Second Quarter Highlights Include:
* Record net income of $16.4 million, up 8%
* Earnings per share of $.25, up 7%
* Return on equity of 17.11%
* Strong annualized consumer loan growth of 21%
* Annualized core deposit growth of 9%
* Net charge-off ratio remains below peer at 4 basis points
ANN ARBOR, Mich., July 14 /PRNewswire-FirstCall/ -- Republic Bancorp Inc.
(Nasdaq: RBNC), today announced record net income for the quarter ended June
30, 2004 of $16,368,000, an increase of 8% over net income of $15,158,000
earned for the second quarter in 2003. Diluted earnings per share were $.25,
up 7% from $.24 earned in 2003. Net income generated annualized returns of
1.17% on average assets and 17.11% on average shareholders' equity for the
second quarter of 2004.
Net income for the six months ended June 30, 2004 was $32,667,000,
compared to net income of $30,311,000 earned for the same period in 2003. For
the six month period ending June 30, 2004, diluted earnings per share were
$.50, an increase of 7% over the $.47 earned in 2003. Annualized returns on
average assets and average shareholders' equity for the first six months of
2004 were 1.18% and 17.13%, respectively.
"We are very pleased to report another record quarter for the Company,"
commented Dana M. Cluckey, President and Chief Executive Officer. "Our retail
banking business line continues to have very strong growth in consumer loans
and core deposits. Our commercial banking division had record closings in the
Small Business Administration lending area during the quarter. Mortgage
banking results reflected higher closing volumes and an increase in income
compared to the first quarter of 2004. Our balanced business model continues
to deliver positive results with strong growth of quality assets and core
deposits, and solid control over costs," added Mr. Cluckey.
Results for the second quarter of 2004 reflect strong performance from the
Company's three business lines.
Retail Banking
* Retail banking results were very strong during the quarter. The
consumer loan portfolio, primarily home equity loans, grew $33 million, or 21%
annualized over March 31, 2004. The Company also had continued growth in core
deposits, which increased $32 million, or 9% annualized for the quarter.
Commercial Banking
* SBA closings for the quarter were $15 million, up 19% from the second
quarter of 2003. The commercial loan portfolio grew $10 million, or 3%
annualized over March 31, 2004.
Mortgage Banking
* During the second quarter of 2004, the Company originated $619 million
in single-family residential mortgages. At June 30, 2004, the Company's
mortgage loan pipeline of applications in process was $489 million.
Income Statement
Net interest income increased $332,000, or 1%, for the quarter ended June
30, 2004 compared to the second quarter of 2003 and increased $318,000, or 1%,
over the first quarter of 2004. These increases are primarily the result of a
16% increase in average earning assets for the second quarter of 2004 compared
to the second quarter of 2003 and 4% growth in average earning assets over the
quarter ended March 31, 2004.
Total noninterest income increased $1.7 million, or 16%, for the quarter
ended June 30, 2004 compared to the first quarter of 2004. The increase was
primarily due to higher levels of service charges, mortgage banking income,
and gains on sale of SBA loans. Excluding mortgage banking income, total
noninterest income for the quarter ended June 30, 2004 increased $910,000, or
18%, compared to the second quarter of 2003. The increase was due primarily
to higher levels of service charges and gains on sale of SBA loans.
Total noninterest expense increased $2.4 million, or 11% for the quarter
ended June 30, 2004, compared to the first quarter of 2004. The increase was
primarily a result of an increase of $1.7 million in salaries and employee
benefits related to employee incentive accruals and an increase in other
noninterest expense of $776,000. Total noninterest expense decreased $3.3
million, or 12% for the quarter ended June 30, 2004 compared to the second
quarter of 2003. The decrease was primarily due to a $2.2 million decrease in
salaries and employee benefits related to employee incentive accruals, and a
$1 million decrease in other noninterest expense reflecting lower residential
mortgage closing volume in 2004 compared to 2003.
The Company's efficiency ratio of 48.66% for the quarter ended June 30,
2004 remains below peer.
Asset Quality and Capital
The Company's asset quality remains very sound. Total non-performing
assets decreased $859,000, or 2%, from March 31, 2004. Net charge-offs to
total average loans were only 4 basis points for the quarter ended June 30,
2004 and remain substantially below the Company's peer group. The Company's
allowance for loan losses to loans, excluding residential real estate
mortgages, was 1.94% at June 30, 2004.
The Company's capital ratios continue to be in excess of the requirements
for a well-capitalized bank. At June 30, 2004, the Company's total risk-based
capital ratio was a strong 12.92% and the Tier 1 leverage ratio was 7.82%.
As previously announced, the Company declared an $.11 per share cash
dividend to shareholders of record as of September 10, 2004 and payable
October 4, 2004. This represents a 16% increase from the most recent cash
dividend of $.095 paid on July 6, 2004.
About the Company
Republic Bancorp Inc., with $5.7 billion in assets, is the third largest
bank holding company headquartered in Michigan and the 78th largest bank
holding company in the country. Its subsidiary, Republic Bank, serves
customers in Michigan, Ohio and Indiana with 94 retail, commercial and
mortgage banking offices and 89 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 has declared an $.11 per share quarterly cash dividend ($.44
per share annually) payable October 4, 2004, which represents an annual yield
of approximately 3.2% 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)
June 30, March 31, Dec. 31, June 30,
2004 2004 2003 2003
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $60,868 $56,748 $63,858 $89,976
Mortgage loans held
for sale 54,836 140,848 135,360 479,753
Securities available
for sale 754,632 713,265 607,450 292,722
Securities held to
maturity (at cost) 240,081 235,552 156,555 -
Loans 4,356,280 4,166,900 4,157,514 3,954,998
Less allowance for
loan losses (43,086) (41,556) (40,271) (38,269)
Net loans 4,313,194 4,125,344 4,117,243 3,916,729
Federal Home Loan Bank
stock (at cost) 80,503 80,503 80,500 79,510
Premises and equipment 27,400 28,570 26,928 27,084
Bank owned life insurance 110,813 109,633 108,330 89,192
Other assets 69,166 59,996 57,464 55,989
Total assets $5,711,493 $5,550,459 $5,353,688 $5,030,955
LIABILITIES
Noninterest-bearing
deposits $294,355 $273,056 $256,265 $298,832
Interest-bearing deposits:
NOW accounts 189,904 182,229 184,217 179,855
Savings and money
market accounts 1,065,516 1,064,319 1,054,857 972,034
Certificates of
deposit under
$100,000 665,841 680,647 678,758 723,278
Certificates of
deposit $100,000
or greater 608,565 690,118 641,172 642,555
Total interest-bearing
deposits 2,529,826 2,617,313 2,559,004 2,517,722
Total deposits 2,824,181 2,890,369 2,815,269 2,816,554
Federal funds purchased
and other short-term
borrowings 595,147 560,044 491,245 266,499
Short-term FHLB advances 391,000 175,000 280,000 405,000
Long-term FHLB advances
and reverse
repurchase agreements 1,411,003 1,429,244 1,286,726 1,042,804
Accrued expenses and
other liabilities 58,209 58,902 61,028 98,836
Long-term debt 50,000 50,000 50,000 50,000
Total liabilities 5,329,540 5,163,559 4,984,268 4,679,693
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;
64,035,000, 64,006,000,
63,527,000, and
63,114,000 issued
and outstanding,
respectively 320,177 320,028 317,633 286,883
Capital surplus 53,709 53,559 50,358 38,081
Unearned compensation -
restricted stock (4,197) (4,731) (1,666) (2,357)
Retained earnings 24,414 14,125 3,893 24,952
Accumulated other
comprehensive income (loss)(12,150) 3,919 (798) 3,703
Total shareholders'
equity 381,953 386,900 369,420 351,262
Total liabilities
and shareholders'
equity $5,711,493 $5,550,459 $5,353,688 $5,030,955
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Interest Income
Loans, including fees $57,298 $62,944 $115,294 $125,880
Investment securities 10,694 3,898 20,517 6,712
Total interest income 67,992 66,842 135,811 132,592
Interest Expense
Deposits 12,667 14,432 25,704 29,926
Short-term borrowings 2,319 1,995 4,337 3,506
Long-term FHLB advances and
reverse repurchase agreements 15,734 13,475 31,544 26,581
Long-term debt 1,075 1,075 2,150 2,189
Total interest expense 31,795 30,977 63,735 62,202
Net interest income 36,197 35,865 72,076 70,390
Provision for loan losses 2,000 3,000 4,500 6,000
Net interest income after
provision for loan losses 34,197 32,865 67,576 64,390
Noninterest Income
Service charges 3,005 2,735 5,702 5,387
Mortgage banking income 6,566 10,455 11,740 20,191
Gain on sale of securities 674 432 1,362 880
Gain on sale of SBA loans 665 96 1,186 291
Income from bank owned
life insurance 1,180 1,320 2,483 2,615
Other noninterest income 428 459 859 994
Total noninterest income 12,518 15,497 23,332 30,358
Noninterest Expense
Salaries and employee
benefits 13,835 16,040 25,924 30,455
Occupancy expense of premises 2,476 2,496 5,095 5,139
Equipment expense 1,652 1,721 3,326 3,426
Other noninterest expense 5,416 6,444 10,056 12,063
Total noninterest expense 23,379 26,701 44,401 51,083
Income before income taxes 23,336 21,661 46,507 43,665
Provision for income taxes 6,968 6,503 13,840 13,354
Net income $16,368 $15,158 $32,667 $30,311
Basic earnings per share $.26 $.24 $.51 $.48
Diluted earnings per share $.25 $.24 $.50 $.47
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands, except operating data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Operating Data (in millions):
Residential mortgage loan closings:
Fixed rate $298 $1,094 $540 $1,917
Adjustable rate 321 216 504 381
Total residential mortgage
loan closings $619 $1,310 $1,044 $2,298
Conventional loans $454 $1,097 $761 $1,916
Government loans 44 86 96 149
Jumbo and other loans 121 127 187 233
Total residential mortgage
loan closings $619 $1,310 $1,044 $2,298
Refinances (percent of total) 44% 71% 45% 73%
Performance Ratios (annualized for the quarter):
Return on average assets 1.17% 1.25% 1.18% 1.28%
Return on average equity 17.11% 17.46% 17.13% 17.67%
Net interest margin 2.75% 3.15% 2.79% 3.14%
Efficiency ratio (1) 48.66% 52.43% 47.21% 51.15%
Per Common Share Data:
Average common shares
outstanding - diluted 64,763 64,116 64,692 64,123
Cash dividends declared $.095 $.077 $.19 $.155
Book value $5.96 $5.57 $5.96 $5.57
Tangible book value $5.88 $5.47 $5.88 $5.47
June 30, Mar. 31, Dec. 31, June 30,
2004 2004 2003 2003
Capital Ratios:
Shareholders' equity to assets 6.69% 6.97% 6.90% 6.98%
Tier 1 risk-based capital 11.77% 11.84% 11.72% 11.38%
Total risk-based capital 12.92% 12.99% 12.85% 12.50%
Tier 1 leverage 7.82% 7.89% 8.04% 8.09%
(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
June 30, 2004 June 30, 2003
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $903 $1 0.65% $338 $1 0.61%
Mortgage loans
held for sale 127,606 1,754 5.50 371,728 5,247 5.65
Securities
available for
sale 740,597 8,217 4.45 266,366 3,592 5.39
Securities held
to maturity 236,784 2,654 4.48 - - -
Portfolio loans:
Commercial
loans 1,544,344 21,206 5.43 1,468,123 22,733 6.13
Residential
real estate
mortgage
loans 2,014,715 25,684 5.10 1,879,731 26,115 5.56
Installment
loans 656,756 8,654 5.28 582,712 8,849 6.09
Total loans,
net of
unearned
income 4,215,815 55,544 5.25 3,930,566 57,697 5.85
FHLB stock 80,721 852 4.23 79,280 1,043 5.26
Total interest-
earning
assets 5,402,426 69,022 5.10 4,648,278 67,580 5.80
Allowance for
loan losses (42,615) (37,986)
Cash and due
from banks 56,025 65,150
Other assets 196,882 164,785
Total
assets $5,612,718 $4,840,227
Average Liabilities and Shareholders' Equity
Interest-bearing
demand deposits $191,335 $131 0.27% $179,959 $161 0.36%
Savings and money
market accounts 1,056,628 3,189 1.21 953,788 3,285 1.38
Time deposits 1,334,148 9,347 2.81 1,408,252 10,986 3.13
Total interest-
bearing
deposits 2,582,111 12,667 1.97 2,541,999 14,432 2.28
Short-term
borrowings 854,019 2,319 1.07 558,493 1,995 1.41
Long-term FHLB
advances and
reverse repurchase
agreements 1,421,560 15,734 4.38 1,031,727 13,475 5.17
Long-term debt 50,000 1,075 8.60 50,000 1,075 8.60
Total interest-
bearing
liabilities 4,907,690 31,795 2.58 4,182,219 30,977 2.95
Noninterest-bearing
deposits 283,691 273,858
Other liabilities 38,708 36,980
Total
liabilities 5,230,089 4,493,057
Shareholders'
equity 382,629 347,170
Total
liabilities and
shareholders'
equity $5,612,718 $4,840,227
Net interest income/
rate spread (FTE) $37,227 2.52% $36,603 2.85%
FTE adjustment $1,030 $738
Impact of noninterest-
bearing sources of funds 0.23% 0.30%
Net interest margin (FTE) 2.75% 3.15%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term investments $671 $2 0.68% $282 $2 1.09%
Mortgage loans held
for sale 110,225 3,128 5.68 404,546 11,517 5.69
Securities available
for sale 706,090 15,799 4.49 229,666 5,736 5.00
Securities held to
maturity 212,724 4,825 4.54 - - -
Portfolio loans:
Commercial loans 1,535,407 42,323 5.45 1,471,111 45,891 6.20
Residential real
estate mortgage
loans 2,021,182 52,770 5.22 1,784,837 50,528 5.66
Installment loans 642,868 17,073 5.33 585,274 17,944 6.18
Total loans,
net of unearned
income 4,199,457 112,166 5.32 3,841,222 114,363 5.95
FHLB stock 80,727 1,909 4.74 78,874 2,155 5.46
Total interest-
earning assets 5,309,894 137,829 5.18 4,554,590 133,773 5.87
Allowance for loan
losses (41,769) (37,251)
Cash and due from banks 54,154 64,716
Other assets 192,962 164,601
Total assets $5,515,241 $4,746,656
Average Liabilities and Shareholders' Equity
Interest-bearing
demand deposits $187,539 $255 0.27% $178,200 $347 0.39%
Savings and money
market accounts 1,048,983 6,656 1.27 941,722 7,033 1.51
Time deposits 1,340,993 18,793 2.81 1,429,920 22,546 3.18
Total interest-
bearing
deposits 2,577,515 25,704 2.00 2,549,842 29,926 2.37
Short-term borrowings 790,838 4,337 1.08 490,325 3,506 1.51
Long-term FHLB advances
and reverse repurchase
agreements 1,408,890 31,544 4.43 1,012,054 26,581 5.22
Long-term debt 50,000 2,150 8.60 51,125 2,189 8.56
Total interest-
bearing
liabilities 4,827,243 63,735 2.63 4,103,346 62,202 3.04
Noninterest-bearing
deposits 269,031 262,403
Other liabilities 37,609 37,844
Total
liabilities 5,133,883 4,403,593
Shareholders' equity 381,358 343,063
Total liabilities
and shareholders'
equity $5,515,241 $4,746,656
Net interest income/
Rate spread (FTE) $74,094 2.55% $71,571 2.83%
FTE adjustment $2,018 $1,181
Impact of noninterest-
bearing sources of funds 0.24% 0.31%
Net interest margin (FTE) 2.79% 3.14%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
June 30, March 31, Dec. 31, June 30,
2004 2004 2003 2003
Portfolio Loan Summary:
Commercial loans:
Commercial and
industrial $40,292 $38,659 $38,319 $44,352
Commercial real
estate mortgage 1,512,948 1,504,112 1,482,814 1,432,456
Total commercial
loans 1,553,240 1,542,771 1,521,133 1,476,808
Residential real estate
mortgages 2,130,310 1,982,025 2,014,809 1,894,246
Installment loans (1) 672,730 642,104 621,572 583,944
Total portfolio
loans $4,356,280 $4,166,900 $4,157,514 $3,954,998
Non-performing assets:
Non-accrual loans:
Commercial $22,889 $24,124 $27,666 $16,696
Residential real
estate mortgage 11,476 11,656 11,181 10,534
Installment 1,070 639 873 1,523
Total non-accrual
loans 35,435 36,419 39,720 28,753
Restructured loans - - - -
Other real estate owned 3,854 3,729 2,718 3,456
Total non-performing
assets $39,289 $40,148 $42,438 $32,209
Allowance for Loan Losses (for the quarter):
Balance at beginning of
period $41,556 $40,271 $39,212 $37,185
Loans charged off:
Commercial 1,131 1,344 1,618 1,542
Residential real
estate mortgage 391 71 54 189
Installment 397 420 669 672
Total charge-offs 1,919 1,835 2,341 2,403
Recoveries:
Commercial 1,235 427 263 259
Residential real
estate mortgage - - - -
Installment 214 193 137 228
Total recoveries 1,449 620 400 487
Net charge-offs 470 1,215 1,941 1,916
Provision charged to expense 2,000 2,500 3,000 3,000
Balance at end of period $43,086 $41,556 $40,271 $38,269
(1) Includes indirect installment loan balances at June 30, 2004, March
31, 2004, December 31, 2003 and June 30, 2003 of $7.9 million, $10.4 million,
$13.4 million and $22.2 million, respectively.
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
June 30, March 31, Dec. 31, June 30,
2004 2004 2003 2003
Asset Quality Ratios:
Non-performing assets to loans and
other real estate owned .90% .96% 1.02% .81%
Non-performing assets to total
assets .69% .72% .79% .64%
Allowance for loan losses
to non-performing loans 121.59% 114.11% 101.39% 133.10%
Allowance for loan losses to loans .99% 1.00% .97% .97%
Allowance for loan losses to loans
(excluding residential real estate
mortgages) 1.94% 1.90% 1.88% 1.86%
Net charge-offs to average loans: (1)
Commercial loans (.03%) .24% .36% .35%
Residential real estate
mortgage loans .08% .01% .01% .04%
Installment loans .11% .14% .35% .30%
Total loans .04% .12% .19% .19%
Earnings coverage of net
charge-offs (2) 52.47x 20.56x 11.83x 12.65x
(1) Quarter-to-date, annualized.
(2) 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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