2005 Highlights Include:
* Record net income of $69.2 million
* Earnings per share of $.90, up 6%
* Return on equity of 16.90%
* Commercial loan growth of 8%
* Efficiency ratio of 46.85%, well below peer
ANN ARBOR, Mich., Jan. 17 /PRNewswire-FirstCall/ -- Republic Bancorp Inc.,
(Nasdaq: RBNC), today announced record net income for the year ended December
31, 2005 of $69,181,000, compared to net income of $66,684,000 earned in 2004.
Diluted earnings per share were $.90, up 6% from $.85 earned in 2004. Net
income generated returns of 1.15% on average assets and 16.90% on average
shareholders' equity for the year ended December 31, 2005.
"We are very pleased to report another year of record income for
Republic," 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. Our return on equity
of approximately 17% continues to be well in excess of our peer group (the
largest 51-100 bank holding companies in the country)."
"As we announced last week, we are also very proud to be recognized again
as one of America's 100 Best Companies to Work For by FORTUNE and ranking as
the 17th Best Company to Work For and the top rated bank in the country. As a
company, we firmly believe in individual recognition and providing our
employees the opportunity for financial and professional growth. All of our
employees are shareholders of the Company and we believe that motivated
employees will deliver exceptional service to our customers, resulting in
increased value for our shareholders," added Mr. Cluckey.
Net income for the fourth quarter was $17,177,000, compared to net income
of $16,804,000 earned for the same period in 2004. Diluted earnings per share
were $.23, an increase of 6% over the $.21 earned in 2004. Annualized returns
on average assets and average shareholders' equity for the fourth quarter 2005
were 1.13% and 16.95%, respectively.
Results for 2005 reflect solid loan closings from each of the Company's
three business lines. The Commercial Banking division had a record $696
million of loan closings, up 23% compared to 2004. Additionally, the
commercial division had SBA loan closings of $46 million during 2005. The
Company's commercial loan portfolio grew $123 million to $1.7 billion, or 8%
over 2004.
The Retail Banking division had consumer loan closings of $428 million
during 2005, primarily home equity lines of credit and term loans. Total
retail deposits grew $48 million, or 2% compared to December 31, 2004.
During 2005, the Mortgage Banking division originated $1.5 billion of
single family residential mortgages, with 38% of these loan closings being
adjustable rate loans. At December 31, 2005, the Company's mortgage loan
pipeline of applicants in process was $303 million.
Income Statement
Net interest income increased $4.2 million, or 3%, for the year ended
December 31, 2005 compared to 2004. The increase was primarily the result of
a 6% increase in average earning assets for the year. For the quarter and
year ended December 31, 2005, the Company's net interest margin was 2.71% and
2.73%, respectively.
Total noninterest income, excluding mortgage banking income, was $24.6
million for the year ended December 31, 2005, which was consistent with 2004.
Other noninterest income for the quarter ended December 31, 2005 includes
gains totaling $513,000 from the sale of $16.8 million of consumer loans, as
the Company sold higher loan to value loans to manage credit risk in its
consumer loan portfolio. Also, during the quarter ended December 31, 2005 and
included in other noninterest income, the Company realized proceeds of
$516,000 from the demutualization of an insurance company that provided
annuity contracts to D&N Bank. An additional $568,000 of proceeds from the
sale of the stock is reflected in gain on sale of securities for the quarter
ended December 31, 2005.
Mortgage banking income for the year ended December 31, 2005 was $18.7
million, a decrease of 18% from 2004. The decrease was primarily a result of
a 17% decrease in mortgage loan sales. Mortgage banking income for the
quarter ended December 31, 2005, includes a gain on sale of mortgage servicing
rights of $999,000. During the quarter, the Company sold $536 million of
mortgage loans serviced for others, of which 52% were mortgage servicing
rights originated by the Company during 2005.
Total noninterest expense decreased $814,000, or 1%, for the year ended
December 31, 2005 compared to 2004. The decrease was a result of a decrease
of $1.3 million in other noninterest expense primarily reflecting lower voice
and data communication expenses and other miscellaneous expenses.
The Company's efficiency ratio for the year ended December 31, 2005 was
46.85%, which compares very favorably to our peer group.
Asset Quality and Capital
Net charge-offs to total average loans were 12 basis points for the year
ended December 31, 2005 and remain substantially below the Company's peer
group. Total non-accrual loans increased $19 million from December 31, 2004,
due primarily to increases in commercial loans and residential real estate
mortgage loans.
For the year ended December 31, 2005, 3,037,500 shares were repurchased
under the Company's 2003 and 2005 Stock Repurchase Programs. During the
fourth quarter of 2005, the Company repurchased 409,000 shares at an average
price of $12.67 per share and has 1,062,852 shares available for repurchase at
December 31, 2005.
The Company's capital ratios continue to be well in excess of the
requirements for a well-capitalized bank. At December 31, 2005, the Company's
Total risk-based capital ratio was 12.32% and the Tier 1 leverage ratio was
7.57%.
About the Company
Republic Bancorp Inc., with $6.1 billion in assets, is the third largest
bank holding company headquartered in Michigan and the 81st 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 consistently been the #1
Small Business Administration bank lender based in Michigan and one of the
Midwest's top retail mortgage lenders. Republic was named the 17th Best
Company to Work For by FORTUNE magazine (marking the 6th year on FORTUNE's
"100 Best Companies to Work For" list) and named to Working Mother magazine's
list of "100 Best Companies for Working Mothers" for the fifth year in a row.
Information about Republic Bancorp Inc.'s financial results and its
products and services, including on-line banking and mortgage applications 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 3.6% 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,
2005 2005 2005 2004
(Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $52,527 $68,395 $55,575 $53,671
Mortgage loans held for sale 38,259 91,844 143,589 105,318
Securities available for sale 862,690 831,820 835,285 620,794
Securities held to maturity
(at cost) 227,304 237,059 252,527 222,757
Loans 4,628,258 4,585,988 4,533,129 4,463,975
Less allowance for loan
losses (42,122) (41,946) (41,871) (41,818)
Net loans 4,586,136 4,544,042 4,491,258 4,422,157
Federal Home Loan Bank
stock (at cost) 80,525 80,521 80,514 80,511
Premises and equipment 26,586 26,690 25,687 26,493
Bank owned life insurance 116,519 115,498 114,414 112,978
Other assets 91,220 85,613 76,379 69,298
Total assets $6,081,766 $6,081,482 $6,075,228 $5,713,977
LIABILITIES
Noninterest-bearing
deposits $284,932 $295,124 $308,730 $274,747
Interest-bearing deposits:
NOW accounts 187,190 184,476 196,221 203,553
Savings and money market
accounts 932,048 977,221 988,449 1,100,333
Retail certificates of
deposit 1,102,188 1,049,334 1,013,567 879,361
Wholesale deposits 636,585 708,452 528,119 588,217
Total interest-bearing
deposits 2,858,011 2,919,483 2,726,356 2,771,464
Total deposits 3,142,943 3,214,607 3,035,086 3,046,211
Federal funds purchased
and other short-term
borrowings 709,300 641,200 719,775 538,300
Short-term FHLB advances 218,000 190,000 362,500 215,000
Long-term FHLB advances and
security repurchase
agreements 1,489,432 1,515,877 1,434,934 1,390,878
Accrued expenses and other
liabilities 67,632 64,570 63,826 63,950
Long-term debt 50,000 50,000 50,000 50,000
Total liabilities 5,677,307 5,676,254 5,666,121 5,304,339
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;
100,000,000 shares
authorized; 74,976,000,
75,309,000, 76,126,000,
and 77,468,000 issued and
outstanding, respectively 374,882 342,315 346,026 352,125
Capital surplus 41,491 40,030 47,556 59,303
Unearned compensation -
restricted stock (4,770) (5,623) (6,323) (3,207)
Retained earnings 3,114 32,692 23,024 3,634
Accumulated other
comprehensive loss (10,258) (4,186) (1,176) (2,217)
Total shareholders'
equity 404,459 405,228 409,107 409,638
Total liabilities and
shareholders' equity $6,081,766 $6,081,482 $6,075,228 $5,713,977
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,
2005 2004 2005 2004
Interest Income
Loans, including fees $73,381 $64,413 $275,858 $241,049
Investment securities and
FHLB stock dividends 12,890 9,864 50,342 41,330
Total interest income 86,271 74,277 326,200 282,379
Interest Expense
Deposits 21,737 14,451 72,710 53,179
Short-term borrowings 8,823 3,954 31,915 12,237
Long-term FHLB advances and
security repurchase
agreements 15,759 15,723 63,239 62,813
Long-term debt 1,075 1,075 4,300 4,300
Total interest expense 47,394 35,203 172,164 132,529
Net interest income 38,877 39,074 154,036 149,850
Provision for loan losses 1,500 1,750 5,800 8,500
Net interest income after
provision for loan losses 37,377 37,324 148,236 141,350
Noninterest Income
Service charges 3,155 2,841 12,162 11,514
Mortgage banking income 4,856 6,441 18,673 22,739
Gain on sale of securities 611 497 1,785 2,461
Gain on sale of SBA loans 889 1,230 2,470 3,816
Income from bank owned life
insurance 1,033 1,095 4,209 4,648
Other noninterest income 1,825 1,034 4,005 2,141
Total noninterest income 12,369 13,138 43,304 47,319
Noninterest Expense
Salaries and employee benefits 16,427 16,862 57,530 56,819
Occupancy expense of premises 2,672 2,584 10,471 10,243
Equipment expense 1,460 1,677 6,248 6,675
Other noninterest expense 4,673 5,203 19,012 20,338
Total noninterest expense 25,232 26,326 93,261 94,075
Income before income taxes 24,514 24,136 98,279 94,594
Provision for income taxes 7,337 7,332 29,098 27,910
Net income $17,177 $16,804 $69,181 $66,684
Basic earnings per share $.23 $.22 $.91 $.86
Diluted earnings per share $.23 $.21 $.90 $.85
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(In thousands, except operating data)
Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
Operating Data (in millions):
Residential mortgage loan
closings:
Fixed rate $210 $214 $950 $978
Adjustable rate 127 230 576 979
Total residential
mortgage loan closings $337 $444 $1,526 $1,957
Conventional loans $158 $214 $785 $945
Government loans 26 44 133 190
Construction loans 43 65 190 255
Jumbo and other loans 110 121 418 567
Total residential
mortgage loan closings $337 $444 $1,526 $1,957
Refinances (percent of total) 41% 38% 39% 40%
Mortgage loan sales $240 $364 $1,015 $1,220
Commercial loan closings:
Commercial loans $197 $151 $696 $564
SBA loans 11 13 46 53
Total commercial loan
closings $208 $164 $742 $617
Consumer loan closings: $100 $107 $428 $498
Performance Ratios (annualized
for the quarter):
Return on average assets 1.13% 1.17% 1.15% 1.18%
Return on average equity 16.95% 16.44% 16.90% 17.03%
Net interest margin 2.71% 2.88% 2.73% 2.83%
Efficiency ratio (1) 49.03% 50.00% 46.85% 47.34%
Per Common Share Data:
Average common shares
outstanding - diluted 75,853 78,567 77,074 78,401
Cash dividends declared $.11 $.10 $.41 $.348
Book value $5.39 $5.29 $5.39 $5.29
Tangible book value $5.34 $5.22 $5.34 $5.22
Dec. 31, Sept. 30, June 30, Dec. 31,
2005 2005 2005 2004
Capital Ratios:
Shareholders' equity to assets 6.65% 6.66% 6.73% 7.17%
Tier 1 risk-based capital 11.24% 11.18% 11.38% 11.87%
Total risk-based capital 12.32% 12.27% 12.50% 12.96%
Tier 1 leverage 7.57% 7.52% 7.57% 7.94%
(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, 2005 December 31, 2004
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $912 $10 4.54% $689 $3 1.42%
Mortgage loans
held for sale 67,306 1,014 6.02 143,697 2,091 5.82
Securities available
for sale:
Taxable 643,608 7,581 4.71 427,399 4,476 4.19
Tax-exempt 203,611 2,644 5.15 206,777 2,881 5.47
Securities held
to maturity 233,391 2,673 4.58 227,877 2,613 4.59
Portfolio loans:
Commercial
loans 1,702,473 30,225 6.95 1,570,694 23,575 5.87
Residential
real estate
mortgage
loans 2,168,307 28,987 5.35 2,162,544 28,422 5.26
Installment
loans 755,571 13,155 6.91 726,132 10,325 5.64
Total loans,
net of
unearned
income 4,626,351 72,367 6.19 4,459,370 62,322 5.54
FHLB stock 80,521 813 4.01 80,733 829 4.07
Total
interest-
earning
assets 5,855,700 87,102 5.90 5,546,542 75,215 5.38
Allowance for
loan losses (41,999) (44,749)
Cash and due
from banks 49,600 56,550
Other assets 226,649 198,569
Total
assets $6,089,950 $5,756,912
Average Liabilities and Shareholders' Equity:
Interest-bearing
demand deposits $183,100 $241 0.52% $201,091 $194 0.38%
Savings and
money market
accounts 962,045 5,046 2.08 1,088,437 3,877 1.42
Retail certificates
of deposit 1,076,896 9,454 3.48 876,857 6,770 3.06
Wholesale
deposits 695,984 6,996 3.99 593,684 3,610 2.41
Total
interest-
bearing
deposits 2,918,025 21,737 2.96 2,760,069 14,451 2.08
Short-term
borrowings 849,750 8,823 4.06 818,947 3,954 1.89
Long-term FHLB
advances and
security repurchase
agreements 1,534,208 15,759 4.02 1,394,075 15,723 4.41
Long-term debt 50,000 1,075 8.60 50,000 1,075 8.60
Total
interest-
bearing
liabilities 5,351,983 47,394 3.49 5,023,091 35,203 2.76
Noninterest-
bearing deposits 285,165 286,931
Other liabilities 47,539 37,949
Total
liabilities 5,684,687 5,347,971
Shareholders'
equity 405,263 408,941
Total
liabilities
and
shareholders'
equity $6,089,950 $5,756,912
Net interest
income/rate
spread (FTE) $39,708 2.41% $40,012 2.62%
FTE adjustment $831 $938
Impact of noninterest-
bearing sources of funds 0.30% 0.26%
Net interest margin (FTE) 2.71% 2.88%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Year Ended Year Ended
December 31, 2005 December 31, 2004
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $1,218 $32 2.64% $585 $7 1.21%
Mortgage loans
held for sale 95,470 5,644 5.91 119,070 6,862 5.76
Securities available
for sale:
Taxable 607,531 28,040 4.62 483,900 19,242 3.98
Tax-exempt 208,178 11,187 5.37 215,707 12,348 5.72
Securities held
to maturity 243,142 11,130 4.58 222,358 10,082 4.53
Portfolio loans:
Commercial
loans 1,641,529 109,104 6.65 1,546,485 87,973 5.69
Residential
real estate
mortgage
loans 2,149,873 112,968 5.25 2,089,464 109,446 5.24
Installment
loans 747,952 48,142 6.44 676,236 36,768 5.42
Total loans,
net of unearned
income 4,539,354 270,214 5.95 4,312,185 234,187 5.43
FHLB stock 80,614 3,459 4.29 80,722 3,651 4.51
Total
interest-
earning
assets 5,775,507 329,706 5.71 5,434,527 286,379 5.27
Allowance for
loan losses (41,962) (43,016)
Cash and due
from banks 49,841 54,642
Other assets 214,205 189,936
Total
assets $5,997,591 $5,636,089
Average Liabilities and Shareholders' Equity:
Interest-bearing
demand
deposits $194,134 $959 0.49% $192,728 $600 0.31%
Savings and
money market
accounts 1,005,075 17,883 1.78 1,043,983 13,629 1.30
Retail certificates
of deposit 1,002,776 33,055 3.30 882,525 27,741 3.14
Wholesale
deposits 597,647 20,813 3.48 510,367 11,209 2.19
Total
interest-
bearing
deposits 2,799,632 72,710 2.60 2,629,603 53,179 2.02
Short-term
borrowings 960,611 31,915 3.32 852,002 12,237 1.41
Long-term FHLB
advances and
security
repurchase
agreements 1,450,456 63,239 4.36 1,400,875 62,813 4.48
Long-term debt 50,000 4,300 8.60 50,000 4,300 8.60
Total
interest-
bearing
liabilities 5,260,699 172,164 3.27 4,932,480 132,529 2.68
Noninterest-bearing
deposits 283,451 276,799
Other liabilities 43,986 35,229
Total
liabilities 5,588,136 5,244,508
Shareholders'
equity 409,455 391,581
Total liabilities
and
shareholders'
equity $5,997,591 $5,636,089
Net interest
income/rate
spread (FTE) $157,542 2.44% $153,850 2.59%
FTE adjustment $3,506 $4,000
Impact of
noninterest-
bearing sources
of funds 0.29% 0.24%
Net interest
margin (FTE) 2.73% 2.83%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Dec. 31, Sept. 30, June 30, Dec. 31,
2005 2005 2005 2004
Portfolio Loan Summary:
Commercial loans:
Commercial and
industrial $28,314 $30,390 $29,753 $32,632
Commercial real estate
mortgage 1,669,556 1,647,460 1,612,718 1,542,660
Total commercial
loans 1,697,870 1,677,850 1,642,471 1,575,292
Residential real
estate mortgages 2,193,128 2,146,613 2,137,046 2,152,720
Installment loans 737,260 761,525 753,612 735,963
Total portfolio
loans $4,628,258 $4,585,988 $4,533,129 $4,463,975
Non-Performing Assets:
Non-accrual loans:
Commercial $27,344 $24,913 $14,550 $17,744
Residential real estate
mortgage 19,026 13,636 12,202 10,705
Installment 2,413 1,361 1,100 852
Total non-accrual
loans 48,783 39,910 27,852 29,301
Other real estate owned:
Commercial 8,575 9,089 4,441 650
Residential real estate
mortgage 3,029 3,331 3,399 2,720
Installment 712 687 1,077 790
Total other real estate
owned 12,316 13,107 8,917 4,160
Total non-performing
assets $61,099 $53,017 $36,769 $33,461
Allowance for Loan Losses (for the quarter):
Balance at beginning
of period $41,946 $41,871 $41,855 $44,167
Loans charged off:
Commercial 1,387 924 907 753
Residential real
estate mortgage 340 577 719 379
Installment 294 345 270 386
Total charge-offs 2,021 1,846 1,896 1,518
Recoveries:
Commercial 334 96 242 17
Residential real
estate mortgage 135 219 17 35
Installment 228 206 253 184
Total recoveries 697 521 512 236
Net charge-offs 1,324 1,325 1,384 1,282
Provision charged
to expense 1,500 1,400 1,400 1,750
Reclassification of
allowance for loan losses
on unfunded loan
commitments(1) - - - (2,817)
Balance at end of period $42,122 $41,946 $41,871 $41,818
(1) 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
(Dollars in thousands)
Dec. 31, Sept. 30, June 30, Dec. 31,
2005 2005 2005 2004
Asset Quality Ratios:
Non-performing assets to
loans and other
real estate owned 1.32% 1.15% .81% .75%
Non-performing assets
to total assets 1.00% .87% .61% .59%
Allowance for loan losses
to non-performing loans 86.35% 105.10% 150.33% 142.72%
Allowance for loan losses
to loans .91% .91% .92% .94%
Allowance for loan losses
to loans (excluding
residential real estate
mortgages) 1.73% 1.72% 1.75% 1.81%
Net charge-offs to average loans: (1)
Commercial loans .25% .20% .16% .19%
Residential real estate
mortgage loans .04% .07% .13% .06%
Installment loans .03% .07% .01% .11%
Total loans .11% .12% .12% .11%
(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 , of
Republic Bancorp Inc., +1-989-725-7337
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