<PAGE> 1
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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------------- --------------
COMMISSION FILE NUMBER 0-27652
REPUBLIC BANCSHARES, INC.
(Exact Name of Registrant As Specified In Its Charter)
FLORIDA 59-1463900
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
111 2nd Avenue N.E., St. Petersburg, FL 33701
(Address of Principal Office) (Zip Code)
(813) 823-7300
(Registrant's Telephone Number, Including Area Code)
- - --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
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. Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
<TABLE>
<S> <C>
Common stock, par value $2.00 per share 4,183,507 shares outstanding at July 31, 1996
- - --------------------------------------- ---------------------------------------------
</TABLE>
<PAGE> 2
REPORT TO SHAREHOLDERS
QUARTER ENDED JUNE 30, 1996
Earnings for the second quarter of 1996 were $1,269,000, 5.4% higher
than earnings of $1,204,000 for the first quarter of this year. When the
second quarter of 1996 is compared to the same period in 1995 before negative
goodwill accretion, earnings increased $209,000 or 19.7%. However, net income
for the second quarter of 1995 amounted to $1,736,000 when the negative
goodwill is included. For the first six months of 1996, the Company's
earnings before negative goodwill improved $566,000 or 29.7% over the same
period last year.
Earnings per share were $.26 for the second quarter of 1996 compared
to $.24 last quarter and $.25 for the second quarter last year. Including the
benefit of the negative goodwill, per share earnings for the second quarter of
1995 were $.41. The number of shares used in the calculation increased
substantially in 1996 because of the stock offering completed in June of last
year. Returns on assets and equity were .63% and 9.93%, respectively, for the
second quarter of 1996 compared to .56% and 11.22% (both excluding negative
goodwill) for the same period last year. Negative goodwill was fully accreted
to income and capital in July 1995.
During the recent quarter, we increased total deposits by $33 million
by effectively marketing new products. In the first quarter, we had reduced
our growth in deposits to decrease our cost of funds and improve our net
interest margin. Our funds cost for the second quarter of 1996 was 9 basis
points lower than our cost for the first quarter and 19 basis points under our
cost for the same period last year. At the same time we were reducing our
funds cost, the yield on earning assets improved through our expanded lending
programs. Asset yield has increased 16 basis points from 8.20% for the second
quarter of last year to 8.36% for the current quarter. As a result of these
efforts, net interest margin has increased by 39 basis points from 3.82% for
the second quarter of 1995 to 4.21% for the current quarter.
Total assets increased to $835 million at June 30, 1996, and total
loans have grown by $29 million during 1996 to $698 million. Republic's tier 1
(leverage) capital ratio was 6.03% and its total risk-based capital ratio was
10.40% at June 30, 1996.
We look forward to continued progress in our financial performance and
had set several key business objectives for 1996. During the first quarter,
one of our objectives, forming a holding company, was accomplished and the
exchange of the Bank's common and preferred stock for the stock of the Company
was completed. As we continue our growth plan, the holding company structure
will allow us to use a broader range of instruments to raise capital and will
facilitate acquisitions of other financial institutions, should such
opportunities arise.
Our other key objectives for 1996 are as follows:
- EXPANDING OUR RESIDENTIAL MORTGAGE PRODUCTION CAPABILITY
- INTRODUCING NEW CONSUMER SERVICES
- INCREASING RETAIL CHECKING ACCOUNTS, BALANCES AND FEE INCOME
<PAGE> 3
EXPANDING OUR RESIDENTIAL MORTGAGE PRODUCTION CAPABILITY
During the second quarter, we completed the addition of Flagship and
Capital Mortgage which operate loan production offices on the west coast of
Florida and in Boston, Massachusetts. This expansion provides the Company with
a broader range of mortgage products and the ability to substantially increase
mortgage production and noninterest income through sales of new loan production
to investors. As a start-up operation, these new units produced $38 million in
new loans during the second quarter, the majority of which will be sold to
investors in the secondary market.
INTRODUCING NEW CONSUMER SERVICES
Progress continues toward developing several new consumer services for
1996. Cash management services were successfully introduced to our business
clients earlier this year, and we recently opened an official page on the
worldwide web in preparation for making internet home banking services
available at the end of 1996 (our internet address is
http://republicbankfl.com). We've also expanded the ability of our ATM
cardholders to access their accounts at ATM terminals worldwide displaying the
Plus! membership logo and our own ATM's are now available at no additional fee
to any cardholders participating in the Plus! or Cirrus networks. Lastly,
planning for issuing our proprietary credit card and debit card programs are
nearing completion, and we will be introducing these new services during the
fourth quarter this year.
INCREASING RETAIL CHECKING ACCOUNTS, BALANCES AND FEE INCOME
Our final key objective for 1996 was to increase retail checking
accounts and balances to improve the level of the Company's fee income. In the
first quarter we introduced Generations Gold, an enhanced checking account
program featuring discounts and rebates on travel services, restaurants, car
rentals, long-distance telephone service and condominium vacations, to name a
few. This new program has been very well received by both new and existing
clients with about half of all new checking accounts registering for the
Generations Gold program. This will continue to be a major focus of our
marketing efforts throughout 1996.
Republic Bank continues to be the largest independently-owned and
operated bank on the west central coast of Florida and the fourth largest such
institution in the state. In addition to our 32 branch franchise in Pasco,
Pinellas, Manatee and Sarasota counties, we have added loan production offices
in central and southwest Florida as-well-as an office in Boston. Your Board
of Directors and management team are proud of the progress made during the past
three years and we are excited about our future. We appreciate your support
and emphasize our dedication towards enhancing your investment in Republic
Bancshares, Inc.
JOHN W. SAPANSKI
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
<PAGE> 4
REPUBLIC BANCSHARES, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
----
<S> <C>
Consolidated Balance Sheets - June 30, 1996 (unaudited)
and December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Statements of Operations -
Three month and six month periods
ended June 30, 1996 and 1995 (all unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Stockholders' Equity -
Year ended December 31, 1995 and
six months ended June 30, 1996 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows -
Six months ended June 30, 1996 and 1995 (all unaudited) . . . . . . . . . . . . . . . . . . . . . . . . 4
Selected Quarterly Financial and Other Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6
Notes to Consolidated Financial Statements (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . 8-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
REPUBLIC BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS - JUNE 30, 1996 AND DECEMBER 31, 1995
($ IN THOUSANDS, EXCEPT PAR VALUES)
June 30, December 31,
ASSETS 1996 1995
------ ------
(unaudited)
<S> <C> <C>
Cash and due from banks $ 22,592 $ 19,806
Interest bearing deposits in banks 17 2
Investment securities:
U.S. Treasuries and Federal agency notes:
Held to maturity - 7,015
Available for sale 22,806 38,147
Mortgage-backed securities:
Held to maturity 17,387 17,112
Available for sale 3,854 2,527
FHLB stock 4,830 3,540
Federal funds sold 35,000 14,621
Loans held for sale 21,202 4,711
Loans, net of allowance for loan losses (Notes 2 and 3) 662,430 649,795
Premises and equipment, net 18,894 18,991
Other real estate owned:
Acquired through foreclosure, net 9,375 8,064
Held for investment 2,498 2,498
Other assets 14,120 15,166
-------- --------
Total assets $835,005 $801,995
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits-
Noninterest-bearing checking $ 40,263 $ 45,641
Interest checking 79,360 71,592
Money market 37,549 38,535
Savings 179,476 91,935
Time deposits 429,288 495,402
-------- --------
Total deposits 765,936 743,105
Securities sold under agreements to repurchase 12,153 3,072
Other liabilities 3,702 4,915
-------- --------
Total liabilities 781,791 751,092
-------- --------
Stockholders' equity:
Perpetual preferred convertible stock ($20.00 par, 100,000 shares authorized,
75,000 shares issued and outstanding. Liquidation preference $6,600
at June 30, 1996 and December 31, 1995.) 1,500 1,500
Common stock ($2.00 par, 10,000,000 shares authorized and 4,183,507
shares issued and outstanding at June 30, 1996 and December 31, 1995) 8,367 8,367
Capital surplus 26,699 26,699
Retained earnings 16,670 14,329
Net unrealized gains (losses) on available-for-sale securities, net of tax effect (22) 8
-------- --------
Total stockholders' equity 53,214 50,903
-------- --------
Total liabilities and stockholders' equity $835,005 $801,995
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
1
<PAGE> 6
REPUBLIC BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
For the Three Months Ended June 30, For the Six Months Ended June 30,
----------------------------------- ---------------------------------
1996 1995 1996 1995
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 14,949 $ 13,185 $ 29,727 $ 24,544
Interest on U.S. Treasuries
and federal agencies 312 361 740 773
Interest on mortgage-backed
securities 333 75 624 75
Interest on federal funds sold 256 936 553 1,616
Interest on other investments 87 72 155 112
--------- --------- --------- ---------
Total interest income 15,937 14,629 31,799 27,120
--------- --------- --------- ---------
INTEREST EXPENSE:
Interest on deposits 7,693 7,753 15,573 14,104
Interest on other borrowings 129 23 176 52
--------- --------- --------- ---------
Total interest expense 7,822 7,776 15,749 14,156
--------- --------- --------- ---------
Net interest income 8,115 6,853 16,050 12,964
PROVISION FOR LOAN LOSSES 450 540 900 1,080
--------- --------- --------- ---------
Net interest income after
provision for loan losses 7,665 6,313 15,150 11,884
--------- --------- --------- ---------
NONINTEREST INCOME:
Service charges & fees on deposit accounts 378 330 754 659
Gains on sale of loans 259 - 248 8
Other operating income 351 366 664 690
--------- --------- --------- ---------
Total noninterest income 988 696 1,666 1,357
--------- --------- --------- ---------
NONINTEREST EXPENSES:
General and administrative ("G&A") expenses:
Salaries and employee benefits 3,374 2,876 6,626 5,433
Net occupancy expense 1,025 742 2,050 1,319
Data processing fees & services 313 235 631 498
FDIC and state assessments 264 371 534 758
Advertising 123 95 203 238
Other operating expense 1,243 1,062 2,254 1,976
--------- --------- --------- ---------
Total G & A expenses 6,342 5,381 12,298 10,222
ORE expense, net of ORE income 125 77 307 150
Amortization of premium on deposits 123 123 245 205
--------- --------- --------- ---------
Total noninterest expenses 6,590 5,581 12,850 10,577
--------- --------- --------- ---------
Income before negative goodwill
accretion and income taxes 2,063 1,428 3,966 2,664
Negative goodwill accretion - 676 - 1,352
--------- --------- --------- ---------
Income before income taxes 2,063 2,104 3,966 4,016
Income tax provision 794 368 1,493 757
--------- --------- --------- ---------
NET INCOME $ 1,269 $ 1,736 $ 2,473 $ 3,259
========= ========= ========= =========
PER SHARE DATA:
Net income per common and
common equivalent share $ .26 $ .41 $ .50 $ .78
========= ========= ========= =========
Weighted average common and common
equivalent shares outstanding 4,953,790 4,187,722 4,953,674 4,170,014
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
2
<PAGE> 7
REPUBLIC BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1995 AND
THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Perpetual Preferred Net Unrealized
Convertible Stock Common Stock Gains (Losses)
------------------- -------------------- on Available
Shares Shares Capital Retained for Sale
Issued Amount Issued Amount Surplus Earnings Securities Total
------ ------ ------ ------ ------- -------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 75,000 $1,500 3,380,337 $6,761 $19,139 $ 8,819 $(54) $36,165
Net income - - - - - 5,773 - 5,773
Net unrealized gains on
available-for-sale securities - - - - - - 62 62
Issuance of common stock - - 800,000 1,600 7,537 - - 9,137
Proceeds from exercise of
stock options - - 3,170 6 23 - - 29
Dividends on preferred
stock - - - - - - (263) (263)
------ ------ --------- ------ ------- ------- ----- -------
BALANCE, DECEMBER 31, 1995 75,000 $1,500 4,183,507 $8,367 $26,699 $14,329 $ 8 $50,903
Net income for the six
months ended June 30,
1996 - - - - - 2,473 - 2,473
Net unrealized losses on
available-for-sale securities - - - - - - (30) (30)
Dividends on preferred
stock - - - - - (132) - (132)
------ ------ --------- ------ ------- ------- --- -------
BALANCE, JUNE 30, 1996 75,000 $1,500 4,183,507 $8,367 $26,699 $16,670 (22) $53,214
====== ====== ========= ====== ======= ======= === =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
3
<PAGE> 8
REPUBLIC BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
-------------------------------- ---------------------------------
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
OPERATING ACTIVITIES: (unaudited) (unaudited) (unaudited) (unaudited)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net income $ 1,269 $ 1,524 $ 2,473 $ 3,259
Reconciliation of net income to net cash
provided by (used in):
Provision for losses on loans and ORE 720 540 1,350 1,080
Depreciation and amortization, net (37) 32 (103) (29)
Amortization of premium and accretion
of fair value 167 (550) 298 (1,700)
(Gain) on sale of investment securities - - (4) -
(Gain) on sale of loans (192) - (192) -
(Gain) loss on sale of ORE (129) (1) (119) 12
Capitalization of mortgage servicing 405 - 420 -
Net (increase) decrease in other assets 5,172 (1,360) 95 (1,087)
Net increase (decrease) in other liabilities (115) 637 (764) 840
--------- -------- ---------- --------
Net cash provided by (used in)
operating activities 7,260 822 3,454 4,549
--------- -------- ---------- --------
INVESTING ACTIVITIES:
Net (increase) decrease in interest bearing
deposits in banks (6) - (15) -
Proceeds from sales & maturities of:
Investment securities held to maturity - 5,000 7,000 11,000
Investment securities available for sale 22,000 - 47,006 -
Purchase of securities available for sale (13,727) - (31,757) -
Purchase of securities held to maturity - - - (358)
Principal repayment on mtg. backed securities 710 - 1,459 -
Purchase of FHLB stock - (2,247) (1,290) (2,247)
Net increase in loans (25,386) (82,154) (35,535) (98,243)
Purchase of premises and equipment (406) (3,795) (612) (4,549)
Proceeds from sale of ORE 1,415 968 1,674 2,213
(Investments) disposals in other real estate
owned (net) - 57 - 79
--------- -------- ---------- --------
Net cash provided by (used in) investing
activities (15,400) (82,171) (12,070) (92,105)
--------- -------- ---------- --------
FINANCING ACTIVITIES:
Net increase (decrease) in deposits 23,854 87,052 22,832 124,784
Net increase (decrease) in repurchase
agreements 7,737 220 9,081 1,010
Proceeds from issuance of common stock - 3 - 9,157
Dividends on perpetual preferred stock (66) (66) (132) (132)
--------- -------- ---------- --------
Net cash provided by
(used in) financing activities 31,525 87,209 31,781 134,819
--------- -------- ---------- --------
Net increase (decrease) in cash and
cash equivalents 23,385 5,860 23,165 47,263
Cash and cash equivalents, beginning
of period 34,207 38,701 34,427 38,701
--------- -------- ---------- --------
Cash and cash equivalents, end
of period $ 57,592 $ 44,561 $ 57,592 $ 85,964
========= ======== ========== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for-
Interest $ 9,180 $ 6,028 $ 16,048 $ 13,632
Income taxes 1,373 266 2,238 1,066
</TABLE>
The accompanying notes are an integral part of these consolidated statements
4
<PAGE> 9
SELECTED QUARTERLY FINANCIAL AND OTHER DATA
EIGHT CONSECUTIVE QUARTERS (UNAUDITED)
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Quarters Ending
-------------------------------------------------------
June 1996 Mar. 1996 Dec. 1995 Sept. 1995
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING DATA:
Interest income $ 15,937 $ 15,862 $ 15,901 $ 14,842
Interest expense 7,822 7,927 8,051 7,794
----------- ----------- ----------- ----------
Net interest income 8,115 7,935 7,850 7,048
Loan loss provision 450 450 275 330
----------- ----------- ----------- ----------
Net interest income after loan loss provision 7,665 7,485 7,575 6,718
Noninterest income 988 678 747 647
General and administrative ("G&A") expenses 6,342 5,955 6,388 5,509
Other noninterest expense 248 305 (6) 389
----------- ----------- ----------- ----------
Net income before income taxes & goodwill accretion 2,063 1,903 1,940 1,467
Accretion of negative goodwill - - - 225
----------- ----------- ----------- ----------
Net income before income taxes 2,063 1,903 1,940 1,692
Income tax provision 794 699 694 424
----------- ----------- ----------- ----------
Net income $ 1,269 $ 1,204 $ 1,246 $ 1,268
=========== =========== =========== ==========
PER SHARE DATA (FULLY-DILUTED):
Earnings per share before goodwill accretion $ .26 $ .25 $ .25 $ .21
Effect of negative goodwill accretion - - - .05
----------- ----------- ----------- ----------
Earnings per share after goodwill accretion $ .26 $ .25 $ .25 $ .26
=========== =========== =========== ==========
Weighted average shares outstanding 4,953,790 4,953,229 4,954,555 4,961,541
BALANCE SHEET DATA (AT PERIOD-END):
Total assets $ 835,005 $ 802,363 $ 801,995 $ 758,739
Investment securities 44,047 51,481 64,801 47,635
Loans, net of unearned income 698,240 676,658 669,416 633,908
Allowance for loan losses 14,608 14,746 14,910 14,641
Deposits 765,936 742,082 743,105 703,237
Negative goodwill - - - -
Stockholders' equity 53,214 52,047 50,903 49,706
SELECTED FINANCIAL RATIOS:
Return on average assets .63% .60% .62% .66%
Return on average assets before goodwill accretion .63 .60 .62 .54
Return on average equity 9.93 9.57 10.07 10.45
Return on average equity before goodwill accretion 9.93 9.57 10.07 8.59
Net interest spread 3.92 3.84 3.84 3.59
Net interest margin 4.21 4.15 4.17 3.91
G&A expense to average assets 2.98 2.96 3.22 2.89
G&A efficiency ratio 69.68 68.84 74.30 71.59
Non-accrual loans to total loans 2.24 2.24 2.02 2.43
Nonperforming assets to total assets 3.13 3.02 2.93 3.19
Allowance for loan loss to total loans 2.09 2.18 2.23 2.31
Allowance for loan loss to non-performing loans 85.06 96.47 90.47 84.53
Tier 1 (leverage) capital ratio 6.03 6.13 6.00 6.21
Tier 1 risk-based capital ratio 9.18 9.19 9.17 9.22
Total risk based capital ratio 10.40 10.40 10.30 10.17
OTHER DATA (AT PERIOD-END):
Number of branch offices 32 32 32 32
Number of full-time equivalent employees 528 432 418 403
- - ---------------------------------------------
</TABLE>
5
<PAGE> 10
<TABLE>
<CAPTION>
SELECTED QUARTERLY FINANCIAL AND OTHER DATA
EIGHT CONSECUTIVE QUARTERS (UNAUDITED)
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
Quarters Ending
-------------------------------------------------------
June 1995 Mar. 1995 Dec. 1994 Sept. 1994
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
OPERATING DATA:
Interest income $ 14,629 $ 12,490 $ 11,237 $ 9,915
Interest expense 7,776 6,378 5,133 4,363
---------- ---------- ---------- ----------
Net interest income 6,853 6,112 6,104 5,552
Loan loss provision 540 540 600 600
---------- ---------- ---------- ----------
Net interest income after loan loss provision 6,313 5,572 5,504 4,952
Noninterest income 696 701 488 848
G&A expenses 5,381 4,880 4,388 4,053
Other noninterest expense 200 156 95 344
---------- ---------- ---------- ----------
Net income before income taxes & goodwill accretion 1,428 1,237 1,509 1,403
Accretion of negative goodwill 676 676 676 676
---------- ---------- ---------- ----------
Net income before income taxes 2,104 1,913 2,185 2,079
Income tax provision 368 389 120 248
---------- ---------- ---------- ----------
Net income $ 1,736 $ 1,524 $ 2,065 $ 1,831
========== ========== ========== ==========
PER SHARE DATA (FULLY-DILUTED):
Earnings per share before goodwill accretion $ .25 $ .20 $ .34 $ .28
Effect of negative goodwill accretion .16 .17 .16 .16
---------- ---------- ---------- ----------
Earnings per share after goodwill accretion $ .41 $ .37 $ .50 $ .44
========== ========== ========== ==========
Weighted average shares outstanding 4,187,722 4,147,418 4,143,518 4,145,902
BALANCE SHEET DATA (AT PERIOD-END):
Total assets $ 764,072 $ 715,178 $ 626,445 $ 586,180
Investment securities 49,823 35,231 40,271 47,445
Loans, net of unearned income 599,964 605,176 516,335 459,517
Allowance for loan losses 14,543 14,723 7,065 5,319
Deposits 708,676 670,941 583,885 544,634
Negative goodwill 225 902 1,578 2,254
Stockholder's equity 48,502 37,660 36,165 34,138
SELECTED FINANCIAL RATIOS:
Return on average assets .92% .91% 1.35% 1.30%
Return on average assets before goodwill accretion .56 .51 .91 .82
Return on average equity 18.33 17.13 23.85 22.20
Return on average equity before goodwill accretion 11.22 9.53 16.04 14.00
Net interest spread 3.58 3.66 4.06 3.99
Net interest margin 3.83 3.86 4.29 4.23
G&A expense to average assets 2.84 2.87 2.86 2.88
G&A efficiency ratio 71.27 71.32 65.06 62.46
Non-accrual loans to total loans 2.21 1.87 2.51 2.65
Nonperforming assets to total assets 2.83 3.18 3.59 3.70
Allowance for loan loss to total loans 2.42 2.43 1.37 1.16
Allowance for loan loss to non-performing loans 99.54 98.93 53.36 41.28
Tier 1 (leverage) capital ratio 6.02 5.17 5.66 5.69
Tier 1 risk-based capital ratio 9.28 7.73 8.39 8.86
Total risk-based capital ratio 10.18 8.60 9.60 9.72
OTHER DATA (AT PERIOD-END):
Number of branch offices 28 28 21 19
Number of full-time equivalent employees 366 351 300 255
- - -----------------------------------------------------
</TABLE>
6
<PAGE> 11
[This page intentionally left blank]
7
<PAGE> 12
REPUBLIC BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation and Organization
Republic Bancshares, Inc. (the "Company") is a bank holding company organized
in March 1996 under the laws of the State of Florida for the purpose of
becoming the holding company for Republic Bank (the "Bank"). In connection
with the reorganization which resulted in the Company becoming the holding
company for the Bank, the Company became the owner of all of the outstanding
capital stock of the Bank. The Company does not currently conduct any
activities other than its ownership and operation of the Bank.
The Bank is a state-chartered, federally-insured commercial bank organized in
1972 providing a full range of retail and commercial banking products and
related financial services. The Bank's headquarters are in St. Petersburg,
Florida. Its principal business is attracting checking, savings and time
deposits from the public and general business customers and using these
deposits to originate residential mortgages, commercial real estate mortgages,
business loans, and consumer loans. The Bank operates through 32 branch
banking offices located in Pasco, Pinellas, Manatee and Sarasota counties and
is currently the largest independent financial institution headquartered on the
west coast of Florida. There are also three residential and two commercial
loan production offices on Florida's west coast and one residential production
office in Boston, Massachusetts.
The FASB has issued SFAS No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities", which is effective for the
Bank's fiscal year beginning January 1, 1997. SFAS 125 provides standards for
distinguishing transfers of financial assets that are sales from transfers that
are secured borrowings. The impact of the adoption of SFAS 125 upon the
results of operations of the Bank is not expected to be material.
These consolidated financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Bank's Annual Report
for the year ended December 31, 1995, filed with the Federal Deposit Insurance
Corporation on Form F-2. The results of the six months ended June 30, 1996 are
not necessarily indicative of the results to be expected for the fiscal year
ending December 31, 1996.
2. LOANS:
Loans at June 30, 1996 and December 31, 1995, are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------ ------
<S> <C> <C>
Real estate mortgage loans:
One-to-four family residential $403,646 $388,221
Multifamily residential 68,243 75,127
Commercial real estate 167,458 153,193
Construction/land development 20,890 13,974
Commercial loans 27,352 29,687
Consumer loans 8,945 6,847
Other loans 1,706 2,367
-------- --------
Total loans 698,240 669,416
Less-allowance for loan losses (14,608) (14,910)
-------- --------
Net loans $683,632 $654,506
======== ========
</TABLE>
8
<PAGE> 13
As of June 30, 1996, the Bank had one-to-four family residential mortgage loans
with a weighted average interest rate of 8.28% which were available for sale
with a carrying amount of $21,202,000 and a market value of approximately
$21,807,000. The carrying value of loans available for sale as of December 31,
1995 approximated their market value of $4,711,000 and had a weighted average
interest rate of 7.47%. Mortgage loans serviced for others as of June 30, 1996
and December 31, 1995 were $70,220,000 and $39,951,000, respectively.
3. ALLOWANCES FOR LOSSES:
Allowance for Loan Losses:
The allowance for loan losses provides for risks of losses inherent in the
credit extension process. Losses are charged to the allowance for loan losses
and recoveries are credited to the allowance. The Company's allowance is an
amount that management believes will be adequate to absorb possible losses on
existing loans that may become uncollectible, based on evaluations of the
collectibility of loans and prior loan loss experience. The evaluations take
into consideration such factors as changes in the nature and volume of the loan
portfolio, overall portfolio quality, review of specific problem loans, and
current economic conditions that may affect the borrower's ability to pay. The
evaluations are periodically reviewed and adjustments are recorded in the
period in which changes become known.
As part of the risk assessment for loans purchased in December 1993 from
CrossLand Savings, FSB ("Crossland"), and for loans purchased during 1994, 1995
and 1996, management allocated a portion of the discount on such loan purchases
to the allowance for loan losses in amounts consistent with the Company's loan
loss policy guidelines. Amounts added to the allowance for loan losses
resulting from discount allocation are available to absorb potential losses
only for those purchased loans and are not available for losses from other
loans. To the extent that losses in certain pools or portfolios of loans
exceed the allowance for loan losses and any remaining unamortized loan
discount allocated to such pool or portfolio, or available as a general
allowance, the Company would have to recognize a loss to the extent of such
shortfall in the then current period.
As of June 30, 1996 and December 31, 1995, approximately $9,158,000 and
$10,249,000 of the allowance had arisen through an allocation of discounts on
purchased loans. Additionally, as of June 30, 1996 and December 31, 1995, the
balance of loan discounts available to absorb losses on pools or portfolios of
purchased loans exceeding amounts transferred to the allowance amounted to
$4,201,000 and $4,561,000, respectively.
Loans on which interest was not being accrued totaled approximately $15,256,000
and $14,504,000 at June 30, 1996 and December 31, 1995, respectively. Loans
past due 90 days or more and still accruing interest at June 30, 1996 and
December 31, 1995, totaled approximately $1,504,000 and $1,876,000,
respectively.
Changes in the allowance for loan losses were as follows (in thousands):
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
1996 1995
---- ----
<S> <C> <C>
Balance, beginning of period $ 14,910 $ 7,065
Provision for loan losses 900 1,080
Discount on purchased loans allocated
to (from) allowance for loan losses (29) 7,214
Loans charged off (1,296) (1,134)
Recoveries of loans charged off 123 318
-------- --------
Balance, end of period $ 14,608 $ 14,543
======== ========
</TABLE>
Allowance for Losses on Other Real Estate ("ORE"):
The Company recognizes any estimated potential decline in the value of ORE
between appraisal dates through periodic additions to the allowance for losses
on ORE. Writedowns charged against this allowance are taken when the related
real estate is sold at a loss. For the six months ended June 30, 1996, the
Company had recorded a provision expense for losses on ORE of $450,000 which
was included in the Company's statement of operations in the line item
captioned ORE expense, net of ORE income. Also included in this line item were
gains on sale of ORE amounting to $119,000 for the first six months of 1996.
9
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMPARISON OF BALANCE SHEETS AT JUNE 30, 1996 AND DECEMBER 31, 1995
Overview
Total assets were $835,005,000 at June 30, 1996 and $801,995,000 at December
31, 1995, an increase of $33,010,000 or 4.1%. Total deposits increased by
$22,831,000 from $743,105,000 at year-end 1995 to $765,936,000. Total loans
increased by $28,824,000 from $669,416,000 at the end of the prior year to
$698,240,000 at the end of the second quarter.
Investment and Mortgage-Backed Securities
Investment and mortgage-backed securities, consisting of U.S. Treasury and
federal agency securities, were $44,047,000 at June 30, 1996 compared to
$64,801,000 at December 31, 1995, a decrease of $20,754,000. During the first
six months of 1996 management permitted the amount in this category to decline
by allowing maturities and sales to exceed purchases. Federal funds sold, all
on an overnight basis, increased by $20,379,000 from $14,621,000 at the prior
year-end to $35,000,000 at June 30, 1996. The Company has recorded its
investment and mortgage-backed securities categorized as "available for sale" at
their period end market value. The market value of the Company's investment and
mortgage-backed securities which were categorized as "held to maturity" exceeded
their cost by $126,000.
Loans
Total loans increased $28,824,000 from $669,416,000 at the prior year-end to
$698,240,000 at June 30, 1996. One-to-four family residential loans increased
by $15,425,000 primarily due to the expansion of the Company's residential loan
production capability. The amount in this category at June 30, 1996 included
$21,202,000 which the Company holds for sale to prospective investors.
Commercial real estate loans increased $14,265,000 to $167,458,000 while
multi-family residential loans decreased $6,884,000. Consumer loans increased
$2,098,000 and commercial (business) and other loans declined slightly.
Allowance for Loan Losses
The allowance for loan losses amounted to $14,608,000 at June 30, 1996 (2.09%
of total loans) compared to $14,910,000 at December 31, 1995. At June 30,
1996, the allowance for loan losses included $6,072,000 allocated to the Bank's
largest loan purchase made in March 1995 (the "March 1995 Purchase"),
$1,139,000 allocated to loans purchased from CrossLand, $1,937,000 allocated to
other loan purchases, and $5,460,000 allocated to loans originated by the
Company. For a discussion of discounts on purchased loans and the use of
amounts allocated to the allowance for loan losses, see the notes to the
consolidated financial statements. Other activity to the allowance in 1996
included provisions for loan losses of $900,000 (based generally on the growth
in the loan portfolio), loan charge-offs (net of recoveries) of $1,173,000, and
$29,000 allocated to loan discounts. The net charge-off amount for the period
included $730,000 assessed against the allowance for loan losses on loans
allocated to the March 1995 Purchase as properties securing certain
nonperforming loans in that purchase were acquired through foreclosure and
recorded at their fair value.
Nonperforming Assets
Nonperforming assets amounted to $26,135,000 or 3.13% of total assets at June
30, 1996, as compared to $23,494,000 or 2.93% of total assets at December 31,
1995. Nonperforming loans totaled $16,760,000 at the end of the second
quarter, an increase of $1,330,000 from the prior year-end total of
$15,430,000. This increase was primarily the result of loans totaling
$1,563,000 in process of renewal which became 90 days past due at June 30,
1996. Other real estate increased by $1,311,000 from $8,064,000 at the end of
the prior year to $9,375,000 at the end of the second quarter. The increase
was the result of acquiring through foreclosure properties securing residential
loans purchased at substantial discounts from their face value.
10
<PAGE> 15
Deposits
Total deposits were $765,936,000 at June 30, 1996, compared to $743,105,000 at
the prior year-end, an increase of $22,831,000. Retail checking balances
increased by $7,768,000 and passbook savings accounts offered to higher-balance
customers at a premium rate of 5.00% increased by $87,810,000. Certificates of
deposit declined by $66,114,000.
Stockholders' Equity
Stockholders' equity was $53,214,000 at June 30, 1996, or 6.37% of total assets
compared to $50,903,000 or 6.35% of total assets at December 31, 1995. At June
30, 1996, the Bank's Tier 1 ("Leverage") Capital ratio was 6.03%, its Tier 1
Risk-Based Capital ratio was 9.18%, and its Total Risk-Based Capital ratio was
10.40%, all in excess of minimum FDIC guidelines for an institution to be
considered a "well-capitalized" bank.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1996
AND 1995
Overview
Net income for the three months ended June 30, 1996 was $1,269,000 or $.26 per
share compared to net income before negative goodwill accretion of $1,060,000
or $.25 per share for the second quarter of 1995. When the negative goodwill
is included in 1995 results, net income amounted to $1,736,000 or $.41 per
share. Return on average assets for the second quarter of 1996 was .63%
compared to .56% for the second quarter of 1995 (.92% including negative
goodwill accretion), while return on average equity was 9.93% compared to
11.22% (18.33% including negative goodwill accretion).
Analysis of Net Interest Income (see table on page 12)
Net interest income for the second quarter of 1996 was $8,115,000 compared to
$6,853,000 for 1995. This $1,262,000 or 18.4% increase was the result of
$381,000 from an improved net interest spread and $881,000 in additional income
from balance sheet growth. Interest income was $15,937,000 for 1996, an
increase of $1,308,000 over 1995 while interest expense increased only by
$46,000. Average asset yield increased 16 basis points from 8.20% for the
second quarter of 1995 to 8.36% for 1996. During this period of improved asset
yield, the average cost of interest-bearing liabilities declined 19 basis
points from 4.63% to 4.44%. As a result, net interest spread increased 35
basis points from 3.57% for 1995 to 3.92% for 1996 and net interest margin,
which includes the benefit of noninterest bearing funds, increased 39 basis
points from 3.82% for 1995 to 4.21% for 1996.
Noninterest Income
Noninterest income for the second quarter of 1996 was $988,000 compared to
$696,000 for the same period of 1995, an increase of $292,000. Service fees on
deposit accounts increased $49,000 and loan service fees increased $58,000.
Net gains on mortgage banking activities, consisting of gains on sale of loans
and recognition of the value of originated mortgage servicing rights
("OMSR's"), increased $259,000, primarily from the operation of Flagship and
Capital Mortgage. The prior year had included $110,000 in merchant charge card
processing fees, a program which has been discontinued.
The following table reflects the components of noninterest income for the three
months ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
For the Three Months
Ended June 30,
------------------------------------------------
Increase
1996 1995 (Decrease)
------ ------ -----------
<S> <C> <C> <C>
Service charges on deposit accounts $ 378 $ 329 $ 49
Loan fee income 139 81 58
Merchant charge card processing fees 0 110 (110)
Gains on sales of loans 258 5 253
Other income 213 171 42
----- ----- -----
Total noninterest income $ 988 $ 696 $ 292
===== ===== =====
</TABLE>
11
<PAGE> 16
The following table summarizes the average yields earned on interest-earning
assets and the average rates paid on interest-bearing liabilities for the three
months ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
Three Months Ended June 30,
-------------------------------------------------------------------------
1996 1995
-------------------------------------------------------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Summary of Average Rates
Interest earning assets:
Loans, net $ 691,755 $ 14,949 8.60% $ 608,164 $ 13,185 8.66%
Investment securities 23,477 312 5.34 32,501 361 4.44
Mortgage backed securities 20,198 333 6.59 5,878 75 5.12
Interest bearing deposits in banks 143 - .42 364 7 7.62
FHLB stock 4,830 87 7.25 3,540 65 7.38
Federal funds sold 19,090 256 5.31 61,705 936 6.00
--------- --------- --------- ---------
Total interest-earning assets 759,493 15,937 8.36 712,152 14,629 8.20
Non interest-earning assets 46,242 44,184
--------- ---------
Total assets $ 805,735 $ 756,336
========= =========
Interest-bearing liabilities:
Interest checking $ 82,549 232 1.13 $ 67,122 280 1.67
Savings 135,513 1,349 4.01 87,605 786 3.59
Money market 36,688 206 2.26 75,199 615 3.28
Time deposits 443,322 5,906 5.36 440,857 6,072 5.52
FHLB advances 3,846 52 5.39 - - -
Other borrowings 6,494 77 4.79 3,249 23 2.92
--------- --------- --------- ---------
Total interest-bearing liabilities 708,412 7,822 4.44 674,032 7,776 4.63
Non interest-bearing liabilities 46,076 44,427
Stockholders' equity 51,247 37,877
--------- ---------
Total liabilities and equity $ 805,735 $ 756,336
========= =========
Net interest income/net interest spread $ 8,115 3.92% $ 6,853 3.57%
========= ==== ========= ====
Net interest margin 4.21% 3.82%
==== ====
Increase (Decrease) Due to (1)
------------------------------
Changes in Net Interest Income Volume Rate Total
------ ---- -----
Interest earning assets:
Loans, net $ 1,729 $ 35 $ 1,764
Investment securities (69) 20 (49 )
Mortgage backed securities 230 28 258
Interest bearing deposits in banks (3) (4) (7 )
FHLB stock 23 (1) 22
Federal funds sold (584) (96) (680 )
------- ------- -------
Total change in interest income 1,326 (18) 1,308
Interest-bearing liabilities:
Interest checking 56 (104) (48 )
Savings 538 25 563
Money market (255) (154) (409 )
Time deposits 26 (192) (166 )
FHLB advances 52 - 52
Other borrowings 28 26 54
-------- ------- -------
Total change in interest expense 445 (399) 46
-------- ------- -------
Increase (decrease) in net interest income $ 881 $ 381 $ 1,262
======== ======= =======
- - ------------------------
</TABLE>
(1) Changes in net interest income due to changes in volume and rate are
based on absolute values.
12
<PAGE> 17
Noninterest Expense
General and administrative ("G & A") expenses for 1996 were $6,343,000 compared
to $5,382,000, an increase of $961,000. Total noninterest expenses, which
include G & A expense, were $6,591,000 for the first quarter of 1996 compared
to $5,582,000 for the same period last year, an increase of $1,009,000. Two of
the major factors causing the expense increase were a full year's effect of the
additional personnel and other operating costs related to the thirteen new
branches opened in 1995 which accounted for $300,000 of the increase and a
$270,000 provision for ORE losses in 1996.
The following table reflects the components of noninterest expense for the
three months ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
For the Three Months
Ended June 30,
---------------------------------------------------
Increase
1996 1995 (Decrease)
------ ------ ----------
<S> <C> <C> <C>
Salaries and benefits $ 3,374 $ 2,876 $ 498
Net occupancy expense 1,025 742 283
Advertising 123 95 28
Data processing fees 313 235 78
FDIC and state assessments 264 371 (107)
Other operating expense 1,243 1,062 181
------- ------- -------
G & A expenses 6,342 5,381 961
ORE expense, net of ORE income 125 77 48
Amortization of premium on deposits 123 123 0
------- ------- -------
Total noninterest expense $ 6,590 $ 5,581 $ 1,009
======= ======= =======
</TABLE>
COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND
1995
Overview
Net income for the six months ended June 30, 1996 was $2,473,000 or $.50 per
share compared to $3,259,000 or $.78 per share for the second quarter of 1995
which included the benefit of negative goodwill accretion. When the negative
goodwill is excluded from 1995 results, net income amounted to $1,907,000 or
$.46 per share. Return on average assets for the first six months of 1996 was
.62% compared to .91% for the same period of 1995 (.54% excluding negative
goodwill accretion), while return on average equity was 9.76% compared to
17.77% (10.40% excluding negative goodwill accretion).
Analysis of Net Interest Income (see table on page 14)
Net interest income for the first six months of 1996 was $16,050,000 compared
to $12,964,000 for 1995. This $3,086,000 or 23.8% increase was the result of
$2,486,000 in additional income from balance sheet growth and $128,000 from an
increased net interest spread. Interest income was $31,799,000 for 1996, an
increase of $4,679,000 over 1995. During the same period interest expense
increased by $1,593,000 from $14,156,000 for 1995 to $15,749,000 for 1996.
Average asset yield increased 27 basis points from 8.09% for 1995 to 8.36% for
1996 and average earning assets increased $86,630,000. During this same period
the average cost of interest-bearing liabilities increased only 1 basis point
from 4.48% to 4.49%. Net interest spread increased 26 basis points from 3.61%
for 1995 to 3.87% for 1996 and net interest margin, which includes the benefit
of noninterest bearing funds, increased from 3.83% for 1995 to 4.18% for 1996.
13
<PAGE> 18
The following table summarizes the average yields earned on interest-earning
assets and the average rates paid on interest-bearing liabilities for the six
months ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------------------------------------------
1996 1995
----------------------------------- -----------------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Summary of Average Rates
Interest earning assets:
Loans, net $ 684,597 $ 29,727 8.64% $ 575,735 $ 24,544 8.53%
Investment securities 27,876 740 5.34 35,030 773 4.44
Mortgage backed securities 20,300 624 6.15 2,939 75 5.12
Interest bearing deposits in banks 93 1 1.17 273 9 6.61
FHLB stock 4,263 154 7.26 2,707 103 7.61
Federal funds sold 20,416 553 5.36 54,231 1,616 5.93
--------- --------- --------- ---------
Total interest-earning assets 757,545 31,799 8.36 670,915 27,120 8.09
Non interest-earning assets 46,266 47,227
--------- ---------
Total assets $ 803,811 $ 718,142
========= =========
Interest-bearing liabilities:
Interest checking $ 80,699 489 1.22 $ 66,091 550 1.68
Savings 117,786 2,274 3.88 93,981 1,697 3.64
Money market 37,550 423 2.26 71,665 1,144 3.22
Time deposits 462,723 12,387 5.38 402,560 10,713 5.37
FHLB advances 1,923 52 5.39 - - -
Other borrowings 5,426 124 4.63 3,113 52 3.34
--------- --------- --------- ----------
Total interest-bearing liabilities 706,107 15,749 4.49 637,410 14,156 4.48
Non interest-bearing liabilities 46,865 43,747
Stockholders' equity 50,839 36,985
--------- ---------
Total liabilities and equity $ 803,811 $ 718,142
========= =========
Net interest income/net interest spread $ 16,050 3.87% $ 12,964 3.61%
========= ==== ========= ====
Net interest margin 4.18% 3.83%
==== ====
Increase (Decrease) Due to (1)
------------------------------
Changes in Net Interest Income Volume Rate Total
- - ------------------------------ ------ ---- -----
Interest earning assets:
Loans, net $ 4,741 $ 442 $ 5,183
Investment securities (88) 55 (33)
Mortgage backed securities 531 18 549
Interest bearing deposits in banks (4) (4) (8)
FHLB stock 56 (5) 51
Federal funds sold (921) (142) (1,063)
------- ------- -------
Total change in interest income 4,315 364 4,679
Interest-bearing liabilities:
Interest checking 109 (170) (61)
Savings 541 36 577
Money market (442) (279) (721)
Time deposits 1,535 139 1,674
FHLB advances 52 - 52
Other borrowings 34 38 72
------- ------- -------
Total change in interest expense 1,829 (236) 1,593
------- ------- -------
Increase (decrease) in net interest income $ 2,486 $ 128 $ 3,086
======= ======= =======
</TABLE>
- - ----------------------
(1) Changes in net interest income due to changes in volume and rate are
based on absolute values.
14
<PAGE> 19
Noninterest Income
Noninterest income for the first six months of 1996 was $1,666,000 compared to
$1,357,000 for the same period of 1995, an increase of $309,000. Service fees
on deposit accounts increased $95,000, loan service fees increased $122,000 and
net gains on mortgage banking activities increased $259,000. Other sources of
income declined $167,000 because the prior year had included $219,000 in
merchant charge card processing fees, a program which has been discontinued.
The following table reflects the components of noninterest income for the six
months ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
-----------------------------------------------
Increase
1996 1995 (Decrease)
-------- ------ ----------
<S> <C> <C> <C>
Service charges on deposit accounts $ 754 $ 659 $ 95
Loan fee income 264 142 122
Merchant charge card processing fees 0 219 (219)
Gains (losses) on sales of loans 267 8 259
Other income 381 329 52
------- ------- -------
Total noninterest income $ 1,666 $ 1,357 $ 309
======= ======= =======
</TABLE>
Noninterest Expense
Total noninterest expenses for the first six months of 1996 were $12,850,000
compared to $10,577,000 for the same period last year, an increase of
$2,273,000. G & A expenses for 1996, included in the noninterest expense
total, were $12,298,000 compared to $10,222,000, an increase of $2,076,000.
The increase was the result of expenses from a full year's operation of the
thirteen new branches opened in 1995, increased occupancy costs from the
Company's headquarters relocation, and an overall expansion of the Company's
loan production capabilities. In 1996 there was a $450,000 provision for
losses on ORE included in the line item captioned ORE expense, net of ORE
income.
The following table reflects the components of noninterest expense for the six
months ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
For the Three Months
Ended June 30,
-----------------------------------------------
Increase
1996 1995 (Decrease)
------ ------ ----------
<S> <C> <C> <C>
Salaries and benefits $ 6,626 $ 5,433 $ 1,193
Net occupancy expense 2,050 1,319 731
Advertising 203 238 (35)
Data processing fees 631 498 133
FDIC and state assessments 534 758 (224)
Other operating expense 2,254 1,976 278
------- -------- --------
G & A expenses 12,298 10,222 2,076
ORE expense, net of ORE income 307 150 157
Amortization of premium on deposits 245 205 40
-------- -------- --------
Total noninterest expense $ 12,850 $ 10,577 $ 2,273
======== ======== ========
</TABLE>
15
<PAGE> 20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is party to various legal proceedings in the ordinary
course of its business. Based on information presently available,
management does not believe that the ultimate outcome in such
proceedings, in the aggregate, would have a material adverse effect
on the Company's financial position or results of operation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
27.0 Financial Data Schedule (for SEC use only)
b. Reports on Form 8-K
There were no reports on Form 8-K filed during the three months
ended June 30, 1996.
16
<PAGE> 21
Pursuant to the requirements of Section 13 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 BANCSHARES, INC.
Date: August 9, 1996 By: /s/ John W. Sapanski
---------------------- -----------------------
John W. Sapanski
Chairman and Chief Executive Officer
(principal executive officer)
Date: August 9, 1996 By: /s/ William R. Falzone
---------------------- -----------------------
William R. Falzone
Treasurer (principal financial and
accounting officer)
17
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATION
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 22,592
<INT-BEARING-DEPOSITS> 17
<FED-FUNDS-SOLD> 35,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 26,660
<INVESTMENTS-CARRYING> 17,387
<INVESTMENTS-MARKET> 17,513
<LOANS> 698,240
<ALLOWANCE> 14,608
<TOTAL-ASSETS> 835,005
<DEPOSITS> 765,936
<SHORT-TERM> 12,153
<LIABILITIES-OTHER> 3,702
<LONG-TERM> 0
0
1,500
<COMMON> 8,367
<OTHER-SE> 43,347
<TOTAL-LIABILITIES-AND-EQUITY> 835,005
<INTEREST-LOAN> 29,727
<INTEREST-INVEST> 2,072
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 31,799
<INTEREST-DEPOSIT> 15,573
<INTEREST-EXPENSE> 15,749
<INTEREST-INCOME-NET> 16,050
<LOAN-LOSSES> 900
<SECURITIES-GAINS> 4
<EXPENSE-OTHER> 12,850
<INCOME-PRETAX> 3,966
<INCOME-PRE-EXTRAORDINARY> 3,966
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,473
<EPS-PRIMARY> .50
<EPS-DILUTED> .50
<YIELD-ACTUAL> 8.36
<LOANS-NON> 15,256
<LOANS-PAST> 1,504
<LOANS-TROUBLED> 2,351
<LOANS-PROBLEM> 4,267
<ALLOWANCE-OPEN> 14,910
<CHARGE-OFFS> 1,296
<RECOVERIES> 123
<ALLOWANCE-CLOSE> 14,608
<ALLOWANCE-DOMESTIC> 14,608
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 14,608
</TABLE>
