SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
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( X ) Annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934.
For the fiscal year ended December 31, 1996.
OR
( ) Transition report pursuant to Section 15(d)
of the Securities Exchange Act of 1934.
For the transition period from
_________________ to ________________.
Commission file number of the issuer: 0-15734
REPUBLIC BANCORP INC.
TAX-DEFERRED SAVINGS PLAN AND TRUST
(Full title of plan)
REPUBLIC BANCORP INC.
1070 East Main Street
Owosso, Michigan 48867
(Name of the issuer and address of
its principal executive office)
REQUIRED INFORMATION
Items 1-3. Financial Statements
Not Applicable.
Item 4. ERISA Financial Statements
The attached financial statements and schedules, which are
hereby incorporated by reference by the Republic Bancorp Inc.
Tax-Deferred Savings Plan and Trust (the "Plan"), have been
prepared in accordance with the financial reporting
requirements of ERISA:
Financial Statements for the years ended December 31,
1996 and 1995, Supplemental Schedules for the year
ended December 31, 1996, and Independent Auditors'
Report dated June 9, 1997.
Attached as Exhibit 23 is a written consent of Deloitte &
Touche LLP, independent auditors for the Plan.
REPUBLIC BANCORP INC.
TAX DEFERRED SAVINGS PLAN
Financial Statements for the
Years Ended December 31, 1996 and 1995,
Supplemental Schedules for the
Year Ended December 31, 1996 and
Independent Auditors' Report
REPUBLIC BANCORP INC.
TAX DEFERRED SAVINGS PLAN
TABLE OF CONTENTS
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Page Number
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Independent Auditors' Report 1
Financial Statements for the Years Ended December 31, 1996 and 1995:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 9
Signatures 10
Supplemental Schedules for the Year Ended December 31, 1996:
Item 27a - Schedule of Assets Held for Investment Purposes 11
Item 27b - Schedule of Loans or Fixed Income Not Required
Item 27c - Schedule of Leases in Default or Classified as Uncollectible Not Required
Item 27d - Schedule of Reportable Transactions 12
Items 27e and 27f - Schedule of Non-Exempt Transactions Not Required
[Letterhead of Deloitte & Touche LLP]
Deloitte &
Touche LLP
____________ _________________________________________
Suite 900 Telephone (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of
Republic Bancorp Inc. Tax Deferred Savings Plan and Trust
Owosso, Michigan
We have audited the accompanying statements of net assets available for
benefits of Republic Bancorp Inc. Tax Deferred Savings Plan and Trust (the
"Plan") as of December 31, 1996 and 1995, and the related statements of
changes in net assets available for benefits for the years then ended.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31,
1996 and 1995, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplemental
schedules of (1) assets held for investment purposes as of December 31,
1996 and (2) reportable transactions for the year ended December 31, 1996
are presented for the purpose of additional analysis and are not a required
part of the basic financial statements, but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974.
These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our
audit of the basic 1996 financial statements and, in our opinion, are
fairly stated in all material respects when considered in relation to the
basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
June 9, 1997
_______________
Deloitte Touche
Tohmatsu
International
_______________
REPUBLIC BANCORP INC. TAX-DEFERRED SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31
1996 1995
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ASSETS
Investments, at fair value (Notes 2 and 4):
Cash and Cash Equivalents $ 23,318 $ 584
Common Stock:
Republic Bancorp Inc. Common Stock
(517,957 shares @ 12/31/96; 401,377 shares @ 12/31/95) 6,045,436 4,314,817
Stock Mutual Funds 4,655,573 2,438,948
Bond and Guaranteed Investment Contract (GIC) Funds 2,405,617 2,077,785
Accrued Dividend Income 51,231 35,808
Loans to Participants 364,417 212,624
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Total Investments 13,545,592 9,080,566
Receivables:
Participants' contributions 74,392 120,885
Employer's contribution 29,456 42,595
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Total Receivables 103,848 163,480
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Net Assets Available for Benefits $13,649,440 $9,244,046
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<FN>
See notes to financial statements.
2
REPUBLIC BANCORP INC. TAX-DEFERRED SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31
1996 1995
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Net Assets Available for Benefits, January 1 $ 9,244,046 $ 6,145,326
Additions:
Participant contributions 2,817,552 2,408,899
Employer contributions, net of forfeitures 630,415 644,000
Dividends on Republic Bancorp Inc. stock 185,501 128,848
Dividends and interest income on investments in
stock mutual funds, bond funds, GIC funds and loan fund 136,024 190,486
Net appreciation in fair value of Republic Bancorp Inc. stock 878,697 506,257
Net appreciation in fair value of investments in
stock mutual funds, bond funds and GIC funds 544,685 327,658
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Total additions 5,192,874 4,206,148
Deductions:
Benefits paid to participants (785,080) (1,107,028)
Administrative loan fees (2,400) (400)
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Total deductions (787,480) (1,107,428)
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Net Increase 4,405,394 3,098,720
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Net Assets Available for Benefits, December 31 $ 13,649,440 $ 9,244,046
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<FN>
See notes to financial statements.
3
REPUBLIC BANCORP INC.
TAX-DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
1. PLAN MERGERS
Effective July 1, 1995, Republic Savings Bank (a subsidiary of
Republic Bancorp Inc.) merged its existing 401(k) Profit Sharing Plan
into the Republic Bancorp Inc. Tax-Deferred Savings Plan (the
"Plan"). Total Plan assets increased $511,932 as a result of the
merger. This increase is reflected in Participant Contributions for
1995.
Effective January 1, 1993, Premier Bancorporation, Inc. (a subsidiary
of Republic Bancorp Inc.) merged its existing 401 (k) plan with the
Plan. Total Plan assets increased $633,350 as a result of the merger.
Five funds managed by the Equitable Life Insurance Society were
merged with the Plan. Participants were allowed to maintain balances
in these funds as of January 1, 1993; however, no further
contributions can be made to these funds.
2. PLAN DESCRIPTION
The following description of the Plan provides only general
information. Participants should refer to the Plan document for a
more complete description of the Plan's provisions. The Plan was
established November 1, 1988 under the provisions of Section 401 (k)
of the Internal Revenue Code and is a voluntary savings plan for
eligible employees of Republic Bancorp Inc. ("Republic"). It is
subject to the provisions of The Employment Retirement Income
Security Act of 1974 (ERISA).
All employees of Republic are eligible to participate in the Plan
after completing one year of continuous service. As of December 31,
1996 and 1995, there were 913 and 826 plan participants,
respectively.
Participant contributions are limited to 15% of the participant's
compensation as defined in the Plan, or such maximum rates as may be
approved by the Internal Revenue Service. Republic contributes an
amount equal to 50% of each participant's elective deferrals for the
Plan year up to 7% of the participant's annual compensation.
Republic's contributions to the Plan are made to the Republic Stock
Fund. Republic's contributions are vested 25% after two years of
service and an additional 25% each year thereafter.
If a nonvested participant is terminated from the Plan, the
participant will forfeit a portion of his account related to employer
contributions. Such forfeitures are applied as a reduction to
required employer contributions. As of December 31, 1996, the amount
of forfeited nonvested accounts totaled $35,505. This amount will be
used to reduce employer contributions for the 1997 Plan year.
4
Each participant's account is credited with the participant's
contribution and an allocation of Republic's contribution and Plan
earnings. Allocations are based upon the participant's account
balances. Expenses of operating the Plan are paid by Republic, with
the exception of administrative loan fees which are paid by Plan
participants.
Although it has not expressed any interest to do so, the Company has
the right to terminate the Plan subject to the provisions of ERISA.
Such termination of the Plan, if any, would not affect an employee's
interest in assets already in the Plan and any employer contributions
not yet vested would become fully vested.
On July 1, 1995, the Company retained the Firstar Trust Company as
trustee for the Plan, providing participants with the following four
investment options:
The Firstar Trust Company Stable Asset Portfolio (Firstar
Stable Asset Fund) invests in a well-diversified portfolio of
guaranteed investment contracts (GICs) issued by highly rated
insurance companies, other stable assets such as U.S. Treasury
bills, and cash or cash equivalents. A Guaranteed Investment
Contract is a negotiated contract with a major insurance
company which includes a guarantee by the insurance company of
principal and interest for a specific length of time. The
current average maturity of investments in the Fund is 1.6
years.
The Portico Bond IMMDEX Fund (Bond IMMDEX Fund) invests in
U.S. Government bonds and investment-grade rated corporate
bonds which have intermediate and longer maturity dates. The
Fund attempts to match the performance of the Lehman Brothers
Government/Corporate Bond Index. The current average maturity
of investments in the Fund is 10 years.
The Vanguard Windsor II Fund is a growth and income stock fund
that invests in the equity securities of large and medium-size
companies whose stocks are considered to be undervalued by the
Fund's advisers.
The American Century-Twentieth Century Ultra Fund (Twentieth
Century Ultra Fund) is an aggressive equity fund that invests
in the common stocks of medium-to-large-size companies whose
stocks are considered by fund management to have better-than
average prospects for appreciation.
For the period January 1, 1994 to June 30, 1995, the following four
investment options were available to participants of the Plan through
Comerica Incorporated's trust department. On July 1, 1995,
participants' June 30, 1995 balances in these funds were transferred
to the four investment funds discussed above.
The Guaranteed Investment Contract Fund (GIC Fund) invested
primarily in guaranteed investment contracts issued by
high-quality insurance companies. Contracts in this Fund
generally had maturities ranging up to a maximum of 8 years,
with an average maturity of
5
approximately 3.5 years. The Fund could also invest in various
short-term investment vehicles for purposes of maintaining
liquidity and to make the Fund responsive to changes in
interest rates.
The Comerica Investment Fund H (Bond Fund) invested in
short-term bonds with a current average maturity under four
years.
The Comerica Investment Fund E invested in the common stock of
growth-oriented companies.
Throughout the plan years ended December 31, 1996 and 1995,
participants were also given the option to invest in the Republic
Bancorp Inc. Common Stock Fund (Republic Stock Fund), which invests
100% in the common stock of Republic Bancorp Inc.
Additionally, the following five investment options were available to
the participants of the Premier Bancorporation, Inc. 401 (k) Plan
prior to its merger with the Plan (see Note 1):
The Equitable Aggressive Fund invests in securities of
smaller-sized companies (with capitalizations generally
between $90 million to $1.5 billion) perceived to have greater
growth potential than large companies.
The Equitable Balanced Fund invests in common stocks, other
equity type instruments, longer-term fixed income securities,
publicly traded debt securities and short-term money market
instruments.
The Equitable Common Stock Fund invests in common stocks and
other equity securities issued by intermediate and large sized
companies with an investment objective of long-term capital
growth and increasing income.
The Equitable Fixed Income Fund invests primarily in
Guaranteed Investment Contracts issued by high quality
insurance companies.
The Equitable Money Market Fund is invested in a money market
account at Republic Bank indexed to the 91 day Treasury Bill.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
6
Investment Valuation and Income Recognition: The accompanying
financial statements reflect the accrual basis of accounting.
Investment are stated at market value which is generally based on
quoted prices as reported by the trustee. Loans to participants are
recorded at cost which approximates market value.
Loan Fund: The loan fund is used for receipt of participant
contributions prior to their investment in designated funds and for
accumulation of cash transfers from other funds prior to distribution
or lending to participants.
Terminated Participants: As of December 31, 1996 and 1995, account
balances held by participants who have terminated employment with the
Plan's sponsor totaled $912,502 and $46,189, respectively. Of these
amounts, $44,374 and $52,585, respectively, represented benefits due to
persons who have elected to withdraw from participation in the Plan.
Reclassification: Certain items in the 1995 financial statements
have been reclassified to conform with the 1996 financial statement
presentation.
4. INVESTMENTS
The following table represents the fair values of investments.
Investments that represent 5% or more of the Plan's net assets
available for benefits are separately identified with an asterisk.
December 31
1996 1995
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Cash and Cash Equivalents:
Portico Institutional Money Market Fund $ 23,318 $ 584
Common Stock:
Republic Bancorp Inc. 6,045,436 * 4,314,817 *
Accrued Dividend Income 51,231 35,808
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6,096,667 4,350,625
Stock Mutual Funds:
Vanguard Windsor II Fund 2,523,429 * 1,239,035 *
Twentieth Century Ultra Fund 1,881,676 * 1,037,097 *
Equitable Aggressive Fund 127,284 59,858
Equitable Balanced Fund 25,801 36,434
Equitable Common Stock Fund 97,383 66,524
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4,655,573 2,438,948
Bond and Guaranteed Investment
Contract (GIC) Funds:
Firstar Stable Asset Fund 1,694,057 * 1,423,618 *
Portico Bond IMMDEX Fund 538,502 394,754
Equitable Fixed Income Fund 173,058 259,413
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2,405,617 2,077,785
Loans to Participants 364,417 212,624
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Total Investments $13,545,592 $9,080,566
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7
5. FUND INFORMATION
Contributions, investment income, and distributions to participants
by fund are as follows for the years ended December 31, 1996 and
1995.
Contributions:
1996 1995
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Common Stock:
Republic Bancorp Inc. $1,169,862 $1,202,659
Stock Mutual Funds:
Vanguard Windsor II Fund 836,314 411,689
Twentieth Century Ultra Fund 845,093 339,776
Comerica Investment Fund E n/a 248,500
Bond Funds and Guaranteed Investment
Contract (GIC) Funds:
Firstar Stable Asset Fund 400,108 365,756
Portico Bond IMMDEX Fund 196,590 134,063
Comerica Investment Fund H n/a 113,184
Comerica GIC Fund n/a 237,272
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Total Contributions $3,447,967 $3,052,899
========== ==========
Investment Income:
1996 1995
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Cash and Cash Equivalents:
Portico Institutional Money Market Fund $ 1,274 $ 32,476
Equitable Money Market Fund -- 3,595
Common Stock:
Republic Bancorp Inc. 1,062,924 634,705
Stock Mutual Funds:
Vanguard Windsor II Fund 419,189 122,360
Twentieth Century Ultra Fund 106,683 29,762
Equitable Aggressive Fund 16,046 15,112
Equitable Balanced Fund 2,736 6,283
Equitable Common Stock Fund 12,537 15,714
Comerica Investment Fund E n/a 123,294
Bond Funds and Guaranteed Investment
Contract (GIC) Funds:
Firstar Stable Asset Fund 90,093 44,488
Portico Bond IMMDEX Fund 18,415 23,777
Equitable Fixed Income Fund 11,154 14,257
Comerica Investment Fund H n/a 40,393
Comerica GIC Fund n/a 41,691
Loan Fund 3,856 4,942
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Total Investment Income $1,744,907 $1,152,849
========== ==========
8
Benefits Paid to Participants:
1996 1995
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Cash and Cash Equivalents:
Portico Institutional Money Market Fund $ 621 $ 93,773
Equitable Money Market Fund -- 20,010
Common Stock:
Republic Bancorp Inc. 363,298 352,573
Stock Mutual Funds:
Vanguard Windsor II Fund 113,952 4,697
Twentieth Century Ultra Fund 106,860 7,493
Equitable Aggressive Fund -- 19,443
Equitable Balanced Fund -- 13,477
Equitable Common Stock Fund -- 1,061
Comerica Investment Fund E n/a 52,194
Bond Funds and Guaranteed Investment
Contract (GIC) Funds:
Firstar Stable Asset Fund 126,387 310,774
Portico Bond IMMDEX Fund 28,287 824
Equitable Fixed Income Fund 41,175 31,685
Comerica Investment Fund H n/a 36,552
Comerica GIC Fund n/a 137,337
Loan Fund 4,500 25,135
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Total Benefits Paid to Participants $ 785,080 $1,107,028
========== ==========
6. TAX STATUS
The Plan has received a favorable determination letter dated January
27, 1993 from the Internal Revenue Service stating that it is a
qualified employee benefit plan, meeting the requirements of Sections
401 (a) and 401 (k) of the Internal Revenue Code.
* * * * * * * *
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
REPUBLIC BANCORP INC.
TAX-DEFERRED SAVINGS
PLAN AND TRUST
REPUBLIC BANCORP INC.
Plan Administrator
Date: ____________________ By: ________________________________
Timothy G. Blazejewski, as Agent
10
Republic Bancorp Inc. Tax-Deferred Savings Plan
Item 27a - Schedule of Assets Held for Investment Purposes
As of December 31, 1996
Units/ Fair
Description Shares Cost Value
- ----------- ------ ---- -----
* Portico Institutional Money Market Fund 23,318 $ 23,318 $ 23,318
* Firstar Stable Asset Fund 76,768 1,606,792 1,694,057
* Portico Bond IMMDEX Fund 19,441 544,092 538,502
* Vanguard Windsor II Fund 105,931 2,302,752 2,523,429
* Twentieth Century Ultra Fund 66,951 1,795,933 1,881,676
* Republic Bancorp Inc. Common Stock 517,957 5,192,239 6,096,667
Equitable Aggressive Fund 609 72,969 127,284
Equitable Balanced Fund 244 19,557 25,801
Equitable Common Stock Fund 181 83,677 97,383
Equitable Fixed Income Fund 173,058 173,058 173,058
Loans to 73 participants against their
individual account balances (w/ interest
rates ranging from 7.1% to 11.7% and
maturing through October 2006) 364,417 364,417 364,417
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Total $12,178,804 $13,545,592
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<FN>
* Party in interest
11
Republic Bancorp Inc. Tax-Deferred Savings Plan
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1996
Number Number
of Units of Units Purchase Selling Net Realized
Purchased Sold Asset Description Price Price Gain/(Loss)
--------- -------- ----------------- -------- ------- ------------
Series of Transactions:
1,295,178 1,279,783 Portico Institutional $ 1,295,178 $ 1,279,783 $ --
Money Market Fund
29,775 21,791 Firstar Stable Asset $ 637,519 $ 464,629 $ 10,284
Fund
66,364 13,560 Vanguard Windsor II $ 1,350,865 $ 310,727 $ 23,580
Fund
40,053 12,795 Twentieth Century $ 1,095,994 $ 359,121 $ 21,962
Ultra Fund
136,266 66,581 Republic Bancorp Inc. $ 1,593,772 $ 764,580 $ 49,685
Common Stock
Single Transaction: None
<FN>
Note 1 - A reportable transaction, as defined by the Department of Labor, is
any transaction or series of transactions in one security for 5% or more of
the current value of plan assets at the beginning of the year.
12
EXHIBIT INDEX
Page
Exhibit Number
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23 Consent of Deloitte & Touche LLP 14
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