First Republic Bank (FRC) Q1 2022 Earnings Call Transcript

First Republic Bank (FRCB)
Q1 2022 Earnings Call
Apr 13, 2022, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to First Republic Bank's first quarter 2022 earnings conference call. Today's conference is being recorded. [Operator instructions] I would now like to turn the call over to Mike Ioanilli, vice president and director of investor relations. Please go ahead.

Michael Ioanilli -- Vice President and Director Investor Relations

Thank you, and welcome to First Republic Bank's first quarter 2022 conference call. Speaking today will be Jim Herbert, founder and executive chairman; Mike Roffler, CEO and president; Mike Selfridge, chief banking officer; Bob Thornton, president of private wealth management; Olga Tsokova, chief accounting officer and acting chief financial officer. Before I hand the call over to Jim, please note that we may make forward-looking statements during today's call that are subject to risks, uncertainties, and assumptions. For a more complete discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements, see the bank's FDIC filings, including the Form 8-K filed today, all available on the bank's website.

And now I'd like to turn the call over to Jim Herbert.

Jim Herbert -- Founder and Executive Chairman

Thank you, Mike. Good morning, everyone. I'd like to make a few introductory comments before I turn this over to the teams. Let me start by saying I am very pleased that the board of directors has appointed Mike Roffler as CEO.

Mike joined us more than a decade ago prior to the management buyback of the bank. His leadership contributions have been felt far beyond his previous role as chief financial officer. Mike truly embodies our service culture and growth mindset. Most importantly, this appointment ensures the continuity of our very differentiated service-based business model.

Mike and our experienced leadership team have a deep understanding of what makes First Republic uniquely successful, including the empowerment of our colleagues, our steadfast focus on safety and stability, and our dedication to extraordinary client service. This model has delivered consistently profitable results and strong steady growth for 36 years through a very wide range of economic and geopolitical environments. In my new role as executive chairman, I look forward to leading the board, engaging with our largest clients and shareholders, while focusing on our strategy, and corporate culture, and supporting Mike and the rest of the team as they carry the First Republic model forward. As you can see from today's terrific earnings results, the continuity of our culture and business model continues to deliver consistent, very good results.

Now let me turn the call over to Mike.

Mike Roffler -- Chief Executive Officer and President

Thank you very much, Jim. It is an honor and privilege to serve as First Republic's CEO. We have many opportunities in front of us, and I look forward to partnering with Jim, the board of directors, our leadership team, and our colleagues to continue the growth and success of First Republic. Now let me turn to this quarter's results.

As Jim mentioned, it was a terrific first quarter across the board. Loans, deposits, and wealth management assets were all up significantly from last year. In terms of loan originations, this was our best quarter ever. At the same time, credit quality remained very strong.

Nonperforming assets were only eight basis points at quarter-end, and we actually had net recoveries during the quarter. Exceptionally strong credit has been a hallmark of First Republic since our founding, and it will continue to be going forward. We are pleased to raise our quarterly dividend for the 11th consecutive year. The consistency of our dividend is indicative of our strength and stability and our continued positive outlook.

Year over year, total loans outstanding were up 19.7%, total deposits have grown 27%, and wealth management assets were up 25%. This strong growth in turn led to strong financial performance. Year over year, total revenues have grown 23%, net interest income is up 22%, while net income was up 20%, and tangible book value per share has increased more than 14%. Importantly, our Tier 1 capital was up 26%.

As you recall, we added $2.8 billion of net new capital in 2021 in anticipation of our growth. In addition to this strong financial performance during the quarter, we also successfully completed our core conversion, the largest technology project in the bank's history. Strategically, our new core system lays the foundation for continued growth, by further enabling digital banking innovation, driving the scalability of the entire enterprise in support of our bankers and wealth professionals, and enhancing client customization and security. As important, the system strengthens our regulatory and operational infrastructure as we continue to grow.

The core conversion was a true team effort that points to the highly collaborative nature of First Republic. I want to thank all of our colleagues for a job very well done. While this major effort is behind us, we continue to invest in technology to serve our clients and empower our colleagues. During the quarter, we also released our 2021 Net Promoter Score, or NPS, an independent measure of client satisfaction.

We are very pleased that our overall NPS increased by six points to 79, our highest level ever and significantly higher than the U.S. banking industry average of 34. Our consistently high scores increased across every region, every line of business, and every generation of clients. Additionally, the more clients do with us, the more satisfied they are.

For clients who consider us their primary bank or lead bank, our NPS increased to 88, the highest level ever. Quite importantly, nearly two-thirds of our clients now consider us their lead bank. Our improved NPS even during the pandemic demonstrates the strength of our client-centric model under challenging conditions. It is a testament to the dedication of our team and the effectiveness of our technology investment in recent years.

It is clear that the more challenging the environment, the more client service is valued. As we look ahead to the rising rate environment, First Republic remains well-positioned. Our balance sheet is strong, and our service model continues to thrive. Demand for client service is not cyclical.

Overall, it was a great quarter. Now I'll turn the call over to Mike Selfridge, chief banking officer.

Mike Selfridge -- Chief Banking Officer

Thank you, Mike. Let me begin with an update on lending. It's been a very strong start to the year. Loan origination volume for the first quarter was a record $17.8 billion.

Single-family residential volume was very strong at $8.4 billion, our second-highest quarter ever. Single-family volume accounted for nearly half of our total volumes during the quarter. Multifamily volume for the quarter was also very strong at $1.7 billion, also our second highest quarter ever. This robust lending activity during the quarter highlights the strength of our markets and our clients.

This is further reflected in our loan pipeline, which is significantly higher compared to the same time last year. We continue to expect mid-teens loan growth for the full year of 2022. In terms of credit, we continue to maintain our conservative underwriting standards. Our average loan-to-value ratio for all real estate loans originated during the quarter was just 57%.

Turning to business banking, it was a very successful quarter. Business loans and line commitments, excluding PPP loans, were up 18% year over year. During the quarter, the utilization rate on capital call lines of credit decreased slightly to 40%. This remains at the higher end of the historical utilization range.

Now let me turn to funding. Overall, it was another very successful quarter of deposit growth. Deposits were up 3.7% from year-end and 26.7% year over year. We continue to maintain a diversified deposit funding base.

Checking deposits represented 70% of total deposits at quarter-end, and business deposits represented 60% of total deposits at quarter-end. The average rate paid on all deposits for the quarter was just five basis points, in line with the prior quarter. This led to an overall funding cost of just 11 basis points, down one basis point from the last quarter. Our strategy of acquiring and growing the next generation of client relationships, which began over a decade ago, continues to be very effective.

For example, year-over-year households acquired through our personal line of credit and professional loan programs were up 15%, and we've acquired more than 5,000 such households in the last 12 months. Clients who came to First Republic through these programs now represent fully one-third of our total consumer borrowing households. I would note these ktwo programs are more than self-funded with deposits. Our next-generation client base has grown.

We've also continued to develop the next generation of relationship managers. These internally trained relationship managers now make up over one-quarter of all relationship managers. As Mike mentioned, our model is performing quite well and continues to drive our safe, stable and organic growth. Now I'd like to turn the call over to Bob Thornton, president of private wealth management.

Bob Thornton -- President of Private Wealth Management

Thank you, Mike. Our Wealth Management business continues to perform very well despite market volatility. Year over year, assets under management grew 25%. During the first quarter, our investment management business had a record net client flow -- inflow of $4.9 billion.

Our overall AUM decreased a modest 2% during the quarter due to market depreciation. Wealth Management fee revenue for the first quarter was $221 million, up 39% year over year. We remain very focused on serving our clients with financial planning, brokerage, trust, insurance, and foreign exchange services in addition to investment management. This comprehensive approach benefits our clients while also diversifying our fee revenue with services that are less subject to market fluctuations.

We also continue to focus on deepening relationships with our wealth management clients by meeting their banking needs. Deposit sourced from our wealth management colleagues increased 28% year over year and now represent 14% of total bank deposits. Our integrated banking and wealth management model has continued to make First Republic an attractive destination for very successful wealth professionals. Since the start of the year, we've welcomed three new wealth management teams to First Republic.

Overall, our wealth management business continues to perform very well despite the broader market volatility. Times like these are a great opportunity to demonstrate our exceptional service and acquire new households. Now I'd like to turn the call over to Olga Tsokova, acting chief financial officer.

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

Thank you, Bob. With a consistent focus on credit, capital and liquidity, we continue to operate in a safe and sound manner. Our credit quality remains excellent. As Mike mentioned, during the first quarter, we had net recoveries of approximately $300,000.

Our provision for loan losses for the quarter was $10 million. This modest provision reflects our underwriting discipline and excellent credit track record as well as our portfolio mix. Our capital position remains very strong. At quarter-end, our Tier 1 leverage ratio was 8.7%.

This reflects the benefits from five successful capital results in 2021, totaling $2.8 billion on a net basis. Liquidity also remains very strong. High-quality liquid assets were 16% of average total assets for the first quarter. Our net interest margin was 2.68% for the first quarter, in line with our guidance.

We continue to expect our net interest margin to be in the range of 2.65% to 2.75% for the full year 2022. Importantly, net interest income was up a very strong 22% year over year. This is due to the robust growth in earning assets and a stable net interest margin. Our efficiency ratio was 62% for the first quarter.

We are pleased to maintain a stable efficiency ratio as we continue to invest in the business. We continue to expect the efficiency ratio to be in the range of 62% to 64% for the full year 2022. Our effective tax rate was 22.9% for the first quarter. We now expect the effective tax rate for the full year 2022 to be in the range of 21% to 22%.

This slight increase is due to reduced tax benefits from the vesting of stock-based awards. Overall, the year is off to a very strong start, reflecting the consistency of our model. And now I'll turn the call back over to Mike Roffler.

Mike Roffler -- Chief Executive Officer and President

Thank you, Jim, Mike, Bob, and Olga. We've had a great start to the year. For over 36 years, First Republic's business model has been grounded in conservative credit, strong capital and liquidity, colleague empowerment, and most importantly, an extraordinary level of client service. This foundation remains unchanged.

Our model is as strong as ever, and our entire team remains focused on executing each and every day. Now we'd be happy to take your questions.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from Steven Alexopoulos with J.P. Morgan.

Steven Alexopoulos -- J.P. Morgan -- Analyst

Hey. Good morning, everyone.

Mike Roffler -- Chief Executive Officer and President

Good morning.

Steven Alexopoulos -- J.P. Morgan -- Analyst

Good morning, Mike. I want to start on loan growth. So regarding the record originations, you guys saw in the quarter, maybe could you unpack that a bit, give us some more color on why we saw the best quarter originations ever? I don't know if there was a rush to refi or what happened there. And then as rates rise, how much of a headwind will that likely be in and could for the first time in many years, the mid-teens outlook for loan growth be at risk?

Mike Selfridge -- Chief Banking Officer

Hey, Steve. It's Mike Selfridge. Thanks for the question. Yes, just to unpack it a little bit to your question.

I would say, overall, the service model is what differentiated us in the market and drove a lot of the significant growth. Maybe a little bit of a pull forward on refi given the rise in rates, but I think it was very consistently steady, particularly in single-family, good mix of refi purchase. Refi was a little bit higher than normal, about 58% but very solid in the purchase market where you know we excel was quite strong despite limited inventory. The capital call line activity was strong, and I would say the backlog going into the second quarter is strong.

Rising rates, yes, that will be a headwind for refi. Looking back historically, refi has never dropped below 40% of our total single-family origination volume. We think that will hold pretty well.

Steven Alexopoulos -- J.P. Morgan -- Analyst

OK. So even with rising rates, still confident in the mid-teens outlook for the year?

Mike Selfridge -- Chief Banking Officer

Confident in the mid-teens for 2022.

Mike Roffler -- Chief Executive Officer and President

Yeah. And I might just add on, Steve. If you go back to a couple of the last cycles, when rates have risen, we've been pretty much sort of 15% to 18% loan growth. And it comes back to where Mike Selfridge started with the service model being there for clients, acquiring new households, and really serving their needs.

Because even in times of a bit of challenge in the market or a bit of challenge in the economy, we're there to serve clients every day. And so that resonates and that leads to the sort of the continued deepening and expansion of relationships you see.

Steven Alexopoulos -- J.P. Morgan -- Analyst

OK. That's helpful. And then on loan yields, the original view is that is as mortgage rates moved up a bit, you might not see much benefit to loan yields. I think you thought you might see spreads compressed.

Maybe can you walk us through what you're seeing real time here? And with the NIM outlook being maintained, what are you expecting for loan yields as mortgage rates continue to drift up?

Mike Selfridge -- Chief Banking Officer

So Steve, back on the heels of strong origination volume. At the end of the quarter, we were originating single-family, just a little bit over 3%, about 3.05%. Multifamily about 3.45% and commercial real estate about 3.65%. Business banking depends on the segment.

Capital call is the largest segment there. It's probably about prime minus 25 to 50 bps, maybe 75% depending on the situation. But -- and I would say it's trending upward.

Mike Roffler -- Chief Executive Officer and President

Yeah. I think that's -- the key point is starting in the quarter, Steve, I think you're getting that competition a little bit, very highly competitive. You didn't see a lot of repricing in the early parts of the quarter. And as you got later, we've started to see the drift up, and that's -- might as well, just quoting sort of even last week rates, and it's even sort of still climbing a little bit from here.

Steven Alexopoulos -- J.P. Morgan -- Analyst

OK. And I guess what I'm trying to understand, the last time you gave the outlook for NIM for this year. On the prior call, you said lower end of the range. Are you still thinking lower or maybe could we push up, I don't know, to the upper end of the range given it sounds like loan yields are going to get a bit better here?

Mike Roffler -- Chief Executive Officer and President

I think that's right, based on where we see the business today, and I think you're probably pushing up toward the middle of the range versus the lower end of where we've been at.

Steven Alexopoulos -- J.P. Morgan -- Analyst

OK. Thanks. And then finally, in terms of quite a few management transitions over the past few months. Maybe for you, Mike, now as the CEO.

Give us an outline, what are you most focused on here? What do you think you need to improve on? And I don't know what the message has been to employees since you took over? And then, Jim, I'd love to hear from you too, right? Executive chairman implies you're going to be more involved than just a typical chair role. How are you thinking about this new role? And what will the involvement be with the company? Thanks.

Mike Roffler -- Chief Executive Officer and President

Thanks, Steve. I appreciate the question, as is Jim. The first thing I'd say is, as my transition to the CEO role does not represent a strategic shift in our direction. It represents the continued thoughtful evolution of our client-focused model and the continuity of our unique service-focused culture, which has been at the heart of everything we've done for over 36 years.

The bank has a very successful business model and strategy. That doesn't change, right? Well, as we talked about in the prepared remarks, our foundation is built on strong credit capital liquidity at all times. And our total focus, our colleagues that have come to work so far today and that are on their way in this morning, is on providing exceptional client service, and that then drives our growth. In terms of improvement, exceptional service comes from continuous innovation, that doesn't stop.

We'll keep doing that. We stay close to clients. We listen to what they need and then we empower our colleagues to go deliver. That doesn't change.

And we're going to continue to invest in the franchise to support our colleagues and support our clients, again, which drives our growth. And maybe just a few examples, right? Mike Selfridge touched on acquiring and building next-generation relationships, a very important part of the strategy as we plant seeds for the future. The relationship between banking and wealth management through an unsiloed, again, focused on client delivery. We also look at markets.

We're excited with Hudson Yards coming online. We're excited that we're going into Seattle through Bellevue here pretty shortly and are already there with wealth management. And again, exceptional service, both in person, digital online, continue to leverage technology and data and most importantly, continue to empower our colleagues. In terms of our employees, every day, we wake up and think about our current client and taking care of them -- take great care of them.

They will bring you more business. They will also bring you to your next client. And we're going to continue to be thoughtful and focused on how we invest in technology and innovation to serve clients. And frankly, the fantastic people in this company are what drives the collective success and the results you see and what we've talked about so far today.

And I'm extremely grateful and thankful for their efforts continuously and to just be a part of the team. Just a wonderful business and our job is to now continue to build it and serve clients and take great care of them every day.

Jim Herbert -- Founder and Executive Chairman

Steve, it's Jim. Mike just gave you the game plan, basically, going forward, which is really no change, no major change. My role is going to be to work with the Board, to focus on strategy along with Mike and the whole team, to pay attention to our largest shareholder -- largest shareholders and clients, and also work with some of our largest bankers and wealth managers in terms of what can we do to help them more. So I do see it as a fairly active role but not day-to-day, not full time, day-to-day.

Steven Alexopoulos -- J.P. Morgan -- Analyst

OK. Gotcha. Great. Thanks for taking my questions.

Operator

Our next question comes from Manan Gosalia with Morgan Stanley.

Manan Gosalia -- Morgan Stanley -- Analyst

Hi. Good morning. I wanted to ask a question on expenses. You kept your expenses flat quarter-on-quarter despite the negative seasonality that you would typically have.

And I know you gave your full year efficiency ratio guidance. But I was wondering, can you talk about how expense growth is tracking relative to the expectations you had in January? To what extent or high inflation and competition for talent driving higher expenses? And you also mentioned that you completed your core systems conversion. So I was wondering if that drives some incremental cost saves given that it gives you more flexibility and also some costs associated with the transition should come out as we go through the year?

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

Sure. In terms of efficiency ratio, as I mentioned in the remarks, we continue to expect to be with our guided range of 62% to 64% for the full year. We were pleased to see that the pace of revenue growth outpaced the growth of our expenses. And for the first quarter, we see the seasonal impact of higher payroll taxes and benefits, but also we had some benefit from still reduced costs due to the pandemic.

They have a lot of opportunities ahead of us to invest in our franchise, in our colleagues, in our preferred banking offices, and our new technologies. In terms of inflationary pressures in compensation, our colleagues are the reason for the success of our business. And we always focused on treating our colleagues fairly and compensating them properly as well. So this is why we don't expect to see much of the pressure on our existing colleagues, but we see some inflationary pressures on the new colleague that we bring on board.

For the core conversion, we have expense back in our guidance for the full year. We completed the conversion, but we still have to maintain the system, so you'll still continue to see the cost around the system going forward. And overall, for those reasons, we believe that we feel confident with our guidance, and we expect our expenses to grow in line with our revenues.

Manan Gosalia -- Morgan Stanley -- Analyst

Great. That's very helpful. And maybe if I can follow up with a question on securities. I think securities grew 18% versus year-end, which is higher than the 6% or so that we've seen in recent quarters? I assume part of this was deposit growth and also there's more opportunity from higher rates.

Can you talk about like what duration and what kind of securities you're putting on? And also how we should expect securities growth to trend from here?

Mike Roffler -- Chief Executive Officer and President

Yes. No. Thanks for the question. So the securities strategy is largely two-pronged as it's been.

Our HQLA portfolio, we've continued to average in overtime. and that continued during the quarter. And given the strong liquidity and how we feel, we felt it was appropriate to maybe add a little bit more than we had in 2021, for example. The second part of our investment strategy is municipal bonds, which has been a core part of the bank really since we bought the bank back in 2010 and have been investing in municipals from that time on.

And it's been a very good, one, yield for portfolio; and number two, effective way of managing our taxes. And so we've been very active in the muni marketplace, frankly, every quarter for the last 12 years, and that continues. And if you think about the long-term of First Republic, it's really about investing for the future, and that goes with investments, right? We average in overtime, and we'll continue to do so as the balance sheet grows. The percentage of investments to total assets doesn't deviate a whole lot.

So it's probably in this range is a safe one as you go forward.

Manan Gosalia -- Morgan Stanley -- Analyst

Great. Appreciate it. Thanks for taking my questions.

Operator

Our next question comes from Casey Haire with Jefferies.

Casey Haire -- Jefferies -- Analyst

Yeah. Thanks. Good morning, everyone. I wanted to follow up on the NIM guide holding it flat.

I think last quarter, you guys talked about three hikes and cash balances elevated. Just wondering how many hikes you're expecting now? And then the cash deployment was up this quarter. So cash balance is down. Just wondering what you mean -- what you're looking for there? And then finally, just deposit betas, should we just use the last tightening cycle as a proxy for how deposit prices trend?

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

So for the NIM, we still believe that our guided range -- we feel comfortable with the 2.65% to 2.75% for the full year 2022. As you noted, the cash balances decreased to $8 billion at the end of first quarter, compared to $13 billion at the end of last year, and it will benefit NIM in the second quarter. Mike Selfridge talked about the loan yields picking up during the later part of the quarter and going into the second quarter, this will benefit the NIM. In terms of the beta, as we've seen in the life cycles, 2015 through 2019, the beta was about 19%.

But as we know, cycles are not the same. And in the last cycle, it took out about two years to get over 100 basis points, and we think this time, it will take them sooner to get there. And that being said, we have shown over time that the model produces stable and consistent results in different rate environments. On the last call in January, we assume three Fed hikes.

For this time, we assume seven Fed hikes going forward.

Casey Haire -- Jefferies -- Analyst

OK. Great. Thank you. And then another one on the loan growth outlook for Mike Selfridge.

I'm sorry if I missed this, but the loan pipeline, how is that shaping up versus the 12/31 pipeline?

Mike Selfridge -- Chief Banking Officer

Casey, it's above the 12/31. And as I mentioned, it's up significantly year over year and it's -- I would characterize it as strong going into Q2.

Casey Haire -- Jefferies -- Analyst

OK. Very good. And just last one for me. As you guys continue to put up this robust growth, you are tracking toward that ever-important $250 billion asset level, probably 2024.

Just what do you guys see as the heavy lifting that you need to do between now and then to keep on sites with regulators and what are the implications for financial implications?

Mike Roffler -- Chief Executive Officer and President

So thanks for the question. I think the one thing I would characterize is when we went from under $50 billion to over, we had to build everything, right? And so there was a big leap at that point to get liquidity stress testing, capital stress testing, all built and established. And even though now we're not subject to those $50 billion rules anymore, we still have those programs in place, right? We still run capital stress tests, we still run liquidity stress test. So there's only enhancement from here, which we're working toward.

And we've done resolution planning, for example, and we're still subject to that. So a lot is not new, and the infrastructure is in place, you'll have to enhance. One of the great things about the core conversion is it will help with the data needs and also faster data, faster information to allow us to do these things on a more real-time basis. And so we're obviously building already, but it's not as big of a leap as you would have thought, like we all remember from about seven years ago when we went over $50 billion.

Casey Haire -- Jefferies -- Analyst

Great. Thank you.

Operator

Our next question comes from Erika Najarian with UBS.

Erika Najarian -- UBS -- Analyst

Hi. Good morning. Jim, it so good to hear from you again. And Mike, congratulations on your new role.

My first question is a follow-up to Steve's line of questioning. Given the volatility in the outlook for the economy, there are a lot of investors that we're speaking to that are new or to First Republic. And Jim and Mike, perhaps you can answer this question that I'm getting. Clearly, the rate trajectory that the forward curve is pricing in is much more violent and significant than we've seen over the past several years.

And so how do you reassure future shareholders about the durability of single-family growth? Maybe say in this public forum, what sort of the secret sauce is. And for Mike Selfridge, I think there is a big debate on what much higher rates will mean for private equity and venture capital. And so given your experience here, how should we think about investment need and other financing needs as rates increase materially and quickly?

Jim Herbert -- Founder and Executive Chairman

Erika, it's Jim, let me start with the answer on mortgages. We have -- I've been at this business a long time. Mortgages lag a little bit, as Mike was indicating, both Mike's actually, but they are climbing fairly rapidly. And what happens as they move fairly quickly as competition tends to pull back, particularly mortgage broker originations and secondary market originations, those are coming to almost to a halt already.

And so our opportunity to continue to grow is greater than one things. The other thing is we're doing most of our business, 60% plus with existing clients, and we still are. The other thing is that our deposit base is entirely different now than in any prior run-up. We're at almost 70% checking and 60% from business banking, which is, to some extent, working capital.

The mortgage business will continue. Part of this bank, I started in 1980, we went through the early '80s. And even then, we made a lot of money. The spread widened on mortgages, and there was business to be done.

So I don't really worry about it very much. The increase is going to be more violent than we have predicted. But as Olga just said, we've redone our forward projections around seven increases, if I have that right. We did seven increases and the NIM stays the same.

The NII still expands as we've said in our deck. So that's the mortgage piece. Let me turn it over to Mike or Mike for the business piece.

Mike Selfridge -- Chief Banking Officer

Yeah. Erika, to your question on BCPEs, just a little backdrop on last quarter's fundraising was strong. Velocity did slow a little bit. And by velocity, I mean, the pace of investment in terms of dollars and exits slowed and that's an exit-driven business.

So public markets if they correct down, then that industry is going to lag a little bit. But having said that, there's still a lot of room for us to grow. And so even if velocity slows and even if utilization rates gravitate toward the mean, which is about 33%, 35%, there's still a base level of business being done. And some of the best funds are actually investing more heavily in the down cycle because they're taking a more of a three- to seven-year time horizon in terms of their investment cycle.

So I'm confident we'll still be able to do well even if the economy turns in that particular segment. And I just note that credit quality in that particular segment is stellar.

Mike Roffler -- Chief Executive Officer and President

Erika, maybe one last comment I'd make, because I like the start of your question sort of in an uncertain backdrop or challenging backdrop and sort of what you see in the results here and sort of our outlook during challenging times in the past, the benefit of client service, which drives growth, right? So if you think about a few of the things like AUM not down very much because client inflows is driving it despite the market volatility. Loan pipeline and backlog remains very strong because, again, we're there to serve clients when -- as Jim mentioned, others might be pulling back a little bit and continuing to deepen and increase relationships with clients who consider us their lead bank. And so service becomes even more valuable when times are challenging. And that's what drives growth and staying very focused on credit, safety, soundness and it's even more valuable.

So it's really fundamental to the way we operate and try to maintain sort of that consistency and stability in all periods because we want to be there for our clients.

Erika Najarian -- UBS -- Analyst

Got it. My second question is a little bit more technical, and this is for Mike R and Olga. As we contemplate the bank crossing $250 million, there's a big debate in the marketplace about how much more liquidity you would have to add to potentially have to adhere to the liquidity coverage ratio? So a multipart question. Number one, you mentioned that you have $29.9 billion in HQLA.

Are munis considered level 1 or level 2b? And just for those broader audiences, 2b would count for less, right?

Mike Roffler -- Chief Executive Officer and President

Yes. That's right.

Erika Najarian -- UBS -- Analyst

And so that's the first question. And the second question is, obviously, the other factor of this is your outflow assumption or your deposit base or your liabilities. So as we think of that 70% checking that you allotted for this quarter, are those higher-value deposits under LCR? In other words, are they considered mostly operational? Therefore, you don't have to hold as much liquidity against them as you would for a nonoperational deposit or a financial institution deposit, for example?

Mike Roffler -- Chief Executive Officer and President

Great question, Erika. And you're right. It is technical. To the first part, the municipals would be considered 2b.

A good portion of our municipal portfolio qualifies as HQLA. And so it's -- it doesn't count as much as level 1 as you mentioned. To the second part of your question on the deposits and the different outflows, one of the things that's important to one is segment is by industry type. And then also, you're right, operational versus nonoperational is very important.

That's where we mentioned earlier, the core system and our data is very important so we can quantify the amounts of operational. And so think about lead bank, very important designation, typically leads to -- they're using us for their operating activities. And so a good portion of those business and consumer are going to be operational in nature, less outflow. As we've mentioned before, and I think people have written about this, the mix of deposits being diversified is also helpful, so you're not reliant on any particular industry.

And all of these activities are absolutely part of our strategic planning process and how we think about the deposit base as we go forward.

Erika Najarian -- UBS -- Analyst

Got it. And just to wrap this all up, could you maintain that net interest margin range even as you add more liquidity to your balance sheet in anticipation of crossing $250 million?

Mike Roffler -- Chief Executive Officer and President

So it's a good question. And again, a lot of it will depend on how much liquidity needs to be added, and that will depend on the deposit base at the time. So it's hard to say how impactful it will be other than we don't believe it's a threatening impact and could it move your margin to lower end versus middle to higher? Probably yes, but the deposit base at the time also will have a big impact on it and what the rate environment is.

Erika Najarian -- UBS -- Analyst

Got it. Thank you.

Operator

Our next question comes from John Pancari with Evercore.

John Pancari -- Evercore ISI -- Analyst

Good morning. Just a couple of clarifications on some of the topics already brought up. So on the deposit sensitivities, Olga, I think you mentioned 19% beta prior cycle. What is your assumption now baked into your latest algo scenarios? And has that changed?

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

So last cycle, as we said, 19%. But for this cycle, we expect beta to be slightly higher than this given how fast -- more than 19%.

Mike Roffler -- Chief Executive Officer and President

Yes. Just a little bit given how fast -- given how fast the Fed is going to move just a little bit, but not much.

John Pancari -- Evercore ISI -- Analyst

OK. All right. But you don't have a quantification of what's in your assumption?

Mike Roffler -- Chief Executive Officer and President

It's a -- given the deposit mix it's a bit different than last time, right? The 19% is all in. So it's a little bit higher than that, but not much.

John Pancari -- Evercore ISI -- Analyst

OK. Got it. Thanks, Mike. And then on the lending side, on the capital call business, Mike Selfridge, I appreciate the detail you gave there.

You indicated a modest decline in line utilization there. Could you just give us a little bit more of the near-term outlook? Do you think that's likely to -- you could see that continue to gradually shift lower and maybe perhaps some just additional color in terms of if you're -- what you're seeing in terms of a change in borrower behavior or appetite near term on those -- around those lines?

Mike Selfridge -- Chief Banking Officer

Yeah. John, maybe a couple of thoughts. I said it was down slightly. It was down from something like 41% to 40%.

And that's still elevated if you look at a longer historic view. Again, historically somewhere in the 33% to 35% range. So it's hard to predict. It's still holding up well.

There's still activity. And I think overall -- and if you look at the dry powder of the industry, I think it's somewhere in the eight-point -- $1.8 trillion range in the United States. So there's still a lot of dry powder to deploy, which will -- most funds we'll use capital call facilities to deploy capital to make investments and then call that capital. So I think it's going to hold up well.

But again, velocity would likely slow with the broader economy from what I see.

John Pancari -- Evercore ISI -- Analyst

Got it. OK. That's helpful. And then lastly, on the expense side, really on the efficiency side.

I know you reiterated the 62% to 64%, you're running around 60% right now. Can you just talk about the likelihood of hitting that range and what gets you there? Where are the -- what are the dynamics that are influencing that range remaining 62% to 64% for your guidance versus where you're running now?

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

Yeah. Sure. The guidance, 62% to 64% includes several components. The first quarter, as we said, we had elevated payroll tax and benefits, but we were pleased that our revenues outpaced -- the growth of revenues outpace the growth of our expenses.

We continue to invest in the business and our people, preferred banking offices as well as technology. Also, we had a benefit in the first quarter of lower caused due to the pandemic as they're turning back to the offices, which we did later this -- in the first quarter, we expect those costs to go back to more normal levels as we continue to -- if we start doing more travel, do more client events and in-person events for our colleagues. And as we said, we think about the expense growth to be in line with the growth of our revenues.

Mike Roffler -- Chief Executive Officer and President

Yeah. I might just add, we're really pleased that we've been sort of at the low end at 62% of our range while continuing to deliver extraordinary service to our clients, continue to add to our colleague base, and invest in the franchise for the future. One of the things that we're always doing is investing for future growth and future client needs and what they want of us. And so I think it's really important that we maintain that consistent sort of range while we continue to invest and also sort of deliver good, stable, consistent returns.

And we're pleased at the level, and it's great to stay at the lower end where we've been in the last few quarters. And we're really -- we're pleased with that while continuing to invest.

John Pancari -- Evercore ISI -- Analyst

Got it. My guess you're 60% then, and your 62% now. But thanks for the color. Appreciate it.

Operator

We'll take our next question from Dave Rochester with Compass Point.

Dave Rochester -- Compass Point Research -- Analyst

Hey. Good morning, guys. Nice quarter, and Jim, good to see you back. And Mike, congrats on the promotions.

It's definitely well deserved.

Mike Roffler -- Chief Executive Officer and President

Thanks, David.

Dave Rochester -- Compass Point Research -- Analyst

Let me go back to the margin guidance. I was wondering how you're thinking about the deposit growth trajectory from here that you have baked into that? And I appreciate the detail on the loan yields. Can you just talk about the yields on the securities you bought this quarter and where you're seeing those purchase yields today? I would imagine they're even higher now, that would be great.

Mike Selfridge -- Chief Banking Officer

Hey, Dave. Mike Selfridge. I'll start with deposits and hand it over to Mike and Olga. Olga mentioned the deposit beta.

And actually, I'd point you to sort of our ability to grow deposits on historic cycles of rate hikes. 2016 to 2018, we still grew deposits 18%. Even going back further, 2004 to 2006, we grew deposits at 25%. So I think our ability to acquire new households, the service model that Mike talked about, the seeds we planted in areas like the next generation of households and relationship managers, the mix business to deposits 60-40, the channel, private banking, wealth management, which is now a large driver of deposit growth, business banking, relationship managers.

I think you put all that together and we're confident in our ability to grow the deposit base and grow it to keep pace with the mid-teens loan growth.

Mike Roffler -- Chief Executive Officer and President

Yes. Maybe just on investments for a minute. You're right, Dave. The yields today, munis are 4.25% roughly, and that was probably just under 4% in the first quarter.

In HQLA, if you think of sort of a three- to four-year duration is, call it, 3.25% now and it was probably started the first quarter in the low 2s and rose to the low 3s, so call it 2.50% to 2.75%. So you're definitely seeing the benefit in new investment from the uptick in rates.

Dave Rochester -- Compass Point Research -- Analyst

Yeah. That makes sense. Appreciate the color. And then how are you guys thinking about cash levels from here? Or where is your comfort level on that bottoming out since we saw a decent drawdown in that this quarter?

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

Hi, Dave. The cash decreased at the end of the first quarter to $8 billion from $13 billion we had at the end of last year. And $8 billion is about 4% of total assets, which we see more as a more normal level for us.

Dave Rochester -- Compass Point Research -- Analyst

Gotcha. So that will remain fairly steady from here, I would imagine. Sounds good. And then just switching to the multifamily segment.

It sounded like you guys saw a big acceleration of production here. We definitely saw that in the growth this quarter. You mentioned a little bit of a pull forward in loan production just in general, given the rate move. And we've heard that there could be actually a decent refi boom going on, right now in the New York City multifamily market.

And I was just wondering if you guys have seen any evidence of that? And maybe you could just give an update on what you're seeing in that segments in multifamily across your footprint and how your pipeline looks in that particular segment? That would be great.

Mike Roffler -- Chief Executive Officer and President

Yeah. And we're pleased with the second best quarter ever in terms of the $1.7 billion originated. It's a little lumpier, but I would say overall multifamily is performing well as an asset class investors are looking for it because rents and vacancy rates have rebounded generally in our bigger markets to pre-pandemic levels. And -- what else can I say there? I don't know if -- there's a little bit of a pull forward there, just like the refi on single-family, but not a whole lot.

So I think it's just steady as it goes as it relates to multifamily. And just reminding you again our median size of what we've originated looking back through the pandemic is less than $2 million loan-to-values and origination about 55% to 60%. Strong debt service coverage ratio with recourse, not deviating at all from our strong stellar credit standards.

Dave Rochester -- Compass Point Research -- Analyst

All right. Great. Thanks for the detail, guys.

Operator

Our next question comes from Ebrahim Poonawala with Bank of America.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Hey. Good morning. I just wanted to follow up, mike, you talked about growth outlook for the loan book relative to rates. Just wanted to get your perspective in terms of how do we think about if the IPO market remains stalled and you have a significant correction in tech stocks.

And in the private markets, what does that mean when you think about just a lack of wealth creation, and what that means for mortgage lending client acquisition? Just as a perspective in terms of historically, like if you look back how has that played out in terms of growth for the bank?

Mike Selfridge -- Chief Banking Officer

Well, first of all, I'd say, given our locations, Boston, New York, Silicon Valley, L.A., we are in innovation centers, and that is alive and well despite ups and downs of cycles, I don't think it's going to impact our business at all. The service model that Mike mentioned, again, a little more than half of our growth coming from existing clients, and put it in perspective with market share that's generally on a cumulative basis, less than 5%, we still have opportunity to grow despite a slowdown in the IPO market.

Mike Roffler -- Chief Executive Officer and President

I'd also add that I think you're hitting that a little bit of -- because of the slowdown, people buy less homes or not as active. And the reality of it is the markets we're in are typically supply constrained, there are more buyers than sellers at any time. And so even if you have a few less buyers that don't have the liquidity or didn't have the expected liquidity, there still are plenty that are looking and typically not enough supply in the markets, which is why you see strength in multifamily and things like that. Because, to Mike's point, these are innovation centers that people still want to be in.

And so they're going to live somewhere.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Got it. And understanding that you have a lot of market share opportunity in these markets, Mike, you mentioned Give us a sense of this hiring pipeline, any new markets that you're looking at or growing? Be it Texas, Florida places where wealth is migrating?

Mike Roffler -- Chief Executive Officer and President

Well, given the market share stats that I just mentioned, we can still grow this franchise very well, just going deeper in our current markets. But as far as -- first of all, we're pleased with the growth in all of our markets. Florida, we're investing more in Florida. We have a new location.

I think we mentioned last quarter in Bellevue, Washington, Bob, and the wealth management side led us there, and that's a -- we believe that's a significant opportunity. And then, of course, just growth in our existing markets as well. No plans for other geographies at this stage.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Got it. Thank you. And Jim, welcome back.

Jim Herbert -- Founder and Executive Chairman

Thank you very much.

Operator

We'll take our next question from Andrew Liesch with Piper Sandler.

Andrew Liesch -- Piper Sandler -- Analyst

Hey. Good morning, everyone. Jim, welcome back. And Mike, congrats on the promotion.

Great to see here. A question on the single-family originations in the quarter. Were those just -- some breakdown on structure. Were these 5/1 ARM, 7/1 ARM? What was the mix of what you originated?

Mike Roffler -- Chief Executive Officer and President

Yes. We don't break it down by that category. But generally speaking, most are hybrids, and I would say five, seven, and 10, ones, and then we do some 30-year fixed rate as well. And that's always been consistent with our client base.

Andrew Liesch -- Piper Sandler -- Analyst

Right. Right. And then I guess with rising rates, I think historically, the duration on your single-family book in around three and a half years. How do you expect that to shift? How much do you think it extends out a little bit further? What dynamics at play do you think -- what dynamics do you think will be at play here as rates are getting higher?

Mike Roffler -- Chief Executive Officer and President

Yeah. Andrew, it will definitely extend a little bit, and that's not unexpected. We see repayment rates will dip a little. But it won't extend as much as one might think just by looking at the primary rates because the client base is very active, right? They go and buy a second home or they buy a larger home.

And so it's not as drop off in terms of repayment rates, extending duration as one might think. But it -- we've been running at 19%, 20% CPR. That will flow into the teens as you sort of get through this refinance and this rush that Mike Selfridge talked about earlier, but it's not a big duration extension that you normally would see in a mortgage lender.

Andrew Liesch -- Piper Sandler -- Analyst

Got it. OK. That's very helpful. You've covered all my other questions.

Thanks so much. I'll get back.

Operator

Our next question comes from Bill Carcache with Wolfe Research?

Bill Carcache -- Wolfe Research -- Analyst

Thank you. Good morning. Within the commercial real estate portfolio, as you look across your customer base, how do you see the risk that high-quality tenants and in class A properties will continue to abide by their lease obligations through the end of their lease terms, but ultimately not renew because they simply don't need as much space?

Mike Selfridge -- Chief Banking Officer

So a couple of -- maybe just from an industry respective in our larger markets like New York, San Francisco, CRE, commercial in general, is more challenged, obviously, with the pandemic vacancies are somewhere in the 20% range. For First Republic, that's not the case. We're doing smaller deals and they're holding up well. So the -- you did point out one important point from an industry perspective.

Leases are generally longer and carrying owners through a cycle. Return to office is a tailwind. And then from our perspective, credit quality is strong, and we're being very selective for the best opportunities.

Bill Carcache -- Wolfe Research -- Analyst

Got it. That's helpful. Separate question. Some banks are expecting a more pronounced decrease in deposits across the system as the Fed begins to reduce the size of its balance sheet.

But it sounds like you expect the impact on First Republic to be relatively modest. Can you go into a little bit more detail on what gives you confidence in your ability to sustained deposit growth at level sufficient to support your loan growth without much of an increase in your deposit betas relative to the last cycle?

Mike Roffler -- Chief Executive Officer and President

Thanks, Bill. I think the thing that gives us confidence is if you come back to the service model and our business model. Even in periods of rising rates in the past, we have grown deposits 15% to 18% relatively and consistently. And if you look back to 2015, '19, that was the case.

And the reason for that is, even though the Fed is acting, service doesn't stop. And so we are deepening relationships. We're adding new households. We're adding new wealth management teams, which bring households.

And so that activity leads us to continue to grow our deposit base and you've seen it time after time. And it comes back to fundamentally our business model is attached to service and doing what clients have asked of us, and that doesn't ever stop.

Bill Carcache -- Wolfe Research -- Analyst

Understood. That's really helpful. That's it for me, and it's great to hear you back and healthy, Jim, and let me also offer my congrats to you, Mike. Thank you.

Jim Herbert -- Founder and Executive Chairman

Thank you.

Operator

We'll take our next question from Terry McEvoy with Stephens.

Terry McEvoy -- Stephens, Inc.-- Analyst

Hi. Good morning. I was just wondering in your conversations with clients asking about higher deposit rates. I did notice last week, you began a CD special, I think, 11 months.

And I didn't know if that was in response to those types of conversations or to maybe fund some of the loan growth that we've talked about on the call?

Mike Roffler -- Chief Executive Officer and President

Thanks, Terry. Periodically we run a deposit special. It's a little bit of testing, and it's a little bit in response to ask, but it's not a driver of anything at this juncture. I would say that client conversations have probably started but with only 1 Fed hike and at 50 basis points, they're not significant at this point in time.

Jim Herbert -- Founder and Executive Chairman

I would say -- let me just add that we won't run into much of that conversation until we get up into a full digit of moves. They've gone up 1% or so, that's going to matter because the money market mutual funds are what bring about the question. We also have a great deal of money swept off the balance sheet. Mike would know that number better than I, but I think we're north of $10 billion.

Mike Roffler -- Chief Executive Officer and President

That's right. That's right. We have solutions for clients, both on and off-balance sheet. And we really expanded that capability in the past, and it exceeds $10 billion now, which again provides great optionality both for the bank and for the clients.

Terry McEvoy -- Stephens, Inc.-- Analyst

OK. And then just as a follow-up. What's the best way to think about the second quarter investment management fees? The equity markets were down in the first quarter, but you also continue to have new client inflows.

Bob Thornton -- President of Private Wealth Management

This is Bob. I -- you hit on the key thing. We have very strong net client inflows. We had a record net client inflow for the first quarter.

I think we'll be about $160 million in investment management fees for the first quarter. And I would also just highlight that even though we have a typical blend of fixed income and equities, most of our pricing on our client portfolio is a blended fee. So the moves don't make that as big a difference as you'd think.

Terry McEvoy -- Stephens, Inc.-- Analyst

Right. Thanks, everyone.

Operator

We'll take our next question from Jared Shaw with Wells Fargo.

Jared Shaw -- Wells Fargo Securities -- Analyst

Hey. Good morning. Thanks for taking the question. Maybe starting with Mike Selfridge, you gave us the yields on loans at quarter-end.

Do you have those numbers for the average for the quarter?

Mike Selfridge -- Chief Banking Officer

I don't have them off the top of my head. I want to say the average is somewhere around 3.11% totality of originations.

Jared Shaw -- Wells Fargo Securities -- Analyst

OK. Across all the products?

Mike Selfridge -- Chief Banking Officer

Across all products, correct.

Jared Shaw -- Wells Fargo Securities -- Analyst

OK. Great. And then looking at the allowance level at 50 basis points here of loans, is this a good floor to assume as we go forward, that the allowance won't go much lower than this? Or is there still room for that to move down as a ratio?

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

So the provision levels, we had a modest provision in the first quarter, but what drove us it was our strong credit track record as well as our portfolio mix. And if you look at our portfolio growth, about 80% of the loan growth on the balance sheet came from single-family loans. So that is one of the drivers of the levels of provision. We're about 50 basis points now.

But as you know, that CECL introduces some volatility on the provision levels. For example, this quarter, some of the economic scenarios have worsened because of the worsened economic environment, but it didn't have a significant impact on the provision. But giving out great credit track record and the portfolio composition, the levels of provision can be at the current level or can even go below where we are now.

Jared Shaw -- Wells Fargo Securities -- Analyst

Do you have what the provision -- or I'm sorry, what the allowance level was just for the SFR, so is 80% of that growth just coming from that lower or that higher-quality bucket -- it's all high quality. But you know what I mean, it's the -- in terms of the actual allocated allowance being lower. What's the allocation for SFR?

Mike Roffler -- Chief Executive Officer and President

It's pretty low. I want to say 10, 11 basis points. And that's -- look at our history and our -- importantly, our underwriting, a 55% to 60% loan-to-value over time. Even with a flat housing price appreciation, you don't see much change or much lost content in those loans.

And so it is a pretty low percentage. And so if that drives most of your growth, you see a lower provision, which you saw this quarter.

Mike Selfridge -- Chief Banking Officer

Jared, it's Mike. If I can just clarify, the number I gave you on the originations for all loans is just under 3%. So it's right around where the total loan yield is portfolio.

Jared Shaw -- Wells Fargo Securities -- Analyst

OK. All right. Great. And then just finally for me.

In the past, you all have mentioned wanting to have sort of two years of growth capital under your belt. Do you feel that you're at that point given the still robust growth outlook? Or are we sort of into the two-year cushion there now?

Mike Roffler -- Chief Executive Officer and President

I think we feel very good given the $2.8 billion net that we raised in 2021. That's one of the reasons we went early in many cases like we did last year, the markets were a lot more receptive than they are currently. And so we feel good about our positioning today. We obviously remain opportunistic, and we do want to continue to look forward to ensure the capital base is there to allow us to serve clients into the future.

But right now, we feel pretty good with where we're at.

Jared Shaw -- Wells Fargo Securities -- Analyst

Great. Thanks very much. Thanks for taking my questions.

Operator

Our next question comes from Chris McGratty with KBW.

Chris O'Connell -- KBW -- Analyst

Good morning. This is Chris O'Connell filling in for Chris McGratty. Most of my questions have been asked, but just wanted to circle back on the margin discussion. You guys gave comments about cash coming down, particularly toward the end of the quarter.

Loan origination yields are above the portfolio yields and securities origination yields are coming in higher as well, along with a better deposit profile than previously. Everything kind of points to improvement in the margin from here and you guys are kind of starting at close to the midpoint of your guide. So I guess, what's -- what are the factors that are pushing back on that or not having you guys commit to being at a higher point in the NIM range?

Mike Roffler -- Chief Executive Officer and President

Thanks for the question and comment. I think you hit on a lot of good points with cash levels being down a little bit. That is -- it's a boost to the margin. But obviously, it doesn't impact net interest income a whole lot, right? And so when we think about sort of the forward look, the most important thing we're here to do is against our clients, competition for loans drive some of that.

And it continues to be a competitive market for the clients that we've continued to acquire and serve over time. And so I think there's a little bit of that baked in. And also the second is the Fed is going to move a bit faster than they had last time. And again, in the interest of serving clients, we're going to continue to do that.

But now stand back from all of that, right? And what we're focused on is generating consistency and stable results while maintaining safety and soundness at all times. And so you're there to serve clients at the prevailing market. And that's what we're here to do, and we're going to continue to do that. And if we deliver consistent margin, consistent efficiency with a growing balance sheet that leads to the net interest income growth you saw this quarter and have seen over many quarters in our history, which then enables investment in the future, planning seeds for growth, and it sort of continues to propel us into the future.

And so that's how we more think about it versus a quick margin expansion that, frankly, may not repeat as you get further out, whereas client service and client growth, that will repeat.

Chris O'Connell -- KBW -- Analyst

Understood. Appreciate the color there. And then just one last touch-up. On the capital call utilization you were referring to before, 40% this quarter versus 41% or 42% last quarter.

What is the historical range on kind of the high end and low end for that?

Mike Selfridge -- Chief Banking Officer

Yes. Low range is about 33%, high range in the low 40s, 42%, I would say, was in the higher end of the range, maybe a little higher. And the average is probably around 35%.

Chris O'Connell -- KBW -- Analyst

Got it. That's helpful. That's all I had. Thank you.

Operator

We'll take our next question from David Chiaverini with Wedbush.

David Chiaverini -- Wedbush Securities -- Analyst

Only one left for me is housekeeping. The income from investments and life insurance was down about 50% from fourth quarter to first quarter. Can you talk about the run rate and outlook there?

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

David, for income from investment and life insurance last quarter, the fourth quarter, we had a benefit, which was recognized, which increased the income. And this quarter because of the volatility of the markets, we've seen some decrease in mark-to-market for some of our BOLI contracts.

David Chiaverini -- Wedbush Securities -- Analyst

Got it. Thank you very much.

Mike Roffler -- Chief Executive Officer and President

David, on a go forward, it's probably more a 20% to 22% if you have a stable market outlook.

David Chiaverini -- Wedbush Securities -- Analyst

Helpful. Thank you.

Operator

We'll take our next question from Tim Coffey with Janney Montgomery Scott.

Tim Coffey -- Janney Montgomery Scott -- Analyst

Great. Good morning, everybody. See, last quarter, we talked about the plan to open 6 new offices by the middle of 2023, given the trajectory of kind of what we're seeing this quarter to top line. Is there a chance those plans could be accelerated or expanded?

Mike Roffler -- Chief Executive Officer and President

Yeah. We're still confident with that number. We've got a second office opening in Jackson. As I mentioned, we're opening in Bellevue.

We're very excited about that. Last year, we expanded in New York. We'll open a few more in New York. So I think that's still a consistent message.

Tim Coffey -- Janney Montgomery Scott -- Analyst

OK. That's only my question. Thank you.

Operator

And we have no further questions at this time. I'd like to turn the conference back to Jim Herbert and Mike Roffler for any additional or closing remarks.

Jim Herbert -- Founder and Executive Chairman

Thank you very much. Thanks, everybody, for the time today. I'd just like to make a very fundamental point. The model is fully intact as this quarter proves and the leadership of the company has never been stronger.

I think the coming volatility is going to prove out, once again, the value of the stability and strength of the model. So let me turn this to Mike.

Mike Roffler -- Chief Executive Officer and President

Yeah. No. Thanks, Jim, and thanks, everybody and for the questions. It really is a great terrific start to 2022.

Our colleagues have done an absolutely fantastic job staying focused on the client and delivering. We've got strong growth opportunities ahead. The markets remain active, and our client base remains very strong. And so we're really optimistic about 2022 and the opportunities ahead of us.

And with that, thank you for all the interest, and have a wonderful day.

Operator

[Operator signoff]

Duration: 72 minutes

Call participants:

Michael Ioanilli -- Vice President and Director Investor Relations

Jim Herbert -- Founder and Executive Chairman

Mike Roffler -- Chief Executive Officer and President

Mike Selfridge -- Chief Banking Officer

Bob Thornton -- President of Private Wealth Management

Olga Tsokova -- Chief Accounting Officer and Acting Chief Financial Officer

Steven Alexopoulos -- J.P. Morgan -- Analyst

Manan Gosalia -- Morgan Stanley -- Analyst

Casey Haire -- Jefferies -- Analyst

Erika Najarian -- UBS -- Analyst

John Pancari -- Evercore ISI -- Analyst

Dave Rochester -- Compass Point Research -- Analyst

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Andrew Liesch -- Piper Sandler -- Analyst

Bill Carcache -- Wolfe Research -- Analyst

Terry McEvoy -- Stephens, Inc.-- Analyst

Jared Shaw -- Wells Fargo Securities -- Analyst

Chris O'Connell -- KBW -- Analyst

David Chiaverini -- Wedbush Securities -- Analyst

Tim Coffey -- Janney Montgomery Scott -- Analyst

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