Exhibit A
 | NEW | |||
| www.republicbancorp.com | Nasdaq: RBNC | |||
| FOR FURTHER INFORMATION: | ||||
| Thomas F. Menacher Exec.V.P., Treasurer & CFO tmenacher@republicbancorp.com (989) 725-7337 | Kristine D. Brenner Director of Investor Relations kbrenner@republicbancorp.com (989) 725-7337 | |||
REPUBLIC BANCORP REPORTS FIRST QUARTER RESULTS
First Quarter Highlights Include:
| • | Record net income of $15.2 million | ||
| • | Earnings per share of $.26, up 9% | ||
| • | Return on equity of 17.88% | ||
| • | Annualized core deposit growth of 21% | ||
| • | Non-performing assets decreased by 8% |
ANN ARBOR, Michigan—April 14, 2003—Republic Bancorp Inc., (Nasdaq: RBNC),today announced record net income for the quarter ended March 31, 2003 of $15,153,000, an increase of 7% over net income of $14,118,000 for the first quarter of 2002. Diluted earnings per share were $.26, up 9% from $.24 earned in 2002. Net income generated annualized returns of 1.30% on average assets and 17.88% on average shareholders’ equity for the quarter ended March 31, 2003. These compare to returns of 1.25% on average assets and 18.14% on average equity for the first quarter of 2002.
“We are pleased to report another outstanding quarter for the Company,” commented Dana M. Cluckey, President and Chief Executive Officer. “Our earnings per share growth of 9% was driven by an increase in noninterest income and controlled expenses. We also had significant growth in core deposits during the quarter which funded the increase in our total portfolio loans. Our focus on providing distinctive personal service and emphasis on real estate secured lending continues to produce consistent and above peer group financial results,” added Mr. Cluckey.
The Company had a strong quarter in mortgage banking. During the quarter, the Company originated $988 million in single-family residential mortgages, up 39% over the first quarter of 2002. At March 31, 2003, the Company’s mortgage loan pipeline of applications in process was $792 million, up 18% over March 31, 2002.
Total noninterest income increased $4.3 million, or 41%, for the quarter ended March 31, 2003, compared to the same period in 2002. The increase was primarily due to higher levels of service charges, mortgage banking income, and income from bank owned life insurance.
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Total noninterest expense decreased by $96,000 for the quarter ended March 31, 2003, compared to the first quarter in 2002. The Company’s efficiency ratio for the quarter ended March 31, 2003 was 48.75%.
Effective January 1, 2003, the Company adopted the fair value method of recording stock options under SFAS 123. In accordance with the transitional guidance of SFAS 148, the fair value method of accounting for stock options will be applied prospectively to awards granted subsequent to January 1, 2003.
In the first quarter of 2003, the Company issued restricted stock in lieu of stock option grants. As a result, the income statement impact associated with expensing stock options was immaterial in the first quarter and is expected to be immaterial for the remainder of 2003.
The Company’s asset quality remains very sound. Total non-performing assets decreased $3.5 million, or 8%, from December 31, 2002. Net charge-offs to total average loans were 18 basis points for the quarter and remain substantially below the Company’s peer group. The Company’s allowance for loan losses to loans, excluding residential real estate mortgages, was 1.81% at March 31, 2003.
During the first quarter of 2003, the Company repurchased 335,000 shares at an average price of $12.20 per share under the 2001 Stock Repurchase Program. The 2001 Stock Repurchase Program allows for the repurchase of up to 4,300,000 shares, of which 833,000 shares are available for repurchase at March 31, 2003.
About the Company
Republic Bancorp Inc., with $4.7 billion in assets, is the third largest bank holding company headquartered in Michigan and the 84th largest bank holding company in the country. Its subsidiary, Republic Bank, serves customers in Michigan, Ohio and Indiana with 96 retail, commercial and mortgage banking offices and 103 ATMs. The Company is the #1 Small Business Administration bank lender based in Michigan for the 9th consecutive year and one of the Midwest’s top ten retail mortgage lenders. Republic has been ranked three times on FORTUNE’s “100 Best Places to Work in America” and twice named to Working Mother magazine’s list of “100 Best Companies for Working Mothers”.
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 atwww.republicbancorp.com.
Cash Dividend
The Company currently pays an annual cash dividend of $.34 per common share, which represents a yield of approximately 2.9% 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 2002 Form 10-K filing with the Securities and Exchange Commission.
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REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
| March 31, | Dec. 31, | Sept. 30, | March 31, | ||||||||||||||||
| 2003 | 2002 | 2002 | 2002 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
ASSETS | |||||||||||||||||||
| Cash and cash equivalents | $ | 77,281 | $ | 75,625 | $ | 83,750 | $ | 59,936 | |||||||||||
| Mortgage loans held for sale | 324,444 | 660,999 | 541,256 | 410,862 | |||||||||||||||
| Securities available for sale | 318,862 | 248,931 | 373,841 | 394,092 | |||||||||||||||
| Loans | 3,857,837 | 3,656,543 | 3,772,670 | 3,467,300 | |||||||||||||||
| Less allowance for loan losses | (37,185 | ) | (36,077 | ) | (33,124 | ) | (29,324 | ) | |||||||||||
| Net loans | 3,820,652 | 3,620,466 | 3,739,546 | 3,437,976 | |||||||||||||||
| Premises and equipment | 27,452 | 27,790 | 28,228 | 29,687 | |||||||||||||||
| Bank owned life insurance | 88,193 | 87,192 | 85,874 | — | |||||||||||||||
| Other assets | 55,383 | 57,192 | 62,390 | 76,902 | |||||||||||||||
| Total assets | $ | 4,712,267 | $ | 4,778,195 | $ | 4,914,885 | $ | 4,409,455 | |||||||||||
LIABILITIES | |||||||||||||||||||
| Noninterest-bearing deposits | $ | 274,956 | $ | 260,634 | $ | 245,547 | $ | 228,274 | |||||||||||
| Interest-bearing deposits: | |||||||||||||||||||
| NOW accounts | 176,454 | 176,366 | 163,868 | 158,917 | |||||||||||||||
| Savings and money market accounts | 968,591 | 910,863 | 888,275 | 844,716 | |||||||||||||||
| Certificates of deposit | 1,442,928 | 1,440,409 | 1,531,569 | 1,467,753 | |||||||||||||||
| Total interest-bearing deposits | 2,587,973 | 2,527,638 | 2,583,712 | 2,471,386 | |||||||||||||||
| Total deposits | 2,862,929 | 2,788,272 | 2,829,259 | 2,699,660 | |||||||||||||||
| Federal funds purchased and other short-term borrowings | 225,910 | 209,070 | 225,500 | 162,548 | |||||||||||||||
| Short-term FHLB advances | 125,000 | 305,000 | 360,000 | 205,000 | |||||||||||||||
| Long-term FHLB advances | 1,025,668 | 1,002,943 | 1,008,670 | 864,718 | |||||||||||||||
| Accrued expenses and other liabilities | 81,698 | 76,682 | 96,929 | 72,227 | |||||||||||||||
| Long-term debt | — | 13,500 | 13,500 | 13,500 | |||||||||||||||
| Total liabilities | 4,321,205 | 4,395,467 | 4,533,858 | 4,017,653 | |||||||||||||||
| Trust preferred securities and preferred stock of subsidiary | 50,000 | 50,000 | 50,000 | 78,719 | |||||||||||||||
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; 57,560,000, 57,441,000, 57,892,000, and 58,444,000 issued and outstanding, respectively | 287,802 | 287,207 | 263,144 | 265,653 | |||||||||||||||
| Capital surplus | 40,669 | 40,633 | 32,123 | 38,652 | |||||||||||||||
| Unearned compensation — restricted stock | (2,682 | ) | (368 | ) | (894 | ) | (1,865 | ) | |||||||||||
| Retained earnings | 14,634 | 4,373 | 32,969 | 13,168 | |||||||||||||||
| Accumulated other comprehensive income (loss) | 639 | 883 | 3,685 | (2,525 | ) | ||||||||||||||
| Total shareholders’ equity | 341,062 | 332,728 | 331,027 | 313,083 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,712,267 | $ | 4,778,195 | $ | 4,914,885 | $ | 4,409,455 | |||||||||||
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REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2003 | 2002 | ||||||||
Interest Income | |||||||||
| Loans, including fees | $ | 62,936 | $ | 69,027 | |||||
| Investment securities | 2,814 | 4,508 | |||||||
| Total interest income | 65,750 | 73,535 | |||||||
Interest Expense | |||||||||
| Deposits | 15,494 | 20,640 | |||||||
| Short-term borrowings | 818 | 783 | |||||||
| FHLB advances | 13,799 | 14,208 | |||||||
| Long-term debt | 39 | 242 | |||||||
| Total interest expense | 30,150 | 35,873 | |||||||
| Net interest income | 35,600 | 37,662 | |||||||
| Provision for loan losses | 3,000 | 2,400 | |||||||
| Net interest income after provision for loan losses | 32,600 | 35,262 | |||||||
Noninterest Income | |||||||||
| Service charges | 2,652 | 1,989 | |||||||
| Mortgage banking income | 9,736 | 7,246 | |||||||
| Gain on sale of securities | 448 | 401 | |||||||
| Income from bank owned life insurance | 1,295 | — | |||||||
| Other noninterest income | 730 | 941 | |||||||
| Total noninterest income | 14,861 | 10,577 | |||||||
Noninterest Expense | |||||||||
| Salaries and employee benefits | 14,415 | 13,927 | |||||||
| Occupancy expense of premises | 2,643 | 2,487 | |||||||
| Equipment expense | 1,705 | 1,680 | |||||||
| Other noninterest expense | 5,619 | 5,703 | |||||||
| Dividends on trust preferred securities and preferred stock of subsidiary | 1,075 | 1,756 | |||||||
| Total noninterest expense | 25,457 | 25,553 | |||||||
| Income before income taxes | 22,004 | 20,286 | |||||||
| Provision for income taxes | 6,851 | 6,168 | |||||||
Net income | $ | 15,153 | $ | 14,118 | |||||
| Basic earnings per share | $ | .26 | $ | .24 | |||||
| Diluted earnings per share | $ | .26 | $ | .24 | |||||
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands, except operating data)
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2003 | 2002 | |||||||||
Operating Data (in millions): | ||||||||||
| Residential mortgage loan closings: | ||||||||||
| Fixed rate | $ | 823 | $ | 560 | ||||||
| Adjustable rate | 165 | 151 | ||||||||
| Total residential mortgage loan closings | $ | 988 | $ | 711 | ||||||
| Conventional loans | $ | 819 | $ | 538 | ||||||
| Government loans | 63 | 86 | ||||||||
| Jumbo and other loans | 106 | 87 | ||||||||
| Total residential mortgage loan closings | $ | 988 | $ | 711 | ||||||
| Refinances (percent of total) | 75 | % | 57 | % | ||||||
Performance Ratios (annualized for the quarter): | ||||||||||
| Return on average assets | 1.30 | % | 1.25 | % | ||||||
| Return on average equity | 17.88 | % | 18.14 | % | ||||||
| Net interest margin | 3.23 | % | 3.54 | % | ||||||
Efficiency ratio(1) | 48.75 | % | 49.74 | % | ||||||
Per Common Share Data: | ||||||||||
| Average common shares outstanding — diluted | 58,302 | 59,170 | ||||||||
| Cash dividends declared | $ | .085 | $ | .077 | ||||||
| Book value | $ | 5.93 | $ | 5.36 | ||||||
| Tangible book value | $ | 5.81 | $ | 5.23 | ||||||
| Mar. 31, | Dec. 31, | Sept. 30, | Mar. 31, | |||||||||||||
| 2003 | 2002 | 2002 | 2002 | |||||||||||||
Capital Ratios: | ||||||||||||||||
| Shareholders’ equity to assets | 7.24 | % | 6.96 | % | 6.74 | % | 7.10 | % | ||||||||
| Tier 1 risk-based capital | 11.63 | % | 11.18 | % | 10.90 | % | 12.28 | % | ||||||||
| Total risk-based capital | 12.75 | % | 12.26 | % | 11.88 | % | 13.21 | % | ||||||||
| Tier 1 leverage | 8.26 | % | 7.81 | % | 8.12 | % | 8.56 | % | ||||||||
| (1) | Includes total noninterest expense, excluding dividends on trust preferred securities, divided by total revenue, excluding gain on sale of securities. |
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands, except operating data)
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2003 | 2002 | ||||||||
Average Balances: | |||||||||
| Total assets | $ | 4,652,053 | $ | 4,526,149 | |||||
| Short-term investments | 225 | 765 | |||||||
| Mortgage loans held for sale | 437,729 | 565,750 | |||||||
| Securities available for sale | 271,022 | 366,934 | |||||||
| Portfolio loans | 3,750,886 | 3,453,054 | |||||||
| Total earning assets | 4,459,862 | 4,386,503 | |||||||
| Interest-bearing deposits | 2,557,788 | 2,498,092 | |||||||
| Short-term borrowings | 243,121 | 169,285 | |||||||
| Total FHLB advances | 1,170,441 | 1,182,874 | |||||||
| Long-term debt | 2,250 | 13,500 | |||||||
| Total interest bearing liabilities | 3,973,600 | 3,863,751 | |||||||
| Shareholders’ equity | 338,956 | 311,357 | |||||||
Interest Margin: | |||||||||
| Assets: | |||||||||
| Short-term investments | 1.82 | % | 2.47 | % | |||||
| Mortgage loans held for sale | 5.73 | % | 6.67 | % | |||||
| Securities available for sale | 4.88 | % | 6.33 | % | |||||
| Portfolio loans: | |||||||||
| Commercial loans | 6.28 | % | 7.15 | % | |||||
| Residential real estate mortgage loans | 5.78 | % | 6.58 | % | |||||
| Installment loans | 6.27 | % | 7.23 | % | |||||
| Total loans, net of unearned income | 6.06 | % | 6.92 | % | |||||
| Total interest-earning assets | 5.95 | % | 6.84 | % | |||||
| Liabilities: | |||||||||
| Interest-bearing demand deposits | 0.43 | % | 0.63 | % | |||||
| Savings deposits | 1.64 | % | 1.80 | % | |||||
| Time deposits | 3.23 | % | 4.49 | % | |||||
| Total interest-bearing deposits | 2.46 | % | 3.35 | % | |||||
| Short-term borrowings | 1.35 | % | 1.85 | % | |||||
| FHLB advances | 4.72 | % | 4.80 | % | |||||
| Long-term debt | 6.93 | % | 7.15 | % | |||||
| Total interest bearing liabilities | 3.06 | % | 3.74 | % | |||||
| Net interest income/rate spread (FTE) | 2.89 | % | 3.10 | % | |||||
| Impact of noninterest bearing sources of funds | 0.34 | % | 0.44 | % | |||||
| Net interest margin (FTE) | 3.23 | % | 3.54 | % | |||||
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
| March 31, | Dec. 31, | Sept. 30, | March 31, | |||||||||||||||||
| 2003 | 2002 | 2002 | 2002 | |||||||||||||||||
Portfolio Loan Summary: | ||||||||||||||||||||
| Commercial loans: | ||||||||||||||||||||
| Commercial and industrial | $ | 45,648 | $ | 48,509 | $ | 58,905 | $ | 68,353 | ||||||||||||
| Commercial real estate mortgage | 1,423,007 | 1,420,758 | 1,417,667 | 1,332,721 | ||||||||||||||||
| Total commercial loans | 1,468,655 | 1,469,267 | 1,476,572 | 1,401,074 | ||||||||||||||||
| Residential real estate mortgages | 1,807,318 | 1,593,929 | 1,695,120 | 1,482,824 | ||||||||||||||||
| Installment loans: | ||||||||||||||||||||
| Consumer direct | 552,970 | 556,507 | 555,367 | 512,586 | ||||||||||||||||
| Consumer indirect | 28,894 | 36,840 | 45,611 | 70,816 | ||||||||||||||||
| Total installment loans | 581,864 | 593,347 | 600,978 | 583,402 | ||||||||||||||||
| Total portfolio loans | $ | 3,857,837 | $ | 3,656,543 | $ | 3,772,670 | $ | 3,467,300 | ||||||||||||
Non-performing assets: | ||||||||||||||||||||
| Non-accrual loans: | ||||||||||||||||||||
| Commercial | $ | 19,920 | $ | 19,167 | $ | 22,137 | $ | 7,012 | ||||||||||||
| Residential real estate mortgage | 13,035 | 15,215 | 11,991 | 14,132 | ||||||||||||||||
| Installment | 2,531 | 2,876 | 2,612 | 2,363 | ||||||||||||||||
| Total non-accrual loans | 35,486 | 37,258 | 36,740 | 23,507 | ||||||||||||||||
| Restructured loans | — | 2,309 | — | — | ||||||||||||||||
| Other real estate owned | 3,459 | 2,904 | 3,568 | 3,134 | ||||||||||||||||
| Total non-performing assets | $ | 38,945 | $ | 42,471 | $ | 40,308 | $ | 26,641 | ||||||||||||
Allowance for Loan Losses (for the quarter): | ||||||||||||||||||||
| Balance at beginning of period | $ | 36,077 | $ | 33,124 | $ | 29,870 | $ | 29,157 | ||||||||||||
| Loans charged off: | ||||||||||||||||||||
| Commercial | 1,146 | 1,246 | 2,412 | 1,099 | ||||||||||||||||
| Residential real estate mortgage | 430 | 232 | 127 | 288 | ||||||||||||||||
| Installment — direct | 372 | 400 | 308 | 454 | ||||||||||||||||
| Installment — indirect | 330 | 430 | 493 | 742 | ||||||||||||||||
| Total charge-offs | 2,278 | 2,308 | 3,340 | 2,583 | ||||||||||||||||
| Recoveries: | ||||||||||||||||||||
| Commercial | 84 | 16 | 134 | 84 | ||||||||||||||||
| Residential real estate mortgage | — | — | — | — | ||||||||||||||||
| Installment — direct | 110 | 50 | 79 | 95 | ||||||||||||||||
| Installment — indirect | 192 | 195 | 181 | 171 | ||||||||||||||||
| Total recoveries | 386 | 261 | 394 | 350 | ||||||||||||||||
| Net charge-offs | 1,892 | 2,047 | 2,946 | 2,233 | ||||||||||||||||
| Provision charged to expense | 3,000 | 5,000 | 6,200 | 2,400 | ||||||||||||||||
| Balance at end of period | $ | 37,185 | $ | 36,077 | $ | 33,124 | $ | 29,324 | ||||||||||||
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
| March 31, | Dec. 31, | Sep. 30, | March 31, | |||||||||||||||
| 2003 | 2002 | 2002 | 2002 | |||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||
Non-performing assets to loans and other real estate owned(1) | .93 | % | .98 | % | .93 | % | .69 | % | ||||||||||
| Non-performing assets to total assets | .83 | % | .89 | % | .82 | % | .60 | % | ||||||||||
| Allowance for loan losses to non-performing loans | 104.79 | % | 91.18 | % | 90.16 | % | 124.75 | % | ||||||||||
Allowance for loan losses to loans(2) | .96 | % | .99 | % | .88 | % | .85 | % | ||||||||||
Allowance for loan losses to loans (excluding residential real estate mortgages)(2) | 1.81 | % | 1.75 | % | 1.59 | % | 1.48 | % | ||||||||||
Net charge-offs to average loans:(1,3) | ||||||||||||||||||
| Commercial loans | .29 | % | .33 | % | .63 | % | .29 | % | ||||||||||
| Residential real estate mortgage loans | .08 | % | .04 | % | .03 | % | .06 | % | ||||||||||
| Direct installment loans | .19 | % | .25 | % | .17 | % | .29 | % | ||||||||||
| Indirect installment loans | 1.68 | % | 2.30 | % | 2.44 | % | 2.91 | % | ||||||||||
| Total loans | .18 | % | .19 | % | .30 | % | .22 | % | ||||||||||
Earnings coverage of net charge-offs(3,4) | 12.98x | 10.63x | 8.30x | 9.98x | ||||||||||||||
| (1) | Includes mortgage loans held for sale. | |
| (2) | Excludes mortgage loans held for sale. | |
| (3) | Quarter-to-date, annualized. | |
| (4) | Operating earnings before taxes plus the provision for loan losses divided by net charge-offs. |