<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
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(X) Annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934.
For the fiscal year ended December 31, 1998
OR
( ) Transition report pursuant to Section 15(d)
of the Securities Exchange Act of 1934.
For the transition period from
_________________ to ________________.
Commission file number of the issuer: 0-15734
REPUBLIC BANCORP INC.
TAX-DEFERRED SAVINGS PLAN AND TRUST
(Full title of plan)
REPUBLIC BANCORP INC.
1070 East Main Street
Owosso, Michigan 48867
(Name of the issuer and address of
its principal executive office)
<PAGE>
REQUIRED INFORMATION
Items 1-3. Financial Statements
Not Applicable.
Item 4. ERISA Financial Statements
The attached financial statements and schedules, which are hereby
incorporated by reference by the Republic Bancorp Inc. Tax-Deferred
Savings Plan and Trust (the "Plan"), have been prepared in
accordance with the financial reporting requirements of ERISA:
Financial Statements for the years ended December 31, 1998 and
1997, Supplemental Schedules for the year ended December 31,
1998, and Independent Auditors' Report dated June 21, 1999
Attached as Exhibit 23 is written consent of independent auditor,
Ernst & Young LLP.
<PAGE>
REPUBLIC BANCORP INC.
TAX DEFERRED SAVINGS PLAN
Financial Statements for the
Years Ended December 31, 1998 and 1997,
Supplemental Schedules for the
Year Ended December 31, 1998 and
Independent Auditors' Report
<PAGE>
REPUBLIC BANCORP INC.
TAX DEFERRED SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
Report of Independent Auditors 1
Financial Statements for the Years Ended December 31, 1998 and 1997:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 10
Signatures 11
Supplemental Schedules for the Year Ended December 31, 1998:
Item 27a - Schedule of Assets Held for Investment Purposes 12
Item 27b - Schedule of Loans or Fixed Income Not Applicable
Item 27c - Schedule of Leases in Default or Classified as Uncollectible Not Applicable
Item 27d - Schedule of Reportable Transactions 13
Items 27e and 27f - Schedule of Non-Exempt Transactions Not Applicable
</TABLE>
<PAGE>
Report of Independent Auditors
To the Trustees and Participants of
Republic Bancorp Inc. Tax-Deferred Savings Plan and Trust
Owosso, Michigan
We have audited the accompanying statements of net assets available for benefits
of Republic Bancorp Inc. Tax-Deferred Savings Plan and Trust as of December 31,
1998 and 1997, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 1998 and 1997 financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
Plan at December 31, 1998 and 1997, and the changes in its net assets available
for benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental Schedule of Assets
Held for Investment as of December 31, 1998 and Schedule of Reportable
Transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules have
been subjected to the auditing procedures applied in our audit of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
June 21, 1999
Detroit, Michigan
<PAGE>
REPUBLIC BANCORP INC. TAX-DEFERRED SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Investments, at fair value (Notes 2 and 4):
Cash and Cash Equivalents $ 78,516 $ 61,597
Common Stock:
Republic Bancorp Inc. Common Stock
(973,609 and 837,705 shares at 12/31/98
and 12/31/97, respectively) 13,341,291 14,424,061
Stock Mutual Funds 12,341,568 7,879,410
Bond and Investment Contract Funds 3,612,152 3,022,781
Loans to Participants 641,765 474,823
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Total Investments 30,015,292 25,862,672
Receivables:
Participants' contributions 52,510 5,923
Employer's contribution 39,085 13,995
----------- -----------
Total Receivables 91,595 19,918
----------- -----------
Assets Available for Benefits $30,106,887 $25,882,590
=========== ===========
</TABLE>
See notes to financial statements.
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<PAGE>
REPUBLIC BANCORP INC. TAX-DEFERRED SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
Assets Available for Benefits, January 1, $ 25,882,590 $ 13,649,440
Additions:
Participant contributions 4,697,920 3,244,778
Employer contributions, net of forfeitures 1,792,589 1,165,495
Dividends on Republic Bancorp Inc. stock 293,999 235,134
Dividends and interest income on investments in
stock mutual funds, bond funds, investment contract
funds and loan fund 233,278 244,269
Net (depreciation) appreciation in fair value of Republic
Bancorp Inc. stock (3,129,256) 6,850,237
Net appreciation in fair value of investments in
stock mutual funds, bond funds and investment
contract funds 2,214,535 1,589,638
------------ ------------
Total additions 6,103,065 13,329,551
Deductions:
Benefits paid to participants (1,876,418) (1,092,778)
Administrative loan fees (2,350) (3,623)
------------ ------------
Total deductions (1,878,768) (1,096,401)
------------ ------------
Net additions 4,224,297 12,233,150
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Assets Available for Benefits, December 31, $ 30,106,887 $ 25,882,590
============ ============
</TABLE>
See notes to financial statements.
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<PAGE>
REPUBLIC BANCORP INC.
TAX-DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1. PLAN DESCRIPTION
The following description of the Republic Bancorp Inc. Tax-Deferred
Savings Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions. The Plan was established November
1, 1988 under the provisions of Section 401(k) of the Internal Revenue
Code and is a voluntary savings plan for eligible employees of Republic
Bancorp Inc. (the "Company"). It is subject to the provisions of The
Employment Retirement Income Security Act of 1974 (ERISA).
All employees of the Company are eligible to participate in the Plan
after completing one year of continuous service. As of December 31,
1998 and 1997, there were 1,315 and 1,152 plan participants,
respectively.
Participant contributions are limited to 15% of the participant's
compensation as defined in the Plan, or such maximum rates as may be
approved by the Internal Revenue Service. The Company contributes an
amount equal to 50% of each participant's elective deferrals for the
Plan year up to 7% of the participant's annual compensation. The
Company's contributions to the Plan are made to the Republic Stock
Fund. The Company's contributions are vested 25% after two years of
service and an additional 25% each year thereafter.
If a nonvested participant is terminated from the Plan, the participant
will forfeit a portion of his account related to employer
contributions. Such forfeitures are applied as a reduction to required
employer contributions. As of December 31, 1998 and 1997, the amount of
forfeited nonvested accounts totaled $117,217 and $54,410,
respectively. These amounts are used to reduce employer contributions
for the subsequent Plan year.
Each participant's account is credited with the participant's
contribution and an allocation of the Company's contribution and Plan
earnings. Allocations are based upon the participant's account
balances. Expenses of operating the Plan are paid by the Company, with
the exception of administrative loan fees which are paid by Plan
participants.
Although it has not expressed any interest to do so, the Company has
the right to terminate the Plan subject to the provisions of ERISA.
Such termination of the Plan, if any, would not affect an employee's
interest in assets already in the Plan and any employer contributions
not yet vested would become fully vested.
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<PAGE>
1. PLAN DESCRIPTION (Continued)
The Plan provides participants with the following six investment
options:
The Firstar Trust Company Stable Asset Portfolio (Firstar
Stable Asset Fund) invests in a well-diversified portfolio of
investment contracts issued by highly rated insurance
companies, other stable assets such as U.S. Treasury bills,
and cash or cash equivalents.
The Firstar Bond IMMDEX Fund (Bond IMMDEX Fund) invests in
U.S. Government bonds and investment-grade rated corporate
bonds which have intermediate and longer maturity dates. The
Fund attempts to match the performance of the Lehman Brothers
Government/Corporate Bond Index.
The Vanguard/Windsor II Fund is a growth and income stock fund
that invests in the equity securities of large and medium-size
companies whose stocks are considered to be undervalued by the
Fund's advisers.
The American Century-Twentieth Century Ultra Fund (Twentieth
Century Ultra Fund) is an equity fund that invests in the
common stocks of medium-to-large-size companies whose stocks
are considered by fund management to have better-than average
prospects for appreciation.
The Firstar Equity Index Fund invests in the stocks of
well-known U.S. Companies in proportion to the industries and
company sizes represented by the Standard & Poor's (S&P) 500
Index, which is an unmanaged index of the stocks of 500
well-known U.S. companies. The Fund attempts to match the
performance of the S&P 500 Index.
The Firstar Balanced Growth Fund is a growth and income stock
fund that invests in stocks, bonds and money market
instruments. It invests in medium-to-large-size companies
whose stocks are considered by fund management to have the
potential to rise in the future and in investment-grade
quality bonds, such as U.S. government bonds and corporate
bonds, which are considered by the Fund's advisors to provide
immediate investment income through regular interest payments.
Throughout the plan years ended December 31, 1998 and 1997,
participants were also given the option to invest in the Republic
Bancorp Inc. Common Stock Fund (Republic Stock Fund), which invests
100% in the common stock of Republic Bancorp Inc.
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<PAGE>
1. PLAN DESCRIPTION (Continued)
The following four investment options were available to December 23,
1997 to the participants of the Premier Bancorporation, Inc. 401(k)
Plan prior to its merger with the Plan effective January 1, 1993:
The Equitable Aggressive Fund invests in securities of
smaller-sized companies (with capitalizations generally
between $90 million to $1.5 billion) perceived to have greater
growth potential than large companies.
The Equitable Balanced Fund invests in common stocks, other
equity type instruments, longer-term fixed income securities,
publicly traded debt securities and short-term money market
instruments.
The Equitable Common Stock Fund invests in common stocks and
other equity securities issued by intermediate and large sized
companies with an investment objective of long-term capital
growth and increasing income.
The Equitable Fixed Income Fund invests primarily in
Guaranteed Investment Contracts issued by high quality
insurance companies.
Effective December 23, 1997, participant balances in these funds were
transferred to the Firstar Stable Asset Fund, the Bond IMMDEX Fund, the
Vanguard/Windsor II Fund, the Twentieth Century Ultra Fund and the
Republic Stock Fund discussed above.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of additions and deductions during the reporting period. Actual
results could differ from those estimates.
Investment Valuation and Income Recognition: The accompanying financial
statements reflect the accrual basis of accounting. Investments are
stated at fair value which is generally based on quoted prices on the
last business day of the Plan year. Loans to participants are recorded
at cost which approximates fair value.
Terminated Participants: As of December 31, 1998 and 1997, account
balances of participants who have terminated employment with the Plan's
sponsor totaled $3,036,326 and $1,478,133, respectively. Amounts
allocated to withdrawn participants are recorded in the Form 5500 for
benefit claims that have been processed and approved for payment prior
to year-end but not yet paid. As of December 31, 1998 and 1997,
$113,036 and $221,568, respectively, have been allocated to accounts of
persons who have elected to withdraw from the plan, but have not yet
been paid.
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<PAGE>
3. INVESTMENTS
The following table represents the fair values of investments.
Investments that represent 5% or more of the Plan's net assets
available for benefits are separately identified with an asterisk.
<TABLE>
<CAPTION>
December 31,
1998 1997
----------- -----------
<S> <C> <C>
Cash and Cash Equivalents:
Firstar Institutional Money Market Fund $ 78,516 $ 61,597
Common Stock:
Republic Bancorp Inc. 13,264,418* 14,357,586*
Accrued Dividend Income 76,873 66,475
----------- -----------
13,341,291 14,424,061
Stock Mutual Funds:
Vanguard/Windsor II Fund 6,163,135* 4,459,031*
Twentieth Century Ultra Fund 5,654,764* 3,345,890*
Firstar Equity Index Fund 356,414 58,645
Firstar Balanced Growth Fund 167,255 15,844
----------- -----------
12,341,568 7,879,410
Bond and Investment Contract Funds:
Firstar Stable Asset Fund 2,489,266* 2,240,049*
Firstar Bond IMMDEX Fund 1,122,886 782,732*
----------- -----------
3,612,152 3,022,781
Loans to Participants 641,765 474,823
----------- -----------
Total Investments $30,015,292 $25,862,672
=========== ===========
</TABLE>
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<PAGE>
4. FUND INFORMATION
Contributions, investment income, and distributions to participants by
fund are as follows for the years ended December 31, 1998 and 1997.
<TABLE>
<CAPTION>
Years Ended December 31,
Contributions: 1998 1997
------------- ----------- ------------
<S> <C> <C>
Common Stock:
Republic Bancorp Inc. $ 2,713,602 $ 1,712,643
Stock Mutual Funds:
Vanguard/Windsor II Fund 1,482,243 1,127,001
Twentieth Century Ultra Fund 1,359,845 962,068
Firstar Equity Index Fund 221,473 13,715
Firstar Balanced Growth Fund 91,803 6,507
Bond Funds and Investment Contact Funds:
Firstar Stable Asset Fund 379,317 364,369
Firstar Bond IMMDEX Fund 242,226 223,970
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Total Contributions $ 6,490,509 $ 4,410,273
=========== ===========
<CAPTION>
Years Ended December 31,
Investment Income: 1998 1997
----------------- ----------- -----------
<S> <C> <C>
Cash and Cash Equivalents:
Portico Institutional Money Market Fund $ 2,299 $ 2,044
Common Stock:
Republic Bancorp Inc. (2,835,257) 7,085,371
Stock Mutual Funds:
Vanguard/Windsor II Fund 780,362 961,508
Twentieth Century Ultra Fund 1,323,918 615,043
Equitable Aggressive Fund -- 10,157
Equitable Balanced Fund -- 2,193
Equitable Common Stock Fund -- 22,221
Firstar Equity Index Fund 50,987 2,292
Firstar Balanced Growth Fund 15,248 378
Bond Funds and Investment Contract Funds:
Firstar Stable Asset Fund 137,871 111,940
Firstar Bond IMMDEX Fund 88,345 61,204
Equitable Fixed Income Fund -- 8,233
Loan Fund 48,783 36,694
----------- -----------
Total Investment Income (Loss) $ (387,444) $ 8,919,278
=========== ===========
</TABLE>
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<PAGE>
4. FUND INFORMATION (Continued)
<TABLE>
<CAPTION>
Years Ended December 31,
Benefits Paid to Participants: 1998 1997
----------------------------- ---------- -----------
<S> <C> <C>
Cash and Cash Equivalents:
Firstar Institutional Money Market Fund $ 108 $ 232
Common Stock:
Republic Bancorp Inc. 724,959 461,987
Stock Mutual Funds:
Vanguard/Windsor II Fund 386,821 272,644
Twentieth Century Ultra Fund 258,728 197,134
Firstar Equity Index Fund 4,154 --
Firstar Balanced Growth Fund 2,589 --
Bond Funds and Investment Contract Funds:
Firstar Stable Asset Fund 354,641 105,875
Firstar Bond IMMDEX Fund 106,513 41,871
Equitable Fixed Income Fund -- 2,367
Loan Fund 37,905 10,668
---------- ----------
Total Benefits Paid to Participants $1,876,418 $1,092,778
========== ==========
</TABLE>
5. TAX STATUS
The Plan has received an opinion letter from the Internal Revenue
Service dated December 28, 1992, stating that that the written form of
the underlying prototype plan document is qualified under Section
401(a) of the Internal Revenue Code (the "Code"), and that any employer
adopting this form of the plan will be considered to have a plan
qualified under Section 401(a) of the Code. Therefore, the related
trust is exempt from taxation. Once qualified, the plan is required to
operate in conformity with the Code to maintain its qualification. The
plan administrator believes the Plan is being operated in compliance
with the applicable requirements of the Code and, therefore, believes
that the Plan is qualified and the related trust is tax exempt.
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<PAGE>
6. IMPACT OF YEAR 2000 (Unaudited)
The Company has disclosed the Impact of Year 2000 in its 1998 Annual
Report on Form 10-K filed with the Securities and Exchange Commision.
As it relates to the Plan, the Company established formal
communications with its third party service providers for payroll and
plan recordkeeping to determine that they have developed plans to
address their own Year 2000 readiness as they relate to the Plan's
operations. All third party service providers have indicated that they
are Year 2000 compliant. If modifications of data processing systems of
either the Plan, the Company, or its service providers are not
completed effectively, the Year 2000 problem could have a material
impact on the operations of the plan. The Company has not developed a
contingency plan because they are confident that all systems will be
Year 2000 compliant.
7. SUBSEQUENT EVENT
On May 17, 1999, the Company acquired D&N Financial Corporation.
Accordingly, the D&N Bank FSB 401K Plan ("D&N Plan") will be merged
into the Plan effective July 1, 1999. As of December 31, 1998, there
were 461 participants in the D&N Plan and the net assets available for
benefits were $20,003,269.
* * * * * * * *
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
REPUBLIC BANCORP INC.
TAX-DEFERRED SAVINGS
PLAN AND TRUST
REPUBLIC BANCORP INC.
Plan Administrator
Date: June 25, 1999 By: /s/ Travis D. Jones
---------------------- -------------------------------
Travis D. Jones, as Agent
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<PAGE>
Republic Bancorp Inc. Tax-Deferred Savings Plan
Employer ID #38-2604669
Plan #001
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Units/ Fair
Description Shares Cost Value
- ----------- ------ ---- -----
<S> <C> <C> <C>
* Firstar Institutional Money Market Fund 78,516 $ 78,516 $ 78,516
* Firstar Stable Asset Fund 100,739 2,224,071 2,489,266
* Firstar Bond IMMDEX Fund 38,654 1,084,603 1,122,886
* Vanguard/Windsor II Fund 206,470 5,424,580 6,163,135
* Twentieth Century Ultra Fund 169,254 5,005,624 5,654,764
* Republic Bancorp Inc. Common Stock 973,609 6,940,142 13,341,291
* Firstar Equity Index Fund 4,289 312,003 356,414
* Firstar Balanced Growth Fund 5,265 159,341 167,255
* Loans to 107 participants against their individual
account balances (with interest rates ranging from
8.37% to 11.25% and maturing through
October 2008) 641,765 641,765 641,765
----------- -----------
Total $21,870,645 $30,015,292
=========== ===========
</TABLE>
* Party in interest
There were no investment assets reportable as acquired and disposed of during
the year.
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<PAGE>
Republic Bancorp Inc. Tax-Deferred Savings Plan
Employer ID #38-2604669
Plan #001
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<TABLE>
<CAPTION>
Purchase Selling Net Realized
Asset Description Price Price Gain/(Loss)
- ----------------- ----- ----- -----------
<S> <C> <C> <C>
Series of Transactions:
Firstar Institutional Money Market Fund $3,611,329 $3,606,021 $ --
Firstar Stable Asset Fund 718,434 602,415 53,622
Vanguard/Windsor II Fund 1,764,053 789,809 139,473
Twentieth Century Ultra Fund 1,736,148 710,157 48,486
Republic Bancorp Inc. Common Stock 3,542,958 1,370,992 831,043
</TABLE>
Single Transaction: None
The purchase and selling prices reported above represent the fair values of the
assets on the transaction dates.
- 13 -
<PAGE>
EXHIBIT INDEX
Page
Exhibit Number
- ------- ------
23 Consent of Ernst & Young LLP 15
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<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements
(Form Statement No. 33-55336, No. 33-55304, No. 33-62508, and No. 333-26515 on
Form S-8, and 33-61842 on Form S-3) pertaining to Republic Bancorp Inc.
Tax-Deferred Savings Plan and Trust of our report dated June 21, 1999 with
respect to the financial statements and schedules of the Republic Bancorp Inc.
Tax-Deferred Savings Plan and Trust included in this annual report (Form 11-K)
for the year ended December 31, 1998.
/s/ Ernst & Young LLP
Detroit, Michigan
June 25, 1999
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