EXHIBIT 99.4
Republic Bancorp Inc.
And D&N Financial Corporation
Unaudited Pro Forma Condensed Combined Statements of Income
For the three months ended March 31, 1999
(In thousands, except per share data)
D&N
Republic Financial Pro Forma
Bancorp Inc. Corporation Combined
------------ ----------- ---------
INTEREST INCOME
Loans, including fees $ 34,761 $ 25,870 $ 60,631
Securities and other 757 9,629 10,386
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Total interest income 35,518 35,499 71,017
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INTEREST EXPENSE
Deposits 14,087 13,366 27,453
Borrowings 6,156 8,524 14,680
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Total interest expense 20,243 21,890 42,133
NET INTEREST INCOME 15,275 13,609 28,884
PROVISION FOR LOAN LOSSES 850 675 1,525
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 14,425 12,934 27,359
OTHER INCOME 36,773 3,813 40,586
OTHER EXPENSES 41,684 9,896 51,580
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INCOME BEFORE INCOME TAXES 9,514 6,851 16,365
INCOME TAXES 3,378 2,151 5,529
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INCOME BEFORE PREFERED STOCK DIVIDENDS 6,136 4,700 10,836
Preferred stock dividends - 681 681
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NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 6,136 $ 4,019 $ 10,155
============ ========== =========
EARNINGS PER COMMON SHARE
Basic $ 0.26 $ 0.43 $ 0.25
Diluted ============ ========== ========
$ 0.26 $ 0.42 $ 0.24
============ ========== ========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 23,786 9,357 40,816
Diluted 23,999 9,593 41,458
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
Republic Bancorp Inc. and D&N Financial Corporation
Unaudited Pro Forma Condensed Combined Balance Sheet
March 31, 1999
(In thousands)
D&N
Republic Financial Pro Forma Pro Forma
Bancorp Inc. Corporation Adjustments Combined
----------- ----------- ----------- ----------
ASSETS
Cash and cash equivalents $ 31,635 $ 37,059 $ 68,694
Mortgage loans held for sale 620,670 8,134 628,804
Securities held to maturity - 60,228 60,228
Securities available for sale 45,150 591,888 637,038
Loans, net 1,203,032 1,309,981 2,513,013
Premises and equipment 19,029 18,818 37,847
Mortgage servicing rights 55,873 5,082 60,955
Other assets 83,804 23,777 $ 9,482 (2) 117,063
----------- ----------- ------------ -----------
TOTAL ASSETS $ 2,059,193 $ 2,054,967 $ 9,482 $ 4,123,642
=========== =========== ============ ===========
LIABILITIES
Deposits $ 1,378,922 $ 1,272,387 $ 2,651,309
Federal funds purchased, repurchase agreements
and other short-term borrowings 52,653 78,049 130,702
Federal Home Loan Bank advances 312,008 529,003 841,011
Accrued expenses and other liabilities 113,425 24,319 $ 31,521 (1) 169,265
Long-term debt 47,500 4,322 51,822
----------- ----------- ------------ -----------
TOTAL LIABILITIES 1,904,508 1,908,080 31,521 3,844,109
PREFERRED STOCK OF SUBSIDIARY - 28,719 28,719
STOCKHOLDERS' EQUITY
Preferred stock - - -
Common stock 118,893 94 85,394 (3) 204,381
Capital surplus 28,601 79,323 (85,394) (3) 22,530
Retained earnings 7,426 38,857 (22,039) (1) 24,244
Accumulated other comprehensive income (loss) (235) (106) (341)
----------- ----------- ------------ -----------
TOTAL STOCKHOLDERS' EQUITY 154,685 118,168 (22,039) 250,814
----------- ----------- ------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,059,193 $ 2,054,967 $ 9,482 $ 4,123,642
=========== =========== ============ ===========
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
Notes to Republic Bancorp Inc.
and D&N Financial Corporation
Unaudited Pro Forma Condensed Combined Financial Statements
(1) Consistent with generally accepted accounting principles, we expect that
restructuring and merger related costs incurred to complete the merger will
be deducted in determining net income in the period in which they are
incurred. These costs will include appropriate accruals, reserves and
charges for D&N to establish and take in respect of excess facilities and
equipment capacity, severance costs, and write-offs of various assets; and
other adjustments taking into account Republic's business plan following
the merger. The pro forma financial statements do not give effect to any
cost savings which may be realized in connection with the consolidation of
our operations.
Restructuring and merger related costs to combine the operations
approximate $22 million on an after-tax basis. The Unaudited Pro Forma
Condensed Combined Statements of Income do not reflect these charges.
However, the Unaudited Pro Forma Condensed Combined Balance Sheet reflects
these charges at that amount.
It is anticipated that these charges will be recognized in the second
quarter of 1999. The following table provides details of the estimated
charges by type of cost:
Estimated Costs
------------------
Pre-tax Post-tax
Types of Costs Combined Combined
-------------- -------- --------
(in millions)
Severance and employee benefit accruals....... $10.4 $ 6.8
Professional fees............................. 5.1 4.9
Branch closings and real estate transactions.. 8.7 5.6
Systems....................................... 2.2 1.4
Other......................................... 5.1 3.3
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Total.................................... $31.5 $22.0
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(2) Income tax expense on pro forma adjustments is reflected using a 35% tax
rate on deductible items. As a result, an estimated $9.5 million current
and deferred tax benefit is reflected herein.
(3) These reclassifications conform D&N's capital structure to that of Republic
based on D&N's shares outstanding as of March 31, 1999.