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To Our Shareholders We are pleased to report that the Company had an outstanding year in 1999. We reported record net operating income of $45.1 million, up 16% over 1998. Operating earnings per share grew 15% to $.99. Return on average shareholders’ equity increased to 17.07% in 1999 and return on average assets was 1.10%. An exciting event occurred in 1999 when the Company merged with D&N Financial Corporation. The merger doubled the Company’s assets and significantly expanded our banking presence to 87 retail bank offices and over 154 ATMs. Strong Revenue and Asset Growth Our record year in earnings during 1999 was the result of strong growth in our commercial and consumer business, along with continued solid performance from our mortgage banking business. Net interest income grew 14% in 1999 due to continued growth in earning assets, specifically our loan portfolio. Republic’s net interest margin increased 24 basis points while many banks in the country experienced declines in their net interest margin. The result was a $16 million increase in net interest income for the year. Total assets grew to $4.3 billion at December 31, 1999. With rising interest rates in 1999, the Company was able to originate and retain more variable rate residential mortgage loans. Additionally, we continued to experience continued growth in real estate-secured commercial loans. We are also pleased to report that for the sixth consecutive year, Republic Bank was named the No. 1 SBA Lender in Michigan. Republic continues to be one of the top 20 retail mortgage lenders in the country, closing over $5.2 billion in mortgage loans. Our mortgage banking business is a profitable complement to our banking franchise. In the Midwest, our retail bankers work closely with our mortgage lenders to maximize customer relationship opportunities. Superior Asset Quality The Company’s asset quality remains very sound and continues to rank among the best in the nation. Our net loan charge-offs totaled only .10% of average total loans in 1999. The average net loan charge-off ratio for our peer group of bank holding companies was .26% in 1999. The high quality of the Company’s loan portfolio is due to our focus on real estate-secured lending and our adherence to conservative underwriting standards.
The Best Place to Work Republic Bancorp Inc. is honored to be ranked 25th on
Fortune magazine’s list of “100 Best Places to Work in America” for
2000. Republic was also honored to be named one of Michigan’s 10 Best
Places to Work by Crain’s Detroit Business.
As a company, we firmly believe in individual recognition and providing
our employees the opportunity for financial and professional growth. We
believe that motivated employees will deliver exceptional service to our
customers, resulting in increased value to our shareholders.
E-Commerce The Company significantly advanced its internet banking
capabilities during 1999. During the year, the Company test-piloted Republic
Bank ExpressNet, an internet banking system. This new system provides for
electronic banking, bill paying and cash management services to retail and
commercial customers. Republic Bank ExpressNet will be available in the
second quarter through www.republicbancorp.com.
Also, the Company established a new subsidiary to process on-line mortgage
loan applications. Through www.buyersdirectmortgage.com,
customers can complete an on-line application, select from various programs
and rates and close their mortgage electronically. Buyersdirectmortgage.com
provides the Company with the ability to compete with other mortgage internet
lending sites.
Commitment to Increasing Shareholder Value The Company remains committed to increasing shareholder
value. In December 1999, Republic declared a 10% stock dividend — the
14th year in a row the Company has issued either a stock dividend or split.
The Company also increased its quarterly cash dividend again for the year
2000. In addition, the Board of Directors approved a stock repurchase program
on November 18, 1999, authorizing the repurchase of up to 1 million shares
of the Company’s outstanding common shares.
We firmly believe in keeping the interests of management and shareholders
closely aligned. To that end, the senior officers of the Company have
purchased over $3.8 million of Republic stock through the Voluntary Management
Stock Accumulation Program.
Republic Bancorp was recently named to the “Michigan Superstar
10,” a ranking of the top financial achievers among Michigan public
companies. Criteria to determine the “Top 10” is based on total
shareholder return, net income growth and return on equity. This award
reflects our focus of growing our business while remaining committed to
enhancing shareholder value.
Directors Emeriti Joseph C. Bromley, Bruce L. Cook, Kenneth D. Seaton, and
George B. Smith will retire from the Board of Directors in April 2000 and
become Directors Emeriti. Combined, these directors have provided over 84
years of outstanding service to the Company. We would like to express our
sincere appreciation for their significant contributions and guidance over
the years.
We move into
2000 with the enthusiasm and momentum to continue the growth in our banking
business. We have the talent, focus and commitment to create additional
value for our shareholders by providing the highest quality of personalized
customer service while continuing to fulfill our vision of Financing
the American Dream.
We appreciate the skill, hard work and dedication of Republic Bancorp
employees who have enabled us to grow the Company and achieve our goals.
We also wish to thank our directors for sharing their knowledge and experience
in the guidance of the Company. Finally, on behalf of our directors, officers
and employees, we thank you for your continued support.
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