 | NEWS | |||
| www.republicbancorp.com | Nasdaq: RBNC |
FOR FURTHER INFORMATION:
| Thomas F. Menacher | Kristine D. Brenner | |
| Exec.V.P., Treasurer & CFO | Director of Investor Relations | |
tmenacher@republicbancorp.com | kbrenner@republicbancorp.com | |
| (989) 725-7337 | (989) 725-7337 |
REPUBLIC BANCORP REPORTS RECORD
FIRST QUARTER RESULTS
First Quarter Highlights Include:
| • | Record net income of $16.3 million, up 8% |
| • | Earnings per share of $.25, up 7% |
| • | Return on equity of 17.15% |
| • | Strong annualized consumer loan growth of 15% |
| • | Annualized core deposit growth of 15% |
| • | Net charge-off ratio remains below peer at 11 basis points |
ANN ARBOR, Michigan—April 13, 2004—Republic Bancorp Inc., (Nasdaq: RBNC),today announced record net income for the quarter ended March 31, 2004 of $16,299,000, an increase of 8% over net income of $15,153,000 earned for the first quarter in 2003. Diluted earnings per share were $.25, up 7% from $.24 earned in 2003. Net income generated annualized returns of 1.20% on average assets and 17.15% on average shareholders’ equity for the first quarter of 2004.
“The Company’s earnings for the quarter were outstanding,” commented Dana Cluckey, President and Chief Executive Officer. “Our retail banking business line had strong growth in consumer loans and core deposits, while commercial banking had solid loan growth, especially in the Small Business Administration lending area. Mortgage banking results reflected lower refinance and closing volumes for the quarter, while increased application volumes in March should provide increased closing volume in the second quarter. Our balanced business model delivered strong growth in quality earning assets and core deposits, and solid control over costs,” added Mr. Cluckey.
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Results for the first quarter of 2004 reflect strong performance for the Company’s commercial and retail banking business lines and increasing momentum for the mortgage banking business line.
| • | Retail banking results were very strong during the quarter. The consumer loan portfolio (excluding indirect loans) grew $24 million, or 15% annualized over December 31, 2003. The Company also had excellent growth in core deposits, which increased $53 million, or 15% annualized for the quarter. |
| • | The commercial loan portfolio grew $22 million, or 6% annualized over December 31, 2003. SBA closings for the quarter were $12 million, up 52% from the first quarter of 2003. |
| • | During the first quarter of 2004, the Company originated $425 million in single-family residential mortgages. At March 31, 2004, the Company’s mortgage loan pipeline of applications in process was $580 million, an increase of 86% over December 31, 2003. |
Net interest income increased $1.4 million, or 4%, for the quarter ended March 31, 2004 compared to the first quarter of 2003 and increased $182,000, or 1%, over the fourth quarter of 2003. These increases are primarily the result of a 17% increase in average earning assets for the first quarter of 2004 compared to the first quarter of 2003 and 5% growth in average earning assets over the quarter ended December 31, 2003. For the quarter ended March 31, 2004, the Company’s net interest margin was 2.82%, compared to 2.95% for the fourth quarter of 2003.
Total noninterest expense decreased $3.4 million, or 14% for the quarter ended March 31, 2004 compared to the first quarter of 2003. The decrease was primarily due to a $2.3 million decrease in salaries and employee benefits and a $1 million decrease in other noninterest expense from the first quarter of 2003. The Company’s efficiency ratio improved to 45.70% in the quarter ended March 31, 2004 compared to 49.82% in the first quarter of 2003.
The Company’s asset quality remains very sound. Total non-performing assets decreased $2.3 million, or 5%, from December 31, 2003. Net charge-offs to total average loans were only 11 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 1.90% at March 31, 2004.
During the first quarter of 2004, the Company repurchased 65,000 shares at an average price of $13.68 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 2,143,000 shares are available for repurchase at March 31, 2004.
The Company’s capital ratios continue to be in excess of the requirements for a well-capitalized bank. At March 31, 2004, the Company’s total risk-based capital ratio was a strong 12.99% and the Tier 1 leverage ratio was 7.89%.
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About the Company
Republic Bancorp Inc., with $5.6 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 93 retail, commercial and mortgage banking offices and 93 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. Republic was recently 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 three 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 atwww.republicbancorp.com.
Cash Dividend
The Company currently pays an annual cash dividend of $.38 per common share, which represents a 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 filing on Form 10-K 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, | |||||||||||||
| 2004 | 2003 | 2003 | 2003 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
ASSETS | ||||||||||||||||
| Cash and cash equivalents | $ | 56,748 | $ | 63,858 | $ | 76,566 | $ | 77,281 | ||||||||
| Mortgage loans held for sale | 140,848 | 135,360 | 391,369 | 324,444 | ||||||||||||
| Securities available for sale | 713,265 | 607,450 | 459,933 | 240,391 | ||||||||||||
| Securities held to maturity (at cost) | 235,552 | 156,555 | — | — | ||||||||||||
| Loans | 4,166,900 | 4,157,514 | 3,999,974 | 3,857,837 | ||||||||||||
| Less allowance for loan losses | (41,556 | ) | (40,271 | ) | (39,212 | ) | (37,185 | ) | ||||||||
| Net loans | 4,125,344 | 4,117,243 | 3,960,762 | 3,820,652 | ||||||||||||
| Federal Home Loan Bank stock (at cost) | 80,503 | 80,500 | 80,502 | 78,471 | ||||||||||||
| Premises and equipment | 28,570 | 26,928 | 26,564 | 27,452 | ||||||||||||
| Bank owned life insurance | 109,633 | 108,330 | 106,858 | 88,193 | ||||||||||||
| Other assets | 59,996 | 57,464 | 57,771 | 55,383 | ||||||||||||
| Total assets | $ | 5,550,459 | $ | 5,353,688 | $ | 5,160,325 | $ | 4,712,267 | ||||||||
LIABILITIES | ||||||||||||||||
| Noninterest-bearing deposits | $ | 273,056 | $ | 256,265 | $ | 287,640 | $ | 274,956 | ||||||||
| Interest-bearing deposits: | ||||||||||||||||
| NOW accounts | 182,229 | 184,217 | 183,195 | 176,454 | ||||||||||||
| Savings and money market accounts | 1,064,319 | 1,054,857 | 1,110,161 | 968,591 | ||||||||||||
| Certificates of deposit | 1,370,765 | 1,319,930 | 1,340,925 | 1,442,928 | ||||||||||||
| Total interest-bearing deposits | 2,617,313 | 2,559,004 | 2,634,281 | 2,587,973 | ||||||||||||
| Total deposits | 2,890,369 | 2,815,269 | 2,921,921 | 2,862,929 | ||||||||||||
| Federal funds purchased and other short-term borrowings | 560,044 | 491,245 | 483,136 | 225,910 | ||||||||||||
| Short-term FHLB advances | 175,000 | 280,000 | 250,000 | 125,000 | ||||||||||||
| Long-term FHLB advances and reverse repurchase agreements | 1,429,244 | 1,286,726 | 1,026,529 | 1,025,668 | ||||||||||||
| Accrued expenses and other liabilities | 58,902 | 61,028 | 73,437 | 81,698 | ||||||||||||
| Long-term debt | 50,000 | 50,000 | 50,000 | 50,000 | ||||||||||||
| Total liabilities | 5,163,559 | 4,984,268 | 4,805,023 | 4,371,205 | ||||||||||||
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; 64,006,000, 63,527,000, 63,170,000, and 63,316,000 issued and outstanding, respectively | 320,028 | 317,633 | 287,133 | 287,802 | ||||||||||||
| Capital surplus | 53,559 | 50,358 | 37,953 | 40,669 | ||||||||||||
| Unearned compensation — restricted stock | (4,731 | ) | (1,666 | ) | (2,058 | ) | (2,682 | ) | ||||||||
| Retained earnings | 14,125 | 3,893 | 35,274 | 14,634 | ||||||||||||
| Accumulated other comprehensive income (loss) | 3,919 | (798 | ) | (3,000 | ) | 639 | ||||||||||
| Total shareholders’ equity | 386,900 | 369,420 | 355,302 | 341,062 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 5,550,459 | $ | 5,353,688 | $ | 5,160,325 | $ | 4,712,267 | ||||||||
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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, | ||||||||
| 2004 | 2003 | |||||||
Interest Income | ||||||||
| Loans, including fees | $ | 57,996 | $ | 62,936 | ||||
| Investment securities | 9,823 | 2,814 | ||||||
| Total interest income | 67,819 | 65,750 | ||||||
Interest Expense | ||||||||
| Deposits | 13,037 | 15,494 | ||||||
| Short-term borrowings | 2,018 | 1,511 | ||||||
| Long-term FHLB advances and reverse repurchase agreements | 15,810 | 13,106 | ||||||
| Long-term debt | 1,075 | 1,114 | ||||||
| Total interest expense | 31,940 | 31,225 | ||||||
| Net interest income | 35,879 | 34,525 | ||||||
| Provision for loan losses | 2,500 | 3,000 | ||||||
| Net interest income after provision for loan losses | 33,379 | 31,525 | ||||||
Noninterest Income | ||||||||
| Service charges | 2,697 | 2,652 | ||||||
| Mortgage banking income | 5,174 | 9,736 | ||||||
| Gain on sale of securities | 688 | 448 | ||||||
| Income from bank owned life insurance | 1,303 | 1,295 | ||||||
| Other noninterest income | 952 | 730 | ||||||
| Total noninterest income | 10,814 | 14,861 | ||||||
Noninterest Expense | ||||||||
| Salaries and employee benefits | 12,089 | 14,415 | ||||||
| Occupancy expense of premises | 2,619 | 2,643 | ||||||
| Equipment expense | 1,674 | 1,705 | ||||||
| Other noninterest expense | 4,640 | 5,619 | ||||||
| Total noninterest expense | 21,022 | 24,382 | ||||||
| Income before income taxes | 23,171 | 22,004 | ||||||
| Provision for income taxes | 6,872 | 6,851 | ||||||
Net income | $ | 16,299 | $ | 15,153 | ||||
| Basic earnings per share | $ | .26 | $ | .24 | ||||
| Diluted earnings per share | $ | .25 | $ | .24 | ||||
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands, except operating data)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2004 | 2003 | |||||||
Operating Data (in millions): | ||||||||
| Residential mortgage loan closings: | ||||||||
| Fixed rate | $ | 242 | $ | 823 | ||||
| Adjustable rate | 183 | 165 | ||||||
| Total residential mortgage loan closings | $ | 425 | $ | 988 | ||||
| Conventional loans | $ | 307 | $ | 819 | ||||
| Government loans | 52 | 63 | ||||||
| Jumbo and other loans | 66 | 106 | ||||||
| Total residential mortgage loan closings | $ | 425 | $ | 988 | ||||
| Refinances (percent of total) | 47 | % | 75 | % | ||||
Performance Ratios (annualized for the quarter): | ||||||||
| Return on average assets | 1.20 | % | 1.30 | % | ||||
| Return on average equity | 17.15 | % | 17.88 | % | ||||
| Net interest margin | 2.82 | % | 3.23 | % | ||||
Efficiency ratio(1) | 45.70 | % | 49.82 | % | ||||
Per Common Share Data: | ||||||||
| Average common shares outstanding — diluted | 64,622 | 64,132 | ||||||
| Cash dividends declared | $ | .095 | $ | .077 | ||||
| Book value | $ | 6.04 | $ | 5.39 | ||||
| Tangible book value | $ | 5.96 | $ | 5.28 | ||||
| Mar. 31, | Dec. 31, | Sept. 30, | Mar. 31, | |||||||||||||
| 2004 | 2003 | 2003 | 2003 | |||||||||||||
Capital Ratios: | ||||||||||||||||
| Shareholders’ equity to assets | 6.97 | % | 6.90 | % | 6.89 | % | 7.24 | % | ||||||||
| Tier 1 risk-based capital | 11.84 | % | 11.72 | % | 11.57 | % | 11.63 | % | ||||||||
| Total risk-based capital | 12.99 | % | 12.85 | % | 12.70 | % | 12.75 | % | ||||||||
| Tier 1 leverage | 7.89 | % | 8.04 | % | 7.90 | % | 8.26 | % | ||||||||
| (1) Includes total noninterest expense, 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)
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||
| March 31, 2004 | March 31, 2003 | |||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
Average Assets: | ||||||||||||||||||||||||
| Short-term investments | $ | 439 | $ | 1 | 0.75 | % | $ | 225 | $ | 1 | 1.82 | % | ||||||||||||
| Mortgage loans held for sale | 92,827 | 1,374 | 5.92 | 437,729 | 6,270 | 5.73 | ||||||||||||||||||
| Securities available for sale | 671,583 | 7,583 | 4.53 | 192,554 | 2,152 | 4.53 | ||||||||||||||||||
| Securities held to maturity | 188,664 | 2,170 | 4.60 | — | — | — | ||||||||||||||||||
| Portfolio loans: | ||||||||||||||||||||||||
| Commercial loans | 1,526,471 | 21,116 | 5.47 | 1,474,131 | 23,159 | 6.28 | ||||||||||||||||||
| Residential real estate mortgage loans | 2,027,648 | 27,086 | 5.34 | 1,688,890 | 24,413 | 5.78 | ||||||||||||||||||
| Installment loans | 628,980 | 8,420 | 5.37 | 587,865 | 9,094 | 6.27 | ||||||||||||||||||
| Total loans, net of unearned income | 4,183,099 | 56,622 | 5.39 | 3,750,886 | 56,666 | 6.06 | ||||||||||||||||||
| FHLB stock | 80,734 | 1,057 | 5.25 | 78,468 | 1,111 | 5.67 | ||||||||||||||||||
| Total interest-earning assets | 5,217,346 | 68,807 | 5.26 | 4,459,862 | 66,200 | 5.95 | ||||||||||||||||||
| Allowance for loan losses | (40,923 | ) | (36,508 | ) | ||||||||||||||||||||
| Cash and due from banks | 52,282 | 64,278 | ||||||||||||||||||||||
| Other assets | 189,026 | 164,421 | ||||||||||||||||||||||
| Total assets | $ | 5,417,731 | $ | 4,652,053 | ||||||||||||||||||||
Average Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 183,744 | $ | 124 | 0.27 | % | $ | 176,421 | $ | 187 | 0.43 | % | ||||||||||||
| Savings deposits | 1,041,338 | 3,467 | 1.34 | 929,538 | 3,747 | 1.64 | ||||||||||||||||||
| Time deposits | 1,347,838 | 9,446 | 2.81 | 1,451,829 | 11,560 | 3.23 | ||||||||||||||||||
| Total interest-bearing deposits | 2,572,920 | 13,037 | 2.03 | 2,557,788 | 15,494 | 2.46 | ||||||||||||||||||
| Short-term borrowings | 727,657 | 2,018 | 1.10 | 421,399 | 1,511 | 1.43 | ||||||||||||||||||
| Long-term FHLB advances and reverse repurchase agreements | 1,396,219 | 15,810 | 4.48 | 992,163 | 13,106 | 5.28 | ||||||||||||||||||
| Long-term debt | 50,000 | 1,075 | 8.60 | 52,250 | 1,114 | 8.53 | ||||||||||||||||||
| Total interest-bearing liabilities | 4,746,796 | 31,940 | 2.68 | 4,023,600 | 31,225 | 3.13 | ||||||||||||||||||
| Noninterest-bearing deposits | 254,371 | 250,820 | ||||||||||||||||||||||
| Other liabilities | 36,479 | 38,677 | ||||||||||||||||||||||
| Total liabilities | 5,037,646 | 4,313,097 | ||||||||||||||||||||||
| Shareholders’ equity | 380,085 | 338,956 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 5,417,731 | $ | 4,652,053 | ||||||||||||||||||||
| Net interest income/ Rate spread (FTE) | $ | 36,867 | 2.58 | % | $ | 34,975 | 2.82 | % | ||||||||||||||||
| FTE adjustment | $ | 988 | $ | 450 | ||||||||||||||||||||
| Impact of noninterest- bearing sources of funds | 0.24 | % | 0.31 | % | ||||||||||||||||||||
| Net interest margin (FTE) | 2.82 | % | 3.13 | % | ||||||||||||||||||||
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
| March 31, | Dec. 31, | Sept. 30, | March 31, | |||||||||||||
| 2004 | 2003 | 2003 | 2003 | |||||||||||||
Portfolio Loan Summary: | ||||||||||||||||
| Commercial loans: | ||||||||||||||||
| Commercial and industrial | $ | 38,659 | $ | 38,319 | $ | 41,668 | $ | 45,648 | ||||||||
| Commercial real estate mortgage | 1,504,112 | 1,482,814 | 1,432,260 | 1,423,007 | ||||||||||||
| Total commercial loans | 1,542,771 | 1,521,133 | 1,473,928 | 1,468,655 | ||||||||||||
| Residential real estate mortgages | 1,982,025 | 2,014,809 | 1,929,312 | 1,807,318 | ||||||||||||
Installment loans(1) | 642,104 | 621,572 | 596,734 | 581,864 | ||||||||||||
| Total portfolio loans | $ | 4,166,900 | $ | 4,157,514 | $ | 3,999,974 | $ | 3,857,837 | ||||||||
Non-performing assets: | ||||||||||||||||
| Non-accrual loans: | ||||||||||||||||
| Commercial | $ | 24,124 | $ | 27,666 | $ | 23,699 | $ | 19,920 | ||||||||
| Residential real estate mortgage | 11,656 | 11,181 | 11,456 | 13,035 | ||||||||||||
| Installment | 639 | 873 | 1,241 | 2,531 | ||||||||||||
| Total non-accrual loans | 36,419 | 39,720 | 36,396 | 35,486 | ||||||||||||
| Restructured loans | — | — | — | — | ||||||||||||
| Other real estate owned | 3,729 | 2,718 | 3,219 | 3,459 | ||||||||||||
| Total non-performing assets | $ | 40,148 | $ | 42,438 | $ | 39,615 | $ | 38,945 | ||||||||
Allowance for Loan Losses (for the quarter): | ||||||||||||||||
| Balance at beginning of period | $ | 40,271 | $ | 39,212 | $ | 38,269 | $ | 36,077 | ||||||||
| Loans charged off: | ||||||||||||||||
| Commercial | 1,344 | 1,618 | 1,816 | 1,146 | ||||||||||||
| Residential real estate mortgage | 71 | 54 | 169 | 430 | ||||||||||||
| Installment | 420 | 669 | 516 | 702 | ||||||||||||
| Total charge-offs | 1,835 | 2,341 | 2,501 | 2,278 | ||||||||||||
| Recoveries: | ||||||||||||||||
| Commercial | 427 | 263 | 250 | 84 | ||||||||||||
| Residential real estate mortgage | — | — | — | — | ||||||||||||
| Installment | 193 | 137 | 194 | 302 | ||||||||||||
| Total recoveries | 620 | 400 | 444 | 386 | ||||||||||||
| Net charge-offs | 1,215 | 1,941 | 2,057 | 1,892 | ||||||||||||
| Provision charged to expense | 2,500 | 3,000 | 3,000 | 3,000 | ||||||||||||
| Balance at end of period | $ | 41,556 | $ | 40,271 | $ | 39,212 | $ | 37,185 | ||||||||
| (1) Includes indirect installment loan balances at March 31, 2004, December 31, 2003, September 30, 2003 and March 31, 2003 of $10.4 million, $13.4 million, $17.1 million and $28.9 million, respectively. |
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
| March 31, | Dec. 31, | Sept. 30, | March 31, | |||||||||||||
| 2004 | 2003 | 2003 | 2003 | |||||||||||||
Asset Quality Ratios: | ||||||||||||||||
Non-performing assets to loans and other real estate owned(1) | .93 | % | .99 | % | .90 | % | .93 | % | ||||||||
| Non-performing assets to total assets | .72 | % | .79 | % | .77 | % | .83 | % | ||||||||
| Allowance for loan losses to non-performing loans | 114.11 | % | 101.39 | % | 107.74 | % | 104.79 | % | ||||||||
Allowance for loan losses to loans(2) | 1.00 | % | .97 | % | .98 | % | .96 | % | ||||||||
Allowance for loan losses to loans (excluding residential real estate mortgages)(2) | 1.90 | % | 1.88 | % | 1.89 | % | 1.81 | % | ||||||||
Net charge-offs to average loans:(1,3) | ||||||||||||||||
| Commercial loans | .24 | % | .36 | % | .43 | % | .29 | % | ||||||||
| Residential real estate mortgage loans | .01 | % | .01 | % | .03 | % | .08 | % | ||||||||
| Installment loans | .14 | % | .35 | % | .22 | % | .27 | % | ||||||||
| Total loans | .11 | % | .18 | % | .19 | % | .18 | % | ||||||||
Earnings coverage of net charge-offs(3,4) | 20.56x | 11.83x | 12.00x | 12.98x | ||||||||||||
| (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. |