Second Quarter 2005 Highlights Include:
* Record net income of $17.5 million, up 7%
* Earnings per share of $.25, up 8%
* Return on equity of 17.00%
* Total assets exceed $6 billion
* Non-accrual loans decrease 14%
* Net charge-off ratio of 12 basis points, well below peer
ANN ARBOR, Mich., July 14 /PRNewswire-FirstCall/ -- Republic Bancorp Inc.,
(Nasdaq: RBNC), today announced record net income for the quarter ended June
30, 2005 of $17,475,000, an increase of 7% over net income of $16,368,000
earned in the second quarter of 2004. Diluted earnings per share were $.25,
up 8% from $.23 earned in 2004. Net income generated returns of 1.16% on
average assets and 17.00% on average shareholders' equity for the quarter
ended June 30, 2005.
Net income for the six months ended June 30, 2005 was $34,782,000,
compared to net income of $32,667,000 earned for the same period in 2004. For
the six month period ending June 30, 2005, diluted earnings per share were
$.49, an increase of 7% over the $.46 earned in 2004. Annualized returns on
average assets and average shareholders' equity for the first six months of
2005 were 1.17% and 16.88%, respectively.
"We are very pleased to report another record quarter for the Company,"
commented Dana M. Cluckey, President and Chief Executive Officer. "Total
assets continued to grow exceeding $6 billion, a milestone for the Company.
Our balanced business model and focused strategies continue to deliver solid
results with strong growth in quality assets and tight control over expenses.
The Company also remains in a strong capital position, with Total risk-based
capital of 12.5%," added Mr. Cluckey.
Results for the second quarter of 2005 reflect solid performance from the
Company's three business lines.
Retail Banking
* The Company's installment loan portfolio, primarily home equity loans,
grew $81 million, or 12% compared to June 30, 2004.
* Total deposits during the same period increased $211 million, or 7%.
Commercial Banking
* The commercial loan portfolio grew $89 million from June 30, 2004, with
the commercial real estate mortgage portfolio up 6%. Commercial loan closings
were a record $194 million during the second quarter of 2005, up 57% from the
second quarter of 2004. Additionally, the Company's commercial loan pipeline
of loans in process continued to increase.
* SBA loan closings were also strong during the quarter at $15 million,
consistent with the second quarter of 2004.
Mortgage Banking
* During the second quarter of 2005, the Company originated $409 million
in single-family residential mortgages, with 40% of these closings being
adjustable rate loans. The residential real estate mortgage loan portfolio
increased $7 million compared to June 30, 2004. At June 30, 2005, the
Company's mortgage loan pipeline of applications in process was $579 million,
an increase of $40 million from March 31, 2005. At June 30, 2005, $152
million of the mortgage loan pipeline represented commitments to fund loan
applications with agreed-upon rates, an increase of $8 million over March 31,
2005.
Income Statement
Net interest income increased $2.6 million, or 7%, for the second quarter
of 2005 compared to the corresponding period in 2004, due to the growth in
average earning assets. For the quarter ended June 30, 2005, the Company's
net interest margin was 2.73%, a decline of 2 basis points from the quarter
ended June 30, 2004.
Total noninterest income decreased $3.6 million for the second quarter of
2005 compared to the corresponding period in 2004, due primarily to lower
mortgage banking income from lower levels of loan fundings.
Total noninterest expense decreased $2.1 million, or 9%, for the second
quarter of 2005 compared to the corresponding period in 2004. The decrease
was primarily a result of a decrease of $1.5 million in salaries and employee
benefits related to lower employee incentive accruals and a decrease of
$601,000 in other noninterest expense primarily reflecting lower residential
mortgage closing volume in 2005 compared to 2004.
The Company's efficiency ratio for the quarter ended June 30, 2005 was
44.01%, which compares favorably to its peer group.
Asset Quality and Capital
The Company's asset quality remains very sound. Net charge-offs to total
average loans were only 12 basis points for the quarter ended June 30, 2005
and remain substantially below the Company's peer group. Total non-performing
loans decreased $4.5 million, or 14%, from March 31, 2005.
During the second quarter of 2005, the Company repurchased 1,198,500
shares at an average price of $13.79 per share under the 2003 Stock Repurchase
Program, which has 78,852 shares available for repurchase at June 30, 2005.
In June 2005, the Board of Directors approved the 2005 Stock Repurchase
Program authorizing the repurchase of up to 2,000,000 additional shares, or
approximately 3% of the shares outstanding. All of the shares under this
program are available for repurchase at June 30, 2005.
The Company's capital ratios continue to be well in excess of the
requirements for a well-capitalized bank. At June 30, 2005, the Company's
Total risk-based capital ratio was 12.50% 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 80th 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 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)
June 30, March 31, Dec. 31, June 30,
2005 2005 2004 2004
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and cash
equivalents $55,575 $54,440 $53,671 $60,868
Mortgage loans held
for sale 143,589 30,380 105,318 54,836
Securities available
for sale 835,285 835,939 620,794 754,632
Securities held to
maturity (at cost) 252,527 261,674 222,757 240,081
Loans 4,533,129 4,488,156 4,463,975 4,356,280
Less allowance for
loan losses (41,871) (41,855) (41,818) (43,086)
Net loans 4,491,258 4,446,301 4,422,157 4,313,194
Federal Home Loan Bank
stock (at cost) 80,514 80,514 80,511 80,503
Premises and equipment 25,687 25,630 26,493 27,400
Bank owned life
insurance 114,414 113,335 112,978 110,813
Other assets 76,379 75,479 69,298 69,166
Total assets $6,075,228 $5,923,692 $5,713,977 $5,711,493
LIABILITIES
Noninterest-bearing
deposits $308,730 $287,124 $274,747 $294,355
Interest-bearing deposits:
NOW accounts 196,221 194,290 203,553 189,904
Savings and money
market accounts 1,000,565 1,070,683 1,103,675 1,065,516
Certificates of
deposit under
$100,000 704,009 685,134 662,357 665,841
Certificates of
deposit $100,000
or greater 825,561 755,515 801,879 608,565
Total interest-bearing
deposits 2,726,356 2,705,622 2,771,464 2,529,826
Total deposits 3,035,086 2,992,746 3,046,211 2,824,181
Federal funds purchased
and other short-term
borrowings 719,775 810,133 538,300 595,147
Short-term FHLB advances 362,500 170,000 215,000 391,000
Long-term FHLB advances
and security repurchase
agreements 1,434,934 1,432,518 1,390,878 1,411,003
Accrued expenses and
other liabilities 63,826 63,347 63,950 58,209
Long-term debt 50,000 50,000 50,000 50,000
Total liabilities 5,666,121 5,518,744 5,304,339 5,329,540
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;
69,205,000, 70,274,000,
70,425,000, and
70,439,000 issued and
outstanding,
respectively 346,026 351,369 352,125 320,177
Capital surplus 47,556 57,578 59,303 53,709
Unearned compensation -
restricted stock (6,323) (7,194) (3,207) (4,197)
Retained earnings 23,024 13,190 3,634 24,414
Accumulated other
comprehensive loss (1,176) (9,995) (2,217) (12,150)
Total shareholders'
equity 409,107 404,948 409,638 381,953
Total liabilities
and shareholders'
equity $6,075,228 $5,923,692 $5,713,977 $5,711,493
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,
2005 2004 2005 2004
Interest Income
Loans, including fees $67,457 $57,298 $131,921 $115,294
Investment securities
and FHLB stock
dividends 13,280 10,694 24,657 20,517
Total interest
income 80,737 67,992 156,578 135,811
Interest Expense
Deposits 16,667 12,667 31,855 25,704
Short-term borrowings 8,325 2,319 13,945 4,337
Long-term FHLB advances
and security repurchase
agreements 15,919 15,734 31,549 31,544
Long-term debt 1,075 1,075 2,150 2,150
Total interest
expense 41,986 31,795 79,499 63,735
Net interest income 38,751 36,197 77,079 72,076
Provision for loan
losses 1,400 2,000 2,900 4,500
Net interest income
after provision for
loan losses 37,351 34,197 74,179 67,576
Noninterest Income
Service charges 3,008 3,005 5,689 5,702
Mortgage banking income 3,232 6,566 9,057 11,740
Gain on sale of
securities 292 674 727 1,362
Gain on sale of SBA loans 561 665 953 1,186
Income from bank owned
life insurance 1,080 1,180 2,093 2,483
Other noninterest income 713 428 1,405 859
Total noninterest
income 8,886 12,518 19,924 23,332
Noninterest Expense
Salaries and employee
benefits 12,350 13,835 25,766 25,924
Occupancy expense of
premises 2,495 2,476 5,196 5,095
Equipment expense 1,599 1,652 3,223 3,326
Other noninterest
expense 4,815 5,416 9,946 10,056
Total noninterest
expense 21,259 23,379 44,131 44,401
Income before income
taxes 24,978 23,336 49,972 46,507
Provision for income
taxes 7,503 6,968 15,190 13,840
Net income $17,475 $16,368 $34,782 $32,667
Basic earnings per share $.25 $.23 $.50 $.46
Diluted earnings per
share $.25 $.23 $.49 $.46
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(In thousands, except operating data)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Operating Data (in millions):
Residential mortgage loan
closings:
Fixed rate $246 $298 $449 $540
Adjustable rate 163 321 305 504
Total residential
mortgage loan
closings $409 $619 $754 $1,044
Conventional loans $217 $311 $411 $519
Government loans 35 44 65 96
Construction loans 57 76 91 117
Jumbo and other loans 100 188 187 312
Total residential
mortgage loan
closings $409 $619 $754 $1,044
Refinances (percent of
total) 33% 44% 39% 45%
Performance Ratios
(annualized for the quarter):
Return on average assets 1.16% 1.17% 1.17% 1.18%
Return on average equity 17.00% 17.11% 16.88% 17.13%
Net interest margin 2.73% 2.75% 2.76% 2.79%
Efficiency ratio (1) 44.01% 47.64% 45.00% 46.22%
Per Common Share Data:
Average common shares
outstanding - diluted 70,526 71,239 70,862 71,161
Cash dividends declared $.11 $.086 $.22 $.173
Book value $5.91 $5.42 $5.91 $5.42
Tangible book value $5.84 $5.35 $5.84 $5.35
June 30, Mar. 31, Dec. 31, June 30,
2005 2005 2004 2004
Capital Ratios:
Shareholders' equity
to assets 6.73% 6.84% 7.20% 6.69%
Tier 1 risk-based
capital 11.38% 11.83% 11.87% 11.77%
Total risk-based capital 12.50% 12.98% 12.96% 12.92%
Tier 1 leverage 7.57% 7.91% 7.94% 7.82%
(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
June 30, 2005 June 30, 2004
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $782 $4 2.04% $903 $1 0.65%
Mortgage loans
held for sale 78,096 1,158 5.93 127,606 1,754 5.50
Securities
available
for sale:
Taxable 634,758 7,337 4.62 515,753 5,010 3.90
Tax-exempt 225,589 3,078 5.47 224,844 3,207 5.72
Securities held
to maturity 257,529 2,970 4.61 236,784 2,654 4.48
Portfolio loans:
Commercial
loans 1,613,861 26,113 6.40 1,544,344 21,206 5.43
Residential
real estate
mortgage
loans 2,172,126 28,459 5.24 2,014,715 25,684 5.10
Installment
loans 747,193 11,727 6.30 656,756 8,654 5.28
Total loans,
net of
unearned
income 4,533,180 66,299 5.83 4,215,815 55,544 5.25
FHLB stock 80,709 855 4.25 80,721 852 4.23
Total
interest-
earning
assets 5,810,643 81,701 5.61 5,402,426 69,022 5.10
Allowance for
loan losses (41,986) (42,615)
Cash and due
from banks 46,963 56,025
Other assets 210,222 196,882
Total
assets $6,025,842 $5,612,718
Average Liabilities and
Shareholders' Equity:
Interest-bearing
demand
deposits $199,899 $231 0.46% $191,33 $131 0.27%
Savings and
money market
accounts 997,596 4,035 1.62 1,056,628 3,189 1.21
Certificates of
deposit under
$100,000 696,431 5,328 3.07 675,236 5,021 2.98
Certificates of
deposit $100,000
or greater 836,569 7,073 3.39 658,912 4,326 2.63
Total interest-
bearing
deposits 2,730,495 16,667 2.45 2,582,111 12,667 1.97
Short-term
borrowings 1,076,191 8,325 3.06 854,019 2,319 1.07
Long-term FHLB
advances and
security
repurchase
agreements 1,429,282 15,919 4.41 1,421,560 15,734 4.38
Long-term debt 50,000 1,075 8.60 50,000 1,075 8.60
Total interest-
bearing
liabil-
ities 5,285,968 41,986 3.16 4,907,690 31,795 2.58
Noninterest-
bearing
deposits 286,356 283,691
Other
liabilities 42,342 38,708
Total
liabil-
ities 5,614,666 5,230,089
Shareholders'
equity 411,176 382,629
Total
liabilities
and
shareholders'
equity $6,025,842 $5,612,718
Net interest
income/rate
spread (FTE) $39,715 2.45% $37,227 2.52%
FTE adjustment $964 $1,030
Impact of
noninterest-
bearing sources
of funds 0.28% 0.23%
Net interest
margin (FTE) 2.73% 2.75%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $1,421 $13 1.77% $671 $2 0.68%
Mortgage loans
held for sale 95,767 2,820 5.89 110,225 3,128 5.68
Securities
available
for sale:
Taxable 582,619 13,318 4.55 488,668 9,513 3.90
Tax-exempt 212,788 5,779 5.48 217,422 6,286 5.80
Securities held
to maturity 246,181 5,661 4.60 212,724 4,825 4.54
Portfolio loans:
Commercial
loans 1,600,064 50,583 6.2 1,535,407 42,323 5.45
Residential
real estate
mortgage
loans 2,146,300 55,965 5.21 2,021,182 52,770 5.22
Installment
loans 741,881 22,553 6.13 642,868 17,073 5.33
Total loans,
net of
unearned
income 4,488,245 129,101 5.75 4,199,457 112,166 5.32
FHLB stock 80,710 1,681 4.20 80,727 1,909 4.74
Total
interest-
earning
assets 5,707,731 158,373 5.55 5,309,894 137,829 5.18
Allowance for
loan losses (41,875) (41,769)
Cash and due
from banks 49,046 54,154
Other assets 208,535 192,962
Total
assets $5,923,437 $5,515,241
Average Liabilities
and Shareholders' Equity:
Interest-bearing
demand
deposits $200,189 $452 0.46% $187,539 $255 0.27%
Savings and
money market
accounts 1,040,631 8,244 1.60 1,048,983 6,656 1.27
Certificates of
deposit under
$100,000 685,026 10,206 3.00 677,421 10,170 3.01
Certificates of
deposit $100,000
or greater 809,395 12,953 3.23 663,572 8,623 2.61
Total
interest-
bearing
deposits 2,735,241 31,855 2.35 2,577,515 25,704 2.00
Short-term
borrowings 985,279 13,945 2.81 790,838 4,337 1.08
Long-term FHLB
advances and
security
repurchase
agreements 1,420,863 31,549 4.42 1,408,890 31,544 4.43
Long-term debt 50,000 2,150 8.60 50,000 2,150 8.60
Total
interest-
bearing
liabil-
ities 5,191,383 79,499 3.06 4,827,243 63,735 2.63
Noninterest-
bearing
deposits 278,231 269,031
Other
liabilities 41,710 37,609
Total
liabil-
ities 5,511,324 5,133,883
Shareholders'
equity 412,113 381,358
Total
liabilities
and
shareholders'
equity $5,923,437 $5,515,241
Net interest
income/rate
spread (FTE) $78,874 2.49% $74,094 2.55%
FTE adjustment $1,795 $2,018
Impact of
noninterest-
bearing sources
of funds 0.27% 0.24%
Net interest
margin (FTE) 2.76% 2.79%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
June 30, March 31, Dec. 31, June 30,
2005 2005 2004 2004
Portfolio Loan Summary:
Commercial loans:
Commercial and industrial $29,753 $31,159 $32,632 $40,292
Commercial real estate
mortgage 1,612,718 1,565,291 1,542,660 1,512,948
Total commercial
loans 1,642,471 1,596,450 1,575,292 1,553,240
Residential real estate
mortgages 2,137,046 2,149,917 2,152,720 2,130,310
Installment loans 753,612 741,789 735,963 672,730
Total portfolio
loans $4,533,129 $4,488,156 $4,463,975 $4,356,280
Non-performing assets:
Non-accrual loans:
Commercial $14,550 $18,705 $17,744 $22,889
Residential real estate
mortgage 12,202 12,560 10,705 11,476
Installment 1,100 1,095 852 1,070
Total non-accrual loans 27,852 32,360 29,301 35,435
Restructured loans - - - -
Other real estate owned 8,917 5,163 4,160 3,854
Total non-performing
assets $36,769 $37,523 $33,461 $39,289
Allowance for Loan Losses (for the quarter):
Balance at beginning of
period $41,855 $41,818 $44,167 $41,556
Loans charged off:
Commercial 907 579 753 1,131
Residential real estate
mortgage 719 594 379 391
Installment 270 527 386 397
Total charge-offs 1,896 1,700 1,518 1,919
Recoveries:
Commercial 242 63 17 1,235
Residential real estate
mortgage 17 - 35 -
Installment 253 174 184 214
Total recoveries 512 237 236 1,449
Net charge-offs 1,384 1,463 1,282 470
Provision charged to
expense 1,400 1,500 1,750 2,000
Reclassification of
allowance for loan losses
on unfunded loan
commitments(1) - - (2,817) -
Balance at end of period $41,871 $41,855 $41,818 $43,086
(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)
June 30, March 31, Dec. 31, June 30,
2005 2005 2004 2004
Asset Quality Ratios:
Non-performing assets to
loans and other real
estate owned .81% .84% .75% .90%
Non-performing assets
to total assets .61% .63% .59% .69%
Allowance for loan losses
to non-performing
loans 150.33% 129.34% 142.72% 121.59%
Allowance for loan
losses to loans .92% .93% .94% .99%
Allowance for loan losses
to loans (excluding
residential real estate
mortgages) 1.75% 1.79% 1.81% 1.94%
Net charge-offs to
average loans: (1)
Commercial loans .16% .13% .19% (.03%)
Residential real estate
mortgage loans .13% .11% .06% .08%
Installment loans .01% .19% .11% .11%
Total loans .12% .13% .11% .04%
(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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