Third Quarter Highlights Include:
* Record net income of $17.2 million, up 9%
* Earnings per share of $.27, up 8%
* Return on equity of 17.45%
* Strong annualized consumer loan growth of 27%
* Net charge-off ratio of only 11 basis points
ANN ARBOR, Mich., Oct. 13 /PRNewswire-FirstCall/ -- Republic Bancorp Inc.
(Nasdaq: RBNC), today announced record net income for the quarter ended
September 30, 2004 of $17,213,000, an increase of 9% over net income of
$15,790,000 earned for the third quarter in 2003. Diluted earnings per share
were $.27, up 8% from $.25 earned in 2003. Net income generated annualized
returns of 1.20% on average assets and 17.45% on average shareholders' equity
for the third quarter of 2004.
Net income for the nine months ended September 30, 2004 was $49,880,000,
compared to net income of $46,101,000 earned for the same period in 2003. For
the nine month period ending September 30, 2004, diluted earnings per share
were $.77, an increase of 7% over the $.72 earned in 2003. Annualized returns
on average assets and average shareholders' equity for the first nine months
of 2004 were 1.19% and 17.24%, 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 during the quarter, reaching $5.8 billion, driven by
strong growth in the consumer and residential loan portfolios. Our higher
level of earnings was due to the growth in both earning assets and net
interest margin, resulting in a 7% increase in net interest income during the
quarter. Also, the Company continues to keep tight control over expenses,
with an efficiency ratio of 48% for the quarter, significantly better than our
peer group," added Mr. Cluckey.
"In addition, we recently announced the Company was again named to Working
Mother Magazine's list of '100 Best Companies for Working Mothers'. We are
proud to be recognized with this honor for four years in a row. By providing
flexible solutions to our employees to facilitate their balance of work and
home life, our employees are more focused in providing customer service which
exceeds expectations. Our outstanding results for the quarter reflect the
distinctive personal services provided by our employees," added Mr. Cluckey.
Results for the third 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 direct
consumer loan portfolio, primarily home equity loans, grew $45 million, or 27%
annualized over June 30, 2004.
Commercial Banking
* SBA closings for the quarter were $12 million, up 27% from the third
quarter of 2003. For the nine months ended September 30, 2004, SBA closings
were $40 million, up 30% from 2003.
Mortgage Banking
* During the third quarter of 2004, the Company originated $469 million
in single-family residential mortgages. At September 30, 2004, the Company's
mortgage loan pipeline of applications in process was $470 million.
Income Statement
Net interest income increased $2.3 million, or 6%, for the quarter ended
September 30, 2004 compared to the third quarter of 2003 and increased $2.5
million, or 7%, over the second quarter of 2004. These increases are
primarily the result of a 14% increase in average earning assets for the third
quarter of 2004 compared to the third quarter of 2003 and a 3% increase in
average earning assets over the quarter ended June 30, 2004. In addition, the
Company's net interest margin for the quarter ended September 30, 2004 was
2.85%, an increase of 10 basis points over the second quarter of 2004.
Total noninterest income, excluding mortgage banking income, increased
$708,000, or 13%, for the quarter ended September 30, 2004 compared to the
third quarter of 2003. The increase was primarily due to higher levels of
gain on sale of SBA loans. Excluding mortgage banking income, total
noninterest income for the quarter ended September 30, 2004 increased
$339,000, or 6%, compared to the second quarter of 2004. The increase was
also due primarily to higher levels of gain on sale of SBA loans.
Total noninterest expense decreased $3.9 million, or 14% for the quarter
ended September 30, 2004 compared to the third quarter of 2003. The decrease
was primarily a result of a decrease of $1.8 million in salaries and employee
benefits related to incentives, temporary services, employee benefits and
payroll taxes reflecting significantly lower residential mortgage closing
volume for 2004 compared to 2003. The decrease in other noninterest expense
of $2.0 million related to decreases in state income taxes, advertising and
other expenses. Total noninterest expenses for the quarter ended September
30, 2004 were down slightly from the quarter ended June 30, 2004.
Asset Quality and Capital
The Company's asset quality remains very sound. Total non-performing
assets decreased $271,000, or 1%, from June 30, 2004. Net charge-offs to
total average loans were only 11 basis points for the quarter ended September
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 September 30, 2004.
During the third quarter of 2004, the Company repurchased 190,000 shares
at an average price of $14.62 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 1,953,000 shares are available for repurchase at
September 30, 2004.
The Company's capital ratios continue to be well in excess of the
requirements for a well-capitalized bank. At September 30, 2004, the
Company's total risk-based capital ratio was a strong 12.82% and the Tier 1
leverage ratio was 7.80%.
About the Company
Republic Bancorp Inc., with $5.8 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 93 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. In 2004, Republic was 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 four
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 $.44 per share,
which represents an annual 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 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)
Sept. 30, June 30, Dec. 31, Sept. 30,
2004 2004 2003 2003
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and cash
equivalents $61,070 $60,868 $63,858 $76,566
Mortgage loans
held for sale 153,875 54,836 135,360 391,369
Securities available
for sale 682,343 754,632 607,450 459,933
Securities held to
maturity (at cost) 231,286 240,081 156,555 -
Loans 4,432,060 4,356,280 4,157,514 3,999,974
Less allowance for
loan losses (44,167) (43,086) (40,271) (39,212)
Net loans 4,387,893 4,313,194 4,117,243 3,960,762
Federal Home Loan
Bank stock (at cost) 80,508 80,503 80,500 80,502
Premises and equipment 26,868 27,400 26,928 26,564
Bank owned
life insurance 111,883 110,813 108,330 106,858
Other assets 66,784 69,166 57,464 57,771
Total assets $5,802,510 $5,711,493 $5,353,688 $5,160,325
LIABILITIES
Noninterest-bearing
deposits $283,813 $294,355 $256,265 $287,640
Interest-bearing deposits:
NOW accounts 201,437 189,904 184,217 183,195
Savings and money
market accounts 1,049,146 1,065,516 1,054,857 1,110,161
Certificates of
deposit under
$100,000 666,538 665,841 678,758 692,713
Certificates of
deposit $100,000
or greater 769,141 608,565 641,172 648,212
Total interest-
bearing deposits 2,686,262 2,529,826 2,559,004 2,634,281
Total deposits 2,970,075 2,824,181 2,815,269 2,921,921
Federal funds purchased
and other
short-term borrowings 533,841 595,147 491,245 483,136
Short-term FHLB advances 403,000 391,000 280,000 250,000
Long-term FHLB advances
and reverse
repurchase agreements 1,388,052 1,411,003 1,286,726 1,026,529
Accrued expenses and
other liabilities 55,149 58,209 61,028 73,437
Long-term debt 50,000 50,000 50,000 50,000
Total liabilities 5,400,117 5,329,540 4,984,268 4,805,023
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;
64,012,000, 64,035,000,
63,527,000, and
63,170,000 issued
and outstanding,
respectively 320,058 320,177 317,633 287,133
Capital surplus 52,367 53,709 50,358 37,953
Unearned compensation -
restricted stock (3,674) (4,197) (1,666) (2,058)
Retained earnings 34,580 24,414 3,893 35,274
Accumulated other
comprehensive loss (938) (12,150) (798) (3,000)
Total shareholders'
equity 402,393 381,953 369,420 355,302
Total liabilities
and shareholders'
equity $5,802,510 $5,711,493 $5,353,688 $5,160,325
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Interest Income
Loans, including fees $61,342 $62,004 $176,636 $187,884
Investment securities and
FHLB stock dividends 10,949 4,556 31,466 11,268
Total interest income 72,291 66,560 208,102 199,152
Interest Expense
Deposits 13,024 13,172 38,728 43,098
Short-term borrowings 3,946 2,365 8,283 5,872
Long-term FHLB advances and
reverse repurchase agreements 15,546 13,538 47,090 40,118
Long-term debt 1,075 1,075 3,225 3,264
Total interest expense 33,591 30,150 97,326 92,352
Net interest income 38,700 36,410 110,776 106,800
Provision for loan losses 2,250 3,000 6,750 9,000
Net interest income after
provision for loan losses 36,450 33,410 104,026 97,800
Noninterest Income
Service charges 2,971 2,972 8,673 8,359
Mortgage banking income 4,558 10,567 16,298 30,758
Gain on sale of securities 602 619 1,964 1,499
Gain on sale of SBA loans 1,400 19 2,586 310
Income from bank owned
life insurance 1,070 1,432 3,553 4,047
Other noninterest income 248 541 1,107 1,535
Total noninterest income 10,849 16,150 34,181 46,508
Noninterest Expense
Salaries and employee benefits 14,033 15,847 39,957 46,302
Occupancy expense of premises 2,564 2,542 7,659 7,681
Equipment expense 1,672 1,752 4,998 5,178
Other noninterest expense 5,079 7,106 15,135 19,169
Total noninterest expense 23,348 27,247 67,749 78,330
Income before income taxes 23,951 22,313 70,458 65,978
Provision for income taxes 6,738 6,523 20,578 19,877
Net income $17,213 $15,790 $49,880 $46,101
Basic earnings per share $.27 $.25 $.78 $.73
Diluted earnings per share $.27 $.25 $.77 $.72
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands, except operating data)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Operating Data (in millions):
Residential mortgage loan closings:
Fixed rate $224 $949 $764 $2,866
Adjustable rate 245 268 749 649
Total residential mortgage
loan closings $469 $1,217 $1,513 $3,515
Conventional loans $285 $920 $921 $2,720
Government loans 51 75 146 204
Jumbo and other loans 133 222 446 591
Total residential mortgage
loan closings $469 $1,217 $1,513 $3,515
Refinances (percent of total) 28% 64% 40% 70%
Performance Ratios (annualized for the quarter):
Return on average assets 1.20% 1.24% 1.19% 1.26%
Return on average equity 17.45% 17.95% 17.24% 17.77%
Net interest margin 2.85% 3.06% 2.81% 3.11%
Efficiency ratio (1) 47.70% 52.46% 47.38% 51.60%
Per Common Share Data:
Average common shares
outstanding - diluted 64,857 64,085 64,748 64,111
Cash dividends declared $.11 $.086 $.30 $.241
Book value $6.29 $5.62 $6.29 $5.62
Tangible book value $6.21 $5.53 $6.21 $5.53
Sept. 30, June 30, Dec. 31, Sept. 30,
2004 2004 2003 2003
Capital Ratios:
Shareholders' equity to assets 6.93% 6.69% 6.90% 6.89%
Tier 1 risk-based capital 11.67% 11.77% 11.72% 11.57%
Total risk-based capital 12.82% 12.92% 12.85% 12.70%
Tier 1 leverage 7.80% 7.82% 8.04% 7.90%
(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
September 30, 2004 September 30, 2003
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $311 $1 1.54% $149 $ - 0.39%
Mortgage loans
held for sale 111,891 1,644 5.88 473,378 6,537 5.52
Securities
available
for sale 745,826 8,433 4.49 379,558 4,793 5.01
Securities
held to
maturity 235,899 2,645 4.48 - - -
Portfolio loans:
Commercial
loans 1,544,194 22,075 5.59 1,471,587 21,738 5.78
Residential
real estate
mortgage
loans 2,151,496 28,253 5.25 1,888,933 25,273 5.35
Installment
loans 692,354 9,370 5.37 589,833 8,456 5.69
Total loans,
net of
unearned
income 4,388,044 59,698 5.39 3,950,353 55,467 5.56
FHLB stock 80,701 913 4.49 80,270 800 3.95
Total
interest-
earning
assets 5,562,672 73,334 5.23 4,883,708 67,597 5.49
Allowance for
loan losses (43,760) (39,003)
Cash and due
from banks 53,699 70,792
Other assets 181,698 179,037
Total
assets $5,754,309 $5,094,534
Average Liabilities and Shareholders' Equity
Interest-bearing
demand
deposits $194,630 $151 0.31% $183,522 $123 0.27%
Savings and
money market
accounts 1,044,979 3,282 1.25 1,017,166 3,131 1.22
Time
deposits 1,362,543 9,591 2.79 1,344,575 9,918 2.93
Total
interest-
bearing
deposits 2,602,152 13,024 1.99 2,545,263 13,172 2.05
Short-term
borrowings 1,006,053 3,946 1.54 788,292 2,365 1.18
Long-term FHLB
advances and
reverse
repurchase
agreements 1,391,268 15,546 4.37 1,029,274 13,538 5.15
Long-term
debt 50,000 1,075 8.60 50,000 1,075 8.60
Total
interest-
bearing
liabil-
ities 5,049,473 33,591 2.62 4,412,829 30,150 2.69
Noninterest-
bearing
deposits 282,032 284,685
Other
liabilities 28,135 45,199
Total
liabil-
ities 5,359,640 4,742,713
Shareholders'
equity 394,669 351,821
Total
liabilities
and
shareholders'
equity $5,754,309 $5,094,534
Net interest
income/rate
spread (FTE) $39,743 2.61% $37,447 2.80%
FTE adjustment $1,043 $1,037
Impact of noninterest-
bearing sources
of funds 0.24% 0.26%
Net interest
margin (FTE) 2.85% 3.06%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Nine Months Ended Nine Months Ended
September 30, 2004 September 30, 2003
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term
investments $550 $4 0.89% $237 $2 0.94%
Mortgage loans
held for sale 110,790 4,771 5.74 427,742 18,053 5.63
Securities
available for
sale 721,577 24,234 4.47 280,178 10,511 5.02
Securities
held to
maturity 220,505 7,469 4.52 - - -
Portfolio loans:
Commercial
loans 1,538,357 64,399 5.50 1,471,271 67,629 6.06
Residential
real estate
mortgage
loans 2,064,937 81,023 5.23 1,819,917 75,801 5.55
Installment
loans 659,483 26,443 5.34 586,811 26,401 6.02
Total loans,
net of
unearned
income 4,262,777 171,865 5.35 3,877,999 169,831 5.82
FHLB stock 80,718 2,822 4.66 79,346 2,955 4.98
Total
interest-
earning
assets 5,396,917 211,165 5.19 4,665,502 201,352 5.74
Allowance for
loan losses (42,434) (37,842)
Cash and due
from banks 54,001 66,763
Other assets 187,038 169,455
Total
assets $5,595,522 $4,863,878
Average Liabilities and Shareholders' Equity
Interest-bearing
demand
deposits $189,920 $406 0.28% $179,993 $471 0.35%
Savings and
money market
accounts 1,047,646 9,938 1.26 967,147 10,163 1.40
Time deposits 1,348,229 28,384 2.80 1,401,159 32,464 3.10
Total
interest-
bearing
deposits 2,585,795 38,728 2.00 2,548,299 43,098 2.26
Short-term
borrowings 863,100 8,283 1.26 590,738 5,872 1.31
Long-term FHLB
advances and
reverse
repurchase
agreements 1,402,809 47,090 4.41 1,017,857 40,118 5.20
Long-term
debt 50,000 3,225 8.60 50,750 3,264 8.58
Total
interest-
bearing
liabil-
ities 4,901,704 97,326 2.62 4,207,644 92,352 2.91
Noninterest-
bearing
deposits 273,396 269,911
Other
liabilities 34,627 40,341
Total
liabil-
ities 5,209,727 4,517,896
Shareholders'
equity 385,795 345,982
Total
liabilities
and
shareholders'
equity $5,595,522 $4,863,878
Net interest
income/Rate
spread (FTE) $113,839 2.57% $109,000 2.83%
FTE adjustment $3,063 $2,200
Impact of
noninterest-
bearing sources
of funds 0.24% 0.28%
Net interest margin (FTE) 2.81% 3.11%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Sept. 30, June 30, Dec. 31, Sept. 30,
2004 2004 2003 2003
Portfolio Loan Summary:
Commercial loans:
Commercial and industrial $37,712 $40,292 $38,319 $41,668
Commercial real estate
mortgage 1,517,746 1,512,948 1,482,814 1,432,260
Total commercial loans 1,555,458 1,553,240 1,521,133 1,473,928
Residential real estate
mortgages 2,160,835 2,130,310 2,014,809 1,929,312
Installment loans (1) 715,767 672,730 621,572 596,734
Total portfolio loans $4,432,060 $4,356,280 $4,157,514 $3,999,974
Non-performing assets:
Non-accrual loans:
Commercial $23,456 $22,889 $27,666 $23,699
Residential real estate
mortgage 10,330 11,476 11,181 11,456
Installment 1,071 1,070 873 1,241
Total non-accrual loans 34,857 35,435 39,720 36,396
Restructured loans - - - -
Other real estate owned 4,161 3,854 2,718 3,219
Total non-performing
assets $39,018 $39,289 $42,438 $39,615
Allowance for Loan Losses (for the quarter):
Balance at beginning
of period $43,086 $41,556 $39,212 $38,269
Loans charged off:
Commercial 1,279 1,131 1,618 1,816
Residential real estate
mortgage 227 391 54 169
Installment 327 397 669 516
Total charge-offs 1,833 1,919 2,341 2,501
Recoveries:
Commercial 410 1,235 263 250
Residential real estate
mortgage 32 - - -
Installment 222 214 137 194
Total recoveries 664 1,449 400 444
Net charge-offs 1,169 470 1,941 2,057
Provision charged to expense 2,250 2,000 3,000 3,000
Balance at end of period $44,167 $43,086 $40,271 $39,212
(1) Includes indirect installment loan balances at September 30, 2004,
June 30, 2004, December 31, 2003 and September 30, 2003 of $6.2 million, $7.9
million, $13.4 million and $17.1 million, respectively.
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
Sept. 30, June 30, Dec. 31, Sept. 30,
2004 2004 2003 2003
Asset Quality Ratios:
Non-performing assets
to loans and
other real estate owned .88% .90% 1.02% .99%
Non-performing assets
to total assets .67% .69% .79% .77%
Allowance for loan losses
to non-performing loans 126.71% 121.59% 101.39% 107.74%
Allowance for loan losses
to loans 1.00% .99% .97% .98%
Allowance for loan losses
to loans (excluding
residential real estate
mortgages) 1.94% 1.94% 1.88% 1.89%
Net charge-offs to
average loans: (1)
Commercial loans .23% (.03%) .36% .43%
Residential real estate
mortgage loans .04% .08% .01% .04%
Installment loans .06% .11% .35% .22%
Total loans .11% .04% .19% .21%
Earnings coverage of
net charge-offs (2) 21.90x 52.47x 11.83x 12.00x
(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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