* Net operating income of $52.5 million * Earnings per share of $.95, up 14% * Return on equity of 17.25% * Strong commercial loan growth of 20% * Net interest margin expands to 3.31%
ANN ARBOR, Mich., Jan. 14 /PRNewswire-FirstCall/ -- Republic Bancorp Inc., , today announced net operating income for the year ended December 31, 2001 of $52,460,000, an increase of 15% over the $45,677,000 earned in 2000. Diluted earnings per share were $.95, up 14% from $.83 earned in 2000. Net operating income generated annualized returns of 1.14% on average assets and 17.25% on average shareholders' equity for the year ended December 31, 2001. Net operating income for 2001 excludes the previously reported $7.8 million after-tax gain on sale of Market Street Mortgage and the $12.3 million after-tax restructuring costs to exit the mortgage servicing business.
"The Company had an outstanding year," commented Dana M. Cluckey, President and Chief Executive Officer. "Our commercial, mortgage and retail banking business lines all had excellent results. Our focus on providing distinctive personal service and emphasis on real estate secured lending continues to produce consistent and strong financial results. In 2001, we made great strides in cross-selling our products and services to our customers and we see more opportunities for 2002," added Mr. Cluckey.
Net income for the fourth quarter was a record $12,300,000, an increase of 13% over the $10,932,000 earned for the fourth quarter of 2000. Diluted earnings per share were $.23 for the fourth quarter of 2001, up 15% from the $.20 for the same quarter of 2000.
During 2001, Republic Bank originated $4.1 billion in single-family residential mortgages, up 83% over the $2.3 billion in 2000. At December 31, 2001, the Company's mortgage loan pipeline of applications in process was $611 million.
Commercial lending activity was strong during the year, as the commercial loan portfolio grew $231 million, or 20% over prior year. In addition, direct consumer loans increased $38 million, or 8%, during the year. The Company also had excellent growth in core deposits, which increased $211 million, or 21% for the year.
The Company's net interest income increased $3.1 million for the quarter ended December 31, 2001 compared to the fourth quarter of 2000 primarily due to a higher net interest margin. For the fourth quarter of 2001, the Company's net interest margin was 3.45%, an increase of 35 basis points over the fourth quarter of 2000 and an increase of 9 basis points over the third quarter of 2001. For the year ended December 31, 2001, the Company's net interest margin was 3.31%, an increase of 17 basis points over 2000.
The Company's asset quality remains very sound. Net charge-offs to total average loans were 19 basis points for the year ended December 31, 2001. Net charge-offs remain well below the Company's peer group.
During the fourth quarter of 2001, the Company repurchased 1,147,000 shares at an average price of $13.40 per share under the 2001 Stock Repurchase Program which allows for the repurchase of up to 3,300,000 shares. A total of 1,665,000 shares have been repurchased under this Program.
Also during the fourth quarter of 2001, the Company sold its entire investment in NetBank, Inc. stock for total proceeds of $17.2 million. This stock was acquired during the second quarter of 2001 in connection with the sale of the Company's subsidiary, Market Street Mortgage Corporation. In total, the Company received $22.1 million for the sale of Market Street Mortgage.
About the Company
Republic Bancorp Inc., with $4.7 billion in assets, is the third largest bank holding company headquartered in Michigan and 84th largest bank holding company in the country. Its subsidiary, Republic Bank, serves customers in Michigan, Ohio and Indiana with 102 retail, commercial and mortgage banking offices and 116 ATMs. The Company is the #1 Small Business Administration bank lender based in Michigan for the 8th consecutive year, one of the Midwest's top ten retail mortgage lenders, ranked 27th on FORTUNE's "100 Best Places to Work in America" and named to Working Mother magazine's list of "100 Best Companies for Working Mothers." Information about Republic Bancorp's financial results and its products and services can be accessed at http://www.republicbancorp.com/ .
The Company provides electronic banking, bill paying and cash management services to retail and commercial customers through ExpressNet, an Internet banking system. ExpressNet and on-line mortgage applications are available at http://www.republicbancorp.com/ .
Cash Dividend
The Company currently pays an annual cash dividend of $.34 per common share, which represents a yield of approximately 2.6% based on the Company's current stock price.
Safe Harbor Statement
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 2000 Form 10-K filing with the Securities and Exchange Commission.
REPUBLIC BANCORP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) Dec. 31, Sept. 30, June 30, Dec. 31, 2001 2001 2001 2000 (Unaudited) (Unaudited) ASSETS Cash and cash equivalents $76,734 $67,784 $113,803 $82,377 Mortgage loans held for sale 748,463 350,738 430,159 385,207 Securities available for sale 364,648 379,867 309,678 211,860 Loans 3,458,381 3,565,312 3,544,090 3,771,676 Less allowance for loan losses (29,157) (28,990) (28,924) (28,450) Net loans 3,429,224 3,536,322 3,515,166 3,743,226 Premises and equipment 30,858 31,458 31,759 36,094 Mortgage servicing rights 2,482 2,216 2,022 51,796 Other assets 88,196 76,376 77,838 100,081 Total assets $4,740,605 $4,444,761 $4,480,425 $4,610,641 LIABILITIES Noninterest-bearing deposits $245,395 $248,053 $318,986 $267,509 Interest-bearing deposits: NOW accounts 153,839 143,711 144,230 150,476 Savings and money market accounts 819,674 800,312 739,790 590,056 Certificates of deposit 1,534,560 1,505,906 1,617,036 1,720,485 Total interest-bearing deposits 2,508,073 2,449,929 2,501,056 2,461,017 Total deposits 2,753,468 2,697,982 2,820,042 2,728,526 Federal funds purchased and other short-term borrowings 176,500 142,000 10,958 1,729 FHLB advances 1,300,718 1,182,218 1,243,718 1,383,513 Accrued expenses and other liabilities 112,783 68,229 56,675 125,790 Long-term debt 13,500 13,500 13,500 47,500 Total liabilities 4,356,969 4,103,929 4,144,893 4,287,058 Trust preferred securities and preferred stock of subsidiary 78,719 28,719 28,719 28,719 SHAREHOLDERS' EQUITY Preferred stock, $25 stated value: $2.25 cumulative and convertible; 5,000,000 shares authorized, none issued and outstanding - - - - Common stock, $5 par value, 75,000,000 shares authorized; 53,166,000, 54,187,000, 54,405,000 and 54,366,000 issued and outstanding, respectively 265,831 246,304 247,294 247,119 Capital surplus 38,693 41,236 43,638 44,961 Retained earnings 3,542 25,987 16,690 2,994 Accumulated other comprehensive loss (3,149) (1,414) (809) (210) Total shareholders' equity 304,917 312,113 306,813 294,864 Total liabilities and shareholders' equity $4,740,605 $4,444,761 $4,480,425 $4,610,641 REPUBLIC BANCORP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) Three Months Ended Year Ended December 31, December 31, 2001 2000 2001 2000 Interest Income Loans, including fees $71,555 $86,368 $316,292 $333,667 Investment securities 4,802 3,695 17,084 14,661 Total interest income 76,357 90,063 333,376 348,328 Interest Expense Deposits 23,341 33,106 114,604 123,162 Short-term borrowings 925 684 3,460 3,532 FHLB advances 14,932 21,636 70,252 83,552 Long-term debt 242 858 1,451 3,434 Total interest expense 39,440 56,284 189,767 213,680 Net interest income 36,917 33,779 143,609 134,648 Provision for loan losses 2,400 1,700 8,700 6,500 Net interest income after provision for loan losses 34,517 32,079 134,909 128,148 Non-interest Income Service charges 1,945 2,070 7,720 7,819 Mortgage loan production revenue 6,288 13,541 46,808 55,720 Net mortgage servicing (expense) revenue 154 (4,695) (127) 3,439 Gain on sale of securities 491 12 1,425 109 Other non-interest income 1,018 632 3,558 3,751 Gain on sale of subsidiary - - 12,000 - Total non-interest income 9,896 11,560 71,384 70,838 Non-interest Expense Salaries and employee benefits 15,225 17,430 64,377 72,538 Occupancy expense of premises 2,410 3,192 11,427 13,467 Equipment expense 1,630 2,391 7,847 9,090 Other non-interest expense 6,517 7,942 29,562 36,546 Restructuring costs to exit mortgage servicing business - - 19,000 - Merger integration and restructuring credit - (4,000) - (4,000) Total non-interest expense 25,782 26,955 132,213 127,641 Income before income taxes 18,631 16,684 74,080 71,345 Provision for income taxes 4,718 5,071 22,515 22,945 Income before dividends 13,913 11,613 51,565 48,400 Dividends on trust preferred securities and preferred stock of subsidiary 1,613 681 3,655 2,723 Net income $12,300 $10,932 $47,910 $45,677 Basic earnings per share $.23 $.20 $.88 $.84 Diluted earnings per share $.23 $.20 $.87 $.83 REPUBLIC BANCORP INC. SUMMARY OF SELECTED FINANCIAL DATA (Dollars in thousands, except operating data) Three Months Ended Year Ended December 31, December 31, 2001 2000 2001 2000 Average Balances: Total assets $4,546,836 $4,513,600 $4,586,436 $4,485,360 Mortgage loans held for sale 508,894 386,782 520,565 425,956 Securities available for sale 383,589 198,642 293,085 195,364 Portfolio loans 3,512,231 3,766,905 3,600,540 3,659,759 Total earning assets 4,406,348 4,356,208 4,416,638 4,283,983 Interest-bearing deposits 2,473,530 2,489,176 2,476,819 2,459,865 Short-term borrowings 154,443 40,865 96,430 55,047 Total FHLB advances 1,247,031 1,323,869 1,323,837 1,339,009 Long-term debt 13,500 47,500 20,125 47,500 Total interest bearing liabilities 3,888,504 3,901,410 3,917,210 3,901,421 Shareholders' equity 309,837 292,082 304,077 280,637 Operating Data (in millions): Residential mortgage loan closings: Fixed rate $1,251 $480 $3,700 $1,821 Adjustable rate 149 36 447 446 Total residential mortgage loan closings $1,400 $516(2) $4,147(2) $2,267(2) Conventional loans $1,076 $309 $3,006 $1,377 Government loans 116 189 492 662 Jumbo and other loans 208 18 649 228 Total residential mortgage loan closings $1,400 $516(2) $4,147(2) $2,267(2) Mortgage loan servicing portfolio $189 $2,229 $189 $2,229 Performance Ratios (annualized for the quarter): Return on average assets 1.08% .97% 1.14%(1) 1.02% Return on average equity 15.88% 14.97% 17.25%(1) 16.28% Yield on earning assets 6.98% 8.24% 7.59% 8.13% Cost of funds 4.00% 5.72% 4.82% 5.48% Net interest margin 3.45% 3.10% 3.31% 3.14% Efficiency ratio 55.66% 68.29% 56.17% 64.10% Per Common Share Data: Average common shares outstanding - diluted 54,488 54,725 55,020 54,890 Cash dividends declared $.085 $.077 $.317 $.288 Book value $5.74 $5.42 $5.74 $5.42 Tangible book value $5.59 $5.21 $5.59 $5.21
(1) Before gain on sale of subsidiary and restructuring costs to exit mortgage servicing business.
(2) Excludes Market Street Mortgage Corporation residential mortgage loan closings of $393 million for the fourth quarter of 2000, $1,194 million and $1,585 million for the years ended December 31, 2001 and 2000, respectively.
REPUBLIC BANCORP INC. SUMMARY OF SELECTED FINANCIAL DATA (Dollars in thousands) Dec. 31, Sept. 30, June 30, Dec. 31, 2001 2001 2001 2000 Asset Quality Ratios: Non-performing assets to loans and other real estate owned (1) .74% .83% .76% .62% Non-performing assets to total assets .66% .74% .68% .56% Allowance for loan losses to non-performing loans 103.47% 100.47% 113.49% 134.87% Allowance for loan losses to loans (2) .84% .81% .82% .75% Allowance for loan losses to loans (excluding residential real estate mortgages) (2) 1.50% 1.51% 1.56% 1.57% Net charge-offs to average loans: (1,3) Commercial loans .34% .20% .44% .18% Residential real estate mortgage loans .02% .05% .03% .01% Installment loans - consumer direct .21% .44% .07% .21% Installment loans - consumer indirect 3.03% 1.80% 1.50% 1.41% Total loans .22% .20% .20% .16% Earnings coverage of net charge-offs (3,4) 8.48x 11.14x 10.33x 11.28x Capital Ratios: Shareholders' equity to assets 6.43% 7.02% 6.85% 6.40% Tier 1 risk-based capital 11.43% 10.49% 10.45% 9.50% Total risk-based capital 12.31% 11.40% 11.38% 10.38% Tier 1 leverage 8.34% 7.54% 6.93% 6.82% (1) Includes mortgage loans held for sale. (2) Excludes mortgage loans held for sale. (3) Quarter-to-date, annualized.
(4) Operating earnings before taxes plus the provision for loan losses divided by net charge-offs.
REPUBLIC BANCORP INC. SUMMARY OF SELECTED FINANCIAL DATA (Dollars in thousands) Dec. 31, Sept. 30, June 30, Dec. 31, 2001 2001 2001 2000 Portfolio Loan Summary: Commercial loans: Commercial and industrial $68,428 $69,431 $73,694 $79,544 Commercial real estate mortgage 1,294,634 1,251,237 1,182,186 1,052,748 Total commercial loans 1,363,062 1,320,668 1,255,880 1,132,292 Residential real estate mortgages 1,511,831 1,648,277 1,691,387 1,964,394 Installment loans: Consumer direct 496,972 490,399 470,746 459,359 Consumer indirect 86,516 105,968 126,077 215,631 Total installment loans 583,488 596,367 596,823 674,990 Total portfolio loans $3,458,381 $3,565,312 $3,544,090 $3,771,676 Non-performing loans: Commercial $6,413 $6,842 $6,176 $5,499 Residential real estate mortgage 18,808 18,920 16,872 13,429 Installment 2,957 3,092 2,437 2,167 Total non-performing loans 28,178 28,854 25,485 21,095 Other real estate owned 2,978 3,847 4,842 4,906 Total non-performing assets $31,156 $32,701 $30,327 $26,001 Allowance for Loan Losses (for the quarter): Balance at beginning of period $28,990 $28,924 $28,794 $28,379 Loans charged off: Commercial 1,159 675 1,400 617 Residential real estate mortgage 126 251 180 149 Installment - consumer direct 329 583 170 331 Installment - consumer indirect 850 612 643 868 Total charge-offs 2,464 2,121 2,393 1,965 Recoveries: Commercial 38 37 35 124 Residential real estate mortgage - - - 62 Installment - consumer direct 68 58 88 86 Installment - consumer indirect 125 92 100 64 Total recoveries 231 187 223 336 Net charge-offs 2,233 1,934 2,170 1,629 Provision charged to expense 2,400 2,000 2,300 1,700 Balance at end of period $29,157 $28,990 $28,924 $28,450 MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X87793538
Contact: Thomas F. Menacher, Exec. V.P., Treasurer & CFO, +1-989-725-7337, tmenacher@republicbancorp.com , or Kristine D. Brenner, Director of Investor Relations, +1-989-725-7004, kbrenner@republicbancorp.com , both of Republic Bancorp Inc.
Website: http://www.republicbancorp.com/
