Second Quarter Highlights Include:
* Earnings per share of $.22 * Return on equity of 16.08% * Total assets of
$6.3 billion * Annualized portfolio loan growth of 7% * Efficiency ratio of
43.38%, well below peer
ANN ARBOR, Mich., July 19 /PRNewswire-FirstCall/ -- Republic Bancorp
Inc., (Nasdaq: RBNC), today announced net income for the quarter ended June
30, 2006 of $16,396,000, compared to net income of $17,475,000 earned in
the second quarter of 2005. Diluted earnings per share were $.22 for the
quarter, compared to $.23 in the second quarter of 2005. Net income
generated returns of 1.05% on average assets and 16.08% on average
shareholders' equity for the quarter ended June 30, 2006.
Net income for the six months ended June 30, 2006 was $32,813,000,
compared to net income of $34,782,000 earned for the same period in 2005.
For the six month period ending June 30, 2006, diluted earnings per share
were $.44, compared to $.45 earned in 2005. Annualized returns on average
assets and average shareholders' equity for the first six months of 2006
were 1.06% and 16.04%, respectively.
"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, driven by annualized portfolio loan growth
of 7%. Also, our variable cost structure and tight control over expenses is
reflected in the 6% decrease in noninterest expense compared to the prior
year, resulting in an efficiency ratio of 43%," added Mr. Cluckey.
Results for the second quarter of 2006 reflect growth in the commercial
and residential loan portfolio. The Commercial banking division had
commercial loan closings of $122 million and SBA loan closings of $12
million during the quarter. The Company's commercial loan portfolio grew
$25 million, or 6% annualized, during the second quarter of 2006.
Also, during the second quarter of 2006, the Mortgage banking division
originated $292 million of single family residential mortgages, an increase
of 30% over the first quarter of 2006. The mortgage loan pipeline of
applications in process was $300 million at June 30, 2006, down $20 million
from March 31, 2006. The Company's residential real estate mortgage loan
portfolio increased $59 million from March 31, 2006, an annualized growth
rate of 10%.
The Retail banking division had consumer loan closings, primarily home
equity lines of credit and term loans, of $80 million during the second
quarter of 2006, an increase of 23% over the first quarter of 2006. Retail
deposits increased $21 million, or 1%, during the quarter ended June 30,
2006.
Income Statement
Net interest income decreased $1.2 million, or 3%, for the second
quarter of 2006 compared to the first quarter of 2006. The decrease was
primarily the result of a 2% increase in average earning assets for the
quarter ended June 30, 2006 being offset by a decline in the net interest
margin. For the quarter ended June 30, 2006, the Company's net interest
margin was 2.54%, a decrease of 13 basis points from the quarter ended
March 31, 2006.
Total noninterest income, excluding mortgage banking income, was $5.8
million for the quarter ended June 30, 2006, up 6% from the first quarter
of 2006. The increase was primarily due to an 11% increase in service
charges. Mortgage banking income for the quarter ended June 30, 2006 was
$2.2 million, an increase of 19% from the first quarter of 2006 due
primarily to a 9% increase in mortgage loan sales compared to the first
quarter of 2006.
Total noninterest expense decreased $895,000, or 4%, for the quarter
ended June 30, 2006 compared to the first quarter of 2006. The decrease was
primarily a result of a decline of $914,000 in salaries and employee
benefits.
The Company's efficiency ratio for the quarter ended June 30, 2006 was
43.38%, which compares very favorably to peer group.
Asset Quality and Capital
Net charge-offs to total average loans were 8 basis points for the
quarter ended June 30, 2006 and remain substantially below the Company's
peer group. Total non-performing assets increased 7% from March 31, 2006,
due to an increase in non-accrual commercial loans.
During the quarter ended June 30, 2006, 265,000 shares were repurchased
under the Company's 2005 Stock Repurchase Program at an average price of
$11.45. The 2005 and 2006 Stock Repurchase Programs have 2,348,152 shares
available for repurchase at June 30, 2006.
The Company's capital ratios continue to be well in excess of the
requirements for a well-capitalized bank. At June 30, 2006, the Company's
Total risk-based capital ratio was 12.03% and the Tier 1 leverage ratio was
7.52%.
Announced Merger with Citizens Banking Corporation
On June 27, 2006, Citizens Banking Corporation (NASDAQ symbol CBCF) and
Republic Bancorp announced that they have agreed to merge Republic into
Citizens to create the new Citizens Republic Bancorp in a transaction
valued at approximately $1.048 billion in stock and cash. The transaction
is projected to close in the fourth quarter of 2006, subject to regulatory
and shareholder approvals. Based on March 31, 2006 information, Citizens
Republic Bancorp will have $13.9 billion in assets, $8.6 billion in
deposits, $2.6 billion in trust assets under administration, and 275
branches and loan production offices in five Midwest states.
About the Company
Republic Bancorp Inc., with $6.3 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 91 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 3.5% 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,
2006 2006 2005 2005
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $64,019 $47,505 $52,527 $55,575
Mortgage loans held for sale 56,127 24,600 38,259 143,589
Securities available for sale 902,926 926,912 861,623 835,285
Securities held to maturity
(at cost) 215,230 222,213 227,262 252,527
Loans, net of
unearned income 4,829,488 4,746,970 4,628,258 4,533,129
Less allowance for
loan losses (43,124) (42,342) (42,122) (41,871)
Net loans 4,786,364 4,704,628 4,586,136 4,491,258
Federal Home Loan Bank stock
(at cost) 80,437 80,529 80,525 80,514
Premises and equipment 26,605 26,887 26,586 25,687
Bank owned life insurance 118,491 117,509 116,519 114,414
Other assets 96,391 92,887 92,329 76,379
Total assets $6,346,590 $6,243,670 $6,081,766 $6,075,228
LIABILITIES
Noninterest-bearing deposits $294,663 $277,791 $284,932 $308,730
Interest-bearing deposits:
NOW accounts 180,375 185,461 187,190 196,221
Savings and
money market accounts 830,175 859,322 932,048 988,449
Retail certificates
of deposit 1,191,906 1,153,593 1,102,188 1,013,567
Wholesale deposits 564,328 607,808 636,585 528,119
Total interest-bearing
deposits 2,766,784 2,806,184 2,858,011 2,726,356
Total deposits 3,061,447 3,083,975 3,142,943 3,035,086
Federal funds purchased
and other short-term
borrowings 643,823 718,153 709,300 719,775
Short-term FHLB advances 500,000 375,000 218,000 362,500
Long-term FHLB advances
and security repurchase
agreements 1,621,467 1,547,071 1,489,432 1,434,934
Accrued expenses and
other liabilities 62,669 62,984 67,632 63,826
Long-term debt 50,000 50,000 50,000 50,000
Total liabilities 5,939,406 5,837,183 5,677,307 5,666,121
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; 74,451,000,
74,684,000, 74,976,000, and
76,126,000 issued and
outstanding, respectively 372,257 373,422 374,882 346,026
Capital surplus 33,777 34,841 36,721 41,233
Retained earnings 19,519 11,307 3,114 23,024
Accumulated other
comprehensive loss (18,369) (13,083) (10,258) (1,176)
Total shareholders' equity 407,184 406,487 404,459 409,107
Total liabilities and
shareholders' equity $6,346,590 $6,243,670 $6,081,766 $6,075,228
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,
2006 2005 2006 2005
Interest Income
Interest and fees on loans $78,205 $67,457 $152,364 $131,921
Interest on securities and
FHLB stock dividends 14,410 13,280 28,650 24,657
Total interest income 92,615 80,737 181,014 156,578
Interest Expense
Deposits 22,800 16,667 44,162 31,855
Short-term borrowings 14,099 8,325 25,569 13,945
Long-term FHLB
advances and security
repurchase agreements 17,180 15,919 32,984 31,549
Long-term debt 1,075 1,075 2,150 2,150
Total interest expense 55,154 41,986 104,865 79,499
Net interest income 37,461 38,751 76,149 77,079
Provision for loan losses 1,750 1,400 3,150 2,900
Net interest income
after provision for
loan losses 35,711 37,351 72,999 74,179
Noninterest Income
Service charges 3,315 3,008 6,308 5,689
Mortgage banking income 2,184 3,232 4,019 9,057
Gain on sale of securities 6 292 68 727
Gain on sale of SBA loans 269 561 817 953
Income from bank owned
life insurance 981 1,080 1,960 2,093
Other noninterest income 1,204 713 2,066 1,405
Total noninterest income 7,959 8,886 15,238 19,924
Noninterest Expense
Salaries and employee
benefits 11,406 12,350 23,726 25,766
Occupancy expense of
premises 2,433 2,495 5,124 5,196
Equipment expense 1,419 1,599 2,853 3,223
Other noninterest expense 4,819 4,815 9,346 9,946
Total noninterest expense 20,077 21,259 41,049 44,131
Income before income taxes 23,593 24,978 47,188 49,972
Provision for income taxes 7,197 7,503 14,375 15,190
Net income $16,396 $17,475 $32,813 $34,782
Basic earnings per share $.22 $.23 $.44 $.45
Diluted earnings per share $.22 $.23 $.44 $.45
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(In thousands, except operating data)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Operating Data (in millions):
Residential mortgage
loan closings:
Fixed rate $218 $246 $375 $449
Adjustable rate 74 163 142 305
Total residential
mortgage loan closings $292 $409 $517 $754
Conventional loans $135 $217 $248 $411
Government loans 24 35 44 65
Construction loans 45 57 64 91
Jumbo and other loans 88 100 161 187
Total residential
mortgage loan closings $292 $409 $517 $754
Refinances (percent of total) 31% 33% 37% 39%
Mortgage loan sales $86 $174 $165 $475
Commercial loan closings:
Commercial loans $122 $194 $243 $300
SBA loans 12 15 23 24
Total commercial
loan closings $134 $209 $266 $324
Consumer loan closings: $80 $137 $145 $212
Performance Ratios
(annualized for the quarter):
Return on average assets 1.05% 1.16% 1.06% 1.17%
Return on average equity 16.08% 17.00% 16.04% 16.88%
Net interest margin 2.54% 2.73% 2.60% 2.76%
Efficiency ratio(1) 43.38% 44.01% 44.12% 45.00%
Per Common Share Data:
Average common shares
outstanding - diluted 75,116 77,578 75,333 77,948
Cash dividends declared $.11 $.10 $.22 $.20
Book value $5.47 $5.37 $5.47 $5.37
Tangible book value $5.42 $5.31 $5.42 $5.31
June 30, Mar. 31, Dec. 31, June 30,
2006 2006 2005 2005
Capital Ratios:
Shareholders' equity to assets 6.42% 6.51% 6.65% 6.73%
Tier 1 risk-based capital 10.98% 11.12% 11.24% 11.38%
Total risk-based capital 12.03% 12.18% 12.32% 12.50%
Tier 1 leverage 7.52% 7.58% 7.57% 7.57%
(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, 2006 June 30, 2005
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $1,068 $14 5.39% $782 $4 2.04%
Mortgage loans
held for sale 34,536 576 6.68 78,096 1,158 5.93
Securities available
for sale:
Taxable 697,322 8,821 5.06 634,758 7,337 4.62
Tax-exempt 219,290 2,884 5.28 225,589 3,078 5.47
Securities held to
maturity 219,298 2,508 4.57 257,529 2,970 4.61
Portfolio loans:
Commercial loans 1,767,998 32,735 7.32 1,613,861 26,113 6.40
Residential real
estate mortgage
loans 2,294,472 31,483 5.49 2,172,126 28,459 5.24
Installment loans 721,242 13,411 7.46 747,193 11,727 6.30
Total loans, net
of unearned
income 4,783,712 77,629 6.46 4,533,180 66,299 5.83
FHLB stock 80,461 1,054 5.25 80,709 855 4.25
Total interest-
earning
assets 6,035,687 93,486 6.17 5,810,643 81,701 5.61
Allowance for loan
losses (42,853) (41,986)
Cash and due from
banks 44,591 46,963
Other assets 235,782 210,222
Total assets $6,273,207 $6,025,842
Average Liabilities
and Shareholders' Equity:
Interest-bearing
demand deposits $181,350 $313 0.69% $199,899 $231 0.46%
Savings and money
market accounts 829,701 4,583 2.22 988,919 3,967 1.60
Retail certificates
of deposit 1,179,905 11,497 3.91 986,261 7,900 3.21
Wholesale deposits 543,375 6,407 4.73 555,416 4,569 3.29
Total interest-
bearing
deposits 2,734,331 22,800 3.34 2,730,495 16,667 2.45
Short-term
borrowings 1,168,438 14,099 4.77 1,076,191 8,325 3.06
Long-term FHLB
advances and
security repurchase
agreements 1,596,644 17,180 4.26 1,429,282 15,919 4.41
Long-term debt 50,000 1,075 8.60 50,000 1,075 8.60
Total interest-
bearing
liabilities 5,549,413 55,154 3.96 5,285,968 41,986 3.16
Noninterest-bearing
deposits 272,105 286,356
Other liabilities 43,865 42,342
Total
liabilities 5,865,383 5,614,666
Shareholders' equity 407,824 411,176
Total
liabilities and
shareholders'
equity $6,273,207 $6,025,842
Net interest income/
rate spread (FTE) $38,332 2.21% $39,715 2.45%
FTE adjustment $871 $964
Impact of noninterest-
bearing sources of funds 0.33% 0.28%
Net interest margin (FTE) 2.54% 2.73%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Six Months Ended Six Months Ended
June 30, 2006 June 30, 2005
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $950 $22 4.99% $1,421 $13 1.77%
Mortgage loans
held for sale 30,362 967 6.37 95,767 2,820 5.89
Securities available
for sale:
Taxable 693,318 17,292 4.99 582,619 13,318 4.55
Tax-exempt 218,131 5,761 5.33 212,788 5,779 5.48
Securities held to
maturity 222,203 5,207 4.69 246,181 5,661 4.60
Portfolio loans:
Commercial loans 1,748,938 63,715 7.25 1,600,064 50,583 6.29
Residential real
estate mortgage
loans 2,256,270 61,329 5.44 2,146,300 55,965 5.21
Installment loans 725,698 26,353 7.32 741,881 22,553 6.13
Total loans, net
of unearned
income 4,730,906 151,397 6.39 4,488,245 129,101 5.75
FHLB stock 80,493 2,098 5.26 80,710 1,681 4.20
Total interest-
earning
assets 5,976,363 182,744 6.11 5,707,731 158,373 5.55
Allowance for loan
losses (42,706) (41,875)
Cash and due from
banks 43,990 49,046
Other assets 232,789 208,535
Total assets $6,210,436 $5,923,437
Average Liabilities
and Shareholders' Equity:
Interest-bearing
demand deposits $181,895 $593 0.66% $200,189 $452 0.46%
Savings and money
market accounts 854,252 8,991 2.12 1,030,271 8,097 1.57
Retail certificates
of deposit 1,158,052 21,677 3.77 950,572 14,908 3.16
Wholesale deposits 575,519 12,901 4.52 554,209 8,398 3.03
Total interest-
bearing
deposits 2,769,718 44,162 3.22 2,735,241 31,855 2.35
Short-term
borrowings 1,117,662 25,569 4.55 985,279 13,945 2.81
Long-term FHLB
advances and
security repurchase
agreements 1,550,038 32,984 4.23 1,420,863 31,549 4.42
Long-term debt 50,000 2,150 8.60 50,000 2,150 8.60
Total interest-
bearing
liabilities 5,487,418 104,865 3.82 5,191,383 79,499 3.06
Noninterest-bearing
deposits 268,381 278,231
Other liabilities 45,575 41,710
Total
liabilities 5,801,374 5,511,324
Shareholders' equity 409,062 412,113
Total
liabilities and
shareholders'
equity $6,210,436 $5,923,437
Net interest income/
rate spread (FTE) $77,879 2.29% $78,874 2.49%
FTE adjustment $1,730 $1,795
Impact of noninterest-
bearing sources of funds 0.31% 0.27%
Net interest margin (FTE) 2.60% 2.76%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
June 30, March 31, Dec. 31, June 30,
2006 2006 2005 2005
Portfolio Loan Summary:
Commercial loans:
Commercial and
industrial $28,554 $27,639 $28,314 $29,753
Commercial real
estate mortgage 1,751,263 1,726,789 1,669,556 1,612,718
Total commercial
loans 1,779,817 1,754,428 1,697,870 1,642,471
Residential real estate
mortgages 2,326,491 2,267,385 2,193,128 2,137,046
Installment loans:
Home equity lines
of credit 353,912 371,955 390,373 444,871
Home equity term loans 195,320 179,578 170,352 136,522
Other consumer loans 173,948 173,624 176,535 172,219
Total installment
loans 723,180 725,157 737,260 753,612
Total portfolio
loans $4,829,488 $4,746,970 $4,628,258 $4,533,129
Non-Performing Assets:
Non-accrual loans:
Commercial $34,355 $26,395 $27,344 $14,550
Residential real
estate mortgage 19,273 21,484 19,026 12,202
Installment 2,059 1,758 2,413 1,100
Total non-
accrual loans 55,687 49,637 48,783 27,852
Other real estate owned:
Commercial 4,598 6,287 8,575 4,441
Residential real
estate mortgage 5,592 4,856 3,029 3,399
Installment 861 1,449 712 1,077
Total other real
estate owned 11,051 12,592 12,316 8,917
Total non-performing
assets $66,738 $62,229 $61,099 $36,769
Allowance for Loan Losses
(for the quarter):
Balance at beginning of
period $42,342 $42,122 $41,946 $41,855
Loans charged off:
Commercial 411 626 1,387 907
Residential real
estate mortgage 390 535 340 719
Installment 351 559 294 270
Total charge-offs 1,152 1,720 2,021 1,896
Recoveries:
Commercial 51 333 334 242
Residential real
estate mortgage 1 47 135 17
Installment 132 160 228 253
Total recoveries 184 540 697 512
Net charge-offs 968 1,180 1,324 1,384
Provision charged to
expense 1,750 1,400 1,500 1,400
Balance at end of period $43,124 $42,342 $42,122 $41,871
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
June 30, March 31, Dec. 31, June 30,
2006 2006 2005 2005
Asset Quality Ratios:
Non-performing assets to loans
and other real estate owned 1.38% 1.31% 1.32% .81%
Non-performing assets
to total assets 1.05% 1.00% 1.00% .61%
Allowance for loan losses
to non-performing loans 77.44% 85.30% 86.35% 150.33%
Allowance for loan losses
to loans .89% .89% .91% .92%
Allowance for loan losses
to loans (excluding residential
real estate mortgages) 1.72% 1.71% 1.73% 1.75%
Net charge-offs to average
loans: (1)
Commercial loans .08% .07% .25% .16%
Residential real estate
mortgage loans .07% .09% .04% .13%
Installment loans .12% .22% .03% .01%
Total loans .08% .10% .11% .12%
(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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