Republic Bancorp Inc. of Ann Arbor, Mich., is open to offers, its chief executive officer said Monday, but the $4.2 billion-asset bank expects to remain independent and focused on internal growth after a large merger it completed in May.

"We're not searching for someone to buy us," said Jerry D. Campbell, chairman and CEO. "If someone knocked on our door with an offer, our board would be responsive."

Republic's stock price has slid 30%, to $12.75 a share at Monday's close, in the year since it announced plans to buy in-state rival D&N Financial Corp. Mr. Campbell said the market viewed the $286 million, all-stock acquisition as a merger of equals that would not produce great cost savings. But Republic has proven the market wrong, he added.

In six months Republic has sliced 15% from D&N's operating costs, he said. And in the third quarter - the first full earnings period that included D&N's results - Republic's net income jumped 21% from a year earlier, to $12.5 million.

The bank expects to build on that growth next year by boosting its mortgage lending presence, primarily in Indiana and Ohio, said Dana M. Cluckey, Republic's president and chief operating officer.

The company plans to add 70 mortgage lenders and open as many as 15 mortgage offices in the hope of stealing business from competitors in a weak mortgage environment. That would build its mortgage team to 500 lenders in 105 offices.

However, the company said it does not want the expansion to detract from its recent momentum in building its commercial and retail banking business. Through the first nine months of this year, that business segment accounted for 84% of Republic's income - up from 57% during all of 1998.

David Mudd, an analyst with Howe Barnes Investments Inc. in Chicago, endorsed the two-pronged growth approach of boosting both the mortgage and commercial lending businesses. Mr. Mudd, who rates Republic a "long-term buy," added that Republic would be an attractive acquisition target for larger banks.

"They've done a good job of diversifying their income stream," he said. "They're not as reliant on their mortgage banking operation as they've been in the past, but they still have the strength to build in that market."

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