EXHIBIT 13
1997 ANNUAL REPORT TO SHAREHOLDERS
EXHIBIT 13
Table of
Contents
Shareholder Highlights
I
To Our Shareholders
2
Financial Highlights
6
Our Corporate Culture
8
Commercial and Retail Banking
10
Mortgage Banking
14
Our Products and Services
18
Our Marketplace
19
Republic Bank
20
Republic Savings Bank
22
Republic Bancorp Mortgage Inc.
24
Market Street Mortgage Corporation
and CUB Funding Corporation
26
Republic Bancorp Inc.
Directors and Officers
28
Five-Year Summary of Selected Financial Data
29
Condensed Consolidated Financial Statements
30
Corporate Information
32
Corporate Profile
Republic Bancorp Inc. is a $1.9 billion bank holding company headquartered in
Ann Arbor, Michigan with 112 offices in 21 states. The Company engages
primarily in the following Lines of business: Commercial and Retail Banking
and Mortgage Banking. We provide commercial, home equity and other consumer
loans, deposit products and retail banking services to customers through 35
retail bank branches located in Michigan and Ohio. We also offer residential
mortgage and construction loans to homebuyers through our nationwide mortgage
origination network of 112 offices.
The Company's subsidiaries include Republic Bank (including its subsidiaries
Republic Bancorp Mortgage Inc., Market Street Mortgage Corporation and CUB
Funding Corporation) and Republic Savings Bank.
Cover Story
The cover of this year's annual report illustrates the nature of Republic
Bancorp's business - growing our real estate-secured commercial and mortgage
lending, the cultivation of a strong sales culture, and adherence to a firmly
planted belief in providing the highest quality of personalized service to
our customers. Our business philosophy will continue to be guided by these
fundamental characteristics as we pursue our vision of Financing the American
Dream.
Shareholder Highlights
o Earnings per share increased 34% for the year.
o Net income rose 28% in 1997.
o Republic Bancorp's stock price appreciated 102% during 1997, compared
to 31% for the S&P 500 Index.
o The cumulative total return on Republic Bancorp's stock, including the
reinvestment of dividends, over the past seven years was 1048%, compared
to 253% for the S&P 500 Index.
o Over the same seven-year period, our market capitalization increased
$380 million.
o 1997 marked the twelfth consecutive year in which Republic Bancorp has
paid a 10% stock dividend.
o Republic Bancorp is the #1 Small Business Administration (SBA) lender
in the State of Michigan.
o Republic Bancorp is the 17th largest retail mortgage lender in the
country.
Graph #1
Increase in Shareholder Value
1/1/91 = $10,000
12/31/97 = $114,812
If an investor had purchased $10,000 in Republic Bancorp common stock on
January 1, 1991, their investment would have grown to $114,812 by December
31, 1997.
1
To Our Shareholders
We are proud to report that the Company had an outstanding year in 1997. Net
income was $18.8 million, up 28% over 1996. Earnings per share grew 34% to
$.99. We earned 1.16% on average assets (ROA), compared to 1.02% in 1996.
Return on average shareholders' equity (ROE) increased to 15.09% in 1997. In
addition, the Company's stock price increased 102% during the year.
Strong Revenue Growth
Net revenues grew 17% in 1997, reflecting solid increases in both net
interest income and noninterest income. Noninterest income, excluding
securities transactions and a gain on the sale of bank branches and deposits,
rose 9% to $99 million. This increase was supported by the achievement of a
record level of retail residential mortgage loan closings during the year.
In 1997, the Company continued to build on its strength in the mortgage
banking business-- residential mortgage lending, sales of mortgages to
secondary market participants, and mortgage loan servicing. In addition, we
have executed our strategic plan to augment the mortgage banking business by
growing our portfolio of residential mortgage loans and real estate-secured
commercial loans. Through effective implementation of this strategy, we
achieved an increase in total interest income of 20% during 1997. This
increase was the driving force behind a 28% rise in net interest income to
$47 million.
Asset Growth
Total assets grew 26% to $1.9 billion at December 31, 1997, reflecting
significant growth in portfolio loans. The portfolio loans balance grew $311
million, or 40%, during the year to $1.1 billion. Commercial loans increased
$127 million to $323 million, reflecting our lending emphasis on real-estate
secured commercial loans. As the Company retained more variable rate
residential mortgage loans, residential real estate loans rose $162 million
to $669 million. Installment loans, which are primarily home equity loans,
increased $22 million to $104 million, as we targeted the marketing of home
equity loans to our existing customer base. This growth in the loan portfolio
enabled us to widen the net interest margin by 28 basis points.
Graph #2 Graph #3
Total Interest Income Total Assets
($ in Millions) ($ in Millions)
1995 = $95.6 1995 = $1,473
1996 = $99.1 1996 = $1,490
1997 = $118.9 1997 = $1,873
2
Superior Asset Quality
The Company's asset quality remains exceptionally strong and continues to
rank among the best in the nation. This is evidenced by our historically low
levels of net loan charge-offs, which totaled only .03% of average total
loans in 1997, compared to .06% of average total loans a year ago. The
average net loan charge-offs ratio for our peer group of bank holding
companies with assets between $1 billion and $3 billion was .28% for both
1997 and 1996. The quality of the Company's loan portfolio remains high
because of our focus on real estate-secured lending and our adherence to
conservative underwriting standards.
Capital Management
In 1997, we continued to actively manage capital, thereby, enhancing
shareholder value. We used capital to open three new bank branches and 13 new
mortgage loan origination offices in attractive markets.
The Company adheres to a disciplined approach to acquisitions, emphasizing
management talent, market share, operational synergies, and potential revenue
growth. In the third quarter of 1997, we completed the purchase of certain
assets and the mortgage origination network of Exchange Mortgage Corporation
based in Southfield, Michigan. This purchase added three new loan production
offices to our nationwide network. The acquisition of Exchange Mortgage also
represented our entrance into the Midwest sub-prime mortgage lending market.
Our strong capital position permitted the repurchase of over 486,000 shares
of common stock. In addition, the Company paid a 10% stock dividend in 1997.
This was the twelfth consecutive year in which a stock dividend was paid, and
resulted in an effective increase in the cash dividend of 10% over the prior
year.
At December 31, 1997, the Company's total risk-based capital ratio was
10.35%. All of the Company's capital ratios remain in excess of minimum
regulatory requirements for a well-capitalized financial institution.
Graph #4 Graph #5
Portfolio Loans Net Loan Charge-Offs to Average Loans
($ in Millions)
Republic Bancorp Peer Group Average
---------------- ------------------
1995 = $578 1995 = 0.06% 1995 = 0.27%
1996 = $785 1996 = 0.06% 1996 = 0.28%
1997 = $1,096 1997 = 0.03% 1997 = 0.28%
3
To Our Shareholders (CONT.)
Distinctive Approach to Banking
Other financial institutions have adopted cost-cutting strategies or business
line diversification strategies to increase revenues. Republic Bancorp has
chosen to concentrate primarily on real estate-secured lending and
personalized customer service to grow our business. In addition to
traditional deposit products, we offer a select group of mortgage and other
financial products to people desiring home ownership and to companies seeking
capital to start or expand a business or to develop residential or commercial
properties.
Our approach to banking has been successful for two primary reasons. First,
we believe in the importance of providing our customers with the highest
quality of personalized service. Second, we have always been committed to
maintaining a strong sales culture in which our employees can grow. These
characteristics truly distinguish Republic Bancorp.
Creating Shareholder Value
Our commitment to increasing shareholder value guides the decisions made
throughout the organization, from employees interacting with customers to
members of the board of directors. This strong commitment exists because the
interests of our employees and management are aligned with the interests of
shareholders. In fact, each full-time employee of the Company is a
shareholder through a stock award program. Additionally, eighty-two percent
of eligible employees participate in the company-sponsored 401(k) plan, which
includes a Republic Bancorp stock investment option. The Company also matches
a portion of employee 401(k) contributions in Republic Bancorp stock.
Furthermore, directors receive 100% of their fees for serving the Company in
the form of common stock and stock warrants. We believe the information
provided throughout this annual report reflects the efforts our employees,
management and directors have made over the years to build exceptional value
for our shareholders.
Outlook for 1998
We believe significant opportunities exist to profitably grow our Company,
thereby creating additional value for our shareholders. In 1998, we plan to
grow Republic Bancorp by concentrating on several initiatives, including:
o Enhancing our internal sales culture and improving customer service and
marketing programs in an effort to cross-sell more products to existing
and potential customers.
o Expanding our commercial and retail banking franchise in growing markets
in the Midwest.
o Further developing our nationwide mortgage lending capabilities,
including sub-prime mortgage lending, in existing and new loan production
offices.
4
The year ahead is filled with the promise of new opportunities. We have the
talent, focus and momentum to create additional value for our shareholders by
providing the highest quality of personalized customer service while
fulfilling our vision of Financing the American Dream.
We wish to thank Republic Bancorp's employees, whose skill, hard work, and
dedication have enabled us to grow the Company and achieve our business
goals. We appreciate our directors for sharing their knowledge and experience
in the guidance of the Company. Finally, we thank you, our shareholders, for
your continued support.
/s/ Jerry D. Campbell
Jerry D. Campbell
Chairman and Chief Executive Officer
/s/ Dana M. Cluckey
Dana M. Cluckey, CPA
President and Chief Operating Officer
Photograph #1
Dana M. Cluckey, CPA Jerry D. Campbell
President and Chief Chairman and Chief
Operating Officer Executive Officer
5
Financial Highlights
(Dollars in thousands, except per share data) 1997 1996 % Change
- ------------------------------------------------------------------------------------
Net Income $ 18,789 $ 14,678 28%
Per Common Share (1)
Diluted earnings $ .99 $ .74 34%
Cash dividends declared .37 .34 10
Book value (year-end) 7.02 6.47 9
Closing price of common stock (year-end) 21.38 10.57 102
Average common shares outstanding 19,069 19,835 (4)
Operating Data
Residential mortgage loan closings $3,891,894 $3,580,700 9%
Commercial loan closings 175,062 121,865 44
SBA loan closings 28,205 24,438 15
Mortgage servicing portfolio (year-end) 3,113,372 2,706,018 15
Year-End Balances
Total assets $1,872,893 $1,490,365 26%
Total loans:
Mortgage loans held for sale 513,533 329,157 56
Portfolio loans, net of unearned income 1,095,744 784,628 40
Deposits 1,177,293 1,013,707 16
Short-term borrowings and FHLB advances 424,906 255,342 66
Long-term debt 47,500 49,189 (3)
Shareholders' equity 131,088 121,815 8
Average Balances
Total assets $1,619,904 $1,442,053 12%
Total loans:
Mortgage loans held for sale 317,114 340,375 (7)
Portfolio loans, net of unearned income 975,900 651,009 50
Deposits 1,071,075 943,238 14
Short-term borrowings and FHLB advances 333,905 277,978 20
Long-term debt 47,948 50,873 (6)
Shareholders' equity 124,524 122,792 1
Selected Ratios
Return on average assets 1.16% 1.02% 14%
Return on average equity 15.09 11.95 26
Net interest margin 3.16 2.88 10
Net charge-offs to average total loans .03 .06 (50)
Average equity to average assets 7.69 8.52 (10)
<FN>
(1) All per share amounts presented have been adjusted to reflect the
issuance of stock dividends.
Graph #6
Earnings per Common Share
1995 = $0.69
1996 = $0.74
1997 = $0.99
Graph #7
Net Interest Income
($ in Millions)
1995 = $30.4
1996 = $36.7
1997 = $46.9
Graph #8
Noninterest Income
($ in Millions)
1995 = $75.2
1996 = $90.8
1997 = $102.5
7
Our Corporate Culture
Our sales orientation attracts people who are motivated to give 100% to
selling our products and providing exceptional customer service everyday. We
recognize the importance of hiring talented individuals with positive
attitudes. Our Human Resources team continually works to create, organize and
assess programs that will attract, motivate, develop and reward people with
these attributes.
Our "Pay for Performance" compensation structure, which includes competitive
base salaries and emphasizes incentive-based compensation, is attractive to
people who are motivated--like our more than 360 commissioned Mortgage Loan
Originators. We measure our employees' work performance on a regular basis to
provide consistent and meaningful feedback. This performance measurement
system links employee compensation to our financial objectives and individual
performance goals. As a result, employees are encouraged to help the Company
meet its overall financial goals through teamwork and personal
accomplishments.
We work together to recruit the best people in the industry. Republic
Bancorp's "Pay for Performance" compensation programs are partnered with the
additional opportunities our Company provides, including:
o Comprehensive, flexible employee benefits programs
o Quarterly and annual recognition awards
o Product "Stars" travel and stock awards
o Local lending support, including processing and closing
o Personal relationship banking philosophy
o Opportunities for personal growth and advancement
Current and prospective employees may also access our web site on the
Internet at www.republicbancorp.com to review career opportunities available
throughout the Company.
We have established several educational programs that underscore our
commitment to the professional growth and development of our sales, retail
banking and support staff. Our programs are designed to recruit and retain
top performers nationwide, as well as help current employees develop new
skills. The following programs are included in these professional development
opportunities:
Fast Track Management Training Program
Each year we conduct extensive college recruiting to identify and recruit
outstanding college graduates for our distinguished program. The program
offers departmental rotations, participation in management training and
meetings, individual mentors and accelerated performance review and salary
consideration. The "Fast Track" program is a unique opportunity for recent
college graduates who want to become an integral part of a growing financial
institution and work directly with top sales and management professionals.
Mortgage Loan Officer Training Program
Republic Bancorp conducts in-house training for individuals seeking to
explore career growth as a Mortgage Loan Originator. Many of our most
successful loan originators are graduates of our extensive classroom and
field instruction programs.
Career Planning and Development
Republic Bancorp supports the drive and energy of our employees who want to
grow with the Company. Our Salary Administration and Compensation program
shows employees the career path and
Illustration
[ Art ]
Symbol: "Republic Bancorp - A Great Place to Work"
8
requirements for progression in each functional area of the Company. Our
Human Resources team and sales managers continually search for external
conferences and seminars, as well as develop internal programs for employees
interested in professional growth. We also strongly believe in promoting from
within the Company.
Ultimately, our corporate culture thrives because of our commitment to
consistent communication and prompt feedback at all levels throughout the
Company. This type of communication allows us to share our goals and
expectations with one another. For example, monthly accountability meetings
permit employees to discuss their achievements and develop short-term goals
with their supervisors. Regular corporate conference calls with the Company's
Chief Executive Officer, known as "TeleRap" sessions, provide employees with
updates on the Company's financial and operating results. In addition, each
employee in a management position at Republic Bancorp maintains an "open
door" management philosophy.
Effective communication of our philosophies and the existence of many
opportunities for both personal and professional growth within our corporate
culture make Republic Bancorp "A Great Place to Work" for our employees.
From Left to Right:
Debra A. Hanses, PHR, Vice President, Corporate Human Resources, Republic
Bancorp Inc.; Denise M. Kiepper, Vice President, Human Resources, Republic
Bancorp Mortgage Inc.; Bethany L. Barker, SPHR, Vice President, Human
Resources, Republic Bank; Nancy J. Weaver, Vice President, Human Resources
and Marketing, Market Street Mortgage Corporation and CUB Funding
Corporation; Michelle J. Dubblestyne, Vice President, Human Resources,
Republic Savings Bank
Photograph #2
9
Commercial and Retail Banking
Commercial Lending
The commercial lending group strives to achieve the highest level of customer
satisfaction by providing expertise, extraordinary service and fast loan
approvals. To consistently reach this goal, our Commercial Loan Officers take
the time to build lasting relationships with their customers. This involves
personally meeting with business owners and commercial developers at their
place of business or project site in order to learn about the business
venture and gather the necessary information to process the loan request. Our
customers appreciate this approach, because it affords them the opportunity
to discuss various issues at length, on a one-on-one basis.
Our Commercial Loan Officers bring knowledge, skill and experience to the
Republic Bancorp commercial lending team and ensure that our customers'
transactions are handled in a friendly and timely manner. In addition, they
cultivate relationships with attorneys, accountants, commercial brokers and
other professionals in their communities to strengthen their customer
referral database.
Graph #9
Commerical Loan Closings
($ in Millions)
1995 = $50
1996 = $122
1997 = $175
As a result of the commercial lending group's effort, the Company has
experienced significant growth in the volume of commercial loans. In 1997,
the commercial lending group grew commercial loan closings 44% to $175
million, compared to $122 million in 1996.
Republic Bancorp is the #1 SBA Lender in the State of Michigan
Republic Bancorp's banking subsidiary, Republic Bank, approved more small
business loans than any other SBA lender in Michigan and, once again, was
recognized by the Small Business Administration as the top provider of SBA
loans to Michigan businesses. This marks the fourth consecutive year in which
Republic Bank has achieved this honor. During the year, Republic Bank was
also designated as a Preferred Lender by the Small Business Administration in
the State of Michigan. The Preferred Lender status allows Republic Bank to
provide direct approval on small business loans, thus enabling our Commercial
Loan Officers to respond quickly to small business owners' requests for
financing.
Consistent with our emphasis on personal service, every small business
customer is assigned an SBA specialist, in addition to their Commercial Loan
Officer, to handle the loan application and to ensure that their specific
needs are addressed. The SBA-guaranteed loans have no short balloon
maturities and offer small businesses longer terms. These features give small
business owners a greater chance to succeed by lowering monthly payments and
enhancing cash flow. In 1997,
10
Republic Bancorp expanded its small-business lending program to include small
businesses in rural areas. These loans are guaranteed by the United States
Department of Agriculture (USDA).
As a result of the efforts and accomplishments of our Commercial Loan
Officers and SBA specialists, the volume of SBA loans closed in 1997
increased 15% to $28 million, compared to $24 million in 1996.
Graph #10
SBA Loan Closings
($ in Millions)
1995 = $17
1996 = $24
1997 = $28
Top photo:
Daniel G. Merkel (left) and Carl F. Moraw (right); Vice Presidents,
Commercial Lending, Republic Savings Bank
Bottom photo:
Dwight G. Reynolds (left), Michigan District Director, Small Business
Administration and Barry J. Eckhold (right), Vice Chairman and Chief
Executive Officer, Republic Bank
Photograph #3
Photograph #4
11
Commercial and
Retail Banking (cont.)
Retail Banking
Deposit products and personal banking services are delivered to customers
through 35 retail bank branches in Michigan and Ohio. We are committed to
providing a pleasant environment in which our customers will feel comfortable
handling their banking needs. Therefore, each branch is designed to allow
individuals to conduct their banking transactions face to face with their own
Personal Banker. As a result, many of these branches function without
drive-through windows, teller windows or automated teller machines.
Our Personal Bankers are knowledgeable people who are trained to manage
retail banking transactions and focus on providing one-on-one service to
customers. They greet each customer with a smile and a willingness to help.
In fact, each customer is assigned a Personal Banker they can turn to for
assistance during each and every visit. And unlike other financial
institutions that may assess fees on customers for providing personal
service, our Personal Bankers help our customers free of charge. Our
customers can see by the attitudes and behaviors exhibited by our Personal
Bankers that we care about treating them well and going the extra mile to
meet their needs.
During 1997, the retail banking group grew total deposits to nearly $1.2
billion from $1.0 billion in 1996, an increase of 16%.
Home Equity Lending
Republic Bancorp's retail lending efforts are concen- trated primarily on
home equity lending. This lending area complements our residential mortgage
lending business since it involves offering home equity products to
Graph #11 Graph #12
Deposits Installment Loan Closings
($ in Millions) ($ in Millions)
1995 = $905 1995 = $41
1996 = $1,014 1996 = $69
1997 = $1,177 1997 = $92
12
Photograph #5
Michelle A. Olechnowicz, a Personal Banker at our Republic Bank - Ann Arbor
office, assists a customer.
existing retail banking and mortgage customers. Personal Bankers offer these
products directly to retail banking customers and receive mortgage customer
referrals from Mortgage Loan Originators. Each mortgage applicant receives
information describing our home equity products and our deposit products.
Our home equity product line includes single-purpose loans, lines of credit,
and up to 125% loan-to-value home equity loans. During 1997, the retail
lending group increased installment loan closings, which are predominantly
comprised of home equity loans, by 34% to $92 million.
13
Mortgage Banking
Residential Mortgage Lending
Purchasing a home is one of the most important financial decisions our
customers will ever make. Therefore, Republic Bancorp offers mortgage
products with terms suitable for a variety of homebuyers and employs
experienced loan originators who provide personalized service and valuable
guidance throughout the application and closing process. The residential
mortgage lending group focuses on simplifying the mortgage process and making
it possible for each one of our customers to achieve their dream of home
ownership.
Homebuyers have access to our more than 360 Mortgage Loan Originators through
the Company's nationwide network of offices. They can also arrange for an
in-home appointment. Prospective borrowers meet one-on-one with a Mortgage
Loan Originator to pre-qualify for a mortgage loan prior to beginning the
house search. Interested homebuyers may also complete and submit a
pre-qualification form directly over the Internet by visiting our web site at
www.republicbancorp.com. In addition, we are expediting the mortgage
application process by providing our Mortgage Loan Originators with laptop
computers to use in the field. This capability adds value to the customer's
home buying experience by reducing the time required for loan approvals.
In 1997, Republic Bancorp implemented a new program for first-time homebuyers
called "Home At Last." This program is designed to make the transition from
renting to owning a home easier.
It includes a number of benefits for homebuyers, including a low
down-payment; a quick pre-qualification interview to determine
affordability; and a "pre-approval letter" that gives buyers a bargaining
advantage. In addition, our Mortgage Loan Originators regularly conduct
educational seminars for first-time homebuyers seeking to more fully
understand the home buying process.
Graph #13
Residential Mortgage Loan Closings
($ in Billions)
1995 = $2.8
1996 = $3.6
1997 = $3.9
During 1997, the residential mortgage lending team completed $3.9 billion in
mortgage loan closings, compared to $3.6 billion in 1996. We reached a
record $3.4 billion in retail mortgage loan closings in 1997, or 88% of total
closings, an increase of $700 million when compared to 1996.
14
Photograph #6
Timothy B. Smith, Vice President, Republic Bancorp Mortgage
Inc., and his Loan Processor, Maureen M. Carleton, assist
residential mortgage loan customers with their application.
15
Mortgage Banking (cont.)
As a result, Republic Bancorp is the 17th largest retail mortgage lender in
the country. We are also proud to be the largest Michigan-based retail
mortgage lender and the largest retail mortgage lender in the Tampa, Florida
area.
Republic Bancorp's Mortgage Loan Originators rank among the top lenders in
the markets we serve. They are dedicated to building personal relationships
with real estate agents and brokers in the communities they serve.
Cultivation of these relationships helps strengthen our existing referral
programs and permits the development of new ones, thereby supporting loan
growth. Most importantly, our Mortgage Loan Originators, along with their
dedicated Loan Processors, are motivated to provide the highest level of
personalized service so that customers can receive quick responses to
questions, timely loan approvals and efficient closings.
Mortgage Loan Sales to the
Secondary Market
Approximately 63% of Republic Bancorp's total mortgage loan closings are
conventional mortgage loans. Another 16% represent government loans either
guaranteed by the Department of Veterans Affairs (VA) or insured by the
Federal Housing Administration (FHA). The remaining 21% are comprised of
portfolio and jumbo loans. We regularly originate conventional mortgages in
conformity with underwriting guidelines permitting their sale directly to the
Federal National Mortgage Association (FNMA) and the Federal Home Loan
Mortgage Corporation (FHLMC). In addition, we originate government loans in
compliance with underwriting guidelines permitting their conversion into
mortgage-backed securities issued by the Government National Mortgage
Association (GNMA).
Mortgage Loan Servicing
At December 31, 1997, the Company serviced $3.1 billion in mortgage loans for
the benefit of others, representing over 39,000 loans. At year-end 1996,
loans serviced for others totaled $2.7 billion or more than 36,000 loans.
Mortgage loans serviced have been originated through our retail bank and
mortgage loan production offices or acquired through bulk purchases.
As a loan servicer, Republic Bancorp performs the servicing function by
collecting and remitting loan payments, holding custodial funds for payment
of taxes and insurance, counseling delinquent mortgagors, supervising
foreclosures and property dispositions in the event of unremedied defaults,
and performing other loan administrative duties. In return, the Company
receives a fee from the investor, ranging from 25 to 45 basis points per year
on the unpaid principal balance of loans in the servicing portfolio. In
addition, the Company retains late fees and other ancillary charges
associated with the administration of the mortgage loan servicing portfolio.
Providing outstanding customer service is the main focus of each servicing
employee at Republic Bancorp. This commitment is demonstrated each time an
employee speaks with a customer over the phone or processes a transaction
that affects a homeowner.
16
Photograph #7
Our servicing employees also concentrate on the accurate and efficient
processing of transactions and information. Technological advancements have
been integrated into various processes to improve accuracy and reduce the
cost of mortgage loan servicing activities. Our efforts are paying off as
evidenced by an increase in the number of loans serviced per servicing
employee, an indicator of efficiency.
Left to right:
Nancy A. Jones, Senior Vice President, Market Street Mortgage Corporation and
CUB Funding Corporation; T. Donnell Smith, CMB, Executive Vice President,
Market Street Mortgage Corporation and CUB Funding Corporation; Marcetta
Nelson-Rhodes, Senior Vice President, Republic Bancorp Mortgage Inc.; Michael
H. Dillon, CPA, Executive Vice President, Market Street Mortgage Corporation
and CUB Funding Corporation
17
Our Products and Services
Commercial Lending Products
Commercial Loans
Republic Bank and Republic Savings Bank provide financing primarily for
commercial real estate in Michigan, Ohio and Indiana. The types of projects
financed typically involve small- to medium-size manufacturing facilities,
retail shopping centers, apartment complexes and office buildings.
SBA Loans
Republic Bank and Republic Savings Bank provide loans guaranteed by the Small
Business Administration to small businesses for owner-occupied commercial
properties; the purchase, construction or expansion of buildings; working
capital; and for machinery and equipment.
USDA Guaranty Loans
For-profit and non-profit organizations and small businesses in rural areas
can apply for a loan through this program offered by Republic Bank in
Michigan and sponsored by the United States Department of Agriculture.
Retail Banking Products
Checking
Republic Bancorp has a wide selection of personal checking accounts available
for customers. Our Signature Plus Checking interest-bearing account rewards
individuals for maintaining multiple accounts with us and automatically
qualifies customers for a higher rate of interest on certificates of deposit.
Our classic Pathfinders Checking account is a financial as well as a social
club that permits individuals age 50 and over to participate in a variety of
active, enjoyable and informative programs. We also offer various checking
accounts specifically for businesses, including business checking accounts
and sweep accounts that contain features such as unlimited deposit and check
writing privileges, money market equivalent rates, and earnings credits.
Savings
Republic Bancorp offers three types of savings vehicles for individuals. Our
Diamond Savings account is a tiered, variable rate account aimed at people
with higher balances seeking competitive rates of return. Our Diamond
Investment money market account is a variable rate account designed to
compete with money market mutual funds. Our Personal Savings account is
designed to help individuals seeking to begin a savings program.
Retail Certificates of Deposit
Republic Bancorp's Retail Certificates of Deposit offer maturities ranging
from two months to eight years with competitive interest rates that will help
individuals meet their investment goals. We also offer various Individual
Retirement Accounts in the form of certificates of deposit that have
competitive rates, an attractive tax-deferral feature, a low initial deposit
requirement, and additional deposit opportunities.
Public Funds
In Michigan and Ohio, Republic Bancorp provides a variety of accounts
tailored to meet the needs of municipalities and educational institutions.
Our Public Fund Certificates of Deposit are available in denominations over
$100,000 and offer competitive rates and flexible terms. Our Public Fund
Money Market Checking account is a variable rate money market account with
unlimited deposit and check writing privileges. Our Public Fund Checking
account features unlimited deposit and check writing privileges, as well as
an earnings credit. We also offer Public Fund Installment Purchase Contracts
that allow governmental organizations to borrow funds at competitive rates
and with flexible terms.
Mortgage Lending Products
Republic Bancorp offers a variety of residential mortgage loan products,
including the following:
o Conventional, fixed-rate 15- and 30-year mortgages;
o One-, three- and five-year adjustable rate mortgages;
o Five- and seven-year balloon mortgages;
o Jumbo mortgages;
o FHA and VA mortgage loans;
o New construction loans;
o Bridge loans;
o Second mortgages;
o Home equity loans;
o Sub-prime mortgage loans; and
o Portfolio loans.
For more information regarding our products and services, please refer to the
map and detail list of offices on the following pages to locate the office
nearest you.
18
Our Marketplace
MAP OF UNITED STATES
Financing the American Dream
Republic Bancorp Inc. has 112 Offices in 21 States.
Commercial, Retail and
Mortgage Banking States (54 Offices)
Michigan-36
Ohio-17
Indiana-1
Mortgage Banking States (58 Offices)
Florida-14 Georgia-4 North Carolina-1
Alabama-1 Illinois-5 Oklahoma-3
Arizona-4 Maryland-2 Pennsylvania-1
California-3 Massachusetts-1 Texas-1
Colorado-4 Missouri-5 Utah-1
Connecticut-2 New York-3 Virginia-3
19
Republic Bank
Highlights
Republic Bank is a state-chartered bank headquartered in Ann Arbor, Michigan.
In 1997, Republic Bank was named a Preferred Lender by the Small Business
Administration (SBA), the highest designation attainable by lending
institutions. Additionally, Republic Bank was recognized as the Number One
SBA Lender in the State of Michigan for the fourth consecutive year.
At December 31, 1997, Republic Bank had total assets of $1.3 billion. Total
deposits grew 22% to $894 million at December 31, 1997. Commercial loan
closings reached $119 million, up 47% from 1996. SBA loan closings were $21
million, up 16% over the prior year. Republic Bank closed $490 million in
residential mortgage loans in 1997, representing a 24% increase over 1996.
Board of Directors
Howard J. Hulsman
Chairman of the Board;
Chairman, Ross
Learning Center
Barry J. Eckhold
Vice Chairman and Chief
Executive Officer, Republic
Bank; Vice Chairman,
Republic Savings Bank
Lee E. Benz
President, Benz
Insurance Company
George L. Burkitt
Certified Public Accountant
Robert G. Edgar
President, R. G.
Edgar & Associates
D. Wayne Fate
Pharmacist
Lloyd G. Ganton
President, Ganton
Retirement Centers, Inc.
Craig L. Johnson
President and Chief Operating
Officer, Republic Bank;
President and Chief
Executive Officer,
Republic Savings Bank
Jack R. Lousma
Consultant
Milton F. Lutz, II
President, Midbrook
Products, Inc.
Robert L. McNaughton
President, McNaughton &
Gunn Printers and
Lithographers
Robert C. Manutes
Retired Pharmacist
William G. Milliken, Jr.
Owner, Milliken
Realty Company
William C. Rands, III
Managing Partner,
Sagres Partners
Milton J. Rosenbaum
Physician
John E. VanderPoel
Regional Bank President,
Republic Bank
David W. Wright
President and Chief
Executive Officer, Durakon
Industries, Inc.
Michael D. Young
President, Michael D. Young
Olds, Pontiac, GMC
Trucks, Inc.
Officers
Barry J. Eckhold
Vice Chairman and Chief
Executive Officer
Craig L. Johnson
President and Chief
Operating Officer
John E. VanderPoel
Regional Bank President
David G. Stickel
Regional President
Constance A. Deneweth
Community Bank
President-Traverse City
Dennis A. Hill
Community Bank
President-Jackson
Richard P. Lupkes
Community Bank
President-Ann Arbor
Thomas G. Zernick
Community Bank
President-Lansing
Theodore J. Carlson
Executive Vice President,
Director of Facilities
Craig C. Foust
Senior Vice President and
Chief Credit Officer
Jeffrey D. Saunders, CPA
Senior Vice President and
Chief Financial Officer
Bethany L. Barker, SPHR
Vice President,
Human Resources
Commercial Lending
Senior Vice Presidents
Ronald L. Clingerman
Thomas A. Creswell
Stuart A. Forsyth
Vice Presidents
Douglas T. Allor
Vincent G. Cassisa
Donald F. Chamberlain
Matthew J. Chrome
Linda S. Crawford
Craig A. Criswell
Larry R. Daniel
John C. Deming
Pamela J. Foster
D. Scott Hannah
E. James Houston, Jr.
Karl C. Jones
Patricia K. Julien
Thomas P. McFadden
Darlene A. Nowak-Baker
Joann M. Roche
Andrew P. Sabatine
David J. Skaff
Gloria A. Tomaszewski
Jeffrey S. Williams
Karl D. Zachmann
Mortgage Lending
Senior Vice Presidents
Lawrence D. Corbett
Michael J. Gleason
Daniel F. MacKenzie
David B. Randall
Diana L. Wallace
Vice Presidents
Rosalee M. Bailey
Sheila G. Brigham
Michael J. Charlow
Teresa A. Damman
Suzanne M. Lieder
Heidi H. McNaughton
20
Vice Presidents (cont.)
Gregory B. Smith
Julie M. Q. Smith
David W. Stellin
Holly G. Tegel
Retail Banking,
Consumer Lending
and Operations
Vice Presidents
Sharon M. Bollinger
Paul C. Fuller
Jack S. Harris
Lorraine A. Jackman
Douglas A. Liverance
Richard A. Roty
Cheryl M. Schantz
Barbara J. Schmit
James L. Stotz
Russell J. Thomas
Joanne M. Wrozek
Office Locations
Ann Arbor Region
Main Office
122 South Main Street
Ann Arbor, MI 48104
(313) 665-4030
2100 South Main Street
Ann Arbor, MI 48103
(313) 665-4080
Flint Region
G-3200 Beecher Road
Flint, MI 48532
(810) 732-3300
20 South Main Street
Clarkston, MI 48346
(248) 922-1200
2050 South Linden Road
Flint, MI 48532
(810) 733-7500
220 East Main Street
Flushing, MI 48433
(810) 659-7712
G-8455 South Saginaw Road
Grand Blanc, MI 48439
(810) 694-8222
1070 East Main Street
Owosso, MI 48867
(517) 723-7800
1345 North Shiawassee Street
Owosso, MI 48867
(517) 723-5101
Jackson Region
306 West Michigan Avenue
Jackson, MI 49201
(517) 789-4300
2201 East Michigan Avenue
Jackson, MI 49202
(517) 789-4330
2030 Fourth Street
Jackson, MI 49203
(517) 789-4335
904 North Wisner Street
Jackson, MI 49202
(517) 789-4326
Loan Production Office
4205 South Westnedge Avenue
Kalamazoo, MI 49008
(616) 344-0011
Lansing Region
500 North Homer Street
Lansing, MI 48912
(517) 351-7300
601 West Grand River
Okemos, MI 48864
(517) 349-1930
127 East Grand River
Webberville, MI 48892
(517) 521-3122
105 West Middle Street
Williamston, MI 48895
(517) 655-4371
Southeastern
Michigan Region
1700 North Woodward,
Suite B
Bloomfield Hills, MI 48304
(248) 258-5300
31155 Northwestern Highway
Farmington Hills, MI 48334
(248) 737-0444
18720 Mack Avenue
Grosse Pointe Farms, MI 48236
(313) 882-6400
Traverse City Region
534 East Front Street
Traverse City, MI 49686
(616) 933-4400
3600 Veterans Drive
Traverse City, MI 49864
(616) 933-5626
Loan Production Office
616 Petoskey Street
Petoskey, MI 49770
(616) 347-0290
Western Michigan
100 E. 8th Street
Holland, MI 49423
(616) 395-2585
Loan Production Office
1500 East Beltline,
Suite 160
Grand Rapids, MI 49506
(616) 977-5907
Photograph #8
Barry J. Eckhold, Vice Chairman and Chief Executive Officer, Republic Bank
21
Republic Savings Bank
Highlights
Republic Savings Bank is a state-chartered savings bank headquartered in
Pepper Pike, Ohio, that offers commercial, retail and mortgage loans in
addition to a variety of checking and deposit products primarily to
individual and business customers in the greater Cleveland, Ohio area and
Indianapolis, Indiana. Republic Savings Bank also originates mortgage loans
through offices in Columbus, Dayton, and Cincinnati, Ohio as well as in
Indiana.
Republic Savings Bank was the top SBA lender in the Cleveland District for
the fourth quarter of 1997. At December 31, 1997, Republic Savings Bank had
assets of $492 million. Total deposits grew 12% to $320 million from $285
million last year. Commercial loan closings were $56 million, an increase of
36% from 1996. SBA loan closings improved to $7 million in 1997. Republic
Savings Bank closed $557 million in residential mortgage loans, representing
a 65% increase from 1996.
Board of Directors
Dennis J. Ibold
Chairman of the Board;
President, Petersen & Ibold, Attorneys at Law
Albert P. Blank
Executive Vice President, Republic Savings Bank
Dana M. Cluckey
President and Chief Operating Officer,
Republic Bancorp Inc.
Paul C. Drueke
First Vice President, Stifel, Nicolaus & Company, Inc.
Barry J. Eckhold
Vice Chairman, Republic Savings Bank; Vice Chairman
and Chief Executive Officer, Republic Bank
Craig L. Johnson
President and Chief Executive Officer, Republic Savings Bank;
President and Chief Operating Officer, Republic Bank
John J. Lennon
Retired Chairman and Chief Executive Officer,
White Engines, Inc.
John L. Macklin
President, Investment Advisors International, Inc.
Lyman H. Treadway
Consultant, Retired Chairman and Chief Executive Officer,
Bancapital Corporation
Officers
Craig L. Johnson
President and Chief Executive Officer
Albert P. Blank
Executive Vice President
Gregory T. Cook
Senior Vice President, Retail Banking
Michelle J. Dubblestyne
Vice President, Human Resources
Michelle T. Ferri, CPA
Vice President, Controller and Treasurer
Jacqueline W. Goler
Vice President, Marketing
Leeanne M. Wright
Vice President, Loan Servicing
22
Commercial Lending
Vice Presidents
E. Christian Barham
Thomas P. Krumel
Daniel G. Merkel
Carl F. Moraw
Neil T. Young
Mortgage Lending
Vice Presidents
Timothy B. Atkinson
Anthony P. Corrao
Davida F. Henson
Darrin L. Kresevic
Marianne McCarty
Edward M. McRitchie
John L. Mlakar
Kathy A. Shaw
Office Locations
Main Office
29225 Chagrin Blvd.
Pepper Pike, OH 44122
(216) 514-3484
17800 Chillicothe Rd.
Chagrin Falls, OH 44023
(440) 543-8237
8389 Mayfield Rd.
Chesterland, OH 44026
(440) 729-1636
80 Severance Circle Drive
Cleveland Heights, OH 44118
(216) 291-3171
5 Aurora Street
Hudson, OH 44236
(330) 653-5111
Greens of Lyndhurst
5710 Mayfield Rd.
Lyndhurst, OH 44124
(440) 461-7300
8382 Mentor Avenue
Mentor, OH 44060
(440) 918-0800
7220 Pearl Rd.
Middleburg Heights, OH 44130
(440) 845-7945
26777 Lorain Rd.
North Olmsted, OH 44070
(440) 779-9922
26301 Curtiss Wright Pkwy.
Richmond Heights, OH 44143
(216) 289-0999
3505 Lee Rd.
Shaker Heights, OH 44120
(216) 991-2800
13991 Cedar Road
South Euclid, OH 44118
(216) 932-7774
201 South Capital, Suite 650
Indianapolis, IN 46225
(317) 237-5300
Loan Production Office
7333 Paragon Rd., Suite 160
Centerville, OH 45459
(937) 438-4663
Loan Production Office
8178 Beechmont Avenue
Cincinnati, OH 45255
(513) 474-1188
Loan Production Office
6551 South Main St., Suite 100
North Kingsville, OH 44068
(440) 224-2114
Loan Production Office
500 W. Wilson Bridge Rd.
Suite 100
Worthington, OH 43085
(614) 888-9582
Loan Production Office
4665 Douglas Circle, Suite 100
Canton, OH 44718
(330) 966-7072
Photograph #9
Craig L. Johnson, President
and Chief Executive Officer,
Republic Savings Bank
23
Republic Bancorp
Mortgage Inc.
Highlights
Republic Bancorp Mortgage Inc. is a mortgage company with headquarters in
Farmington Hills, Michigan. Republic Bancorp Mortgage offers a variety of
mortgage loans, including conventional, construction, FHA/VA government-
insured, jumbo and sub-prime, as well as home equity products. These
products are available through 17 offices located in Michigan, Connecticut,
Massachusetts, New York and Ohio. Republic Bancorp Mortgage has three
divisions: Home Funding Inc., Unlimited Mortgage Services and Exchange
Mortgage Corporation.
Exchange Mortgage Corporation, including its sub-prime lending division,
Union Mortgage Services, was acquired in September 1997. This acquisition
provided Republic Bancorp Mortgage with an opportunity to expand the
Company's mortgage lending activities into the more profitable sub-prime
mortgage lending market. The establishment of a sub-prime lending division
within the Company is expected to enhance the volume of mortgage loans
originated to applicants with less-than-perfect credit histories.
Republic Bancorp Mortgage's Southeast Michigan region has consistently been
recognized as one of the top five mortgage origination groups in the State of
Michigan. Republic Bancorp Mortgage originated $917 million of residential
mortgage loans in 1997, an increase of 31% from 1996.
Board of Directors
George B. Smith
Chairman of the Board
Charles W. Adams
Consultant
Douglas E. Brandewie
President and Chief Executive
Officer, Republic Bancorp
Mortgage Inc.
Jerry D. Campbell
Chairman and Chief Executive
Officer, Republic Bancorp Inc.
Dana M. Cluckey
President and Chief Operating
Officer, Republic Bancorp Inc.
Barry J. Eckhold
Vice Chairman and
Chief Executive Officer,
Republic Bank
and Vice Chairman,
Republic Savings Bank
William C. Rands, III
Managing Partner,
Sagres Partners
Arthur F. Vine
Retired Director of
Mortgage Servicing,
Michigan State Housing
Development Authority
Officers
George B. Smith
Chairman of the Board
Douglas E. Brandewie
President and Chief Executive
Officer
Teresa E. Fagan
Executive Vice President,
Unlimited Mortgage
Services, Inc.
Sandra J. Nickol
Senior Vice President
Kristin L. Ouellette
Senior Vice President
Kathleen Quinn
Division President,
Home Funding Inc.
Marcetta Nelson-Rhodes
Senior Vice President
Lawrence Rosenberg, CPA
Senior Vice President and
Chief Financial Officer
W. Eric Stone
Division President, Unlimited
Mortgage Services, Inc.
Edward A. Tilk
Executive Vice President,
Exchange Mortgage
Corporation
Michael J. Walsh
Division President, Exchange
Mortgage Corporation
William A. Zablocki
Senior Vice President
Denise M. Kiepper
Vice President,
Human Resources
Vice Presidents
Patricia Cook-Anderson
Barbara J. Bartus
Robert L. Borkowski
Koleen M. Cook
Charles W. Cracraft
Robert D. Decraene
Thomas E. Dodrill
Deborah L. Dupilka
Erik C. Eriksen
Susan A. Farrar
Debra J. Gouin
Deborah E. Herman
Wendy L. Hunt
C. Ann Jeffares
Alex N. Masterpole
Carrie E. Meacham
Mary D. Mitchell
Raquel R. Moore
Ross G. Ritter
Barbara Jo Smith
Daniel B. Smith
Thomas B. Smith
Timothy B. Smith
Linda C. Stafford
Michael G. Taormino
Peter D. Tull
Kimberly L. Visniski
William D. Wilhammer
24
Office Locations
Main Office
31155 Northwestern Hwy.
Farmington Hills, MI 48334
(248) 932-4701
1919 West Stadium Blvd., Suite 4
Ann Arbor, MI 48103
(734) 995-4499
1700 North Woodward Avenue,
Suite B
Bloomfield Hills, MI 48304
(248) 646-7050
322 West Grand River
Brighton, MI 48116
(810) 229-7440
836 Centennial Way
Lansing, MI 48917
(517) 886-2816
186 South Main Street
Plymouth, MI 48170
(734) 459-7800
315 Water Street
Rochester, MI 48307
(248) 656-4200
24370 Northwestern Hwy.,
Southfield, MI 48075
(248) 357-8360
14405 Northline Rd.
Southgate, MI 48195
(734) 283-6200
13219 Eureka
Southgate, MI 48195
(734) 246-9900
457 Main Street
Danbury, CT 06811
(800) 767-4787
141 Orange Street
New Haven, CT 06510
(203) 776-3980
Two Meeting House Road
Chelmsford, MA 01824
(978) 250-2700
1407 Route 9
Clifton Park, NY 12065
(800) 724-0969
6701 Manlius Center Rd.
East Syracuse, NY 13057
(800) 860-8207
Two Summit Court, Suite 306
Fishkill, NY 12524
(800) 724-2111
450 West Wilson Bridge Road, Suite 370
Worthington, OH 43085
(614) 785-1730
Photograph #10
Douglas E. Brandewie, President
and Chief Executive Officer,
Republic Bancorp Mortgage Inc.
25
Market Street Mortgage
Corporation and
CUB Funding Corporation
Highlights
Market Street Mortgage Corporation and CUB Funding Corporation are mortgage
companies with headquarters in Clearwater, Florida. Market Street Mortgage
and CUB Funding offer a range of mortgage loan products, including
conventional, construction, FHA/VA government-insured, jumbo and sub-prime,
as well as home equity products. These products are offered through a total
of 49 offices in Florida, California, Alabama, Arizona, Colorado, Georgia,
Illinois, Maryland, Missouri, North Carolina, Oklahoma, Pennsylvania, Texas,
Utah and Virginia.
In 1997, Market Street Mortgage was awarded one of two national contracts to
be a master servicer of government loans for the Government National Mortgage
Association (GNMA). Also, Market Street Mortgage was the Number One
originator of mortgages for home purchases in the Tampa, Florida area for the
eighth year in a row.
Market Street Mortgage closed $1.3 billion in residential mortgage loans in
1997, an increase of 15% from 1996. CUB Funding's residential mortgage
closings were $632 million in 1997.
Market Street
Mortgage
Corporation
Board of Directors
Randall C. Johnson, CMB
Chairman of the Board,
President and Chief
Executive Officer
Jerry D. Campbell
Chairman and Chief Executive
Officer, Republic Bancorp Inc.
Dana M. Cluckey, CPA
President and Chief
Operating Officer,
Republic Bancorp Inc.
Michael H. Dillon, CPA
Executive Vice President
T. Donnell Smith, CMB
Executive Vice President
Officers
Randall C. Johnson, CMB
Chairman of the Board,
President and Chief Executive
Officer
T. Donnell Smith, CMB
Executive Vice President
Michael H. Dillon, CPA
Executive Vice President
James B. Capps
Senior Vice President
Tracy S. Jackson, CPA
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
Nancy A. Jones
Senior Vice President
Barbara VanAntwerp
Senior Vice President
Nancy J. Weaver
Vice President
Robert W. Johnson, Esq.
Legal Counsel and
Chief Compliance Officer
Vice Presidents
Betty Ann Armstrong
Anna Y. Agee
Anthony J. Agliardi, CPA
Ross G. Bennett, CMB
Barry W. Carroll
Thomas J. Chess
Jerry F. Cobbe
Joy C. Douglas
Deborah L. Drake
Michael A. Dulla
Charles D. Feisal
Timothy J. Hawkes
Barbara J. Jenkins
Bruce W. Kates
Patricia K. McCabe
Stephen H. McLaughlin
Richard A. Munch
Brian J. Murphy
JoAnn Schuler Perry
Sandra K. Pettinger
Brian W. Prentice
Lauren C. Reed
Charles W. Richardson
Clarence P. Rideout
Neal B. Saxon, Jr.
Timothy A. Slone
Gene F. Swindle
John M. Welsh
Frank L. Wolff
Office Locations
Main Office
2650 McCormick Drive,
Suite 200
Clearwater, FL 33759
(813) 724-7000
28341 S. Tamiami Trail
Bonita Springs, FL 34134
(941) 495-5454
1375 Oakfield Drive
Brandon, FL 33511
(813) 681-7700
3620 NW 43rd Street, Unit F
Gainesville, FL 32606
(352) 336-7766
100 South Lawrence Blvd.
Keystone Heights, FL 32656
(352) 473-1020
11701 Belcher Rd. South,
Largo, FL 33773
(813) 539-8300
2500 Maitland Center Pkwy.
Maitland, FL 32751
(407) 875-6900
11440 N. Kendall Dr.,
Miami, FL 33176
(305) 596-1640
9050 Pines Blvd.,
Pembroke Pines, FL 33024
(954) 438-6600
698 Brent Lane
Pensacola, FL 32503
(904) 479-7991
300 31st Street, N.,
St. Petersburg, FL 33713
(813) 321-4439
3550 Buschwood Park Dr.
Tampa, FL 33618
(813) 932-4578
3802 Ehrlich Road,
Tampa, FL 33624
(813) 961-6694
205 S. Hoover St.,
Tampa, FL 33609
(813) 286-8700
6719 Taylor Circle,
Montgomery, AL 36117
(334) 277-9011
1255 Baseline Road
Mesa, AZ 85202
(602) 897-7447
8800 N. Gainey Center Dr.
Scottsdale, AZ 85258
(602) 596-0735
500 E. Fry Blvd.
Sierra Vista, AZ 85635
(520) 458-8523
6303 E. Tanque Verde
Tucson, AZ 85715
(520) 751-0071
7850 Vance Drive
Arvada, CO 80003
(303) 424-6993
6025 S. Quebec
Englewood, CO 80111
(303) 721-1120
26
214 8th Street
Glenwood Springs, CO 81601
(970) 945-7200
606 Mountain View Ave.
Longmont, CO 80501
(303) 772-4400
5669 Whitesville Rd.
Columbus, GA 31904
(706) 324-0074
300 Chastain Center Blvd.
Kennesaw, GA 30144
(770) 795-0886
23 Eastbrook Bend
Peachtree City, GA 30269
(770) 631-4000
344 Corder Road
Warner Robins, GA 31088
(912) 328-6660
1211 West 22nd Street
Oak Brook, IL 60523
(630) 990-1310
8752-3 West 159th Street
Orland Park, IL 60462
(708) 403-5663
1375 E. Woodfield Rd.
Schaumburg, IL 60173
(847) 706-9411
3901 National Dr.
Burtonsville, MD 20866
(301) 989-8500
18215-D Flower Hill Way
Gaithersburg, MD 20879
(301) 670-5660
2701 Coltsgate Rd.
Charlotte, NC 28211
(704) 365-9044
1320 N.W. Homestead Dr.
Lawton, OK 73505
(580) 248-3448
4200 Perimeter Center
Oklahoma City, OK 73112
(405) 942-1200
217 West 5th Street
Stillwater, OK 74074
(405) 377-2754
RD1, Box 1020
New Freedom, PA 17349
(717) 235-8889
8200 Brook River Center
Dallas, TX 75247
(214) 631-1810
917 East Country Hills Drive
South Ogden City, UT 84403
(801) 392-6160
7611 Little River Turnpike
Annandale, VA 22003
(703) 941-6600
3998 Fair Ridge Dr.
Fairfax, VA 22033
(703) 359-0100
8700 Centreville Road
Manassas, VA 20110
(703) 331-0300
CUB Funding
Corporation
Officers
Randall C. Johnson, CMB
Chairman of the Board and
Chief Executive Officer
Daniel M. LuVisi
Vice Chairman and President
T. Donnell Smith, CMB
Executive Vice President
Michael H. Dillon, CPA
Executive Vice President
Harry A. "Bud" Blank
President, Leader
Financial Division
Tracy S. Jackson, CPA
Senior Vice President
Chief Financial Officer,
Treasurer and Secretary
Nancy A. Jones
Senior Vice President
Barbara J. Jenkins
Vice President
Nancy J. Weaver
Vice President
Office Locations
26565 West Agoura Road
Calabasas, CA 91302-1958
(818) 880-4400
702 East Highway 50
O'Fallon, IL 62269
(618) 632-1010
112 West Homer
Adams Parkway,
Alton, IL 62002
(618) 467-5626
1659 Clarkson
Chesterfield, MO 63017
(314) 530-9494
386 Festus Center Drive
Festus, MO 63028
(314) 931-5626
423 S. Kirkwood Road
Kirkwood, MO 63122
(314) 965-9940
13723 Riverport Dr., Suite 104
Maryland Heights, MO 63043
(314) 770-0288
Photograph #11
Randall C. Johnson, CMB, Chairman of the Board, President and Chief Executive
Officer, Market Street Mortgage Corporation and CUB Funding Corporation
27
Republic Bancorp Inc.
Directors and Officers
Board of Directors
Jerry D. Campbell Chairman and Chief Executive Officer
Dana M. Cluckey, CPA President and Chief Operating Officer
Bruce L. Cook Chairman, Wolverine Sign Works
Richard J. Cramer, Sr. President, Dee Cramer, Inc.
Dr. George A. Eastman Orthodontic Consultant
Howard J. Hulsman Chairman, Ross Learning Inc.
Gary Hurand President, Dawn Donut Systems, Inc.
Dennis J. Ibold President, Petersen & Ibold, Attorneys at Law
Stephen M. Klein Chairman and Chief Executive Officer, Omni Financial Services Inc.
John J. Lennon Retired Chairman and CEO, White Engines, Inc.
Sam H. McGoun President and CEO, Willis Corroon Corporation of Michigan, Inc.
Kelly E. Miller President and CEO, Miller Exploration Company
Joe D. Pentecost President, Better Properties, Inc.
George B. Smith Chairman of the Board, Republic Bancorp Mortgage Inc.
Dr. Jeoffrey K. Stross Professor of Internal Medicine, University Medical Center, The University of Michigan
Directors-Emeriti
Myer N. Franklin
David Laro
John F. Northway
Lyman H. Treadway
Executive Officers
Jerry D. Campbell Chairman and Chief Executive Officer
Dana M. Cluckey, CPA President and Chief Operating Officer
Barry J. Eckhold Vice President and Chief Credit Officer
Thomas F. Menacher, CPA Senior Vice President, Treasurer and Chief Financial Officer
George E. Parker, III General Counsel and Corporate Secretary
Corporate Officers
Vivian N. Bennett, CPA Financial Reporting and Investor Relations Officer
Gregory R. Bixby Vice President, Chief Information Officer
Timothy G. Blazejewski, CPA Vice President, Chief Investment Officer
Debra A. Hanses, PHR Vice President, Corporate Human Resources
Travis D. Jones, CPA Vice President, Corporate Controller
Jack D. Speckmann Director of Loan Review and Internal Audit
Pamela E. Taiariol Director of Compliance
Executive Office Principal Office
1070 East Main Street 122 South Main Street
Owosso, MI 48867 Ann Arbor, MI 48104
(517) 725-7337 (313) 665-4030
28
Five-Year Summary of
Selected Financial Data
Year Ended December 31 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------
Earnings Summary (in thousands)
Interest income $118,852 $ 99,147 $ 95,597 $ 78,219 $ 78,831
Interest expense 71,912 62,427 65,192 44,999 42,268
Net interest income 46,940 36,720 30,405 33,220 36,563
Provision for loan losses 3,031 290 24 94 603
Mortgage banking income 93,700 86,377 70,960 69,899 85,128
Other noninterest income 8,815 4,469 4,241 5,762 6,992
Noninterest expense 117,742 104,492(1) 83,152 85,021 93,539
Income before cumulative effect of a
change in accounting principle and
extraordinary item 18,789 15,066 14,264 15,719 22,233
Net income 18,789 14,678 14,264 15,719 23,183
Per Common Share(2)
Basic earnings $ 1.01 $ .76 $ .71 $ .77 $ 1.19
Diluted earnings .99 .74 .69 .75 1.13
Cash dividends declared .37 .34 .28 .22 .15
Book value (year-end) 7.02 6.47 6.34 5.78 5.54
Closing stock price (year-end) 21.38 10.57 8.88 7.42 9.39
Dividend payout ratio 37% 46% 40% 30% 13%
Operating Data (in millions)
Closings:
Residential mortgage loans $ 3,892 $ 3,581 $ 2,847 $ 2,837 $ 4,911
Commercial loans 175 122 50 27 20
SBA loans 28 24 17 12 7
Mortgage loan servicing portfolio 3,113 2,706 3,967 4,669 3,023
Year-End Balances (in millions)
Total assets $ 1,873 $ 1,490 $ 1,473 $ 1,364 $ 1,171
Total earning assets 1,731 1,349 1,323 1,224 1,078
Mortgage loans held for sale 514 329 423 152 508
Portfolio loans 1,096 785 578 605 407
Deposits 1,177 1,014 905 819 834
Short-term borrowings and FHLB advances 425 255 344 327 160
Long-term debt 48 49 52 56 20
Shareholders' equity 131 122 126 118 111
Ratios
Return on average assets 1.16% 1.02% 1.00% 1.23% 1.94%
Return on average equity 15.09 11.95 11.71 13.43 23.72
Net interest margin (3) 3.16 2.88 2.38 2.88 3.29
Net loan charge-offs to average total loans (4) .03 .06 .06 .20 .06
Allowance for loan losses as a percentage
of year-end portfolio loans .67 .60 .87 .92 1.77
Non-performing assets as a percentage
of year-end total assets .68 .44 .20 .30 .45
Average shareholders' equity to average assets 7.69 8.52 8.56 9.14 8.16
Tier 1 risk-based capital 9.75 13.30 15.72 17.57 16.35
Total risk-based capital 10.35 13.84 18.63 21.05 20.19
Tier 1 leverage 6.58 8.16 8.31 8.43 8.43
<FN>
(1) Includes a one-time assessment of $1.5 million ($975,000 after tax, or
$.05 per share) for the recapitalization of the Savings Association
Insurance Fund.
(2) The basic earnings per share amounts prior to 1997 have been restated as
required to comply with Statement of Financial Accounting Standards No.
128, Earnings Per Share. All per share amounts presented have been
adjusted to reflect the issuance of stock dividends.
(3) Net interest income (FTE) expressed as a percentage of average
interest-earning assets.
(4) Includes mortgage loans held for sale.
29
Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
December 31 (Dollars in thousands) 1997 1996
- ---------------------------------------------------------------------------------------
Assets:
Cash and due from banks $ 27,458 $ 33,590
Interest-earning deposits with banks 2,210 6,524
Mortgage loans held for sale 513,533 329,157
Securities available for sale 119,881 228,621
Loans, net of unearned income 1,095,744 784,628
Less allowance for loan losses (7,334) (4,709)
----------- -----------
Net loans 1,088,410 779,919
----------- -----------
Premises and equipment, net 12,505 15,008
Mortgage servicing rights 58,413 44,398
Other assets 50,483 53,148
----------- -----------
Total Assets $ 1,872,893 $ 1,490,365
=========== ===========
Liabilities and Shareholders' Equity:
Deposits $ 1,177,293 $ 1,013,707
Federal funds purchased, securities sold under
agreement to repurchase and other short-term borrowings 58,274 121,142
FHLB advances 366,632 134,200
Accrued expenses and other liabilities 91,142 49,243
Long-term debt 47,500 49,189
----------- -----------
Total Liabilities 1,740,841 1,367,481
Minority Interest 964 1,069
Shareholders' Equity 131,088 121,815
----------- -----------
Total Liabilities and Shareholders' Equity $ 1,872,893 $ 1,490,365
=========== ===========
Condensed Consolidated Statements of Income
Year Ended December 31
(Dollars in thousands, except per share data) 1997 1996
- ---------------------------------------------------------------------------------
Interest income $ 118,852 $ 99,147
Interest expense 71,912 62,427
--------- ---------
Net interest income 46,940 36,720
Provision for loan losses 3,031 290
--------- ---------
Net interest income after provision for loan losses 43,909 36,430
Noninterest income 102,515 90,846
Noninterest expense 117,742 104,492
--------- ---------
Income before income taxes and extraordinary item 28,682 22,784
Income taxes 9,893 7,718
--------- ---------
Income before extraordinary item 18,789 15,066
Extraordinary item - early redemption of debt, net of tax -- (388)
--------- ---------
Net income $ 18,789 $ 14,678
========= =========
Net income per common share:
Basic $ 1.01 $ .76
Diluted $ .99 $ .74
--------- ---------
30
Condensed Consolidated Statement of Changes in Shareholders' Equity
Net
Unrealized
Gains (Losses)
Number of on Securities Total
Common Common Capital Retained Available Shareholders'
(In thousands) Shares Stock Surplus Earnings for Sale Equity
- ---------------------------------------------------------------------------------------------------------------------
Balances at January 1, 1997 17,129 $ 85,646 $ 37,538 $ 1,079 $ (2,448) $ 121,815
Net income 18,789 18,789
Cash dividends declared (6,950) (6,950)
($0.37 per common share)
Awards of shares under
restricted stock plan (1,575) (1,575)
Amortization of restricted
shares issued 824 824
Issuance of common shares:
10% stock dividend 1,693 8,466 3,155 (11,644) (23)
Exercise of stock options
and stock warrants 342 1,710 45 1,755
Tax benefit related to
stock-based awards 1,123 1,123
Common shares repurchased (486) (2,431) (3,889) (6,320)
Change in net unrealized losses
on securities available
for sale 1,650 1,650
------ -------- --------- --------- -------- -----------
Balances at December 31, 1997 18,678 $ 93,391 $ 37,221 $ 1,274 $ (798) $ 131,088
====== ======== ========= ========= ======== ===========
Report of Independent Auditors
We have audited, in accordance with generally accepted auditing standards,
the consolidated balance sheet of Republic Bancorp Inc. and subsidiaries as
of December 31, 1997 and the related statements of income, changes in
shareholders' equity, and cash flows for the year ended December 31, 1997
(not presented separately herein) and in our report dated January 15, 1998,
we expressed an unqualified opinion on those consolidated financial
statements.
In our opinion, the information set forth in the accompanying condensed
consolidated financial statements is fairly stated, in all material respects,
in relation to the consolidated financial statements from which it has been
derived. The financial statements of Republic Bancorp Inc. for the year ended
December 31, 1996, were audited by other auditors whose report dated January
16, 1997 expressed an unqualified opinion on those statements and included an
explanatory paragraph that disclosed the change in the Company's method of
accounting for mortgage servicing rights.
/s/ Ernst & Young LLP
Detroit, Michigan
January 15, 1998
31
Corporate Information
Annual Meeting
The Annual Meeting of Shareholders
of Republic Bancorp Inc. will be held
Wednesday, April 22, 1998 at 9:00 a.m. at
the Novi Hilton, 21111 Haggerty Road,
Novi, Michigan.
Common Stock
Republic Bancorp Inc. common stock is
listed on the National Market Tier of the
Nasdaq Stock Market and is traded under
the symbol RBNC.
Principal Market Makers
A.G. Edwards & Sons, Inc.
St. Louis, Missouri 63103
Allen & Company, Inc.
New York, New York 10022
Robert W. Baird & Co., Inc.
Milwaukee, Wisconsin 53202
Dean Witter Reynolds, Inc.
New York, New York 10048
First Albany Corporation
Albany, New York 12207
First of Michigan Corporation
Detroit, Michigan 48226
Herzog, Heine, Geduld, Inc.
Jersey City, New Jersey 07310
Howe Barnes Investment, Inc.
Chicago, Illinois 60603
Keefe, Bruyette & Woods, Inc.
New York, New York 10048
MacAllister Pitfield MacKay
New York, New York 10004
Mayer & Schweitzer Inc.
Jersey City, New Jersey 07302
Nash Weiss
Jersey City, New Jersey 07302
Paine Webber Inc.
New York, New York 10019
Roney & Co.
Detroit, Michigan 48226
Smith Barney Shearson, Inc.
New York, New York 10105
Spencer Clarke L.P.
New York, New York 10022
Stifel Nicolaus & Co., Inc.
St. Louis, Missouri 63102
Troster Singer Corporation
Jersey City, New Jersey 07302
Stock Transfer Agent
and Registrar
Shareholders requiring a change of name, address or ownership of stock, as
well as information about shareholder records, lost or stolen certificates or
dividend checks should contact:
State Street Bank and Trust Company
c/o Boston EquiServe
P.O. Box 8200
Boston, MA 02266-8200
(800) 257-1770
Independent Auditors
Ernst & Young LLP
500 Woodward Avenue, Suite 1700
Detroit, Michigan 48226-3426
Stock Price and Trading Volume Information
Quarterly
Trading Volume
Date Closing Price (In thousands)
- -------------------------------------------------------------------
December 31, 1997 $21.38 3,990
September 30, 1997 $15.00 3,150
June 30, 1997 $12.95 3,440
March 31, 1997 $11.81 3,390
December 31, 1996 $10.57 4,050
- ---------------------------------------------------------------
32
Shareholder Information
Dividend Payment Dates
Subject to approval of the Board of Directors, quarterly cash dividend
payments are made during January, April, July and October.
Dividend Reinvestment Plan
Through the Republic Bancorp Inc. Dividend Reinvestment Plan,
shareholders with common stock registered in their names can reinvest
their dividends in additional shares of common stock. In addition,
participating shareholders may purchase common stock with supplemental
cash payments of $10 to $5,000 each quarter. The Company assumes all
costs associated with the purchase of shares under the Plan.
Participating shareholders also have the option to deposit stock
certificates into their Dividend Reinvestment Plan account. For a
brochure, authorization card or further information, please contact
Vivian N. Bennett at the address or telephone number listed below.
Account Consolidation and Elimination of Duplicate Mailings
If you receive duplicate mailings of Republic Bancorp materials at one
address, and you wish to discontinue such mailings, or you would like to
consolidate your registered shareholder accounts, write or call our
stock transfer agent at the address or telephone number provided,
providing your full name and address the way it appears on your account
statements.
Form 10-K and Other Financial Reports
Copies of Republic Bancorp's 1997 Annual Report on Form 10-K filed with
the Securities and Exchange Commission, Quarterly Form 10-Q's, and
Quarterly Earnings Releases may be obtained by calling or writing the
Investor Contact identified below.
Internet Address
Information on Republic Bancorp's financial results and its products and
services can be accessed on the Internet at
http://www.republicbancorp.com.
Photograph #12 Photograph #13
Analyst and Media Contact Investor Contact
Thomas F. Menacher, CPA Vivian N. Bennett, CPA
Senior Vice President, Treasurer Financial Reporting and
and Chief Financial Officer Investor Relations Officer
1070 East Main Street 1070 East Main Street
Owosso, Michigan 48867 Owosso, Michigan 48867
(517) 725-7337 (517) 725-7004