EXHIBIT 99.6
NEWS BULLETIN Republic Bancorp Inc.
FROM: 122 S. Main Street
The Financial Relation Board Ann Arbor, MI 48104 [LOGO]
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BSMG WORLDWIDE www.republicbancorp.com
NASDAQ: RBNC
FOR FURTHER INFORMATION:
At Republic Bancorp Inc.: At the Financial Relations Board:
Thomas F. Menacher Kristine D. Brenner John Kroen Lisa Ferguson Bess Gallanis
Exec. V.P., Treasurer & CFO Investor Relations General Info. Analyst Inquiries Media Inquiries
(517) 725-7337 (517) 725-7004 (312) 640-6763 (312) 640-6788 (312) 640-6737
FOR IMMEDIATE RELEASE
WEDNESDAY, JULY 14, 1999
REPUBLIC BANCORP REPORTS SECOND QUARTER 1999 OPERATING
EARNINGS INCREASE 17% TO $.28 PER SHARE
* Record net operating income of $11.7 million up 18%
* Net interest income increased 9% to $30.6 million
* Operating return on equity of 17.56% and return on assets of 1.18%
* Mortgage loan originations of $1.5 billion
ANN ARBOR, Michigan, July 14, 1999... Republic Bancorp Inc. (NASDAQ: RBNC)
announced record net operating income for the bank holding company for the
quarter and six months ended June 30, 1999. Net operating income for the second
quarter was $11,690,000, or $.28 per diluted share, up 17% from $.24 earned for
the second quarter of 1998. All prior period data have been restated for the
merger with D&N Financial Corporation in May 1999, which was accounted for as a
pooling of interests.
Net operating income for the quarter generated annualized returns of 1.18% on
average assets and 17.56% on average equity. These compare with returns of
1.04% on average assets and 16.29% on average equity for the second quarter of
1998. Net operating income for the six months ended June 30, 1999 was
$21,845,000, a 14% increase over the $19,188,000 earned for the six months ended
June 30, 1998. For the six month period ending June 30, 1999, diluted earnings
per share were $.53, an increase of 13% over the $.47 earned in 1998. Net
operating income for the first six months of 1999 generated annualized return on
average assets and return on average shareholders' equity of 1.08% and 16.29%,
respectively.
Net operating earnings exclude the after tax impact of one-time charges related
to the Company's merger with D&N Financial Corporation. In total, $30.2 million
of after tax charges were recorded in the second quarter, consisting of $22
million in merger and restructuring charges, a $4.9 million loss on the sale of
low-yielding fixed rate securities, and an additional $3.3 million provision for
loan losses. Including these charges, the Company reported a net loss for the
second quarter of $18.5 million and a net loss of $8.4 million for the six
months ended June 30, 1999.
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The Company had another excellent quarter in mortgage banking, originating $1.51
billion in single-family residential mortgages. At June 30, 1999, the Company's
mortgage loan pipeline of applications in process was $1.5 billion. Republic
Bancorp Inc. is the 20th largest retail mortgage lender in the country.
Commercial lending activity has remained strong, as the Company had commercial
loan closings of $131 million during the second quarter of 1999. The Company
also closed $12.8 million in Small Business Administration (SBA) loans, an
increase of 51% from the second quarter of 1998. At June 30, 1999, the
Company's pipeline of SBA loans in process totaled $45 million. Republic Bank
has been the Number One SBA lender in the state of Michigan for five years in a
row and is a Preferred Lender with the SBA.
The Company's net interest income increased $2.4 million for the quarter, an
increase of 9% from the corresponding period in 1998 due to the continued growth
in earning assets and the improved mix of earning assets. During the second
quarter, $265 million of low-yielding investment securities were sold with a
portion of the proceeds redeployed into higher-yielding residential mortgage
loans. Approximately $164 million in securities will settle in the third
quarter and will be redeployed into residential mortgage loans. The better mix
of earning assets also contributed to an increase of 11 basis points in the
Company's net interest margin to 3.25% for the quarter. The net interest margin
for the six months ended June 30, 1999 was 3.13%, compared to 3.10% for the same
period of 1998.
"The Company had a great quarter," commented Jerry D. Campbell, Chairman and
Chief Executive Officer. "Lending pipelines are strong across all of our
business lines: commercial, mortgage and consumer. Higher levels of earning
assets will further increase our net interest income during the remainder of
1999."
"The merger with D&N has gone very smoothly and we expect to see future
operating results reflect the impact of cost savings and revenue enhancements
from the merger." Campbell further added, "We are focused on growing the
Company, providing high quality personalized service to our customers and
motivating our employees. We recently announced that all employees of Republic
have been awarded stock options entitling them to Republic stock. We believe
this will result in highly motivated and focused employees."
"The merger with D&N has strengthened our commercial and retail banking presence
in Michigan. We are now the 94/th/ largest bank in the country with a
nationwide mortgage banking network," said Campbell.
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About the Company
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Republic Bancorp Inc., a rapidly growing regional bank holding company
specializing in personalized service and commercial, consumer and mortgage
lending, is a $4 billion company with headquarters in Ann Arbor, Michigan. Its
subsidiaries, Republic Bank (including its subsidiaries Republic Bancorp
Mortgage Inc. and Market Street Mortgage Corporation) and D&N Bank (including
its subsidiary Quincy Insurance) operate 190 offices in the following 22 states:
Michigan, Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia,
Illinois, Indiana, Maryland, Massachusetts, Missouri, Nevada, New York, North
Carolina, Ohio, Oklahoma, Pennsylvania, Texas, Utah and Virginia. The Company
is the #1 Small Business Administration lender in the state of Michigan for the
5th consecutive year. Additionally, the Company is the 20th largest retail
mortgage lender in the country.
To further expand its delivery channels, Market Street Mortgage Corporation
takes mortgage applications over the Internet at www.marketstreetmortgage.com.
The Company anticipates further expanding its Internet capabilities to all
Republic affiliates in the latter part of 1999. Information about Republic
Bancorp Inc.'s financial results and its products and services can be accessed
on the Internet at www.republicbancorp.com.
Cash Dividend
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The Company currently pays an annual cash dividend of $.36 per common share,
which represents a yield of 2.5%.
Safe Harbor Statement
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As with any statements other than those reflecting historical facts, forward-
looking statements contained in this announcement involve risk, and, as such,
future financial performance may differ from current expectations due to a
variety of marketplace factors. These factors include, without limitation,
those disclosed in Republic Bancorp's 1998 Form 10-K filing with the Securities
and Exchange Commission.
To receive Republic Bancorp Inc.'s latest news release and other corporate
documents, free of charge via fax, simply dial 1-800-PRO-INFO.
Use company ticker RBNC.
Financial tables follow...
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REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
Interest Income
Loans, including fees................................ $ 61,276 $ 62,268 $ 121,907 $ 121,256
Investment securities................................ 9,758 8,577 20,144 18,011
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Total interest income.............................. 71,034 70,845 142,051 139,267
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Interest Expense
Deposits............................................. 26,635 26,553 54,088 52,392
Short-term borrowings................................ 627 2,022 1,894 4,829
FHLB advances........................................ 12,216 13,101 24,652 25,459
Long-term debt....................................... 947 1,004 1,924 2,015
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Total interest expense............................. 40,425 42,680 82,558 84,695
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Net interest income.................................. 30,609 28,165 59,493 54,572
Provision for loan losses............................ 6,575 2,050 8,100 3,800
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Net interest income after provision for loan losses.. 24,034 26,115 51,393 50,772
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Non-Interest Income
Service charges...................................... 1,805 1,445 3,509 2,851
Mortgage banking..................................... 37,118 33,558 74,255 62,678
Loss on sale of securities........................... (7,237) (46) (6,588) (144)
Gain on sale of SBA loans............................ 111 477 348 1,096
Other non-interest income............................ 1,045 854 1,904 2,135
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Total non-interest income.......................... 32,842 36,288 73,428 68,616
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Non-Interest Expense
Salaries and employee benefits....................... 20,779 16,361 41,520 32,411
Mortgage loan commissions and incentives............. 13,097 13,190 24,982 24,431
Occupancy expense of premises........................ 3,456 2,765 6,792 5,439
Equipment expense.................................... 1,662 1,545 3,445 3,037
Merger and restructuring............................. 31,521 - 31,521 -
Other non-interest expense........................... 11,653 13,042 25,488 23,423
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Total non-interest expense......................... 82,168 46,903 133,748 88,741
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Income (loss) before income taxes.................... (25,292) 15,500 (8,927) 30,647
Provision (credit) for income taxes.................. (7,464) 4,938 (1,935) 10,098
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Income (loss) before preferred stock dividends....... (17,828) 10,562 (6,992) 20,549
Dividends on preferred stock......................... 680 680 1,361 1,361
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Net income (loss).................................... $ (18,508) $ 9,882 $ (8,353) $ 19,188
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Basic earnings (loss) per share...................... $ (.45) $ .25 $ (.20) $ .48
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Diluted earnings (loss) per share $ (.45) $ .24 $ (.20) $ .47
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands, except operating data)
June 30, March 31, December 31, June 30,
1999 1999 1998 1998
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Period-End Balances:
Total assets...................................... $3,977,561 $4,114,160 $4,213,766 $3,982,572
Mortgage loans held for sale...................... 420,413 628,804 770,028 746,557
Total securities.................................. 284,307 637,038 671,553 610,939
Portfolio loans................................... 2,882,177 2,535,140 2,543,772 2,418,380
Allowance for loan losses......................... 24,489 22,127 21,446 20,549
Total deposits.................................... 2,557,362 2,651,309 2,642,831 2,367,432
Total FHLB advances............................... 916,911 841,011 986,571 922,071
Long-term debt.................................... 51,669 51,821 52,194 53,102
Shareholders' equity (1).......................... 250,590 272,853 265,877 246,733
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
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Average Balances:
Total assets........................................... $3,957,494 $3,791,279 $4,058,993 $3,761,435
Mortgage loans held for sale........................... 508,324 597,638 555,858 536,033
Total securities....................................... 570,569 503,143 612,235 532,977
Portfolio loans........................................ 2,657,291 2,489,983 2,602,413 2,485,672
Earning assets......................................... 3,767,631 3,596,655 3,798,989 3,559,475
Interest-bearing deposits.............................. 2,422,692 2,227,882 2,435,926 2,201,080
Short-term borrowings.................................. 44,404 150,215 71,030 177,595
Total FHLB advances.................................... 862,387 901,620 873,688 881,557
Long-term debt......................................... 53,583 54,262 55,302 54,698
Shareholders' equity (1)............................... 266,304 242,622 268,234 238,143
Operating Data (in millions):
Residential mortgage loan closings..................... $ 1,513 $ 1,565 $ 2,885 $ 3,140
Mortgage loan servicing portfolio...................... 3,503 3,952 3,503 3,952
Performance Ratios (before merger charges): (2)
Return on average assets............................... 1.18% 1.04% 1.08% 1.02%
Return on average equity............................... 17.56% 16.29% 16.29% 16.11%
Net interest margin.................................... 3.25% 3.14% 3.13% 3.10%
Per Common Share Data:
Average common shares outstanding - diluted............ 41,550 41,230 41,504 41,119
Cash dividends declared................................ $ .09 $ .08 $ .18 $ .16
Book value............................................. $ 6.10 $ 6.12 $ 6.10 $ 6.12
(1) Common shares outstanding at June 30, 1999, March 31, 1999, December 31,
1998 and June 30, 1998 were 41,091,000, 40,876,000, 40,712,000 and
40,343,000, respectively.
(2) Annualized
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
June 30, March 31, December 31, June 30,
1999 1999 1998 1998
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Asset Quality Ratios:
Non-performing assets to loans and
other real estate owned (1,3)............ .59% .80% .77% .92%
Non-performing assets to total assets (3)... .49% .62% .61% .73%
Allowance for loan losses
to non-performing loans.................. 163.01% 113.36% 107.35% 85.08%
Allowance for loan losses to loans (2)...... .85% .87% .84% .85%
Allowance for loan losses to loans
(excluding residential real
estate mortgages) (2).................... 1.75% 1.71% 1.72% 1.79%
Net charge-offs to
average loans outstanding (1,4).......... .32% .11% .07% .08%
Earnings coverage of net charge-offs (4,5).. 7.56x 14.65x 22.50x 29.18x
Capital Ratios:
Average shareholders' equity to assets(4)... 6.61% 6.63% 6.37% 6.33%
Tier 1 risk-based capital................... 9.68% 10.16% 9.80% 10.37%
Total risk-based capital.................... 10.58% 10.93% 10.55% 11.20%
Tier 1 leverage............................. 6.71% 6.82% 6.54% 6.86%
(1) Includes mortgage loans held for sale.
(2) Excludes mortgage loans held for sale.
(3) Non-performing assets as of June 30, 1999, March 31, 1999, December 31,
1998 and June 30, 1998 were as follows:
June 30, March 31, December 31, June 30,
1999 1999 1998 1998
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Non-performing loans:
Commercial............................... $ 4,989 $ 8,063 $ 6,141 $ 6,892
Residential mortgage..................... 8,259 9,153 12,011 15,944
Installment.............................. 1,775 2,304 1,826 1,316
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Total non-performing loans............... 15,023 19,520 19,978 24,152
Other real estate owned.................... 4,575 5,845 5,648 5,029
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Total non-performing assets.............. $19,598 $25,365 $25,626 $29,181
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(4) Year-to-date, annualized.
(5) Operating earnings before taxes plus the provision for loan losses divided
by net charge-offs.
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REPUBLIC BANCORP INC.
SUMMARY OF SELECTED FINANCIAL DATA
(Dollars in thousands)
June 30, March 31, December 31, June 30,
1999 1999 1998 1998
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Portfolio Loan Summary:
Commercial loans:
Commercial and industrial................ $ 90,353 $ 89,747 $ 83,105 $ 84,431
Commercial real estate mortgage.......... 643,954 572,614 549,586 470,126
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Total commercial loans................ 734,307 662,361 632,691 554,557
Residential real estate mortgages*.......... 1,479,656 1,243,478 1,295,484 1,270,742
Installment loans........................... 668,214 629,301 615,597 593,081
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Total portfolio loans................. $2,882,177 $2,535,140 $2,543,772 $2,418,380
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* Does not include loans held for sale.
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