EX-99.1 2 a04-7735_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Banking Center Expansion Paves the Way for 8% Increase in Second Quarter Net Income

 

 

July 16, 2004

 

Contact: Kevin Sipes

Executive Vice President & CFO

 

 

Louisville, KY – Republic Bancorp, Inc. (“Republic” or the “Company”) (NASDAQ: RBCAA), the holding company for Republic Bank & Trust Company and Republic Bank & Trust Company of Indiana, concluded another successful quarter, growing net income 8% over the second quarter of 2003.  “We are extremely excited that we were able to increase our net income over the second quarter of 2003.  We believe this is a tremendous achievement, given the record- level of mortgage income we attained during the second quarter of 2003,” commented Steve Trager, President & CEO of Republic.  “Our core business remains a solid foundation as we continue to look for new ways to profitably grow the balance sheet while diversifying our traditional and non-traditional business lines,” Trager further commented.

 

Net income for the second quarter of 2004 totaled $7.9 million compared to $7.3 million during the same period in 2003, an increase of 8%.  Diluted earnings per Class A Common Share increased 5% over the second quarter of 2003 to $0.42. Return on average assets (ROA) and return on average equity (ROE) were 1.42% and 17.33% for the quarter. “These results reflect our ongoing efforts to grow revenue while keeping a tight rein on expenses and maintaining the sound credit quality of our loan portfolio.  The Company was able to share the fruits of its success with its shareholders during the second quarter by increasing its quarterly cash dividend 23%,” Trager further stated.

 

Republic’s sound asset quality improved further through the second quarter of 2004 resulting in a lower provision for loan losses compared to the same period in 2003. Positive trends of delinquencies and non-performing loans continued in the Company’s traditional loan portfolio.  Republic’s percentage of delinquent loans to total loans was a favorable 0.76% at June 30, 2004 compared to 0.82% at December 31, 2003.  In addition, the Company’s percentage of non-performing loans to total loans was 0.79% at June 30, 2004 compared to 0.82% at December 31, 2003.  “At Republic, we believe asset quality is a critical barometer in measuring a Bank’s long-term success.  We are extremely proud of our track record of low loan losses and remain dedicated to maintaining our strict underwriting standards,” commented David Vest, Executive Vice President & Chief Lending Officer of Republic.

 

Net interest income increased $606,000 during the second quarter of 2004 compared to the second quarter of 2003.  The increase was primarily due to an increase in loans outstanding, most notably in the residential real estate and deferred deposit portfolios.  “Increased net interest income was a component in replacing the earnings from the decline of our record mortgage banking income in 2003.  Further increasing net interest income through growth in our loan portfolio remains a key focus for the remainder of 2004.  We remain particularly optimistic about our home equity products on the retail banking side of our business, while potential commercial loan prospects also continue to post steady growth,” Vest further commented.

 

 

The Company’s retail banking center network continued to have great success attracting new relationships during the first half of 2004.  Home equity loans grew $38 million during the first half of the year, while the Company also added $38 million in residential real estate loans.  “These strong growth numbers in retail banking are another indication of the success of our secondary marketing initiative during the past three years.  Unlike many other institutions, which sold their customers’ fixed rate loans into the secondary market and never saw the customer again, Republic capitalized on the low rate environment to establish long-term banking relationships through the cross-sale of its various products such as its home equity line of credit.  At Republic, we do not solicit one-time customers, we seek long-term clients and that is why we believe we are the bank of choice in our many markets across Kentucky and Indiana,” commented Steve Trager.

 

Non interest income activities, exclusive of mortgage banking income, also continued to support the Company’s strong operating results in 2004.   “With our expanded banking center network, we opened over 24,000 new checking accounts in the last 12 months.  These new clients helped pave the way for a 31% increase in service charges on deposit accounts during the second quarter of 2004,” commented Scott Trager, President of Republic Bank & Trust Company.  As a result of its continued success in retail banking, the Company announced plans during the quarter to open its 34th banking center in Owensboro, KY, which is scheduled to open in the first quarter of 2005.

 

The ‘Cash Management’ line of business continued to attract new client relationships during the second quarter as well, through promotion of the ‘Premier First’ money market and ‘Free Business Checking’ products. Premier First accounts alone grew $19 million during the second quarter of 2004.  Business on-line banking, lock-box services and the ‘$999’ commercial real estate loan product continue to be avenues for growth, as these products compete favorably within Republic’s markets. “Attracting low cost deposits is a major focus for every associate at Republic.  Our commitment to technology coupled with our premier client service places us at the pinnacle of servicing business clients within our markets,” stated Jeff Norton, Senior Vice President of Commercial Banking for Republic Bank & Trust Company.

 

“We continue to focus our efforts on profitably growing the balance sheet through our strong loan origination and deposit gathering functions, while at the same time complementing these basic banking strategies with non-traditional business lines.  Our strong results exemplify the merits of our business model and strategic planning.  We remain steadfast to maintaining the highest standards - employing a corporate culture that is responsive to our community, supportive of our associates and accountable to our shareholders.  We remain grateful for the continued support of our clients and our shareholders,” Steve Trager concluded.

 

Republic Bancorp, Inc., has 33 banking centers, and is the parent company of: Republic Bank & Trust Company with 31 banking centers in 8 Kentucky communities - Bowling Green, Elizabethtown, Frankfort, Georgetown, Lexington, Louisville, Owensboro and Shelbyville; Republic Bank & Trust Company of Indiana with 2 banking centers in Jeffersonville and New Albany; and Refunds Now, a nationwide tax refund loan and check provider.  Republic offers internet banking at www.republicbank.com. Republic has over $2 billion in assets and $1 billion in trust assets under custody and management. Republic’s Class A Common Stock is listed under the symbol ‘RBCAA’ on the NASDAQ National Market System.

 

Statements in this press release relating to Republic’s plans, objectives, or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations. Republic’s actual strategies and results in future periods may differ materially

 

 

from those currently expected due to various risks and uncertainties, including those discussed in Republic’s 2003 Form 10-K and subsequent 10-Qs filed with the Securities and Exchange Commission.

 

 

REPUBLIC BANCORP, INC.

CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (unaudited)

(in thousands)

 

Statements of Financial Condition

 

 

 

June 30, 2004

 

December 31, 2003

 

June 30, 2003

 

Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

71,115

 

$

60,876

 

$

62,359

 

Securities available for sale

 

270,541

 

295,520

 

214,875

 

Securities to be held to maturity

 

102,304

 

115,411

 

68,019

 

Mortgage loans held for sale

 

8,218

 

13,732

 

32,555

 

Loans

 

1,689,074

 

1,581,952

 

1,416,765

 

Allowance for loan losses

 

(13,530

)

(13,959

)

(12,668

)

Federal Home Loan Bank stock

 

19,909

 

19,148

 

18,768

 

Other assets

 

57,025

 

55,091

 

47,940

 

Total Assets

 

$

2,204,656

 

$

2,127,771

 

$

1,848,613

 

 

 

 

 

 

 

 

 

Liabilities and Equity:

 

 

 

 

 

 

 

Non interest-bearing deposits

 

$

230,593

 

$

193,321

 

$

212,122

 

Interest-bearing deposits

 

1,067,751

 

1,103,791

 

938,316

 

Total deposits

 

1,298,344

 

1,297,112

 

1,150,438

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase and other short-term borrowings

 

279,545

 

220,040

 

148,290

 

Federal Home Loan Bank borrowings

 

420,160

 

420,178

 

361,688

 

Other liabilities

 

22,350

 

21,062

 

20,401

 

Total liabilities

 

2,020,399

 

1,958,392

 

1,680,817

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

184,257

 

169,379

 

167,796

 

Total Liabilities and Equity

 

$

2,204,656

 

$

2,127,771

 

$

1,848,613

 

 

Average Balances

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

Federal funds sold

 

$

27,492

 

$

16,055

 

$

56,809

 

$

27,882

 

Investments, including FHLB Stock

 

404,198

 

307,810

 

406,479

 

311,827

 

Loans, including loans held for sale

 

1,677,826

 

1,439,848

 

1,663,005

 

1,419,568

 

Total earning assets

 

2,109,516

 

1,763,713

 

2,126,293

 

1,759,277

 

Total assets

 

2,209,539

 

1,839,778

 

2,228,568

 

1,832,486

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity:

 

 

 

 

 

 

 

 

 

Non interest-bearing deposits

 

$

235,678

 

$

181,602

 

$

232,441

 

$

194,175

 

Interest-bearing deposits

 

1,059,617

 

951,315

 

1,083,076

 

942,955

 

Repurchase agreements and other short-term borrowings

 

285,059

 

164,703

 

285,631

 

181,455

 

Federal Home Loan Bank borrowings

 

420,996

 

345,068

 

424,572

 

325,233

 

Total interest-bearing liabilities

 

1,765,672

 

1,461,086

 

1,793,279

 

1,449,643

 

Stockholders’ equity

 

181,175

 

165,420

 

177,096

 

162,821

 

 

 

Income Statement Data

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

 

 

Total interest income(1)

 

$

29,767

 

$

28,399

 

$

67,577

 

$

61,129

 

Total interest expense

 

9,576

 

8,814

 

19,613

 

17,766

 

Net interest income

 

20,191

 

19,585

 

47,964

 

43,363

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

(447

)

1,854

 

1,602

 

6,195

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

3,353

 

2,567

 

6,324

 

4,744

 

Electronic refund check fees

 

786

 

693

 

5,192

 

3,862

 

Mortgage banking income

 

864

 

4,218

 

1,542

 

9,150

 

Other

 

1,452

 

1,509

 

2,529

 

2,965

 

Total non interest income

 

6,455

 

8,987

 

15,587

 

20,721

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

8,093

 

8,063

 

17,866

 

16,480

 

Occupancy and equipment, net

 

3,361

 

2,976

 

7,022

 

5,802

 

Communication and transportation

 

615

 

570

 

1,353

 

1,430

 

Marketing and development

 

552

 

733

 

1,188

 

1,572

 

Supplies

 

188

 

326

 

649

 

732

 

Other

 

2,337

 

2,791

 

5,045

 

5,276

 

Total non interest expenses

 

15,146

 

15,459

 

33,123

 

31,292

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

11,947

 

11,259

 

28,826

 

26,597

 

Income tax expense

 

4,096

 

3,992

 

9,920

 

9,379

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

7,851

 

$

7,267

 

$

18,906

 

$

17,218

 

 

(1)   The amount of fees on loans in total interest income was approximately $3.6 million and $3.1 million for the quarters ended June 30, 2004 and 2003, and $15.3 million and $10.6 million for six months ended June 30, 2004 and 2003.

 

 

REPUBLIC BANCORP, INC.

CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (unaudited)

(dollars in thousands, except per share data)

 

 

 

As of and for the
Three Months Ended
June 30,

 

As of and for the
Six Months Ended
June 30,

 

 

 

2004

 

2003

 

2004

 

2003

 

Per Share Data(2):

 

 

 

 

 

 

 

 

 

Basic average shares outstanding

 

17,918

 

17,795

 

17,903

 

17,747

 

Diluted average shares outstanding

 

18,544

 

18,178

 

18,536

 

18,053

 

End of period shares outstanding:

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

15,884

 

15,737

 

15,884

 

15,737

 

Class B Common Stock

 

2,054

 

2,066

 

2,054

 

2,066

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

10.27

 

$

9.43

 

$

10.27

 

$

9.43

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per Class A Common Share

 

0.44

 

0.41

 

1.06

 

0.97

 

Basic earnings per Class B Common Share

 

0.43

 

0.40

 

1.04

 

0.96

 

Diluted earnings per Class A Common Share

 

0.42

 

0.40

 

1.02

 

0.95

 

Diluted earnings per Class B Common Share

 

0.42

 

0.39

 

1.01

 

0.94

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share:

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

0.077

 

0.063

 

0.140

 

0.115

 

Class B Common Stock

 

0.070

 

0.057

 

0.127

 

0.105

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

Return on average assets (ROA)

 

1.42

%

1.58

%

1.70

%

1.88

%

Return on average equity (ROE)

 

17.33

 

17.57

 

21.35

 

21.15

 

Yield on average earning assets

 

5.64

 

6.44

 

6.36

 

6.95

 

Cost of interest-bearing liabilities

 

2.17

 

2.41

 

2.19

 

2.45

 

Net interest spread

 

3.47

 

4.03

 

4.17

 

4.50

 

Net interest margin

 

3.83

 

4.44

 

4.51

 

4.93

 

Efficiency ratio(3)

 

57

 

54

 

52

 

49

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

Loans on non-accrual status

 

 

 

 

 

9,274

 

9,641

 

Loans past due 90 days or more

 

 

 

 

 

4,007

 

1,187

 

Total non-performing loans

 

 

 

 

 

13,281

 

10,828

 

Other real estate owned

 

 

 

 

 

39

 

443

 

Total non-performing assets

 

 

 

 

 

13,320

 

11,271

 

Non-performing loans to total loans

 

 

 

 

 

0.79

%

0.76

%

Non-performing assets to total assets

 

 

 

 

 

0.60

 

0.61

 

Allowance for loan losses to total loans

 

 

 

 

 

0.80

 

0.89

 

Allowance for loan losses to non-performing loans

 

 

 

 

 

102

 

117

 

Net loan charge-offs to average loans

 

 

 

 

 

0.24

 

0.52

 

Delinquent loans to total loans(4)

 

 

 

 

 

0.76

 

0.96

 

 

 

 

 

 

 

 

 

 

 

Other Key Data:

 

 

 

 

 

 

 

 

 

End of period full-time equivalent employees

 

 

 

 

 

583

 

616

 

Number of banking centers

 

 

 

 

 

33

 

28

 

 

(2)   Prior period amounts have been restated to reflect the 5% stock dividend declared in the first quarter of 2004.

(3)   Equals total non-interest expense divided by the sum of net interest income and non interest income.

(4)   Equals total loans over 30 days past due divided by total loans.