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8-K - REPUBLIC BANCORP, INC. 8-K - REPUBLIC BANCORP INC /KY/ | a6471623.htm |
Exhibit 99.1
Net Income for the First Nine Months of 2010 increased $22.0 Million Over the First Nine Months of 2009 to $60.3 Million; Republic Posts Net Income of $7.3 Million for the Third Quarter of 2010, a 29% Increase Over the Third Quarter of 2009
LOUISVILLE, Ky.--(BUSINESS WIRE)--October 20, 2010--Republic Bancorp, Inc. is pleased to report the Company achieved net income of $60.3 million for the first nine months of 2010, a $22.0 million, or 58%, increase over the first nine months of 2009. Diluted Earnings per Class A Common Share increased 57% for the first nine months of 2010 to $2.89. Return on average assets (“ROA”) and return on average equity (“ROE”) were 2.25% and 22.50% for the nine months ended September 30, 2010. Net income was $7.3 million for the third quarter of 2010, a $1.6 million increase over the third quarter of 2009. Diluted Earnings per Class A Common Share increased to $0.35 for the third quarter of 2010.
Steve Trager, Republic’s President & CEO noted, “We are excited that we continue to produce solid results in a difficult environment for banks. In August, we were once again recognized for our continued success with a top-10 national ranking in the American Banker’s first quarter 2010 ranking of the nation’s most efficient bank holding companies. This was the fourth recognition that Republic has received during 2010 as one of the highest performing financial institutions in the United States. As with any business endeavor, our success is the result of the cumulative effort of our 730+ associates that care for our existing clients each and every day while diligently working to attract new ones.”
Republic Bancorp, Inc. (“Republic” or the “Company”) (NASDAQ: RBCAA), headquartered in Louisville, Kentucky, is the holding company for Republic Bank & Trust Company and Republic Bank.
The following chart highlights Republic’s results of operations for the third quarter and first nine months of 2010 compared to the same periods in 2009:
YTD | YTD | % | QTR | QTR | % | |||||||||||
(dollars in thousands, except per share data) | 09/30/10 | 09/30/09 | Increase | 09/30/10 | 09/30/09 | Increase | ||||||||||
Net Income | $ | 60,335 | $ | 38,287 | 58% | $ | 7,310 | $ | 5,661 | 29% | ||||||
Diluted Earnings per Class A Share | $ | 2.89 | $ | 1.84 | 57% | $ | 0.35 | $ | 0.27 | 30% | ||||||
Return on Average Assets ("ROA") | 2.25% | 1.47% | 53% | 0.92% | 0.74% | 24% | ||||||||||
Return on Average Equity ("ROE") | 22.50% | 16.55% | 36% | 7.92% | 7.11% | 11% | ||||||||||
With the third quarter’s solid results, the Company continues to add to its already strong capital levels. Since December 31, 2008, or over the last seven quarters, capital has increased by $95 million to $371 million as of September 30, 2010. Dividends declared by Republic over that same 21-month time period were $19 million. In addition to the accolades that the Company has received in 2010 as a top performing bank in the United States, Republic, with a 5-year dividend growth rate of nearly 14% and a 12-month trailing dividend yield of 2.9%, was also recently recognized as a top dividend paying Company by the popular financial website, The Motley Fool.
Results of Operations for the Third Quarter of 2010 Compared to the Third Quarter of 2009
Traditional Banking and Mortgage Banking (collectively “Core Banking”)
Net income from Core Banking was $6.3 million for the third quarter of 2010, a $74,000 increase compared to the third quarter of 2009. Net income for the quarter was positively impacted by a reduction in provision for loan losses and lower overhead expenses, which helped to offset a decrease in net interest income. As with previous quarters, the Company remained conservative in its lending and investment strategies while continuing its focus on core deposit growth.
While Republic’s Core Banking net interest margin was a healthy 3.49% for the third quarter of 2010, net interest income declined by $1.3 million, or 5%, during the quarter. “Net interest income continued to be negatively impacted by historically low long-term interest rates combined with soft consumer demand for adjustable rate mortgage products held within the Company’s portfolio. Combining these factors with our on-going conservative investing and lending strategies, we expect some moderation of our net interest margin will likely continue in the near-term. With a strong capital base and continuing solid earnings results, we expect to maintain our conservative asset deployment strategies for the foreseeable future, while selectively seeking opportunities to grow the Company’s asset base with quality loan and investment products,” further noted Trager.
Core Banking non-interest income declined by 3% during the third quarter of 2010 to $7.5 million, with the primary decrease occurring in the “service charges on deposits” category. Approximately $652,000 of the decline in service charges on deposits was the result of the discontinuation of the Company’s Currency Connection product, which was marketed to clients on a national basis through various third parties. The Company discontinued the product because the future profitability no longer met management’s required rate of return due to a substantial anticipated increase in the cost of future product delivery. Partially offsetting the decline in service charges on deposits during the third quarter was an $850,000 decrease in Other-Than-Temporary-Impairment (“OTTI”) charges associated with the Company’s small private label security portfolio.
Core Banking non-interest expenses declined $613,000, or 3%, for the third quarter of 2010 to $22.8 million. The primary driver of the decline in overhead expenses for the quarter was a decrease in third party costs associated with the Company’s debit card product and a reduction in FDIC insurance expense. The decrease in debit card costs was the direct result of a contract with a new third party provider, which substantially reduced, among other things, usage fees incurred by the Company for its debit card customer base. FDIC Insurance expense decreased $413,000 during the third quarter of 2010.
Core Banking provision for loan losses for the third quarter of 2010 was $1.7 million, a $583,000 decrease from the third quarter of 2009. Non-performing loans favorably declined nearly $6.8 million from December 31, 2009 and $1.3 million from June 30, 2010 to $36.4 million at September 30, 2010. The Traditional Bank’s delinquency ratio improved 29 basis points from year end and 3 basis points from June 30, 2010 to 1.69% at September 30, 2010. Overall, the Company’s allowance for loan losses to total loans was 1.14% as of September 30, 2010 compared to 1.01% at December 31, 2009. “Our current credit quality measures remain in the top echelon of our peer group, nationally, and continue to reflect our sound lending practices. We remain encouraged by the modest improvements the Company has experienced in trends within select credit quality measurements during the first nine months of 2010,” further commented Trager.
Tax Refund Solutions (“TRS”)
TRS, which derives substantially all of its revenues during the first and second quarters of the year, historically operates at a net loss during the third and fourth quarters of the year as the Company prepares for the upcoming tax season. During the third quarter of 2010, however, TRS posted net income of $967,000 compared to a net loss of $608,000 for the third quarter of 2009. The large positive swing in earnings was the result of the Company’s revised Refund Anticipation Loan (“RAL”) underwriting standards for 2010, which continued to pay dividends with better than expected payments received during the quarter for RALs previously charged off during the year. In total, TRS recorded recoveries of previously charged-off RALs of $3.5 million for the third quarter of 2010 compared to recoveries of $882,000 during the third quarter of 2009. As a result of these recoveries, TRS’ RAL loss rate improved to approximately 0.37% of total RALs originated as of September 30, 2010.
Entering the final quarter of 2010, the Company will begin accumulating funds for its first quarter 2011 tax season. The Company expects to employ a similar on-balance sheet funding strategy as it did during the first quarter 2010 tax season. As a result, Republic expects to experience a nominal decline in its total Company net interest income and net interest margin during the fourth quarter of 2010 compared to the third quarter of 2010, as it begins to accumulate additional cash. The final impact to the Company’s net interest income and net interest margin for the fourth quarter of 2010 cannot yet be determined because the Company has not finalized its strategy regarding the amount and the timing of its funding needs for the first quarter 2011 tax season.
CONCLUSION
“With continued uncertainty in a rapidly changing economic, regulatory and political landscape, Republic remains a safe and secure partner for its client base and a solid long-term investment opportunity for its shareholders. Our slogan, ‘We were here for you yesterday. We are here for you today. We will be here for you tomorrow,®’ has never been more accurate than it is today. Our capital base and credit quality ratios are among the best in the country. We have produced solid results over our many years by not chasing the ‘can’t miss’ products of the time, but instead remaining true to our aspirations of maintaining the highest credit quality in the industry while providing superior client service that is second to none. We believe these philosophies will continue to pay dividends for our clients and our shareholders for many years to come,” concluded Steve Trager.
Republic Bancorp, Inc. (Republic) has 44 banking centers and is the parent company of Republic Bank & Trust Company with 35 banking centers in 13 Kentucky communities - Bowling Green, Covington, Crestwood, Elizabethtown, Florence, Frankfort, Georgetown, Independence, Lexington, Louisville, Owensboro, Shelbyville and Shepherdsville and three banking centers in southern Indiana – Floyds Knobs, Jeffersonville and New Albany. Republic Bank has banking centers in Hudson, Palm Harbor, Port Richey, New Port Richey and Temple Terrace, Florida as well as Cincinnati, Ohio. Republic operates Tax Refund Solutions, a nationwide tax refund loan and check provider. Republic offers internet banking at www.republicbank.com. Republic has $3.0 billion in assets and $1 billion in trust assets under custody and management. Republic is headquartered in Louisville, Kentucky, and Republic's Class A Common Stock is listed under the symbol 'RBCAA' on the NASDAQ Global Select Market.
We were here for you yesterday. We are here for you today. We will be here for you tomorrow. ®
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 2009 Form 10-K and subsequent 10-Qs filed with the Securities and Exchange Commission.
Republic Bancorp, Inc. Financial Information | ||||||||||||
Third Quarter 2010 Earnings Release | ||||||||||||
(all amounts other than per share amounts and number of employees and number of banking centers are expressed in thousands unless otherwise noted) |
||||||||||||
Balance Sheet Data | ||||||||||||
Sept. 30, 2010 | Dec. 31, 2009 | Sept. 30, 2009 | ||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | 171,024 | $ | 1,068,179 | $ | 138,906 | ||||||
Investment securities | 600,834 | 467,235 | 498,329 | |||||||||
Mortgage loans held for sale | 5,783 | 5,445 | 8,597 | |||||||||
Loans | 2,157,330 | 2,268,232 | 2,292,913 | |||||||||
Allowance for loan losses | (24,566 | ) | (22,879 | ) | (19,793 | ) | ||||||
Federal Home Loan Bank stock, at cost | 26,274 | 26,248 | 26,248 | |||||||||
Premises and equipment, net | 38,171 | 39,380 | 39,629 | |||||||||
Goodwill | 10,168 | 10,168 | 10,168 | |||||||||
Other assets and accrued interest receivable | 50,751 | 56,760 | 42,424 | |||||||||
Total assets | $ | 3,035,769 | $ | 3,918,768 | $ | 3,037,421 | ||||||
Liabilities and Stockholders' Equity: | ||||||||||||
Deposits: | ||||||||||||
Non interest-bearing | $ | 328,083 | $ | 318,275 | $ | 325,641 | ||||||
Interest-bearing | 1,409,019 | 2,284,206 | 1,352,792 | |||||||||
Total deposits | 1,737,102 | 2,602,481 | 1,678,433 | |||||||||
Securities sold under agreements to repurchase and other short-term borrowings | 286,510 | 299,580 | 280,841 | |||||||||
Federal Home Loan Bank advances | 565,424 | 637,607 | 699,689 | |||||||||
Subordinated note | 41,240 | 41,240 | 41,240 | |||||||||
Other liabilities and accrued interest payable | 34,668 | 21,840 | 22,295 | |||||||||
Total liabilities | 2,664,944 | 3,602,748 | 2,722,498 | |||||||||
Stockholders' equity | 370,825 | 316,020 | 314,923 | |||||||||
Total liabilities and Stockholders' equity | $ | 3,035,769 | $ | 3,918,768 | $ | 3,037,421 | ||||||
Average Balance Sheet Data | ||||||||||||
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||
Assets: | ||||||||||||
Investment securities, including FHLB stock | $ | 623,758 | $ | 533,202 | $ | 538,977 | $ | 541,789 | ||||
Federal funds sold and other interest-earning deposits | 229,125 | 87,202 | 519,489 | 354,618 | ||||||||
Loans and fees, including loans held for sale | 2,180,565 | 2,308,156 | 2,389,558 | 2,411,128 | ||||||||
Total earning assets | 3,033,448 | 2,928,560 | 3,448,024 | 3,307,535 | ||||||||
Total assets | 3,163,734 | 3,056,269 | 3,578,249 | 3,478,209 | ||||||||
Liabilities and Stockholders' Equity: | ||||||||||||
Non interest-bearing deposits | $ | 345,970 | $ | 327,173 | $ | 447,989 | $ | 400,830 | ||||
Interest-bearing deposits | 1,471,806 | 1,376,461 | 1,775,299 | 1,732,077 | ||||||||
Securities sold under agreements to repurchase and other short-term borrowings |
333,299 | 311,867 | 322,492 | 322,553 | ||||||||
Federal Home Loan Bank advances | 565,445 | 655,791 | 577,170 | 622,391 | ||||||||
Subordinated note | 41,240 | 41,240 | 41,240 | 41,240 | ||||||||
Total interest-bearing liabilities | 2,411,790 | 2,385,359 | 2,716,201 | 2,718,261 | ||||||||
Stockholders' equity | 369,279 | 318,704 | 357,614 | 308,403 | ||||||||
Income Statement Data | ||||||||||||||||
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Total interest income (1) | $ | 35,270 | $ | 38,265 | $ | 159,386 | $ | 175,128 | ||||||||
Total interest expense | 8,818 | 10,529 | 28,009 | 38,655 | ||||||||||||
Net interest income | 26,452 | 27,736 | 131,377 | 136,473 | ||||||||||||
Provision for loan losses | (1,804 | ) | 1,427 | 17,966 | 28,778 | |||||||||||
Non interest income: | ||||||||||||||||
Service charges on deposit accounts | 3,847 | 4,990 | 11,728 | 14,404 | ||||||||||||
Electronic refund check fees | 293 | 137 | 58,513 | 25,272 | ||||||||||||
Net RAL securitization income | 8 | 26 | 228 | 498 | ||||||||||||
Mortgage banking income | 1,679 | 1,667 | 4,094 | 9,358 | ||||||||||||
Debit card interchange fee income | 1,213 | 1,321 | 3,745 | 3,792 | ||||||||||||
Net gain / loss on sales, calls and impairment of securities | - | (850 | ) | (126 | ) | (5,871 | ) | |||||||||
Other | 783 | 597 | 1,822 | 1,844 | ||||||||||||
Total non interest income | 7,823 | 7,888 | 80,004 | 49,297 | ||||||||||||
Non interest expenses: | ||||||||||||||||
Salaries and employee benefits | 13,399 | 12,652 | 43,743 | 39,815 | ||||||||||||
Occupancy and equipment, net | 5,114 | 5,474 | 16,585 | 16,811 | ||||||||||||
Communication and transportation | 887 | 1,056 | 4,075 | 4,000 | ||||||||||||
Marketing and development | 722 | 722 | 10,116 | 12,362 | ||||||||||||
FDIC insurance expense | 586 | 999 | 2,485 | 4,053 | ||||||||||||
Bank franchise tax expense | 642 | 685 | 2,432 | 1,957 | ||||||||||||
Data processing | 660 | 766 | 1,978 | 2,315 | ||||||||||||
Debit card interchange expense | 299 | 702 | 1,234 | 2,070 | ||||||||||||
Supplies | 219 | 463 | 1,597 | 1,739 | ||||||||||||
Other real estate owned expense | 562 | 82 | 1,365 | 2,065 | ||||||||||||
FHLB advance prepayment expense | - | - | 1,531 | - | ||||||||||||
Other | 2,032 | 2,138 | 13,765 | 8,748 | ||||||||||||
Total non interest expenses | 25,122 | 25,739 | 100,906 | 95,935 | ||||||||||||
Income before income tax expense | 10,957 | 8,458 | 92,509 | 61,057 | ||||||||||||
Income tax expense | 3,647 | 2,797 | 32,174 | 22,770 | ||||||||||||
Net income | $ | 7,310 | $ | 5,661 | $ | 60,335 | $ | 38,287 | ||||||||
As of and for the | As of and for the | |||||||||||||||
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Per Share Data: | ||||||||||||||||
Basic average shares outstanding | 20,917 | 20,779 | 20,857 | 20,731 | ||||||||||||
Diluted average shares outstanding | 20,988 | 20,922 | 20,945 | 20,891 | ||||||||||||
End of period shares outstanding: | ||||||||||||||||
Class A Common Stock | 18,627 | 18,485 | 18,627 | 18,485 | ||||||||||||
Class B Common Stock | 2,308 | 2,309 | 2,308 | 2,309 | ||||||||||||
Book value per share | $ | 17.71 | $ | 15.14 | $ | 17.71 | $ | 15.14 | ||||||||
Tangible book value per share | 16.84 | 14.24 | 16.84 | 14.24 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic earnings per Class A Common Stock | 0.35 | 0.27 | 2.90 | 1.85 | ||||||||||||
Basic earnings per Class B Common Stock | 0.34 | 0.26 | 2.86 | 1.82 | ||||||||||||
Diluted earnings per Class A Common Stock | 0.35 | 0.27 | 2.89 | 1.84 | ||||||||||||
Diluted earnings per Class B Common Stock | 0.34 | 0.26 | 2.85 | 1.80 | ||||||||||||
Cash dividends declared per share: | ||||||||||||||||
Class A Common Stock | 0.143 | 0.132 | 0.418 | 0.385 | ||||||||||||
Class B Common Stock | 0.130 | 0.120 | 0.380 | 0.350 | ||||||||||||
Performance Ratios: | ||||||||||||||||
Return on average assets | 0.92 | % | 0.74 | % | 2.25 | % | 1.47 | % | ||||||||
Return on average equity | 7.92 | 7.11 | 22.50 | 16.55 | ||||||||||||
Efficiency ratio (2) | 74 | 71 | 48 | 50 | ||||||||||||
Yield on average earning assets | 4.65 | 5.23 | 6.16 | 7.06 | ||||||||||||
Cost of interest-bearing liabilities | 1.46 | 1.77 | 1.37 | 1.90 | ||||||||||||
Net interest spread | 3.19 | 3.46 | 4.79 | 5.16 | ||||||||||||
Net interest margin | 3.49 | 3.79 | 5.08 | 5.50 | ||||||||||||
Asset Quality Ratios: | ||||||||||||||||
Loans on non-accrual status | 36,358 | 40,355 | 36,358 | 40,355 | ||||||||||||
Loans past due 90 days or more and still on accrual | - | 2 | - | 2 | ||||||||||||
Total non-performing loans | 36,358 | 40,357 | 36,358 | 40,357 | ||||||||||||
Other real estate owned | 6,203 | 3,239 | 6,203 | 3,239 | ||||||||||||
Total non-performing assets | 42,561 | 43,596 | 42,561 | 43,596 | ||||||||||||
Non-performing loans to total loans | 1.69 | % | 1.76 | % | 1.69 | % | 1.76 | % | ||||||||
Non-performing loans to total loans - Banking Segment | 1.69 | 1.76 | 1.69 | 1.76 | ||||||||||||
Non-performing assets to total loans (including OREO) | 1.97 | 1.90 | 1.97 | 1.90 | ||||||||||||
Allowance for loan losses to total loans | 1.14 | 0.86 | 1.14 | 0.86 | ||||||||||||
Allowance for loan losses to total loans - Banking Segment | 1.14 | 0.86 | 1.14 | 0.86 | ||||||||||||
Allowance for loan losses to non-performing loans | 68 | 49 | 68 | 49 | ||||||||||||
Net loan charge-offs to average loans | 0.05 | 0.26 | 0.91 | 1.32 | ||||||||||||
Net loan charge-offs to average loans - Banking Segment | 0.70 | 0.42 | 0.46 | 0.26 | ||||||||||||
Delinquent loans to total loans (3) | 1.69 | 2.23 | 1.69 | 2.23 | ||||||||||||
Delinquent loans to total loans - Banking Segment (3) | 1.69 | 2.23 | 1.69 | 2.23 | ||||||||||||
Other Information: | ||||||||||||||||
End of period full-time equivalent employees | 738 | 745 | 738 | 745 | ||||||||||||
Number of banking centers | 44 | 44 | 44 | 44 | ||||||||||||
Balance Sheet Data | ||||||||||||||||||||
Quarterly Comparison | ||||||||||||||||||||
Sept. 30, 2010 | June 30, 2010 | March 31, 2010 | Dec. 31, 2009 | Sept. 30, 2009 | ||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 171,024 | $ | 268,489 | $ | 322,291 | $ | 1,068,179 | $ | 138,906 | ||||||||||
Investment securities | 600,834 | 567,688 | 460,231 | 467,235 | 498,329 | |||||||||||||||
Mortgage loans held for sale | 5,783 | 3,309 | 5,801 | 5,445 | 8,597 | |||||||||||||||
Loans | 2,157,330 | 2,203,995 | 2,273,188 | 2,268,232 | 2,292,913 | |||||||||||||||
Allowance for loan losses | (24,566 | ) | (26,659 | ) | (25,640 | ) | (22,879 | ) | (19,793 | ) | ||||||||||
Federal Home Loan Bank stock, at cost | 26,274 | 26,274 | 26,274 | 26,248 | 26,248 | |||||||||||||||
Premises and Equipment, net | 38,171 | 37,560 | 38,300 | 39,380 | 39,629 | |||||||||||||||
Goodwill | 10,168 | 10,168 | 10,168 | 10,168 | 10,168 | |||||||||||||||
Other assets and interest receivable | 50,751 | 49,628 | 70,382 | 56,760 | 42,424 | |||||||||||||||
Total assets | $ | 3,035,769 | $ | 3,140,452 | $ | 3,180,995 | $ | 3,918,768 | $ | 3,037,421 | ||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Non interest-bearing | $ | 328,083 | $ | 355,761 | $ | 473,221 | $ | 318,275 | $ | 325,641 | ||||||||||
Interest-bearing | 1,409,019 | 1,470,092 | 1,425,909 | 2,284,206 | 1,352,792 | |||||||||||||||
Total deposits | 1,737,102 | 1,825,853 | 1,899,130 | 2,602,481 | 1,678,433 | |||||||||||||||
Securities sold under agreements to repurchase and other short-term borrowings |
286,510 | 302,054 | 275,111 | 299,580 | 280,841 | |||||||||||||||
Federal Home Loan Bank advances | 565,424 | 565,483 | 545,564 | 637,607 | 699,689 | |||||||||||||||
Subordinated note | 41,240 | 41,240 | 41,240 | 41,240 | 41,240 | |||||||||||||||
Other liabilities and accrued interest payable | 34,668 | 40,056 | 62,736 | 21,840 | 22,295 | |||||||||||||||
Total liabilities | 2,664,944 | 2,774,686 | 2,823,781 | 3,602,748 | 2,722,498 | |||||||||||||||
Stockholders' equity | 370,825 | 365,766 | 357,214 | 316,020 | 314,923 | |||||||||||||||
Total liabilities and Stockholders' equity | $ | 3,035,769 | $ | 3,140,452 | $ | 3,180,995 | $ | 3,918,768 | $ | 3,037,421 | ||||||||||
Average Balance Sheet Data | ||||||||||||||||||||
Quarterly Comparison | ||||||||||||||||||||
Sept. 30, 2010 | June 30, 2010 | March 31, 2010 | Dec. 31, 2009 | Sept. 30, 2009 | ||||||||||||||||
Assets: | ||||||||||||||||||||
Investment securities, including FHLB stock | $ | 623,758 | $ | 516,746 | $ | 474,792 | $ | 522,783 | $ | 533,202 | ||||||||||
Federal funds sold and other interest-earning deposits | 229,125 | 245,863 | 1,093,433 | 301,090 | 87,202 | |||||||||||||||
Loans and fees, including loans held for sale | 2,180,565 | 2,247,410 | 2,658,713 | 2,287,368 | 2,308,156 | |||||||||||||||
Total earning assets | 3,033,448 | 3,010,019 | 4,226,938 | 3,111,241 | 2,928,560 | |||||||||||||||
Total assets | 3,163,734 | 3,147,246 | 4,423,918 | 3,232,793 | 3,056,269 | |||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||
Non interest-bearing deposits | $ | 345,970 | $ | 382,006 | $ | 635,587 | $ | 324,797 | $ | 327,173 | ||||||||||
Interest-bearing deposits | 1,471,806 | 1,444,036 | 2,406,326 | 1,544,941 | 1,376,461 | |||||||||||||||
Securities sold under agreements to repurchase and other short-term borrowings |
333,299 | 309,539 | 324,149 | 327,056 | 311,867 | |||||||||||||||
Federal Home Loan Bank advances | 565,445 | 554,201 | 612,379 | 653,747 | 655,791 | |||||||||||||||
Subordinated note | 41,240 | 41,240 | 41,240 | 41,240 | 41,240 | |||||||||||||||
Total interest-bearing liabilities | 2,411,790 | 2,349,016 | 3,384,094 | 2,566,984 | 2,385,359 | |||||||||||||||
Stockholders' equity | 369,279 | 364,288 | 338,980 | 316,855 | 318,704 | |||||||||||||||
Income Statement Data | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
Sept. 30, 2010 | June 30, 2010 | March 31, 2010 | Dec. 31, 2009 | Sept. 30, 2009 | |||||||||||||||
Total interest income (4) | $ | 35,270 | $ | 36,887 | $ | 87,229 | $ | 37,477 | $ | 38,265 | |||||||||
Total interest expense | 8,818 | 8,834 | 10,357 | 10,087 | 10,529 | ||||||||||||||
Net interest income | 26,452 | 28,053 | 76,872 | 27,390 | 27,736 | ||||||||||||||
Provision for loan losses | (1,804 | ) | 2,980 | 16,790 | 5,197 | 1,427 | |||||||||||||
Non interest income: | |||||||||||||||||||
Service charges on deposit accounts | 3,847 | 4,009 | 3,872 | 4,752 | 4,990 | ||||||||||||||
Electronic refund check fees | 293 | 5,052 | 53,168 | 17 | 137 | ||||||||||||||
Net RAL securitization income | 8 | 25 | 195 | 16 | 26 | ||||||||||||||
Mortgage banking income | 1,679 | 1,403 | 1,012 | 1,663 | 1,667 | ||||||||||||||
Debit card interchange fee income | 1,213 | 1,312 | 1,220 | 1,322 | 1,321 | ||||||||||||||
Net gain / loss on sales, calls and impairment of securities |
- | (57 | ) | (69 | ) | 49 | (850 | ) | |||||||||||
Other | 783 | 560 | 479 | 505 | 597 | ||||||||||||||
Total non interest income | 7,823 | 12,304 | 59,877 | 8,324 | 7,888 | ||||||||||||||
Non interest expenses: | |||||||||||||||||||
Salaries and employee benefits | 13,399 | 12,966 | 17,378 | 11,358 | 12,652 | ||||||||||||||
Occupancy and equipment, net | 5,114 | 5,053 | 6,418 | 5,559 | 5,474 | ||||||||||||||
Communication and transportation | 887 | 719 | 2,469 | 1,354 | 1,056 | ||||||||||||||
Marketing and development | 722 | 802 | 8,592 | 784 | 722 | ||||||||||||||
FDIC insurance expense | 586 | 782 | 1,117 | 940 | 999 | ||||||||||||||
Bank franchise tax expense | 642 | 645 | 1,145 | 686 | 685 | ||||||||||||||
Data processing | 660 | 598 | 720 | 702 | 766 | ||||||||||||||
Debit card interchange expense | 299 | 286 | 649 | 1,026 | 702 | ||||||||||||||
Supplies | 219 | 346 | 1,032 | 659 | 463 | ||||||||||||||
Other real estate owned expense | 562 | 502 | 301 | 188 | 82 | ||||||||||||||
FHLB advance prepayment expense | - | - | 1,531 | - | - | ||||||||||||||
Other | 2,032 | 1,946 | 9,787 | 2,294 | 2,138 | ||||||||||||||
Total non interest expenses | 25,122 | 24,645 | 51,139 | 25,550 | 25,739 | ||||||||||||||
Income before income tax expense | 10,957 | 12,732 | 68,820 | 4,967 | 8,458 | ||||||||||||||
Income tax expense | 3,647 | 4,335 | 24,192 | 1,123 | 2,797 | ||||||||||||||
Net income | $ | 7,310 | $ | 8,397 | $ | 44,628 | $ | 3,844 | $ | 5,661 | |||||||||
As of and for the Three Months Ended | ||||||||||||||||||||
Sept. 30, 2010 | June 30, 2010 | March 31, 2010 | Dec. 31, 2009 | Sept. 30, 2009 | ||||||||||||||||
Per Share Data: | ||||||||||||||||||||
Basic average shares outstanding | 20,917 | 20,840 | 20,814 | 20,802 | 20,779 | |||||||||||||||
Diluted average shares outstanding | 20,988 | 20,958 | 20,872 | 20,890 | 20,922 | |||||||||||||||
End of period shares outstanding: | ||||||||||||||||||||
Class A Common Stock | 18,627 | 18,546 | 18,502 | 18,499 | 18,485 | |||||||||||||||
Class B Common Stock | 2,308 | 2,308 | 2,309 | 2,309 | 2,309 | |||||||||||||||
Book value per share | $ | 17.71 | $ | 17.55 | $ | 17.17 | $ | 15.19 | $ | 15.14 | ||||||||||
Tangible book value per share | 16.84 | 16.67 | 16.27 | 14.28 | 14.24 | |||||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic earnings per Class A Common Stock | 0.35 | 0.40 | 2.15 | 0.19 | 0.27 | |||||||||||||||
Basic earnings per Class B Common Stock | 0.34 | 0.39 | 2.13 | 0.17 | 0.26 | |||||||||||||||
Diluted earnings per Class A Common Stock | 0.35 | 0.40 | 2.14 | 0.19 | 0.27 | |||||||||||||||
Diluted earnings per Class B Common Stock | 0.34 | 0.39 | 2.13 | 0.17 | 0.26 | |||||||||||||||
Cash dividends declared per share: | ||||||||||||||||||||
Class A Common Stock | 0.143 | 0.143 | 0.132 | 0.132 | 0.132 | |||||||||||||||
Class B Common Stock | 0.130 | 0.130 | 0.120 | 0.120 | 0.120 | |||||||||||||||
Performance Ratios: | ||||||||||||||||||||
Return on average assets | 0.92 | % | 1.07 | % | 4.04 | % | 0.48 | % | 0.74 | % | ||||||||||
Return on average equity | 7.92 | 9.22 | 53.63 | 4.85 | 7.11 | |||||||||||||||
Efficiency ratio (2) | 74 | 61 | 37 | 72 | 71 | |||||||||||||||
Yield on average earning assets | 4.65 | 4.90 | 8.25 | 4.82 | 5.23 | |||||||||||||||
Cost of interest-bearing liabilities | 1.46 | 1.50 | 1.22 | 1.57 | 1.77 | |||||||||||||||
Net interest spread | 3.19 | 3.40 | 7.03 | 3.25 | 3.46 | |||||||||||||||
Net interest margin | 3.49 | 3.73 | 7.27 | 3.52 | 3.79 | |||||||||||||||
Asset Quality Data: | ||||||||||||||||||||
Loans on non-accrual status | 36,358 | 37,669 | 39,955 | 43,136 | 40,355 | |||||||||||||||
Loans past due 90 days or more and still on accrual | - | - | 4 | 8 | 2 | |||||||||||||||
Total non-performing loans | 36,358 | 37,669 | 39,959 | 43,144 | 40,357 | |||||||||||||||
Other real estate owned | 6,203 | 6,359 | 6,203 | 4,772 | 3,239 | |||||||||||||||
Total non-performing assets | 42,561 | 44,028 | 46,162 | 47,916 | 43,596 | |||||||||||||||
Non-performing loans to total loans | 1.69 | % | 1.71 | % | 1.76 | % | 1.90 | % | 1.76 | % | ||||||||||
Non-performing loans to total loans - Banking Segment | 1.69 | 1.71 | 1.78 | 1.90 | 1.76 | |||||||||||||||
Non-performing assets to total loans (including OREO) | 1.97 | 1.99 | 2.03 | 2.11 | 1.90 | |||||||||||||||
Allowance for loan losses to total loans | 1.14 | 1.21 | 1.13 | 1.01 | 0.86 | |||||||||||||||
Allowance for loan losses to total loans - Banking Segment | 1.14 | 1.21 | 1.07 | 1.01 | 0.86 | |||||||||||||||
Allowance for loan losses to non-performing loans | 68 | 71 | 64 | 53 | 49 | |||||||||||||||
Net loan charge-offs to average loans | 0.05 | 0.35 | 2.11 | 0.37 | 0.26 | |||||||||||||||
Net loan charge-offs to average loans - Banking Segment | 0.70 | 0.40 | 0.31 | 0.59 | 0.42 | |||||||||||||||
Delinquent loans to total loans (3) | 1.69 | 1.72 | 1.76 | 1.98 | 2.23 | |||||||||||||||
Delinquent loans to total loans - Banking Segment (3) | 1.69 | 1.72 | 1.78 | 1.98 | 2.23 | |||||||||||||||
Other Information: | ||||||||||||||||||||
End of period full-time equivalent employees | 738 | 740 | 749 | 735 | 745 | |||||||||||||||
Number of banking centers | 44 | 44 | 44 | 44 | 44 | |||||||||||||||
Segment Data:
The reportable segments are determined by the type of products and services offered, distinguished between Traditional Banking, Mortgage Banking and Tax Refund Solutions (“TRS”). They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business (such as branches and subsidiary banks), which are then aggregated if operating performance, products/services, and customers are similar. Loans, investments and deposits provide the majority of the net revenue from Traditional Banking operations; servicing fees and loan sales provide the majority of revenue from Mortgage Banking operations; RAL fees and ERC/ERD fees provide the majority of the revenue from TRS. All Company operations are domestic. Segment information for the three and nine months ended September 30, 2010 and 2009 follows:
Three Months Ended September 30, 2010 | |||||||||||||||
(dollars in thousands) |
Traditional Banking |
Tax Refund Solutions |
Mortgage Banking |
Total Company | |||||||||||
Net interest income | $ | 26,341 | $ | 13 | $ | 98 | $ | 26,452 | |||||||
Provision for loan losses | 1,726 | (3,530 | ) | - | (1,804 | ) | |||||||||
Electronic Refund Check fees | - | 293 | - | 293 | |||||||||||
Net RAL securitization income | - | 8 | - | 8 | |||||||||||
Mortgage banking income | - | - | 1,679 | 1,679 | |||||||||||
Net gain on sales, calls and impairment of securities |
- | - | - | - | |||||||||||
Other non interest income | 5,764 | 43 | 36 | 5,843 | |||||||||||
Total non interest income | 5,764 | 344 | 1,715 | 7,823 | |||||||||||
Total non interest expenses | 22,277 | 2,279 | 566 | 25,122 | |||||||||||
Gross operating profit | 8,102 | 1,608 | 1,247 | 10,957 | |||||||||||
Income tax expense | 2,627 | 641 | 379 | 3,647 | |||||||||||
Net income | $ | 5,475 | $ | 967 | $ | 868 | $ | 7,310 | |||||||
Segment assets | $ | 3,005,971 | $ | 13,412 | $ | 14,008 | $ | 3,033,391 | |||||||
Net interest margin | 3.49 | % | NM | NM | 3.49 | % | |||||||||
Three Months Ended September 30, 2009 | |||||||||||||||
(dollars in thousands) |
Traditional Banking |
Tax Refund Solutions |
Mortgage Banking |
Total Company | |||||||||||
Net interest income | $ | 27,576 | $ | 47 | $ | 113 | $ | 27,736 | |||||||
Provision for loan losses | 2,309 | (882 | ) | - | 1,427 | ||||||||||
Electronic Refund Check fees | - | 137 | - | 137 | |||||||||||
Net RAL securitization income | - | 26 | - | 26 | |||||||||||
Mortgage banking income | - | - | 1,667 | 1,667 | |||||||||||
Net loss on sales, calls and impairment of securities |
(850 | ) | - | - | (850 | ) | |||||||||
Other non interest income | 6,864 | 18 | 26 | 6,908 | |||||||||||
Total non interest income | 6,014 | 181 | 1,693 | 7,888 | |||||||||||
Total non interest expenses | 23,132 | 2,283 | 324 | 25,739 | |||||||||||
Gross operating profit | 8,149 | (1,173 | ) | 1,482 | 8,458 | ||||||||||
Income tax expense | 2,855 | (565 | ) | 507 | 2,797 | ||||||||||
Net income | $ | 5,294 | $ | (608 | ) | $ | 975 | $ | 5,661 | ||||||
Segment assets | $ | 3,012,018 | $ | 7,966 | $ | 17,437 | $ | 3,037,421 | |||||||
Net interest margin | 3.79 | % | NM | NM | 3.79 | % | |||||||||
Nine Months Ended September 30, 2010 | ||||||||||||||
(dollars in thousands) |
Traditional Banking |
Tax Refund Solutions |
Mortgage Banking |
Total Company | ||||||||||
Net interest income | $ | 80,364 | $ | 50,729 | $ | 284 | $ | 131,377 | ||||||
Provision for loan losses | 9,502 | 8,464 | - | 17,966 | ||||||||||
Electronic Refund Check fees | - | 58,513 | - | 58,513 | ||||||||||
Net RAL securitization income | - | 228 | - | 228 | ||||||||||
Mortgage banking income | - | - | 4,094 | 4,094 | ||||||||||
Net gain on sales, calls and impairment of securities |
(126 | ) | - | - | (126 | ) | ||||||||
Other non interest income | 17,183 | 53 | 59 | 17,295 | ||||||||||
Total non interest income | 17,057 | 58,794 | 4,153 | 80,004 | ||||||||||
Total non interest expenses | 70,567 | 28,273 | 2,066 | 100,906 | ||||||||||
Gross operating profit | 17,352 | 72,786 | 2,371 | 92,509 | ||||||||||
Income tax expense | 5,593 | 25,862 | 719 | 32,174 | ||||||||||
Net income | $ | 11,759 | $ | 46,924 | $ | 1,652 | $ | 60,335 | ||||||
Segment assets | $ | 3,005,971 | $ | 13,412 | $ | 14,008 | $ | 3,033,391 | ||||||
Net interest margin | 3.62 | % | NM | NM | 5.08 | % | ||||||||
Nine Months Ended September 30, 2009 | ||||||||||||||
(dollars in thousands) |
Traditional Banking |
Tax Refund Solutions |
Mortgage Banking |
Total Company | ||||||||||
Net interest income | $ | 82,905 | $ | 52,880 | $ | 688 | $ | 136,473 | ||||||
Provision for loan losses | 9,425 | 19,353 | - | 28,778 | ||||||||||
Electronic Refund Check fees | - | 25,272 | - | 25,272 | ||||||||||
Net RAL securitization income | - | 498 | - | 498 | ||||||||||
Mortgage banking income | - | - | 9,358 | 9,358 | ||||||||||
Net loss on sales, calls and impairment of securities |
(5,871 | ) | - | - | (5,871 | ) | ||||||||
Other non interest income | 19,912 | 50 | 78 | 20,040 | ||||||||||
Total non interest income | 14,041 | 25,820 | 9,436 | 49,297 | ||||||||||
Total non interest expenses | 71,212 | 23,632 | 1,091 | 95,935 | ||||||||||
Gross operating profit | 16,309 | 35,715 | 9,033 | 61,057 | ||||||||||
Income tax expense | 5,428 | 14,290 | 3,052 | 22,770 | ||||||||||
Net income | $ | 10,881 | $ | 21,425 | $ | 5,981 | $ | 38,287 | ||||||
Segment assets | $ | 3,012,018 | $ | 7,966 | $ | 17,437 | $ | 3,037,421 | ||||||
Net interest margin | 3.79 | % | NM | NM | 5.50 | % | ||||||||
_____________________________________ |
(1) – The amount of loan fee income included in total interest income was $924,000 and $763,000 for the quarters ended September 30, 2010 and 2009. The amount of loan fee income included in total interest income was $54.2 million and $59.8 million for the nine months ended September 30, 2010 and 2009. |
(2) – Equals total non-interest expense divided by the sum of net interest income and non interest income. The ratio excludes net loss on sales, calls and impairment of investment securities. |
(3) – Equals total loans over 30 days past due divided by total loans. |
(4) – The amount of loan fee income included in total interest income per quarter was as follows: $924,000 (quarter ended September 30, 2010), $2.1 million (quarter ended June 30, 2010), $51.2 million (quarter ended March 31, 2010), $900,000 (quarter ended December 31, 2009) and $763,000 (quarter ended September 30, 2009). |
NM – Not meaningful |
CONTACT:
Republic Bancorp, Inc.
Kevin Sipes, 502-560-8628
Executive
Vice President and Chief Financial Officer