First Quarter Highlights Include: * Earnings per share of $.22 * Return on
equity of 16.01% * Total assets of $6.2 billion * Annualized portfolio loan
growth of 10% * Efficiency ratio of 44.85%, well below peer
ANN ARBOR, Mich., April 18 /PRNewswire-FirstCall/ -- Republic Bancorp
Inc. (Nasdaq: RBNC), today announced net income for the quarter ended March
31, 2006 of $16,417,000, compared to net income of $17,307,000 earned in
the first quarter of 2005. Diluted earnings per share were $.22 for the
quarter, consistent with the first quarter of 2005. Net income generated
returns of 1.07% on average assets and 16.01% on average shareholders'
equity for the quarter ended March 31, 2006.
"We are pleased to report another quarter of solid performance for the
Company," commented Dana M. Cluckey, President and Chief Executive Officer.
"Total assets continue to grow reaching $6.2 billion at quarter end, driven
by growth in commercial and residential real estate loans. Also, our
variable cost structure and tight control over expenses is reflected in the
8% decrease in noninterest expense compared to the prior year. The
Company's capital position is also very strong, with Total risk-based
capital remaining in excess of 12%," added Mr. Cluckey.
Results for the first quarter of 2006 reflect growth in the commercial
and residential loan portfolio. The Commercial banking division had loan
closings of $121 million, up 13% compared to the first quarter of 2005.
Additionally, the commercial division had SBA loan closings of $11 million
during the first quarter of 2006, up 39% from the first quarter of 2005.
The Company's commercial loan portfolio grew $57 million, or 13%
annualized, during the first quarter of 2006.
As previously announced, Republic Bank was recently named the Preferred
Lender of the Year in the State of Michigan by the Small Business
Administration. The recognition is awarded to the lender that approves the
most PLP (Preferred Lender Program) loans during the SBA fiscal year, which
ended September 30, 2005. Thomas G. Zernick, Republic Bank President of SBA
Lending, commented that "It's very exciting to again be recognized as the
Number One SBA PLP lender in the State of Michigan. As a Preferred Lender,
Republic Bank enjoys delegated underwriting authority from the SBA, which
allows us to make credit decisions on behalf of the Agency. This authority
makes getting an SBA loan from Republic Bank a streamlined and transparent
experience for our borrowers."
During the first quarter of 2006, the Mortgage banking division
originated $225 million of single family residential mortgages and has a
mortgage loan pipeline of applications in process of $320 million at March
31, 2006. The Company's residential real estate mortgage loan portfolio
increased $74 million from December 31, 2005, an annualized growth rate of
14%.
The Retail banking division had consumer loan closings, primarily home
equity lines of credit and term loans, of $65 million during the first
quarter of 2006, a decrease of 13% compared to the previous year.
Income Statement
Net interest income increased $360,000, or 1%, for the first quarter of
2006 compared to 2005. The increase was primarily the result of a 6%
increase in average earning assets for the quarter ended March 31, 2006,
compared to the first quarter of 2005. For the quarter ended March 31,
2006, the Company's net interest margin was 2.67%, a decrease of 4 basis
points from the quarter ended December 31, 2005.
Total noninterest income, excluding mortgage banking income, was $5.4
million for the quarter ended March 31, 2006, up 4% from the first quarter
of 2005. The increase was primarily due to a 12% increase in service
charges. Mortgage banking income for the quarter ended March 31, 2006 was
$1.8 million, a decrease of 68% from the first quarter of 2005. The
decrease was primarily a result of a 74% decrease in mortgage loan sales
compared to the first quarter of 2005.
Total noninterest expense decreased $1.9 million, or 8%, for the
quarter ended March 31, 2006 compared to the first quarter of 2005. The
decrease was a result of a decline of $1.1 million in salaries and employee
benefits and a decrease of $604,000 in other noninterest expense primarily
reflecting lower voice and data communication expenses, loan collection
expenses and advertising expenses.
The Company's efficiency ratio for the quarter ended March 31, 2006 was
44.85%, which compares very favorably to our peer group.
Asset Quality and Capital
Net charge-offs to total average loans were 10 basis points for the
quarter ended March 31, 2006 and remain substantially below the Company's
peer group. Total non-accrual loans increased 2% from December 31, 2005,
due to an increase in residential real estate mortgage loans.
During the quarter ended March 31, 2006, 449,700 shares were
repurchased under the Company's 2005 Stock Repurchase Program at an average
price of $12.17. The 2005 Stock Repurchase Program has 613,152 shares
available for repurchase at March 31, 2006.
The Company's capital ratios continue to be well in excess of the
requirements for a well-capitalized bank. At March 31, 2006, the Company's
Total risk-based capital ratio was 12.18% and the Tier 1 leverage ratio was
7.58%.
About the Company
Republic Bancorp Inc., with $6.2 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 92 retail, commercial and
mortgage banking offices and 91 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 3.7% 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)
March 31, Dec. 31, Sept. 30, March 31,
2006 2005 2005 2005
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and cash
equivalents $47,505 $52,527 $68,395 $54,440
Mortgage loans
held for sale 24,600 38,259 91,844 30,380
Securities available
for sale 926,912 862,690 831,820 835,939
Securities held
to maturity
(at cost) 222,213 227,304 237,059 261,674
Loans 4,746,970 4,628,258 4,585,988 4,488,156
Less allowance
for loan losses (42,342) (42,122) (41,946) (41,855)
Net loans 4,704,628 4,586,136 4,544,042 4,446,301
Federal Home
Loan Bank
stock (at cost) 80,529 80,525 80,521 80,514
Premises and
equipment 26,887 26,586 26,690 25,630
Bank owned
life insurance 117,509 116,519 115,498 113,335
Other assets 92,887 91,220 85,613 75,479
Total assets $6,243,670 $6,081,766 $6,081,482 $5,923,692
LIABILITIES
Noninterest-bearing
deposits $277,791 $284,932 $295,124 $287,124
Interest-bearing
deposits:
NOW accounts 185,461 187,190 184,476 194,290
Savings and
money market
accounts 859,322 932,048 977,221 1,058,736
Retail
certificates
of deposit 1,153,593 1,102,188 1,049,334 949,430
Wholesale
deposits 607,808 636,585 708,452 503,166
Total interest-
bearing
deposits 2,806,184 2,858,011 2,919,483 2,705,622
Total
deposits 3,083,975 3,142,943 3,214,607 2,992,746
Federal funds
purchased and
other short-term
borrowings 718,153 709,300 641,200 810,133
Short-term FHLB
advances 375,000 218,000 190,000 170,000
Long-term FHLB
advances and
security
repurchase
agreements 1,547,071 1,489,432 1,515,877 1,432,518
Accrued expenses
and other
liabilities 62,984 67,632 64,570 63,347
Long-term debt 50,000 50,000 50,000 50,000
Total
liabilities 5,837,183 5,677,307 5,676,254 5,518,744
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;
74,684,000,
74,976,000,
75,309,000, and
77,301,000 issued
and outstanding,
respectively 373,422 374,882 342,315 351,369
Capital surplus 34,841 36,721 34,407 50,384
Retained earnings 11,307 3,114 32,692 13,190
Accumulated other
comprehensive
loss (13,083) (10,258) (4,186) (9,995)
Total
shareholders'
equity 406,487 404,459 405,228 404,948
Total
liabilities and
shareholders'
equity $6,243,670 $6,081,766 $6,081,482 $5,923,692
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended
March 31,
2006 2005
Interest Income
Loans, including fees $74,159 $64,464
Investment securities and FHLB stock dividends 14,240 11,377
Total interest income 88,399 75,841
Interest Expense
Deposits 21,362 15,188
Short-term borrowings 11,470 5,620
Long-term FHLB advances and security
repurchase agreements 15,804 15,630
Long-term debt 1,075 1,075
Total interest expense 49,711 37,513
Net interest income 38,688 38,328
Provision for loan losses 1,400 1,500
Net interest income after provision for loan losses 37,288 36,828
Noninterest Income
Service charges 2,993 2,681
Mortgage banking income 1,835 5,825
Gain on sale of securities 62 435
Gain on sale of SBA loans 548 392
Income from bank owned life insurance 979 1,013
Other noninterest income 862 692
Total noninterest income 7,279 11,038
Noninterest Expense
Salaries and employee benefits 12,320 13,416
Occupancy expense of premises 2,691 2,701
Equipment expense 1,434 1,624
Other noninterest expense 4,527 5,131
Total noninterest expense 20,972 22,872
Income before income taxes 23,595 24,994
Provision for income taxes 7,178 7,687
Net income $16,417 $17,307
Basic earnings per share $.22 $.22
Diluted earnings per share $.22 $.22
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(In thousands, except operating data)
Three Months Ended
March 31,
2006 2005
Operating Data (in millions):
Residential mortgage loan closings:
Fixed rate $157 $203
Adjustable rate 68 142
Total residential mortgage loan closings $225 $345
Conventional loans $113 $194
Government loans 20 30
Construction loans 19 34
Jumbo and other loans 73 87
Total residential mortgage loan closings $225 $345
Refinances (percent of total) 46% 46%
Mortgage loan sales $79 $301
Commercial loan closings:
Commercial loans $121 $106
SBA loans 11 8
Total commercial loan closings $132 $114
Consumer loan closings: $65 $75
Performance Ratios (annualized for the quarter):
Return on average assets 1.07% 1.19%
Return on average equity 16.01% 16.76%
Net interest margin 2.67% 2.79%
Efficiency ratio (1) 44.85% 45.96%
Per Common Share Data:
Average common shares outstanding - diluted 75,552 78,322
Cash dividends declared $.11 $.10
Book value $5.44 $5.24
Tangible book value $5.39 $5.17
Mar. 31, Dec. 31, Sept. 30, Mar. 31,
2006 2005 2005 2005
Capital Ratios:
Shareholders' equity
to assets 6.51% 6.65% 6.66% 6.84%
Tier 1 risk-based capital 11.12% 11.24% 11.18% 11.83%
Total risk-based capital 12.18% 12.32% 12.27% 12.98%
Tier 1 leverage 7.58% 7.57% 7.52% 7.91%
(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
March 31, 2006 March 31, 2005
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $345 $7 4.74% $2,067 $9 1.67%
Mortgage loans
held for
sale 26,143 391 5.98 113,635 1,662 5.85
Securities
available
for sale:
Taxable 689,286 8,470 4.92 529,900 5,980 4.51
Tax-exempt 216,959 2,878 5.38 199,848 2,702 5.48
Securities
held to
maturity 225,140 2,699 4.80 234,708 2,691 4.59
Portfolio loans:
Commercial
loans 1,729,667 30,982 7.16 1,586,114 24,470 6.17
Residential
real
estate
mortgage
loans 2,217,643 29,846 5.38 2,120,187 27,506 5.19
Installment
loans 730,204 12,940 7.19 736,509 10,826 5.96
Total
loans,
net of
unearned
income 4,677,514 73,768 6.32 4,442,810 62,802 5.67
FHLB stock 80,525 1,045 5.26 80,712 827 4.15
Total
interest-
earning
assets 5,915,912 89,258 6.05 5,603,680 76,673 5.49
Allowance for
loan losses (42,558) (41,762)
Cash and
due from
banks 43,017 51,151
Other assets 230,610 206,811
Total
assets $6,146,981 $5,819,880
Average Liabilities
and Shareholders'
Equity:
Interest-bearing
demand
deposits $182,446 $280 0.62% $200,481 $222 0.45%
Savings and
money market
accounts 879,098 4,407 2.03 1,072,178 4,130 1.56
Retail
certificates
of deposit 1,135,957 10,181 3.63 915,071 7,008 3.11
Wholesale
deposits 608,020 6,494 4.33 552,336 3,828 2.81
Total
interest-
bearing
deposits 2,805,521 21,362 3.09 2,740,066 15,188 2.25
Short-term
borrowings 1,066,323 11,470 4.30 893,359 5,620 2.52
Long-term
FHLB advances
and security
repurchase
agreements 1,502,914 15,804 4.21 1,411,945 15,630 4.43
Long-term
debt 50,000 1,075 8.60 50,000 1,075 8.60
Total
interest-
bearing
liabil-
ities 5,424,758 49,711 3.69 5,095,370 37,513 2.96
Noninterest-
bearing
deposits 264,615 270,015
Other
liabilities 47,305 41,445
Total
liabil-
ities 5,736,678 5,406,830
Shareholders'
equity 410,303 413,050
Total
liabilities
and
shareholders'
equity $6,146,981 $5,819,880
Net interest
income/rate
spread
(FTE) $39,547 2.36% $39,160 2.53%
FTE adjustment $859 $832
Impact of noninterest-
bearing sources
of funds 0.31% 0.26%
Net interest
margin (FTE) 2.67% 2.79%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
March 31, Dec. 31, Sept. 30, March 31,
2006 2005 2005 2005
Portfolio Loan Summary:
Commercial loans:
Commercial and
industrial $27,639 $28,314 $30,390 $31,159
Commercial real
estate mortgage 1,726,789 1,669,556 1,647,460 1,565,291
Total commercial
loans 1,754,428 1,697,870 1,677,850 1,596,450
Residential real
estate mortgages 2,267,385 2,193,128 2,146,613 2,149,917
Installment loans:
Home equity lines
of credit 371,955 390,373 437,566 442,421
Home equity
term loans 179,578 170,352 148,404 126,583
Other consumer loans 173,624 176,535 175,555 172,785
Total installment
loans 725,157 737,260 761,525 741,789
Total portfolio
loans $4,746,970 $4,628,258 $4,585,988 $4,488,156
Non-Performing Assets:
Non-accrual loans:
Commercial $26,395 $27,344 $24,913 $18,705
Residential real
estate mortgage 21,484 19,026 13,636 12,560
Installment 1,758 2,413 1,361 1,095
Total non-accrual
loans 49,637 48,783 39,910 32,360
Other real estate owned:
Commercial 6,287 8,575 9,089 569
Residential real
estate mortgage 4,856 3,029 3,331 3,766
Installment 1,449 712 687 828
Total other real
estate owned 12,592 12,316 13,107 5,163
Total non-performing
assets $62,229 $61,099 $53,017 $37,523
Allowance for Loan Losses (for the quarter):
Balance at beginning
of period $42,122 $41,946 $41,871 $41,818
Loans charged off:
Commercial 626 1,387 924 579
Residential real
estate mortgage 535 340 577 594
Installment 559 294 345 527
Total charge-offs 1,720 2,021 1,846 1,700
Recoveries:
Commercial 333 334 96 63
Residential real
estate mortgage 47 135 219 -
Installment 160 228 206 174
Total recoveries 540 697 521 237
Net charge-offs 1,180 1,324 1,325 1,463
Provision charged
to expense 1,400 1,500 1,400 1,500
Balance at end of period $42,342 $42,122 $41,946 $41,855
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
March 31, Dec. 31, Sept. 30, March 31,
2006 2005 2005 2005
Asset Quality Ratios:
Non-performing assets to
loans and
other real estate owned 1.31% 1.32% 1.15% .84%
Non-performing assets
to total assets 1.00% 1.00% .87% .63%
Allowance for loan losses
to non-performing loans 85.30% 86.35% 105.10% 129.34%
Allowance for loan
losses to loans .89% .91% .91% .93%
Allowance for loan
losses to loans (excluding
residential real
estate mortgages) 1.71% 1.73% 1.72% 1.79%
Net charge-offs to
average loans: (1)
Commercial loans .07% .25% .20% .13%
Residential real
estate mortgage loans .09% .04% .07% .11%
Installment loans .22% .03% .07% .19%
Total loans .10% .11% .12% .13%
(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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