Republic Bancorp 8-K Republic Bancorp Reports Record Second Quarter Results

EXHIBIT 99.1

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
SECOND QUARTER RESULTS

Second Quarter Highlights Include:

• Record net income of $16.4 million, up 8%

• Earnings per share of $.25, up 7%

• Return on equity of 17.11%

• Strong annualized consumer loan growth of 21%

• Annualized core deposit growth of 9%

• Net charge-off ratio remains below peer at 4 basis points

ANN ARBOR, Michigan-July 14, 2004-Republic Bancorp Inc., (Nasdaq: RBNC),today announced record net income for the quarter ended June 30, 2004 of $16,368,000, an increase of 8% over net income of $15,158,000 earned for the second quarter in 2003. Diluted earnings per share were $.25, up 7% from $.24 earned in 2003. Net income generated annualized returns of 1.17% on average assets and 17.11% on average shareholders’ equity for the second quarter of 2004.

Net income for the six months ended June 30, 2004 was $32,667,000, compared to net income of $30,311,000 earned for the same period in 2003. For the six month period ending June 30, 2004, diluted earnings per share were $.50, an increase of 7% over the $.47 earned in 2003. Annualized returns on average assets and average shareholders’ equity for the first six months of 2004 were 1.18% and 17.13%, respectively.

“We are very pleased to report another record quarter for the Company,” commented Dana M. Cluckey, President and Chief Executive Officer. “Our retail banking business line continues to have very strong growth in consumer loans and core deposits. Our commercial banking division had record closings in the Small Business Administration lending area during the quarter. Mortgage banking results reflected higher closing volumes and an increase in income compared to the first quarter of 2004. Our balanced business model continues to deliver positive results with strong growth of quality assets and core deposits, and solid control over costs,” added Mr. Cluckey.

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Results for the second 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 consumer loan portfolio, primarily home equity loans, grew $33 million, or 21% annualized over March 31, 2004. The Company also had continued growth in core deposits, which increased $32 million, or 9% annualized for the quarter.

Commercial Banking

• SBA closings for the quarter were $15 million, up 19% from the second quarter of 2003. The commercial loan portfolio grew $10 million, or 3% annualized over March 31, 2004.

Mortgage Banking

• During the second quarter of 2004, the Company originated $619 million in single-family residential mortgages. At June 30, 2004, the Company’s mortgage loan pipeline of applications in process was $489 million.

Income Statement
Net interest income increased $332,000, or 1%, for the quarter ended June 30, 2004 compared to the second quarter of 2003 and increased $318,000, or 1%, over the first quarter of 2004. These increases are primarily the result of a 16% increase in average earning assets for the second quarter of 2004 compared to the second quarter of 2003 and 4% growth in average earning assets over the quarter ended March 31, 2004.

Total noninterest income increased $1.7 million, or 16%, for the quarter ended June 30, 2004 compared to the first quarter of 2004. The increase was primarily due to higher levels of service charges, mortgage banking income, and gains on sale of SBA loans. Excluding mortgage banking income, total noninterest income for the quarter ended June 30, 2004 increased $910,000, or 18%, compared to the second quarter of 2003. The increase was due primarily to higher levels of service charges and gains on sale of SBA loans.

Total noninterest expense increased $2.4 million, or 11% for the quarter ended June 30, 2004, compared to the first quarter of 2004. The increase was primarily a result of an increase of $1.7 million in salaries and employee benefits related to employee incentive accruals and an increase in other noninterest expense of $776,000. Total noninterest expense decreased $3.3 million, or 12% for the quarter ended June 30, 2004 compared to the second quarter of 2003. The decrease was primarily due to a $2.2 million decrease in salaries and employee benefits related to employee incentive accruals, and a $1 million decrease in other noninterest expense reflecting lower residential mortgage closing volume in 2004 compared to 2003.

The Company’s efficiency ratio of 48.66% for the quarter ended June 30, 2004 remains below peer.

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Asset Quality and Capital
The Company’s asset quality remains very sound. Total non-performing assets decreased $859,000, or 2%, from March 31, 2004. Net charge-offs to total average loans were only 4 basis points for the quarter ended June 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 June 30, 2004.

The Company’s capital ratios continue to be in excess of the requirements for a well-capitalized bank. At June 30, 2004, the Company’s total risk-based capital ratio was a strong 12.92% and the Tier 1 leverage ratio was 7.82%.

As previously announced, the Company declared an $.11 per share cash dividend to shareholders of record as of September 10, 2004 and payable October 4, 2004. This represents a 16% increase from the most recent cash dividend of $.095 paid on July 6, 2004.

About the Company
Republic Bancorp Inc., with $5.7 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 94 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. 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 has declared an $.11 per share quarterly cash dividend ($.44 per share annually) payable October 4, 2004, which represents an annual yield of approximately 3.2% 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.

Page 4

REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	June 30,			March 31,			Dec. 31,			June 30,
	2004			2004			2003			2003
	(Unaudited)			(Unaudited)						(Unaudited)
ASSETS
Cash and cash equivalents	$	60,868		$	56,748		$	63,858		$	89,976
Mortgage loans held for sale		54,836			140,848			135,360			479,753
Securities available for sale		754,632			713,265			607,450			292,722
Securities held to maturity (at cost)		240,081			235,552			156,555			—
Loans		4,356,280			4,166,900			4,157,514			3,954,998
Less allowance for loan losses		(43,086	)		(41,556	)		(40,271	)		(38,269	)
Net loans		4,313,194			4,125,344			4,117,243			3,916,729
Federal Home Loan Bank stock (at cost)		80,503			80,503			80,500			79,510
Premises and equipment		27,400			28,570			26,928			27,084
Bank owned life insurance		110,813			109,633			108,330			89,192
Other assets		69,166			59,996			57,464			55,989
Total assets	$	5,711,493		$	5,550,459		$	5,353,688		$	5,030,955
LIABILITIES
Noninterest-bearing deposits	$	294,355		$	273,056		$	256,265		$	298,832
Interest-bearing deposits:
NOW accounts		189,904			182,229			184,217			179,855
Savings and money market accounts		1,065,516			1,064,319			1,054,857			972,034
Certificates of deposit under $100,000		665,841			680,647			678,758			723,278
Certificates of deposit $100,000 or greater		608,565			690,118			641,172			642,555
Total interest-bearing deposits		2,529,826			2,617,313			2,559,004			2,517,722
Total deposits		2,824,181			2,890,369			2,815,269			2,816,554
Federal funds purchased and other short-term borrowings		595,147			560,044			491,245			266,499
Short-term FHLB advances		391,000			175,000			280,000			405,000
Long-term FHLB advances and reverse repurchase agreements		1,411,003			1,429,244			1,286,726			1,042,804
Accrued expenses and other liabilities		58,209			58,902			61,028			98,836
Long-term debt		50,000			50,000			50,000			50,000
Total liabilities		5,329,540			5,163,559			4,984,268			4,679,693
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; 64,035,000, 64,006,000, 63,527,000, and 63,114,000 issued and outstanding, respectively		320,177			320,028			317,633			286,883
Capital surplus		53,709			53,559			50,358			38,081
Unearned compensation — restricted stock		(4,197	)		(4,731	)		(1,666	)		(2,357	)
Retained earnings		24,414			14,125			3,893			24,952
Accumulated other comprehensive income (loss)		(12,150	)		3,919			(798	)		3,703
Total shareholders’ equity		381,953			386,900			369,420			351,262
Total liabilities and shareholders’ equity	$	5,711,493		$	5,550,459		$	5,353,688		$	5,030,955

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REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2004		2003		2004		2003
Interest Income
Loans, including fees	$	57,298	$	62,944	$	115,294		125,880
Investment securities		10,694		3,898		20,517		6,712
Total interest income		67,992		66,842		135,811		132,592
Interest Expense
Deposits		12,667		14,432		25,704		29,926
Short-term borrowings		2,319		1,995		4,337		3,506
Long-term FHLB advances and reverse repurchase agreements		15,734		13,475		31,544		26,581
Long-term debt		1,075		1,075		2,150		2,189
Total interest expense		31,795		30,977		63,735		62,202
Net interest income		36,197		35,865		72,076		70,390
Provision for loan losses		2,000		3,000		4,500		6,000
Net interest income after provision for loan losses		34,197		32,865		67,576		64,390
Noninterest Income
Service charges		3,005		2,735		5,702		5,387
Mortgage banking income		6,566		10,455		11,740		20,191
Gain on sale of securities		674		432		1,362		880
Gain on sale of SBA loans		665		96		1,186		291
Income from bank owned life insurance		1,180		1,320		2,483		2,615
Other noninterest income		428		459		859		994
Total noninterest income		12,518		15,497		23,332		30,358
Noninterest Expense
Salaries and employee benefits		13,835		16,040		25,924		30,455
Occupancy expense of premises		2,476		2,496		5,095		5,139
Equipment expense		1,652		1,721		3,326		3,426
Other noninterest expense		5,416		6,444		10,056		12,063
Total noninterest expense		23,379		26,701		44,401		51,083
Income before income taxes		23,336		21,661		46,507		43,665
Provision for income taxes		6,968		6,503		13,840		13,354
Net income	$	16,368	$	15,158	$	32,667	$	30,311
Basic earnings per share	$	.26	$	.24	$	.51	$	.48
Diluted earnings per share	$	.25	$	.24	$	.50	$	.47

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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands, except operating data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2004			2003			2004			2003
Operating Data (in millions):
Residential mortgage loan closings:
Fixed rate	$	298		$	1,094		$	540		$	1,917
Adjustable rate		321			216			504			381
Total residential mortgage loan closings	$	619		$	1,310			1,044		$	2,298
Conventional loans	$	454		$	1,097			761		$	1,916
Government loans		44			86			96			149
Jumbo and other loans		121			127			187			233
Total residential mortgage loan closings	$	619		$	1,310			1,044		$	2,298
Refinances (percent of total)		44	%		71	%		45	%		73	%
Performance Ratios (annualized for the quarter):
Return on average assets		1.17	%		1.25	%		1.18	%		1.28	%
Return on average equity		17.11	%		17.46	%		17.13	%		17.67	%
Net interest margin		2.75	%		3.15	%		2.79	%		3.14	%
Efficiency ratio (1)		48.66	%		52.43	%		47.21	%		51.15	%
Per Common Share Data:
Average common shares outstanding — diluted		64,763			64,116			64,692			64,123
Cash dividends declared	$	.095		$	.077			.19		$	.155
Book value	$	5.96		$	5.57			5.96		$	5.57
Tangible book value	$	5.88		$	5.47			5.88		$	5.47
	June 30,			Mar. 31,			Dec. 31,			June 30,
		2004			2004			2003			2003
Capital Ratios:
Shareholders’ equity to assets		6.69	%		6.97	%		6.90	%		6.98	%
Tier 1 risk-based capital		11.77	%		11.84	%		11.72	%		11.38	%
Total risk-based capital		12.92	%		12.99	%		12.85	%		12.50	%
Tier 1 leverage		7.82	%		7.89	%		8.04	%		8.09	%
(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
	June 30, 2004								June 30, 2003
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Average Assets:
Short-term investments	$	903		$	1		0.65	%	$	338		$	1		0.61	%
Mortgage loans held for sale		127,606			1,754		5.50			371,728			5,247		5.65
Securities available for sale		740,597			8,217		4.45			266,366			3,592		5.39
Securities held to maturity		236,784			2,654		4.48			—			—		—
Portfolio loans:
Commercial loans		1,544,344			21,206		5.43			1,468,123			22,733		6.13
Residential real estate mortgage loans		2,014,715			25,684		5.10			1,879,731			26,115		5.56
Installment loans		656,756			8,654		5.28			582,712			8,849		6.09
Total loans, net of unearned income		4,215,815			55,544		5.25			3,930,566			57,697		5.85
FHLB stock		80,721			852		4.23			79,280			1,043		5.26
Total interest-earning assets		5,402,426			69,022		5.10			4,648,278			67,580		5.80
Allowance for loan losses		(42,615	)							(37,986	)
Cash and due from banks		56,025								65,150
Other assets		196,882								164,785
Total assets	$	5,612,718							$	4,840,227
Average Liabilities and Shareholders’ Equity
Interest-bearing demand deposits	$	191,335		$	131		0.27	%	$	179,959		$	161		0.36	%
Savings and money market accounts		1,056,628			3,189		1.21			953,788			3,285		1.38
Time deposits		1,334,148			9,347		2.81			1,408,252			10,986		3.13
Total interest-bearing deposits		2,582,111			12,667		1.97			2,541,999			14,432		2.28
Short-term borrowings		854,019			2,319		1.07			558,493			1,995		1.41
Long-term FHLB advances and
reverse repurchase agreements		1,421,560			15,734		4.38			1,031,727			13,475		5.17
Long-term debt		50,000			1,075		8.60			50,000			1,075		8.60
Total interest-bearing liabilities		4,907,690			31,795		2.58			4,182,219			30,977		2.95
Noninterest-bearing deposits		283,691								273,858
Other liabilities		38,708								36,980
Total liabilities		5,230,089								4,493,057
Shareholders’ equity		382,629								347,170
Total liabilities and shareholders’ equity	$	5,612,718							$	4,840,227
Net interest income/ rate spread (FTE)				$	37,227		2.52	%				$	36,603		2.85	%
FTE adjustment				$	1,030							$	738
Impact of noninterest- bearing sources of funds							0.23	%							0.30	%
Net interest margin (FTE)							2.75	%							3.15	%

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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)

	Six Months Ended								Six Months Ended
	June 30, 2004								June 30, 2003
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Average Assets:
Short-term investments	$	671		$	2		0.68	%	$	282		$	2		1.09	%
Mortgage loans held for sale		110,225			3,128		5.68			404,546			11,517		5.69
Securities available for sale		706,090			15,799		4.49			229,666			5,736		5.00
Securities held to maturity		212,724			4,825		4.54			—			—		—
Portfolio loans:
Commercial loans		1,535,407			42,323		5.45			1,471,111			45,891		6.20
Residential real estate mortgage loans		2,021,182			52,770		5.22			1,784,837			50,528		5.66
Installment loans		642,868			17,073		5.33			585,274			17,944		6.18
Total loans, net of unearned income		4,199,457			112,166		5.32			3,841,222			114,363		5.95
FHLB stock		80,727			1,909		4.74			78,874			2,155		5.46
Total interest-earning assets		5,309,894			137,829		5.18			4,554,590			133,773		5.87
Allowance for loan losses		(41,769	)							(37,251	)
Cash and due from banks		54,154								64,716
Other assets		192,962								164,601
Total assets	$	5,515,241							$	4,746,656
Average Liabilities and Shareholders’ Equity
Interest-bearing demand deposits	$	187,539		$	255		0.27	%	$	178,200		$	347		0.39	%
Savings and money market accounts		1,048,983			6,656		1.27			941,722			7,033		1.51
Time deposits		1,340,993			18,793		2.81			1,429,920			22,546		3.18
Total interest-bearing deposits		2,577,515			25,704		2.00			2,549,842			29,926		2.37
Short-term borrowings		790,838			4,337		1.08			490,325			3,506		1.51
Long-term FHLB advances and reverse repurchase agreements		1,408,890			31,544		4.43			1,012,054			26,581		5.22
Long-term debt		50,000			2,150		8.60			51,125			2,189		8.56
Total interest-bearing liabilities		4,827,243			63,735		2.63			4,103,346			62,202		3.04
Noninterest-bearing deposits		269,031								262,403
Other liabilities		37,609								37,844
Total liabilities		5,133,883								4,403,593
Shareholders’ equity		381,358								343,063
Total liabilities and shareholders’ equity	$	5,515,241							$	4,746,656
Net interest income/ Rate spread (FTE)				$	74,094		2.55	%				$	71,571		2.83	%
FTE adjustment				$	2,018							$	1,181
Impact of noninterest- bearing sources of funds							0.24	%							0.31	%
Net interest margin (FTE)							2.79	%							3.14	%

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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)

	June 30,		March 31,		Dec. 31,		June 30,
	2004		2004		2003		2003
Portfolio Loan Summary:
Commercial loans:
Commercial and industrial	$	40,292	$	38,659	$	38,319	$	44,352
Commercial real estate mortgage		1,512,948		1,504,112		1,482,814		1,432,456
Total commercial loans		1,553,240		1,542,771		1,521,133		1,476,808
Residential real estate mortgages		2,130,310		1,982,025		2,014,809		1,894,246
Installment loans (1)		672,730		642,104		621,572		583,944
Total portfolio loans	$	4,356,280	$	4,166,900	$	4,157,514	$	3,954,998
Non-performing assets:
Non-accrual loans:
Commercial	$	22,889	$	24,124	$	27,666	$	16,696
Residential real estate mortgage		11,476		11,656		11,181		10,534
Installment		1,070		639		873		1,523
Total non-accrual loans		35,435		36,419		39,720		28,753
Restructured loans		—		—		—		—
Other real estate owned		3,854		3,729		2,718		3,456
Total non-performing assets	$	39,289	$	40,148	$	42,438	$	32,209
Allowance for Loan Losses (for the quarter):
Balance at beginning of period	$	41,556	$	40,271	$	39,212	$	37,185
Loans charged off:				��
Commercial		1,131		1,344		1,618		1,542
Residential real estate mortgage		391		71		54		189
Installment		397		420		669		672
Total charge-offs		1,919		1,835		2,341		2,403
Recoveries:
Commercial		1,235		427		263		259
Residential real estate mortgage		—		—		—		—
Installment		214		193		137		228
Total recoveries		1,449		620		400		487
Net charge-offs		470		1,215		1,941		1,916
Provision charged to expense		2,000		2,500		3,000		3,000
Balance at end of period	$	43,086	$	41,556	$	40,271	$	38,269

⁽¹⁾ Includes indirect installment loan balances at June 30, 2004, March 31, 2004, December 31, 2003 and June 30, 2003 of $7.9 million, $10.4 million, $13.4 million and $22.2 million, respectively.

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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA

	June 30,			March 31,			Dec. 31,			June 30,
	2004			2004			2003			2003
Asset Quality Ratios:
Non-performing assets to loans and other real estate owned		.90	%		.96	%		1.02	%		.81	%
Non-performing assets to total assets		.69	%		.72	%		.79	%		.64	%
Allowance for loan losses to non-performing loans		121.59	%		114.11	%		101.39	%		133.10	%
Allowance for loan losses to loans		.99	%		1.00	%		.97	%		.97	%
Allowance for loan losses to loans (excluding residential real estate mortgages)		1.94	%		1.90	%		1.88	%		1.86	%
Net charge-offs to average loans: (1)
Commercial loans		(.03	%)		.24	%		.36	%		.35	%
Residential real estate mortgage loans		.08	%		.01	%		.01	%		.04	%
Installment loans		.11	%		.14	%		.35	%		.30	%
Total loans		.04	%		.12	%		.19	%		.19	%
Earnings coverage of net charge-offs (2)		52.47x			20.56x			11.83x			12.65x

⁽¹⁾ Quarter-to-date, annualized.

⁽²⁾ Operating earnings before taxes plus the provision for loan losses divided by net charge-offs.