##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2003Oro
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


For the transition period from
    
    
    toCommission File Number:
    
    0-15734


REPUBLIC BANCORP INC(Exact name of registrant as specified in its charter)


Michigan
    
    38-2604669(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)1070 East Main Street, Owosso, Michigan
    
    48867(Address of principal executive offices)
    
    (Zip Code)


(989) 725-7337
(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.

þ Yes
    
    o No


Indicate by check whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act).

þ Yes
    
    o 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.

Common Stock Outstanding as of October 31, 2003:Common Stock, $5 Par Value Per Share
    
    57,751,962 Shares






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TABLE OF CONTENTS



|                                                 |                                                                                               |                                                                                                   |  |  |  |  |  | 
|------------------------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                   
|                                                 | Item 1. Financial Statements (Unaudited)                                                     
|                                                 |                                                                                               | Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002                       
|                                                 |                                                                                               | Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2003 and 2002
|                                                 |                                                                                               | Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2002      
|                                                 |                                                                                               | Notes to Consolidated Financial Statements                                                       
|                                                 | Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
|                                                 | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                                 | Item 4. Controls and Procedures                                                              
|PART II. OTHER INFORMATION                      
|                                                 | Item 1. Legal Proceedings                                                                    
|                                                 | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                                       
|Computations of Ratios-Earnings to Fixed Charges
|302 Certification of Chief Executive Officer    
|302 Certification of Chief Financial Officer    
|906 Certification of Chief Executive Officer    
|906 Certification of Chief Financial Officer    



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##### Table of Contents



INDEX

PART I
    
    FINANCIAL INFORMATIONItem 1
    
    Financial Statements (Unaudited)Consolidated Balance Sheets as of September 30, 2003and December 31, 2002
    
    
    3Consolidated Statements of Income for the Three and NineMonths Ended September 30, 2003 and 2002
    
    
    4Consolidated Statements of Cash Flows for the NineMonths Ended September 30, 2003 and 2002
    
    
    5Notes to Consolidated Financial Statements
    
    
    6 - 9Item 2
    
    Managements Discussion and Analysis ofResults of Operations and Financial Condition
    
    
    10 - 21Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4
    
    Controls and Procedures
    
    
    23PART II
    
    OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    
    24Item 6
    
    Exhibits and Reports on Form 8-K
    
    
    24SIGNATURE
    
    
    
    
    25


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PART I  FINANCIAL INFORMATION
ITEM 1  Financial Statements

REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

September 30,
    
    
    December 31,(Dollars in thousands)
    
    2003
    
    
    2002(Unaudited)ASSETSCash and cash equivalents
    
    $
    76,566
    
    
    $
    75,625Mortgage loans held for sale
    
    
    391,369
    
    
    
    660,999Securities available for sale (amortized cost of
$464,549 and $169,098, respectively)
    
    
    459,933
    
    
    
    170,456Loans
    
    
    
    3,999,974
    
    
    
    3,656,543Less allowance for loan losses
    
    
    (39,212
    )
    
    
    (36,077
    )Net loans
    
    
    3,960,762
    
    
    
    3,620,466Federal Home Loan Bank stock (at cost)
    
    
    80,502
    
    
    
    78,475Premises and equipment
    
    
    26,564
    
    
    
    27,790Bank owned life insurance
    
    
    106,858
    
    
    
    87,192Other assets
    
    
    57,771
    
    
    
    57,192Total assets
    
    $
    5,160,325
    
    
    $
    4,778,195LIABILITIESNoninterest-bearing deposits
    
    $
    287,640
    
    
    $
    260,634Interest-bearing deposits:NOW accounts
    
    
    183,195
    
    
    
    176,366Savings and money market accounts
    
    
    1,110,161
    
    
    
    910,863Certificates of deposit
    
    
    1,340,925
    
    
    
    1,440,409Total interest-bearing deposits
    
    
    2,634,281
    
    
    
    2,527,638Total deposits
    
    2,921,921
    
    
    
    2,788,272Federal funds purchased and other short-term borrowings
    
    
    483,136
    
    
    
    209,070Short-term FHLB advances
    
    
    250,000
    
    
    
    305,000Long-term FHLB advances
    
    
    1,026,529
    
    
    
    1,002,943Accrued expenses and other liabilities
    
    
    73,437
    
    
    
    76,682Long-term debt
    
    
    
    
    
    
    13,500Total liabilities
    
    
    4,755,023
    
    
    
    4,395,467Trust preferred securities
    
    
    50,000
    
    
    
    50,000SHAREHOLDERS EQUITYPreferred stock, $25 stated value: $2.25 cumulative
and convertible; 5,000,000 shares authorized,
none issued and outstanding
    
    
    
    
    
    
    Common stock, $5 par value, 75,000,000 shares
authorized; 57,427,000 and 57,441,000, issued and
outstanding, respectively
    
    
    287,133
    
    
    
    287,207Capital surplus
    
    
    37,953
    
    
    
    40,633Unearned compensation  restricted stock
    
    
    (2,058
    )
    
    
    (368
    )Retained earnings
    
    
    35,274
    
    
    
    4,373Accumulated other comprehensive (loss) income
    
    
    (3,000
    )
    
    
    883Total shareholders equity
    
    
    355,302
    
    
    
    332,728Total liabilities and shareholders equity
    
    $
    5,160,325
    
    
    $
    4,778,195


See notes to consolidated financial statements.

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REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In thousands, except per share data)
    
    2003
    
    
    2002
    
    
    2003
    
    
    2002Interest Income:Loans, including fees
    
    $
    62,004
    
    
    $
    65,120
    
    
    $
    187,884
    
    
    $
    198,435Interest on securities and FHLB stock dividends
    
    
    4,556
    
    
    
    5,355
    
    
    
    11,268
    
    
    
    15,426Total interest income
    
    
    66,560
    
    
    
    70,475
    
    
    
    199,152
    
    
    
    213,861Interest Expense:Deposits
    
    
    13,172
    
    
    
    18,209
    
    
    
    43,098
    
    
    
    57,913Short-term borrowings
    
    
    1,056
    
    
    
    1,008
    
    
    
    2,832
    
    
    
    2,648FHLB advances
    
    
    14,847
    
    
    
    14,481
    
    
    
    43,158
    
    
    
    42,342Long-term debt
    
    
    
    
    
    
    241
    
    
    
    39
    
    
    
    724Total interest expense
    
    
    29,075
    
    
    
    33,939
    
    
    
    89,127
    
    
    
    103,627Net interest income
    
    
    37,485
    
    
    
    36,536
    
    
    
    110,025
    
    
    
    110,234Provision for loan losses
    
    
    3,000
    
    
    
    6,200
    
    
    
    9,000
    
    
    
    11,000Net interest income after provision for loan losses
    
    
    34,485
    
    
    
    30,336
    
    
    
    101,025
    
    
    
    99,234Noninterest Income:Mortgage banking income
    
    
    10,567
    
    
    
    7,715
    
    
    
    30,758
    
    
    
    23,101Service charges
    
    
    2,972
    
    
    
    2,484
    
    
    
    8,359
    
    
    
    6,490Gain on sale of securities
    
    
    619
    
    
    
    1,933
    
    
    
    1,499
    
    
    
    2,751Income from bank owned life insurance
    
    
    1,432
    
    
    
    874
    
    
    
    4,047
    
    
    
    874Other noninterest income
    
    
    560
    
    
    
    1,135
    
    
    
    1,845
    
    
    
    3,499Total noninterest income
    
    
    16,150
    
    
    
    14,141
    
    
    
    46,508
    
    
    
    36,715Noninterest Expense:Salaries and employee benefits
    
    
    15,847
    
    
    
    13,535
    
    
    
    46,302
    
    
    
    40,412Occupancy expense of premises
    
    
    2,542
    
    
    
    2,467
    
    
    
    7,681
    
    
    
    7,439Equipment expense
    
    
    1,752
    
    
    
    1,750
    
    
    
    5,178
    
    
    
    5,095Other noninterest expense
    
    
    7,106
    
    
    
    5,290
    
    
    
    19,169
    
    
    
    16,750Dividends on trust preferred securities and
preferred stock of subsidiary
    
    
    1,075
    
    
    
    1,242
    
    
    
    3,225
    
    
    
    4,753Total noninterest expense
    
    
    28,322
    
    
    
    24,284
    
    
    
    81,555
    
    
    
    74,449Income before income taxes
    
    
    22,313
    
    
    
    20,193
    
    
    
    65,978
    
    
    
    61,500Provision for income taxes
    
    
    6,523
    
    
    
    5,910
    
    
    
    19,877
    
    
    
    18,565Net Income
    
    $
    15,790
    
    
    $
    14,283
    
    
    $
    46,101
    
    
    $
    42,935Basic earnings per share
    
    $
    .28
    
    
    $
    .25
    
    
    $
    .80
    
    
    $
    .74Diluted earnings per share
    
    $
    .27
    
    
    $
    .24
    
    
    $
    .79
    
    
    $
    .72Average common shares outstanding  diluted
    
    
    58,259
    
    
    
    59,038
    
    
    
    58,283
    
    
    
    59,250Cash dividends declared per common share
    
    $
    .095
    
    
    $
    .077
    
    
    $
    .265
    
    
    $
    .232


See notes to consolidated financial statements.

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REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended September 30 (In thousands)
    
    2003
    
    
    2002Cash Flows From Operating Activities:Net income
    
    $
    46,101
    
    
    $
    42,935Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    8,023
    
    
    
    8,078Net gains on sale of securities available for sale
    
    
    (1,499
    )
    
    
    (2,751
    )Net gains on sale of commercial and residential real estate loans
    
    
    (3,235
    )
    
    
    (4,069
    )Proceeds from sale of mortgage loans held for sale
    
    
    2,531,599
    
    
    
    1,756,447Origination of mortgage loans held for sale
    
    
    (2,261,969
    )
    
    
    (1,549,240
    )Net (increase) decrease in other assets
    
    
    (21,179
    )
    
    
    14,801Net decrease in other liabilities
    
    
    (3,245
    )
    
    
    (15,854
    )Other, net
    
    
    3,136
    
    
    
    4,116Total adjustments
    
    
    251,631
    
    
    
    211,528Net cash provided by operating activities
    
    
    297,732
    
    
    
    254,463Cash Flows From Investing Activities:Proceeds from sale of securities available for sale
    
    
    54,764
    
    
    
    211,455Proceeds from maturities/payments of securities available for sale
    
    
    116,915
    
    
    
    42,682Purchases of securities available for sale
    
    
    (454,477
    )
    
    
    (250,528
    )Purchases of FHLB stock
    
    
    (2,027
    )
    
    
    (1
    )Purchase/additions of bank owned life insurance
    
    
    (16,500
    )
    
    
    (85,000
    )Proceeds from sale of commercial and residential real estate loans
    
    
    122,138
    
    
    
    158,772Net increase in loans made to customers
    
    
    (458,434
    )
    
    
    (463,298
    )Premises and equipment expenditures
    
    
    (3,470
    )
    
    
    (2,168
    )Net cash used in investing activities
    
    
    (641,091
    )
    
    
    (388,086
    )Cash Flows From Financing Activities:Net increase in total deposits
    
    
    133,649
    
    
    
    75,791Net increase in short-term borrowings
    
    
    274,066
    
    
    
    49,000Net decrease in short-term FHLB advances
    
    
    (55,000
    )
    
    
    (125,000
    )Proceeds from long-term FHLB advances
    
    
    100,000
    
    
    
    192,952Payments on long-term FHLB advances
    
    
    (76,414
    )
    
    
    Payments on long-term debt
    
    
    (13,500
    )
    
    
    Redemption of preferred stock of subsidiary
    
    
    
    
    
    
    (30,250
    )Net proceeds from issuance of common shares
    
    
    8,918
    
    
    
    4,477Repurchase of common shares
    
    
    (12,751
    )
    
    
    (12,760
    )Dividends paid on common shares
    
    
    (14,668
    )
    
    
    (13,571
    )Net cash provided by financing activities
    
    
    344,300
    
    
    
    140,639Net increase in cash and cash equivalents
    
    
    941
    
    
    
    7,016Cash and cash equivalents at beginning of period
    
    
    75,625
    
    
    
    76,734Cash and cash equivalents at end of period
    
    $
    76,566
    
    
    $
    83,750


See notes to consolidated financial statements.

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REPUBLIC BANCORP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1  Basis of Presentation

The accompanying unaudited consolidated financial statements of Republic
Bancorp Inc. and Subsidiaries (the Company) have been prepared in accordance
with accounting principles generally accepted in the United States (GAAP) for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes necessary for a comprehensive presentation of
financial position, results of operations and cash flow activity required by
accounting principles generally accepted in the United States for complete
financial statements. In the opinion of management, all normal recurring
adjustments necessary for a fair presentation of results have been included.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Companys Annual Report on Form 10-K for the
year ended December 31, 2002.

Note 2  Principles of Consolidation

The consolidated financial statements include the accounts of the parent
company, Republic Bancorp Inc., its wholly-owned banking subsidiary, Republic
Bank (including its wholly-owned subsidiaries Quincy Investment Services, Inc.,
CAS Properties, Inc., Republic Bank Real Estate Finance, LLC and Republic
Management Company, Inc.) and Republic Capital Trust I. The consolidated
statements of income and cash flows for the three and nine months ended
September 30, 2002, also include the accounts of Republic Banks wholly-owned
subsidiary, D&N Capital Corporation. On July 22, 2002, the Company redeemed
all 1,210,000 issued and outstanding shares of D&N Capital Corporations 9.0%
Noncumulative Preferred Stock, Series A (liquidation preference $25.00 per
share) at a redemption price of $25.00 per share, plus accrued dividends of
$0.1375 per share, for cash. All significant intercompany accounts and
transactions have been eliminated in consolidation.

On the consolidated balance sheets, Federal Home Loan Bank (FHLB) stock
totaling $78.5 million has been reclassified at December 31, 2002 from
securities available for sale to Federal Home Loan Bank stock, at cost, to
conform to the current period presentation. In addition, on the consolidated
statements of cash flows, mortgage servicing rights totaling $2.8 million at
September 30, 2002 have been reclassified to other assets to conform to the
current year presentation.

Note 3  Consolidated Statements of Cash Flows

Supplemental disclosures of cash flow information for the nine months ended
September 30, include:

(In thousands)
    
    2003
    
    
    2002Cash paid during the period for:Interest
    
    $
    90,141
    
    
    $
    99,138Income taxes
    
    $
    19,624
    
    
    $
    18,626Non-cash investing activities:Loan charge-offs
    
    $
    7,182
    
    
    $
    8,077


Note 4  Comprehensive Income
The following table sets forth the computation of comprehensive income:

Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In thousands)
    
    2003
    
    
    2002
    
    
    2003
    
    
    2002Net income
    
    $
    15,790
    
    
    $
    14,283
    
    
    $
    46,101
    
    
    $
    42,935Unrealized holding (losses) gains on securities, net of tax
    
    $
    (6,301
    )
    
    $
    3,967
    
    
    $
    (2,909
    )
    
    $
    8,622Reclassification adjustment for gains included in net income,
net of tax of $217, $677, $525 and $963, respectively
    
    
    (402
    )
    
    
    (1,256
    )
    
    
    (974
    )
    
    
    (1,788
    )Net unrealized (losses) gains on securities, net of tax
    
    
    (6,703
    )
    
    
    2,711
    
    
    
    (3,883
    )
    
    
    6,834Comprehensive income
    
    $
    9,087
    
    
    $
    16,994
    
    
    $
    42,218
    
    
    $
    49,769


Note 5  Intangible Assets
The following table summarizes the Companys core deposit intangible asset which is subject to amortization:

(Dollars in thousands)
    
    September 30, 2003
    
    
    December 31, 2002Core Deposit Intangible Asset:Gross carrying amount
    
    $
    10,475
    
    
    $
    10,475Accumulated amortization
    
    
    (5,649
    )
    
    
    (4,907
    )Net book value
    
    $
    4,826
    
    
    $
    5,568


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Note 5  Intangible Assets (Continued)

Amortization expense on the core deposit intangible asset totaled $247,500 for
each of the quarters ended September 30, 2003 and 2002, and $990,000 for the
year ended December 31, 2002. The Company expects core deposit intangible
amortization expense to be $990,000 for each of the years ending December 31,
2003 and 2004. The Company expects core deposit intangible amortization
expense for the year ended December 31, 2005 to be $936,000 and for each of the
years ended December 31, 2006 and 2007 to be $823,000, respectively.

Note 6  Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Dollars in thousands, except per share data)
    
    2003
    
    
    2002
    
    
    2003
    
    
    2002Numerator for basic and diluted earnings per share:Net income
    
    $
    15,790
    
    
    $
    14,283
    
    
    $
    46,101
    
    
    $
    42,935Denominator for basic earnings per share 
weighted-average shares
    
    
    57,410,468
    
    
    
    58,199,708
    
    
    
    57,469,689
    
    
    
    58,339,849Effect of dilutive securities:Stock options
    
    
    789,018
    
    
    
    773,190
    
    
    
    752,301
    
    
    
    844,256Warrants
    
    
    60,004
    
    
    
    64,884
    
    
    
    60,634
    
    
    
    66,288Dilutive potential common shares
    
    
    849,022
    
    
    
    838,074
    
    
    
    812,935
    
    
    
    910,544Denominator for diluted earnings per shareadjusted
weighted-average shares for assumed conversions
    
    
    58,259,490
    
    
    
    59,037,782
    
    
    
    58,282,624
    
    
    
    59,250,393Basic earnings per share
    
    $
    .28
    
    
    $
    .25
    
    
    $
    .80
    
    
    $
    .74Diluted earnings per share
    
    $
    .27
    
    
    $
    .24
    
    
    $
    .79
    
    
    $
    .72


Note 7  Segment Information

The Companys operations are managed as three major business segments: (1)
commercial banking, (2) retail banking, and
(3) mortgage banking. The commercial banking segment consists of commercial
lending to small- and medium-sized companies, primarily in the form of
commercial real estate and Small Business Administration (SBA) loans. The
retail banking segment consists of home equity lending, other consumer lending
and the deposit-gathering function. Deposits and loan products are offered
through 82 retail branch offices of Republic Bank, which are staffed by
personal bankers and loan originators. The mortgage banking segment is
comprised of mortgage loan production. Mortgage loan production is conducted
in all offices of Republic Bank. Treasury and Other is comprised of balance
sheet management activities that include the securities portfolio, residential
real estate mortgage portfolio loans and outside funding. Treasury and Other
also includes unallocated corporate expenses such as corporate overhead,
including accounting, data processing, human resources and operation costs.

In 2003, the allocated capital to the retail banking segment was decreased to
5% of total deposits compared to 10% in 2002. All prior period amounts have
been restated to conform to the current year presentation.

The following table presents the financial results of each business segment for
the three and nine months ended September 30, 2003 and 2002.

Treasury(In thousands)
    
    Commercial
    
    
    Retail
    
    
    Mortgage
    
    
    and Other
    
    
    ConsolidatedFor the Three Months Ended September 30, 2003Net interest income from external customers
    
    $
    21,538
    
    
    $
    (6,997
    )
    
    $
    8,889
    
    
    $
    14,055
    
    
    $
    37,485Internal funding
    
    
    (8,282
    )
    
    
    32,683
    
    
    
    (3,777
    )
    
    
    (20,624
    )
    
    
    Net interest income
    
    
    13,256
    
    
    
    25,686
    
    
    
    5,112
    
    
    
    (6,569
    )
    
    
    37,485Provision for loan losses
    
    
    2,370
    
    
    
    276
    
    
    
    68
    
    
    
    286
    
    
    
    3,000Noninterest income
    
    
    103
    
    
    
    3,082
    
    
    
    14,953
    
    
    
    (1,988
    )
    
    
    16,150Noninterest expense
    
    
    2,659
    
    
    
    8,121
    
    
    
    7,857
    
    
    
    9,685
    
    
    
    28,322Income before taxes
    
    
    8,330
    
    
    
    20,371
    
    
    
    12,140
    
    
    
    (18,528
    )
    
    
    22,313Income taxes
    
    
    2,972
    
    
    
    7,268
    
    
    
    4,249
    
    
    
    (7,966
    )
    
    
    6,523Net income
    
    $
    5,358
    
    
    $
    13,103
    
    
    $
    7,891
    
    
    $
    (10,562
    )
    
    $
    15,790Depreciation and amortization
    
    $
    29
    
    
    $
    740
    
    
    $
    496
    
    
    $
    1,008
    
    
    $
    2,273Capital expenditures
    
    $
    44
    
    
    $
    544
    
    
    $
    91
    
    
    $
    367
    
    
    $
    1,046Net identifiable assets (in millions)
    
    $
    1,454
    
    
    $
    2,784
    
    
    $
    572
    
    
    $
    350
    
    
    $
    5,160Return
on equity(1)
    
    
    14.77
    %
    
    
    39.63
    %
    
    
    93.05
    %
    
    
    n/m
    
    
    
    17.95
    %Return on assets
    
    
    1.48
    %
    
    
    1.89
    %
    
    
    4.64
    %
    
    
    n/m
    
    
    
    1.24
    %Efficiency ratio
    
    
    19.90
    %
    
    
    28.23
    %
    
    
    39.16
    %
    
    
    n/m
    
    
    
    51.39
    %


7



---



##### Table of Contents



Note 7  Segment Information (Continued)

Treasury(In thousands)
    
    Commercial
    
    
    Retail
    
    
    Mortgage
    
    
    and Other
    
    
    ConsolidatedFor the Three Months Ended September 30, 2002Net interest income from external customers
    
    $
    24,676
    
    
    $
    (10,745
    )
    
    $
    6,337
    
    
    $
    16,268
    
    
    $
    36,536Internal funding
    
    
    (10,627
    )
    
    
    37,576
    
    
    
    (3,156
    )
    
    
    (23,793
    )
    
    
    Net interest income
    
    
    14,049
    
    
    
    26,831
    
    
    
    3,181
    
    
    
    (7,525
    )
    
    
    36,536Provision for loan losses
    
    
    2,354
    
    
    
    357
    
    
    
    
    
    
    
    3,489
    
    
    
    6,200Noninterest income
    
    
    341
    
    
    
    2,691
    
    
    
    10,567
    
    
    
    542
    
    
    
    14,141Noninterest expense
    
    
    2,710
    
    
    
    8,040
    
    
    
    6,944
    
    
    
    6,590
    
    
    
    24,284Income before taxes
    
    
    9,326
    
    
    
    21,125
    
    
    
    6,804
    
    
    
    (17,062
    )
    
    
    20,193Income taxes
    
    
    3,341
    
    
    
    7,537
    
    
    
    2,381
    
    
    
    (7,349
    )
    
    
    5,910Net income
    
    $
    5,985
    
    
    $
    13,588
    
    
    $
    4,423
    
    
    $
    (9,713
    )
    
    $
    14,283Depreciation and amortization
    
    $
    36
    
    
    $
    785
    
    
    $
    657
    
    
    $
    2,014
    
    
    $
    3,492Capital expenditures
    
    $
    20
    
    
    $
    70
    
    
    $
    177
    
    
    $
    677
    
    
    $
    944Net identifiable assets (in millions)
    
    $
    1,453
    
    
    $
    2,931
    
    
    $
    697
    
    
    $
    (166
    )
    
    $
    4,915Return on equity(1)
    
    
    16.65
    %
    
    
    41.86
    %
    
    
    83.85
    %
    
    
    n/m
    
    
    
    17.33
    %Return on assets
    
    
    1.66
    %
    
    
    1.91
    %
    
    
    4.19
    %
    
    
    n/m
    
    
    
    1.25
    %Efficiency ratio
    
    
    18.83
    %
    
    
    27.23
    %
    
    
    50.51
    %
    
    
    n/m
    
    
    
    47.27
    %


Treasury(In thousands)
    
    Commercial
    
    
    Retail
    
    
    Mortgage
    
    
    and Other
    
    
    ConsolidatedFor the Nine Months Ended September 30, 2003Net interest income from external customers
    
    $
    66,993
    
    
    $
    (23,578
    )
    
    $
    24,770
    
    
    $
    41,840
    
    
    $
    110,025Internal funding
    
    
    (26,582
    )
    
    
    101,756
    
    
    
    (11,013
    )
    
    
    (64,161
    )
    
    
    Net interest income
    
    
    40,411
    
    
    
    78,178
    
    
    
    13,757
    
    
    
    (22,321
    )
    
    
    110,025Provision for loan losses
    
    
    6,932
    
    
    
    980
    
    
    
    205
    
    
    
    883
    
    
    
    9,000Noninterest income
    
    
    790
    
    
    
    8,620
    
    
    
    42,113
    
    
    
    (5,015
    )
    
    
    46,508Noninterest expense
    
    
    7,351
    
    
    
    23,704
    
    
    
    22,568
    
    
    
    27,932
    
    
    
    81,555Income before taxes
    
    
    26,918
    
    
    
    62,114
    
    
    
    33,097
    
    
    
    (56,151
    )
    
    
    65,978Income taxes
    
    
    9,604
    
    
    
    22,161
    
    
    
    11,584
    
    
    
    (23,472
    )
    
    
    19,877Net income
    
    $
    17,314
    
    
    $
    39,953
    
    
    $
    21,513
    
    
    $
    (32,679
    )
    
    $
    46,101Depreciation and amortization
    
    $
    91
    
    
    $
    2,252
    
    
    $
    1,845
    
    
    $
    3,835
    
    
    $
    8,023Capital expenditures
    
    $
    53
    
    
    $
    1,564
    
    
    $
    449
    
    
    $
    1,404
    
    
    $
    3,470Net identifiable assets (in millions)
    
    $
    1,454
    
    
    $
    2,784
    
    
    $
    572
    
    
    $
    350
    
    
    $
    5,160Return on equity(1)
    
    
    15.90
    %
    
    
    40.23
    %
    
    
    94.04
    %
    
    
    n/m
    
    
    
    17.77
    %Return on assets
    
    
    1.59
    %
    
    
    1.91
    %
    
    
    4.70
    %
    
    
    n/m
    
    
    
    1.26
    %Efficiency ratio
    
    
    17.84
    %
    
    
    27.31
    %
    
    
    40.39
    %
    
    
    n/m
    
    
    
    50.52
    %


Treasury(In thousands)
    
    Commercial
    
    
    Retail
    
    
    Mortgage
    
    
    and Other
    
    
    ConsolidatedFor the Nine Months Ended September 30, 2002Net interest income from external customers
    
    $
    73,128
    
    
    $
    (36,673
    )
    
    $
    24,744
    
    
    $
    49,035
    
    
    $
    110,234Internal funding
    
    
    (32,338
    )
    
    
    115,240
    
    
    
    (12,358
    )
    
    
    (70,544
    )
    
    
    Net interest income
    
    
    40,790
    
    
    
    78,567
    
    
    
    12,386
    
    
    
    (21,509
    )
    
    
    110,234Provision for loan losses
    
    
    4,577
    
    
    
    1,087
    
    
    
    
    
    
    
    5,336
    
    
    
    11,000Noninterest income
    
    
    1,417
    
    
    
    6,778
    
    
    
    24,821
    
    
    
    3,699
    
    
    
    36,715Noninterest expense
    
    
    7,357
    
    
    
    23,851
    
    
    
    20,655
    
    
    
    22,586
    
    
    
    74,449Income before taxes
    
    
    30,273
    
    
    
    60,407
    
    
    
    16,552
    
    
    
    (45,732
    )
    
    
    61,500Income taxes
    
    
    10,845
    
    
    
    21,545
    
    
    
    5,793
    
    
    
    (19,618
    )
    
    
    18,565Net income
    
    $
    19,428
    
    
    $
    38,862
    
    
    $
    10,759
    
    
    $
    (26,114
    )
    
    $
    42,935Depreciation and amortization
    
    $
    107
    
    
    $
    2,374
    
    
    $
    1,804
    
    
    $
    3,793
    
    
    $
    8,078Capital expenditures
    
    $
    38
    
    
    $
    313
    
    
    $
    475
    
    
    $
    1,342
    
    
    $
    2,168Net identifiable assets (in millions)
    
    $
    1,453
    
    
    $
    2,931
    
    
    $
    697
    
    
    $
    (166
    )
    
    $
    4,915Return on equity(1)
    
    
    18.57
    %
    
    
    40.03
    %
    
    
    55.24
    %
    
    
    n/m
    
    
    
    17.85
    %Return on assets
    
    
    1.86
    %
    
    
    1.83
    %
    
    
    2.76
    %
    
    
    n/m
    
    
    
    1.28
    %Efficiency ratio
    
    
    17.43
    %
    
    
    27.95
    %
    
    
    55.51
    %
    
    
    n/m
    
    
    
    48.33
    %




|(1) |  | Capital is allocated as a percentage of assets of 10% and 5% for the
commercial and mortgage banking segments, respectively and is allocated as a
percentage of deposits of 5% for the retail segment.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | n/m  Not meaningful
| |  | --------------------

8



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##### Table of Contents



Note 8  Stock Based Compensation

Effective January 1, 2003, the Company adopted the fair value method of
recording stock options under SFAS 123. In accordance with the transitional
guidance of SFAS 148, the fair value method of accounting for stock options
will be applied prospectively to awards granted subsequent to January 1, 2003.
In the first nine months of 2003, the Company generally issued restricted stock
in lieu of stock option grants. As a result, the GAAP income statement impact
associated with expensing stock options in the first nine months of 2003 was
immaterial. The income statement impact from expensing stock options is
expected to be immaterial for the remainder of 2003.

The following table presents net income and earnings per share had compensation
cost for the Companys stock-based compensation plans been determined in
accordance with SFAS No. 123 for all outstanding and unvested awards for the
three and nine months ended September 30, 2003 and 2002.

Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Dollars in thousands, except per share data)
    
    2003
    
    
    2002
    
    
    2003
    
    
    2002Net income (as reported)
    
    $
    15,790
    
    
    $
    14,283
    
    
    $
    46,101
    
    
    $
    42,935Add: Stock-based employee compensation expense included
in reported net income, net of related tax effects
    
    
    214
    
    
    
    308
    
    
    
    1,020
    
    
    
    841Deduct: Total stock-based employee compensation expense
determined under fair value based method for all
awards, net of related tax effects
    
    
    (414
    )
    
    
    (604
    )
    
    
    (1,648
    )
    
    
    (1,783
    )Net income (pro forma)
    
    $
    15,590
    
    
    $
    13,987
    
    
    $
    45,473
    
    
    $
    41,993Basic earnings per share (as reported)
    
    $
    .28
    
    
    $
    .25
    
    
    $
    .80
    
    
    $
    .74Basic earnings per share (pro forma)
    
    
    .27
    
    
    
    .24
    
    
    
    .79
    
    
    
    .72Diluted earnings per share (as reported)
    
    $
    .27
    
    
    $
    .24
    
    
    $
    .79
    
    
    $
    .72Diluted earnings per share (pro forma)
    
    
    .27
    
    
    
    .24
    
    
    
    .78
    
    
    
    .71


Note 9  Legal Proceedings

D&N Bank, a Federal Savings Bank acquired by the Company in May 1999 and merged
into Republic Bank in December 2000, was a plaintiff, along with approximately
120 other institutions, in a claim and an appeal in the United States Court of
Appeals for the Federal Circuit seeking substantial damages as a result of the
1989 Financial Institutions Reform, Recovery and Enforcement Acts mandatory
phase-out of the regulatory capital treatment of supervisory goodwill. On July
25, 2003, Republic Bank as successor in interest to D&N Bank, filed a Petition
for Rehearing En Banc of Plaintiff-Appellant D&N Bank, FSB, from the United
States Court of Appeals for the Federal Circuit Panel Decision of June 17, 2003
which affirmed summary judgment in favor of government in the matter of D&N
Bank v. United States of America. The United States Court of Appeals denied
Republic Banks request for rehearing En Banc, and accordingly no further
action will be taken in this matter by Republic Bank.

In the ordinary course of business, the Company and its subsidiaries are
parties to certain routine litigation. Based on current knowledge and after
consultation with legal counsel, management believes that the aggregate
liabilities, if any, arising from such legal proceedings would not have a
material adverse effect on the Companys consolidated financial position,
results of operations or liquidity.

Note 10  Subsequent Event

On October 16, 2003 the Board of Directors declared a 10% stock dividend to
shareholders of record on November 7, 2003 and payable on December 1, 2003.

9



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##### Table of Contents






ITEM 2: Managements Discussion and Analysis of Financial Condition and Results of Operations

EARNINGS PERFORMANCE

The Company reported net income for the quarter ended September 30, 2003 of
$15.8 million. This compares to net income of $14.3 million for the third
quarter of 2002. Diluted earnings per share for the third quarter of 2003 were
$.27, up 12% from $.24 earned in 2002. Annualized returns on average assets
and average shareholders equity for the quarter ended September 30, 2003 were
1.24% and 17.95%, respectively.

Net income for the nine months ended September 30, 2003 was $46.1 million,
compared to net income of $42.9 million earned for the same period in 2002.
For the nine month period ended September 30, 2003, diluted earnings per share
were $.79, an increase of 9% over the $.72 earned in 2002. Annualized returns
on average assets and average shareholders equity for the first nine months of
2003 were 1.26% and 17.77%, respectively.

RESULTS OF OPERATIONS

Net Interest Income

The following discussion should be read in conjunction with Table I and Table
II on the following two pages, which identify and quantify the components
impacting net interest income for the three and nine months ended September 30,
2003 and 2002.

Net interest income, on a fully taxable equivalent (FTE) basis, was $38.5
million for the third quarter of 2003 compared to $37.6 million for the third
quarter of 2002. The increase was primarily the result of an increase in the
Companys average interest earning assets of $503 million, or 11%. The average
mortgage loans held for sale balance increased $205 million, or 76%, the
average securities available for sale balance increased $31 million, or 9%, and
the average portfolio loan balance increased $270 million, or 7%, during the
third quarter of 2003 compared to 2002. The increase in the average portfolio
loan balance reflects a $15 million, or 1%, increase in average commercial
loans and a $261 million, or 16%, increase in average residential real estate
mortgage loans partially offset by a decrease of $6 million in average
installment loans. The decrease in average installment loans is a result of a
$32 million decrease in the average indirect installment loan balance partially
offset by an increase of $26 million in the average direct installment loan
balance. Average total interest bearing liabilities increased $458 million for
the third quarter of 2003 compared to 2002 primarily due to a $40 million
increase in total average interest-bearing deposits, a $381 million increase in
average short-term borrowings and short-term FHLB advances, and a $50 million
increase in average long-term FHLB advances.

The net interest margin (FTE) was 3.15% for the quarter ended September 30,
2003, a decrease of 27 basis points from 3.42% in 2002. The decrease in the
margin was primarily attributable to the Companys yield on earning assets
decreasing more than the decline in the cost of funds on interest-bearing
liabilities as a result of the Companys asset sensitive position in the
declining interest rate environment over the past twelve months.

For the nine months ended September 30, 2003, net interest income (FTE) was
$112.2 million, compared to $113.7 million for the first nine months of 2002.
The decrease was primarily the result of a decrease in the Companys net
interest margin offsetting the net interest income generated from the $340
million, or 8%, growth in average interest-earning assets. The net interest
margin (FTE) for the nine months ended September 30, 2003, declined 30 basis
points to 3.20% from 3.50% for the comparable period in 2002. The decrease in
the margin was due to the Companys yield on earning assets decreasing more
than the decline in the cost of funds on interest-bearing liabilities as a
result the Companys asset sensitive position in the declining interest rate
environment over the past twelve months.

10



---



##### Table of Contents



Table I  Quarterly Net Interest Income and Rate/Volume Analysis (FTE)

Three Months Ended
    
    
    Three Months EndedSeptember 30, 2003
    
    
    September 30, 2002Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average(Dollar amounts in thousands)
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateAverage Assets:Short-term investments
    
    $
    149
    
    
    $
    
    
    
    
    0.39
    %
    
    $
    4,806
    
    
    $
    27
    
    
    
    2.21
    %Mortgage loans held for sale
    
    
    473,378
    
    
    
    6,537
    
    
    
    5.52
    
    
    
    268,625
    
    
    
    4,290
    
    
    
    6.39Securities
available for sale(2)
    
    
    379,558
    
    
    
    4,793
    
    
    
    5.01
    
    
    
    348,699
    
    
    
    5,185
    
    
    
    5.90Portfolio
loans(1):Commercial loans
    
    
    1,471,587
    
    
    
    21,738
    
    
    
    5.78
    
    
    
    1,456,255
    
    
    
    24,953
    
    
    
    6.71Residential real estate mortgage loans
    
    
    1,888,933
    
    
    
    25,273
    
    
    
    5.35
    
    
    
    1,627,474
    
    
    
    25,687
    
    
    
    6.31Installment loans
    
    
    589,833
    
    
    
    8,456
    
    
    
    5.69
    
    
    
    596,228
    
    
    
    10,190
    
    
    
    6.78Total loans, net of unearned income
    
    
    3,950,353
    
    
    
    55,467
    
    
    
    5.56
    
    
    
    3,679,957
    
    
    
    60,830
    
    
    
    6.54Federal Home Loan Bank stock
    
    
    80,270
    
    
    
    800
    
    
    
    3.95
    
    
    
    79,086
    
    
    
    1,243
    
    
    
    6.23Total interest-earning assets
    
    
    4,883,708
    
    
    
    67,597
    
    
    
    5.49
    
    
    
    4,381,173
    
    
    
    71,575
    
    
    
    6.47Allowance for loan losses
    
    
    (39,003
    )
    
    
    
    
    
    
    
    
    
    
    (30,344
    )Other assets
    
    
    249,829
    
    
    
    
    
    
    
    
    
    
    
    214,754Total assets
    
    $
    5,094,534
    
    
    
    
    
    
    
    
    
    
    $
    4,565,583Average Liabilities and Shareholders Equity:Interest-bearing demand deposits
    
    $
    183,522
    
    
    $
    123
    
    
    
    0.27
    %
    
    $
    162,358
    
    
    $
    279
    
    
    
    0.68
    %Savings and money market accounts
    
    
    1,017,166
    
    
    
    3,131
    
    
    
    1.22
    
    
    
    879,180
    
    
    
    3,961
    
    
    
    1.79Time deposits
    
    
    1,344,575
    
    
    
    9,918
    
    
    
    2.93
    
    
    
    1,463,248
    
    
    
    13,969
    
    
    
    3.79Total interest-bearing deposits
    
    
    2,545,263
    
    
    
    13,172
    
    
    
    2.05
    
    
    
    2,504,786
    
    
    
    18,209
    
    
    
    2.88Short-term borrowings
    
    
    390,042
    
    
    
    1,056
    
    
    
    1.06
    
    
    
    216,062
    
    
    
    1,008
    
    
    
    1.83Short-term FHLB advances
    
    
    398,250
    
    
    
    1,309
    
    
    
    1.29
    
    
    
    190,978
    
    
    
    1,236
    
    
    
    2.53Long-term FHLB advances
    
    
    1,029,274
    
    
    
    13,538
    
    
    
    5.15
    
    
    
    979,214
    
    
    
    13,245
    
    
    
    5.29Long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,500
    
    
    
    241
    
    
    
    7.15Total interest-bearing liabilities
    
    
    4,362,829
    
    
    
    29,075
    
    
    
    2.62
    
    
    
    3,904,540
    
    
    
    33,939
    
    
    
    3.43Noninterest-bearing deposits
    
    
    284,685
    
    
    
    
    
    
    
    
    
    
    
    244,053Other liabilities
    
    
    45,199
    
    
    
    
    
    
    
    
    
    
    
    30,971Total liabilities
    
    
    4,692,713
    
    
    
    
    
    
    
    
    
    
    
    4,179,564Trust preferred securities and preferred
stock of subsidiary
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    56,406Shareholders equity
    
    
    351,821
    
    
    
    
    
    
    
    
    
    
    
    329,613Total liabilities and shareholders equity
    
    $
    5,094,534
    
    
    
    
    
    
    
    
    
    
    $
    4,565,583Net interest income/rate spread (FTE)
    
    
    
    
    
    $
    38,522
    
    
    
    2.87
    %
    
    
    
    
    
    $
    37,636
    
    
    
    3.04
    %Net interest margin (FTE)
    
    
    
    
    
    
    
    
    
    
    3.15
    %
    
    
    
    
    
    
    
    
    
    
    3.42
    %


Increase (decrease) due to change in:
    
    Volume(3)
    
    
    Rate(3)
    
    
    Net ChangeShort-term investments
    
    $
    (15
    )
    
    $
    (12
    )
    
    $
    (27
    )Mortgage loans held for sale
    
    
    2,898
    
    
    
    (651
    )
    
    
    2,247Securities available for sale
    
    
    429
    
    
    
    (821
    )
    
    
    (392
    )Federal Home Loan Bank stock
    
    
    19
    
    
    
    (462
    )
    
    
    (443
    )Portfolio loans(1):Commercial loans
    
    
    251
    
    
    
    (3,466
    )
    
    
    (3,215
    )Residential real estate mortgage loans
    
    
    3,800
    
    
    
    (4,214
    )
    
    
    (414
    )Installment loans
    
    
    (108
    )
    
    
    (1,626
    )
    
    
    (1,734
    )Total loans, net of unearned income
    
    
    3,943
    
    
    
    (9,306
    )
    
    
    (5,363
    )Total interest income
    
    
    7,274
    
    
    
    (11,252
    )
    
    
    (3,978
    )Interest-bearing demand deposits
    
    
    31
    
    
    
    (187
    )
    
    
    (156
    )Savings deposits
    
    
    553
    
    
    
    (1,383
    )
    
    
    (830
    )Time deposits
    
    
    (1,066
    )
    
    
    (2,985
    )
    
    
    (4,051
    )Total interest-bearing deposits
    
    
    (482
    )
    
    
    (4,555
    )
    
    
    (5,037
    )Short-term borrowings
    
    
    578
    
    
    
    (530
    )
    
    
    48Short-term FHLB advances
    
    
    866
    
    
    
    (793
    )
    
    
    73Long-term FHLB advances
    
    
    645
    
    
    
    (352
    )
    
    
    293Long-term debt
    
    
    (241
    )
    
    
    
    
    
    
    (241
    )Total interest expense
    
    
    1,366
    
    
    
    (6,230
    )
    
    
    (4,864
    )Net interest income
    
    $
    5,908
    
    
    $
    (5,022
    )
    
    $
    886




|(1) |  | Non-accrual loans and overdrafts are included in average balances.
|--- |  | ------------------------------------------------------------------



|(2) |  | The FTE adjustment for tax-exempt securities interest income totaled
$1,032,000 and $1,073,000 for the quarters ended September 30, 2003 and
2002, respectively.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) |  | Rate/volume variances are proportionately allocated to rate and volume
based on the absolute value of the change in each.
|--- |  | -------------------------------------------------------------------------------------------------------------------------

11



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##### Table of Contents



Table II  Year-to-Date Net Interest Income and Rate/Volume Analysis (FTE)

Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2003
    
    
    September 30, 2002Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average(Dollar amounts in thousands)
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateAverage Assets:Short-term investments
    
    $
    237
    
    
    $
    2
    
    
    
    0.94
    %
    
    $
    2,232
    
    
    $
    35
    
    
    
    2.10
    %Mortgage loans held for sale
    
    
    427,742
    
    
    
    18,053
    
    
    
    5.63
    
    
    
    363,128
    
    
    
    18,005
    
    
    
    6.61Securities available for sale (2)
    
    
    280,178
    
    
    
    10,511
    
    
    
    5.02
    
    
    
    329,237
    
    
    
    15,247
    
    
    
    6.19Portfolio loans(1):Commercial loans
    
    
    1,471,271
    
    
    
    67,629
    
    
    
    6.06
    
    
    
    1,415,478
    
    
    
    74,024
    
    
    
    6.90Residential real estate mortgage loans
    
    
    1,819,917
    
    
    
    75,801
    
    
    
    5.55
    
    
    
    1,546,865
    
    
    
    75,508
    
    
    
    6.51Installment loans
    
    
    586,811
    
    
    
    26,401
    
    
    
    6.02
    
    
    
    589,543
    
    
    
    30,898
    
    
    
    7.01Total loans, net of unearned income
    
    
    3,877,999
    
    
    
    169,831
    
    
    
    5.82
    
    
    
    3,551,886
    
    
    
    180,430
    
    
    
    6.75Federal Home Loan Bank stock
    
    
    79,346
    
    
    
    2,955
    
    
    
    4.98
    
    
    
    79,076
    
    
    
    3,638
    
    
    
    6.15Total interest-earning assets
    
    
    4,665,502
    
    
    
    201,352
    
    
    
    5.74
    
    
    
    4,325,559
    
    
    
    217,355
    
    
    
    6.68Allowance for loan losses
    
    
    (37,842
    )
    
    
    
    
    
    
    
    
    
    
    (29,760
    )Other assets
    
    
    236,218
    
    
    
    
    
    
    
    
    
    
    
    179,963Total assets
    
    $
    4,863,878
    
    
    
    
    
    
    
    
    
    
    $
    4,475,762Average Liabilities and Shareholders Equity:Interest-bearing demand deposits
    
    $
    179,993
    
    
    $
    471
    
    
    
    0.35
    %
    
    $
    160,021
    
    
    $
    782
    
    
    
    0.65
    %Savings and money market accounts
    
    
    967,147
    
    
    
    10,163
    
    
    
    1.40
    
    
    
    851,936
    
    
    
    11,518
    
    
    
    1.81Time deposits
    
    
    1,401,159
    
    
    
    32,464
    
    
    
    3.10
    
    
    
    1,463,288
    
    
    
    45,613
    
    
    
    4.17Total interest-bearing deposits
    
    
    2,548,299
    
    
    
    43,098
    
    
    
    2.26
    
    
    
    2,475,245
    
    
    
    57,913
    
    
    
    3.13Short-term borrowings
    
    
    305,980
    
    
    
    2,832
    
    
    
    1.22
    
    
    
    189,897
    
    
    
    2,648
    
    
    
    1.84Short-term FHLB advances
    
    
    284,758
    
    
    
    3,040
    
    
    
    1.41
    
    
    
    229,531
    
    
    
    5,096
    
    
    
    2.93Long-term FHLB advances
    
    
    1,017,857
    
    
    
    40,118
    
    
    
    5.20
    
    
    
    901,991
    
    
    
    37,246
    
    
    
    5.45Long-term debt
    
    
    750
    
    
    
    39
    
    
    
    6.93
    
    
    
    13,500
    
    
    
    724
    
    
    
    7.15Total interest-bearing liabilities
    
    
    4,157,644
    
    
    
    89,127
    
    
    
    2.85
    
    
    
    3,810,164
    
    
    
    103,627
    
    
    
    3.61Noninterest-bearing deposits
    
    
    269,911
    
    
    
    
    
    
    
    
    
    
    
    234,177Other liabilities
    
    
    40,341
    
    
    
    
    
    
    
    
    
    
    
    39,683Total liabilities
    
    
    4,467,896
    
    
    
    
    
    
    
    
    
    
    
    4,084,024Trust preferred securities and preferred
stock of subsidiary
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    71,119Shareholders equity
    
    
    345,982
    
    
    
    
    
    
    
    
    
    
    
    320,619Total liabilities and shareholders equity
    
    $
    4,863,878
    
    
    
    
    
    
    
    
    
    
    $
    4,475,762Net interest income/rate spread (FTE)
    
    
    
    
    
    $
    112,225
    
    
    
    2.89
    %
    
    
    
    
    
    $
    113,728
    
    
    
    3.07
    %Net interest margin (FTE)
    
    
    
    
    
    
    
    
    
    
    3.20
    %
    
    
    
    
    
    
    
    
    
    
    3.50
    %


Increase (decrease) due to change in:
    
    Volume(3)
    
    
    Rate(3)
    
    
    Net ChangeShort-term investments
    
    $
    (20
    )
    
    $
    (13
    )
    
    $
    (33
    )Mortgage loans held for sale
    
    
    2,938
    
    
    
    (2,890
    )
    
    
    48Securities available for sale
    
    
    (2,088
    )
    
    
    (2,648
    )
    
    
    (4,736
    )Federal Home Loan Bank stock
    
    
    12
    
    
    
    (695
    )
    
    
    (683
    )Portfolio loans(1):Commercial loans
    
    
    2,798
    
    
    
    (9,193
    )
    
    
    (6,395
    )Residential real estate mortgage loans
    
    
    12,296
    
    
    
    (12,003
    )
    
    
    293Installment loans
    
    
    (143
    )
    
    
    (4,354
    )
    
    
    (4,497
    )Total loans, net of unearned income
    
    
    14,951
    
    
    
    (25,550
    )
    
    
    (10,599
    )Total interest income
    
    
    15,793
    
    
    
    (31,796
    )
    
    
    (16,003
    )Interest-bearing demand deposits
    
    
    87
    
    
    
    (398
    )
    
    
    (311
    )Savings deposits
    
    
    1,452
    
    
    
    (2,807
    )
    
    
    (1,355
    )Time deposits
    
    
    (1,867
    )
    
    
    (11,282
    )
    
    
    (13,149
    )Total interest-bearing deposits
    
    
    (328
    )
    
    
    (14,487
    )
    
    
    (14,815
    )Short-term borrowings
    
    
    1,257
    
    
    
    (1,073
    )
    
    
    184Short-term FHLB advances
    
    
    1,007
    
    
    
    (3,063
    )
    
    
    (2,056
    )Long-term FHLB advances
    
    
    4,609
    
    
    
    (1,737
    )
    
    
    2,872Long-term debt
    
    
    (664
    )
    
    
    (21
    )
    
    
    (685
    )Total interest expense
    
    
    5,881
    
    
    
    (20,381
    )
    
    
    (14,500
    )Net interest income
    
    $
    9,912
    
    
    $
    (11,415
    )
    
    $
    (1,503
    )




|(1) |  | Non-accrual loans and overdrafts are included in average balances.
|--- |  | ------------------------------------------------------------------



|(2) |  | The FTE adjustment for tax-exempt securities interest income totaled
$2.2 million and $3.5 million for the nine month periods ending September
30, 2003 and 2002, respectively.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) |  | Rate/volume variances are proportionately allocated to rate and volume
based on the absolute value of the change in each.
|--- |  | -------------------------------------------------------------------------------------------------------------------------

12



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##### Table of Contents



Noninterest Income

Total noninterest income increased $2.0 million, or 14%, for the quarter ended
September 30, 2003, compared to the same period in 2002. The increase was
primarily due to higher levels of service charges, mortgage banking income, and
income from bank owned life insurance, offset by lower gains on sale of
securities. Service charges were $3.0 million for the third quarter of 2003,
an increase of $488,000, or 20%, due primarily to an increase in retail bank
service fees. Mortgage banking income increased due to higher levels of loan
fundings of loans sold into the secondary market. Additionally, the Company
had income of $1.4 million from bank owned life insurance during the third
quarter of 2003, an increase of $558,000 over the same period of 2002. Bank
owned life insurance is used to fund future employee benefit costs. During the
quarter ended September 30, 2003, gain on sale of securities was $619,000, a
decrease of $1.3 million from the third quarter of 2002.

For the nine months ended September 30, 2003, total noninterest income
increased $9.8 million, or 27%, compared to the same period in 2002. This
increase was also primarily due to higher levels of service charges, mortgage
banking income and income from bank owned life insurance.

Mortgage Banking Income

The Company closed $1.22 billion in single-family residential mortgage loans in
the third quarter of 2003, an increase of 7% compared to $1.14 billion closed
in the same period last year. During the first nine months of 2003, mortgage
loan closings were $3.52 billion, an increase of 39% compared to $2.52 billion
for the comparable period in 2002. Refinancings for the third quarter of 2003
represented 64% of total closings compared to 65% in the third quarter of 2002.
During the nine months ended September 30, 2003, refinancings represented 70%
of total closings compared to 56% for the same period of 2002. Mortgage loan
volumes during the first nine months of 2003 increased primarily due to the
decrease in interest rates which resulted in a higher level of mortgage
refinance activity.

For the three months ended September 30, 2003, mortgage banking income
increased $2.9 million, or 37%, to $10.6 million from $7.7 million a year
earlier. The increase is primarily due to higher funding levels of loans sold
into the secondary market. Mortgage loans held for sale fundings were $970
million during the third quarter of 2003 compared to $319 million in the prior
year. The ratio of mortgage loan production income to mortgage loans held for
sale fundings was 2.12% for the third quarter of 2003, compared to 2.38% for
the third quarter 2002.

For the nine months ended September 30, 2003, mortgage banking income increased
$7.7 million, or 33%, compared to the same period of 2002. The increase is
also primarily due to higher funding levels of loans sold into the secondary
market. For the nine months ended September 30, 2003, mortgage loans held for
sale fundings totaled $2.53 billion compared to $1.76 billion during the first
nine months of 2002. The ratio of mortgage production revenue to mortgage
loans held for sale fundings was 2.03% for both the first nine months of 2003
and 2002.

Mortgage banking income includes fee revenue derived from the loan origination
process (e.g., points collected), gains on the sale of mortgage loans and the
related mortgage servicing rights released concurrently with the underlying
loans sold (mortgage loan production income), net of commissions, incentives
and deferred mortgage loan origination costs and fees for mortgage loans held
for sale and residential portfolio loans as accounted for under FASB Statement
No. 91, Accounting for Nonrefundable Fees and Costs Associated with Originating
or Acquiring Loans and Initial Direct Costs of Leases(SFAS 91). Mortgage loan
production income totaled $20.5 million and $7.6 million for the third quarters
of 2003 and 2002, respectively, and $51.4 million and $35.6 million for the
nine months ended September 30, 2003 and 2002, respectively. Commissions and
incentives paid were $13.2 million and $10.2 million for the third quarters of
2003 and 2002, respectively, and $33.6 million and $22.4 million for the nine
months ended September 30, 2003 and 2002, respectively. The SFAS 91 credit to
mortgage banking income totaled $2.6 million and $9.7 million for the third
quarters of 2003 and 2002, respectively, and $10.0 million and $6.8 million for
the first nine months of 2003 and 2002, respectively.

Mortgage banking income also includes gains on sales of mortgage portfolio
loans totaling $700,000 and $579,000 for the third quarters of 2003 and 2002,
respectively, and $2.9 million and $3.1 million for the nine months ended
September 30, 2003 and 2002, respectively. Mortgage loan portfolio sales
totaled $31.9 million and $38.7 million for the third quarters of 2003 and
2002, respectively, and $115.6 million and $140.8 million for the nine months
ended September 30, 2003 and 2002, respectively.

During the quarter ended September 30, 2003, the Company had mortgage loan
applications of $972 million and at September 30, 2003, the Companys mortgage
loan pipeline of applications in process was $427 million. The Company
anticipates that mortgage applications for the quarter ended December 31, 2003
will range from $550 to $650 million as refinancings have remained at lower
levels.

13



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##### Table of Contents



Noninterest Expense

Total noninterest expense for the quarter ended September 30, 2003 increased
$4.0 million, to $28.3 million compared to $24.3 million for the third quarter
of 2002. For the nine months ended September 30, 2003, total noninterest
expense increased $7.1 million to $81.6 million compared to $74.4 million in
2002. The increase in both periods is due primarily to increases in salaries
and employee benefits and other noninterest expense. The increase in salaries
and employee benefits reflects a higher level of incentive accruals driven by
the strong results for each business line and Republic Bank, and above peer
group results in earnings per share and return on equity for the Company. The
increase in other noninterest expense primarily reflects increases in
advertising expense, state tax accruals, recruiting fees and other
miscellaneous expenses.

BALANCE SHEET ANALYSIS

ASSETS

At September 30, 2003, the Company had $5.16 billion in total assets, an
increase of $382 million, or 8%, from $4.78 billion at December 31, 2002. The
increase is primarily the result of an increase in the Companys total
portfolio loans and securities available for sale, partially offset by a
decrease in mortgage loans held for sale.

Securities

The Companys investment securities portfolio serves as a secondary source of
earnings and contributes to the management of interest rate risk and liquidity
risk. The securities portfolio is comprised primarily of government agency
securities and municipal securities.
Investment securities available for sale increased $290 million from December
31, 2002, to $460 million, representing 8.9% of total assets at September 30,
2003. Fixed rate securities within the portfolio, excluding municipal
securities, totaled $93.6 million and $65.7 million at September 30, 2003 and
December 31, 2002, respectively. The Companys securities portfolio increased
during the quarter, driven primarily by the purchase of adjustable rate
government agency securities, to offset the decline in mortgage loans held for
sale.

During the nine months ended September 2003, the Company sold $53.3 million of
investment securities and realized gross gains and losses on the sales of
available for sale securities of $1.54 million and $38,019 respectively.
During the nine months ended September 2003, the Company had $44.9 million of
government agency securities that were called prior to the maturity date
resulting in no material gains or losses.

The following table details the composition, amortized cost and fair value of
the Companys investment securities portfolio at September 30, 2003:

Securities Available for SaleGross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(In thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueSecurities:Government agency securities
    
    $
    238,176
    
    
    $
    59
    
    
    $
    987
    
    
    $
    237,248Collateralized mortgage obligations
    
    
    13,473
    
    
    
    
    
    
    
    137
    
    
    
    13,336Mortgage-backed securities
    
    
    3,165
    
    
    
    32
    
    
    
    16
    
    
    
    3,181Municipal and other securities
    
    
    209,735
    
    
    
    1,333
    
    
    
    4,900
    
    
    
    206,168Total securities available for sale
    
    $
    464,549
    
    
    $
    1,424
    
    
    $
    6,040
    
    
    $
    459,933


Certain securities having a carrying value of $184.4 million and $76.9 million
at September 30, 2003 and December 31, 2002, respectively, were pledged to
secure FHLB advances, securities sold under agreements to repurchase and public
deposits as required by law.

The Company anticipates that its securities portfolio will increase during the
fourth quarter to further offset the decline in mortgage loans held for sale.

Federal Home Loan Bank Stock

As a member of the Federal Home Loan Bank (FHLB) of Indianapolis, the Company
is required to own capital stock in the FHLB. The carrying value of the stock
is at cost, or par. All transactions in the capital stock of the FHLB are
executed at par. The balance of FHLB stock was $80.5 million and $78.5 million
at September 30, 2003 and December 31, 2002, respectively. The Company earned
an average dividend of 3.95% on the FHLB stock during the third quarter.

14



---



##### Table of Contents



Mortgage Loans Held for Sale

Mortgage loans held for sale were $391 million at September 30, 2003, a
decrease of $270 million from $661 million at December 31, 2002. The decrease
was primarily due to a decrease in residential mortgage loan closings during
the third quarter of 2003 compared to the fourth quarter of 2002 (loans closed
generally remain in loans held for sale for 30 to 60 days after closing).
Residential mortgage loan closings during the third quarter of 2003 were $1.2
billion compared to $1.4 billion closed during the fourth quarter of 2002
($306 million of mortgage loan closings during the third quarter 2003 were
portfolio loan closings compared to $235 million during the fourth quarter of
2002).

The Company anticipates that mortgage loans held for sale will further decline
in the fourth quarter due to an expected decrease of mortgage loan closings in
the fourth quarter of 2003.

Portfolio Loans

Total portfolio loans were $4.0 billion at September 30, 2003, an increase of
$343 million from $3.66 billion at December 31, 2002. The increase was
primarily due to increases in the residential real estate mortgage loan
balance. The residential portfolio loan balance
increased $335 million during the first nine months of 2003 due to the addition
of $1.1 billion of fixed rate and variable rate portfolio residential loan
closings which were offset by $719 million in mortgage principal payments and
paid-off residential loans.

The commercial portfolio loan balance was $1.47 billion at September 30, 2003
and December 31, 2002. During the nine months ended September 30, 2003 and
2002, the Company closed $30.7 million and $31.3 million in Small Business
Administration (SBA) loans, respectively. The Company sold $3.3 million and
$13.9 million of the guaranteed portion of SBA loans during the nine months
ended September 30, 2003 and 2002, respectively, resulting in corresponding
gains of $310,000 and $1.0 million respectively.

The consumer direct installment loan portfolio increased $23.1 million during
the nine months ended September 30, 2003, primarily due to an increase in home
equity loan closings. The consumer indirect installment loan portfolio
decreased $19.7 million during the nine months ended September 30, 2003 due to
the anticipated pay-off of these loans.

The following table provides further information regarding the Companys loan
portfolio:

September 30, 2003
    
    
    December 31, 2002(Dollars in thousands)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentCommercial loans:Commercial and industrial
    
    $
    41,668
    
    
    
    1.1
    %
    
    $
    48,509
    
    
    
    2.0
    %Commercial real estate mortgage
    
    
    1,432,260
    
    
    
    35.8
    
    
    
    1,420,758
    
    
    
    37.4Total commercial loans
    
    
    1,473,928
    
    
    
    36.9
    
    
    
    1,469,267
    
    
    
    39.4Residential real estate mortgages
    
    
    1,929,312
    
    
    
    48.2
    
    
    
    1,593,929
    
    
    
    43.7Installment loans:Consumer direct
    
    
    579,623
    
    
    
    14.5
    
    
    
    556,507
    
    
    
    14.4Consumer indirect
    
    
    17,111
    
    
    
    0.4
    
    
    
    36,840
    
    
    
    2.5Total installment loans
    
    
    596,734
    
    
    
    14.9
    
    
    
    593,347
    
    
    
    16.9Total portfolio loans
    
    $
    3,999,974
    
    
    
    100.0
    %
    
    $
    3,656,543
    
    
    
    100.0
    %


Credit Quality

The Company attempts to minimize credit risk in its loan portfolio by focusing
primarily on real estate-secured lending (i.e., commercial real estate mortgage
and construction loans, residential real estate mortgage and construction loans
and home equity loans). As of September 30, 2003, such loans comprised
approximately 98% of total portfolio loans. The Companys general policy is to
originate conventional residential real estate mortgages with loan-to-value
ratios of 80% or less; SBA-secured loans or real estate-secured commercial
loans with loan-to-value ratios of 75% or less that are secured by personal
guarantees; and home equity loans with combined first and second mortgages with
loan-to-value ratios of 85% or less.

The Company originates primarily conventional mortgage loans secured by
residential properties which conform to the underwriting guidelines for sale to
the Federal National Mortgage Association (Fannie Mae) and the Federal Home
Loan Mortgage Corporation (Freddie Mac), or for conversion to mortgage-backed
securities issued by the Government National Mortgage Association (GNMA).

The majority of the Companys commercial loans are secured by real estate and
are generally made to small and medium-size businesses. These loans are made
at rates based on the prevailing prime interest rate of Republic Bank, as well
as fixed rates for terms generally ranging from three to five years. Management
believes that the Companys historically low net charge-offs are reflective of
the emphasis on real estate-secured lending and adherence to conservative
underwriting standards.

15



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##### Table of Contents



Non-Performing Assets

Non-performing assets consist of non-accrual loans, restructured loans and
other real estate owned (OREO). OREO represents real estate properties
acquired through foreclosure or by deed in lieu of foreclosure. Commercial
loans, residential real estate mortgage loans and installment loans are
generally placed on non-accrual status when principal or interest is 90 days or
more past due, unless the loans are well-secured and in the process of
collection. In all cases, loans may be placed on non-accrual status earlier
when, in the opinion of management, reasonable doubt exists as to the full,
timely collection of interest or principal.

The following table summarizes the Companys non-performing assets and 90-day
past due loans:

September 30,
    
    
    December 31,(Dollars in thousands)
    
    2003
    
    
    2002Non-Performing Assets:Non-accrual loans:Commercial
    
    $
    23,699
    
    
    $
    19,167Residential real estate mortgages
    
    
    11,456
    
    
    
    15,215Installment
    
    
    1,241
    
    
    
    2,876Total non-accrual loans
    
    
    36,396
    
    
    
    37,258Restructured loans
    
    
    
    
    
    
    2,309Other real estate owned
    
    
    3,219
    
    
    
    2,904Total non-performing assets
    
    $
    39,615
    
    
    $
    42,471Non-performing assets as a percentage of:Portfolio loans and OREO
    
    
    .99
    %
    
    
    1.16
    %Portfolio loans, mortgage loans held for
sale and OREO
    
    
    .90
    %
    
    
    .98
    %Total assets
    
    
    .77
    %
    
    
    .89
    %Loans past due 90 days or more and still accruing interest:Commercial
    
    $
    
    
    
    $
    Residential real estate
    
    
    
    
    
    
    Installment
    
    
    
    
    
    
    Total loans past due 90 days or more
    
    $
    
    
    
    $
    


At September 30, 2003, approximately $27.5 million, or .63% of total loans were
30-89 days delinquent, compared to $26.5 million, or .61%, at December 31,
2002. The Company also maintains a list of potential problem loans (classified
as watch and substandard, but excluding non-accrual and restructured loans)
identified as requiring a higher level of monitoring where known information
about possible credit problems of borrowers causes management to have serious
doubts as to the ability of such borrowers to comply with the present repayment
terms. As of September 30, 2003, total potential problem loans were $30.9
million, or 0.70% of total loans, compared to $36.9 million, or .85% of total
loans at December 31, 2002.

Provision and Allowance for Loan Losses

The allowance for loan losses represents the Companys estimate of probable
credit losses related to specifically identified loans as well as probable
credit losses inherent in the remainder of the loan portfolio that have been
incurred as of the balance sheet date. The allowance for loan losses is
maintained at an adequate level through additions to the provision for loan
losses. An appropriate level of the risk allocated allowance is determined
based on the application of risk percentages to graded loans by categories.
Specific reserves are established for individual loans when deemed necessary by
management. In addition, management considers other factors when determining
the allowance, including loan quality, changes in the size and character of the
loan portfolio, consultation with regulatory authorities, amount of
nonperforming loans, delinquency trends and economic conditions and industry
trends.

It must be understood, however, that inherent risks and uncertainties related
to the operation of a financial institution require management to rely on
estimates, appraisals and evaluations of loans to prepare the Companys
financial statements. Changes in economic conditions and the financial
prospects of borrowers may result in abrupt changes to the estimates,
appraisals or evaluations used. In addition, if actual circumstances and
losses differ substantially from managements assumptions and estimates, the
allowance for loan losses may not be sufficient to absorb all future losses,
and net income could be significantly impacted.

During the nine months ended September 30, 2003, the Company recorded provision
for loan losses of $9.0 million, a decrease of $2.0 million from the comparable
period in 2002. The decrease in the provision in 2003 was primarily due to
lower levels of non-performing assets and a decrease in net charge-offs during
the first nine months of 2003. Non-performing assets have decreased $2.9
million, or 7%, since year-end and net charge-offs are $1.2 million, or 17%,
lower than the nine months ended September 30, 2002. The Company anticipates
that the net charge-offs for the fourth period of 2003 to be in the range of
amounts recorded during each of the first three quarters of the year.

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##### Table of Contents



Provision and Allowance for Loan Losses (Continued)

The following table provides an analysis of the allowance for loan losses:

Nine Months EndedSeptember 30,(Dollars in thousands)
    
    2003
    
    
    2002Allowance for loan losses:Balance at January 1
    
    $
    36,077
    
    
    $
    29,157Loans charged off
    
    
    (7,182
    )
    
    
    (8,077
    )Recoveries of loans previously charged off
    
    
    1,317
    
    
    
    1,044Net charge-offs
    
    
    (5,865
    )
    
    
    (7,033
    )Provision charged to expense
    
    
    9,000
    
    
    
    11,000Balance at September 30
    
    $
    39,212
    
    
    $
    33,124Annualized net charge-offs as a percentage of average loans
(including loans held for sale)
    
    
    .18
    %
    
    
    .24
    %Allowance for loan losses as a percentage of total portfolio loans
outstanding at period-end
    
    
    .98
    %
    
    
    .88
    %Allowance for loan losses as a percentage of non-performing
loans
    
    
    107.74
    %
    
    
    90.16
    %


SFAS No. 114, Accounting By Creditors for Impairment of a Loan, as amended by
SFAS No. 118, considers a loan impaired when it is probable that payment of
principal and interest will not be collected in accordance with the contractual
terms of the original loan agreement. Consistent with this definition, all
non-accrual and restructured loans (with the exception of residential mortgage
and consumer installment loans) are considered impaired. An impaired loan for
which it is deemed necessary to record a specific allocated allowance may be
written down to the fair value of the underlying collateral via a direct
charge-off against the allowance for loan losses at the time it is determined
the loan balance exceeds the fair value of the collateral. Those impaired
loans not requiring a specific allocated allowance represent loans for which
the fair value of the underlying collateral equaled or exceeded the recorded
investment in the loan. All impaired loans were evaluated using the fair value
of the underlying collateral as the measurement method.

Bank Owned Life Insurance

On July 31, 2002, Republic Bank purchased $85 million of separate account bank
owned life insurance to fund future employee benefit costs. In the third
quarter of 2003, the Company added $16.5 million to the Non-Modified Endowment
Contract policy. The Non-Modified Endowment Contract policy allows for
additional investments in each of the next five years without increasing the
face amount of the insurance policy or requiring the participation of more
employees. Increases in the cash surrender value resulting from investment
returns are recorded in noninterest income.

Off-Balance Sheet Instruments

In the normal course of business, the Company becomes a party to transactions
involving financial instruments with off-balance sheet risk to meet the
financing needs of its customers and to manage its own exposure to interest
rate risk. These financial instruments include commitments to extend credit,
standby letters of credit and forward commitments to sell mortgage loans that
are not reflected in the consolidated financial statements. The contractual
amounts of these instruments express the extent of the Companys involvement in
these transactions as of the balance sheet date. These instruments involve, to
varying degrees, elements of credit risk, market risk and liquidity risk in
excess of the amount recognized in the consolidated balance sheets. However,
management believes that they do not represent unusual risks for the Company
and management does not anticipate any significant losses to arise from these
transactions.

Commitments to extend credit are legally binding agreements to lend cash to a
customer as long as there is no breach of any condition established in the
contract. Commitments generally have fixed expiration dates or other
termination clauses and may require the payment of a fee. Commitments to fund
loan applications with agreed-upon rates subject the Company to market risk due
to fluctuations in interest rates. Standby letters of credit guarantee the
performance of a customer to a third party. The Company issues these
guarantees primarily to support public and private borrowing arrangements, real
estate construction projects, bond financing and similar transactions.

The credit risk associated with commitments to extend credit and standby
letters of credit is essentially the same as that involved with direct lending.
Therefore, these instruments are subject to the Companys loan review and
approval procedures and credit policies. Based upon managements credit
evaluation of the counterparty, the Company may require the counterparty to
provide collateral as security for the agreement, including real estate,
accounts receivable, inventories, and investment securities. The maximum
credit risk associated with these instruments equals their contractual amounts
and assumes that the counterparty defaults and the collateral proves to be
worthless. The total contractual amounts of commitments to extend credit and
standby letters of credit do not necessarily represent future cash
requirements, since many of these agreements may expire without being drawn
upon. At September 30, 2003, no liability is recorded for the commitments to
extend credit, while deferred revenue for standby letters of credit was
$83,000. At December 31, 2002, there was no liability or deferred revenue
recorded for the commitments to extend credit or the standby letters of credit.

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##### Table of Contents



Off-Balance Sheet Instruments (Continued)

At September 30, 2003, the Company had outstanding $93 million of commitments
to fund residential real estate loan applications with agreed-upon rates
(Interest Rate Lock Commitments). Interest Rate Lock Commitments and holding
residential mortgage loans for sale to the secondary market exposes the Company
to interest rate risk during the period from application to when the loan is
sold to the investors. To minimize this exposure to interest rate risk, the
Company enters into firm commitments to sell such mortgage loans and Interest
Rate Lock Commitments at specified future dates to various third parties.

At September 30, 2003, the Company had outstanding mandatory forward
commitments to sell $441 million of residential mortgage loans, which includes
put options on 10-year treasury futures with a notional amount of $600,000.
These mandatory forward commitments covered $360 million of mortgage loans held
for sale and $81 million of Interest Rate Lock Commitments. These outstanding
forward commitments to sell mortgage loans are expected to settle in the fourth
quarter of 2003 without producing any material gains or losses.

The Company implemented SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities,as amended effective January 1, 2001. For the quarter
ended September 30, 2003, the impact of SFAS 133 on net income was immaterial.

The following table presents the contractual amounts of the Companys
off-balance sheet financial instruments outstanding at September 30, 2003 and
December 31, 2002.

September 30,
    
    
    December 31,(In thousands)
    
    2003
    
    
    2002Financial instruments whose contract amounts represent credit risk:Commitments to fund residential real estate loans
    
    $
    391,114
    
    
    $
    340,615Commitments to fund commercial real estate loans
    
    
    276,105
    
    
    
    142,332Other unused commitments to extend credit, primarily revolving
consumer loans
    
    
    406,219
    
    
    
    374,692Standby letters of credit
    
    
    54,515
    
    
    
    46,480Financial instruments subject to interest rate risk:Residential real estate loan applications with agreed-upon rates
    
    
    93,302
    
    
    
    181,042Forward commitments to sell residential real estate mortgage loans
    
    
    440,936
    
    
    
    789,037


LIABILITIES

Total liabilities were $4.76 billion at September 30, 2003, a $360 million, or
8% increase from $4.40 billion at December 31, 2002. This increase was
primarily due to increases in total deposits and federal funds purchased and
other short-term borrowings.

Deposits

Total deposits increased $134 million, or 5%, to $2.92 billion at September 30,
2003 from $2.79 billion at December 31, 2002. Noninterest bearing deposits
increased $27 million, or 10%; savings and money market accounts increased $199
million, or 22%; and certificates of deposit decreased $99 million, or 7%, for
the period.

A significant portion of the increase of savings and money market accounts
($107 million) resulted from the deposit of a single money management company.
The amount of deposit with the money management company may change
significantly on a quarterly basis.

Short-Term Borrowings

Short-term borrowings with maturities of less than one year, along with the
related average balances and interest rates for the nine months ended September
30, 2003 and the year ended December 31, 2002, were as follows:

September 30, 2003
    
    
    December 31, 2002Average
    
    
    
    
    
    
    
    
    
    
    AverageEnding
    
    
    Average
    
    
    Rate During
    
    
    Ending
    
    
    Average
    
    
    Rate During(Dollars in thousands)
    
    Balance
    
    
    Balance
    
    
    Period
    
    
    Balance
    
    
    Balance
    
    
    PeriodFederal funds purchased
    
    $
    326,500
    
    
    $
    274,956
    
    
    
    1.26
    %
    
    $
    208,500
    
    
    $
    201,621
    
    
    
    1.77
    %Securities sold under agreements
to repurchase
    
    
    156,137
    
    
    
    30,695
    
    
    
    0.87
    
    
    
    
    
    
    
    
    
    
    
    Other short-term borrowings
    
    
    499
    
    
    
    329
    
    
    
    0.94
    
    
    
    570
    
    
    
    508
    
    
    
    1.38Total short-term borrowings
    
    $
    483,136
    
    
    $
    305,980
    
    
    
    1.22
    %
    
    $
    209,070
    
    
    $
    202,129
    
    
    
    1.75
    %


At September 30, 2003 and December 31, 2002, other short-term borrowings
consisted of treasury, tax and loan (TT&L) demand notes.

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##### Table of Contents



FHLB Advances

Republic Bank routinely utilizes FHLB advances, both on a short- and long-term
basis, to provide funding for mortgage loans held for sale and to minimize the
interest rate risk associated with certain fixed rate commercial and
residential mortgage portfolio loans and fixed rate investment securities.
These advances are generally secured under a blanket security agreement by
first mortgage loans and investment securities with an aggregate book value
equal to at least 145% of the advances.

FHLB advances outstanding at September 30, 2003 and December 31, 2002, were as
follows:

September 30, 2003
    
    
    December 31, 2002Average
    
    
    
    
    
    
    AverageEnding
    
    
    Rate At
    
    
    Ending
    
    
    Rate At(Dollars in thousands)
    
    Balance
    
    
    Period-End
    
    
    Balance
    
    
    Period-EndShort-term FHLB advances
    
    $
    250,000
    
    
    
    1.33
    %
    
    $
    305,000
    
    
    
    1.33
    %Long-term FHLB advances
    
    
    1,026,529
    
    
    
    5.15
    
    
    
    1,002,943
    
    
    
    5.30Total
    
    $
    1,276,529
    
    
    
    4.40
    %
    
    $
    1,307,943
    
    
    
    4.37
    %


The long-term FHLB advances have original maturities ranging from May 2004 to
October 2017.

CAPITAL

Shareholders equity was $355 million at September 30, 2003, a $22 million, or
7%, increase from $333 million at December 31, 2002. This increase primarily
resulted from the retention of $30.9 million in earnings after the payment of
dividends. Capital was reduced by $12.7 million through the repurchase of
991,500 shares of common stock during the nine months ended September 30, 2003.

The Company is subject to regulatory capital requirements administered by
federal banking agencies. Capital adequacy guidelines require minimum capital
ratios of 8.00% for Total risk-based capital, 4.00% for Tier 1 risk-based
capital and 3.00% for Tier 1 leverage. To be considered well-capitalized under
the regulatory framework, minimum capital ratios of 10.00% for Total risk-based
capital, 6.00% for Tier 1 risk-based capital and 5.00% for Tier 1 leverage must
be maintained.

As of September 30, 2003, the Company met all capital adequacy requirements to
which it is subject and management does not anticipate any difficulty in
meeting these requirements on an ongoing basis. The Companys capital ratios
were as follows:

September 30,
    
    
    December 31,2003
    
    
    2002Total capital to risk-weighted assets (1)
    
    
    12.70
    %
    
    
    12.26
    %Tier 1 capital to risk-weighted assets (1)
    
    
    11.57
    
    
    
    11.18Tier 1 capital to average assets (1)
    
    
    7.90
    
    
    
    7.81




|(1) |  | As defined by the regulations.
|--- |  | ------------------------------

As of September 30, 2003, the Companys total risk-based capital was $441
million and Tier 1 risk-based capital was $402 million, an excess of $94
million and $194 million, respectively, over the minimum guidelines prescribed
by regulatory agencies for a well-capitalized institution. In addition,
Republic Bank had regulatory capital ratios in excess of the minimum levels
established for well-capitalized institutions.

ACCOUNTING AND FINANCIAL REPORTING DEVELOPMENTS

The Companys consolidated financial statements are prepared based on the
application of accounting policies, the most significant of which are described
in Note 1 to the consolidated financial statements included in the Companys
2002 Annual Report on Form 10-K. These policies require estimates and
assumptions which may prove inaccurate or subject to variations. Changes in
underlying factors, assumptions or estimates could have a material impact on
the Companys future financial condition and results of operations. The most
critical of these significant accounting policies is the policy for the
allowance for loan losses. This policy is discussed more fully on pages 38 and
39 of the Companys 2002 Annual Report on Form 10-K.

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##### Table of Contents



ACCOUNTING AND FINANCIAL REPORTING DEVELOPMENTS (Continued)

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity.This
Statement establishes standards for how an issuer classifies and measures in
its statement of financial position certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances) because that financial instrument embodies an
obligation of the issuer.

On November 7, 2003, the Financial Accounting Standards Board (FASB) issued
FASB Staff Position No. 150-3, which deferred for an indefinite period the
application of the measurement and recognition guidance in SFAS No. 150 for
mandatory redeemable noncontrolling interests that are classified as equity in
the financial statements of the subsidiary but would be classified as a
liability in the parents financial statements under SFAS 150 because the
subsidiary has a limited life (i.e., trust preferred securities). As a result
of the deferral of SFAS 150, trust preferred securities will continue to be
classified as mezzanine financing and the dividends paid as a component of
noninterest expense. The Company cannot predict when the requirements of SFAS
150 will apply to its trust preferred securities.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation
of Variable Interest Entities. FIN 46 provides principles on how to identify
variable interest entities (VIEs), and requires the consolidation of VIEs in
which an enterprise absorbs a majority of the entitys expected losses,
receives a majority of the entitys expected residual returns, or both, as a
result of ownership, contractual or other financial interests in the entity.
Currently, entities are generally consolidated by an enterprise when it has a
controlling financial interest through ownership of a majority voting interest
in the entity. FIN 46 also requires additional disclosures by primary
beneficiaries and other significant variable interest holders. The Company
must apply the provisions of FIN 46 to its existing variable interests in a VIE
no later than December 31, 2003. As a result of adoption, the Company expects
that it will need to deconsolidate its trust preferred securities subsidiary.
Deconsolidation of this subsidiary will change the classification of the trust
preferred securities to subordinated debt at December 31, 2003, and the
dividends paid on its trust preferred securities as interest expense beginning
January 1, 2004. Banking regulators announced that, until notice is given to
the contrary, this debt would continue to qualify as Tier 1 Capital. The
adoption of the provisions of FIN 46 will not impact the Companys net income
or earnings per share, however, reclassification to interest expense in 2004
will decrease the Companys net interest margin by approximately 9 basis
points.

In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. This interpretation expands the
disclosures to be made by a guarantor in its financial statements about its
obligations under certain guarantees and requires the guarantor to recognize a
liability for the fair value of an obligation assumed under a guarantee. FIN
45 applies to contracts or indemnification agreements that contingently require
the guarantor to make payments to the guaranteed party based on changes in an
underlying that is related to an asset, liability, or equity security of the
guaranteed party. Guarantees subject to the disclosure requirements of FIN 45
but not to the recognition provisions include, among others, a guarantee
accounted for as a derivative instrument under SFAS 133, a parents guarantee
of debt owed to a third party by its subsidiary or vice versa, and a guarantee
which is based on performance not price. The disclosure requirements of FIN 45
are effective for the Company as of December 31, 2002, and require disclosure
of the nature of the guarantee, the maximum potential amount of future payments
that the guarantor could be required to make under the guarantee, and the
current amount of the liability, if any, for the guarantors obligation under
the guarantee. The recognition requirements of FIN 45 are to be applied
prospectively to guarantees issued or modified after December 31, 2002.
Significant guarantees that have been entered into by the Company are disclosed
in Item 2: Managements Discussion and Analysis of Financial Condition and
Results of Operations   Off-Balance Sheet Instruments. The requirements of
FIN 45 did not have a material impact on the financial position or results of
operations of the Company for the quarter or period ended September 30, 2003.

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##### Table of Contents



FORWARD-LOOKING STATEMENTS

From time to time, the Company may communicate or publish forward-looking
statements relating to such matters as possible or assumed future results of
our operations, anticipated financial performance, business prospects, new
products, and similar matters. These forward-looking statements are subject to
risks and uncertainties. Also, when we use any of the words believes,
expects, plans, anticipates, estimates, seeks, intends, outlook,
forecast, target, project, assume, achievable, potential,
strategy, goal, trends, and variations of such words and similar
expressions we are making forward-looking statements.

The process of determining quarterly earnings involves, among other things, an
evaluation of credit quality and reserves which is only completed at the end of
each quarter and which must be performed in accordance with the requirements of
GAAP and applicable regulatory requirements. Therefore, any estimates of
future reserve requirements that are imbedded in current earnings guidance are
just current estimates that are subject to significant potential revisions
based on the facts and circumstances which may exist at future period ends.

We claim the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995 for all of
our forward-looking statements. We believe that our forward-looking statements
are reasonable. You should not place undue reliance on any such
forward-looking statements, which speak only as of the date made. You should
understand that the following important factors, in addition to those discussed
elsewhere in this Quarterly Report on Form 10-Q, or in our filings with the SEC
(which are accessible on the SECs website at www.sec.gov and on our website at
www.republicbancorp.com), or in our press releases, could affect our future
results and performance. This could cause those results to differ materially
from those expressed in our forward-looking statements. Factors that might
cause such a difference include the following:



| |  |  | significantly increased competition from banking and non-banking
institutions;
| | - |  | ------------------------------------------------------------------------------



| |  |  | inflation and changes in the interest rate environment that reduce
our margins or reduce the fair value of financial instruments;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | general political, industry and economic conditions, either
domestically or internationally, that are different than expected;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | adverse developments concerning credit quality in our business
segments that may result in increases in our provisions for credit
losses, nonperforming assets, net charge-offs and reserve for credit
losses;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | adverse changes in the securities markets;
| | - |  | ------------------------------------------



| |  |  | legislative or regulatory changes that adversely affect our business;
| | - |  | ---------------------------------------------------------------------



| |  |  | the ability to enter new markets successfully and capitalize on growth opportunities;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | effects of and changes in trade, monetary and fiscal policies and
laws, including interest rate policies of the Federal Reserve board;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | timely development of and acceptance of new products and services;
| | - |  | ------------------------------------------------------------------



| |  |  | changes in consumer spending, borrowing and savings habits;
| | - |  | -----------------------------------------------------------



| |  |  | effect of changes in accounting policies and practices, as may be
adopted by the bank regulatory agencies and the Financial Accounting
Standards Board;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in our organization, compensation and benefit plans;
| | - |  | ------------------------------------------------------------



| |  |  | costs and effects of litigation and unexpected or adverse outcomes in such litigation; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | our success in managing risks involved in the foregoing.
| | - |  | --------------------------------------------------------

The Company undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such statement is made
to reflect the occurrence of unanticipated events.

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##### Table of Contents






ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

MARKET RISK MANAGEMENT

Market risk is the risk of loss arising from adverse changes in the fair value
of financial instruments due to changes in interest rates, foreign exchange
rates and equity prices. The Companys market risk exposure is composed of
interest rate risk. Interest rate risk arises in the normal course of business
to the extent that there is a difference between the amount of the Companys
interest-earning assets and interest-bearing liabilities that are
prepaid/withdrawn, reprice or mature in specified periods.

The primary objective of asset and liability management is to maintain
stability in the level of net interest income by producing an appropriate yield
and maturity mix of assets and liabilities within the interest rate risk limits
set by the Companys Asset and Liability Management Committee (ALCO) and
consistent with projected liquidity needs and capital adequacy requirements.

The Companys ALCO, which meets weekly, is responsible for reviewing the
interest rate sensitivity position of the Company and establishing policies to
monitor and limit exposure to interest rate risk. Senior management is
responsible for ensuring that the Companys asset and liability management
procedures adhere to corporate policies and risk limits established by the
board of directors.

The Company utilizes two complementary quantitative tools to measure and
monitor interest rate risk: static gap analysis and earnings simulation
modeling. While each of these interest rate risk measurements has limitations,
the Company believes that evaluating these measures together provides a
reasonably comprehensive view of the Companys exposure to interest rate risk.

Static Gap Analysis:Static gap analysis is utilized at the end of each month
to measure the amount of interest rate risk embedded in the balance sheet as of
a point in time. The Company undertakes this analysis by comparing the
differences in the repricing characteristics of interest-earning assets and
interest-bearing liabilities. A gap is defined as the difference between the
principal amount of interest-earning assets and interest-bearing liabilities
that reprice within a specified time period. This gap provides a general
indication of the sensitivity of the Companys net interest income to interest
rate changes. If more assets than liabilities reprice or mature in a given
period, resulting in an asset sensitive position or positive gap, increases in
market interest rates will generally benefit net interest income because
earning asset rates will reflect the changes more quickly than rates paid on
interest-bearing liabilities. Alternatively, where interest-bearing
liabilities reprice more quickly than interest-earning assets, resulting in a
liability sensitive position or negative gap, increases in market interest
rates will generally have an adverse impact on net interest income. At
September 30, 2003 the Companys cumulative one-year gap was a positive 9.00%
of total earning assets.

The Companys current policy is to maintain a mix of asset and liabilities with
repricing and maturity characteristics that permit a moderate amount of
short-term interest rate risk based on current interest rate projections,
customer credit demands and deposit preferences. The Company generally
operates in a range of zero to +15% of total earning assets for the cumulative
one-year gap. Management believes that this range reduces the vulnerability of
net interest income to large shifts in market interest rates while allowing the
Company to take advantage of fluctuations in current short-term rates.
Management also believes that this range complements the Companys strong
retail mortgage banking franchise.

Earnings Simulation Modeling:On a monthly basis, management uses an earnings
simulation model to estimate the effects of various hypothetical changes in
interest rates on the Companys projected net interest income over the ensuing
twelve-month period. The model permits management to evaluate the effects of
various parallel shifts of the U.S. Treasury yield curve, upward and downward,
on net interest income expected in a stable interest rate environment (i.e.,
base net interest income).

As of September 30, 2003, the earnings simulation model projects the following
change in net interest income from base net interest income, assuming an
immediate parallel shift in market interest rates:

Change in market interest rates in basis points
    
    
    +200
    
    
    
    +100
    
    
    
    +50
    
    
    
    -50
    
    
    
    -100
    
    
    
    -200Change in net interest income over
the next twelve months
    
    
    4.33
    %
    
    
    2.43
    %
    
    
    1.28
    %
    
    
    -1.93
    %
    
    
    -3.29
    %
    
    
    -12.78
    %


These projected levels are well within the Companys policy limits. These
results portray the Companys interest rate risk position as asset sensitive
for the one-year horizon. The earnings simulation model assumes that current
balance sheet totals remain constant and all maturities and prepayments of
interest-earning assets and interest-bearing liabilities are reinvested at
current market rates.

Additional quantitative and qualitative disclosures about market risk are
discussed throughout Item 2: Managements Discussion and Analysis of Financial
Condition and Results of Operations beginning on page 10 of this report.

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ITEM 4: Disclosure Controls and Procedures

Internal Controls

The Company maintains a system of internal controls designed to provide
reasonable assurance that: (i) transactions are executed in accordance with
managements general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles, and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
managements general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

Under the supervision and with the participation of the Companys management,
including the Companys Chief Executive Officer and Chief Financial Officer,
the Company has evaluated the effectiveness of the design and operation of the
Companys internal controls and procedures as of the end of the period covered
by this report (the Evaluation Date). There have been no significant changes
in the Companys internal controls or in other factors that could significantly
affect these controls subsequent to the Evaluation Date.

Disclosure Controls And Procedures

The Company maintains disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) that are designed to provide
reasonable assurance that the information required to be disclosed in the
reports it files with the SEC is collected and then processed, summarized and
disclosed within the time periods specified in the rules of the SEC. Under the
supervision and with the participation of the Companys management, including
the Companys Chief Executive Officer and Chief Financial Officer, the Company
has evaluated the effectiveness of the design and operation of its disclosure
controls and procedures as of the end of the period covered by this report.
Based on such evaluation, the Companys Chief Executive Officer and Chief
Financial Officer have concluded that these procedures are effective in
collecting such information and in processing, summarizing and disclosing such
information.

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PART II  OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, the Company and its subsidiaries
are parties to certain routine litigation. Based on current knowledge
and after consultation with legal counsel, management believes that the
aggregate liabilities, if any, arising from such legal proceedings
would not have a material adverse effect on the Companys consolidated
financial position, results of operations or liquidity.

Item 6. Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------

(12)
    
    Computations of ratios of earnings to fixed charges.*(31)(a)
    
    Certification of Principal Executive Officer of Republic
Bancorp Inc. Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302
of the Sarbanes-Oxley Act of 2002)*(31)(b)
    
    Certification of Principal Financial Officer of Republic
Bancorp Inc. Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302
of the Sarbanes-Oxley Act of 2002)*(32)(a)
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of
2002).*(32)(b)
    
    Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of
2002)*




| | * | Filed herewith | 
| | - | -------------- | 



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------

On July 15, 2003, the Company filed a report on Form 8-K reporting
that the Company released its second quarter results and held a
conference call on July 15, 2003 to discuss the earnings release.
The press release was included as an exhibit.

On July 18, 2003, the Company filed a report on Form 8-K reporting
that on July 17, 2003, the Company announced a 12% increase in its
common stock cash dividend and a new stock repurchase program of two
million shares. The press release was included as an exhibit.

On July 22, 2003, the Company filed a report on Form 8-K reporting
that the Company announced a blackout period to its Board of
Directors and Executive Officers beginning on August 15, 2003 and
ending on August 27, 2003. This blackout period corresponded with
the blackout period for the participants in the Companys
tax-deferred savings plan resulting from certain servicing
enhancements to the plan.

On September 19, 2003, the Company filed a report on Form 8-K
reporting that Dana M. Cluckey, Republic Bancorps President and
Chief Executive Officer, and Thomas F. Menacher, Executive Vice
President, Treasurer and Chief Financial Officer, simulcast a
presentation for the RBC Capital Markets Financial Institutions
Conference on September 19, 2003. A slide presentation was included
as an exhibit.

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SIGNATURE

Pursuant to the requirements of the Securities and 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)Date: November 13, 2003
    
    BY:
    
    /s/ Thomas F. MenacherThomas F. MenacherExecutive Vice President, Treasurer and
Chief Financial Officer
 (Principal Financial and
Accounting Officer)


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EXHIBIT INDEX

Exhibit No.
    
    Description(12)
    
    Computations of ratios of earnings to fixed charges.*(31)(a)
    
    Certification of Principal Executive Officer of Republic
Bancorp Inc. Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302
of the Sarbanes-Oxley Act of 2002)*(31)(b)
    
    Certification of Principal Financial Officer of Republic
Bancorp Inc. Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302
of the Sarbanes-Oxley Act of 2002)*(32)(a)
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of
2002).*(32)(b)
    
    Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of
2002)*