- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1996 OR Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 33-77324 REPUBLIC BANCORP, INC. (Exact name of registrant as specified in its charter) Kentucky 61-0862051 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 601 West Market Street, Louisville, Kentucky 40202 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (502) 584-3600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X Yes __ No The number of shares outstanding of the issuer's class of common stock as of the latest practicable date: 6,051,261 shares of Class A Common Stock and 1,170,207 shares of Class B Common Stock as of August 12, 1996. The Exhibit index is on page 28. This filing contains 30 pages (including this facing sheet). - --------------------------------------------------------------------------------
REPUBLIC BANCORP, INC. FORM 10-Q TABLE OF CONTENTS PART I - FINANCIAL INFORMATION PAGE Item 1. Financial Statements .............................................. 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ............................. 15 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K .................................. 26 Signatures
PART I ITEM 1 REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS(UNAUDITED)(dollars in thousands) JUNE 30, DECEMBER 31, 1996 1995 ASSETS: Cash and cash equivalents: Cash and due from banks $ 26,548 $ 30,988 Federal funds sold 32,325 44,325 -------- --------- Total cash and cash equivalents 58,873 75,313 Securities to be held to maturity - fair values: $133,134 (1996) and $114,749 (1995) 134,404 114,654 Loans, less allowance for loan losses of $6,241 (1996) and $3,695 (1995) 706,460 668,193 Mortgage loans held for sale 6,057 5,988 Federal Home Loan Bank stock 5,359 5,176 Accrued interest receivable 8,020 7,244 Premises and equipment, net 13,765 12,015 Other assets 2,273 2,764 -------- -------- TOTAL $ 935,211 $ 891,347 ========= ========== LIABILITIES: Deposits: Non-interest bearing $66,832 $63,304 Interest bearing 680,088 671,139 Securities sold under agreements to repurchase and other short-term borrowings 50,209 21,729 Other borrowed funds 70,340 68,063 Accrued interest payable 4,301 4,314 Other liabilities 3,685 4,296 --------- --------- Total Liabilities 875,455 832,845 --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred Stock, no par value; authorized, 100,000 shares; Series A 8.5% noncumulative convertible, 50,000 shares issued and outstanding (liquidation preference $5,000) 5,000 5,000 Class A Common stock, no par value Class B Common stock, no par value 3,491 3,491 Additional paid-in capital 6,817 6,817 Retained earnings 44,448 43,194 -------- ------- Total stockholders' equity 59,756 58,502 --------- -------- TOTAL $ 935,211 $ 891,347 ========= ========= See notes to consolidated financial statements.
REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)(in thousands,except per share data) Three Months Ended Six Months Ended June 30, June 30, INTEREST INCOME: 1996 1995 1996 1995 Loans, including fees $17,526 $14,965 $34,631 $28,633 Investment securities and mortgage-backed securities: Taxable 1,933 2,074 3,918 3,688 Non-taxable 32 33 64 65 FHLB dividends 101 83 193 162 Other 247 448 641 711 ------- ------- ------- ------- Total interest income 19,839 17,603 39,447 33,259 ------- ------- ------- ------- INTEREST EXPENSE: Deposits 8,580 8,060 17,414 14,435 Short-term borrowings 658 254 1,145 508 Long-term debt 982 1,151 1,965 2,345 ------- ------ ------- -------- Total interest expense 10,220 9,465 20,524 17,288 ------- ------ ------- -------- NET INTEREST INCOME 9,619 8,138 18,923 15,971 PROVISION FOR LOAN LOSSES 3,703 1,503 5,634 1,940 ------- ------ ------- -------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,916 6,635 13,289 14,031 ------- ----- ------ -------- NON-INTEREST INCOME: Service charges on deposit accounts 584 469 1,094 906 Other service charges and fees 276 337 668 657 Bank card services 287 308 631 615 Net gain on sale of loans 356 199 722 366 Loan servicing income 206 224 416 450 Other 83 999 749 1,268 ------- ------- ------ ------ Total non-interest income 1,792 2,536 4,280 4,262 ------- ------- ------ ------ NON-INTEREST EXPENSE: Salaries and employee benefits 2,992 2,639 6,398 5,248 Occupancy and equipment 1,586 1,319 3,031 2,555 Communication and transportation 398 337 730 658 Marketing and development 415 309 755 571 Insurance 296 321 496 651 Supplies 242 187 454 455 Other 1,114 889 1,974 1,800 ----- ------ ------- ------- Total non-interest expense 7,043 6,001 13,838 11,938 --------- ------ ------- ------- INCOME BEFORE INCOME TAXES 665 3,170 3,731 6,355 INCOME TAXES 339 1,117 1,482 2,220 ------- ------ ------ ------- NET INCOME $ 326 $ 2,053 $ 2,249 $ 4,135 ======= ======= ====== ======= NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE $ .03 $ .26 $ .27 $ .53 ======= ======= ======= ======= See notes to consolidated financial statements.
<TABLE> <CAPTION> REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (in thousands, except per share data) <S> <C> <C> <C> <C> <C> <C> <C> <C> Common Preferred Stock Additional Total Stock Class A Class B Paid-in Retained Stockholders Shares Amount Shares Amount Shares Amount Capital Earnings Equity BALANCE January 1, 1996 50,000 $5,000 1,203,578 $3,491 $6,817 $43,194 $58,502 Stock Dividend 6,017,890 $ 0 Dividend Declared Preferred ($2.125 per share) (213) (213) Common: Class A ($.055 per share) (664) (664) Class B ($.050 per share) (118) (118) Net Income 2,249 2,249 BALANCE June 30, 1996 50,000 $5,000 6,017,890 $ 0 1,203,578 $3,491 $6,817 $44,448 $59,756 ====== ====== ========= ==== ========= ====== ====== ======= ======= See notes to consolidated financial statements. </TABLE>
REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1996 AND 1995(in thousands) - ------------------------------------------------------------------------- 1996 1995 OPERATING ACTIVITIES: Net income $2,249 $4,135 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization of premises and equipment 1,542 1,117 Amortization and accretion of investment securities (143) (238) FHLB stock dividends (183) (159) Provision for loan losses 5,634 1,940 Net gain on sale of loans (722) (366) Proceeds from sale of loans 76,426 23,513 Origination of mortgage loans held for sale (75,773) (29,308) Changes in assets and liabilities: Accrued interest receivable (776) (1,297) Other assets 491 (1,054) Accrued interest payable (13) 401 Other liabilities (701) 495 -------- -------- Net cash provided by (used in) operating activities 8,031 (821) INVESTING ACTIVITIES: Purchases of securities to be held to maturity (117,602) (76,072) Proceeds from maturities of securities 97,995 52,413 Net increase in loans (43,901) (57,710) Proceeds from sales of real estate acquired in settlement of loans 219 Net purchases of premises and equipment (3,292) (773) -------- ----- Net cash used in investing activities (66,800) (81,923) -------- -------- FINANCING ACTIVITIES: Net increase (decrease) in deposits 12,477 85,351 Net increase in securities sold under agreements to repurchase and other short-term borrowings 28,480 12,054 Payments on other borrowings (21,723) (18,230) Proceeds from other borrowings 24,000 Purchase and retirement of common stock (75) Sale of common stock 126 Sale of preferred stock 5,000 Cash dividends paid (905) (750) -------- -------- Net cash provided by financing activities 42,329 83,476 -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (16,440) 732 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 75,313 38,533 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 58,873 $ 39,265 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 20,537 $ 16,887 ======== ========= Income taxes $ 2,432 $ 2,059 ======== ========== See notes to consolidated financial statements.
REPUBLIC BANCORP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. BASIS OF PRESENTATION (AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES) Basis of Presentation - The consolidated financial statements include the accounts of Republic Bancorp, Inc. and its wholly-owned subsidiaries; Republic Mortgage Company, Republic Insurance Agency, Inc. and Republic Bank & Trust Company (Bank), collectively "Republic". All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month and six-month periods ending June 30, 1996, are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in Republic's annual report on Form 10-K for the year ended December 31, 1995. Mortgage Servicing Rights - On January 1, 1996, Republic adopted Statement of Financial Accounting Standards No. 122, Accounting for Mortgage Servicing Rights (SFAS No. 122) which requires an enterprise with mortgage banking activities to recognize the right to service mortgage loans for others as a separate asset, however those rights were acquired. Under previous accounting guidance, a separate asset was recognized for purchased, but not originated, mortgage servicing rights. Under SFAS No. 122, the total cost of mortgage loans originated with the intent to sell is allocated between the servicing right and the loan without the servicing right based on their relative fair values at the date of origination. The capitalized cost of servicing rights are amortized in proportion to, and over the period of, the estimated net servicing income. The mortgage servicing asset is periodically evaluated for impairment by stratifying by predominant risk characteristics. Since adoption of this Statement, loans sold in the secondary market have been primarily servicing released. Accordingly, adoption of SFAS No. 122 has had no material impact on Republic's financial position or results of operations. Earnings Per Share - Earnings per common and common equivalent share is based upon the weighted average of common and common equivalent shares outstanding during the year. Primary and fully diluted earnings per share are approximately the same. The number of common and common equivalent shares utilized in the per share computations was 7,596,443 and 7,566,252 for the three months ended June 30, 1996 and 1995, respectively, and 7,591,107 and 7,478,394 for the six months ended June 30, 1996 and 1995, respectively. 2. STOCKHOLDERS EQUITY AND STOCK DIVIDEND At December 31, 1995, common stock authorized consisted of 2,000,000 shares of no par stock, of which 1,203,578 shares were issued and outstanding. On January 8, 1996 the stockholders approved an amendment to Republic's Articles of Incorporation to authorize 15,000,000 shares of Class A Common Stock, no par value and 2,000,000 shares of Class B Common Stock, no par value. On February 16, 1996, the Board of Directors declared a stock dividend of five shares of Class A Common Stock for each share of Class B Common Stock owned by stockholders of record on February 20, 1996 payable on February 29, 1996. The stock dividend has been treated as a stock split and all share and earnings per share amounts have been retroactively restated to give effect to the stock split. The Class A shares are entitled to cash dividends equal to 110% of the dividend paid per share on the Class B Common Stock. Class A shares have one vote per share and Class B shares have ten votes per share. Class B stock may be converted, at the option of the holder, to Class A stock on a share-for-share basis. The Class A Common Stock is not convertible into any other class of Republic's capital stock. 3. RECLASSIFICATIONS Certain amounts have been reclassified in the 1995 financial statements to conform with the current period classifications. The reclassifications have no effect on net income or stockholders' equity as previously reported. <TABLE> <CAPTION> 4. SECURITIES TO BE HELD TO MATURITY June 30, 1996 (in thousands) <S> <C> <C> <C> <C> Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value U.S. Treasury Securities and U.S. Government Agencies $129,231 $248 $(1,655) $127,824 Obligations of state and political subdivisions 4,468 187 (3) 4,652 Mortgage-backed securities 705 (47) 658 Total securities to be held to maturity $134,404 $435 $(1,705) $133,134 ======== ==== ======== ======== </TABLE> Securities to be held to maturity having an amortized cost of $125 million and a fair value of $124 million at June 30, 1996, were pledged to secure public deposits, securities sold under agreements to repurchase and for other purposes, as required or permitted by law. <TABLE> <CAPTION> December 31, 1995 (in thousands) <S> <C> <C> <C> <C> Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value U.S. Treasury Securities and U.S. Government Agencies $109,282 $777 $ (823) $109,236 Obligations of state and political subdivisions 4,629 176 (1) 4,804 Mortgage-backed securities 743 (34) 709 -------- ---- -------- -------- Total securities to be held to maturity $114,654 $953 $ (858) $114,749 ======== ==== ======== ======== </TABLE> <TABLE> <CAPTION> 5. LOANS June 30, 1996 December 31, 1995 (in thousands) <S> <C> <C> Residential real estate $407,195 $371,846 Commercial real estate 67,463 75,648 Real estate construction 32,870 31,230 Commercial 23,589 21,042 Consumer 105,560 98,730 Home equity 50,454 48,244 Bank card 24,393 25,581 Other 3,730 3,424 -------- -------- Total loans 715,254 675,745 -------- -------- Less: Unearned interest income and unamortized loan fees 2,553 3,857 Allowance for loan losses 6,241 3,695 -------- -------- Loans, net $706,460 $668,193 ======== ======== </TABLE> <TABLE> <CAPTION> The following table sets forth the changes in the allowance for loan losses: Three Months Ended, Six Months Ended, June 30 June 30 <S> <C> <C> <C> <C> 1996 1995 1996 1995 (in thousands) Balance, beginning of period $4,261 $2,187 $3,695 $1,827 Provision charged to income 3,703 1,503 5,634 1,940 Charge-offs (1,761) (655) (3,161) (740) Recoveries 38 17 73 25 ------- ------ ------- ------ Balance, end of period $6,241 $3,052 $6,241 $3,052 ======= ====== ======= ======= </TABLE> <TABLE> <CAPTION> Information about Republic's investment in impaired loans is as follows: June 30, 1996 December 31, 1995 (in thousands) <S> <C> <C> Gross impaired loans $1,592 $4,064 Less: Related allowances for loan losses 100 589 ------ ------ Net impaired loans with related allowances 1,492 3,475 Impaired loans with no related allowances 0 87 ------ ------ Total $1,492 $3,562 ====== ====== Average impaired loans outstanding $1,592 $3,432 ====== ====== </TABLE> <TABLE> <CAPTION> 6. INTEREST BEARING DEPOSITS June 30, 1996 December 31, 1995 <S> <C> <C> NOW and Super NOW $84,976 $76,972 Money market 31,934 26,772 Savings 15,239 15,395 Money market certificates of deposit 66,068 58,599 Individual retirement accounts 35,085 34,275 Certificates of deposit, $100,000 and over 54,181 55,708 Other certificates of deposit 344,505 355,344 Brokered deposits 48,100 48,074 -------- -------- Total interest bearing deposits $680,088 $671,139 </TABLE> 7. SHORT-TERM BORROWINGS Short-term borrowings consist of repurchase agreements and overnight liabilities to deposit customers arising from a cash management program offered by Republic. While effectively deposit equivalents, such arrangements are in the form of repurchase agreements. The repurchase agreements are treated as financings; accordingly, the securities involved with the agreements are recorded as assets and are held by a safekeeping agent and the obligations to repurchase the securities are reflected as liabilities. Balances as of and for the six months ended June 30, 1996: (dollars in thousands) Average outstanding balance $55,303 Average interest rate 4.41% Maximum outstanding at month end $85,980
8. SEGMENT INFORMATION Republic's operations include two reportable segments: banking and mortgage banking. The banking segment is engaged in making loans, investing in securities and collecting deposits. The mortgage banking segment originates residential mortgage loans for resale in the secondary mortgage market and services loans for the Bank and others. Intersegment interest income and expense represent interest on loans and advances from the banking segment to the mortgage banking segment computed at New York prime, and advances from Republic to the Bank. <TABLE> <CAPTION> Three months ended June 30, 1996 (in thousands) Mortgage Republic Bank Banking Bancorp Eliminations Consolidated <S> <C> <C> <C> <C> Interest income: Unaffiliated customers $19,602 $ 190 47 $ 19,839 Intersegment 187 $ (187) -------- ------- ------ ------- -------- Total interest income 19,789 190 47 (187) 19,839 -------- ------- ------ ------- -------- Interest expense: Unaffiliated customers 10,179 41 10,220 Intersegment 47 140 (187) -------- ------- ------ ------- Total interest expense 10,226 140 41 (187) 10,220 -------- ------- ------ ------- -------- Net interest income 9,563 50 6 9,619 Provision for loan losses 3,703 3,703 Non-interest income 1,270 522 1,792 Non-interest expense 6,725 318 7,043 -------- ------- ------ -------- Income before income taxes$ 405 $ 254 $ 6 $ 665 ======== ======= ====== ======== Identifiable assets $927,527 $ 6,925 $ 759 $935,211 ======== ======= ====== ======== Depreciation and amortization of premises and equipment $ 656 $ 22 $ 678 ===== ======= ======== Capital expenditures $ 2,251 $ 6 $ 2,257 ======== ======= ======== </TABLE>
<TABLE> <CAPTION> Three months ended June 30, 1995 (in thousands) Mortgage Republic Bank Banking BancorpEliminationsConsolidated <S> <C> <C> <C> <C> Interest income: Unaffiliated customers $ 17,401 $ 155 $ 47 $ 17,603 Intersegment 177 $ (177) -------- ------- ------ ------- -------- Total interest income 17,578 155 47 (177) 17,603 -------- ------- ------ ------- -------- Interest expense: Unaffiliated customers 9,411 54 9,465 Intersegment 47 130 (177) -------- ------- ------ ------- Total interest expense 9,458 130 54 (177) 9,465 -------- ------- ------ ------- -------- Net interest income 8,120 25 (7) 8,138 Provision for loan losses 1,503 1,503 Non-interest income 2,077 459 2,536 Non-interest expense 5,738 257 6 6,001 -------- ------- ------ -------- Income (loss) before income taxes $ 2,956 $ 227 $ (13) $ 3,170 ======== ======= ====== ======== Identifiable assets $816,847 $ 7,205 $ 439 $824,491 ======== ======= ====== ======== Depreciation and amortization of premises and equipment $ 521 $ 32 $ 553 ===== ======= ======== Capital expenditures $ 514 $ 2 $ 516 ======== ======= ======== </TABLE>
<TABLE> <CAPTION> Six months ended June 30, 1996 (in thousands) Mortgage Republic Bank Banking Bancorp Eliminations Consolidated <S> <C> <C> <C> <C> Interest income: Unaffiliated customers $ 39,009 $ 341 $ 97 $ 39,447 Intersegment 357 $ (357) -------- ------- ------ ------- -------- Total interest income 39,366 341 97 (357) 39,447 -------- ------- ------ ------- -------- Interest expense: Unaffiliated customers 20,442 82 20,524 Intersegment 97 260 (357) -------- ------- ------ ------- Total interest expense 20,539 260 82 (357) 20,524 -------- ------- ------ ------- -------- Net interest income 18,827 81 15 18,923 Provision for loan losses 5,634 5,634 Non-interest income 3,249 1,031 4,280 Non-interest expense 13,210 588 40 13,838 -------- ------- ------ -------- Income (loss) before income taxes $ 3,232 $ 524 $ (25) $ 3,731 ======== ======= ====== ======== Identifiable assets $927,527 $ 6,925 $ 759 $935,211 ======== ======= ====== ======== Depreciation and amortization of premises and equipment $ 1,497 $ 45 $ 1,542 ===== ====== ======== Capital expenditures $ 4,288 $ 14 $ 4,302 ======== ======= ======== </TABLE>
<TABLE> <CAPTION> Six months ended June 30, 1995 (in thousands) Mortgage Republic Bank Banking Bancorp Eliminations Consolidated <S> <C> <C> <C> <C> Interest income: Unaffiliated customers $ 32,903 $ 289 $ 67 $ 33,259 Intersegment 305 $ (305) -------- ------- ------ ------- -------- Total interest income 33,208 289 67 (305) 33,259 -------- ------- ------ ------- -------- Interest expense: Unaffiliated customers 17,171 117 17,288 Intersegment 67 238 $ (305) -------- ------- ------ ------- Total interest expense 17,238 238 117 (305) 17,288 -------- ------- ------ ------- -------- Net interest income 15,970 51 (50) 15,971 Provision for loan losses 1,940 1,940 Non-interest income 3,437 825 4,262 Non-interest expense 11,399 533 6 11,938 -------- ------- ------ -------- Income (loss) before income taxes $ 6,068 $ 343 $ (56) $ 6,355 ======== ======= ====== ======== Identifiable assets $816,847 $ 7,205 $ 439 $824,491 ======== ======= ====== ======== Depreciation and amortization of premises and equipment $ 1,052 $ 65 $ 1,117 ==== ====== ======== Capital expenditures $ 771 $ 2 $ 773 ======= ====== ======== </TABLE>
PART I ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Republic, headquartered in Louisville, Kentucky, was incorporated on January 2, 1974. The Bank is a commercial banking and trust corporation organized and chartered under the laws of the Commonwealth of Kentucky. The Bank is also headquartered in Louisville, Kentucky and provides banking services through seventeen banking centers throughout Kentucky. The Bank's activities include the acceptance of deposits for checking, savings and time deposit accounts, making secured and unsecured loans, investing in securities, rental of safe deposit boxes and trust services. The Bank's lending services include the making of real estate, commercial, consumer and Bankcard loans and its operating revenues are derived primarily from interest and fees on domestic real estate, commercial and consumer loans, and from interest on securities of the United States Government and Agencies, states, and municipalities. Regulators for Republic include the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Bank and the Kentucky Department of Financial Institutions. In assets, the Bank is the sixth largest FDIC-insured bank in Louisville, Kentucky and the ninth largest FDIC-insured commercial bank in Kentucky. COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1996 AND DECEMBER 31, 1995 Overview. Republic's total assets were $935.2 million at June 30, 1996, compared to $891.3 million at December 31, 1995, an increase of 5%. The growth was primarily attributable to increased market loan demand. Cash and cash equivalents. The cash and cash equivalents decreased from $75.3 million at December 31, 1995 to $58.9 million at June 30, 1996. Cash and due from banks decreased $4.4 million, while federal funds sold decreased $12 million. These decreases resulted from increased loan demand and management's deployment of funds into the investment portfolio. Securities to be held to maturity. Securities increased from $114.7 million at December 31, 1995, to $134.4 million at June 30, 1996. The investment portfolio consists primarily of U. S. Treasury and U.S. Government Agencies with a range of maturities, none of which exceed ten years. Republic maintains a conservative interest rate risk strategy in that 85% of the portfolio matures within 5 years. Funds provided by maturing securities throughout the six month period ended June 30, 1996 were primarily used to purchase replacement securities. No investment securities were sold prior to maturity through June 30, 1996.
Loans. Net loans increased $38.3 million to $706.5 million at June 30, 1996, compared to $668.2 million at December 31, 1995. The increase in net loans was led by residential lending which has increased 10% since December 31, 1995. Residential real estate loans increased due to Republic's marketing activities and sustained customer demand. In recent periods, Republic has experienced strong overall loan growth throughout its markets. If current economic trends remain stable, Republic anticipates continued loan growth. Republic's unsecured consumer loan portfolio ("All Purpose", "Pre-Approved", and Bankcard) increased marginally from $88.3 million at December 31, 1995 to $91.9 million at June 30, 1996. Republic's "All Purpose" loans, with total outstandings of $27.2 million at June 30, 1996, are originated through Republic's retail operating units. This product has an average loan amount of $8,000 and an average annual percentage rate of 17.73% with a standard maximum maturity of 5 years. "Pre-Approved" loans, with total outstandings of $40.3 million at June 30, 1996, are delivered through direct mail, targeting customers both in and outside of Republic's traditional Kentucky markets. The "Pre-Approved" product has an average loan amount of $7,800 and an average annual percentage rate of 14.25% with a standard maximum maturity of 5 years. Republic's Bankcard program, with total outstandings of $24.4 million at June 30, 1996, has an average loan amount of $2,518 and an average annual percentage rate of 13.21%. Allowance and Provision for Loan Losses. The allowance for loan losses increased from $3.7 million at December 31, 1995 to $6.2 million at June 30, 1996. The increase is primarily attributable to the unsecured consumer loan portfolio. The additions to the allowance have increased Republic's allowance for loans losses to total loan ratio to .87% at June 30, 1996 up from .55% at December 31, 1995. The provision for loan losses was $3.7 million in second quarter, 1996, compared to $1.5 million in second quarter 1995. Net charge-offs increased $1.1 million during second quarter 1996 over second quarter 1995. Republic's unsecured consumer loan portfolio accounted for 88% of total charge-offs in the second quarter of 1996. Similarly, the provision for loan losses was $5.6 million for the six months ended June 30, 1996, compared to $1.9 million for the six months ended June 30, 1995. Net charge-offs increased $2.4 million during six months ended June 30, 1996 over the comparable period in 1995. Republic's unsecured consumer loan portfolio accounted for 91% of total charge-offs in the first half of 1996. The charge-offs in the unsecured portfolio were principally comprised of $1.3 million in the "All-Purpose" program and $819,000 in the "Pre-Approved" program. As a result of increasing charge-offs, management has limited the growth of the unsecured consumer loan portfolio by tightening the underwriting standards for the "All-Purpose" program and reducing the number of direct mail offers for the "Pre-Approved" loan program. These actions are expected to increase the average quality of these loan programs and gradually reduce the rate of charge-offs. Republic also experienced charge-offs in its Bank card program of $670,000 for the six months ended June 30, 1996, compared to $294,000 for the comparable period in 1995. Management anticipates that the current level of charge-offs in the unsecured consumer loan portfolio may continue at or near its current level, but believes, based on information presently available, that it has adequately provided for these losses as of June 30, 1996. Future adjustments, which could be material, may be necessary if actual performance differs from management's estimates. Table 1 below depicts the allowance activity by loan type for the three months and six months ended June 30, 1996 and 1995. <TABLE> <CAPTION> Table 1 - Summary of Loan Loss Experience Three Months Ended Six Months Ended June 30, June 30, <S> <C> <C> <C> <C> (in thousands) 1996 1995 1996 1995 Allowance For Loan Losses Balance Beginning of Period $4,261 $2,187 $3,695 $1,827 Charge-offs: Real Estate 128 293 140 313 Commercial 6 0 13 5 Consumer 1,627 362 3,008 422 ------ ------ ------ ------ Total (1,761) (655) (3,161) (740) ------- ------ ------- ------ Recoveries: Real Estate 2 2 Commercial Consumer 37 17 72 25 ------ ------ ------ ------ Total 39 17 74 25 ------ ------ ------ ------ Net charge-offs: (1,722) (638) (3,087) (715) Provision For Loan Losses 3,703 1,503 5,634 1,940 ------ ------ ------ ------ Allowance For Loan Losses End of Period $6,241 $3,052 $6,241 $3,052 ====== ====== ====== ====== </TABLE> Premises and Equipment, net. Premises and equipment increased from $12.1 million at December 31, 1995 to $13.8 million at June 30, 1996. The increase resulted from the addition of a new banking center and technology enhancements. The technology enhancements included expansion of the Bank's personal computer network, platform automation and telecommunication system improvements. Deposits. Total deposits increased to $746.9 million at June 30, 1996, compared to $734.4 million at December 31, 1995. This increase was primarily due to a rise in core deposits resulting from deposit gathering activities designed to attract new funds. Republic plans to continue its deposit gathering initiatives while working to maximize retention of maturing rate-sensitive deposits through aggressive pricing strategies and new products. Securities Sold Under Agreements to Repurchase and Other Short Term Borrowings. Short term borrowings increased from $21.7 million at December 31, 1995 to $50.2 million at June 30, 1996. The change was primarily due to increased funds provided by public sector enterprises and other new funding relationships. Management intends to develop additional public sector relationships to increase short term borrowings in the near term. RESULTS OF OPERATIONS Overview. For the three months ended June 30, 1996, Republic's net income was $326,000, or $.03 per share compared to $2.1 million, or $.26 per share, for the second quarter of 1995. Earnings for the second quarter 1996 produced an annualized return on average assets of .14% and a return on average stockholders' equity of 2.22%, compared to returns of 1.0% and 15.05%, respectively, for the comparable period in 1995. For the six months ended June 30, 1996, net income was $2.2 million compared to $4.1 million for the same period in 1995. The decline in earnings was attributable to increased provisions to the Bank's loan loss reserve prompted by a rise in charge-offs in the unsecured consumer loan portfolio. Net Interest Income. For second quarter, 1996, net interest income was $9.6 million, up 19% over the $8.1 million attained during second quarter, 1995. This increase was primarily attributable to Republic's continued loan growth, particularly residential real estate loans. During second quarter, 1996, average interest-earning assets were $863.3 million, an increase of $80.8 million over second quarter 1995. The yield on average interest-earning assets increased from 9.00% during second quarter of 1995 to 9.19% during second quarter of 1996. Total average interest bearing liabilities increased from $696.4 million in the second quarter of 1995 to $776.3 in the second quarter of 1996. The cost of average interest-bearing liabilities decreased from 5.44% during second quarter of 1995 to 5.27% in the second quarter of 1996, as higher cost deposits matured. Overall, the net interest rate spread increased from 3.56% during second quarter of 1995, to 3.93% in the comparable quarter of 1996. The Bank's net interest margin increased from 4.16% in second quarter, 1995 to 4.46% in second quarter, 1996. Net interest income for the six months ended June 30, 1996 was $18.9 million, up $2.9 million from $16.0 million during the six months ended June 30, 1995. When comparing the respective six month periods, average earning assets grew by $105.1 million in 1996 and average interest bearing liabilities increased $97.4 million. The rise in net interest income in 1996 is primarily due to the increase of the Bank's loan portfolio. The Bank's exposure to changes in interest rates is managed by maintaining a balance between interest-earning assets and interest-bearing liabilities which are expected to mature or are sensitive to interest rate changes. At June 30, 1996, the Bank's exposure to changes in interest rates reflected a negative one year gap of $819,000 compared to a positive one year gap of $12.3 million at December 31, 1995. The change in the one year gap was attributable to the placement of the federal funds into longer term investments and the increase of short term borrowings. Management does not deem the change to be significant. Tables 2 and 3 on page 19 and 20 provides detailed information as to average balance, interest income/expense, and rates by major balance sheet category for the three and six months ended June 30, 1996 and 1995.
<TABLE> <CAPTION> Table 2 - Average Balance Sheet and Average Rates - for Second Quarter, 1996 and 1995 (in thousands) - ---------------------------------------------------------------------------------------------------- Three Months Ended June 30, 1996 Three Months Ended June 30, 1995 ------------------------------- ------------------------------- ASSETS Average Average Average Average Balance Interest Rate (4) Balance Interest Rate (4) ------- -------- -------- ------- -------- -------- <S> <C> <C> <C> <C> <C> <C> Earning Assets: US Treasury and US Government Agency Securities $119,469 $1,856 6.21% $121,761 $1,996 6.56% State and Political Subdivision Securities 4,590 98 8.54% 4,751 100 8.42% Other Investment Securities 5,345 103 7.71% 4,999 83 6.64% Mortgage-Backed Securities 716 9 5.03% 811 10 4.93% Federal Funds Sold 19,012 247 5.20% 29,734 449 6.04% Total Loans and Fees (1) 714,190 17,526 9.82% 620,478 14,965 9.65% ------- ------ ----- ------- ------ ----- Total Earning Assets 863,322 19,839 9.19% 782,534 17,603 9.00% Less: Allowance for Loan Losses (4,678) (2,517) Non-Earning Assets: Cash and Due From Banks 20,656 14,869 Bank Premises and Equipment, Net 13,526 12,232 Other Assets 9,206 10,680 --------- ---------- Total Assets $902,032 $817,798 ========= ========== LIABILITIES AND STOCK- HOLDERS' EQUITY: Interest Bearing Liabilities Transaction Accounts $151,982 $1,307 3.44% $141,571 $1,309 3.70% Money Market Accounts 33,852 364 4.30% 18,137 210 4.63% Individual Retirement Accounts 34,695 536 6.18% 31,477 497 6.32% Certificates of Deposits and Other Time Deposits 425,682 6,373 5.99% 407,622 6,044 5.93% Repurchase Agreements and Other Borrowings 130,092 1,640 5.04% 97,618 1,405 5.76% ------- ----- ----- ------ ----- ------ Total Interest Bearing Liabilities 776,303 10,220 5.27% 696,425 9,465 5.44% Non-Interest Bearing Liabilities: Non-Interest Bearing Deposits 59,379 53,796 Other Liabilities 7,633 13,025 Stockholders' Equity 58,717 54,552 --------- ---------- Total Liabilities and Stock- holders' Equity $902,032 $817,798 ========= ========== Net Interest Income $9,619 $8,138 =========== =========== Net Interest Spread (2) 3.93% 3.56% ========= ======== Net Interest Margin (3) 4.46% 4.16% ========= ======== - -------------------------------------------------------------------------------- For purposes of these calculations, non-accruing loans are included in the quarterly average loan amounts outstanding. (1) The amount of fees included in interest on loans was $37,000 and $67,000 for the three months ended June 30, 1996 and 1995, respectively. (2) Net interest spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average interest-earning assets. (4) For purposes of calculating these figures, all interest income and interest costs are annualized. </TABLE>
<TABLE> <CAPTION> Table 3 - Average Balance Sheet and Average Rates - for Six Months, 1996 and 1995 - -------------------------------------------------------------------------------------------------------------------- Six Months Ended June 30, 1996 Six Months Ended June 30, 1995 -------------------------------------------- --------------------------------------------- ASSETS Average Average Average Average Balance Interest Rate (4) Balance Interest Rate (4) ------- -------- -------- ------- -------- -------- <S> <C> <C> <C> <C> <C> <C> Earning Assets: US Treasury and US Government Agency Securities $120,340 $3,762 6.25% $113,836 $3,531 6.20% State and Political Subdivision Securities 4,613 197 8.54% 4,735 200 8.45% Other Investment Securities 5,304 197 7.43% 4,984 164 6.58% Mortgage-Backed Securities 725 19 5.24% 822 20 4.87% Federal Funds Sold 24,033 641 5.33% 23,889 711 5.95% Total Loans and Fees (1) 703,422 34,631 9.85% 605,036 28,633 9.46% -------- ------ ----- ------- ------- ----- Total Earning Assets 858,437 39,447 9.19% 753,302 33,259 8.83% Less: Allowance for Loan Losses (4,258) (2,181) Non-Earning Assets: Cash and Due From Banks 19,669 15,657 Bank Premises and Equipment, Net 13,082 12,216 Other Assets 10,183 9,921 ------- ------- Total Assets $897,113 $788,915 ======= ========= LIABILITIES AND STOCK- HOLDERS' EQUITY: Interest Bearing Liabilities Transaction Accounts $149,830 $2,610 3.48% $148,525 $2,549 3.43% Money Market Accounts 32,565 697 4.28% 14,920 334 4.48% Individual Retirement Accounts 34,467 1,075 6.24% 28,680 874 6.09% Certificates of Deposits and Other Time Deposits 432,197 13,032 6.03% 380,064 10,678 5.62% Repurchase Agreements and Other Borrowings 120,669 3,110 5.15% 100,169 2,853 5.70% --------- ------- ------ --------- ------- ----- Total Interest Bearing Liabilities 769,728 20,524 5.33% 672,358 17,288 5.14% Non-Interest Bearing Liabilities: Non-Interest Bearing Deposits 58,549 52,336 Other Liabilities 9,326 12,157 Stockholders' Equity 59,510 52,064 -------- ------ Total Liabilities and Stockholders' Equity $897,113 $788,915 ======== ========= Net Interest Income $18,923 $15,971 ======= ======== Net Interest Spread (2) 3.86% 3.69% ====== ===== Net Interest Margin (3) 4.41% 4.24% ====== ===== - -------------------------------------------------------------------------------- For purposes of these calculations, non-accruing loans are included in the quarterly average loan amounts outstanding. (1) The amount of fees included in interest on loans was $47,000 and $102,000 for the six months ended June 30, 1996 and 1995, respectively. (2) Net interest spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average interest-earning assets. (4) For purposes of calculating these figures, all interest income and interest costs are annualized. </TABLE>
<TABLE> <CAPTION> 20 Table 4 - Volume/Rate Variance Analysis (in thousands) - ------------------------------------ The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected Republic's interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate. Three Months Ended June 30, 1996 Six Months Ended June 30, 1996 Compared to Three Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1995 ------------------------------------------- ------------------------------------------- Increase/(Decrease) Increase/(Decrease) Due To Due To Total Net Total Net <S> <C> <C> <C> <C> <C> <C> Interest Income (1): US Treasury and Government Agency Securities ($140) ($38) ($102) $231 $202 $29 State and Political Subdivision Securities (2) (3) 1 (3) (5) 2 Other Investment Securities 20 6 14 33 11 22 Mortgage-Backed Securities (1) (2) 1 (1) (2) 1 Federal Funds Sold (202) (162) (40) (70) 4 (74) Total Loans and Fees 2,561 2,260 301 5,998 4,656 1,342 ------ ------ ---- ------ ------ ----- Net Change in Interest Income 2,236 2,061 175 6,188 4,866 1,322 ------ ------ ---- ------ ------ ----- Interest Expense: Interest Bearing Transaction Accounts (2) 96 (98) 61 22 39 Money Market Accounts 154 182 (28) 363 395 (32) Individual Retirement Accounts 39 51 (12) 201 176 25 Certificates of Deposit and Other Time Deposits 329 268 61 2,354 1,465 889 Repurchase Agreements and Other Borrowings 235 467 (232) 257 584 (327) ---- ---- ----- ---- ---- ----- Net Change in Interest Expense 755 1,064 (309) 3,236 2,642 594 ---- ------ ----- ------ ------ --- Increase in Net Interest Income $1,481 $997 $484 $2,952 $2,224 $728 ======= ===== ===== ======= ======= ==== (1) Interest income for loans on non-accrual status have been eliminated from revenues. </TABLE> Non-Interest Income. Non-interest income was $1.8 million during second quarter 1996, down from $2.5 million during second quarter of 1995. Non-interest income remained constant at $4.3 million for the six months ended 1996 and 1995. Service charges on deposit accounts rose 25% in second quarter 1996 over second quarter 1995, while also having increased 21% for the six months ended 1996 due to increased fees. Net gain on sale of loans increased $157,000 in second quarter, 1996, over second quarter, 1995, and also increased 97% for the six months ended 1996 over 1995 due to increased secondary market mortgage loan volume. The decrease in other non-interest income during second quarter 1996 and the six month period ended 1996 resulted from a one time gain of $738,000 for the reversal of a previously expensed legal matter during the second quarter of 1995. Non-Interest Expense. Total non-interest expense was $7.0 million in second quarter 1996, compared to $6.0 million for second quarter 1995, an increase of 17%. Non-interest expense increased 16% from $11.9 million for the six months ended June 30, 1995, compared to $13.8 million for the comparable period in 1996. Non-interest expense levels are often measured using a non-interest interest expense ratio (non-interest expense divided by the sum of net income and non-interest income). Republic's non-interest expense ratio increased from 56% for the second quarter 1995, to 62% for second quarter 1996. Management anticipates that this ratio will continue to increase in the near term due to growth and expansion. Salary and employee benefits expense increased 13% for the second quarter, 1996 over second quarter, 1995, and 22% for the six months ended June 30, 1996 due to staff additions and annual merit increases. Republic's staffing level rose to 401 full-time equivalent employees (FTE's) at June 30, 1996, compared to 343 FTE's at June 30, 1995. The increase in staffing was primarily attributable to future staffing needs prompted by the Bank's expansion plans during the remainder of 1996. Also, staffing in operational areas was increased to support sustained strong loan demand. Occupancy and equipment expense increased 20% in second quarter, 1996, over second quarter 1995. This expense increased from $2.6 million for the six months ended June 30, 1995 to $3.0 for the comparable period in 1996. The increase was primarily due to depreciation expenses associated with new technology enhancements for lending and customer support systems. The increase is also due to an additional banking center location which was opened during the first quarter of 1996. Management intends to continue its expansion plans by adding 4 additional banking centers during 1996, subject to regulatory approval. Management anticipates that Republic's expansion plans and continued technology enhancements will result in an increased occupancy and equipment expense level during the remainder of 1996. Insurance expense decreased $25,000 from second quarter, 1995, to second quarter 1996. The decrease resulted from a lowering of federal deposit insurance premiums on deposits insured by the Bank Insurance Fund (BIF). Approximately 45% of Republic's deposits are insured by BIF. The remaining 55% are insured by the Savings Association Insurance Fund (SAIF) of the FDIC resulting from the merger of Republic Savings Bank, F.S.B. with the Bank in 1994. The SAIF deposits are currently assessed at 23 cents per $100 of deposits. However, Congress has been considering a special, one-time assessment on SAIF deposits and a subsequent merger of the SAIF and BIF funds. If enacted, this legislation could result in a material one-time pre-tax charge. The amount of such charge, if any, cannot be determined at this time. Republic is required to reimburse the FDIC for tax benefits received resulting from tax deductions for losses on loans and other real estate owned (OREO) acquired through the acquisition of a failed institution. Republic has remitted amounts it has determined to be due under the terms of the agreement. Republic is involved in discussions with the FDIC concerning interpretations of certain provisions of the agreement and may be required to remit additional payments related to prior years. Management intends to vigorously contest any request by the FDIC for additional payments. While Republic does not believe the outcome will have a material impact on its future results of operations, the ultimate resolution of this matter is unknown. There have been no new developments with respect to this matter during the period. Other non-interest expense increased $225,000 during the second quarter, 1996 over second quarter, 1995, and 10% for the six months ended June 30, 1996 over the comparable period in 1995. The increase is attributable to legal fees associated with collection efforts on charged off consumer loans, increased state taxes on deposits and professional fees. ASSET QUALITY Loans, including impaired loans under SFAS 114 and excluding consumer loans, are placed on non-accrual status when they become past due 90 days or more as to principal or interest, unless they are adequately secured and in the process of collection. When loans are placed on non-accrual status, all unpaid accrued interest is reversed. These loans remain on non-accrual status until the borrower demonstrates the ability to remain current or the loan is deemed uncollectible and is charged off. Consumer loans are not placed on non-accrual status but are reviewed periodically and charged off when deemed uncollectible. At June 30, 1996, Republic had $383,000 in consumer loans 90 days or more past due compared to $361,000 at December 31, 1995. Table 5 provides information related to non-performing assets and loans 90 days or more past-due. Accruing loans contractually past due 90 days or more increased from $1.5 million at December 31, 1995 to $3.8 million at June 30, 1996. This rise is attributable to loans secured by commercial real estate. Management anticipates that commercial real estate loans 90 days or more past due will return to prior levels in the near term. While loans past due 90 days or more increased, total non-performing assets increased moderately due to the successful disposition of OREO.
<TABLE> <CAPTION> Table 5 - Non-Performing Assets June 30, December 31, 1996(1) 1995(1) (dollars in thousands) <S> <C> <C> Loans on non-accrual status (2) $928 $ 742 Loans past due 90 days or more 3,759 1,463 ------ ------ Total non-performing loans 4,687 2,205 Other real estate owned 0 552 ------ ------ Total non-performing assets $4,687 $2,757 ====== ====== Percentage of non-performing loans to total .66% .33% loans .50% .41% Percentage of non-performing assets to total loans (1) The table is exclusive of impaired loans which remained on accrual status as of June 30, 1996. (2) Interest income that would have been earned and received on non-accrual loans was not material. </TABLE> Republic defines impaired loans to be those commercial real estate and commercial loans greater than $499,999 that management has classified as doubtful (collection of all amounts due is highly questionable or improbable) or loss (all or a portion of the loan has been written off or a specific allowance for loss has been provided). Republic's policy is to charge off all or that portion of its investment in an impaired loan upon a determination it is probable the full amount will not be collected. Impaired loans decreased from $3.6 million at December 31, 1995 to $1.6 million at June 30, 1996. LIQUIDITY Asset/liability management strategies are designed to ensure safety and soundness, maintain liquidity and regulatory capital standards and achieve an optimal net interest margin. Management monitors interest rate and liquidity risk in relation to prospective market and business conditions and implements appropriate funding and balance sheet strategies. These strategies are designed to maintain liquidity within the Bank's policy guidelines. In order to maintain an acceptable liquidity position, Republic has established access to additional sources of funding. Substantial resources can be realized from the investment portfolio, of which $43.6 million matures or is putable within one year. These maturing securities can be utilized to provide additional liquidity as needed. Republic's operating centers also provide access to a retail deposit market. In addition, Republic has established lines of credit with various financial institutions which can provide additional funds for liquidity if needed.
CAPITAL During the second quarter of 1996 Republic purchased 3,286 shares of the Bank's common stock for $4.0 million. This infusion of capital increased the Bank's Tier 1 leverage ratio from 6.7% at December 31, 1995 to 6.8% at June 30, 1996. The Bank intends to maintain a capital position that meets the regulatory definition, as defined by the FDIC, of a "well capitalized" institution. Table 6 below indicates the Bank's capital at June 30, 1996.
<TABLE> <CAPTION> Table 6 - Bank Capital Ratios As of June 30, 1996 Tier I Tier I Total (dollars in thousands) Risk Based Leverage Risk Based Capital Ratio Capital Ratio Capital Ratio <S> <C> <C> <C> Bank Stockholders' Equity $61,045 $61,045 $61,045 General Valuation Allowance 6,241 Less: Goodwill and Core Deposit Intangibles (9) (9) (9) ------- ------- ------ Computed Regulatory Capital $61,036 $61,036 $67,277 ======= ======= ======= Computed Ratio 10.6% 6.8% 11.7% FDIC "Well Capitalized" Ratio 6.0% 5.0% 10.0% FDIC Minimum Capital Requirements 4.0% 3.0% 8.0% Kentucky banking regulations limit the amount of dividends that may be paid to Republic by the Bank without prior approval of the Bank's regulatory agency. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the Bank's current year's net income, as defined in the regulations, combined with the retained net income of the preceding two years, less any dividends declared during those periods. At June 30, 1996, the Bank had $8.7 million of retained earnings available for payment of dividends. </TABLE>
PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K A. The exhibits required by Item 601 of Regulation S-K are attached to and listed in the Exhibit Index on page 28. B. A Form 8-K dated May 31, 1996 was filed relating to "Item 4. Changes in Registrant's Certifying Accountant." The Form 8-K disclosed that Republic has engaged Crowe Chizek and Company, LLP as its principal accountants.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Republic Bancorp, Inc. (Registrant) Principal Executive Officer:Bernard M. Trager Date:8/14/96 /s/ Bernard M. Trager Chairman and Chief Executive Officer rincipal Financial Officer:E. William Petter, Jr. Date:8/14/96 /S/ E. William Petter, Jr. Executive Vice President, Chief Financial Officer
EXHIBIT INDEX Exhibit Description Page 11 Statement Regarding Computation of Per Share 29 Earnings 27 Financial Data Schedule 30
<TABLE> <CAPTION> Exhibit 11. Statement Regarding Computation of Per Share Earnings in thousands, except per share amounts (unaudited) Three Months SixMonths Ended June 30, Ended June 30, 1996 1995 1996 1995 <S> <C> <C> <C> <C> Primary earnings per common share: Weighted average common shares outstanding 7,221 7,182 7,221 7,182 Common stock equivalents due to dilutive effect of stock options 75 84 70 84 Common stock equivalents due to dilutive effect of Convertible Preferred Stock 300 300 300 210 ------ ------ ------ ------- Average shares and equivalents outstanding 7,596 7,566 7,591 7,476 Net income $ 326 $2,053 $2,249 $4,135 Less preferred stock dividends 106 106 213 152 ------ ------ ------ ------ Income available for common stock 220 1,947 2,036 3,983 Primary net income per share $ .03 $ .26 $ .27 $ .53 ====== ====== ====== ====== Fully-diluted earnings per common share: Weighted average common shares outstanding 7,221 7,182 7,221 7,182 Common stock equivalents due to dilutive effect of stock options 75 84 70 84 Common stock equivalents due to dilutive effect of Convertible Preferred Stock 300 300 300 210 ------ ------ ------ ------ Average shares and equivalents outstanding 7,596 7,566 7,591 7,476 Net income $326 $2,053 $2,249 $4,135 Less preferred stock dividends 106 106 213 152 ------ ------ ------ ------ Income available for common stock 220 1,947 2,036 3,983 Fully-diluted net income per share $ .03 $ .26 $ .27 $ .53 ====== ====== ====== ====== </TABLE>