Third Quarter 2005 Highlights Include:
* Net income of $17.2 million
* Earnings per share of $.25
* Return on equity of 16.87%
* Annualized commercial loan growth of 9%
* Year-to-date efficiency ratio of 46%, well below peer
ANN ARBOR, Mich., Oct. 13 /PRNewswire-FirstCall/ -- Republic Bancorp Inc.,
(Nasdaq: RBNC), today announced net income for the quarter ended September 30,
2005 of $17,222,000, compared to net income of $17,213,000 earned in the third
quarter of 2004. Diluted earnings per share were $.25, up 3% from $.24 earned
in 2004. Net income generated returns of 1.14% on average assets and 16.87%
on average shareholders' equity for the quarter ended September 30, 2005.
Net income for the nine months ended September 30, 2005 was $52,004,000,
compared to net income of $49,880,000 earned for the same period in 2004. For
the nine month period ending September 30, 2005, diluted earnings per share
were $.74, an increase of 5% over the $.70 earned in 2004. Annualized returns
on average assets and average shareholders' equity for the first nine months
of 2005 were 1.16% and 16.88%, respectively.
"The Company's solid financial results were driven again by our focused
business strategies and motivated employees," commented Dana M. Cluckey,
President and Chief Executive Officer. "Our commercial, retail and mortgage
business lines all contributed to our increased profitability and worked well
together to serve our customers. Republic continues to operate very
efficiently and is well capitalized with Total risk-based capital of over
12%," added Mr. Cluckey.
"In addition, we are proud to be recognized by Working Mother magazine's
list of '100 Best Companies for Working Mothers' for the fifth year in a row.
By providing flexible solutions to our employees to facilitate their balance
of work and home life, they are more focused in providing customer service
which exceeds expectations. Our consistent and solid financial results
reflect the distinctive personal service provided by our employees," added Mr.
Cluckey.
Results for the third quarter of 2005 reflect solid performance from the
Company's three business lines.
Commercial Banking
* The commercial loan portfolio grew $122 million from September 30,
2004, with the commercial real estate mortgage portfolio up 9%. Commercial
loan closings were a record $198 million during the third quarter of 2005, up
19% from the third quarter of 2004. Through September 30, 2005, commercial
loan closings totaled $498 million, up 21% over 2004.
* SBA loan closings during the quarter were $12 million, consistent with
the third quarter of 2004. SBA closings through September 30, 2005 were $36
million.
Retail Banking
* The Company's installment loan portfolio, primarily home equity loans,
grew $46 million, or 6% compared to September 30, 2004. Consumer loan
closings were $115 million during the third quarter of 2005, down 8% from the
third quarter of 2004. Through September 30, 2005, consumer loan closings
totaled $327 million.
* Total retail deposits increased $99 million, or 4% compared to
September 30, 2004.
Mortgage Banking
* During the third quarter of 2005, the Company originated $435 million
in single-family residential mortgages, with 33% of these closings being
adjustable rate loans. At September 30, 2005, the Company's mortgage loan
pipeline of applications in process was $528 million, an increase of $58
million from September 30, 2004. At September 30, 2005, $116 million of the
mortgage loan pipeline represented commitments to fund loan applications with
agreed-upon rates.
Income Statement
Net interest income decreased $620,000, or 2%, for the third quarter of
2005 compared to the corresponding period in 2004, due to a decline in the net
interest margin partially offset by an increase in average earning assets.
For the quarter ended September 30, 2005, the Company's net interest margin
was 2.67%.
Total noninterest income increased $162,000 for the third quarter of 2005
compared to the corresponding period in 2004, due primarily to higher mortgage
banking income and service charges.
Total noninterest expense increased $550,000, or 2%, for the third quarter
of 2005 compared to the corresponding period in 2004. The increase was
primarily a result of an increase of $1.3 million in salaries and employee
benefits related to higher employee incentive accruals partially offset by a
decrease of $686,000 in other noninterest expense primarily reflecting lower
state taxes and other miscellaneous expenses.
The Company's efficiency ratio for the nine months ended September 30,
2005 was 46.09%, which compares favorably to our peer group.
Asset Quality and Capital
Net charge-offs to total average loans were 12 basis points for the
quarter ended September 30, 2005 and remain substantially below the Company's
peer group. Total non-accrual loans increased $12.1 million from June 30,
2005, with a majority of the increase related to commercial loans.
During the third quarter of 2005, the Company repurchased 807,000 shares
at an average price of $14.69 per share. Of these repurchases, 78,852 shares
were repurchased under the 2003 Stock Repurchase Program, which has now been
completed. The remaining 728,148 shares were repurchased under the 2005 Stock
Repurchase Program which has 1,271,852 shares available for repurchase.
Through September 30, 2005, 2,628,500 shares have been repurchased.
The Company's capital ratios continue to be well in excess of the
requirements for a well-capitalized bank. At September 30, 2005, the
Company's Total risk-based capital ratio was 12.27% and the Tier 1 leverage
ratio was 7.52%.
About the Company
Republic Bancorp Inc., with $6.1 billion in assets, is the third largest
bank holding company headquartered in Michigan and the 82nd 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 five 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 3.3% 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)
Sept. 30, June 30, Dec. 31, Sept. 30,
2005 2005 2004 2004
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $68,395 $55,575 $53,671 $61,070
Mortgage loans held for
sale 91,844 143,589 105,318 153,875
Securities available for
sale 831,820 835,285 620,794 682,343
Securities held to
maturity (at cost) 237,059 252,527 222,757 231,286
Loans 4,585,988 4,533,129 4,463,975 4,432,060
Less allowance for
loan losses (41,946) (41,871) (41,818) (44,167)
Net loans 4,544,042 4,491,258 4,422,157 4,387,893
Federal Home Loan Bank
stock (at cost) 80,521 80,514 80,511 80,508
Premises and equipment 26,690 25,687 26,493 26,868
Bank owned life insurance 115,498 114,414 112,978 111,883
Other assets 85,613 76,379 69,298 66,784
Total assets $6,081,482 $6,075,228 $5,713,977 $5,802,510
LIABILITIES
Noninterest-bearing
deposits $295,124 $308,730 $274,747 $283,813
Interest-bearing deposits:
NOW accounts 184,476 196,221 203,553 201,437
Savings and money
market accounts 977,221 988,449 1,100,333 1,045,351
Retail certificates
of deposit 1,049,334 1,013,567 879,361 876,291
Wholesale deposits 708,452 528,119 588,217 563,183
Total interest-bearing
deposits 2,919,483 2,726,356 2,771,464 2,686,262
Total deposits 3,214,607 3,035,086 3,046,211 2,970,075
Federal funds purchased
and other short-term
borrowings 718,775 719,775 538,300 533,841
Short-term FHLB advances 190,000 362,500 215,000 403,000
Long-term FHLB advances
and security repurchase
agreements 1,438,302 1,434,934 1,390,878 1,388,052
Accrued expenses and
other liabilities 64,570 63,826 63,950 55,149
Long-term debt 50,000 50,000 50,000 50,000
Total liabilities 5,676,254 5,666,121 5,304,339 5,400,117
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; 68,463,000,
69,205,000, 70,425,000,
and 70,413,000 issued and
outstanding,
respectively 342,315 346,026 352,125 320,058
Capital surplus 40,030 47,556 59,303 52,367
Unearned compensation -
restricted stock (5,623) (6,323) (3,207) (3,674)
Retained earnings 32,692 23,024 3,634 34,580
Accumulated other
comprehensive loss (4,186) (1,176) (2,217) (938)
Total shareholders'
equity 405,228 409,107 409,638 402,393
Total liabilities
and shareholders'
equity $6,081,482 $6,075,228 $5,713,977 $5,802,510
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,
2005 2004 2005 2004
Interest Income
Loans, including fees $70,556 $61,342 $202,477 $176,636
Investment securities
and FHLB stock
dividends 12,795 10,949 37,452 31,466
Total interest
income 83,351 72,291 239,929 208,102
Interest Expense
Deposits 19,118 13,024 50,973 38,728
Short-term borrowings 9,147 3,946 23,092 8,283
Long-term FHLB advances
and security repurchase
agreements 15,931 15,546 47,480 47,090
Long-term debt 1,075 1,075 3,225 3,225
Total interest
expense 45,271 33,591 124,770 97,326
Net interest income 38,080 38,700 115,159 110,776
Provision for loan losses 1,400 2,250 4,300 6,750
Net interest income after
provision for loan
losses 36,680 36,450 110,859 104,026
Noninterest Income
Service charges 3,318 2,971 9,007 8,673
Mortgage banking income 4,760 4,558 13,817 16,298
Gain on sale of
securities 447 602 1,174 1,964
Gain on sale of SBA loans 628 1,400 1,581 2,586
Income from bank owned life
insurance 1,083 1,070 3,176 3,553
Other noninterest income 775 248 2,180 1,107
Total noninterest
income 11,011 10,849 30,935 34,181
Noninterest Expense
Salaries and employee
benefits 15,337 14,033 41,103 39,957
Occupancy expense of
premises 2,603 2,564 7,799 7,659
Equipment expense 1,565 1,672 4,788 4,998
Other noninterest expense 4,393 5,079 14,339 15,135
Total noninterest
expense 23,898 23,348 68,029 67,749
Income before income
taxes 23,793 23,951 73,765 70,458
Provision for income
taxes 6,571 6,738 21,761 20,578
Net income $17,222 $17,213 $52,004 $49,880
Basic earnings per share $.25 $.24 $.75 $.71
Diluted earnings per
share $.25 $.24 $.74 $.70
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(In thousands, except operating data)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Mortgage Operating Data (in millions):
Residential mortgage loan closings:
Fixed rate $291 $224 $740 $764
Adjustable rate 144 245 449 749
Total residential
mortgage loan
closings $435 $469 $1,189 $1,513
Conventional loans $216 $212 $627 $731
Government loans 42 51 107 146
Construction loans 56 73 147 190
Jumbo and other loans 121 133 308 446
Total residential
mortgage loan
closings $435 $469 $1,189 $1,513
Refinances (percent of
total) 37% 28% 38% 40%
Mortgage loan sales $300 $205 $775 $854
Performance Ratios (annualized for the quarter):
Return on average assets 1.14% 1.20% 1.16% 1.19%
Return on average equity 16.87% 17.45% 16.88% 17.24%
Net interest margin 2.67% 2.85% 2.73% 2.81%
Efficiency ratio (1) 48.26% 46.71% 46.09% 46.39%
Per Common Share Data:
Average common shares
outstanding - diluted 69,616 71,343 70,442 71,222
Cash dividends declared $.11 $.10 $.33 $.273
Book value $5.92 $5.71 $5.92 $5.71
Tangible book value $5.85 $5.64 $5.85 $5.64
Sept. 30, June 30, Dec. 31, Sept. 30,
2005 2005 2004 2004
Capital Ratios:
Shareholders' equity to
assets 6.66% 6.73% 7.20% 6.93%
Tier 1 risk-based
capital 11.18% 11.38% 11.87% 11.67%
Total risk-based
capital 12.27% 12.50% 12.96% 12.82%
Tier 1 leverage 7.52% 7.57% 7.94% 7.80%
(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
September 30, 2005 September 30, 2004
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term investments $1,125 $9 3.26% $311 $1 1.54%
Mortgage loans held
for sale 123,039 1,811 5.89 111,891 1,644 5.88
Securities available for sale:
Taxable 620,465 7,142 4.60 524,579 5,252 4.00
Tax-exempt 203,673 2,762 5.38 221,247 3,181 5.70
Securities held to
maturity 246,915 2,795 4.53 235,899 2,645 4.48
Portfolio loans:
Commercial loans 1,662,161 28,295 6.66 1,544,194 22,075 5.59
Residential real
estate mortgage
loans 2,138,468 28,017 5.24 2,151,496 28,253 5.25
Installment loans 752,278 12,433 6.56 692,354 9,370 5.37
Total loans, net
of unearned
income 4,552,907 68,745 5.98 4,388,044 59,698 5.39
FHLB stock 80,518 965 4.75 80,701 913 4.49
Total interest-
earning
assets 5,828,642 84,229 5.73 5,562,672 73,334 5.23
Allowance for loan
losses (42,098) (43,760)
Cash and due from
banks 51,647 53,699
Other assets 212,929 181,698
Total assets $6,051,120 $5,754,309
Average Liabilities and Shareholders' Equity:
Interest-bearing
demand deposits $193,258 $266 0.55% $194,630 $151 0.31%
Savings and money
market accounts 998,537 4,738 1.88 1,033,022 3,237 1.24
Retail certificates
of deposit 1,031,360 8,693 3.34 876,527 6,875 3.11
Wholesale deposits 584,836 5,421 3.68 497,973 2,761 2.20
Total interest-
bearing
deposits 2,807,991 19,118 2.70 2,602,152 13,024 1.99
Short-term
borrowings 1,022,939 9,147 3.50 1,006,053 3,946 1.54
Long-term FHLB
advances and security
repurchase
agreements 1,425,914 15,931 4.37 1,391,268 15,546 4.37
Long-term debt 50,000 1,075 8.60 50,000 1,075 8.60
Total interest-
bearing
liabilities 5,306,844 45,271 3.36 5,049,473 33,591 2.62
Noninterest-bearing
deposits 292,012 282,032
Other liabilities 43,931 28,135
Total
liabilities 5,642,787 5,359,640
Shareholders' equity 408,333 394,669
Total liabilities
and shareholders'
equity $6,051,120 $5,754,309
Net interest income/
rate spread (FTE) $38,958 2.37% $39,743 2.61%
FTE adjustment $878 $1,043
Impact of noninterest-
bearing sources of funds 0.30% 0.24%
Net interest margin (FTE) 2.67% 2.85%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Nine Months Ended Nine Months Ended
September 30, 2005 September 30, 2004
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Average Assets:
Short-term investments $1,321 $22 2.20% $550 $4 0.89%
Mortgage loans held
for sale 104,960 4,630 5.88 110,790 4,771 5.74
Securities available for sale:
Taxable 595,373 20,458 4.53 502,871 14,765 3.91
Tax-exempt 209,717 8,543 5.45 218,706 9,469 5.79
Securities held to
maturity 246,429 8,457 4.58 220,505 7,469 4.52
Portfolio loans:
Commercial loans 1,620,991 78,879 6.42 1,538,357 64,399 5.50
Residential real
estate mortgage
loans 2,143,661 83,982 5.22 2,064,937 81,023 5.23
Installment loans 745,385 34,986 6.28 659,483 26,443 5.34
Total loans, net
of unearned
income 4,510,037 197,847 5.83 4,262,777 171,865 5.35
FHLB stock 80,645 2,646 4.39 80,718 2,822 4.66
Total interest-
earning assets 5,748,482 242,603 5.60 5,396,917 211,165 5.19
Allowance for loan
losses (41,950) (42,434)
Cash and due from
banks 49,922 54,001
Other assets 210,018 187,038
Total assets $5,966,472 $5,595,522
Average Liabilities and Shareholders' Equity:
Interest-bearing
demand deposits $197,853 $718 0.49% $189,920 $406 0.28%
Savings and money
market accounts 1,019,600 12,837 1.68 1,029,134 9,752 1.26
Retail certificates
of deposit 977,798 23,600 3.23 884,287 20,971 3.16
Wholesale deposits 564,508 13,818 3.27 482,454 7,599 2.10
Total interest-
bearing
deposits 2,759,759 50,973 2.47 2,585,795 38,728 2.00
Short-term
borrowings 997,970 23,092 3.05 863,100 8,283 1.26
Long-term FHLB
advances and security
repurchase
agreements 1,422,232 47,480 4.40 1,402,809 47,090 4.41
Long-term debt 50,000 3,225 8.60 50,000 3,225 8.60
Total interest-
bearing
liabilities 5,229,961 124,770 3.16 4,901,704 97,326 2.62
Noninterest-bearing
deposits 282,875 273,396
Other liabilities 42,783 34,627
Total
liabilities 5,555,619 5,209,727
Shareholders' equity 410,853 385,795
Total liabilities
and shareholders'
equity $5,966,472 $5,595,522
Net interest income/
rate spread (FTE) $117,833 2.44% $113,839 2.57%
FTE adjustment $2,674 $3,063
Impact of noninterest-
bearing sources of funds 0.29% 0.24%
Net interest margin (FTE) 2.73% 2.81%
REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
Sept. 30, June 30, Dec. 31, Sept. 30,
2005 2005 2004 2004
Portfolio Loan Summary:
Commercial loans:
Commercial and
industrial $30,390 $29,753 $32,632 $37,712
Commercial real
estate mortgage 1,647,460 1,612,718 1,542,660 1,517,746
Total commercial
loans 1,677,850 1,642,471 1,575,292 1,555,458
Residential real estate
mortgages 2,146,613 2,137,046 2,152,720 2,160,835
Installment loans 761,525 753,612 735,963 715,767
Total portfolio
loans $4,585,988 $4,533,129 $4,463,975 $4,432,060
Non-performing assets:
Non-accrual loans:
Commercial $24,913 $14,550 $17,744 $23,456
Residential real
estate mortgage 13,636 12,202 10,705 10,330
Installment 1,361 1,100 852 1,071
Total non-accrual
loans 39,910 27,852 29,301 34,857
Other real estate owned:
Commercial 9,089 4,441 650 1,035
Residential real estate
mortgage 3,331 3,399 2,720 2,636
Installment 687 1,077 790 490
Total other real
estate owned 13,107 8,917 4,160 4,161
Total non-performing
assets $53,017 $36,769 $33,461 $39,018
Allowance for Loan Losses (for the quarter):
Balance at beginning of
period $41,871 $41,855 $44,167 $43,086
Loans charged off:
Commercial 924 907 753 1,279
Residential real
estate mortgage 577 719 379 227
Installment 345 270 386 327
Total charge-offs 1,846 1,896 1,518 1,833
Recoveries:
Commercial 96 242 17 410
Residential real estate
mortgage 219 17 35 32
Installment 206 253 184 222
Total recoveries 521 512 236 664
Net charge-offs 1,325 1,384 1,282 1,169
Provision charged to
expense 1,400 1,400 1,750 2,250
Reclassification of
allowance for loan losses
on unfunded loan
commitments(1) - - (2,817) -
Balance at end of period $41,946 $41,871 $41,818 $44,167
(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)
Sept. 30, June 30, Dec. 31, Sept. 30,
2005 2005 2004 2004
Asset Quality Ratios:
Non-performing assets to
loans and other real
estate owned 1.15% .81% .75% .88%
Non-performing assets to
total assets .87% .61% .59% .67%
Allowance for loan losses
to non-performing loans 105.10% 150.33% 142.72% 126.71%
Allowance for loan losses
to loans .91% .92% .94% 1.00%
Allowance for loan losses
to loans (excluding
residential real estate
mortgages) 1.72% 1.75% 1.81% 1.94%
Net charge-offs to average loans: (1)
Commercial loans .20% .16% .19% .23%
Residential real estate
mortgage loans .07% .13% .06% .04%
Installment loans .07% .01% .11% .06%
Total loans .12% .12% .11% .11%
(1) Quarter-to-date, annualized.
SOURCE Republic Bancorp Inc.
 back to top
Related links:
http://www.republicbancorp.com
CONTACT:
Thomas F. Menacher, Exec. V.P., Treasurer &
CFO, tmenacher@republicbancorp.com , +1-989-725-7337, or Kristine
D. Brenner, Director of Investor Relations,
kbrenner@republicbancorp.com , +1-989-725-7337, both of Republic
Bancorp Inc.
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