losses         13,737,000     9,977,000        26,246,000    19,460,000
                                                       ----------     ---------        ----------    ----------

Non-interest income:
  Servicing fees, net                                     491,000       458,000           979,000     1,100,000
  Loan and related fees                                   320,000       368,000           515,000       801,000
  Gain on sale of loans                                 1,162,000        76,000         2,252,000       248,000
  Gain on investment securities                            48,000            --            48,000            --
  Other income                                             73,000        44,000            96,000        64,000
                                                           ------        ------            ------        ------

   Total non-interest income                            2,094,000       946,000         3,890,000     2,213,000
                                                        ---------       -------         ---------     ---------

Non-interest expense:
  Salaries and related benefits                         3,163,000     2,296,000         6,389,000     4,510,000
  Occupancy                                               884,000       841,000         1,755,000     1,625,000
  Advertising                                             659,000       544,000         1,125,000     1,040,000
  Professional fees                                       412,000       405,000           638,000       634,000
  FDIC insurance premiums                                  44,000        82,000            86,000       160,000
  REO costs and losses                                  1,201,000       160,000         1,845,000       886,000
  Other general and administrative                      2,028,000     1,554,000         3,986,000     3,037,000
                                                        ---------     ---------         ---------     ---------

   Total non-interest expense                           8,391,000     5,882,000        15,824,000    11,892,000
                                                        ---------     ---------        ----------    ----------

Income before income taxes                              7,440,000     5,041,000        14,312,000     9,781,000
Provision for income taxes                              3,088,000     2,040,000         5,940,000     4,010,000
                                                        ---------     ---------         ---------     ---------

Net income                                            $ 4,352,000   $ 3,001,000       $ 8,372,000   $ 5,771,000
                                                      ===========   ===========       ===========   ===========

Net income adjusted for effect of convertible
  issue, used for fully diluted EPS                   $ 4,352,000   $ 3,397,000       $ 8,389,000   $ 6,563,000
                                                      ===========   ===========       ===========   ===========

Primary earnings per share                            $      0.41   $      0.39       $      0.84   $      0.76
                                                      ===========   ===========       ===========   ===========

Weighted average shares - primary                      10,643,526     7,655,491         9,975,268     7,625,556
                                                       ==========     =========         =========     =========

Fully diluted earnings per share                      $      0.41   $      0.33       $      0.79   $      0.64
                                                      ===========   ===========       ===========   ===========

Weighted average shares - fully diluted                10,710,972    10,238,497        10,691,008    10,179,192
                                                       ==========    ==========        ==========    ==========

</TABLE>
See notes to financial statements.
                                       5
<PAGE>


FIRST REPUBLIC BANCORP INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
                                                                            Six Months ended
                                                                            ----------------
                                                                                June 30,
                                                                                --------
                                                                       1997                     1996
                                                                       ----                     ----
<S>                                                              <C>                     <C>         
Operating Activities
  Net Income                                                      $  8,372,000            $  5,771,000
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Provision for losses                                              500,000               3,588,000
     Provision for depreciation and amortization                     1,520,000               2,144,000
     Amortization of loan fees                                        (756,000)             (1,069,000)
     Amortization of mortgage servicing rights                         367,000                 234,000
     Amortization of investment securities discounts                   (20,000)                (26,000)
     Amortization of investment securities premiums                    181,000                 136,000
     Loans originated for sale                                     (83,588,000)            (33,336,000)
     Loans sold into commitments                                    80,644,000              39,841,000
     Increase in deferred taxes                                       (854,000)             (1,043,000)
     Gain on sale of investment securities                             (48,000)                     --
     Net gains on sale of loans                                     (2,252,000)               (248,000)
     Noncash cost of benefit plans                                     849,000                      --
     Increase in interest receivable                                (1,820,000)             (1,511,000)
     Decrease in interest payable                                     (614,000)               (839,000)
     Increase in other assets                                          (14,000)               (668,000)
     Decrease in other liabilities                                  (2,408,000)               (255,000)
                                                                    ----------                -------- 

     Net Cash Provided By Operating Activities                          59,000              12,719,000

Investment Activities
     Loans originated                                             (412,330,000)           (386,384,000)
     Other loans sold                                              137,385,000              12,989,000
     Principal payments on loans                                   219,493,000             202,401,000
     Purchases of investment securities                             (4,083,000)            (24,569,000)
     Sale of investment securities                                  10,566,000                      --
     Repayments of investment securities                            10,051,000              10,261,000
     Additions to fixed assets                                        (314,000)               (510,000)
     Net proceeds from sale of real estate owned                     4,165,000               6,517,000
                                                                     ---------               ---------

     Net Cash Used by Investing Activities                         (35,067,000)           (179,295,000)

Financing Activities
     Net increase in passbook, MMA and NOW checking accounts        53,011,000              63,942,000
     Issuance of certificates of deposit                           123,087,000             216,738,000
     Repayments of certificates of deposit                        (124,654,000)           (166,598,000)
     Increase in long-term FHLB advances                                    --              25,000,000
     Repayments of other long-term borrowings                         (167,000)                     --
     Net increase in short-term borrowings                          30,000,000              16,000,000
     Decrease in deferred compensation - ESOP                          167,000                      --
     Repayments of subordinated debentures                             (54,000)                (78,000)
     Proceeds from employee stock purchase plan                         95,000                 101,000
     Proceeds from common stock options exercised                    1,193,000                 167,000
     Purchases of treasury stock                                    (7,117,000)                     --
                                                                    ----------             -----------           

     Net Cash Provided by Financing Activities                      75,561,000             155,272,000

     Increase (decrease) in Cash and Cash Equivalents               40,553,000             (11,304,000)

     Cash and Cash Equivalents at Beginning of Period               29,298,000              30,918,000
                                                                    ----------              ----------

     Cash and Cash Equivalents at End of Period                   $ 69,851,000            $ 19,614,000
                                                                  ============            ============

</TABLE>

See notes to financial statements.
                                       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  Nevada  chartered  thrift  company  subsidiary,  First
Republic  Savings  Bank ("the  Bank").  First  Republic and its  subsidiary  are
collectively   referred  to  as  the   "Company."   All  material   intercompany
transactions   and   balances   are   eliminated   in   consolidation.   Certain
reclassifications  have been made to the 1996 financial  statements in order for
them to conform with the 1997 presentation.

These  interim  financial  statements  should  be read in  conjunction  with the
Company's  1996  Annual  Report  to  Stockholders  and  Consolidated   Financial
Statements and Notes thereto.  Results for the quarter and six months ended June
30, 1997 should not be  considered  indicative of results to be expected for the
full year.

2. RECENT ACCOUNTING PRONOUNCEMENTS

In February  1997, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS
No. 128").  SFAS No. 128  establishes  standards  for  computing and  presenting
earnings per share  ("EPS") and applies to entities  with  publicly  held common
stock or potential  common  stock.  SFAS No. 128  simplifies  the  standards for
computing  earnings per share  previously  found in APB Opinion No. 15, Earnings
per Share,  and replaces the  presentation of primary EPS with a presentation of
"basic  EPS." SFAS No.  128 makes  modest  revisions  to the fully  diluted  EPS
calculation  which will be  designated  as "diluted  EPS." It also requires dual
presentation of a basic and diluted EPS on the face of the income  statement and
requires a  reconciliation  of the  numerator and  denominator  of the basic EPS
computation  to the numerator and  denominator  of the diluted EPS  computation.
SFAS No. 128 is effective for  financial  statements  issued for periods  ending
after December 15, 1997,  including interim periods;  earlier application is not
permitted.  This statement  requires  restatement of all  prior-period  EPS data
presented.

In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income. This
Statement  establishes  standards  for reporting  and  displaying  comprehensive
income and its  components  in the  financial  statements.  It  requires  that a
company classify items of other  comprehensive  income, as defined by accounting
standards, by their nature (e.g., unrealized gains or losses on securities) in a
financial statement,  but does not require a specific format for that statement.
The  Company  is in  the  process  of  determining  its  preferred  format.  The
accumulated balance of other comprehensive  income is to be displayed separately
from retained  earnings and additional  paid-in capital in the equity section of
the balance sheet.  This Statement is effective with the year-end 1998 financial
statements;  however,  a total  for  comprehensive

                                       7
<PAGE>
2. RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

income  is  required  in the  financial  statements  of  1998  interim  periods.
Reclassification  of  financial  statements  for earlier  periods  provided  for
comparative  purposes is required.

In June 1997,  the FASB issued SFAS No. 131,  Disclosures  about  Segments of an
Enterprise  and  Related  Information.  The  Statement  requires  that a  public
business  enterprise  report  financial and  descriptive  information  about its
reportable  operating  segments  on  the  basis  that  is  used  internally  for
evaluating  segment  performance  and  deciding  how to  allocated  resources to
segments.   This  statement  is  effective  with  the  year-end  1998  financial
statements.

The Securities  and Exchange  Commission  (SEC) has approved rule  amendments to
clarify and expand existing  disclosure  requirements  for derivative  financial
instruments.  The amendments require enhanced  disclosure of accounting policies
for  derivative  financial   instruments  in  the  footnotes  to  the  financial
statements.  In addition, the amendments expand existing disclosure requirements
to include  quantitative and qualitative  information about market risk inherent
in market risk sensitive instruments.  The required quantitative and qualitative
information  should be disclosed  outside the financial  statements  and related
notes  thereto.  The enhanced  accounting  policy  disclosure  requirements  are
effective for the quarterly  period ended June 30, 1997. As the Company believes
that the derivative financial instrument  disclosures contained within the notes
to the financial statements of its 1996 Form 10-K substantially conform with the
accounting  policy  requirements  of these rule  amendments,  no further interim
period  disclosure has been provided.  The rule amendments that require expanded
disclosure of  quantitative  and qualitative  information  about market risk are
effective with the 1997 Form 10-K.

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 Republic Savings Bank, a Nevada-chartered,  FDIC-insured
thrift company subsidiary. First Republic Savings Bank is a member of the FDIC's
Bank Insurance Fund ("BIF").

On October 31, 1996, the Company completed the merger of its two thrift and loan
subsidiaries,  with the  merger  of First  Republic  Thrift  & Loan  into  First
Republic  Savings Bank, in order to achieve  certain  operational  efficiencies.
Subsequent to the merger,  First  Republic  Savings Bank is the surviving  legal
entity and continues to operate in both Nevada and  California in  substantially
the same manner as each subsidiary had been operating.

Additionally,  the  Company is  pursuing a change in the legal  charter of First
Republic  Savings 

                                       8
<PAGE>
GENERAL (Continued)
-------------------

Bank from a thrift company charter to a commercial bank charter.  Such a charter
change  would  allow the  Company  to  provide  additional  services,  including
traditional demand deposit checking accounts,  to its customers.  The Company is
also   considering   merging  the  parent  company  into  the  merged  operating
subsidiary,  concurrent  with the conversion of such  subsidiary to a commercial
bank.  These  remaining  potential  corporate  reorganizations  are  subject  to
regulatory  approval;  the holding company merger is also subject to stockholder
approval at a special  meeting expected to be held prior to  September 30, 1997.
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  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 six months of 1997,  the Company  continued its focus on single
family lending,  and the level of loan  originations  were increased from to the
prior year as a result of strong customer demand for home purchases and improved
secondary market conditions  allowing the amount of loans sold or originated for
sale to  investors to be higher.  For the six months  ended June 30,  1997,  the
Company  originated  $495.9 million of loans and loan sales were $218.0 million,
as  compared  to loan  originations  of $419.7  million  and loan sales of $52.8
million  for the six  months  ended  June 30,  1996.  Total  loans of all  types
originated  by the  Company  in 1996 were  $848.3  million,  and loan sales were
$172.8 million in 1996.

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
portfolio of mortgage loans serviced for secondary market investors consisted of
$934.0 million in loans at June 30, 1997.

                                       9
<PAGE>
GENERAL (Continued)
-------------------


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

                                                        At or for the six months              At or for the Year
                                                              Ended June 30,                  Ended December 31,
                                                              --------------                  ------------------
                                                            1997         1996           1996         1995           1994
                                                            ----         ----           ----         ----           ----
<S>                                                   <C>           <C>           <C>           <C>           <C>      
Selected Ratios:
 Return on average assets*                                  0.77%        0.58%          0.61%        0.07%          0.47%
 Return on average equity*                                 10.95        10.34          10.86         1.08           6.77
 Average equity to average assets                           7.00         5.65           5.63         6.00           6.94
 Leverage ratio                                             7.29         5.70           5.90         5.84           6.43
 Tier 1 risk-based capital ratio                           10.87         8.56           9.17         8.53           9.42
 Total risk-based capital ratio                            14.12        14.79          14.80        15.00          16.32
 Net interest margin*                                       2.43         2.34           2.32         1.97           2.47
 Non-interest expense to average assets*                    1.28         1.12           1.17         1.07           1.28
 Nonaccruing assets to total assets                         1.01         2.08           1.32         2.46           2.41
 Nonaccruing assets and performing restructured
   loans to total assets                                    1.12         2.44           1.66         3.13           3.43
 Net loan chargeoffs (recoveries) to average loans*        (0.05)        0.27           0.35         0.69           0.58
 Reserve for possible losses to total loans                 0.93         1.05           0.91         1.07           0.96
 Reserve for possible losses to nonaccruing loans            94%           68%           72%           49%            44%

Share Data:
 Common shares outstanding                             9,692,934     7,352,991     7,716,258     7,330,400     7,444,703
 Tangible book value per common share                     $16.56        $15.56        $16.46        $14.76        $14.40

----------
*Six months data is annualized


The Bank's retail deposits are the Company's principal source of funds with FHLB
advances, loan principal repayments,  sales of loans, 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 Republic Savings Bank is an approved  voluntary member of the Federal Home
Loan Bank of San Francisco (FHLB). The Bank is currently approved for 40% of its
total assets or approximately  $891.0 million of FHLB advances at June 30, 1997.
Such  advances  are  collateralized  by real  estate  mortgage  loans and $621.5
million has been advanced at June 30, 1997.  Membership in the FHLB provides the
Bank with an alternative funding source for its loans.

The Bank, 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 San Mateo south of San Francisco, a branch in Los Angeles, a branch in
Beverly Hills, three branches in San Diego County and two branches in Las Vegas,
Nevada.  As of June 30,  1997,  the Bank had  total  assets  of  $2,227,611,000,
tangible  shareholder's  equity of $154,127,000 and total capital (consisting of
tangible  shareholder's  equity,  subordinated  capital  notes and  reserves) of
$182,608,000.  At June 30, 1997, the Bank's leverage ratio was 7.05%,  its ratio
of Tier 1 capital  to  risk-adjusted  assets  was  10.48% and its ratio of total
capital to risk adjusted assets was 12.42%.  This compares to minimum  leverage,
Tier  1 and  total  capital  ratios  of  5%,  6% and  10%,  respectively,  to be
considered "well capitalized" under FDIC regulations.

                                       10
<PAGE>

LIQUIDITY
---------

Liquidity  refers  to the  ability  to  maintain  a cash flow  adequate  to fund
operations  and to meet present and future  funding  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 diversified  portfolio of marketable  investment  securities,  which
includes U.S. Government securities and mortgage backed securities.  At June 30,
1997, the investment  securities portfolio of $141,820,000,  plus cash and short
term  investments of  $69,851,000,  amounted to  $211,671,000,  or 9.5% of total
assets. At June 30, 1997, 92 % of the Company's investments mature within twelve
months or are adjustable rate in nature.  At June 30, 1997, the Company owned no
investments of a trading nature.

Additional  sources  of  liquidity  at  June  30,  1997  could  be  provided  by
approximately $110,000,000 of borrowings collateralized by investment securities
and available  unused FHLB advances of  approximately  $269,000,000.  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  certificates
of deposit 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 June 30, 1997  approximately  66% 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 June 30, 1997,  approximately  89% of the
Company's interest-earning assets and 83 % of interest-bearing  liabilities will
reprice  within  the next  year and the  Company's  one-year  cumulative  GAP is
positive 9.8%. Despite the Company's positive repricing position,  the Company's
net interest  margin  decreased  following the rapid  increase in interest rates
during 1994, but began to recover  gradually in the third and fourth quarters of
1995.  For most of 1996 and the  first  six  months  of  1997,  market  rates of
interest were relatively stable and the Company's net interest margin was higher
and more stable,  averaging  2.50% in the second  quarter of 1997,  2.36% in the
first  quarter of 1997 and 2.32% for all of 1996  versus  1.97% for all of 1995.
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,  and the Company's strategy to increase
its home loans which carry lower margins

                                       11
<PAGE>
ASSET AND LIABILITY MANAGEMENT (Continued)
------------------------------------------

than other types of real estate secured loans that the Company originates.

The following table summarizes the differences between the Company's maturing or
rate adjusting  assets and  liabilities,  or "GAP"  position,  at June 30, 1997.
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  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 ended June 30, 1997. A portion of the Company's  adjustable  loans carry
minimum interest rates, or floors,  which have historically become the effective
loan yield as rates declined from the levels in prior periods and  approximately
$184,018,000 of such loans remain at these minimum interest rates as of June 30,
1997. The following table  illustrates  maturities or interest rate  adjustments
based upon the contractual maturities or adjustment dates at June 30, 1997:

                                       12
<PAGE>

</TABLE>
<TABLE>
<CAPTION>


                                                      FIRST REPUBLIC BANCORP
                                             ASSET & LIABILITY REPRICING SENSITIVITY
                                                           June 30, 1997
                                                              (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   1,080,488   533,816   134,193    42,856    144,836      44,175         0       1,980,364

Securities                         0      99,817    41,951    13,912         0          0      19,803         0         175,483

Cash & short-term
 investments                  67,351       2,500         0         0         0          0           0         0          69,851

Non-interest bearing
 assets, net                       0           0         0         0         0          0           0    12,335          12,335
                              ------   ---------   -------   -------    ------    -------      ------    ------       ---------
 TOTAL                        67,351   1,182,805   575,767   148,105    42,856    144,836      63,978    12,335       2,238,033



LIABILITIES AND
 STOCKHOLDERS' EQUITY:

NOW, Passbooks & MMA's             0     299,982    27,254    13,750     5,869          0           0         0         346,855

Certificates of deposit:
 $100,000 or greater               0      24,244    32,096    34,133    16,778      3,946         100         0         111,297
 less than $100,000                0     226,878   258,548   286,675   143,737     30,517          85         0         946,440

FHLB advances, long-term           0     244,170   165,000    87,360         0     72,500      22,500         0         591,530

FHLB advances, short-term          0      30,000         0         0         0          0           0         0          30,000

ESOP debt                        500           0         0         0         0          0           0         0             500

Other liabilities                  0           0         0         0         0          0           0    21,428          21,428

Subordinated debt                  0           0         0         0         0      1,475      27,952         0          29,427

Equity                             0           0         0         0         0          0           0   160,556         160,556
                              ------     -------   -------  --------   -------    -------      ------   -------       ---------
 TOTAL                           500     825,274   482,898   421,918   166,384    108,438      50,637   181,984       2,238,033



Repricing Assets
 over (under) liab            66,851     357,531    92,869  (273,813) (123,528)    36,398      13,341  (169,649)              0

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

Hedged gap                    66,851     357,531    67,869  (273,813) (123,528)    61,398      13,341  (169,649)              0
                              ======     =======    ======  ========  ========     ======      ======  ========          ======

Gap as % of
 Total assets                  2.99%      15.98%     3.03%   -12.23%    -5.52%      2.74%       0.60%    -7.58%           0.00%
                               ====       =====      ====     =====      ====       ====        ====      ====            ==== 

Cumulative gap                66,851     424,372   492,251   218,438    94,910    156,308     169,649         0               0
                              ======     =======   =======   =======    ======    =======     =======    ======          ======

Cumulative gap                 2.99%      18.96%    21.99%     9.76%     4.24%      6.98%       7.58%     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, the
     Twelve  Month  Moving  Average One Year  Treasury  Index or the Prime rate,
     subject  generally  to a maximum  increase of 2%  annually  and 5% over the
     lifetime of the loan.

(2)  NOW, 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  NOW,  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 $1,215,000,000  which terminate in periods ranging
from July 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  8.5% 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 June 30, 1997, $37,400,000 of the Bank's advances with the FHLB
contained interest caps of 12.0% as part of the borrowing  agreements.  The cost
of interest  rate cap  transactions  is  amortized  over their lives and totaled
$764,000  and  $814,000  for the six  months  ended  June  30,  1997  and  1996,
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 June 30, 1997, 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
specific  long-term FHLB advances to  semi-annual  adjustable  liabilities.  The
Company's  long-term  FHLB  advances,   with  a  weighted  average  maturity  of
approximately  10 years at June 30, 1997,  have provided an alternative  funding
source to the Company's retail deposits, which generally have a shorter maturity
than the contractual  life of mortgage  loans.  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.

From  1990  to  1995,  the  Company  utilized  FHLB  advances  as a  substantial
supplement to deposit gathering to fund its asset growth.  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 the Bank. At June 30, 1997, total FHLB advances  outstanding
were $621,530,000.  Of this amount,  $520,830,000 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 


                                      14 
<PAGE>
ASSET AND LIABILITY MANAGEMENT (Continued)
------------------------------------------

for its real estate secured loans which generally  carry a contractual  maturity
of from 10 to 30 years. 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 June 30, 1997, the
Company's total capital,  including total stockholders'  equity,  debentures and
reserves  was  $208,484,000.  Total  stockholders'  equity at June 30,  1997 has
increased  by  $34,146,000  since  December  31,  1996.  This  increase  results
primarily from the Company's  conversion  during the first quarter of all of its
outstanding 7 1/4% convertible  subordinated  debentures due 2002 into shares of
common stock.  As a result,  the number of shares  outstanding  at June 30, 1997
increased  approximately 2,245,000 from that at December 31, 1996, at which time
$30,685,000 of these  convertible  debentures were  outstanding.  Net income was
$8,372,000  for the first  six  months  of 1997 and  there  was an  increase  of
$909,000  in the market  value of that  portion of the  Company's  portfolio  of
securities which are classified as available for sale. During the second quarter
of 1997, the Company  purchased  345,100 shares of its common stock, for a total
cost of $7,117,000.

First Republic is not a bank holding company,  and unlike 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's  leverage ratio would have been 7.29%,
its Tier 1  risk-based  capital  ratio would have been 10.87% and its total risk
based capital ratio would have been 14.12% at June 30, 1997.

As of June 30, 1997, the Company held 770,494 shares of common stock as treasury
stock. The Company purchased 345,100 of these shares in June 1997 and 425,394 of
these shares in 1995 and prior years,  with a total cost of  $11,880,000.  As of
June 30, 1997,  324,900  shares were  remaining  under the Company's  authorized
stock repurchase plan.

During  the first six  months of 1997,  First  Republic  received  from the Bank
dividends of $8,000,000  representing  approximately  25% of the Bank's earnings
for the fourth  quarter of 1996 and the first  quarter of 1997 and a retroactive
increase of the dividend from  approximately 25% to 50% of earnings from January
1, 1996 to March 31, 1997.  First  Republic also received  interest  payments of
$527,000  from the Bank for the six months ended June 30,  1997.  The ability of
First  Republic to receive  future  dividends  and other  payments from the Bank
depends upon the operating  results and capital level of the Bank,  restrictions
upon such payments  imposed by creditors of the Bank, FDIC regulations and other
governmental regulations governing the Bank.

                                       15
<PAGE>


RESULTS OF OPERATIONS -  Quarter Ended June 30, 1997 Compared to Quarter Ended
-----------------------  -----------------------------------------------------
                         June 30, 1996
                         -------------

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  second  quarter  of 1997,  First  Republic's  total  assets  grew to
$2,238,033,000 at June 30, 1997 from $2,183,453,000 at March 31, 1997, primarily
as a result of an increase in single family mortgage  loans.  The Company's loan
originations  for the second  quarter  of 1997 were  $295,345,000,  compared  to
$200,573,000  for the first  quarter  of 1997 and  $220,779,000  for the  second
quarter of 1996.  Single family loans  originated in the second  quarter of 1997
were $211  million  compared to $154  million for the first  quarter of 1997 and
$173 million in the second quarter of 1996.

Mortgage banking activity  resulted in the sale of $131,783,000 of single family
loans to secondary market investors during the second quarter of 1997,  compared
with $10,456,000 in the second quarter of 1996. The Company's  portfolio of real
estate loans serviced for secondary market  investors  increased to $934,014,000
at June 30, 1997 from  $799,500,000  at December 31,  1996.  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 strength of
the general  economy and the housing  industry,  and conditions in the secondary
loan sale markets.

The Company  reported net income of $4,352,000 for the second quarter of 1997 as
compared to $3,001,000 in the same quarter of 1996.  Fully diluted  earnings per
share  was $0.41  for the  second  quarter  of 1997,  compared  to $0.33 for the
similar  period in 1996.  First  Republic's  pretax  operating  results  for the
quarter  ended June 30, 1997 were higher than a year ago  primarily  because the
Company's net interest  income for the second quarter was  $1,945,000  higher in
1997 than 1996, the provision for loan losses was $1,815,000  lower and the gain
on sale of loans was  $1,086,000  higher,  offset in part by higher REO  related
expenses of  $1,041,000  and higher  operating  costs  from  operating  a larger
company.

Total interest  income  increased to $42,833,000  for the second quarter of 1997
from $39,324,000 for the second quarter of 1996.  Interest income on real estate
and other  loans  increased  to  $39,007,000  for the  second  quarter  of 1997,
compared to  $35,802,000  in 1996.  The average  yield on loans was 7.99% in the
first  quarter of 1997  compared to 7.83% for the first  quarter of 1997 and was
8.04% for the second quarter of 1996.  The Company's  yield on loans is affected
by market rates,  portfolio mix, 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  $1,939,153,000  at March 31, 1997 to  $1,980,364,000 at June 30,
1997. As a percentage of the Company's  permanent loan portfolio,  loans secured
by single family  residences  increased to 65% at June 30, 1997 from 62% at June
30, 1996.

                                       16
<PAGE>
RESULTS OF OPERATIONS -  Quarter Ended June 30, 1997 Compared to Quarter Ended
-----------------------  -----------------------------------------------------
                         June 30, 1996 (Continued)
                         -------------------------


Interest  income  on cash,  short-term  investments  and  investment  securities
increased  as a result  of a  higher  average  portfolio  for the  quarter.  The
increase was  partially  offset by a slightly  lower  average rate earned on the
portfolio.  Such interest  income was  $3,826,000 in the second  quarter of 1997
compared  to  $3,522,000  in the same  period of 1996.  The  average  investment
position  was  $232,355,000  during the second  quarter of 1997 and earned 6.60%
compared to an average position of $207,703,000  earning 6.92% during the second
quarter of 1996. 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 second  quarter has increased to $29,096,000 in
1997 from $27,532,000 in 1996. 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,
money  market  (MMA) and NOW checking  accounts  and  certificates  of deposit),
increased to $19,457,000  in the second quarter of 1997 from  $17,391,000 in the
second  quarter of 1996.  The average  rate paid on  deposits  was 5.62% for the
second  quarter  of 1997,  compared  to 5.63% for the first  quarter of 1997 and
5.72% for the second quarter of 1996.

Interest  expense on other  borrowings  decreased  to  $9,639,000  in the second
quarter of 1997 from $10,141,000 in the second quarter of 1996, as a result of a
higher  average rate paid on a higher  average level of FHLB advances  offset by
the full conversion of the Company's outstanding 7 1/4% convertible subordinated
debentures  by March 31,  1997.  The average  rate paid on the  Company's  other
borrowings and FHLB advances,  excluding longer term  debentures,  was 6.00% for
the second quarter of 1997, compared to 5.91% for the first quarter of 1997, and
5.92%  for the  second  quarter  of 1996;  thus the  average  rate paid on these
liabilities,  primarily FHLB advances, increased 9 basis points (0.09%) from the
first quarter of 1997 to the second  quarter of 1997 and 8 basis points  (0.08%)
from the second quarter of 1996 to the second quarter of 1997.

The  Company's net interest  income was  $13,737,000  for the second  quarter of
1997,  compared to  $11,792,000  for the second  quarter of 1996, as a result of
earning a higher margin on a higher average balance of assets.  The net interest
margin,  calculated as net interest  income  divided by total  average  interest
earning assets, was 2.50% for the second quarter of 1997,  compared to 2.36% for
the second quarter of 1996 and 2.32% for all of 1996.

Non-interest  income for the second quarter of 1997 increased to $2,094,000 from
$946,000 in the second quarter of 1996, primarily due to increased gains on sale
of loans.  Service fee revenue, net of amortized costs on the Company's mortgage
servicing  rights,  was  $491,000  for the second  quarter of 1997  compared  to
$458,000 for the same period of 1996,  primarily due to lower average  servicing
fees on a higher average servicing  portfolio and higher amortization costs. The
average balance of the servicing  portfolio  increased to  $875,210,000  for the
second quarter of 1997 compared to $774,593,000  for the second quarter of 1996.
Total loans  serviced were  $934,014,000  at June 30, 1997 and  $799,500,000  at
December 31, 1996. The  percentage of 

                                       17
<PAGE>
RESULTS OF OPERATIONS -  Quarter Ended June 30, 1997 Compared to Quarter Ended
-----------------------  -----------------------------------------------------
                         June 30, 1996 (Continued)
                         -------------------------


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  0.31%  for the six  months of 1997  compared  to 0.34% for all of
1996.

For the second  quarter,  loan and related  fee income was  $320,000 in 1997 and
$368,000 in 1996. This income  category  includes  miscellaneous  fees collected
from  borrowers  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
$131,783,000  for the  second  quarter  of 1997 and  $10,456,000  for the second
quarter of 1996. 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 majority of the
loans sold in the second quarter of 1997 were adjustable rate mortgages based on
the COFI index.  The sale of loans  resulted in net gains of $1,162,000  for the
second  quarter of 1997,  compared to $76,000  for the same period of 1996.  The
gain on the sale of  loans  includes  the  value  attributed  to  mortgage  loan
servicing rights under SFAS No. 125, which was $1,296,000 for the second quarter
of 1997 and $83,000 for the second quarter of 1996.

The Company's  mortgage  banking  activities are 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 $8,391,000 for the second quarter of 1997, compared
to $5,882,000 for the same period in 1996. In 1997, the Company  reported higher
personnel   costs   related  to  higher   loan   volume  and  higher   corporate
profitability,  increased  advertising  and from  operating a larger company and
higher other operating costs. The Company also incurred or accrued approximately
$400,000 of nonrecurring costs, including those related to the Company's planned
corporate reorganization,  introduction of a new corporate identity and ultimate
conversion  to a commercial  bank.  The Company's  non-interest  expense for the
second quarter of 1997 included  $1,201,000  related to results of operating REO
properties and writedowns from changes in value of REO  properties,  compared to
$160,000  of REO  related  expenses,  net of gains on sold  REO,  in the  second
quarter of 1996.

As a percentage of total assets, general and administrative expenses,  excluding
REO related

                                       18
<PAGE>
RESULTS OF OPERATIONS -  Quarter Ended June 30, 1997 Compared to Quarter Ended
-----------------------  -----------------------------------------------------
                         June 30, 1996 (Continued)
                         -------------------------


costs,  was 1.31% for the second quarter of 1997,  compared to 1.14%
for the  second  quarter  of 1996,  and  1.17%  for all of 1996.  The  Company's
operating  efficiency ratio, or net non-interest  expense as a percentage of net
interest  income  and  recurring  non-interest  income,  was 49% for the  second
quarter of 1997,  compared  to 41% for the same period in 1996 and 47.0% for all
of 1996.

RESULTS OF OPERATIONS -  Six Months Ended June 30, 1997 Compared to Six Months
-----------------------  -----------------------------------------------------
                         Ended June 30, 1996
                         -------------------

The trend in income and expense  items for the  comparable  six month periods is
generally  consistent with the comparison of the second quarter of 1997 with the
same quarter of 1996,  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, as a result of an increased  average balance
sheet,  as presented in the following  table.  Net interest income has increased
due  to  a  higher  average  equity  level  resulting  from  the  conversion  of
convertible  debentures  and an  increased  level of assets  earning a  slightly
higher  interest rate spread.  The rates paid on liabilities has decreased 0.22%
while yields earned on interest-earning assets has decreased 0.21%.

Non-interest  income was $3,890,000 for the first six months of 1997 as compared
to $2,213,000  for the same period in 1996. An increase in gain on sale of loans
of $2,004,000  was partially  offset by decreases in net servicing fees and loan
and related fees.

Non-interest  expense increased to $15,824,000 in 1997 from $11,892,000 in 1996.
Salaries and related  benefits  have  increased as a result of higher  personnel
costs  related  to  higher  loan  volume,  higher  corporate  profitability  and
increased personnel to provide expanded deposit services.  Also, the increase in
the Company's common stock price has increased the non-cash  expenses related to
the Company's  variable rate stock option plans,  the Employee  Stock  Ownership
Plan ("ESOP") and the 1997  Restricted  Stock Plan.  REO related  writedowns and
costs  increased  to  $1,845,000  for the six months  ended  June 30,  1997 from
$886,000 in the same period 1996. Other general and administrative expenses have
increased due to the costs incurred or accrued in connection  with the Company's
planned  reorganization  and conversion to a commercial bank. As a percentage of
average assets, noninterest expenses increased to 1.28% for the first six months
of 1997 from 1.12% for the first six months of 1996.

The  following  table  presents  for the first six months of 1997 and 1996,  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 -  Six Months Ended June 30, 1997 Compared to Six Months
-----------------------  -----------------------------------------------------
                         Ended June 30, 1996 (Continued)
                         -------------------------------

<TABLE>
<CAPTION>




                                                                               Six months Ended June 30,
                                                         -----------------------------------------------------------------
                                                                         1997                               1996
                                                         ----------------------------          ---------------------------
                                                          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      $       953    $     22   4.66%     $     2,179    $     48   4.43%
Short-term investments                                      36,717       1,083   5.87           25,462         718   5.58
Investment securities                                      182,476       6,182   6.78          181,270       6,383   7.05
Loans                                                    1,949,561      77,087   7.91        1,746,067      70,975   8.13
                                                         ---------      ------               ---------      ------   

 Total earning assets                                    2,169,707      84,374   7.78        1,954,978      78,124   7.99
                                                                        ------                              ------
Non interest-earning assets                                 14,838                              20,167
                                                            ------                              ------

 Total average assets                                   $2,184,545                          $1,975,145
                                                        ==========                          ==========


Liabilities and Stockholders' Equity:
Passbooks, MMA's and NOW checking                         $326,412       7,807   4.82%        $212,915     $ 5,092   4.81%
Certificates of deposit                                  1,052,092      30,642   5.87          983,045      29,459   6.03
                                                         ---------      ------                 -------      ------   

 Total customer deposits                                 1,378,504      38,449   5.62        1,195,960      34,551   5.81

Other borrowings                                           593,519      17,517   5.95          583,960      17,492   6.02
Subordinated debentures                                     37,858       1,577   8.33           64,015       2,891   9.03
                                                            ------       -----                  ------       -----   

 Total interest-bearing liabilities                      2,009,881      57,543   5.77        1,843,935      54,934   5.99
                                                                        ------                              ------
Non interest-bearing liabilities                            21,801                              19,596
Stockholders' equity                                       152,863                             111,614
                                                           -------                             -------

 Total average liabilities and stockholders' equity     $2,184,545                          $1,975,145
                                                        ==========                          ==========

Net interest spread                                                              2.01%                               2.00%
Net interest income and net interest margin                            $26,831   2.43%                    $ 23,190   2.34%
                                                                       =======                            ========  
</TABLE>


The Company's balance sheet at June 30, 1997 is generally  comparable to that at
December 31, 1996.  Total assets have increased  $81,434,000 to  $2,238,033,000,
while there was a net increase in the Company's loan  portfolio of  $56,915,000.
Funds were raised primarily by retail deposits which increased $51,444,000.  The
Company's  reserve for possible  losses was  $18,501,000  at June 30, 1997,  and
there were two foreclosed real estate properties  resulting in other real estate
owned with a net book value of $2,850,000.

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 1996 and the first six months
of 1997. Substantially,  all of the Company's net loan growth since December 31,
1995 is represented by growth in single family home loans.

                                       20
<PAGE>
ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES (Continued)
-----------------------------------------------------------

<TABLE>
<CAPTION>

                                            June 30,                    December 31,
                                                             --------------------------------
                                              1997                1996               1995
                                         -------------       -------------      -------------
<S>                                   <C>                 <C>                 <C>  
Loans:
Single family (1-4 units)               $1,240,676,000      $1,231,230,000       $983,331,000
Multifamily (5+ units)                     322,836,000         320,715,000        350,507,000
Commercial real estate                     292,199,000         285,141,000        286,824,000
Multifamily/commercial construction         17,624,000           7,347,000          9,013,000
Single family construction                  37,655,000          36,686,000         19,349,000
Home equity credit lines                    48,259,000          35,497,000         26,572,000
                                         -------------       -------------      -------------
 Real estate mortgages subtotal          1,959,249,000       1,916,616,000      1,675,596,000
                                         -------------       -------------      -------------

Commercial business and other               21,115,000           6,833,000          6,667,000
                                         -------------       -------------      -------------

 Total loans                             1,980,364,000       1,923,449,000      1,682,263,000

Unearned fee income                         (3,016,000)         (3,116,000)        (4,380,000)
Reserve for possible losses                (18,501,000)        (17,520,000)       (18,068,000)
                                         -------------       -------------      -------------
 Loans, net                             $1,958,847,000      $1,902,813,000     $1,659,815,000
                                        ==============      ==============     ==============
</TABLE>

The following table presents an analysis of the Company's loan portfolio at June
30, 1997 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)     $811,425    $264,130       $38,932    $102,118      $ 9,054    $ 63,276  $1,288,935     65.1%
Multifamily (5+ units)            149,090      66,115           434      15,245       91,951         ---     322,836     16.3%
Commercial real estate            196,696      34,289         1,050      11,824       46,016       2,323     292,199     14.7%
Construction loans                 16,734      15,525         1,050       1,277       20,018         675      55,279      2.8%
Business loans                        ---       1,949         1,736         121          ---         ---       3,806      0.2%
Other loans                        13,833       1,115            84          31           52       2,194      17,309      0.9%
                               ----------    --------       -------    --------     --------     -------  ----------    ----- 
 Total                         $1,187,778    $383,123       $43,286    $130,616     $167,091     $68,470  $1,980,364    100.0%
                               ==========    ========       =======    ========     ========     =======  ==========    ===== 

Percent by location                 60.0%       19.3%          2.2%        6.6%         8.4%        3.5%       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>


                                                                       June 30,                December 31,
                                                                                     -----------------------------
                                                                         1997          1996                1995
                                                                      ----------     ----------         ----------
<S>                                                                 <C>            <C>               <C>
Nonaccruing loans:
 Single family                                                       $       ---    $       ---        $       ---
 Multifamily                                                          11,611,000     18,402,000         23,664,000
 Commercial real estate                                                8,113,000      5,783,000         12,555,000
 Other                                                                    40,000         69,000            331,000
                                                                      ----------     ----------         ----------
   Total nonaccruing loans                                            19,764,000     24,254,000         36,550,000
Real estate owned ("REO")                                              2,850,000      4,313,000         10,198,000
                                                                      ----------     ----------         ----------
   Total nonaccruing assets                                           22,614,000     28,567,000         46,748,000
Performing restructured loans                                          2,459,000      7,220,000         12,795,000
                                                                      ----------     ----------         ----------

   Total nonaccruing assets and performing restructured loans        $25,073,000    $35,787,000        $59,543,000
                                                                     ===========    ===========        ===========

Accruing single family loans more than 90 days past due              $ 3,936,000    $ 4,565,000        $ 3,747,000

Percent of Total Assets:
 Nonaccruing assets                                                        1.01%          1.32%              2.46%
 Nonaccruing assets and performing restructured loans                      1.12%          1.66%              3.13%
Ratio of reserve for possible losses to nonaccruing loans                    94%            72%                49%
</TABLE>

At June 30, 1997, the dollar amount of the Company's  nonaccruing  loans and REO
after  chargeoffs was  $22,614,000  compared to $28,567,000 at December 31, 1996
and  $46,748,000  at December 31,  1995.

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 twelve  months or more.  In 1995
and 1996, the Company has experienced increased  delinquencies,  additional loan
loss  provisions  and  higher  partial  loan  chargeoffs  as a  result  of  this
substantial natural disaster.  During the first six months of 1997, only one new
loan in the Company's loan portfolio secured by properties in Los Angeles County
was  placed  on  nonaccrual  status.  Additionally,  certain  loans in  Northern
California  have been placed on nonaccrual  status because of adverse 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 second  quarter of 1997.  Nonaccrual  loans are  segmented  by major
geographical region and activity.

CHANGE IN NONACCRUAL
LOANS BY REGION
<TABLE>
<CAPTION>
                                        Los Angeles      Northern
                                           County       California          Nevada             Total
                                           ------       ----------          ------             -----

<S>                                  <C>               <C>                <C>              <C>         
Balance March 31, 1997                $ 14,197,000      $8,719,000         $     ---        $ 22,916,000

Additions to nonaccrual loans:
 New nonaccrual loans                      449,000         180,000               ---             629,000

Deductions from nonaccrual loans:
 Chargeoffs to reserves, net              (268,000)            ---               ---            (268,000)
 Transfer to foreclosed assets            (794,000)            ---               ---            (794,000)
 Cash proceeds received                   (612,000)        (82,000)              ---            (694,000)
 Return to accrual status               (1,321,000)       (704,000)              ---          (2,025,000)
                                        ----------        --------          --------          ---------- 

Balance June 30, 1997                 $ 11,651,000     $ 8,113,000         $     ---        $ 19,764,000
                                      ============     ===========         =========        ============
</TABLE>


Additions to nonaccrual  loans during the second quarter of 1997 were related to
one commercial real estate loan in Northern California and one apartment loan in
Los Angeles County.

Deductions from nonaccrual loans during the second quarter of 1997 resulted from
$268,000 of chargeoffs to the Company's reserve for possible losses,  $2,025,000
of loans (four loans) were returned to accrual status and foreclosures  upon one
property ($794,000).  Also, cash proceeds of $694,000 received during the second
quarter of 1997 were used to payoff,  paydown  or 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 second quarter of 1997 related to loans which were on
nonaccrual  status at March 31, 1997. 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 June 30,  1997,  the amounts  reported  for REO,  nonaccruing  loans,  and
performing  restructured  loans have been  reduced  by  previous  chargeoffs  of
$4,274,000, $5,050,000 and $422,000, respectively.

The Company's  nonaccrual loans included  $12,468,000 of loans on which interest
payments were received during the quarter at an average payment rate of over 10%
on their  written down  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 June 30,  1997,  four loans in the amount of  $2,459,000  are  reported as
performing  restructured loans. The increase in this category from $1,142,000 at
March 31,  1997 is a result of three loans in

                                       23
<PAGE>
ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES (Continued)
-----------------------------------------------------------

the amount of $1,321,000  being removed from nonaccrual as a result of achieving
satisfactory payment records.  Additional loan modifications have been completed
in 1997 and  additional  modifications  may be entered  into with the  Company's
borrowers in future quarters.

During the second quarter of 1997, one loan totaling $794,000 was transferred to
REO.  Three REO properties  with a remaining  March 31, 1997 book value totaling
$1,369,000 were sold and the Company recovered proceeds in excess of the written
down basis of these properties by $88,000. At June 30, 1997, the Company held as
REO  properties  one  apartment  building 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 June 30, 1997, the
Company is actively  marketing its REO  properties  for sale and expects to sell
certain REO  properties  and to  foreclose  upon  additional  loans in the third
quarter of 1997.

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 June 30, 1997, 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 less than
0.06% on all  loans  originated.  For the most  recent  fourteen  quarters  from
January 1, 1994 to June 30, 1997,  net  chargeoffs  on single  family loans as a
percentage of average  single family loans was 0.02%.  As of June 30, 1997,  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 72% of the Company's
total loans at June 30, 1997.

As a percentage of nonaccruing loans, the reserve for possible losses was 72% at
December 31, 1996 and 94% at June 30, 1997.  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 

                                       24
<PAGE>
ASSET QUALITY AND PROVISION FOR POSSIBLE LOSSES (Continued)
-----------------------------------------------------------

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.

Although substantially all nonaccrual loans have been reduced to their currently
estimated  collateral fair value (net of selling costs) at June 30, 1997,  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  provision  for losses as well as  chargeoff  and recovery
activity for the periods indicated.
<TABLE>
<CAPTION>

                                                           Six Months Ended                   Year Ended
                                                               June 30,                       December 31,
                                                                                   ---------------------------------
                                                                 1997                    1996               1995
                                                            --------------         --------------    ---------------
<S>                                                        <C>                    <C>               <C>            
Reserve for Possible Losses:
Balance beginning of period                                  $ 17,520,000            $ 18,068,000       $ 14,355,000

Provision charged to expense                                      500,000               5,838,000         14,765,000

Chargeoffs on originated loans:
 Single family                                                         --                (302,000)           (14,000)
 Multifamily                                                     (526,000)             (6,548,000)        (9,314,000)
 Commercial real estate                                                --                (705,000)        (2,163,000)
 Commercial business and other loans                                   --                 (21,000)           (48,000)
 Construction loans                                                    --                      --           (353,000)

Recoveries on originated loans:
 Single family                                                         --                      --              3,000
 Multifamily                                                      771,000                 287,000            765,000
 Commercial real estate                                           236,000                 855,000             30,000
 Commercial business and other loans                                   --                  46,000             54,000

Acquired loans:
 Chargeoffs                                                            --                      --            (22,000)
 Recoveries                                                            --                   2,000             10,000
                                                           --------------          --------------    ---------------
Net recoveries (chargeoffs)                                       481,000              (6,386,000)       (11,052,000)
                                                           --------------          --------------    ---------------
Balance end of period                                      $  18,501,0000          $   17,520,000    $    18,068,000
                                                           ==============          ==============    ===============


Average loans for the period                               $1,949,561,000          $1,818,100,000    $ 1,591,827,000
Total loans at period end                                   1,980,364,000           1,923,449,000      1,682,263,000

Ratios of reserve for possible losses to:
 Total loans                                                         0.93%                   0.91%              1.07%
 Nonaccruing loans                                                     94%                     72%                49%
 Nonaccruing loans and performing restructured loans                   83%                     50%                37%
 Net chargeoffs (recoveries) to average loans                       (0.05%)                  0.35%              0.69%

</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 June 30,  1997.  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:
 Multifamily                                              $ 1,774,000           $309,000
 Commercial Real Estate                                     1,138,000            270,000
 Other                                                         39,000              4,000
                                                          -----------           --------
                                                          $ 2,951,000           $583,000
                                                          -----------           ========

Impaired loans not requiring a SFAS No. 114 allowance:
 Multifamily                                               11,159,000
 Commercial Real Estate                                     8,113,000
                                                           ----------

                                                           19,272,000
                                                           ----------

Total                                                     $22,223,000
                                                          ===========
</TABLE>

The $19,272,000 of loans reported as impaired loans not requiring a SFAS No. 114
allowance  are  classified  in this manner  because,  as of June 30,  1997,  the
recorded  investments in these loans have been reduced to their  collateral fair
value,  net of selling  costs,  by  $5,132,000  of  specific  chargeoffs  to the
Company's reserves.  At June 30, 1997, 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 quarter
and six months ended June 30, 1997 was $173,000 and $278,000,  respectively, all
of which was  recorded  using the cash  received  method.  The average  recorded
investment in impaired loans during the second quarter of 1997 was approximately
$23,000,000.



                                       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 May 30, 1997, the Company filed a Form 8-K relating to Item 5
                therein,  covering the  registrant's  release on May 28, 1997 to
                the business  community of its decision to no longer  search for
                strategic  alternatives  that would result in the acquisition of
                the Company by another  party.  The Company also  announced that
                its Board of Directors  has  increased,  by up to an  additional
                500,000 shares,  the number of shares  authorized for repurchase
                from time to time,  either  on open  market  transactions  or in
                block purchases.

           C.   On June 23, 1997,  the Company filed a Form 8-K relating to Item
                5 therein, covering the registrant's release on June 23, 1997 to
                the business community of its execution of a letter of intent to
                acquire,  through its wholly  owned  subsidiary  First  Republic
                Savings  Bank,  a 19.9%  equity  stake  in  Trainer,  Wortham  &
                Company,   Incorporated   of  New  York  City,  an   independent
                investment advisory firm.

           D.   On July 18, 1997,  the Company filed a Form 8-K relating to Item
                5 therein, covering the registrant's release on July 17, 1997 to
                the  business  community of its earnings for the quarter and six
                months ended June 30, 1997.

           E.   On August 8, 1997, the Company filed a Form 8-K relating to Item
                5 therein,  covering the  registrant's release on August 7, 1997
                to  the  business  community  that its Board  of  Directors  has
                increased,  by up to an  additional  500,000 shares,  the number
                of shares  authorized for repurchase  from time to time,  either
                on open market transactions or in block purchases.

                                       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:   August 13, 1997                 /s/KATHERINE AUGUST-DEWILDE
                                        ---------------------------  
                                        KATHERINE AUGUST-DEWILDE
                                        Executive Vice President and
                                        Chief Operating Officer





Date:   August 13, 1997                 /s/WILLIS H. NEWTON, JR.
                                        ------------------------
                                        WILLIS H. NEWTON, JR.
                                        Sr. Vice President and
                                        Chief Financial Officer
                                        (Principal Financial Officer)







<PAGE>