SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 1996 Commission File Number 0-15734
REPUBLIC BANCORP INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2604669
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1070 East Main Street, Owosso, Michigan 48867
(Address of principal executive offices)
(517) 725-7337
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES __ X __ NO _______
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock Outstanding as of October 31, 1996:
Common Stock, $5 Par Value ................................ 15,677,866 Shares
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of September 30, 1996
and December 31, 1995 ................................. 3
Consolidated Statements of Income for the Three and Nine
Months Ended September 30, 1996 and 1995............... 4
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 1996 and 1995............... 5
Notes to Consolidated Financial Statements............. 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition.......... 7 - 18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................... 19
Item 2. Changes in Securities.................................. 19
Item 6. Exhibits and Reports on Form 8-K....................... 19
SIGNATURE ....................................................... 20
EXHIBITS.............................................................. 21 - 22
2
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, December 31,
(Dollars in thousands) 1996 1995
- -------------------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents ..................................... $ 36,611 $ 39,831
Mortgage loans held-for-sale .................................. 318,034 423,364
Securities available-for-sale (amortized cost of
$278,534 and $319,865, respectively) ........................ 272,498 317,579
Loans ......................................................... 715,215 578,112
Less allowance for loan losses .............................. (4,651) (5,002)
----------- -----------
Net loans ..................................................... 710,564 573,110
----------- -----------
Premises and equipment, net of depreciation ................... 14,256 14,724
Mortgage servicing rights ..................................... 44,019 58,265
Other assets .................................................. 49,318 45,817
----------- -----------
Total assets .............................................. $ 1,445,300 $ 1,472,690
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing ......................................... $ 121,983 $ 126,427
Interest-bearing ............................................ 847,050 778,302
----------- -----------
Total deposits ............................................ 969,033 904,729
Federal funds purchased and securities sold under
agreements to repurchase .................................... 130,339 134,237
Other short-term borrowings ................................... -- 128,701
FHLB advances ................................................. 118,500 80,500
Accrued expenses and other liabilities ........................ 57,414 44,806
Long-term debt ................................................ 49,317 52,441
----------- -----------
Total liabilities ......................................... 1,324,603 1,345,414
----------- -----------
Minority interest ............................................. 1,238 900
----------- -----------
Shareholders' Equity:
Preferred stock, $25 stated value:
5,000,000 shares authorized, none issued and
outstanding ................................................. -- --
Common stock, $5 par value, 20,000,000 shares
authorized; 15,669,618 and 16,477,981 shares
issued and outstanding, respectively ........................ 78,348 82,390
Capital surplus ............................................... 37,150 43,177
Market value adjustment on securities available-for-sale, net . (3,924) (1,363)
Retained earnings ............................................. 7,885 2,172
----------- -----------
Total shareholders' equity ................................ 119,459 126,376
----------- -----------
Total liabilities and shareholders' equity ................ $ 1,445,300 $ 1,472,690
=========== ===========
<FN>
See notes to consolidated financial statements.
3
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands, except per share data) 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------
Interest Income:
Loans, including fees ................................... $ 20,738 $ 19,006 $ 59,134 $ 51,084
Investment securities ................................... 4,870 5,602 14,852 19,473
-------- -------- -------- --------
Total interest income ............................. 25,608 24,608 73,986 70,557
-------- -------- -------- --------
Interest Expense:
Demand deposits ......................................... 338 371 1,036 1,205
Savings and time deposits ............................... 10,043 9,896 30,015 27,424
Short-term borrowings ................................... 2,797 5,036 8,948 13,789
FHLB advances ........................................... 1,593 545 4,211 1,411
Long-term debt .......................................... 888 1,389 2,849 4,045
-------- -------- -------- --------
Total interest expense ............................ 15,659 17,237 47,059 47,874
-------- -------- -------- --------
Net interest income ..................................... 9,949 7,371 26,927 22,683
Provision for loan losses ............................... 90 -- 200 24
-------- -------- -------- --------
Net interest income after provision for loan losses ..... 9,859 7,371 26,727 22,659
-------- -------- -------- --------
Noninterest Income:
Service charges ......................................... 296 344 902 969
Mortgage banking ........................................ 22,225 19,295 63,608 52,297
Gains on sale of securities ............................. 314 1,136 742 1,054
Gains on sale of SBA loans .............................. 290 204 765 803
Other ................................................... 450 231 986 770
-------- -------- -------- --------
Total noninterest income .......................... 23,575 21,210 67,003 55,893
-------- -------- -------- --------
Noninterest Expense:
Salaries and employee benefits .......................... 11,386 8,703 31,238 22,645
Mortgage loan commissions ............................... 6,211 5,079 17,964 12,001
Occupancy expense of premises ........................... 1,600 1,332 4,536 3,878
Equipment expense ....................................... 1,187 1,139 3,502 3,238
Other operating expense ................................. 5,591 5,871 18,010 16,911
Minority interest ....................................... 216 91 409 619
SAIF assessment fee ..................................... 1,500 -- 1,500 --
-------- -------- -------- --------
Total noninterest expense ......................... 27,691 22,215 77,159 59,292
-------- -------- -------- --------
Income before income taxes and extraordinary item ....... 5,743 6,366 16,571 19,260
Provision for income taxes .............................. 1,989 2,252 5,656 7,016
-------- -------- -------- --------
Income before extraordinary item ........................ 3,754 4,114 10,915 12,244
Extraordinary item (early redemption of debt, net of tax) -- -- (388) --
-------- -------- -------- --------
Net Income .............................................. $ 3,754 $ 4,114 $ 10,527 $ 12,244
======== ======== ======== ========
Income per common share before extraordinary item ....... $ .23 $ .24 $ .66 $ .72
Extraordinary item ...................................... -- -- (.02) --
-------- -------- -------- --------
Net income per common share - primary and fully diluted . $ .23 $ .24 $ .64 $ .72
======== ======== ======== ========
Average common shares outstanding - fully diluted ....... 16,220 17,001 16,518 16,990
======== ======== ======== ========
Cash dividends declared per common share ................ $ .10 $ .09 $ .30 $ .27
======== ======== ======== ========
<FN>
See notes to consolidated financial statements.
4
REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30 (In thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities:
Net income ............................................................ $ 10,527 $ 12,244
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization ..................................... 4,041 4,032
Amortization of mortgage servicing rights ......................... 5,992 5,265
Net gains on sale of securities available-for-sale ................ (770) (1,054)
Net gains on sale of mortgage servicing rights .................... (24,106) (20,438)
Net gains on sale of loans ........................................ (3,300) (1,694)
Origination of mortgage loans held-for-sale ....................... (2,549,233) (1,752,335)
Proceeds from sales of mortgage loans held-for-sale ............... 2,654,563 1,397,335
(Increase) decrease in other assets ............................... 917 (7,315)
Increase in other liabilities ..................................... 12,608 8,288
Other, net ........................................................ (1,703) (2,758)
----------- -----------
Total adjustments ............................................... 99,009 (370,674)
----------- -----------
Net cash provided by (used in) operating activities .......... 109,536 (358,430)
----------- -----------
Cash Flows From Investing Activities:
Proceeds from sale of securities available-for-sale ................... 125,325 194,336
Proceeds from maturities/prepayments of securities available-for-sale . 31,256 60,900
Purchases of securities available-for-sale ............................ (115,115) (117,152)
Proceeds from maturities/prepayments of securities held-to-maturity ... -- 11,691
Proceeds from sale of loans ........................................... 107,655 195,101
Net increase in loans made to customers ............................... (240,308) (146,689)
Proceeds from sale of mortgage servicing rights ....................... 36,106 42,678
Additions to mortgage servicing rights ................................ (9,490) (25,446)
----------- -----------
Net cash provided by (used in) investing activities .......... (64,571) 215,419
----------- -----------
Cash Flows From Financing Activities:
Net increase in deposits .............................................. 64,304 64,542
Purchase of bank branch deposits ...................................... -- 20,497
Net increase (decrease) in short-term borrowings ...................... (132,600) 84,287
Net increase (decrease) in short-term FHLB advances ................... 24,500 (29,950)
Increase in long-term FHLB advances ................................... 13,500 6,000
Increase in long-term debt ............................................ -- 24,604
Proceeds from issuance of senior debentures, net of issuance costs .... 22,233 --
Payments on long-term debt ............................................ (25,625) (16,115)
Net proceeds from issuance of common shares ........................... 606 1,068
Repurchase of common shares ........................................... (10,376) (3,821)
Dividends paid ........................................................ (4,727) (4,047)
----------- -----------
Net cash provided by (used in) financing activities .......... (48,185) 147,065
----------- -----------
Net increase (decrease) in cash and cash equivalents .................. (3,220) 4,054
Cash and cash equivalents at beginning of period ...................... 39,831 23,678
----------- -----------
Cash and cash equivalents at end of period ............................ $ 36,611 $ 27,732
=========== ===========
<FN>
See notes to consolidated financial statements.
5
REPUBLIC BANCORP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements of Republic
Bancorp Inc. and Subsidiaries (the "Company") have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes necessary for a comprehensive presentation of financial position,
results of operations and cash flow activity required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all normal recurring adjustments necessary for a fair presentation
of results have been included. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
Certain amounts in prior periods have been reclassified to conform to the
current year's presentation.
Note 2 - Principles of Consolidation
The consolidated financial statements include the accounts of Republic Bancorp
Inc.; two wholly-owned subsidiaries, Republic Bank and Republic Savings Bank
("Republic Savings"); and Market Street Mortgage Corporation ("Market
Street"), of which the Company owns an 80% majority interest. Republic Bank
operates a wholly-owned subsidiary, Republic Bancorp Mortgage Inc. ("Republic
Mortgage"), and its divisions, Home Funding, Inc. and Unlimited Mortgage
Services. Republic Bank also owns an 80% majority interest in CUB Funding
Corporation ("CUB Funding") which operates two divisions, RSL Mortgage and
Leader Financial. All material intercompany transactions and balances have
been eliminated in consolidation.
Note 3 - Consolidated Statements of Cash Flows
Supplemental disclosures of cash flow information for the nine months ended
September 30, include:
(In thousands) 1996 1995
---- ----
Cash paid during the period for:
Interest ..................................................... $47,032 $45,675
Income taxes ................................................. $ 7,676 $ 6,105
Non-cash investing activities:
Portfolio loan charge-offs ................................... $ 643 $ 731
Securitization of residential real estate portfolio loans into
investment securities available-for-sale ................. $38,802 $72,000
6
ITEM 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
EARNINGS PERFORMANCE
The Company reported net income of $3.8 million for the quarter ended
September 30, 1996, compared to $4.1 million earned in the third quarter of
1995. Included in the third quarter 1996 results was a one-time assessment of
$975,000, or $.06 per share, after taxes, mandated by federal law for the
recapitalization of the Savings Association Insurance Fund (SAIF). Excluding
this one-time charge, net income for the quarter was $4.7 million, a 15%
increase over the corresponding period in 1995. Fully diluted earnings per
share were $.29, excluding the effect of the SAIF assessment, compared to $.24
in the third quarter of 1995. Excluding the SAIF assessment, return on average
shareholders' equity was 15.55% and return on average assets was 1.29% for the
third quarter of 1996, compared to 13.35% and 1.14%, respectively, for the
comparable period in 1995.
For the nine months ended September 30, 1996, net income was $10.5 million,
compared to $12.2 million reported for the same period in 1995. Excluding the
extraordinary item for the early redemption of the Company's $17.25 million
Subordinated Notes in the first quarter of 1996 and the previously discussed
SAIF assessment, the Company earned $11.9 million for the nine months ended
September 30, 1996. Fully diluted earnings per share before the extraordinary
item and SAIF assessment were $.72 for the nine months ended September 30,
1996, compared to $.72 reported for the same period in 1995. Return on average
shareholders' equity and return on average assets, excluding the extraordinary
item and SAIF assessment, were 12.83% and 1.09%, respectively, for the
year-to-date period, compared to 13.56% and 1.16%, respectively, in 1995.
RESULTS OF OPERATIONS
Mortgage Banking
The following discussion provides information that relates specifically to the
Company's mortgage banking segment, which generates revenue equal to
approximately 95% of total noninterest income.
The Company closed $882.8 million in single family residential mortgage loans
in the third quarter of 1996, a slight decrease from the $894.0 million closed
in the third quarter of 1995. For the nine months ended September 30, 1996,
residential mortgage loan closings totaled $2.7 billion, an increase of 38%
over the $1.9 billion closed during the same period last year. This
year-to-date increase in mortgage loan closings is primarily the result of a
lower interest rate environment and the acquisitions of RSL Mortgage,
Unlimited Mortgage Services and Leader Financial.
The following table summarizes the Company's income from mortgage banking
activities:
Three Months Ended Nine months ended
September 30, September 30,
(In thousands) 1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------
Mortgage production income .................. $ 19,119 $ 17,368 $ 55,995 $ 38,786
Net mortgage loan servicing income .......... 2,168 2,142 6,267 7,329
Gain (loss) on sale of mortgage servicing ... 938 (215) 1,346 6,182
-------- -------- -------- --------
Total mortgage banking income .......... $ 22,225 $ 19,295 $ 63,608 $ 52,297
======== ======== ======== ========
7
Mortgage banking income increased $2.9 million, or 15%, to $22.2 million for
the third quarter of 1996 from $19.3 million for the comparable period in
1995, primarily due to an increase in mortgage production income. Mortgage
production income includes fee income derived from the loan origination
process (i.e., points collected), gain on the sale of mortgage loans and gain
on the sale of the related servicing rights. Mortgage production income
increased $1.8 million, or 10%, to $19.1 million for the quarter ended
September 30, 1996, from $17.4 million for the same period a year ago. This
increase resulted as sales of the Company's single family mortgage loans
totaled $862 million during the third quarter of 1996, an increase of
23% when compared to $712 million a year ago. This increase was offset
by lower gross margins as mortgage production income decreased 22 basis points,
on a per loan basis, to 222 basis points for the three months ended September
30, 1996, from 244 basis points for the corresponding period in 1995,
reflecting increased price competition for mortgage products.
For the nine months ended September 30, 1996, mortgage banking income totaled
$63.6 million, an increase of $11.3 million, or 22%, when compared to $52.3
million for the comparable period in 1995. Accounting for most of this
increase was a rise in mortgage production income by $17.2 million, or 44%, to
$56.0 million from $38.8 million a year earlier, reflecting a higher
volume of loan originations and a corresponding increase in loan sales.
The Company sold $2.70 billion of single family mortgage loans during
the first nine months of 1996, an increase of 62% when compared to $1.65
billion for the same period a year earlier. On a per loan basis, mortgage
production income decreased 27 basis points to 208 basis points for the nine
months ended September 30, 1996, from 235 basis points for the corresponding
period in 1995.
At September 30, 1996, loans serviced for the benefit of others totaled $3.0
billion, compared to $4.0 billion at December 31, 1995, and $3.6 billion at
September 30, 1995. The Company's net mortgage loan servicing income for the
third quarter of 1996 remained relatively stable compared to the same period
last year. On a year-to-date basis, net mortgage loan servicing income
decreased $1.1 million from the prior year due to a smaller average servicing
portfolio during 1996.
The Company periodically sells mortgage servicing rights (MSRs) from its
servicing portfolio in bulk sales. During the third quarter of 1996, MSRs
associated with loans having principal balances totaling $435 million were
sold, resulting in gains of $938,000. Bulk servicing sales in the third
quarter of 1995 on loans with a principal balance of $199 million resulted in
a net loss of $215,000. For the nine months ended September 30, 1996 and 1995,
the Company had sales of MSRs on loans with principal balances of $1.1 billion
and $2.1 billion, respectively, resulting in gains of $1.3 million and $6.2
million, respectively.
The remainder of the Management's Discussion and Analysis provides various
disclosures and analyses relating principally to the commercial banking
segment.
Net Interest Income
The following discussion should be read in conjunction with Tables I and II,
which provide detailed analyses of the components impacting net interest
income for the quarters and nine months ended September 30, 1996 and 1995.
Net interest income, on a fully taxable equivalent (FTE) basis, was $10.2
million for the quarter ended September 30, 1996, an increase of $2.8 million,
or 38%, from $7.4 million for the third quarter of 1995. The net interest
margin (FTE) for the third quarter was 3.04%, compared to 2.25% for the
corresponding period in 1995.
Average earning assets remained relatively stable, increasing 1% to $1.33
billion in the third quarter of 1996 from $1.31 billion in the third quarter
of 1995. Interest income growth resulted from a favorable shift in the mix of
average earning assets toward higher-yielding commercial, residential real
estate mortgage and installment
8
Table I - Quarterly Net Interest Income and Rate/Volume Analysis (FTE)
Three Months Ended Three Months Ended
September 30, 1996 September 30, 1995
- -------------------------------------------------------------------------------------------------------------------
Average Average Average Average
(Dollars in thousands) Balance(1) Interest Rate Balance(1) Interest Rate
- -------------------------------------------------------------------------------------------------------------------
Assets:
Money market investments......................... $ 5,026 $ 47 3.71% $ 22,285 $ 310 5.56%
Mortgage loans held for sale..................... 332,687 6,682 8.03 354,508 6,787 7.66
Securities....................................... 318,705 5,042 6.28 351,476 5,292 6.02
Commercial loans................................. 167,397 3,857 9.14 109,788 2,774 10.11
Real estate mortgage loans....................... 428,039 8,270 7.73 415,271 7,845 7.56
Installment loans................................ 74,244 1,929 10.31 58,440 1,600 10.95
---------- ------- ----- ---------- ------- -----
Loans, net of unearned income.................. 669,680 14,056 8.33 583,499 12,219 8.38
---------- ------- ----- ---------- ------- -----
Total interest earning assets................ 1,326,098 25,827 7.73 1,311,768 24,608 7.50
Allowance for loan losses........................ (4,730) (5,069)
Cash and due from banks.......................... 31,020 24,741
Other assets..................................... 110,187 115,373
---------- ----------
Total assets................................. $1,462,575 $1,446,813
========== ==========
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits................. $ 55,580 339 2.44 $ 62,114 371 2.39
Savings deposits................................. 221,474 2,342 4.23 173,143 1,595 3.68
Time deposits.................................... 523,626 7,701 5.88 539,378 8,303 6.16
---------- ------- ----- ---------- ------- -----
Total interest-bearing deposits................ 800,680 10,382 5.19 774,635 10,269 5.30
Warehousing lines of credit...................... -- -- -- 150,918 2,872 7.61
Other short-term borrowings...................... 203,148 2,797 5.46 132,627 2,086 6.29
FHLB advances.................................... 109,892 1,593 5.75 35,744 545 6.10
Long-term debt................................... 49,335 887 7.13 66,768 1,465 8.78
---------- ------- ----- ---------- ------- -----
Total interest-bearing liabilities........... 1,163,055 15,659 5.34 1,160,692 17,237 5.94
------- ----- ------- -----
Noninterest-bearing deposits..................... 130,464 137,656
Other liabilities................................ 47,947 25,226
---------- ----------
Total liabilities............................ 1,341,466 1,323,574
Shareholders' equity............................. 121,109 123,239
---------- ----------
Total liabilities and shareholders' equity... $1,462,575 $1,446,813
========== ==========
Net interest income/Rate spread (FTE)............ $10,168 2.39% $ 7,371 1.56%
======= ===== ======= =====
Net interest margin.............................. 3.04% 2.25%
===== =====
Increase (decrease) due to change in: Volume(2) Rate(2) Net Inc (Dec)
---------------------------------------------------- ------- -------------
Interest income:
Money market investments................. $ (184) $ (79) $ (263)
Mortgage loans held for sale............. (429) 324 (105)
Securities............................... (479) 229 (250)
Commercial loans......................... 1,365 (282) 1,083
Real estate mortgage loans............... 244 181 425
Installment loans........................ 425 (96) 329
------ ------ ------
Loans, net of unearned income........... 2,034 (197) 1,837
------ ------ ------
Total interest income................. 942 277 1,219
Interest expense:
Interest-bearing demand deposits......... (40) 8 (32)
Savings deposits......................... 488 259 747
Time deposits............................ (238) (364) (602)
------ ------ ------
Total interest-bearing deposits......... 210 (97) 113
Warehousing lines of credit.............. (1,436) (1,436) (2,872)
Other short-term borrowings.............. 1,010 (299) 711
FHLB advances............................ 1,080 (32) 1,048
Long-term debt........................... (337) (241) (578)
------ ------ ------
9
Total interest expense................ 527 (2,105) (1,578)
------ ------ ------
Net interest income...................... $ 415 $2,382 $2,797
====== ====== ======
<FN>
(1) Non-accrual loans and overdrafts are included in average balances.
(2) Rate/volume variances are proportionately allocated to rate and volume
based on the absolute value of the change in each.
Table II - Year-to-Date Net Interest Income and Rate/Volume Analysis (FTE)
Nine Months Ended Nine Months Ended
September 30, 1996 September 30, 1995
- ----------------------------------------------------------------------------------------------------------
Average Average Average Average
(Dollars in thousands) Balance(1) Interest Rate Balance(1) Interest Rate
- ----------------------------------------------------------------------------------------------------------
Assets:
Money market investments................. $ 9,361 $ 356 5.08% $ 18,849 $ 767 5.43%
Mortgage loans held for sale............. 360,338 20,778 7.69 218,564 13,123 8.01
Securities............................... 317,966 15,084 6.34 409,881 18,707 6.09
Commercial loans......................... 154,811 10,828 9.35 105,899 7,872 9.91
Real estate mortgage loans............... 389,608 22,209 7.60 456,014 25,778 7.54
Installment loans........................ 70,036 5,319 10.15 54,335 4,310 10.58
---------- -------- ----- ---------- -------- -----
Loans, net of unearned income.......... 614,455 38,356 8.35 616,248 37,960 8.21
---------- -------- ----- ---------- -------- -----
Total interest earning assets........ 1,302,120 74,574 7.66 1,263,542 70,557 7.45
Allowance for loan losses................ (4,860) (5,347)
Cash and due from banks.................. 26,979 24,857
Other assets............................. 127,775 129,846
---------- ----------
Total assets......................... $1,452,014 $1,412,898
========== ==========
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits......... $ 58,264 1,036 2.38 $ 64,611 1,205 2.49
Savings deposits......................... 210,100 6,377 4.06 177,122 4,949 3.73
Time deposits............................ 532,506 23,638 5.93 514,519 22,477 5.82
---------- -------- ----- ---------- -------- -----
Total interest-bearing deposits........ 800,870 31,051 5.18 756,252 28,631 5.05
Warehousing lines of credit.............. 30,556 1,775 7.77 86,275 5,068 7.83
Other short-term borrowings.............. 171,634 7,173 5.59 188,245 8,745 6.19
FHLB advances........................... 95,728 4,211 5.88 30,428 1,411 6.18
Long-term debt........................... 51,393 2,848 7.41 61,925 4,020 8.66
---------- -------- ----- ---------- -------- -----
Total interest-bearing liabilities... 1,150,181 47,058 5.47 1,123,125 47,875 5.68
-------- ----- -------- -----
Noninterest-bearing deposits............. 128,790 127,773
Other liabilities........................ 49,827 41,647
---------- ----------
Total liabilities.................... 1,328,798 1,292,545
Shareholders' equity..................... 123,216 120,353
---------- ----------
Total liabilities and shareholders'
equity............................. $1,452,014 $1,412,898
========== ==========
Net interest income/Rate spread (FTE).... $27,516 2.19% $ 22,682 1.77%
======= ===== ======== =====
Net interest margin...................... 2.83% 2.39%
===== =====
Increase (decrease) due to change in: Volume(2) Rate(2) Net Inc (Dec)
------------------------------------- --------- ------- -------------
Interest income:
Money market investments......... $ (365) $ (46) $ (411)
Mortgage loans held for sale..... 8,202 (547) 7,655
Securities....................... (4,368) 745 (3,623)
Commercial loans................. 3,425 (469) 2,956
Real estate mortgage loans....... (3,775) 206 (3,569)
Installment loans................ 1,190 (181) 1,009
-------- ------ -------
Loans, net of unearned income... 840 (444) 396
-------- ------ -------
Total interest income......... 4,309 (292) 4,017
Interest expense:
Interest-bearing demand deposits. (60) (109) (169)
Savings deposits................. 970 458 1,428
Time deposits.................... 742 419 1,161
-------- ------ -------
Total interest-bearing deposits. 1,652 768 2,420
Warehousing lines of credit...... (3,252) (41) (3,293)
Other short-term borrowings...... (748) (824) (1,572)
FHLB advances.................... 2,872 (72) 2,800
Long-term debt................... (634) (538) (1,172)
-------- ------ -------
Total interest expense....... (110) (707) (817)
-------- ------ -------
Net interest income.............. $ 4,419 $ 415 $ 4,834
======== ====== =======
<FN>
(1) Non-accrual loans and overdrafts are included in average balances.
(2) Rate/volume variances are proportionately allocated to rate and volume
based on the absolute value of the change in each.
10
portfolio loans. This growth was partially funded by declines in the average
balance of investment securities and mortgage loans held-for-sale. Average
commercial loans increased $58 million, or 52%, to $167 million from $110
million a year ago. Average residential mortgage loans totaled $428 million
for the three months ended September 30, 1996, an increase of $13 million from
$415 million a year ago. Average installment loans increased $16 million, or
27%, to $74 million from $58 million a year ago, as home equity lending
volumes improved. The shift in the mix of earning assets from the third
quarter of 1995 to the third quarter of 1996 was partially responsible for an
improved net interest margin as the average yield on interest-earning assets
increased 23 basis points to 7.73% from 7.50%.
Interest-bearing liabilities averaged $1.16 billion for the three months ended
September 30, 1996 and 1995, as increases in the average balances of
interest-bearing deposits, Federal Home Loan Bank (FHLB) advances, federal
funds purchased and securities sold under agreements to repurchase totaling
$171 million were largely offset by decreases in the average balances of
warehousing lines of credit and long-term debt totaling $168 million.
The Company's elimination of external warehousing lines of credit at
the mortgage companies to fund mortgage loan originations and the
first quarter 1996 refinancing of the Company's $17.25 million 9%
Subordinated Notes with 6.87% Senior Debentures were the primary reasons for
the $1.6 million decline in interest expense to $15.7 million for the third
quarter of 1996 from $17.2 million for the same period a year ago. These
events, along with a decrease in the average rate paid on certificates of
deposits, contributed to a 60 basis-point decrease in the average cost of
funds to 5.34% from 5.94% for the same period a year ago.
For the nine months ended September 30, 1996, net interest income (FTE)
totaled $27.5 million, an increase of $4.8 million, or 21%, from $22.7 million
earned for the comparable period in 1995. The net interest margin for the
first nine months of 1996 was 2.83%, compared to 2.39% for the same period a
year ago.
Average earning assets increased $39 million, or 3%, to $1.30 billion for the
nine months ended September 30, 1996, from $1.26 billion for the same period
in 1995, led by strong growth in average mortgage loans held-for-sale,
commercial loans and installment loans. Average mortgage loans held-for-sale
totaled $360 million for the first nine months of 1996, an increase of $142
million when compared to $219 million for the comparable period in 1995.
Average commercial loans increased $49 million, or 46%, to $155 million from
$106 million a year ago. Average installment loans rose $16 million, or 29%,
to $70 million from $54 million a year earlier. Growth in the average balances
of these loan categories was partially funded by declines in average
investment securities and real estate mortgage loans of $92 million and $66
million, respectively. Positively impacting the net interest margin was a 21
basis-point increase in the yield on average earning assets from 7.45% to
7.66%, as the mix shifted toward higher-yielding mortgage loans held-for-sale,
commercial loans and installment loans.
For the nine-month period ended September 30, 1996, average interest-bearing
liabilities rose $27 million, or 2%, to $1.15 billion, compared to $1.12
billion for the corresponding period in 1995. This increase resulted primarily
from rising average balances in interest-bearing deposits and FHLB advances of
$45 million and $65 million, respectively. Partially offsetting this increase
was a decline of $56 million in the average balances of more expensive
warehousing lines of credit. The cost of funds decreased by 21 basis points
to 5.47% from 5.68% last year, mainly due to the first quarter 1996
elimination of external warehousing lines of credit and the refinancing of
9% Subordinated Notes with 6.87% Senior Debentures.
Noninterest Expense
The one-time assessment of 65.7 basis points to recapitalize the SAIF was
applied to Republic Savings Bank's SAIF-insured deposit balances of $212
million as of March 31, 1995 and Republic Bank's Oakar deposit balance
of $16 million as of the same date. This assessment totaled $1.5 million
on a pre-tax basis. Excluding the
11
SAIF assessment, noninterest expenses for the quarter ended September 30, 1996
increased $4 million to $26.2 million from $22.2 million for the same period
in 1995. For the nine months ended September 30, 1996, noninterest expense
totaled $75.7 million, excluding the one-time SAIF assessment, an increase of
$16.4 million from $59.3 million for the same period in 1995. Salaries and
employee benefits and mortgage loan commissions represent the largest
components of noninterest expense. Salaries and benefits expense rose $2.7
million to $11.4 million for the third quarter of 1996 from $8.7 million for
the comparable period in 1995, primarily due to the acquisition of RSL
Mortgage, Leader Financial and Unlimited Mortgage Services. For the nine
months ended September 30, 1996, salaries and benefits totaled $31.2 million,
an increase of $8.6 million when compared to the same period a year ago. This
increase resulted primarily from the above acquisitions and the hiring of
additional personnel in response to higher residential mortgage, commercial
and home equity loan origination volumes. Mortgage loan commissions,
which fluctuate with loan origination volume and the mix of retail
and wholesale loan production, totaled $6.2 million for the third
quarter of 1996, an increase of $1.1 million from the prior year, and
$18.0 million for the year-to-date period, up $6.0 million from the same
period last year.
BALANCE SHEET ANALYSIS
ASSETS
Total assets at September 30, 1996 were $1.45 billion, a decrease of $27
million from $1.47 billion at December 31, 1995, as increases in the loan
portfolio totaling $137 million were offset by declines in mortgage loans
held-for-sale, investment securities and mortgage servicing rights totaling
$165 million.
Securities
The Company's securities available-for-sale portfolio serves as a source of
liquidity and earnings with relatively minimal principal risk. The portfolio
is comprised primarily of U.S. Treasury securities, U.S. Government agency
obligations, obligations collateralized by U.S. Government agencies (primarily
in the form of mortgage-backed securities and collateralized mortgage
obligations) and municipal securities. The portfolio is currently comprised of
securities with expected maturities ranging from less than one year to 16.7
years or indexed to adjustable rates. The Company's securities
available-for-sale portfolio balance declined $45 million, or 14%, to $272
million at September 30, 1996 from $318 million at December 31, 1995. Most of
the reduction in the portfolio balance occurred during the third quarter of
1996 as securities were sold to provide funding for higher-yielding portfolio
residential mortgage loans. At September 30, 1996, the securities portfolio
constituted 18.9% of total assets, compared to 21.6% at December 31, 1995.
The following table details the composition, amortized cost and fair value of
the Company's available-for-sale securities portfolio at September 30, 1996:
Available-for-Sale Securities
------------------------------------------------------
Amortized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
- -----------------------------------------------------------------------------------------------------
Debt Securities:
U.S. Treasury securities ............ $ 9,858 $ -- $ (164) $ 9,694
U.S. Government agency obligations .. 57,429 44 (420) 57,053
Mortgage-backed securities .......... 66,521 4 (1,825) 64,700
Collateralized mortgage obligations . 88,880 -- (1,964) 86,916
Municipal and other securities ...... 35,948 40 (999) 34,989
-------- ------ ------- --------
Total Debt Securities ............. 258,636 88 (5,372) 253,352
Equity securities ..................... 19,898 -- (752) 19,146
-------- ------ ------- --------
Total Securities Available-for-Sale $278,534 $ 88 $(6,124) $272,498
======== ====== ======= ========
12
Gross realized gains and losses on sales of available-for-sale securities were
$332,000 and $18,000, respectively, for the quarter ended September 30, 1996,
and $769,000 and $27,000, respectively, for the nine months ended September
30, 1996.
Certain securities having a carrying value of approximately $134 million and
$164 million at September 30, 1996 and December 31, 1995, respectively, were
pledged to secure repurchase agreements, FHLB advances, and other deposits as
required by law.
Mortgage Loans Held-for-Sale
Mortgage loans held-for-sale declined $105 million, or 25%, to $318 million at
September 30, 1996 from $423 million at December 31, 1995, reflecting a
decrease in refinance volume.
Portfolio Loans
Total portfolio loans grew $137 million, or 24%, to $715 million at September
30, 1996 from $573 million at December 31, 1995, reflecting growth in all
lending areas.
The residential mortgage portfolio loan balance increased $83 million, or 22%,
to $465 million at September 30, 1996, due to higher lending volumes resulting
from increased sales efforts and favorable interest rates. The commercial loan
balance rose $41 million, or 31%, to $173 million at September 30, 1996, as
demand for real estate-secured lending in markets served by the Company
remained strong. The installment loan portfolio balance, which is
predominantly comprised of home equity loans, grew $13 million, or 21%, to $77
million at September 30, 1996.
During the third quarter of 1996, the Company closed $5.3 million of Small
Business Administration (SBA) loans, a 20% increase from the $4.4 million
closed in the third quarter of 1995. For the nine months ended September 30,
1996, SBA loan closings totaled $16.1 million, compared to $14.2 million for
the same period in 1995. During the first nine months of 1996 and 1995, the
Company sold $11.6 million and $9.2 million, respectively, of the guaranteed
portion of SBA loans, resulting in gains of $765,000 and $803,000,
respectively.
Credit Quality
The Company attempts to minimize credit risk in its loan portfolio by focusing
primarily on residential real estate mortgages and real estate-secured
commercial lending. As of September 30, 1996, these loans comprised 85.3% of
total portfolio loans. The Company's general policy is to originate
conventional residential real estate mortgages with loan-to-value ratios of
80% or less and SBA-secured loans or real estate-secured commercial loans with
loan-to-value ratios of 70% or less. The substantial majority of the Company's
loans are conventional mortgage loans which are secured by residential
properties and comply with the requirements for sale to or conversion to
mortgage-backed securities issued by the Federal Home Loan Mortgage
Corporation (FHLMC), the Federal National Mortgage Association (FNMA), or the
Government National Mortgage Association (GNMA). The majority of the Company's
commercial loans are secured by real estate and are generally made to small
and medium-sized businesses. These loans are made at rates based on the
prevailing prime interest rates of Republic Bank and Republic Savings, as well
as fixed rates for terms generally ranging from three to five years.
Management's emphasis on real estate-secured lending with lower loan-to-value
ratios is reflected in the Company's historically low net charge-off ratio
percentages.
13
The following table provides further information regarding the Company's loan
portfolio:
September 30, 1996 December 31, 1995
-------------------- ---------------------
(Dollars in thousands) Amount Percent Amount Percent
- -------------------------------------------------------------------------------------
Commercial loans:
Secured by real estate ...... $145,344 20.3% $108,108 18.7%
Other (generally secured) ... 27,786 3.9 24,325 4.2
-------- ----- -------- -----
Total commercial loans .. 173,130 24.2 132,433 22.9
Residential real estate mortgages 464,753 65.0 381,803 66.0
Installment loans ............... 77,332 10.8 63,876 11.1
-------- ----- -------- -----
Total portfolio loans ... $715,215 100.0% $578,112 100.0%
======== ===== ======== =====
Non-performing Assets
Loans held in the portfolio are reviewed on a regular basis and are placed on
non-accrual status when, in the opinion of management, reasonable doubt exists
as to the full, timely collection of interest or principal. Real estate
acquired by the Company as a result of foreclosure or by deed in lieu of
foreclosure is classified as other real estate owned (OREO) until such time as
it is sold.
The following table summarizes the Company's non-performing assets and 90-day
past due loans:
September 30, December 31, September 30,
(Dollars in thousands) 1996 1995 1995
- -------------------------------------------------------------------------------------------
Non-performing Assets:
Non-accrual loans:
Commercial ............................. $1,473 $ 500 $ 415
Residential real estate mortgages ...... 3,010 661 333
Installment ............................ 108 131 117
------ ------ ------
Total non-accrual loans .............. 4,591 1,292 865
Restructured loans ....................... -- 688 794
------ ------ ------
Total non-performing loans ........... 4,591 1,980 1,659
Other real estate owned .................. 1,319 980 1,299
------ ------ ------
Total non-performing assets .......... $5,910 $2,960 $2,958
====== ====== ======
Loans past due 90 days or more and still
accruing interest:
Commercial ............................... $ -- $ 209 $ 326
Residential real estate mortgages ........ 406 42 --
Installment .............................. 39 94 165
------ ------ ------
Total loans past due 90 days or more . $ 445 $ 345 $ 491
====== ====== ======
Non-performing assets as a percentage of:
Total portfolio loans and OREO (1) ..... .82% .51% .52%
Total loans and OREO (2) ............... .57% .30% .28%
Total assets ........................... .41% .20% .19%
<FN>
(1) Excludes mortgage loans held for sale.
(2) Includes mortgage loans held for sale.
14
At September 30, 1996, approximately $6.4 million, or .90% of total portfolio
loans were 30-89 days delinquent.
Allowance for Loan Losses
Management is responsible for maintaining an adequate allowance for estimated
loan losses. The appropriate level of the allowance for estimated loan losses
is determined by systematically reviewing the loan portfolio quality,
analyzing economic changes, consulting with regulatory agencies and reviewing
historical loan loss experience. Actual net losses are charged against the
allowance. If actual circumstances and losses differ substantially from
management's assumptions and estimates, the allowance for loan losses may not
be sufficient to absorb all future losses, and net earnings could be
significantly and adversely affected.
In management's opinion, the allowance for loan losses is adequate to meet
potential losses in the loan portfolio that can be reasonably anticipated
based on current conditions. It must be understood, however, that there are
inherent risks and uncertainties related to the operation of a financial
institution. By necessity, the Company's financial statements are dependent
upon estimates, appraisals and evaluations of loans. Therefore, the
possibility exists that abrupt changes in such estimates, appraisals and
evaluations might be required due to changes in economic conditions and/or the
economic prospects of borrowers.
The following table provides an analysis of the allowance for loan losses:
Nine Months Ended
September 30,
-----------------------
(Dollars in thousands) 1996 1995
------- -------
Allowance for loan losses:
Balance at January 1 ............................................. $ 5,002 $ 5,544
Loans charged off .............................................. (643) (731)
Recoveries of loans previously charged off ..................... 92 224
------- -------
Net charge-offs .............................................. (551) (507)
Provision charged to expense ................................... 200 24
------- -------
Balance at September 30 .......................................... $ 4,651 $ 5,061
======= =======
Net charge-offs as a percentage of average portfolio loans
outstanding .................................................. .12% .11%
Allowance for loan losses as a percentage of total portfolio loans
outstanding at period-end .................................... .65 .88
Allowance for loan losses as a percentage of non-performing
loans ........................................................ 101.32 305.20
Off-Balance Sheet Instruments
At September 30, 1996 the Company had outstanding $190 million of commitments
to fund residential real estate loan applications with agreed-upon rates,
including $27.7 million of residential portfolio loans. To offset the
interest-rate risk associated with the Company's commitments to fund mortgage
loans and mortgage loans held-for-sale, the Company enters into firm
commitments to sell such loans at specified future dates to various third
parties. At September 30, 1996, the Company had outstanding forward
commitments to sell $455 million of residential mortgage loans, of which
$318 million related to the balance of mortgage loans held-for-sale at
September 30, 1996. These outstanding forward commitments to sell
mortgage loans, which are scheduled to settle in the fourth quarter
of 1996, are not expected to produce any material gains or losses related
to the financial instruments.
15
LIABILITIES.
Total liabilities were $1.33 billion at September 30, 1996, down $21 million
from $1.35 billion at December 31, 1995, as increases in deposits, FHLB
advances and accrued expenses and other liabilities totaling $115 million were
offset by a $135 million decrease in short-term borrowings and long-term debt.
Deposits
Total deposits were $969 million at September 30, 1996, an increase of $64
million, or 7%, from $905 million at December 31, 1995. Noninterest-bearing
deposits declined $4 million, or 4%, from $126 million at year-end 1995, to
$122 million at September 30, 1996, primarily due to a $5 million decrease in
mortgage escrow balances. Interest-bearing deposits rose $69 million to $847
million at September 30, 1996 from $778 million at December 31, 1995,
primarily reflecting an increase in savings and money market account balances.
Short-Term Borrowings
Short-term borrowings with maturities of less than one year, along with the
related average balances and interest rates for the nine months ended
September 30, 1996 and the year ended December 31, 1995, were as follows:
September 30, 1996 December 31, 1995
-------------------------------- ----------------------------------
Ending Average Average Ending Average Average
(Dollars in thousands) Balance Balance Rate Balance Balance Rate
- ----------------------------------------------------------------------------------------------------------------
Federal funds purchased ............... $ 8,000 $ 27,341 5.73% $ 16,000 $ 9,427 5.65%
Securities sold under agreements
to repurchase ....................... 122,339 141,787 5.63 118,237 158,999 6.21
-------- --------
Total federal funds purchased and
securities sold under agreements
to repurchase ................... $130,339 $134,237
======== ========
Other short-term borrowings:
Revolving repurchase agreements ..... $ -- $ 4,683 6.67% $ 27,797 $ 25,900 6.93%
Warehousing lines of credit ......... -- 25,873 6.81 88,779 63,300 7.28
Mortgage servicing acquisition
line of credit .................... -- 1,043 8.14 4,000 3,714 8.60
Revolving credit agreement .......... -- 1,463 7.99 8,125 10,200 8.54
-------- --------
Total other short-term borrowings $ -- $128,701
======== ========
FHLB Advances
Republic Bank and Republic Savings routinely borrow short-term and long-term
advances from the FHLB to provide liquidity for mortgage loan originations and
match fund certain fixed-rate commercial and mortgage loans. These advances
are generally secured by first mortgage loans or securities equal to at least
150% of the advances under a blanket security agreement. FHLB borrowings
outstanding as of the periods indicated were as follows:
September 30, 1996 December 31, 1995
------------------ ------------------
Ending Average Ending Average
(Dollars in thousands) Balance Rate Balance Rate
- ------------------------------------------------------------------------------
Short-term FHLB advances.......... $ 69,000 5.84% $ 44,500 5.73%
Long-term FHLB advances............ 49,500 6.32 36,000 6.22
-------- --------
Total.......................... $118,500 $ 80,500
======== ========
16
The long-term FHLB advances have original maturities ranging from June 1997 to
July 2001.
Long-Term Debt
Obligations with original maturities of more than one year consisted of the
following:
September 30, December 31,
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------------
7.17% Senior Debentures due 2001 ............. $25,000 $25,000
6.75% Senior Debentures due 2001 ............. 9,000 --
6.95% Senior Debentures due 2003 ............. 13,500 --
9.00% Subordinated Notes due 2003 ............ -- 17,250
6.99% Mortgage Loan due 2000 ................. 1,817 1,887
Note payable under term loan agreement @ prime
(8.50% at 12/31/95) plus 1.00% due 2000 .... -- 8,304
------- -------
Total long-term debt ................... $49,317 $52,441
======= =======
Capital
Shareholders' equity at September 30, 1996 was $119 million, compared with
$126 million at December 31, 1995. The decrease of $7 million during the first
nine months of 1996 was primarily due to the repurchase of 906,300 shares of
the Company's common stock under the previously announced stock repurchase
program.
The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies. At September 30, 1996, the Company's capital ratios were as
follows:
September 30, December 31,
1996 1995
------------- ------------
Tier 1 risk-based capital (minimum - 4.00%)..... 14.27% 15.72%
Total risk-based capital (minimum - 8.00%)...... 14.84 18.63
Tier 1 leverage (minimum - 3.00%)............... 8.01 8.31
The Total risk-based capital ratio declined from year-end 1995 due to the
Company's first quarter 1996 redemption of $17.25 million of 9.00%
Subordinated Notes, which qualified as Tier 2 capital, as well as an increase
in risk-weighted assets resulting from loan growth. As of September 30, 1996,
Total risk-based capital was $121.1 million, an excess of $55.8 million over
the minimum guidelines prescribed by regulatory agencies.
The Company is committed to maintaining a strong capital position. As of
September 30, 1996, the Total risk-based capital and Tier 1 risk-based capital
ratios for Republic Bank and Republic Savings exceeded the minimum regulatory
requirements. Management believes the Company's capital structure is adequate
and does not anticipate any difficulty in meeting these requirements on an
ongoing basis.
Accounting Developments
In October 1995, the Financial Accounting Standards Board (FASB) issued SFAS
No. 123, "Accounting for Stock-Based Compensation," effective January 1, 1996.
The statement encourages, but does not require, establishment of a fair value
based method of accounting for stock-based compensation plans. The Company
elected to retain the accounting treatment prescribed by APB Opinion 25,
"Accounting for Stock Issued to Employees," as permitted, and will comply with
the statement's relevant disclosure requirements in its 1996 Annual Report on
Form 10-K.
17
In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." The
statement is effective for such transactions occurring after December 31,
1996, and is not expected to have a material effect on the Company's financial
statements.
18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company and its subsidiaries are parties to certain ordinary
routine litigation in the normal course of business. In the opinion
of management, liabilities arising from such litigation would not
have a material effect on the Company's consolidated financial
statements.
Item 2. Changes in Securities
In August 1996, the Board of Directors declared a quarterly cash
dividend of $0.10 per share of common stock, payable on October 4,
1996 to shareholders of record September 6, 1996. In September
1996, the Board of Directors declared a 10% stock dividend to be
issued December 2, 1996 to shareholders of record November 4, 1996.
In addition, the Board of Directors authorized the purchase of up
to 9.9% of the shares of common stock outstanding, after the 10%
stock dividend, under the Company's Stock Repurchase Plan.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11. Statement Re: Computation of Per Share Earnings
27. Financial Data Schedule
(b) Reports on Form 8-K
None.
19
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REPUBLIC BANCORP INC.
(Registrant)
Date: November 14, 1996 BY: /s/ Thomas F. Menacher
------------------------------------
Thomas F. Menacher
Senior Vice President, Treasurer and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
20