First Quarter Highlights Include:
* Record net income of $16.3 million, up 8%
* Earnings per share of $.25, up 7%
* Return on equity of 17.15%
* Strong annualized consumer loan growth of 15%
* Annualized core deposit growth of 15%
* Net charge-off ratio remains below peer at 11 basis points
ANN ARBOR, Mich., April 13 /PRNewswire-FirstCall/ -- Republic Bancorp Inc.
(Nasdaq: RBNC), today announced record net income for the quarter ended March
31, 2004 of $16,299,000, an increase of 8% over net income of $15,153,000
earned for the first quarter in 2003. Diluted earnings per share were $.25,
up 7% from $.24 earned in 2003. Net income generated annualized returns of
1.20% on average assets and 17.15% on average shareholders' equity for the
first quarter of 2004.
"The Company's earnings for the quarter were outstanding," commented Dana
Cluckey, President and Chief Executive Officer. "Our retail banking business
line had strong growth in consumer loans and core deposits, while commercial
banking had solid loan growth, especially in the Small Business Administration
lending area. Mortgage banking results reflected lower refinance and closing
volumes for the quarter, while increased application volumes in March should
provide increased closing volume in the second quarter. Our balanced business
model delivered strong growth in quality earning assets and core deposits, and
solid control over costs," added Mr. Cluckey.
Results for the first quarter of 2004 reflect strong performance for the
Company's commercial and retail banking business lines and increasing momentum
for the mortgage banking business line.
* Retail banking results were very strong during the quarter. The
consumer loan portfolio (excluding indirect loans) grew $24 million, or 15%
annualized over December 31, 2003. The Company also had excellent growth in
core deposits, which increased $53 million, or 15% annualized for the quarter.
* The commercial loan portfolio grew $22 million, or 6% annualized over
December 31, 2003. SBA closings for the quarter were $12 million, up 52% from
the first quarter of 2003.
* During the first quarter of 2004, the Company originated $425 million
in single-family residential mortgages. At March 31, 2004, the Company's
mortgage loan pipeline of applications in process was $580 million, an
increase of 86% over December 31, 2003.
Net interest income increased $1.4 million, or 4%, for the quarter ended
March 31, 2004 compared to the first quarter of 2003 and increased $182,000,
or 1%, over the fourth quarter of 2003. These increases are primarily the
result of a 17% increase in average earning assets for the first quarter of
2004 compared to the first quarter of 2003 and 5% growth in average earning
assets over the quarter ended December 31, 2003. For the quarter ended March
31, 2004, the Company's net interest margin was 2.82%, compared to 2.95% for
the fourth quarter of 2003.
Total noninterest expense decreased $3.4 million, or 14% for the quarter
ended March 31, 2004 compared to the first quarter of 2003. The decrease was
primarily due to a $2.3 million decrease in salaries and employee benefits and
a $1 million decrease in other noninterest expense from the first quarter of
2003. The Company's efficiency ratio improved to 45.70% in the quarter ended
March 31, 2004 compared to 49.82% in the first quarter of 2003.
The Company's asset quality remains very sound. Total non-performing
assets decreased $2.3 million, or 5%, from December 31, 2003. Net charge-offs
to total average loans were only 11 basis points for the quarter and remain
substantially below the Company's peer group. The Company's allowance for
loan losses to loans, excluding residential real estate mortgages, was 1.90%
at March 31, 2004.
During the first quarter of 2004, the Company repurchased 65,000 shares at
an average price of $13.68 per share under the 2003 Stock Repurchase Program.
The 2003 Stock Repurchase Program allows for the repurchase of up to 2,200,000
shares of which 2,143,000 shares are available for repurchase at March 31,
2004.
The Company's capital ratios continue to be in excess of the requirements
for a well-capitalized bank. At March 31, 2004, the Company's total risk-
based capital ratio was a strong 12.99% and the Tier 1 leverage ratio was
7.89%.
About the Company
Republic Bancorp Inc., with $5.6 billion in assets, is the third largest
bank holding company headquartered in Michigan and the 82nd largest bank
holding company in the country. Its subsidiary, Republic Bank, serves
customers in Michigan, Ohio and Indiana with 93 retail, commercial and
mortgage banking offices and 93 ATMs. The Company is the #1 Small Business
Administration bank lender based in Michigan for the 10th consecutive year and
one of the Midwest's top retail mortgage lenders. Republic was recently named
as the 5th Best Company to Work For by FORTUNE magazine (marking the fourth
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 three
years 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 $.38 per common
share, which represents a yield of approximately 2.8% 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 filing on Form
10-K with the Securities and Exchange Commission.
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31, Dec. 31, Sept. 30, March 31,
2004 2003 2003 2003
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $56,748 $63,858 $76,566 $77,281
Mortgage loans held for sale 140,848 135,360 391,369 324,444
Securities available for sale 713,265 607,450 459,933 240,391
Securities held to maturity
(at cost) 235,552 156,555 - -
Loans 4,166,900 4,157,514 3,999,974 3,857,837
Less allowance for
loan losses (41,556) (40,271) (39,212) (37,185)
Net loans 4,125,344 4,117,243 3,960,762 3,820,652
Federal Home Loan
Bank stock (at cost) 80,503 80,500 80,502 78,471
Premises and equipment 28,570 26,928 26,564 27,452
Bank owned life insurance 109,633 108,330 106,858 88,193
Other assets 59,996 57,464 57,771 55,383
Total assets $5,550,459 $5,353,688 $5,160,325 $4,712,267
LIABILITIES
Noninterest-bearing deposits $273,056 $256,265 $287,640 $274,956
Interest-bearing deposits:
NOW accounts 182,229 184,217 183,195 176,454
Savings and
money market accounts 1,064,319 1,054,857 1,110,161 968,591
Certificates of deposit 1,370,765 1,319,930 1,340,925 1,442,928
Total interest-bearing
deposits 2,617,313 2,559,004 2,634,281 2,587,973
Total deposits 2,890,369 2,815,269 2,921,921 2,862,929
Federal funds purchased
and other
short-term borrowings 560,044 491,245 483,136 225,910
Short-term FHLB advances 175,000 280,000 250,000 125,000
Long-term FHLB advances
and reverse
repurchase agreements 1,429,244 1,286,726 1,026,529 1,025,668
Accrued expenses and
other liabilities 58,902 61,028 73,437 81,698
Long-term debt 50,000 50,000 50,000 50,000
Total liabilities 5,163,559 4,984,268 4,805,023 4,371,205
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; 64,006,000,
63,527,000, 63,170,000, and
63,316,000 issued and
outstanding, respectively 320,028 317,633 287,133 287,802
Capital surplus 53,559 50,358 37,953 40,669
Unearned compensation -
restricted stock (4,731) (1,666) (2,058) (2,682)
Retained earnings 14,125 3,893 35,274 14,634
Accumulated other
comprehensive income (loss) 3,919 (798) (3,000) 639
Total shareholders'
equity 386,900 369,420 355,302 341,062
Total liabilities and
shareholders'
equity $5,550,459 $5,353,688 $5,160,325 $4,712,267
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended
March 31,
2004 2003
Interest Income
Loans, including fees $57,996 $62,936
Investment securities 9,823 2,814
Total interest income 67,819 65,750
Interest Expense
Deposits 13,037 15,494
Short-term borrowings 2,018 1,511
Long-term FHLB advances and
reverse repurchase agreements 15,810 13,106
Long-term debt 1,075 1,114
Total interest expense 31,940 31,225
Net interest income 35,879 34,525
Provision for loan losses 2,500 3,000
Net interest income after
provision for loan losses 33,379 31,525
Noninterest Income
Service charges 2,697 2,652
Mortgage banking income 5,174 9,736
Gain on sale of securities 688 448
Income from bank owned life insurance 1,303 1,295
Other noninterest income 952 730
Total noninterest income 10,814 14,861
Noninterest Expense
Salaries and employee benefits 12,089 14,415
Occupancy expense of premises 2,619 2,643
Equipment expense 1,674 1,705
Other noninterest expense 4,640 5,619
Total noninterest expense 21,022 24,382
Income before income taxes 23,171 22,004
Provision for income taxes 6,872 6,851
Net income $16,299 $15,153
Basic earnings per share $.26 $.24
Diluted earnings per share $.25 $.24
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands, except operating data)
Three Months Ended
March 31,
2004 2003
Operating Data (in millions):
Residential mortgage loan closings:
Fixed rate $242 $823
Adjustable rate 183 165
Total residential
mortgage loan closings $425 $988
Conventional loans $307 $819
Government loans 52 63
Jumbo and other loans 66 106
Total residential mortgage
loan closings $425 $988
Refinances (percent of total) 47% 75%
Performance Ratios (annualized for the quarter):
Return on average assets 1.20% 1.30%
Return on average equity 17.15% 17.88%
Net interest margin 2.82% 3.23%
Efficiency ratio (1) 45.70% 49.82%
Per Common Share Data:
Average common shares
outstanding - diluted 64,622 64,132
Cash dividends declared $.095 $.077
Book value $6.04 $5.39
Tangible book value $5.96 $5.28
Mar. 31, Dec. 31, Sept. 30, Mar. 31,
2004 2003 2003 2003
Capital Ratios:
Shareholders' equity to assets 6.97% 6.90% 6.89% 7.24%
Tier 1 risk-based capital 11.84% 11.72% 11.57% 11.63%
Total risk-based capital 12.99% 12.85% 12.70% 12.75%
Tier 1 leverage 7.89% 8.04% 7.90% 8.26%
(1) Includes total noninterest expense, divided by total revenue,
excluding gain on sale of securities.
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Three Months Ended Three Months Ended
March 31, 2004 March 31, 2003
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $439 $1 0.75% $225 $1 1.82%
Mortgage loans held
for sale 92,827 1,374 5.92 437,729 6,270 5.73
Securities available
for sale 671,583 7,583 4.53 192,554 2,152 4.53
Securities held to
maturity 188,664 2,170 4.60 - - -
Portfolio loans:
Commercial
loans 1,526,471 21,116 5.47 1,474,131 23,159 6.28
Residential
real estate
mortgage
loans 2,027,648 27,086 5.34 1,688,890 24,413 5.78
Installment
loans 628,980 8,420 5.37 587,865 9,094 6.27
Total loans,
net of unearned
income 4,183,099 56,622 5.39 3,750,886 56,666 6.06
FHLB stock 80,734 1,057 5.25 78,468 1,111 5.67
Total
interest-earning
assets 5,217,346 68,807 5.26 4,459,862 66,200 5.95
Allowance for
loan losses (40,923) (36,508)
Cash and due
from banks 52,282 64,278
Other assets 189,026 164,421
Total assets $5,417,731 $4,652,053
Average Liabilities and Shareholders' Equity
Interest-bearing
demand deposits $183,744 $124 0.27% $176,421 $187 0.43%
Savings deposits 1,041,338 3,467 1.34 929,538 3,747 1.64
Time deposits 1,347,838 9,446 2.81 1,451,829 11,560 3.23
Total
interest-bearing
deposits 2,572,920 13,037 2.03 2,557,788 15,494 2.46
Short-term
borrowings 727,657 2,018 1.10 421,399 1,511 1.43
Long-term FHLB
advances and
reverse repurchase
agreements 1,396,219 15,810 4.48 992,163 13,106 5.28
Long-term debt 50,000 1,075 8.60 52,250 1,114 8.53
Total
interest-bearing
liabilities 4,746,796 31,940 2.68 4,023,600 31,225 3.13
Noninterest-bearing
deposits 254,371 250,820
Other liabilities 36,479 38,677
Total
liabilities 5,037,646 4,313,097
Shareholders'
equity 380,085 338,956
Total liabilities
and shareholders'
equity $5,417,731 $4,652,053
Net interest income/
Rate spread (FTE) $36,867 2.58% $34,975 2.82%
FTE adjustment $988 $450
Impact of noninterest-
bearing sources of funds 0.24% 0.31%
Net interest margin (FTE) 2.82% 3.13%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
March 31, Dec. 31, Sept. 30, March 31,
2004 2003 2003 2003
Portfolio Loan Summary:
Commercial loans:
Commercial and
industrial $38,659 $38,319 $41,668 $45,648
Commercial real
estate mortgage 1,504,112 1,482,814 1,432,260 1,423,007
Total commercial
loans 1,542,771 1,521,133 1,473,928 1,468,655
Residential real
estate mortgages 1,982,025 2,014,809 1,929,312 1,807,318
Installment loans (1) 642,104 621,572 596,734 581,864
Total portfolio
loans $4,166,900 $4,157,514 $3,999,974 $3,857,837
Non-performing assets:
Non-accrual loans:
Commercial $24,124 $27,666 $23,699 $19,920
Residential real
estate mortgage 11,656 11,181 11,456 13,035
Installment 639 873 1,241 2,531
Total non-accrual
loans 36,419 39,720 36,396 35,486
Restructured loans - - - -
Other real estate owned 3,729 2,718 3,219 3,459
Total non-performing
assets $40,148 $42,438 $39,615 $38,945
Allowance for Loan Losses (for the quarter):
Balance at beginning
of period $40,271 $39,212 $38,269 $36,077
Loans charged off:
Commercial 1,344 1,618 1,816 1,146
Residential real
estate mortgage 71 54 169 430
Installment 420 669 516 702
Total charge-offs 1,835 2,341 2,501 2,278
Recoveries:
Commercial 427 263 250 84
Residential real
estate mortgage - - - -
Installment 193 137 194 302
Total recoveries 620 400 444 386
Net charge-offs 1,215 1,941 2,057 1,892
Provision charged
to expense 2,500 3,000 3,000 3,000
Balance at end of period $41,556 $40,271 $39,212 $37,185
(1) Includes indirect installment loan balances at March 31, 2004,
December 31, 2003, September 30, 2003 and March 31, 2003 of $10.4 million,
$13.4 million, $17.1 million and $28.9 million, respectively.
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
March 31, Dec. 31, Sept. 30, March 31,
2004 2003 2003 2003
Asset Quality Ratios:
Non-performing assets
to loans and
other real estate
owned (1) .93% .99% .90% .93%
Non-performing assets
to total assets .72% .79% .77% .83%
Allowance for loan losses
to non-performing
loans 114.11% 101.39% 107.74% 104.79%
Allowance for loan losses
to loans (2) 1.00% .97% .98% .96%
Allowance for loan
losses to loans
(excluding residential
real estate
mortgages) (2) 1.90% 1.88% 1.89% 1.81%
Net charge-offs to
average loans: (1,3)
Commercial loans .24% .36% .43% .29%
Residential real estate
mortgage loans .01% .01% .03% .08%
Installment loans .14% .35% .22% .27%
Total loans .11% .18% .19% .18%
Earnings coverage
of net
charge-offs (3,4) 20.56x 11.83x 12.00x 12.98x
(1) Includes mortgage loans held for sale.
(2) Excludes mortgage loans held for sale.
(3) Quarter-to-date, annualized.
(4) Operating earnings before taxes plus the provision for loan losses
divided by net charge-offs.
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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