##### 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 1934 
|                                                                                   |  |                                                                                         
|For the quarterly period ended March 31, 2003                                     
|                                                                                   |  |                                                                                         
|Or                                                                                 |  |                                                                                         
|                                                                                   |  |                                                                                         
|o                                                                                  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|                                                                                   |  |                                                                                         
|For the transition period from _______________________ to ________________________
|                                                                                   |  |                                                                                         
|Commission File Number: 0-15734                                                   

REPUBLIC BANCORP INC.

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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

(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 April 30, 2003: |  |                  
|Common Stock, $5 Par Value                     |  | 57,527,143 Shares





---

TABLE OF CONTENTS



|                                                   |                                                                                               |                                                                                          |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                    
|                                                   | Item 1  Financial Statements (Unaudited)                                                    
|                                                   |                                                                                               | Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002                  
|                                                   |                                                                                               | Consolidated Statements of Income for the Three Months Ended March 31, 2003 and 2002    
|                                                   |                                                                                               | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 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 4. Submission of Matters to a Vote of Security Holders                                  
|                                                   | Item 5. Changes in Securities                                                                
|                                                   | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                                         
|CERTIFICATION                                     
|Computation of Ratios of Earnings to Fixed Charges
|Certification Pursuant to 18 U.S.C. Section 1350  
|Certification Pursuant to 18 U.S.C. Section 1350  



---



##### Table of Contents



INDEX

|               |  |         |  |                                                                                          |  |      
|-------------- |  | ------- |  | ---------------------------------------------------------------------------------------- |  | -----
|PART I.        |  |         |  | FINANCIAL INFORMATION                                                                    |  |      
|               |  |         |  |                                                                                          |  |      
|               |  | Item 1. |  | Financial Statements (Unaudited)                                                         |  |      
|               |  |         |  |                                                                                          |  |      
|               |  |         |  | Consolidated Balance Sheets as of March 31, 2003
and December 31, 2002                   |  | 3    
|               |  |         |  |                                                                                          |  |      
|               |  |         |  | Consolidated Statements of Income for the Three
Months Ended March 31, 2003 and 2002     |  | 4    
|               |  |         |  |                                                                                          |  |      
|               |  |         |  | Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 2003 and 2002 |  | 5    
|               |  |         |  |                                                                                          |  |      
|               |  |         |  | Notes to Consolidated Financial Statements                                               |  | 6-8  
|               |  |         |  |                                                                                          |  |      
|               |  | Item 2. |  | Managements Discussion and Analysis of
Results of Operations and Financial Condition    |  | 9-17 
|               |  |         |  |                                                                                          |  |      
|               |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                               |  | 18-19
|               |  |         |  |                                                                                          |  |      
|               |  | Item 4. |  | Controls and Procedures                                                                  |  | 19   
|               |  |         |  |                                                                                          |  |      
|PART II.       |  |         |  | OTHER INFORMATION                                                                        |  |      
|               |  |         |  |                                                                                          |  |      
|               |  | Item 1. |  | Legal Proceedings                                                                        |  | 19   
|               |  |         |  |                                                                                          |  |      
|               |  | Item 4. |  | Submission of Matters to a Vote of Security Holders                                      |  | 20   
|               |  |         |  |                                                                                          |  |      
|               |  | Item 5. |  | Other Information                                                                        |  | 20   
|               |  |         |  |                                                                                          |  |      
|               |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                         |  | 21   
|               |  |         |  |                                                                                          |  |      
|SIGNATURE      |  |         |  | 22                                                                                      
|               |  |         |  |                                                                                          |  |      
|CERTIFICATIONS |  |         |  | 23-24                                                                                   

2



---



##### Table of Contents












PART I  FINANCIAL INFORMATION
ITEM 1  Financial Statements

REPUBLIC BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                                                                                                              |                                   |                                            |           |           |             |   |           |              |           |  | 
|----------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------------------------ | --------- | --------- | ----------- | - | --------- | ------------ | --------- |  | 
|                                                                                                                              |                                   |                                            |           |           | March 31,   |   |           | December 31, |          
|(Dollars in thousands)                                                                                                        |                                   | 2003                                       |           |           | 2002        |  
|                                                                                                                              |                                   |                                            |           |           |             |  
|                                                                                                                              |                                   |                                            |           |           | (Unaudited) |   |           |              |           | 
|ASSETS                                                                                                                        |                                   |                                            |           |           |             |   |           |             
|Cash and cash equivalents                                                                                                     |                                   | $                                          | 77,281    |           |             | $ | 75,625    |             
|Mortgage loans held for sale                                                                                                  |                                   |                                            | 324,444   |           |             |   | 660,999   |             
|Securities available for sale (amortized cost of
$317,879 and $247,573, respectively)                                         |                                   |                                            | 318,862   |           |             |   | 248,931   |             
|Loans                                                                                                                         |                                   |                                            | 3,857,837 |           |             |   | 3,656,543 |             
|                                                                                                                              | Less allowance for loan losses    |                                            |           | (37,185   | )           |   |           | (36,077      | )        
|                                                                                                                              |                                   |                                            |           |           |             |  
|Net loans                                                                                                                     |                                   |                                            | 3,820,652 |           |             |   | 3,620,466 |             
|Premises and equipment                                                                                                        |                                   |                                            | 27,452    |           |             |   | 27,790    |             
|Bank owned life insurance                                                                                                     |                                   |                                            | 88,193    |           |             |   | 87,192    |             
|Other assets                                                                                                                  |                                   |                                            | 55,383    |           |             |   | 57,192    |             
|                                                                                                                              |                                   |                                            |           |           |             |  
|                                                                                                                              |                                   | Total assets                               |           | $         | 4,712,267   |   |           | $            | 4,778,195 | 
|                                                                                                                              |                                   |                                            |           |           |             |  
|LIABILITIES                                                                                                                   |                                   |                                            |           |           |             |   |           |             
|Noninterest-bearing deposits                                                                                                  |                                   | $                                          | 274,956   |           |             | $ | 260,634   |             
|Interest-bearing deposits:                                                                                                    |                                   |                                            |           |           |             |   |           |             
|                                                                                                                              | NOW accounts                      |                                            |           | 176,454   |             |   |           | 176,366      |          
|                                                                                                                              | Savings and money market accounts |                                            |           | 968,591   |             |   |           | 910,863      |          
|                                                                                                                              | Certificates of deposit           |                                            |           | 1,442,928 |             |   |           | 1,440,409    |          
|                                                                                                                              |                                   |                                            |           |           |             |  
|                                                                                                                              |                                   | Total interest-bearing deposits            |           |           | 2,587,973   |   |           |              | 2,527,638 | 
|                                                                                                                              |                                   |                                            |           |           |             |  
|                                                                                                                              |                                   | Total deposits                             |           |           | 2,862,929   |   |           |              | 2,788,272 | 
|Federal funds purchased and other short-term borrowings                                                                       |                                   |                                            | 225,910   |           |             |   | 209,070   |             
|Short-term FHLB advances                                                                                                      |                                   |                                            | 125,000   |           |             |   | 305,000   |             
|Long-term FHLB advances                                                                                                       |                                   |                                            | 1,025,668 |           |             |   | 1,002,943 |             
|Accrued expenses and other liabilities                                                                                        |                                   |                                            | 81,698    |           |             |   | 76,682    |             
|Long-term debt                                                                                                                |                                   |                                            |          |           |             |   | 13,500    |             
|                                                                                                                              |                                   |                                            |           |           |             |  
|                                                                                                                              |                                   | Total liabilities                          |           |           | 4,321,205   |   |           |              | 4,395,467 | 
|Trust preferred securities                                                                                                    |                                   |                                            | 50,000    |           |             |   | 50,000    |             
|SHAREHOLDERS EQUITY                                                                                                          |                                   |                                            |           |           |             |   |           |             
|Preferred 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; 57,560,000 and 57,441,000, issued and
outstanding, respectively     |                                   |                                            | 287,802   |           |             |   | 287,207   |             
|Capital surplus                                                                                                               |                                   |                                            | 40,669    |           |             |   | 40,633    |             
|Unearned compensation restricted stock                                                                                       |                                   |                                            | (2,682    | )         |             |   | (368      | )           
|Retained earnings                                                                                                             |                                   |                                            | 14,634    |           |             |   | 4,373     |             
|Accumulated other comprehensive income                                                                                        |                                   |                                            | 639       |           |             |   | 883       |             
|                                                                                                                              |                                   |                                            |           |           |             |  
|                                                                                                                              | Total shareholders equity        |                                            |           | 341,062   |             |   |           | 332,728      |          
|                                                                                                                              |                                   |                                            |           |           |             |  
|                                                                                                                              |                                   | Total liabilities and shareholders equity |           | $         | 4,712,267   |   |           | $            | 4,778,195 | 
|                                                                                                                              |                                   |                                            |           |           |             |  

See notes to consolidated financial statements.

3



---



##### Table of Contents






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

|                                                                          |                          |                           |        |                    |        |   |        |        |        | 
|------------------------------------------------------------------------- | ------------------------ | ------------------------- | ------ | ------------------ | ------ | - | ------ | ------ | ------ | 
|                                                                          |                          |                           |        | Three Months Ended |       
|                                                                          |                          |                           |        | March 31,          |       
|                                                                          |                          |                           |        |                    |       
|(In thousands, except per share data)                                     |                          | 2003                      |        |                    | 2002   |  
|                                                                          |                          |                           |        |                    |        |  
|Interest Income:                                                          |                          |                           |        |                    |        |   |        |       
|Loans, including fees                                                     |                          | $                         | 62,936 |                    |        | $ | 69,027 |       
|Investment securities                                                     |                          |                           | 2,814  |                    |        |   | 4,508  |       
|                                                                          |                          |                           |        |                    |        |  
|                                                                          |                          | Total interest income     |        |                    | 65,750 |   |        |        | 73,535 | 
|                                                                          |                          |                           |        |                    |        |  
|Interest Expense:                                                         |                          |                           |        |                    |        |   |        |       
|Deposits                                                                  |                          |                           | 15,494 |                    |        |   | 20,640 |       
|Short-term borrowings                                                     |                          |                           | 818    |                    |        |   | 783    |       
|FHLB advances                                                             |                          |                           | 13,799 |                    |        |   | 14,208 |       
|Long-term debt                                                            |                          |                           | 39     |                    |        |   | 242    |       
|                                                                          |                          |                           |        |                    |        |  
|                                                                          |                          | Total interest expense    |        |                    | 30,150 |   |        |        | 35,873 | 
|                                                                          |                          |                           |        |                    |        |  
|Net interest income                                                       |                          |                           | 35,600 |                    |        |   | 37,662 |       
|Provision for loan losses                                                 |                          |                           | 3,000  |                    |        |   | 2,400  |       
|                                                                          |                          |                           |        |                    |        |  
|Net interest income after provision for loan losses                       |                          |                           | 32,600 |                    |        |   | 35,262 |       
|                                                                          |                          |                           |        |                    |        |  
|Noninterest Income:                                                       |                          |                           |        |                    |        |   |        |       
|Mortgage banking income                                                   |                          |                           | 9,736  |                    |        |   | 7,246  |       
|Service charges                                                           |                          |                           | 2,652  |                    |        |   | 1,989  |       
|Gain on sale of securities                                                |                          |                           | 448    |                    |        |   | 401    |       
|Income from bank owned life insurance                                     |                          |                           | 1,295  |                    |        |   |       |       
|Other noninterest income                                                  |                          |                           | 730    |                    |        |   | 941    |       
|                                                                          |                          |                           |        |                    |        |  
|                                                                          | Total noninterest income |                           |        | 14,861             |        |   |        | 10,577 |       
|                                                                          |                          |                           |        |                    |        |  
|Noninterest Expense:                                                      |                          |                           |        |                    |        |   |        |       
|Salaries and employee benefits                                            |                          |                           | 14,415 |                    |        |   | 13,927 |       
|Occupancy expense of premises                                             |                          |                           | 2,643  |                    |        |   | 2,487  |       
|Equipment expense                                                         |                          |                           | 1,705  |                    |        |   | 1,680  |       
|Other noninterest expense                                                 |                          |                           | 5,619  |                    |        |   | 5,703  |       
|Dividends on trust preferred securities and
preferred stock of subsidiary |                          |                           | 1,075  |                    |        |   | 1,756  |       
|                                                                          |                          |                           |        |                    |        |  
|                                                                          |                          | Total noninterest expense |        |                    | 25,457 |   |        |        | 25,553 | 
|                                                                          |                          |                           |        |                    |        |  
|Income before income taxes                                                |                          |                           | 22,004 |                    |        |   | 20,286 |       
|Provision for income taxes                                                |                          |                           | 6,851  |                    |        |   | 6,168  |       
|                                                                          |                          |                           |        |                    |        |  
|Net income                                                                |                          | $                         | 15,153 |                    |        | $ | 14,118 |       
|                                                                          |                          |                           |        |                    |        |  
|Basic earnings per share                                                  |                          | $                         | .26    |                    |        | $ | .24    |       
|                                                                          |                          |                           |        |                    |        |  
|Diluted earnings per share                                                |                          | $                         | .26    |                    |        | $ | .24    |       
|                                                                          |                          |                           |        |                    |        |  
|Average common shares outstanding diluted                                |                          |                           | 58,302 |                    |        |   | 59,170 |       
|                                                                          |                          |                           |        |                    |        |  
|Cash dividends declared per common share                                  |                          | $                         | .085   |                    |        | $ | .077   |       
|                                                                          |                          |                           |        |                    |        |  

See notes to consolidated financial statements.

4



---



##### Table of Contents






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

|                                                                   |                                                                                             |                                                                   |                                           |   |          |          |          |   |          |          |  
|------------------------------------------------------------------ | ------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ----------------------------------------- | - | -------- | -------- | -------- | - | -------- | -------- | -
|Three Months Ended March 31 (In thousands)                         |                                                                                             | 2003                                                              |                                           |   | 2002     |         
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|Cash Flows From Operating Activities:                              |                                                                                             |                                                                   |                                           |   |          |          |          |  
|Net income                                                         |                                                                                             | $                                                                 | 15,153                                    |   |          | $        | 14,118   |  
|                                                                   | Adjustments to reconcile net income to net cash provided by
(used in) operating activities: |                                                                   |                                           |   |          |          |          |   |         
|                                                                   |                                                                                             | Depreciation and amortization                                     |                                           |   | 3,306    |          |          |   | 2,119    |         
|                                                                   |                                                                                             | Net gains on sale of securities available for sale                |                                           |   | (448     | )        |          |   | (401     | )       
|                                                                   |                                                                                             | Net gains on sale of commercial and residential real estate loans |                                           |   | (595     | )        |          |   | (802     | )       
|                                                                   |                                                                                             | Proceeds from sale of mortgage loans held for sale                |                                           |   | 860,165  |          |          |   | 841,719  |         
|                                                                   |                                                                                             | Origination of mortgage loans held for sale                       |                                           |   | (523,610 | )        |          |   | (504,118 | )       
|                                                                   |                                                                                             | Net (increase) decrease in other assets                           |                                           |   | (6,100   | )        |          |   | 11,493   |         
|                                                                   |                                                                                             | Net increase (decrease) in other liabilities                      |                                           |   | 5,016    |          |          |   | (40,556  | )       
|                                                                   |                                                                                             | Other, net                                                        |                                           |   | (120     | )        |          |   | (197     | )       
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|                                                                   |                                                                                             |                                                                   | Total adjustments                         |   |          | 337,614  |          |   |          | 309,257  |  
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|                                                                   |                                                                                             |                                                                   | Net cash provided by operating activities |   |          | 352,767  |          |   |          | 323,375  |  
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|Cash Flows From Investing Activities:                              |                                                                                             |                                                                   |                                           |   |          |          |          |  
|Proceeds from sale of securities available for sale                |                                                                                             |                                                                   | 13,564                                    |   |          |          | 40,275   |  
|Proceeds from maturities/payments of securities available for sale |                                                                                             |                                                                   | 22,461                                    |   |          |          | 7,111    |  
|Purchases of securities available for sale                         |                                                                                             |                                                                   | (106,352                                  | ) |          |          | (75,618  | )
|Proceeds from sale of commercial and residential real estate loans |                                                                                             |                                                                   | 20,079                                    |   |          |          | 42,634   |  
|Net increase in loans made to customers                            |                                                                                             |                                                                   | (217,327                                  | ) |          |          | (50,496  | )
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|                                                                   |                                                                                             |                                                                   | Net cash used in investing activities     |   |          | (267,575 | )        |   |          | (36,094  | )
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|Cash Flows From Financing Activities:                              |                                                                                             |                                                                   |                                           |   |          |          |          |  
|Net increase (decrease) in total deposits                          |                                                                                             |                                                                   | 74,657                                    |   |          |          | (53,808  | )
|Net increase (decrease) in short-term borrowings                   |                                                                                             |                                                                   | 16,840                                    |   |          |          | (13,952  | )
|Net decrease in short-term FHLB advances                           |                                                                                             |                                                                   | (180,000                                  | ) |          |          | (280,000 | )
|Proceeds from long-term FHLB advances                              |                                                                                             |                                                                   | 75,000                                    |   |          |          | 49,000   |  
|Payments on long-term FHLB advances                                |                                                                                             |                                                                   | (52,275                                   | ) |          |          |         |  
|Payments on long-term debt                                         |                                                                                             |                                                                   | (13,500                                   | ) |          |          |         |  
|Net proceeds from issuance of common shares                        |                                                                                             |                                                                   | 4,720                                     |   |          |          | 2,930    |  
|Repurchase of common shares                                        |                                                                                             |                                                                   | (4,088                                    | ) |          |          | (3,706   | )
|Dividends paid on common shares                                    |                                                                                             |                                                                   | (4,890                                    | ) |          |          | (4,543   | )
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|                                                                   |                                                                                             |                                                                   | Net cash used in financing activities     |   |          | (83,536  | )        |   |          | (304,079 | )
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|Net increase (decrease) in cash and cash equivalents               |                                                                                             |                                                                   | 1,656                                     |   |          |          | (16,798  | )
|Cash and cash equivalents at beginning of period                   |                                                                                             |                                                                   | 75,625                                    |   |          |          | 76,734   |  
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         
|Cash and cash equivalents at end of period                         |                                                                                             | $                                                                 | 77,281                                    |   |          | $        | 59,936   |  
|                                                                   |                                                                                             |                                                                   |                                           |   |          |         

See notes to consolidated financial statements.

5



---



##### Table of Contents






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
financial statements as of March 31, 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. Therefore, the
consolidated balance sheet as of March 31, 2003 does not include D&N Capital
Corporation. All significant intercompany accounts and transactions have been
eliminated in consolidation.

Mortgage servicing rights totaling $2.3 million at March 31, 2002 have been
reclassified to other assets to conform to the current year presentation. In
addition, dividends on trust preferred securities and preferred stock of
subsidiary for the three months ended March 31, 2002 have been reclassified to
noninterest expense.

Note 3  Consolidated Statements of Cash Flows

Supplemental disclosures of cash flow information for the three months ended
March 31, include:

|                                 |                  |      |   |        |      |  |   |        | 
|-------------------------------- | ---------------- | ---- | - | ------ | ---- |  | - | ------ | 
|(In thousands)                   |                  | 2003 |   |        | 2002 | 
|                                 |                  |      |   |        |      | 
|Cash paid during the period for: |                  |      |   |        |      |  |   |       
|                                 | Interest         |      | $ | 30,115 |      |  | $ | 36,970 | 
|                                 | Income taxes     |      | $ | 1,200  |      |  |   |       | 
|Non-cash investing activities:   |                  |      |   |        |      |  |   |       
|                                 | Loan charge-offs |      | $ | 2,278  |      |  | $ | 2,583  | 

Note 4  Comprehensive Income

The following table sets forth the computation of comprehensive income:

|                                                                                                        |  |                    |        |   |  |  |  |  |      |   |        |  
|------------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - |  |  |  |  | ---- | - | ------ | -
|                                                                                                        |  | Three Months Ended |       
|                                                                                                        |  | March 31,          |       
|                                                                                                        |  |                    |       
|(In thousands)                                                                                          |  | 2003               |        |   |  |  |  |  | 2002 |  
|                                                                                                        |  |                    |        |   |  |  |  |  |      |  
|Net income                                                                                              |  | $                  | 15,153 |   |  |  |  |  |      | $ | 14,118 |  
|Unrealized holding gains on securities, net of tax                                                      |  | $                  | 47     |   |  |  |  |  |      | $ | 885    |  
|Reclassification adjustment for gains included in net
income, net of tax of $157 and $141, respectively |  |                    | (291   | ) |  |  |  |  |      |   | (261   | )
|                                                                                                        |  |                    |        |   |  |  |  |  |      |  
|Net unrealized gains (losses) on securities, net of tax                                                 |  |                    | (244   | ) |  |  |  |  |      |   | 624    |  
|                                                                                                        |  |                    |        |   |  |  |  |  |      |  
|Comprehensive income                                                                                    |  | $                  | 14,909 |   |  |  |  |  |      | $ | 14,742 |  
|                                                                                                        |  |                    |        |   |  |  |  |  |      |  

Note 5  Intangible Assets

The following table summarizes the Companys core deposit intangible asset which is subject to amortization:

|                               |                          |                |   |        |               |  |   |        |       | 
|------------------------------ | ------------------------ | -------------- | - | ------ | ------------- |  | - | ------ | ----- | 
|(Dollars in thousands)         |                          | March 31, 2003 |   |        | Dec. 31, 2002 | 
|                               |                          |                |   |        |               | 
|Core Deposit Intangible Asset: |                          |                |   |        |               |  |   |       
|                               | Gross carrying amount    |                | $ | 10,475 |               |  | $ | 10,475 |      
|                               | Accumulated amortization |                |   | (5,154 | )             |  |   | (4,907 | )    
|                               |                          |                |   |        |               | 
|                               |                          | Net book value |   | $      | 5,321         |  |   | $      | 5,568 | 
|                               |                          |                |   |        |               | 

6



---



##### Table of Contents



Note 5  Intangible Assets (Continued)

Amortization expense on the core deposit intangible asset totaled $247,500 for
each of the quarters ended March 31, 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 March 31, |           
|                                                                                                    |                                |                         |               |                                  |            |                              |           
|(Dollars in thousands, except per share data)                                                       |                                | 2003                    |               |                                  | 2002       |                             
|                                                                                                    |                                |                         |               |                                  |            |                             
|Numerator for basic and diluted earnings per share:                                                 |                                |                         |               |                                  |            |                              |            |  
|                                                                                                    |                                | Net income              |               | $                                | 15,153     |                              |            | $ | 14,118     |        
|Denominator for basic earnings per share-                                                           |                                |                         |               |                                  |            |                              |            |  
|                                                                                                    |                                | weighted-average shares |               |                                  | 57,540,895 |                              |            |   | 58,327,380 |        
|                                                                                                    | Effect of dilutive securities: |                         |               |                                  |            |                              |            |   |           
|                                                                                                    |                                |                         | Stock options |                                  |            | 696,496                      |            |   |            | 780,987 |        
|                                                                                                    |                                |                         | Warrants      |                                  |            | 64,403                       |            |   |            | 61,378  |        
|                                                                                                    |                                |                         |               |                                  |            |                             
|                                                                                                    |                                |                         |               | Dilutive potential common shares |            |                              | 760,899    |   |            |         | 842,365 | 
|                                                                                                    |                                |                         |               |                                  |            |                             
|Denominator for diluted earnings per share-adjusted
weighted-average shares for assumed conversions |                                |                         | 58,301,794    |                                  |            |                              | 59,169,745 |  
|                                                                                                    |                                |                         |               |                                  |            |                             
|Basic earnings per share                                                                            |                                | $                       | .26           |                                  |            | $                            | .24        |  
|                                                                                                    |                                |                         |               |                                  |            |                             
|Diluted earnings per share                                                                          |                                | $                       | .26           |                                  |            | $                            | .24        |  
|                                                                                                    |                                |                         |               |                                  |            |                             

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 56 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 months ended March 31, 2003 and 2002.

|                                            |                     |            |        |       |        |   |        |          |  |   |           |        |  |              |          |         |   |   |        |        | 
|------------------------------------------- | ------------------- | ---------- | ------ | ----- | ------ | - | ------ | -------- |  | - | --------- | ------ |  | ------------ | -------- | ------- | - | - | ------ | ------ | 
|                                            |                     |            |        |       |        |   |        |          |  |   |           |        |  |              | Treasury |         |   |   |        |       
|(In thousands)                              |                     | Commercial |        |       | Retail |   |        | Mortgage |  |   | and Other |        |  | Consolidated |         
|                                            |                     |            |        |       |        |   |        |          |  |   |           |        |  |              |         
|For the Three Months Ended March 31, 2003   |                     |            |        |       |        |   |        |          |  |   |           |        |  |              |          |         |   |   |        |       
|Net interest income from external
customers |                     | $          | 22,941 |       |        | $ | (8,735 | )        |  | $ | 8,404     |        |  | $            | 12,990   |         |   | $ | 35,600 |       
|Internal funding                            |                     |            | (9,334 | )     |        |   | 34,909 |          |  |   | (3,909    | )      |  |              | (21,666  | )       |   |   |       |       
|                                            |                     |            |        |       |        |   |        |          |  |   |           |        |  |              |         
|Net interest income                         |                     |            | 13,607 |       |        |   | 26,174 |          |  |   | 4,495     |        |  |              | (8,676   | )       |   |   | 35,600 |       
|Provision for loan losses                   |                     |            | 2,054  |       |        |   | 231    |          |  |   | 68        |        |  |              | 647      |         |   |   | 3,000  |       
|Noninterest income                          |                     |            | 332    |       |        |   | 2,674  |          |  |   | 14,425    |        |  |              | (2,570   | )       |   |   | 14,861 |       
|Noninterest expense                         |                     |            | 2,307  |       |        |   | 7,747  |          |  |   | 7,321     |        |  |              | 8,082    |         |   |   | 25,457 |       
|                                            |                     |            |        |       |        |   |        |          |  |   |           |        |  |              |         
|                                            | Income before taxes |            |        | 9,578 |        |   |        | 20,870   |  |   |           | 11,531 |  |              |          | (19,975 | ) |   |        | 22,004 | 
|Income taxes                                |                     |            | 3,417  |       |        |   | 7,446  |          |  |   | 4,036     |        |  |              | (8,048   | )       |   |   | 6,851  |       
|                                            |                     |            |        |       |        |   |        |          |  |   |           |        |  |              |         
|Net income                                  |                     | $          | 6,161  |       |        | $ | 13,424 |          |  | $ | 7,495     |        |  | $            | (11,927  | )       |   | $ | 15,153 |       
|                                            |                     |            |        |       |        |   |        |          |  |   |           |        |  |              |         
|Depreciation and amortization               |                     | $          | 32     |       |        | $ | 767    |          |  | $ | 645       |        |  | $            | 1,862    |         |   | $ | 3,306  |       
|Capital expenditures                        |                     | $          | 3      |       |        | $ | 589    |          |  | $ | 100       |        |  | $            | 537      |         |   | $ | 1,229  |       
|Net identifiable assets (in millions)       |                     | $          | 1,449  |       |        | $ | 2,820  |          |  | $ | 481       |        |  | $            | (38      | )       |   | $ | 4,712  |       
|Return on equity(1)                         |                     |            | 16.93  | %     |        |   | 40.67  | %        |  |   | 103.47    | %      |  |              | n/m      |         |   |   | 17.88  | %     
|Return on assets                            |                     |            | 1.69   | %     |        |   | 1.92   | %        |  |   | 5.17      | %      |  |              | n/m      |         |   |   | 1.30   | %     
|Efficiency ratio                            |                     |            | 16.55  | %     |        |   | 26.85  | %        |  |   | 38.69     | %      |  |              | n/m      |         |   |   | 48.75  | %     

7



---



##### Table of Contents



Note 7  Segment Information (Continued)

|                                            |                     |            |         |        |        |   |         |          |  |   |           |       |  |              |          |         |   |   |        |        | 
|------------------------------------------- | ------------------- | ---------- | ------- | ------ | ------ | - | ------- | -------- |  | - | --------- | ----- |  | ------------ | -------- | ------- | - | - | ------ | ------ | 
|                                            |                     |            |         |        |        |   |         |          |  |   |           |       |  |              | Treasury |         |   |   |        |       
|(In thousands)                              |                     | Commercial |         |        | Retail |   |         | Mortgage |  |   | and Other |       |  | Consolidated |         
|                                            |                     |            |         |        |        |   |         |          |  |   |           |       |  |              |         
|For the Three Months Ended March 31, 2002   |                     |            |         |        |        |   |         |          |  |   |           |       |  |              |          |         |   |   |        |       
|Net interest income from external
customers |                     | $          | 24,295  |        |        | $ | (13,839 | )        |  | $ | 11,780    |       |  | $            | 15,426   |         |   | $ | 37,662 |       
|Internal funding                            |                     |            | (10,754 | )      |        |   | 39,727  |          |  |   | (5,891    | )     |  |              | (23,082  | )       |   |   |       |       
|                                            |                     |            |         |        |        |   |         |          |  |   |           |       |  |              |         
|Net interest income                         |                     |            | 13,541  |        |        |   | 25,888  |          |  |   | 5,889     |       |  |              | (7,656   | )       |   |   | 37,662 |       
|Provision for loan losses                   |                     |            | 1,282   |        |        |   | 304     |          |  |   |          |       |  |              | 814      |         |   |   | 2,400  |       
|Noninterest income                          |                     |            | 290     |        |        |   | 1,998   |          |  |   | 7,306     |       |  |              | 983      |         |   |   | 10,577 |       
|Noninterest expense                         |                     |            | 2,451   |        |        |   | 8,111   |          |  |   | 7,189     |       |  |              | 6,046    |         |   |   | 23,797 |       
|                                            |                     |            |         |        |        |   |         |          |  |   |           |       |  |              |         
|                                            | Income before taxes |            |         | 10,098 |        |   |         | 19,471   |  |   |           | 6,006 |  |              |          | (13,533 | ) |   |        | 22,042 | 
|Preferred stock dividend                    |                     |            |        |        |        |   |        |          |  |   |          |       |  |              | 1,756    |         |   |   | 1,756  |       
|Income taxes                                |                     |            | 3,534   |        |        |   | 6,815   |          |  |   | 2,102     |       |  |              | (6,283   | )       |   |   | 6,168  |       
|                                            |                     |            |         |        |        |   |         |          |  |   |           |       |  |              |         
|Net income                                  |                     | $          | 6,564   |        |        | $ | 12,656  |          |  | $ | 3,904     |       |  | $            | (9,006   | )       |   | $ | 14,118 |       
|                                            |                     |            |         |        |        |   |         |          |  |   |           |       |  |              |         
|Depreciation and amortization               |                     | $          | 34      |        |        | $ | 798     |          |  | $ | 559       |       |  | $            | 728      |         |   | $ | 2,119  |       
|Capital expenditures                        |                     | $          | 18      |        |        | $ | 138     |          |  | $ | 36        |       |  | $            | 173      |         |   | $ | 365    |       
|Net identifiable assets (in millions)       |                     | $          | 1,370   |        |        | $ | 2,841   |          |  | $ | 569       |       |  | $            | (371     | )       |   | $ | 4,409  |       
|Return on equity(1)                         |                     |            | 19.38   | %      |        |   | 38.79   | %        |  |   | 42.26     | %     |  |              | n/m      |         |   |   | 18.14  | %     
|Return on assets                            |                     |            | 1.94    | %      |        |   | 1.85    | %        |  |   | 2.11      | %     |  |              | n/m      |         |   |   | 1.25   | %     
|Efficiency ratio                            |                     |            | 17.72   | %      |        |   | 29.09   | %        |  |   | 54.48     | %     |  |              | n/m      |         |   |   | 49.74  | %     



|(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
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 8  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. Increases in the
cash surrender value resulting from investment returns are recorded in
noninterest income.

Note 9  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 quarter 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 quarter 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 months ended March 31, 2003 and 2002.

|                                                                                                                                            |  |      |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|(In thousands, except per share data)                                                                                                       |  | 2003 |        |   | 2002 |  
|                                                                                                                                            |  |      |        |   |      |  
|Net income (as reported)                                                                                                                    |  | $    | 15,153 |   |      | $ | 14,118 |  
|Add: Stock-based employee compensation expense included
in reported net income, net of related tax effects                                  |  |      | 591    |   |      |   | 248    |  
|Deduct: Total stock-based employee compensation expense
determined under fair value based method for all
awards, net of related tax effects |  |      | (816   | ) |      |   | (520   | )
|                                                                                                                                            |  |      |        |   |      |  
|Net income (pro forma)                                                                                                                      |  | $    | 14,928 |   |      | $ | 13,846 |  
|                                                                                                                                            |  |      |        |   |      |  
|Basic earnings per share (as reported)                                                                                                      |  | $    | .26    |   |      | $ | .24    |  
|Basic earnings per share (pro forma)                                                                                                        |  |      | .26    |   |      |   | .24    |  
|Diluted earnings per share (as reported)                                                                                                    |  | $    | .26    |   |      | $ | .24    |  
|Diluted earnings per share (pro forma)                                                                                                      |  |      | .26    |   |      |   | .23    |  

8



---



##### Table of Contents






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

EARNINGS PERFORMANCE

The Company reported record net income for the quarter ended March 31, 2003 of
$15.2 million, a 7% increase over net income of $14.1 million in the first
quarter of 2002. Diluted earnings per share for the first quarter of 2003 were
$.26, up 9% from $.24 earned in 2002. Annualized returns on average assets and
shareholders equity for the first three months of 2003 were 1.30% and 17.88%,
respectively. These compare to returns of 1.25% on average assets and 18.14%
on average equity for the first quarter of 2002.

RESULTS OF OPERATIONS

Net Interest Income

The following discussion should be read in conjunction with Table I on the
following page, which identifies and quantifies the components impacting net
interest income for the three months ended March 31, 2003 and 2002.

Net interest income, on a fully taxable equivalent (FTE) basis, was $36.1
million for the first quarter of 2003 compared to $38.9 million for the first
quarter of 2002. The decrease was primarily the result of a decrease in the
net interest margin. The net interest margin (FTE) was 3.23% for the quarter
ended March 31, 2003, a decrease of 31 basis points from 3.54% in 2002. The
decrease in the margin was due to the Companys yield on earning assets
decreasing more than the decline in interest-bearing liabilities. Total
interest earning assets increased $73 million for the first quarter of 2003
compared to 2002 primarily due to an increase in average total portfolio loan
balances of $298 million offset by decreases in the average balance of mortgage
loans held for sale of $128 million and securities available for sale of $96
million. Average total interest bearing liabilities increased $110 million for
the first quarter of 2003 compared to 2002 primarily due to a $60 million
increase in total average interest-bearing deposits and a $74 million increase
in short-term borrowings.

9



---



##### Table of Contents



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

|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         |  |      |      |      | 
|------------------------------------------------------------ | -------------------------------------- | ------------------------------------------ | --------- | ------------------ | --------- | - | ------------------ | ------ | ------ |  | ------- | ---- | ---- | -------- | --------- | --------- | --------- | - | ------ | ------ | ------- |  | ---- | ---- | ---- | 
|                                                             |                                        |                                            |           | Three Months Ended |           |   | Three Months Ended |       
|                                                             |                                        |                                            |           | March 31, 2003     |           |   | March 31, 2002     |       
|                                                             |                                        |                                            |           |                    |           |   |                    |       
|                                                             |                                        |                                            |           | Average            |           |   |                    |        |        |  | Average |      |      | Average  |           |           |           |   |        |        | Average | 
|(Dollar amounts in thousands)                                |                                        | Balance                                    |           |                    | Interest  |   |                    | Rate   |        |  | Balance |      |      | Interest |           |           | Rate      |  
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |  
|Average Assets:                                              |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         |  |      |     
|Short-term investments                                       |                                        | $                                          | 225       |                    |           | $ | 1                  |        |        |  | 1.82    | %    |      | $        | 765       |           |           | $ | 5      |        |         |  | 2.47 | %   
|Mortgage loans held for sale                                 |                                        |                                            | 437,729   |                    |           |   | 6,270              |        |        |  | 5.73    |      |      |          | 565,750   |           |           |   | 9,431  |        |         |  | 6.67 |     
|Securities available for sale                                |                                        |                                            | 271,022   |                    |           |   | 3,263              |        |        |  | 4.88    |      |      |          | 366,934   |           |           |   | 5,727  |        |         |  | 6.33 |     
|Portfolio loans(1):                                          |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         |  |      |     
|                                                             | Commercial loans                       |                                            |           | 1,474,131          |           |   |                    | 23,159 |        |  |         | 6.28 |      |          |           | 1,376,387 |           |   |        | 24,616 |         |  |      | 7.15 |     
|                                                             | Residential real estate mortgage loans |                                            |           | 1,688,890          |           |   |                    | 24,413 |        |  |         | 5.78 |      |          |           | 1,494,531 |           |   |        | 24,598 |         |  |      | 6.58 |     
|                                                             | Installment loans                      |                                            |           | 587,865            |           |   |                    | 9,094  |        |  |         | 6.27 |      |          |           | 582,136   |           |   |        | 10,382 |         |  |      | 7.23 |     
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |  
|                                                             |                                        | Total loans, net of unearned income        |           |                    | 3,750,886 |   |                    |        | 56,666 |  |         |      | 6.06 |          |           |           | 3,453,054 |   |        |        | 59,596  |  |      |      | 6.92 | 
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |  
|                                                             |                                        | Total interest-earning assets              |           |                    | 4,459,862 |   |                    |        | 66,200 |  |         |      | 5.95 |          |           |           | 4,386,503 |   |        |        | 74,759  |  |      |      | 6.84 | 
|Allowance for loan losses                                    |                                        |                                            | (36,508   | )                  |           |   |                    |        |        |  |         |      |      |          | (29,285   | )         |           |   |        |        |         |  |      |     
|Cash and due from banks                                      |                                        |                                            | 64,278    |                    |           |   |                    |        |        |  |         |      |      |          | 62,452    |           |           |   |        |        |         |  |      |     
|Other assets                                                 |                                        |                                            | 164,421   |                    |           |   |                    |        |        |  |         |      |      |          | 106,479   |           |           |   |        |        |         |  |      |     
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         | 
|                                                             |                                        | Total assets                               |           | $                  | 4,652,053 |   |                    |        |        |  |         |      |      |          |           | $         | 4,526,149 |   |        |        |         |  |      |      |      | 
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         | 
|Average Liabilities and Shareholders Equity:                |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         |  |      |     
|Interest-bearing demand deposits                             |                                        | $                                          | 176,421   |                    |           |   | 187                |        |        |  | 0.43    |      |      | $        | 156,240   |           |           |   | 242    |        |         |  | 0.63 |     
|Savings deposits                                             |                                        |                                            | 929,538   |                    |           |   | 3,747              |        |        |  | 1.64    |      |      |          | 833,068   |           |           |   | 3,694  |        |         |  | 1.80 |     
|Time deposits                                                |                                        |                                            | 1,451,829 |                    |           |   | 11,560             |        |        |  | 3.23    |      |      |          | 1,508,784 |           |           |   | 16,704 |        |         |  | 4.49 |     
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |  
|                                                             | Total interest-bearing deposits        |                                            |           | 2,557,788          |           |   |                    | 15,494 |        |  |         | 2.46 |      |          |           | 2,498,092 |           |   |        | 20,640 |         |  |      | 3.35 |     
|Short-term borrowings                                        |                                        |                                            | 243,121   |                    |           |   | 818                |        |        |  | 1.35    |      |      |          | 169,285   |           |           |   | 783    |        |         |  | 1.85 |     
|Short-term FHLB advances                                     |                                        |                                            | 178,278   |                    |           |   | 693                |        |        |  | 1.56    |      |      |          | 335,445   |           |           |   | 2,450  |        |         |  | 2.92 |     
|Long-term FHLB advances                                      |                                        |                                            | 992,163   |                    |           |   | 13,106             |        |        |  | 5.28    |      |      |          | 847,429   |           |           |   | 11,758 |        |         |  | 5.55 |     
|Long-term debt                                               |                                        |                                            | 2,250     |                    |           |   | 39                 |        |        |  | 6.93    |      |      |          | 13,500    |           |           |   | 242    |        |         |  | 7.15 |     
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |  
|                                                             |                                        | Total interest-bearing liabilities         |           |                    | 3,973,600 |   |                    |        | 30,150 |  |         |      | 3.06 |          |           |           | 3,863,751 |   |        |        | 35,873  |  |      |      | 3.74 | 
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |       
|Noninterest-bearing deposits                                 |                                        |                                            | 250,820   |                    |           |   |                    |        |        |  |         |      |      |          | 227,953   |           |           |   |        |        |         |  |      |     
|Other liabilities                                            |                                        |                                            | 38,677    |                    |           |   |                    |        |        |  |         |      |      |          | 44,369    |           |           |   |        |        |         |  |      |     
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         | 
|                                                             |                                        | Total liabilities                          |           |                    | 4,263,097 |   |                    |        |        |  |         |      |      |          |           |           | 4,136,073 |   |        |        |         |  |      |      |      | 
|Trust preferred securities and preferred
stock of subsidiary |                                        |                                            | 50,000    |                    |           |   |                    |        |        |  |         |      |      |          | 78,719    |           |           |   |        |        |         |  |      |     
|Shareholders equity                                         |                                        |                                            | 338,956   |                    |           |   |                    |        |        |  |         |      |      |          | 311,357   |           |           |   |        |        |         |  |      |     
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         | 
|                                                             |                                        | Total liabilities and shareholders equity |           | $                  | 4,652,053 |   |                    |        |        |  |         |      |      |          |           | $         | 4,526,149 |   |        |        |         |  |      |      |      | 
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         | 
|Net interest income/rate spread (FTE)                        |                                        |                                            |           |                    |           | $ | 36,050             |        |        |  | 2.89    | %    |      |          |           |           |           | $ | 38,886 |        |         |  | 3.10 | %   
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |       
|Net interest margin (FTE)                                    |                                        |                                            |           |                    |           |   |                    |        |        |  | 3.23    | %    |      |          |           |           |           |   |        |        |         |  | 3.54 | %   
|                                                             |                                        |                                            |           |                    |           |   |                    |        |        |  |         |      |      |          |           |           |           |   |        |        |         | 

|                                      |                                 |                                        |                                     |      |         |       |        |            |        |         |        |        |        |        |  
|------------------------------------- | ------------------------------- | -------------------------------------- | ----------------------------------- | ---- | ------- | ----- | ------ | ---------- | ------ | ------- | ------ | ------ | ------ | ------ | -
|Increase (decrease) due to change in: |                                 | Volume(2)                              |                                     |      | Rate(2) |       |        | Net Change |       
|                                      |                                 |                                        |                                     |      |         |       |        |            |       
|Short-term investments                |                                 | $                                      | (3                                  | )    |         | $     | (1     | )          |        | $       | (4     | )     
|Mortgage loans held for sale          |                                 |                                        | (1,948                              | )    |         |       | (1,213 | )          |        |         | (3,161 | )     
|Securities available for sale         |                                 |                                        | (1,313                              | )    |         |       | (1,151 | )          |        |         | (2,464 | )     
|Portfolio loans(1):                   |                                 |                                        |                                     |      |         |       |        |            |        |         |        |       
|                                      |                                 | Commercial loans                       |                                     |      | 1,670   |       |        |            | (3,127 | )       |        |        | (1,457 | )     
|                                      |                                 | Residential real estate mortgage loans |                                     |      | 2,994   |       |        |            | (3,179 | )       |        |        | (185   | )     
|                                      |                                 | Installment loans                      |                                     |      | 104     |       |        |            | (1,392 | )       |        |        | (1,288 | )     
|                                      |                                 |                                        |                                     |      |         |       |        |            |       
|                                      |                                 |                                        | Total loans, net of unearned income |      |         | 4,768 |        |            |        | (7,698  | )      |        |        | (2,930 | )
|                                      |                                 |                                        |                                     |      |         |       |        |            |       
|                                      |                                 |                                        | Total interest income               |      |         | 1,504 |        |            |        | (10,063 | )      |        |        | (8,559 | )
|Interest-bearing demand deposits      |                                 |                                        | 30                                  |      |         |       | (85    | )          |        |         | (55    | )     
|Savings deposits                      |                                 |                                        | 407                                 |      |         |       | (354   | )          |        |         | 53     |       
|Time deposits                         |                                 |                                        | (610                                | )    |         |       | (4,534 | )          |        |         | (5,144 | )     
|                                      |                                 |                                        |                                     |      |         |       |        |            |       
|                                      | Total interest-bearing deposits |                                        |                                     | (173 | )       |       |        | (4,973     | )      |         |        | (5,146 | )     
|Short-term borrowings                 |                                 |                                        | 283                                 |      |         |       | (248   | )          |        |         | 35     |       
|Short-term FHLB advances              |                                 |                                        | (881                                | )    |         |       | (876   | )          |        |         | (1,757 | )     
|Long-term FHLB advances               |                                 |                                        | 1,940                               |      |         |       | (592   | )          |        |         | 1,348  |       
|Long-term debt                        |                                 |                                        | (196                                | )    |         |       | (7     | )          |        |         | (203   | )     
|                                      |                                 |                                        |                                     |      |         |       |        |            |       
|                                      |                                 |                                        | Total interest expense              |      |         | 973   |        |            |        | (6,696  | )      |        |        | (5,723 | )
|                                      |                                 |                                        |                                     |      |         |       |        |            |       
|                                      |                                 |                                        | Net interest income                 |      | $       | 531   |        |            | $      | (3,367  | )      |        | $      | (2,836 | )
|                                      |                                 |                                        |                                     |      |         |       |        |            |       



|(1) Non-accrual loans and overdrafts are included in average balances.                                                       
|-----------------------------------------------------------------------------------------------------------------------------
|                                                                                                                             
|(2) Rate/volume variances are proportionately allocated to rate and volume
based on the absolute value of the change in each.

10



---



##### Table of Contents



Noninterest Income

Total noninterest income increased $4.3 million, or 41%, for the quarter ended
March 31, 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. Service charges were $2.7 million for
the first quarter of 2003, an increase of $663,000, or 33%, compared to the
first quarter of 2002. Mortgage banking income increased due to improved
execution of loans sold into the secondary market. Additionally, the Company
had income of $1.3 million from bank owned life insurance, which is used to
fund future employee benefit costs.

Mortgage Banking Income

The Company closed $988 million in single-family residential mortgage loans in
the first quarter of 2003, an increase of 39%, compared to $711 million closed
in the same period last year. Mortgage loan volumes during 2003 increased
primarily due to the decrease in interest rates which resulted in a higher
level of mortgage refinance activity. Refinancings for the first quarter of
2003 represented approximately 75% of total closings compared to 57% in the
first quarter of 2002.

For the three months ended March 31, 2003, mortgage banking income increased
$2.5 million, or 34%, to $9.7 million from $7.2 million a year earlier. The
increase is due to higher mortgage production revenue resulting primarily from
improved execution of loans sold into the secondary market. The ratio of
mortgage production revenue to mortgage loans held for sale fundings was 1.95%
for the first quarter of 2003, compared to 1.81% for the first quarter 2002.
For the three months ended March 31, 2003, mortgage loans held for sale
fundings totaled $860 million, a 2% increase from the $842 million sold during
the first quarter 2002.

Mortgage banking income includes fee revenue derived from the loan origination
process (i.e., 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 $17.2 million and $15.8 million for 2003 and 2002,
respectively. Commissions and incentives paid were $8.2 million and $5.7 for
the first quarters of 2003 and 2002, respectively. For the first quarter of
2003, the SFAS 91 credit to mortgage banking income totaled $753,000 compared to a SFAS 91 debit to mortgage
banking income of $2.9 million for the first quarter of 2002.

Mortgage banking income also includes gains on sales of mortgage portfolio
loans totaling $400,000 and $624,000 for the first quarters of 2003 and 2002,
respectively. Mortgage loan portfolio sales totaled $17.8 million and $38.6
million for the first quarters of 2003 and 2002, respectively.

Noninterest Expense

Total noninterest expense for the quarter ended March 31, 2003 decreased
$96,000, to $25.5 million compared to $25.6 million for the first quarter of
2002. This decrease is primarily the result of decreases in other noninterest
expense and dividends on preferred stock of subsidiary in 2003 compared to
2002, partially offset by an increase in salaries and employee benefits.

BALANCE SHEET ANALYSIS

ASSETS

At March 31, 2003, the Company had $4.71 billion in total assets, a decrease of
$66 million, or 1%, from $4.78 billion at December 31, 2002. The decrease is
primarily the result of a decrease in the Companys mortgage loans held for
sale.

Securities

Investment securities available for sale increased $70 million, to $319
million, representing 6.8% of total assets at March 31, 2003. At December 31,
2002, the investment securities portfolio totaled $249 million, or 5.2% of
total assets. During the first three months of 2003, the Company sold $13.1
million of investment securities and realized gross gains and losses on the
sales of available for sale securities of $486,000 and $38,000, respectively.

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 debt securities portfolio is comprised primarily of municipal
securities and government agency securities. Fixed rate securities within the
portfolio, excluding municipal securities, totaled $74.6 million and $65.7
million at March 31, 2003 and December 31, 2002, respectively.

11



---



##### Table of Contents



The following table details the composition, amortized cost and fair value of
the Companys investment securities portfolio at March 31, 2003:

|                   |                                     |                       |                                     |         |                               |         |   |            |       |       |            |       |     |      |           |         |         |         | 
|------------------ | ----------------------------------- | --------------------- | ----------------------------------- | ------- | ----------------------------- | ------- | - | ---------- | ----- | ----- | ---------- | ----- | --- | ---- | --------- | ------- | ------- | ------- | 
|                   |                                     |                       |                                     |         | Securities Available for Sale |        
|                   |                                     |                       |                                     |         |                               |        
|                   |                                     |                       |                                     |         |                               |         |   |            | Gross |       |            | Gross |     |      | Estimated |        
|                   |                                     |                       |                                     |         | Amortized                     |         |   | Unrealized |       |       | Unrealized |       |     | Fair |          
|(In thousands)     |                                     | Cost                  |                                     |         | Gains                         |         |   | Losses     |       |       | Value      |      
|                   |                                     |                       |                                     |         |                               |         |   |            |       |       |            |      
|Debt Securities:   |                                     |                       |                                     |         |                               |         |   |            |       |       |            |       |     |      |           |        
|                   | Government agency securities        |                       | $                                   | 106,211 |                               |         | $ | 101        |       |       | $          | 55    |     |      | $         | 106,257 |        
|                   | Collateralized mortgage obligations |                       |                                     | 22,963  |                               |         |   | 16         |       |       |            | 294   |     |      |           | 22,685  |        
|                   | Mortgage-backed securities          |                       |                                     | 5,678   |                               |         |   | 149        |       |       |            | 39    |     |      |           | 5,788   |        
|                   | Municipal and other securities      |                       |                                     | 104,520 |                               |         |   | 1,374      |       |       |            | 269   |     |      |           | 105,625 |        
|                   |                                     |                       |                                     |         |                               |         |   |            |       |       |            |      
|                   |                                     | Total debt securities |                                     |         | 239,372                       |         |   |            | 1,640 |       |            |       | 657 |      |           |         | 240,355 |        
|Investment in FHLB |                                     |                       | 78,507                              |         |                               |         |  |            |       |       |           |       |     |      | 78,507    |        
|                   |                                     |                       |                                     |         |                               |         |   |            |       |       |            |      
|                   |                                     |                       | Total securities available for
sale |         | $                             | 317,879 |   |            | $     | 1,640 |            |       | $   | 657  |           |         | $       | 318,862 | 
|                   |                                     |                       |                                     |         |                               |         |   |            |       |       |            |      

Certain securities having a carrying value of approximately $68.3 million and
$76.9 million at March 31, 2003 and December 31, 2002, respectively, were
pledged to secure FHLB advances and public deposits as required by law.

Mortgage Loans Held for Sale

Mortgage loans held for sale were $324 million at March 31, 2003, a decrease of
$337 million, or 51%, from $661 million at December 31, 2002. The decrease was
primarily due to a decrease in residential mortgage loan closings during the
first quarter of 2003 of $988 million compared to $1.4 billion closed during
the fourth quarter of 2002 (loans closed generally remain in loans held for
sale for 30 to 60 days after closing). In addition, $435 million of mortgage
loan closings during the first quarter 2003 were portfolio loan closings
compared to $235 million during the fourth quarter of 2002.

Portfolio Loans

Total portfolio loans were $3.86 billion at March 31, 2003, an increase of $201
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 $213 million during the first
three months of 2003 due to the addition of $435 million of fixed rate and
variable rate residential loan closings which was offset by $215 million in
pay-off of portfolio loans. During the three months ended March 31, 2003 and
2002, the Company closed $8.1 million and $10.0 million in Small Business
Administration (SBA) loans, respectively. The Company sold $1.7 million and
$3.3 million of the guaranteed portion of SBA loans in the first three months
of 2003 and 2002, respectively, resulting in corresponding gains of $195,000
and $178,000, respectively.

The commercial portfolio loan balance at March 31, 2003 was $1.47 billion, or
unchanged from December 31, 2002.

The consumer direct installment loan portfolio decreased $3.5 million during
the first three months of 2003 as some borrowers utilized the low interest rate
environment to refinance their home equity loans. The consumer indirect
installment loan portfolio decreased $7.9 million during the first quarter of
2003 due to the anticipated pay-off of these loans.

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

|                                  |                                 |                   |                        |                         |         |                |         |        |                   |       |           |           |         |           |         |      |      |       |      | 
|--------------------------------- | ------------------------------- | ----------------- | ---------------------- | ----------------------- | ------- | -------------- | ------- | ------ | ----------------- | ----- | --------- | --------- | ------- | --------- | ------- | ---- | ---- | ----- | ---- | 
|                                  |                                 |                   |                        |                         |         | March 31, 2003 |         |        | December 31, 2002 |      
|                                  |                                 |                   |                        |                         |         |                |         |        |                   |      
|(Dollars in thousands)            |                                 | Amount            |                        |                         | Percent |                |         | Amount |                   |       | Percent   |          
|                                  |                                 |                   |                        |                         |         |                |         |        |                   |       |           |          
|Commercial loans:                 |                                 |                   |                        |                         |         |                |         |        |                   |       |           |           |         |           |         |     
|                                  | Commercial and industrial       |                   | $                      | 45,648                  |         |                |         | 1.2    | %                 |       | $         | 48,509    |         |           |         | 2.0  | %   
|                                  | Commercial real estate mortgage |                   |                        | 1,423,007               |         |                |         | 36.9   |                   |       |           | 1,420,758 |         |           |         | 37.4 |     
|                                  |                                 |                   |                        |                         |         |                |         |        |                   |       |           |          
|                                  |                                 |                   | Total commercial loans |                         |         | 1,468,655      |         |        |                   | 38.1  |           |           |         | 1,469,267 |         |      |      | 39.4  |     
|Residential real estate mortgages |                                 |                   | 1,807,318              |                         |         |                | 46.8    |        |                   |       | 1,593,929 |           |         |           | 43.7    |     
|Installment loans:                |                                 |                   |                        |                         |         |                |         |        |                   |       |           |           |         |           |         |     
|                                  |                                 | Consumer direct   |                        |                         | 552,970 |                |         |        | 14.3              |       |           |           | 556,507 |           |         |      | 14.4 |      
|                                  |                                 | Consumer indirect |                        |                         | 28,894  |                |         |        | 0.8               |       |           |           | 36,840  |           |         |      | 2.5  |      
|                                  |                                 |                   |                        |                         |         |                |         |        |                   |       |           |          
|                                  |                                 |                   |                        | Total installment loans |         |                | 581,864 |        |                   |       | 15.1      |           |         |           | 593,347 |      |      |       | 16.9 | 
|                                  |                                 |                   |                        |                         |         |                |         |        |                   |       |           |          
|                                  |                                 |                   | Total portfolio loans  |                         | $       | 3,857,837      |         |        |                   | 100.0 | %         |           | $       | 3,656,543 |         |      |      | 100.0 | %   
|                                  |                                 |                   |                        |                         |         |                |         |        |                   |       |           |          

12



---



##### Table of Contents



Credit Quality

The Company attempts to minimize credit risk in the 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 March 31, 2003, such loans comprised
approximately 97% 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 and 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s emphasis on real estate-secured lending and adherence to
conservative underwriting standards is reflected in the Companys historically
low net charge-offs.

Non-Performing Assets

Non-performing assets consist of non-accrual 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:

|                                                            |                         |                                                        |                                      |       |           |        |   |              |        |        | 
|----------------------------------------------------------- | ----------------------- | ------------------------------------------------------ | ------------------------------------ | ----- | --------- | ------ | - | ------------ | ------ | ------ | 
|                                                            |                         |                                                        |                                      |       | March 31, |        |   | December 31, |       
|(Dollars in thousands)                                      |                         | 2003                                                   |                                      |       | 2002      |       
|                                                            |                         |                                                        |                                      |       |           |       
|Non-Performing Assets:                                      |                         |                                                        |                                      |       |           |        |   |             
|                                                            | Non-accrual loans:      |                                                        |                                      |       |           |        |   |              |       
|                                                            |                         | Commercial                                             |                                      | $     | 19,920    |        |   | $            | 19,167 |       
|                                                            |                         | Residential real estate mortgages                      |                                      |       | 13,035    |        |   |              | 15,215 |       
|                                                            |                         | Installment                                            |                                      |       | 2,531     |        |   |              | 2,876  |       
|                                                            |                         |                                                        |                                      |       |           |       
|                                                            |                         |                                                        | Total non-accrual loans              |       |           | 35,486 |   |              |        | 37,258 | 
|                                                            | Restructured loans      |                                                        |                                      |      |           |        |   | 2,309        |       
|                                                            | Other real estate owned |                                                        |                                      | 3,459 |           |        |   | 2,904        |       
|                                                            |                         |                                                        |                                      |       |           |       
|                                                            |                         |                                                        | Total non-performing assets          |       | $         | 38,945 |   |              | $      | 42,471 | 
|                                                            |                         |                                                        |                                      |       |           |       
|Non-performing assets as a percentage of:                   |                         |                                                        |                                      |       |           |        |   |             
|                                                            |                         | Portfolio loans and OREO                               |                                      |       | 1.01      | %      |   |              | 1.16   | %     
|                                                            |                         | Portfolio loans, mortgage loans held for
sale and OREO |                                      |       | .93       | %      |   |              | .98    | %     
|                                                            |                         | Total assets                                           |                                      |       | .83       | %      |   |              | .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 March 31, 2003, approximately $21.7 million, or .56% of total portfolio
loans were 30-89 days delinquent, compared to $26.5 million, or .72%, at
December 31, 2002. The Company also maintains a watch list for loans
identified as requiring a higher level of monitoring by management because of
one or more characteristics, such as economic conditions, industry trends,
nature of collateral, collateral margin, payment history or other factors. As
of March 31, 2003, total loans on the watch list, excluding those categorized
as non-accrual loans, were $26.9 million, or .70% of total portfolio loans,
compared to $33.3 million, or .90% of total portfolio 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

13



---



##### Table of Contents



are established for individual loans when deemed necessary by management. In
addition, management considers other factors when determining the unallocated
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 three months ended March 31, 2003, the Company recorded provision
for loan losses of $3.0 million, an increase of $600,000 from the comparable
period in 2002. The increase in 2003 was deemed necessary by management as a
result of the increase in the loan portfolio balance and a higher level of
non-performing loans as compared to March 31, 2002.

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

|                                                                                             |                                            |                 |        |                    |        |   |        |        |        |  
|-------------------------------------------------------------------------------------------- | ------------------------------------------ | --------------- | ------ | ------------------ | ------ | - | ------ | ------ | ------ | -
|                                                                                             |                                            |                 |        | Three Months Ended |       
|                                                                                             |                                            |                 |        | March 31,          |       
|                                                                                             |                                            |                 |        |                    |       
|(Dollars in thousands)                                                                       |                                            | 2003            |        |                    | 2002   |  
|                                                                                             |                                            |                 |        |                    |        |  
|Allowance for loan losses:                                                                   |                                            |                 |        |                    |        |   |        |       
|Balance at January 1                                                                         |                                            | $               | 36,077 |                    |        | $ | 29,157 |       
|                                                                                             | Loans charged off                          |                 |        | (2,278             | )      |   |        | (2,583 | )     
|                                                                                             | Recoveries of loans previously charged off |                 |        | 386                |        |   |        | 350    |       
|                                                                                             |                                            |                 |        |                    |        |  
|                                                                                             |                                            | Net charge-offs |        |                    | (1,892 | ) |        |        | (2,233 | )
|                                                                                             | Provision charged to expense               |                 |        | 3,000              |        |   |        | 2,400  |       
|                                                                                             |                                            |                 |        |                    |        |  
|Balance at March 31                                                                          |                                            | $               | 37,185 |                    |        | $ | 29,324 |       
|                                                                                             |                                            |                 |        |                    |        |  
|Annualized net charge-offs as a percentage of average loans
(including loans held for sale)  |                                            |                 | .18    | %                  |        |   | .22    | %     
|Allowance for loan losses as a percentage of total portfolio loans
outstanding at period-end |                                            |                 | .96    | %                  |        |   | .85    | %     
|Allowance for loan losses as a percentage of non-performing
loans                            |                                            |                 | 104.79 | %                  |        |   | 124.75 | %     

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 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. Consequently, 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.

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,
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

14



---



##### Table of Contents



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 March 31, 2003 and
December 31, 2002, no liability is recorded for the commitments to extend
credit or the standby letters of credit.

At March 31, 2003, the Company had outstanding $367 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 March 31, 2003, the Company had outstanding mandatory forward commitments to
sell $616 million of residential mortgage loans, of which $292 million covered
mortgage loans held for sale and $324 million covered Interest Rate Lock
Commitments. These outstanding forward commitments to sell mortgage loans are
expected to settle in the second quarter of 2003 without producing any material
gains or losses.

The Company implemented FAS 133, as amended effective January 1, 2001. For the
quarter ended March 31, 2003, the impact of FAS 133 on net income was
immaterial.

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

|                                                                    |                                                                               |      |           |         |      |              |   |         | 
|------------------------------------------------------------------- | ----------------------------------------------------------------------------- | ---- | --------- | ------- | ---- | ------------ | - | ------- | 
|                                                                    |                                                                               |      | March 31, |         |      | December 31, |  
|(In thousands)                                                      |                                                                               | 2003 |           |         | 2002 |             
|                                                                    |                                                                               |      |           |         |      |             
|Financial instruments whose contract amounts represent credit risk: |                                                                               |      |           |         |      |              |   |        
|                                                                    | Commitments to fund residential real estate loans                             |      | $         | 479,553 |      |              | $ | 340,615 | 
|                                                                    | Commitments to fund commercial real estate loans                              |      |           | 193,330 |      |              |   | 142,332 | 
|                                                                    | Other unused commitments to extend credit, primarily revolving
consumer loans |      |           | 379,993 |      |              |   | 374,692 | 
|                                                                    | Standby letters of credit                                                     |      |           | 47,007  |      |              |   | 46,480  | 
|Financial instruments subject to interest rate risk:                |                                                                               |      |           |         |      |              |   |        
|                                                                    | Residential real estate loan applications with agreed-upon rates              |      |           | 366,564 |      |              |   | 181,042 | 
|                                                                    | Forward commitments to sell residential real estate mortgage loans            |      |           | 615,671 |      |              |   | 789,037 | 

LIABILITIES

Total liabilities were $4.32 billion at March 31, 2003, a $74 million, or 2%
decrease from $4.40 billion at December 31, 2002. This decrease was primarily
due to a decrease in short-term FHLB advances, which were used to fund mortgage
loans held for sale and the payment of long-term debt.

Deposits

Total deposits increased $75 million, or 3%, to $2.86 billion at March 31, 2003
from $2.79 billion at December 31, 2002. Noninterest bearing deposits
increased $14.3 million, or 5%; NOW and savings and money market accounts
increased $57.8 million, or 5%; and certificates of deposit increased $2.5
million, or less than 1%, for the quarter.

Short-Term Borrowings

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

|                            |                             |         |                |         |         |                   |         |         |             |  |         |        |   |         |         |         |        |             |         |         |  |         |      |      |  
|--------------------------- | --------------------------- | ------- | -------------- | ------- | ------- | ----------------- | ------- | ------- | ----------- |  | ------- | ------ | - | ------- | ------- | ------- | ------ | ----------- | ------- | ------- |  | ------- | ---- | ---- | -
|                            |                             |         | March 31, 2003 |         |         | December 31, 2002 |        
|                            |                             |         |                |         |         |                   |        
|                            |                             |         |                |         |         |                   |         |         |             |  | Average |        |   |         |         |         |        |             |         |         |  | Average |     
|                            |                             |         | Ending         |         |         | Average           |         |         | Rate During |  |         | Ending |   |         | Average |         |        | Rate During |        
|(Dollars in thousands)      |                             | Balance |                |         | Balance |                   |         | Period  |             |  | Balance |        |   | Balance |         |         | Period |            
|                            |                             |         |                |         |         |                   |         |         |             |  |         |        |   |         |         |         |        |            
|Federal funds purchased     |                             | $       | 225,500        |         |         | $                 | 242,811 |         |             |  | 1.35    | %      |   | $       | 208,500 |         |        | $           | 237,957 |         |  |         | 1.57 | %   
|Other short-term borrowings |                             |         | 410            |         |         |                   | 310     |         |             |  | 1.29    |        |   |         | 570     |         |        |             | 470     |         |  |         | 0.85 |     
|                            |                             |         |                |         |         |                   |         |         |             |  |         |        |   |         |         |         |        |            
|                            | Total short-term borrowings |         | $              | 225,910 |         |                   | $       | 243,121 |             |  |         | 1.35   | % |         | $       | 209,070 |        |             | $       | 238,427 |  |         |      | 1.53 | %
|                            |                             |         |                |         |         |                   |         |         |             |  |         |        |   |         |         |         |        |            

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

15



---



##### 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 March 31, 2003 and December 31, 2002, were as
follows:

|                         |  |         |                |  |            |                   |         |         |        |   |            |         |  |         |      |   | 
|------------------------ |  | ------- | -------------- |  | ---------- | ----------------- | ------- | ------- | ------ | - | ---------- | ------- |  | ------- | ---- | - | 
|                         |  |         | March 31, 2003 |  |            | December 31, 2002 |        
|                         |  |         |                |  |            |                   |        
|                         |  |         |                |  |            |                   | Average |         |        |   |            |         |  | Average |     
|                         |  |         | Ending         |  |            | Rate At           |         |         | Ending |   |            | Rate At | 
|(Dollars in thousands)   |  | Balance |                |  | Period-End |                   |         | Balance |        |   | Period-End |        
|                         |  |         |                |  |            |                   |         |         |        |   |            |        
|Short-term FHLB advances |  | $       | 125,000        |  |            |                   | 1.56    | %       |        | $ | 305,000    |         |  |         | 1.33 | %
|Long-term FHLB advances  |  |         | 1,025,668      |  |            |                   | 5.28    |         |        |   | 1,002,943  |         |  |         | 5.30 |  
|                         |  |         |                |  |            |                   |         |         |        |   |            |        
|Total                    |  | $       | 1,150,668      |  |            |                   | 4.72    | %       |        | $ | 1,307,943  |         |  |         | 4.37 | %
|                         |  |         |                |  |            |                   |         |         |        |   |            |        

The long-term FHLB advances have original maturities ranging from May 2003 to
October 2017.

Long-Term Debt

The 6.95% Senior Debentures of $13.5 million matured on January 15, 2003 and
were paid in full.

CAPITAL

Shareholders equity was $341 million at March 31, 2003, an $8 million, or 3%,
increase from $333 million at December 31, 2002. This increase primarily
resulted from the retention of $10.3 million in earnings after the payment of
dividends and the repurchase of 335,000 shares of common stock during the first
three months of 2003.

The Company is subject to regulatory capital requirements administered by
federal banking agencies. Failure to meet minimum capital requirements can
initiate actions by regulators that, if undertaken, could have an effect on the
Companys financial statements. 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 for prompt corrective action,
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 March 31, 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:

|                                           |  |           |       |   |              |  |       |  
|------------------------------------------ |  | --------- | ----- | - | ------------ |  | ----- | -
|                                           |  | March 31, |       |   | December 31, | 
|                                           |  | 2003      |       |   | 2002         | 
|                                           |  |           |       |   |              | 
|Total capital to risk-weighted assets (1)  |  |           | 12.75 | % |              |  | 12.26 | %
|Tier 1 capital to risk-weighted assets (1) |  |           | 11.63 |   |              |  | 11.18 |  
|Tier 1 capital to average assets (1)       |  |           | 8.26  |   |              |  | 7.81  |  



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

As of March 31, 2003, the Companys total risk-based capital was $421 million
and Tier 1 risk-based capital was $384 million, an excess of $91 million and
$186 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.

16



---



##### Table of Contents



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.

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, Off-Balance Sheet Instruments. The requirements of FIN 45 did not
have a material impact on the financial position or results of operations for
the quarter ended March 31, 2003.

FORWARD-LOOKING STATEMENTS

From time to time, we may 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 or similar expressions we are making forward-looking statements.

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, in our press releases, and in
our public documents to which we refer, 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 economic conditions, either nationally or in our market areas, that are worse than expected;                                                   
|
| |  |  | 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.

17



---



##### 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
entirely 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 the optimal 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 Banks asset and liability management
procedures adhere to corporate policies and risk limits established by its
respective board of directors.

The Company utilizes two complementary quantitative tools to measure and
monitor interest rate risk: static gap analysis and earnings simulation
modeling. Each of these interest rate risk measurements has limitations, but
when evaluated together, they provide a reasonably comprehensive view of the
exposure the Company has 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 March
31, 2003 the Companys cumulative one-year gap was a positive 16.73% 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. This
range also complements the Companys strong retail mortgage banking franchise.
The one-year gap at March 31, 2003 exceeds this range primarily due to the
prepayment assumptions the model uses in estimating the maturity terms of the
residential mortgage portfolio. With residential mortgage rates at historical
lows, prepayment speed assumptions are at high levels resulting in a high level
of assumed maturities within the one-year period. A slow-down in prepayment
speed assumptions to more normalized levels would significantly reduce the
one-year gap percentage.

Earnings Simulation Modeling:On a monthly basis, the earnings simulation model
is used to quantify 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 March 31, 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 |       |   | -200 | 
|                                                          |  |      |      |   |      |  |      |     |  |  |      |   |  |      |       |   |      | 
|Change in net interest income over
the next twelve months |  |      | 8.65 | % |      |  | 5.15 | %   |  |  | 3.01 | % |  |      | -1.92 | % |      |  | -2.82 | % |  |  | -7.86 | %

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.

18



---



##### Table of Contents



Additional quantitative and qualitative disclosures about market risk are
discussed throughout Managements Discussion and Analysis of Financial
Condition and Results of Operations beginning on page 9 of this report.




ITEM 4: 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. Such evaluation was conducted within the 90 days prior to the date of filing of this report. 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
date of such evaluation.

Disclosure Controls And Procedures

The Company maintains disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) that are designed (i) to collect the
information it is required to disclose in the reports it files with the SEC,
and (ii) to process, summarize and disclose this information 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. Such evaluation was conducted within the 90 days prior to the date
of filing of this report. Based on such evaluation, the Companys Chief
Executive Officer and Chief Financial Officer have concluded that these
procedures are effective.

As recommended by the SEC, and in order to enhance its disclosure controls and
procedures, the Company has appointed a disclosure committee that includes the
Companys controller, chief credit officer, chief ethics officer and principal
risk management officer, senior vice president of human resources and the
investor relations officer. This committees members also include officers of
Republic Bank who are involved in the flow of information regarding the
Companys financial performance, controls and financial reporting.

This committee is responsible for assessing the materiality and timeliness of
the Companys disclosures in its periodic reports and coordinating the timely
review of the Companys periodic reports by the various parties involved
(including the Companys CEO, CFO, independent accountants, internal auditors
and audit committee).




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. In the opinion of
management, 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.

19



---



##### Table of Contents








|Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                             
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | Republic Bancorp Inc. held its 2003 Annual Meeting of Shareholders on
April 23, 2003. The following directors, who constitute the entire
board of directors of Republic Bancorp Inc., were elected at the annual
meeting to serve until the next annual meeting:

|                        |  |     |            |  |             |  |         | 
|----------------------- |  | --- | ---------- |  | ----------- |  | ------- | 
|Director                |  | For |            |  | Abstentions | 
|                        |  |     |            |  |             | 
|Jerry D. Campbell       |  |     | 48,474,936 |  |             |  | 609,679 | 
|Dana M. Cluckey         |  |     | 48,524,107 |  |             |  | 609,679 | 
|George J. Butvilas      |  |     | 48,470,963 |  |             |  | 609,679 | 
|Lee E. Benz             |  |     | 48,431,497 |  |             |  | 609,679 | 
|Mary P. Cauley          |  |     | 48,439,584 |  |             |  | 609,679 | 
|Richard J. Cramer, Sr.  |  |     | 48,439,584 |  |             |  | 609,679 | 
|Dr. George A. Eastman   |  |     | 48,439,584 |  |             |  | 609,679 | 
|Barry J. Eckhold        |  |     | 48,465,821 |  |             |  | 609,679 | 
|Gary Hurand             |  |     | 48,439,584 |  |             |  | 609,679 | 
|Dennis J. Ibold         |  |     | 48,468,591 |  |             |  | 609,679 | 
|Stanley A. Jacobson     |  |     | 48,428,727 |  |             |  | 609,679 | 
|John J. Lennon          |  |     | 48,431,497 |  |             |  | 609,679 | 
|Milton F. Lutz II       |  |     | 48,439,584 |  |             |  | 609,679 | 
|Sam H. McGoun           |  |     | 48,431,497 |  |             |  | 609,679 | 
|Kelly E. Miller         |  |     | 48,439,584 |  |             |  | 609,679 | 
|Randolph P. Piper       |  |     | 48,497,902 |  |             |  | 609,679 | 
|Dr. Isaac J. Powell     |  |     | 48,431,497 |  |             |  | 609,679 | 
|William C. Rands III    |  |     | 48,436,814 |  |             |  | 609,679 | 
|B. Thomas M. Smith, Jr. |  |     | 48,431,497 |  |             |  | 609,679 | 
|Dr. Jeoffrey K. Stross  |  |     | 48,431,497 |  |             |  | 609,679 | 
|Steven E. Zack          |  |     | 48,431,497 |  |             |  | 609,679 | 



|Item 1. |  | Shareholders also approved the ratification and amendment of the
Directors Compensation Plan. The amendment increased the maximum
number of shares and warrants issued under the plan, including all of
the shares and warrants issued under the plan to date, to 600,000. The
amendment also changed, on a going forward basis, the types of awards
under the plan. From 1993 to 2002, all meeting fees were paid in stock
and non-employee directors of Republic Bancorp Inc. received a warrant
to purchase shares of Republic common stock for their annual retainer
fee. Commencing on April 23, 2003 all meeting fees and the annual
retainer paid to non-employee directors of Republic Bancorp Inc. will
be paid in stock. Subject to the restrictions set forth in the plan,
the amount of any award may be adjusted by the Board.
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | The number of votes cast for and against as well as the number of
abstentions as to the ratification and amendment of the Directors
Compensation Plan are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|                      |  |     |            |  |         |  |           |         |  |  |         | 
|--------------------- |  | --- | ---------- |  | ------- |  | --------- | ------- |  |  | ------- | 
|                      |  | For |            |  | Against |  |           | Abstain | 
|                      |  |     |            |  |         |  |           |         | 
|Number of votes cast: |  |     | 47,515,633 |  |         |  | 1,263,979 |         |  |  | 278,916 | 






|Item 5. |  | Changes in Securities                                                                                                                                                                  
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | On February 21, 2003, the Board of Directors declared a quarterly cash
dividend of $0.085 per share of common stock, payable on April 7, 2003
to shareholders of record March 14, 2003.

20



---



##### Table of Contents








|Item 6. |  | Exhibits and Reports on Form 8-K
|------- |  | --------------------------------



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

|        |  |                                                                                                                                  
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------
|(12)    |  | Computations of ratios of earnings to fixed charges.*                                                                            
|(99)(a) |  | Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of
2002).*
|(99)(b) |  | Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act 0f
2002)* 



| | *Filed herewith
| | ---------------
|
| | (b)            
|
| |                
|
| |                
|
| |                

21



---



##### Table of Contents






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: May 14, 2003 |  |  |  | BY:                                |  | /s/ Thomas F. Menacher                                                                                                         
|                   |  |  |  |                                    | 
|                   |  |  |  |                                    |  | Thomas F.
Menacher
Executive Vice President, Treasurer and
Chief Financial Officer
(Principal Financial and
Accounting Officer)

22



---



##### Table of Contents






CEO CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dana M. Cluckey, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Republic
Bancorp Inc;                                                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                      



| | a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of the registrants board of directors (or persons
performing the equivalent functions):
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |                                                      
|------------------ |  | -----------------------------------------------------
|Date: May 14, 2003 |  | /s/ Dana M. Cluckey                                  
|                   |  |                                                      
|                   |  | Dana M. Cluckey
President and Chief Executive Officer

23



---



##### Table of Contents



CFO CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas F. Menacher, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Republic
Bancorp Inc;                                                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly represent in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                 
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                         



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to he registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent functions):
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involved
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |                                                                                   
|------------------ |  | ----------------------------------------------------------------------------------
|Date: May 14, 2003 |  | /s/ Thomas F. Menacher                                                            
|                   |  |                                                                                   
|                   |  | Thomas F. Menacher
Executive Vice President, Treasurer
and Chief Financial Officer

24



---



##### Table of Contents



10-Q EXHIBIT INDEX

|            |  |                                                                                                                       
|----------- |  | ----------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                           
|            |  |                                                                                                                       
|EX-12       |  | Computations of ratios of earnings to fixed charges.                                                                  
|            |  |                                                                                                                       
|EX-99.1     |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|            |  |                                                                                                                       
|EX-99-2     |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002