Exhibit 99.1

Press Release dated July 10, 2003

 

Republic Bancorp, Inc.’s Second Quarter Earnings Soar 45%

 

 

July 10, 2003

 

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 45% over the second quarter of 2002.  “We are excited about achieving record second quarter earnings, especially during this period of economic uncertainty.  Several business lines produced strong results during the quarter and our asset quality continued to compare favorably with the industry as non-performing loans remained low,” commented Steve Trager, President and CEO of Republic.

 

Net income for the second quarter of 2003 totaled $7.3 million compared to $5.0 million during the same period in 2002, while assets remained steady at $1.8 billion.  Diluted earnings per Class A Common Shares increased 45% over the second quarter of 2002 to $0.42.  Return on average assets (ROA) and return on average equity (ROE) were 1.58% and 17.57% for the quarter, compared to 1.25% and 14.19% during the second quarter of 2002. The Company’s ratio of delinquent loans to total loans was 0.96%, while the ratio of non-performing loans to total loans was 0.80% at the end of the second quarter of 2003.

 

Net interest income increased 31% during the second quarter of 2003, compared to the same period in 2002, primarily due to an increase in loans outstanding.  Steve Trager further commented, “Loan growth continued at a healthy pace during the second quarter of 2003 – quite an accomplishment in the age of vast refinancing.  This increase was funded by growth in our lower cost deposit base and ever cheaper term Federal Home Loan Bank advances.  We believe our balance sheet remains well positioned, harmonizing increased shareholder value with interest rate risk, to provide a solid foundation for continued success in 2003.”

 

Non-interest income activities continued to support the Company’s strong operating results in the second quarter of 2003.  Solid growth from non-interest income sources, bolstered

 

 

by a strong mortgage banking function and the successful completion of the 2003 tax season at Refunds Now®, were leading contributors to the Company’s success during the second quarter of 2003.  Non-interest income increased $4.6 million during the quarter compared to the second quarter of 2002.  This was largely attributable to the sale of over $270 million in fixed-rate secondary market loans during the period which contributed $4.7 million in gains on sale of loans. Executive Vice President and Chief Lending Officer of Republic Bank & Trust Company, David Vest commented, “We believe our success is due to many factors, but in particular we are proud of our $999 closing cost product, which is well known in our markets.  This brand recognition has been, and will continue to be, an important asset of Republic.” The growing deposit transaction account base is a focus of Republic’s effort to increase lower-cost deposits and has also contributed to a 36% increase in deposit fee income during the second quarter of 2003 compared to the same period in 2002.

 

From a technology standpoint, many new and existing Republic clients are electing to receive their bank statements electronically – reducing the cost of providing monthly paper statements. As was experienced in the first quarter of 2003, the ‘Cash Management’ line of business continued to attract new client relationships during the second quarter through promotion of the ‘Premier First’ money market and ‘Free Business Checking’ products. The business on-line banking, lock-box services, and the ‘$999’ commercial real estate loan product continue to be focuses for growth as they compete favorably within Republic’s markets.  Republic also believes its ‘live person’ call center, one of the differentiating factors compared to its large out of state competitors, has assisted by not only providing quality customer service but also by expanding current client relationships.

 

“We are also proud to be publicly recognized for our outstanding performance and tireless dedication.  During the second quarter of 2003, we were recognized by a leading Louisville publication, Business First, as the top mortgage lending producer in the metropolitan Louisville area during 2002.  Further, receipt of the Southern Ohio and Kentucky Ernst & Young Services Entrepreneur of the Year Award in June 2003 is representative of the entrepreneurial spirit of every associate at Republic.  This acknowledgement is one result of our unwavering adherence to improving the bottom-line and our commitment to creating an environment where our associates can realize their potential and excel in serving our clients,” stated Steve Trager.

 

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Steve Trager continued by saying, “We are excited about our accomplishments during the first six months of 2003 but remain steadfast in focusing on profitability and growth during the remainder of the year.  During the second quarter of this year, Republic Bank & Trust Company opened its 27th and 28th banking centers in Louisville in the Jeffersontown community and at Jewish Hospital, bringing the total of new banking centers opened during 2003 to three.  Republic has plans for at least six more banking centers by the end of the year.  The dramatic expansion of our footprint provides more opportunities for us to serve a growing customer base.  With this exciting growth, we will never lose sight of the hard work and dedication to customer service that got us where we are today.”

 

Neighborhood Banking.  Republic Bancorp, Inc., has 28 banking centers, and is the parent company of: Republic Bank & Trust Company with 26 banking centers in 7 Kentucky communities - Bowling Green, Elizabethtown, Frankfort, Lexington, Louisville, Owensboro, and Shelbyville, with three additional banking centers in Louisville and one banking center in Lexington under construction; Republic Bank & Trust Company of Indiana with 2 banking centers in Clarksville and New Albany, Indiana; and Refunds Now, a nationwide tax refund loan and check provider.  Republic Bank offers internet banking at www.republicbank.com. Republic Bank was the recipient of the 2002 Community Partnership Award from the Federal Home Loan Bank of Cincinnati. Republic Bancorp, Inc. has $1.8 billion in assets and $1 billion in trust assets under custody and management. Republic Bancorp, Inc, headquartered in Louisville, KY, is traded on the NASDAQ (RBCAA).

 

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 2002 Form 10-K and subsequent 10-Qs filed with the Securities and Exchange Commission.

 

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REPUBLIC BANCORP, INC.

CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (unaudited)

(in thousands, except per share data)

 

Statement of Financial Condition

 

 

 

June 30, 2003

 

December 31, 2002

 

June 30, 2002

 

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

62,359

 

$

39,853

 

$

46,475

 

Securities available for sale

 

214,875

 

203,047

 

284,896

 

Securities held to maturity

 

68,019

 

85,412

 

53,707

 

Mortgage loans held for sale

 

32,555

 

65,695

 

16,357

 

Loans

 

1,416,459

 

1,310,063

 

1,164,338

 

Allowance for loan losses

 

(12,362

)

(10,148

)

(9,165

)

FHLB stock

 

18,768

 

18,324

 

17,897

 

Other assets

 

47,940

 

40,460

 

34,769

 

Total Assets

 

$

1,848,613

 

$

1,752,706

 

$

1,609,274

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

212,122

 

$

175,460

 

$

152,354

 

Interest bearing deposits

 

938,316

 

864,730

 

822,982

 

Total deposits

 

1,150,438

 

1,040,190

 

975,336

 

 

 

 

 

 

 

 

 

Repurchase agreements and other short-term borrowings

 

148,290

 

224,929

 

166,695

 

Other borrowed funds

 

361,688

 

319,299

 

308,206

 

Other liabilities

 

20,401

 

17,492

 

16,151

 

Total liabilities

 

1,680,817

 

1,601,910

 

1,466,388

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

167,796

 

150,796

 

142,886

 

Total Liabilities and Equity

 

$

1,848,613

 

$

1,752,706

 

$

1,609,274

 

 

Average Balances

 

 

 

Second quarter Ended June 30,

 

Six months Ended June 30,

 

 

 

2003

 

2002

 

2003

 

2002

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Fed funds sold and other

 

$

16,055

 

$

56,389

 

$

27,882

 

$

65,339

 

Investments, including FHLB Stock

 

307,810

 

323,441

 

311,827

 

304,666

 

Loans, including loans held for sale

 

1,439,848

 

1,168,235

 

1,419,568

 

1,185,865

 

Total earning assets

 

1,763,713

 

1,548,065

 

1,759,277

 

1,555,870

 

Total assets

 

1,839,778

 

1,604,020

 

1,832,486

 

1,612,019

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

181,602

 

$

141,507

 

$

194,175

 

$

150,722

 

Interest bearing deposits

 

951,315

 

792,393

 

942,955

 

771,247

 

Repurchase agreements and other short-term borrowings

 

164,703

 

226,319

 

181,455

 

249,556

 

FHLB borrowings

 

345,068

 

283,039

 

325,233

 

286,090

 

Total interest bearing liabilities

 

1,461,086

 

1,301,751

 

1,449,643

 

1,306,893

 

Stockholders’ equity

 

165,420

 

141,125

 

162,821

 

135,862

 

 

4

 

 

 

Second Quarter Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2003

 

2002

 

2003

 

2002

 

Income Statement Data

 

 

 

 

 

 

 

 

 

Total interest income (1)

 

$

28,399

 

$

25,627

 

$

61,129

 

$

54,956

 

Total interest expense

 

8,814

 

10,662

 

17,766

 

21,381

 

Net interest income

 

19,585

 

14,965

 

43,363

 

33,575

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

1,854

 

(1,473

)

6,195

 

1,224

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

2,726

 

2,011

 

5,046

 

3,828

 

Electronic refund check fees

 

693

 

348

 

3,862

 

3,141

 

Title insurance commissions

 

666

 

406

 

1,339

 

891

 

Net gain on sale of loans

 

4,682

 

942

 

10,111

 

2,888

 

Other

 

220

 

632

 

363

 

1,199

 

Total non-interest income

 

8,987

 

4,339

 

20,721

 

11,947

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

7,979

 

7,284

 

16,316

 

14,789

 

Occupancy and equipment

 

2,976

 

2,371

 

5,802

 

4,659

 

Communication and transportation

 

570

 

601

 

1,430

 

1,237

 

Marketing and development

 

739

 

667

 

1,588

 

1,241

 

Bankshares tax

 

480

 

436

 

976

 

854

 

Supplies

 

326

 

243

 

732

 

508

 

Other

 

2,389

 

1,406

 

4,448

 

3,030

 

Total non-interest expense

 

15,459

 

13,008

 

31,292

 

26,318

 

 

 

 

 

 

 

 

 

 

 

Net income before taxes

 

11,259

 

7,769

 

26,597

 

17,980

 

Income taxes

 

3,992

 

2,762

 

9,379

 

6,314

 

Net income

 

$

7,267

 

$

5,007

 

$

17,218

 

$

11,666

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

Basic average shares outstanding

 

16,947

 

16,764

 

16,902

 

16,448

 

Diluted average shares outstanding

 

17,312

 

17,035

 

17,193

 

17,115

 

Book value per share (2)

 

$

9.73

 

$

8.40

 

$

9.73

 

$

8.40

 

Basic earnings per share Class A common

 

0.43

 

0.30

 

1.02

 

0.71

 

Basic earnings per share Class B common

 

0.42

 

0.29

 

1.01

 

0.70

 

Diluted earnings per share Class A common

 

0.42

 

0.29

 

1.00

 

0.69

 

Diluted earnings per share Class B common

 

0.41

 

0.29

 

0.99

 

0.68

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

 

 

 

 

 

 

 

 

Class A common

 

0.066

 

0.055

 

0.121

 

0.099

 

Class B common

 

0.060

 

0.050

 

0.110

 

0.090

 

 

(1)           The amount of fees on loans in total interest income was approximately $3,081 and $601 for the quarters ended June 30, 2003 and 2002, and $10,645 and $4,498 for six months ended June 30, 2003 and 2002.

(2)           Equals total stockholders’ equity, exclusive of accumulated other comprehensive income, divided by total Class A and Class B common shares outstanding.

 

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Second quarter Ended
June 30,

 

Six months Ended
June 30,

 

 

 

2003

 

2002

 

2003

 

2002

 

Performance ratios

 

 

 

 

 

 

 

 

 

Return on average assets (ROA)

 

1.58

%

1.25

%

1.88

%

1.45

%

Return on average stockholders’ equity (ROE)

 

17.57

 

14.19

 

21.15

 

17.17

 

Yield on average earning assets

 

6.44

 

6.63

 

6.95

 

7.06

 

Cost of interest bearing liabilities

 

2.41

 

3.28

 

2.45

 

3.27

 

Net interest spread

 

4.03

 

3.35

 

4.50

 

3.79

 

Net interest margin

 

4.44

 

3.87

 

4.93

 

4.32

 

Efficiency ratio (3)

 

54

 

67

 

49

 

58

 

 

 

 

 

 

 

 

 

 

 

Asset quality ratios

 

 

 

 

 

 

 

 

 

Loans on non-accrual status

 

 

 

 

 

9,641

 

7,447

 

Loans past due 90 days or more

 

 

 

 

 

1,187

 

2,368

 

Total non-performing loans

 

 

 

 

 

10,828

 

9,815

 

Other real estate owned

 

 

 

 

 

443

 

482

 

Total non-performing assets

 

 

 

 

 

11,271

 

10,297

 

Non-performing loans to total loans

 

 

 

 

 

0.76

%

0.84

%

Non-performing assets to total loans

 

 

 

 

 

0.80

 

0.88

 

Net loan charge-offs to average loans

 

 

 

 

 

0.52

 

0.11

 

Allowance for loan losses to total loans

 

 

 

 

 

0.89

 

0.79

 

Allowance for loan losses to non-performing loans

 

 

 

 

 

117

 

93

 

Delinquent loans to total loans (4)

 

 

 

 

 

0.96

 

1.18

 

 

 

 

 

 

 

 

 

 

 

Other key data

 

 

 

 

 

 

 

 

 

End-of-period full-time equivalent employees

 

 

 

 

 

616

 

545

 

Number of bank offices

 

 

 

 

 

28

 

23

 

 

(3)           Equals 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, excluding mortgage loans held for sale.

 

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