2004 Highlights Include:
* Record net income of $66.7 million, up 10%
* Earnings per share of $.94, up 9%
* Return on equity of 17.03%
* Strong consumer loan growth of 20%
* Core deposit growth of 9%
* Decrease in non-performing assets of 21%
ANN ARBOR, Mich., Jan. 13 /PRNewswire-FirstCall/ -- Republic Bancorp Inc.
(Nasdaq: RBNC), today announced record net income for the year ended December
31, 2004 of $66,684,000, an increase of 10% over net income of $60,726,000
earned in 2003. Diluted earnings per share were $.94, up 9% from $.86 earned
in 2003. Net income generated returns of 1.18% on average assets and 17.03%
on average shareholders' equity for the year ended December 31, 2004.
"Republic had an outstanding year," commented Dana M. Cluckey, President
and Chief Executive Officer. "The Company's three business lines all
contributed to our profitability and growth and worked well together to serve
our customers. We believe the earning asset and deposit growth in 2004,
combined with our strong capital position and solid asset quality will provide
the momentum necessary for another successful year in 2005," added Mr.
Cluckey.
Net income for the fourth quarter was $16,804,000, an increase of 15% over
net income of $14,625,000 earned for the same period in 2003. Diluted
earnings per share were $.24, an increase of 14% over the $.21 earned in 2003.
Annualized returns on average assets and average shareholders' equity for the
fourth quarter of 2004 were 1.17% and 16.44%, respectively.
Results for 2004 reflect solid performance from the Company's three
business lines.
Retail Banking
* Retail banking results were very strong during 2004. The direct
consumer loan portfolio, primarily home equity loans, grew $123 million, or
20% over 2003. The Company also had excellent growth in core deposits, which
increased $133 million, or 9% for the year.
Commercial Banking
* The commercial loan portfolio grew $54 million, or 4% over 2003. SBA
closings for the year were a record $53 million, up 13% from 2003.
Mortgage Banking
* During 2004, the Company originated $2.0 billion in single-family
residential mortgages. In addition, the residential mortgage portfolio grew
$138 million, or 7% over 2003. At December 31, 2004, the Company's mortgage
loan pipeline of applications in process was $350 million.
Income Statement
Net interest income increased $7.4 million, or 5%, for the year ended
December 31, 2004 compared to 2003. The increase was primarily the result of
a 15% increase in average earning assets for the year. For the year ended
December 31, 2004, the Company's net interest margin was 2.83%. For the
quarter ended December 31, 2004, the net interest margin was 2.88%.
Total noninterest income, excluding mortgage banking income, increased
$2.8 million, or 13%, for the year ended December 31, 2004 compared to 2003.
The increase was primarily due to higher gains on sale of SBA loans.
Total noninterest expense decreased $10.6 million, or 10% for the year
ended December 31, 2004 compared to 2003. The decrease was primarily a result
of a decrease of $3.6 million in salaries and employee benefits related to
incentives, temporary services, employee benefits and payroll taxes reflecting
significantly lower residential mortgage closing volume for 2004 compared to
2003. The decrease in other noninterest expense of $6.8 million related to
decreases in state income taxes, loan collection expenses, advertising and
other expenses.
The Company's efficiency ratio for the year ended December 31, 2004 was
47.34%, which compares favorably to our peer group.
Asset Quality and Capital
The Company's asset quality remains very sound. Total non-performing
assets decreased $9.0 million, or 21%, from December 31, 2003. Net charge-
offs to total average loans were only 10 basis points for the year ended
December 31, 2004 and remain substantially below the Company's peer group.
During the fourth quarter of 2004, the Company repurchased 272,500 shares
at an average price of $15.47 per share under the 2003 Stock Repurchase
Program. For the year ended December 31, 2004, the Company repurchased
527,500 shares at an average price of $14.94. The 2003 Stock Repurchase
Program has 1,900,352 shares available for repurchase at December 31, 2004.
The Company's capital ratios continue to be well in excess of the
requirements for a well-capitalized bank. At December 31, 2004, the Company's
total risk-based capital ratio was a strong 13.00% and the Tier 1 leverage
ratio was 7.97%.
Other Announcements
As announced this week, Republic Bancorp was named to FORTUNE's "100 Best
Companies to Work For" for the fifth year. Republic ranked as the 3rd Best
Company to Work For and the #1 Best Small Company to Work For in the country.
Also, Republic ranked #1 of the Michigan-based companies on FORTUNE's list.
About the Company
Republic Bancorp Inc., with $5.7 billion in assets, is the third largest
bank holding company headquartered in Michigan and the 79th largest bank
holding company in the country. Its subsidiary, Republic Bank, serves
customers in Michigan, Ohio and Indiana with 95 retail, commercial and
mortgage banking offices and 90 ATMs. Republic has been the #1 Small Business
Administration bank lender based in Michigan for 10 years and one of the
Midwest's top retail mortgage lenders. Republic was recently named as the 3rd
Best Company to Work For by FORTUNE magazine (marking the fifth year on
FORTUNE's "100 Best Companies to Work For") and named to Working Mother
magazine's list of "100 Best Companies for Working Mothers" for the fourth
year in a row.
Information about Republic Bancorp's financial results and its products
and services, including on-line mortgage applications and its Internet banking
system, ExpressNet, can be accessed at http://www.republicbancorp.com .
Cash Dividend
The Company currently pays an annual cash dividend of $.44 per share,
which represents an annual yield of approximately 3% based on the Company's
current stock price.
Safe Harbor Statement
As with any statements other than those reflecting historical facts,
forward-looking statements contained in this announcement involve risk, and,
as such, future financial performance may differ from current expectations due
to a variety of marketplace factors. These factors include, without
limitation, those disclosed in Republic Bancorp's most recent filings on Form
10-K and Form 10-Q with the Securities and Exchange Commission.
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Dec. 31, Sept. 30, June 30, Dec. 31,
2004 2004 2004 2003
(Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $53,671 $61,070 $60,868 $63,858
Mortgage loans held
for sale 105,318 153,875 54,836 135,360
Securities available
for sale 620,794 682,343 754,632 607,450
Securities held to
maturity (at cost) 222,757 231,286 240,081 156,555
Loans 4,463,975 4,432,060 4,356,280 4,157,514
Less allowance for
loan losses (41,818) (44,167) (43,086) (40,271)
Net loans 4,422,157 4,387,893 4,313,194 4,117,243
Federal Home Loan
Bank stock (at cost) 80,511 80,508 80,503 80,500
Premises and equipment 26,493 26,868 27,400 26,928
Bank owned life insurance 112,978 111,883 110,813 108,330
Other assets 71,000 66,784 69,166 57,464
Total assets $5,715,679 $5,802,510 $5,711,493 $5,353,688
LIABILITIES
Noninterest-bearing
deposits $274,747 $283,813 $294,355 $256,265
Interest-bearing deposits:
NOW accounts 203,553 201,437 189,904 184,217
Savings and money market
accounts 1,103,675 1,049,146 1,065,516 1,054,857
Certificates of
deposit under
$100,000 662,357 666,538 665,841 678,758
Certificates of
deposit $100,000
or greater 801,879 769,141 608,565 641,172
Total interest-bearing
deposits 2,771,464 2,686,262 2,529,826 2,559,004
Total deposits 3,046,211 2,970,075 2,824,181 2,815,269
Federal funds purchased
and other
short-term borrowings 538,300 533,841 595,147 491,245
Short-term FHLB advances 215,000 403,000 391,000 280,000
Long-term FHLB advances
and reverse
repurchase agreements 1,390,878 1,388,052 1,411,003 1,286,726
Accrued expenses and
other liabilities 63,950 55,149 58,209 61,028
Long-term debt 50,000 50,000 50,000 50,000
Total liabilities 5,304,339 5,400,117 5,329,540 4,984,268
SHAREHOLDERS' EQUITY
Preferred stock,
$25 stated value:
$2.25 cumulative
and convertible;
5,000,000 shares
authorized,
none issued and
outstanding - - - -
Common stock,
$5 par value;
75,000,000 shares
authorized;
70,425,000,
70,413,000,
70,439,000,
and 69,879,000
issued and outstanding,
respectively 352,125 320,058 320,177 317,633
Capital surplus 61,005 52,367 53,709 50,358
Unearned compensation -
restricted stock (3,207) (3,674) (4,197) (1,666)
Retained earnings 3,634 34,580 24,414 3,893
Accumulated other
comprehensive loss (2,217) (938) (12,150) (798)
Total shareholders'
equity 411,340 402,393 381,953 369,420
Total liabilities and
shareholders' equity $5,715,679 $5,802,510 $5,711,493 $5,353,688
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Interest Income
Loans, including fees $64,413 $59,241 $241,049 $247,125
Investment securities and
FHLB stock dividends 9,864 7,287 41,330 18,555
Total interest income 74,277 66,528 282,379 265,680
Interest Expense
Deposits 14,451 13,207 53,179 56,305
Short-term borrowings 3,954 1,817 12,237 7,689
Long-term FHLB advances and
reverse repurchase agreements 15,723 14,732 62,813 54,850
Long-term debt 1,075 1,075 4,300 4,339
Total interest expense 35,203 30,831 132,529 123,183
Net interest income 39,074 35,697 149,850 142,497
Provision for loan losses 1,750 3,000 8,500 12,000
Net interest income after
provision for loan losses 37,324 32,697 141,350 130,497
Noninterest Income
Service charges 2,841 2,738 11,514 11,097
Mortgage banking income 6,441 8,218 22,739 38,976
Gain on sale of securities 497 691 2,461 2,190
Gain on sale of SBA loans 1,230 12 3,816 322
Income from bank owned
life insurance 1,095 1,472 4,648 5,519
Other noninterest income 1,034 1,140 2,141 2,675
Total noninterest income 13,138 14,271 47,319 60,779
Noninterest Expense
Salaries and employee
benefits 16,862 14,152 56,819 60,454
Occupancy expense of premises 2,584 2,615 10,243 10,296
Equipment expense 1,677 1,590 6,675 6,768
Other noninterest expense 5,203 7,967 20,338 27,136
Total noninterest expense 26,326 26,324 94,075 104,654
Income before income taxes 24,136 20,644 94,594 86,622
Provision for income taxes 7,332 6,019 27,910 25,896
Net income $16,804 $14,625 $66,684 $60,726
Basic earnings per share $.24 $.21 $.95 $.87
Diluted earnings per share $.24 $.21 $.94 $.86
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(In thousands, except operating data)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Operating Data (in millions):
Residential mortgage loan closings:
Fixed rate $214 $309 $978 $3,175
Adjustable rate 230 217 979 866
Total residential mortgage
loan closings $444 $526 $1,957 $4,041
Conventional loans $279 $322 $1,200 $3,042
Government loans 44 51 190 255
Jumbo and other loans 121 153 567 744
Total residential mortgage
loan closings $444 $526 $1,957 $4,041
Refinances (percent of total) 38% 38% 40% 66%
Performance Ratios (annualized for the quarter):
Return on average assets 1.17% 1.13% 1.18% 1.23%
Return on average equity 16.44% 16.10% 17.03% 17.33%
Net interest margin 2.88% 2.95% 2.83% 3.07%
Efficiency ratio (1) 50.00% 52.35% 47.34% 51.23%
Per Common Share Data:
Average common shares
outstanding - diluted 71,425 70,787 71,273 70,589
Cash dividends declared $.11 $.086 $.383 $.305
Book value $5.84 $5.29 $5.84 $5.29
Tangible book value $5.77 $5.20 $5.77 $5.20
Dec. 31, Sept. 30, June 30, Dec. 31,
2004 2004 2004 2003
Capital Ratios:
Shareholders' equity to assets 7.20% 6.93% 6.69% 6.90%
Tier 1 risk-based capital 11.91% 11.67% 11.77% 11.72%
Total risk-based capital 13.00% 12.82% 12.92% 12.85%
Tier 1 leverage 7.97% 7.80% 7.82% 8.04%
(1) Includes total noninterest expense, divided by total revenue (FTE),
excluding gain on sale of securities.
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Three Months Ended Three Months Ended
December 31, 2004 December 31, 2003
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $689 $3 1.42% $574 $1 0.37%
Mortgage loans
held for sale 143,697 2,091 5.82 156,944 2,287 5.83
Securities
available for
sale 634,176 7,357 4.60 515,901 6,127 4.71
Securities held
to maturity 227,877 2,613 4.59 98,297 1,139 4.64
Portfolio loans:
Commercial
loans 1,570,694 23,575 5.87 1,499,542 21,249 5.54
Residential
real estate
mortgage
loans 2,162,544 28,422 5.26 1,998,618 27,316 5.47
Installment
loans 726,132 10,325 5.64 608,758 8,389 5.47
Total loans,
net of
unearned
income 4,459,370 62,322 5.54 4,106,918 56,954 5.50
FHLB stock 80,733 829 4.07 80,750 1,024 5.03
Total
interest-
earning
assets 5,546,542 75,215 5.38 4,959,384 67,532 5.40
Allowance for
loan losses (44,749) (39,868)
Cash and due
from banks 56,550 55,396
Other assets 198,569 186,733
Total
assets $5,756,912 $5,161,645
Average Liabilities and Shareholders' Equity:
Interest-bearing
demand
deposits $201,091 $194 0.38% $187,742 $128 0.27%
Savings and
money market
accounts 1,091,774 3,895 1.42 1,080,141 3,486 1.28
Time deposits 1,467,204 10,362 2.80 1,322,256 9,593 2.88
Total
interest-
bearing
deposits 2,760,069 14,451 2.08 2,590,139 13,207 2.02
Short-term
borrowings 818,947 3,954 1.89 641,710 1,817 1.11
Long-term FHLB
advances and
reverse
repurchase
agreements 1,394,075 15,723 4.41 1,200,748 14,732 4.80
Long-term debt 50,000 1,075 8.60 50,000 1,075 8.60
Total interest-
bearing
liabil-
ities 5,023,091 35,203 2.76 4,482,597 30,831 2.71
Noninterest-
bearing
deposits 286,931 268,030
Other
liabilities 37,949 47,671
Total
liabil-
ities 5,347,971 4,798,298
Shareholders'
equity 408,941 363,347
Total
liabilities
and
shareholders'
equity $5,756,912 $5,161,645
Net interest
income/rate
spread (FTE) $40,012 2.62% $36,701 2.69%
FTE adjustment $938 $1,004
Impact of
noninterest-
bearing sources
of funds 0.26% 0.26%
Net interest
margin (FTE) 2.88% 2.95%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Year Ended Year Ended
December 31, 2004 December 31, 2003
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $585 $7 1.21% $322 $2 0.68%
Mortgage loans
held for sale 119,070 6,862 5.76 359,486 20,339 5.66
Securities
available for
sale 699,607 31,590 4.50 339,593 16,630 4.90
Securities held
to maturity 222,358 10,082 4.53 24,574 1,140 4.64
Portfolio loans:
Commercial loans 1,546,485 87,973 5.69 1,478,397 88,878 5.93
Residential real
estate mortgage
loans 2,089,464 109,446 5.24 1,864,960 103,118 5.53
Installment
loans 676,236 36,768 5.42 592,342 34,790 5.87
Total loans,
net of unearned
income 4,312,185 234,187 5.43 3,935,699 226,786 5.73
FHLB stock 80,722 3,651 4.51 79,700 3,978 4.99
Total interest-
earning assets 5,434,527 286,379 5.27 4,739,374 268,875 5.65
Allowance for
loan losses (43,016) (38,352)
Cash and due
from banks 54,642 63,898
Other assets 189,936 174,035
Total assets $5,636,089 $4,938,955
Average
Liabilities and
Shareholders'
Equity:
Interest-bearing
demand
deposits $192,728 $600 0.31% $181,947 $599 0.33%
Savings and money
market accounts 1,058,740 13,832 1.30 995,637 13,648 1.37
Time deposits 1,378,135 38,747 2.80 1,381,271 42,058 3.04
Total interest-
bearing
deposits 2,629,603 53,179 2.02 2,558,855 56,305 2.20
Short-term
borrowings 852,002 12,237 1.41 603,847 7,689 1.26
Long-term FHLB
advances and
reverse
repurchase
agreements 1,400,875 62,813 4.48 1,063,695 54,850 5.16
Long-term debt 50,000 4,300 8.60 50,563 4,339 8.58
Total interest-
bearing
liabilities 4,932,480 132,529 2.68 4,276,960 123,183 2.86
Noninterest-
bearing deposits 276,799 269,436
Other
liabilities 35,229 42,236
Total
liabilities 5,244,508 4,588,632
Shareholders'
equity 391,581 350,323
Total
liabilities and
shareholders'
equity $5,636,089 $4,938,955
Net interest
income/ Rate
spread (FTE) $153,850 2.59% $145,692 2.79%
FTE adjustment $4,000 $3,195
Impact of noninterest-
bearing sources of funds 0.24% 0.28%
Net interest margin (FTE) 2.83% 3.07%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Dec. 31, Sept. 30, June 30, Dec. 31,
2004 2004 2004 2003
Portfolio Loan Summary:
Commercial loans:
Commercial and industrial $32,632 $37,712 $40,292 $38,319
Commercial real estate
mortgage 1,542,660 1,517,746 1,512,948 1,482,814
Total commercial
loans 1,575,292 1,555,458 1,553,240 1,521,133
Residential real estate
mortgages 2,152,720 2,160,835 2,130,310 2,014,809
Installment loans (1) 735,963 715,767 672,730 621,572
Total portfolio loans $4,463,975 $4,432,060 $4,356,280 $4,157,514
Non-performing assets:
Non-accrual loans:
Commercial $17,744 $23,456 $22,889 $27,666
Residential real estate
mortgage 10,705 10,330 11,476 11,181
Installment 852 1,071 1,070 873
Total non-accrual loans 29,301 34,857 35,435 39,720
Restructured loans - - - -
Other real estate owned 4,160 4,161 3,854 2,718
Total non-performing
assets $33,461 $39,018 $39,289 $42,438
Allowance for Loan Losses
(for the quarter):
Balance at beginning of
period $44,167 $43,086 $41,556 $39,212
Loans charged off:
Commercial 753 1,279 1,131 1,618
Residential real estate
mortgage 379 227 391 54
Installment 386 327 397 669
Total charge-offs 1,518 1,833 1,919 2,341
Recoveries:
Commercial 17 410 1,235 263
Residential real estate
mortgage 35 32 - -
Installment 184 222 214 137
Total recoveries 236 664 1,449 400
Net charge-offs 1,282 1,169 470 1,941
Provision charged to expense 1,750 2,250 2,000 3,000
Reclassification of allowance
for loan losses
on unfunded loan
commitments(2) (2,817) - - -
Balance at end of period $41,818 $44,167 $43,086 $40,271
(1) Includes indirect installment loan balances at December 31, 2004,
September 30, 2004, June 30, 2004 and December 31, 2003 of $5.0 million, $6.2
million, $7.9 million and $13.4 million, respectively.
(2) During the fourth quarter of 2004, the Company reclassified $2.8
million of its allowance for loan losses to a separate allowance for probable
credit losses inherent in unfunded loan commitments. Net income and prior
period balances were not affected by this reclassification. The separate
allowance is included in "accrued expenses and other liabilities."
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
Dec. 31, Sept. 30, June 30, Dec. 31,
2004 2004 2004 2003
Asset Quality Ratios:
Non-performing assets to
loans and other real
estate owned .75% .88% .90% 1.02%
Non-performing assets to
total assets .59% .67% .69% .79%
Allowance for loan losses
to non-performing loans 142.72% 126.71% 121.59% 101.39%
Allowance for loan losses
to loans .94% 1.00% .99% .97%
Allowance for loan losses
to loans (excluding
residential real estate
mortgages) 1.81% 1.94% 1.94% 1.88%
Net charge-offs to average
loans: (1)
Commercial loans .19% .23% (.03%) .36%
Residential real estate
mortgage loans .06% .04% .08% .01%
Installment loans .11% .06% .11% .35%
Total loans .11% .11% .04% .19%
(1) Quarter-to-date, annualized.
SOURCE Republic Bancorp Inc.
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Related links:
http://www.republicbancorp.com
CONTACT:
Thomas F. Menacher, Exec. V.P., Treasurer &
CFO, tmenacher@republicbancorp.com , or Kristine D. Brenner,
Director of Investor Relations, kbrenner@republicbancorp.com ,
both of Republic Bancorp Inc., +1-989-725-7337
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