Banking Center Expansion Paves the Way for 8% Increase in Second Quarter Net Income at Republic Bancorp.LOUISVILLE Louisville (l  `ēvĭl), city (1990 pop. 269,063), seat of Jefferson co., NW Ky., at the Falls of the Ohio; inc. 1780. , Ky. -- Republic Bancorp, Inc. ("Republic" or
the "Company") (NASDAQ NASDAQin full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :RBCAA), the holding company for Republic Bank & Trust Company and Republic Bank & Trust Company of Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , 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 at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. during the second quarter of 2003," commented Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Trager, President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. 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 di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings per Class A Common Share increased 5% over the second quarter of 2003 to $0.42. Return on average assets (ROA ROA See: Return on assets ROA See: Right of accumulation ROA See return on assets (ROA). ) and return on average equity (ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. ) 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 A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. continued in the Company's traditional loan portfolio. Republic's percentage of delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. loans to total loans was a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 0.76% at June June: see month. 30, 2004 compared to 0.82% at December December: see month. 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 Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. success. We are extremely proud of our track record of low loan losses and remain dedicated to maintaining our strict underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. 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 op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op 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 Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. 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 one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. customers, we seek long-term clients and that is why we believe we are the bank of choice in our many markets across Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. and Indiana," commented Steve Trager. Non interest income Non-interest income is derived from the execution/processing business, the advisory business and any principal business that does not appear on the balance sheet. Financial institutions that wish to maximize execution/processing income depend on volume and efficiency for profits. 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 PAVE Cardiology A clinical trial–Post AV Node Ablation Evaluation 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 Owensboro, city (1990 pop. 53,549), seat of Daviess co., W Ky., on the Ohio River; settled c.1800, inc. as a city 1866. It is an important tobacco market and a shipping point for a farm and oil region. , 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 fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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 pinnacle (pĭn`ĭkəl), minor architectural motif of vertical tapering shape, usually crowning a pier, buttress, or gable. Although sometimes it appears in Renaissance design, as in the Certosa di Pavia, it is almost exclusively a medieval of servicing business clients within our markets," stated Jeff Norton Jeffrey Thomas Norton (born November 25 1965, Arlington, Massachusetts) is a retired American ice hockey defenceman. He grew up in the town of Acton, Massachusetts , 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 The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and deposit gathering functions, while at the same time complementing these basic banking strategies with non-traditional business lines. Our strong results exemplify ex·em·pli·fy tr.v. ex·em·pli·fied, ex·em·pli·fy·ing, ex·em·pli·fies 1. a. To illustrate by example: exemplify an argument. b. the merits of our business model and strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. . 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 Bowling Green. 1 City (1990 pop. 40,641), seat of Warren co., S Ky., on the Barren River; inc. 1812. It is a shipping and marketing center for an area producing tobacco, corn, livestock, and dairy items. , Elizabethtown Elizabethtown, city (1990 pop. 18,167), seat of Hardin co., central Ky.; inc. 1797. Originally developed as a trade center for agriculture, whiskey, and tobacco, the city now manufactures a variety of products. , Frankfort, Georgetown, Lexington, Louisville, Owensboro and Shelbyville; Republic Bank & Trust Company of Indiana with 2 banking centers in Jeffersonville and New Albany New Albany, city (1990 pop. 36,322), seat of Floyd co., S Ind., near the falls of the Ohio River opposite Louisville, Ky.; inc. 1819. The city was a shipbuilding center in the 19th cent., and the riverboats Robert E. Lee and Eclipse were built there. ; and Refunds Now, a nationwide tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Republic's plans, objectives, or future performance are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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, December 31, June 30,
2004 2003 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 Six Months Ended
June 30, 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
REPUBLIC BANCORP, INC.
CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (unaudited)
(continued) (in thousands)
Income Statement Data
Three Months Ended Six Months Ended
June 30, 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)
(continued) (dollars in thousands, except per share data)
As of and for the As of and for the
Three Months Ended Six Months Ended
June 30, 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.
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