Republic Bancorp, Inc. (NASDAQ: RBCAA), headquartered
in Louisville, Kentucky, is the holding company of Republic Bank
& Trust Company (the “Bank”).
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Republic Bancorp, Inc. (“Republic” or the “Company”) reported
second quarter 2022 net income of $23.9 million, equaling its net
income for the second quarter of 2021 and resulting in Diluted
Earnings per Class A Common Share (“Diluted EPS”) of $1.20.
Year-to-date net income was $51.8 million, a $1.9 million, or 4%,
increase from the same period in 2021, resulting in return on
average assets (“ROA”) and return on average equity (“ROE”) of
1.64% and 12.21% for the first six months of 2022.
Logan Pichel, President and CEO of Republic Bank & Trust
Company, commented, “Our second quarter results benefitted from a
one-time payment received as a result of concluding our legal issue
with Green Dot. That payment helped offset the expected decline in
PPP(3) fee income and reductions in mortgage banking and Warehouse
Lending revenues resulting from significantly higher interest
rates.”
The following chart presents the Company’s second quarter 2022
net income for each operating segment compared to the second
quarter of 2021.
NET INCOME
(dollars in thousands)
Three Months Ended Jun.
30,
Reportable Segment
2022
2021
$ Change
% Change
Traditional Banking - excluding PPP net
income impact*
$
6,657
$
4,396
$
2,261
51
%
Traditional Banking - PPP net income
impact*
125
3,437
(3,312)
(96)
Total Traditional Bank
6,782
7,833
(1,051)
(13)
Warehouse Lending
2,405
4,110
(1,705)
(41)
Mortgage Banking
(679)
1,065
(1,744)
(164)
Total Core Bank
8,508
13,008
(4,500)
(35)
Tax Refund Solutions - excluding TRS
Transaction items*
2,919
7,928
(5,009)
(63)
Tax Refund Solutions - TRS Transaction
items*
9,226
(752)
9,978
NM
Total Tax Refund Solutions*
12,145
7,176
4,969
69
Republic Credit Solutions
3,248
3,738
(490)
(13)
Total Republic Processing Group
15,393
10,914
4,479
41
Total Company
$
23,901
$
23,922
$
(21)
—
*See Footnote 1 for a reconciliation of non-GAAP measures to
their most comparable GAAP measures.
Pichel continued, “We are encouraged by the continued growth in
the fundamentals of our Traditional Bank, as evidenced by:
- +51% growth in net income, excluding PPP(1)
- Year-to-date loan growth of $213 million, or 6%, excluding PPP,
with notable growth from our Northern Kentucky/Cincinnati market,
our Private, CRE, and Commercial Banking division, and our
Corporate Banking division
- 16-basis-point growth in net interest margin from the first to
the second quarter of 2022
- Retention of deposit balances and account relationships
- Prudent expense control
- Pristine credit quality
“Given the strength of our current balance sheet, as well as the
many opportunities we continue to see across our various business
segments, we are pleased overall with how we are positioned for
this operating environment and are optimistic for a strong second
half of 2022, and beyond,” concluded Pichel.
The following table highlights Republic’s key metrics for the
three and six months ended June 30, 2022 and 2021. Additional
financial details, including segment-level data, are provided in
the financial supplement to this release. The attached digital
version of this release includes the financial supplement as an
appendix. The financial supplement may also be found as Exhibit
99.2 of the Company’s Form 8-K filed with the SEC on July 22,
2022.
Total Company Financial
Performance Highlights
Three Months Ended Jun.
30,
Six Months Ended Jun.
30,
(dollars in thousands, except per share
data)
2022
2021
$ Change
% Change
2022
2021
$ Change
% Change
Income Before Income Tax Expense
$
30,440
$
30,561
$
(121)
—
%
$
66,254
$
64,305
$
1,949
3
%
Net Income
23,901
23,922
(21)
—
51,827
49,975
1,852
4
Diluted EPS
1.20
1.16
0.04
3
2.59
2.41
0.18
7
Return on Average Assets ("ROA")
1.53
%
1.49
%
NA
3
1.64
%
1.57
%
NA
4
Return on Average Equity ("ROE")
11.23
11.27
NA
—
12.21
11.86
NA
3
NA – Not applicable
Results of Operations for the Second
Quarter of 2022 Compared to the Second Quarter of
2021
Core Bank(2)
Net income from Core Banking was $8.5 million for the second
quarter of 2022 compared to $13.0 million for the second quarter of
2021. The decrease in net income at the Core Bank was primarily
driven by a $4.4 million decrease in pre-tax PPP loan fees and
interest, a $2.4 million decline in net interest income from the
Warehouse Lending segment (“Warehouse”), and a $2.4 million
decrease in Mortgage Banking income, with these decreases partially
offset by an increase of $5.3 million in non-PPP-related
Traditional Bank net interest income. The decreases in both
Warehouse and Mortgage Banking income were driven by a reduction in
industry-wide demand for home mortgage refinancing following a
dramatic rise in long-term interest rates. The increase in non-PPP
Traditional Bank net interest income was driven by strong
Traditional Bank loan growth coupled with a recent rise in
short-term interest rates.
Net Interest Income – Core Bank net interest income was $43.2
million for the second quarter of 2022, a $1.5 million, or 3%,
decrease from the second quarter of 2021. This change was driven
primarily by the following:
Traditional Bank,
Excluding PPP
Excluding PPP fees and interest(3), from the
second quarter of 2021 to the second quarter of 2022, the
Traditional Bank’s net interest income increased $5.3 million, or
16%, and its net interest margin (“NIM”) expanded 25 basis points
to 3.06%. This increase in net interest income and related
expansion in NIM resulted primarily from the following:
- Increases in the Federal Funds Target Rate (“FFTR”) during 2022
have benefitted the Traditional Bank’s high level of
interest-earning cash on its balance sheet, as well as its loan and
investment portfolio yields, although to a lesser degree. As a
result, the Traditional Bank’s yield on interest-earning assets,
excluding PPP, increased 20 basis points from the second quarter of
2021 to the second quarter of 2022.
- Average non-PPP Traditional Bank loans grew from $3.3 billion
during the second quarter of 2021 to $3.6 billion during the second
quarter of 2022.
Traditional Bank,
PPP
The Core Bank recognized $167,000 of fees and
interest on its PPP portfolio during the second quarter of 2022
compared to $4.6 million of similar fees and interest during the
second quarter of 2021. The $4.4 million decrease in PPP fees and
interest primarily highlighted the short-term nature of the PPP, as
approximately 97% of all fees and interest eligible to be
recognized under the program by the Core Bank were recognized
during 2020 and 2021. As of June 30, 2022, total PPP loans of $15
million remained on the Core Bank’s balance sheet out of the
original $738 million originated during 2020 and 2021, with less
than $350,000 of PPP fee income left to be recognized over the
remaining lives of the loans.
Warehouse
Lending
Net interest income within the Core Bank’s
Warehouse segment decreased $2.4 million, or 39%, from the second
quarter of 2021 to the second quarter of 2022. Overall, average
outstanding Warehouse balances declined from $727 million during
the second quarter of 2021 to $579 million for the second quarter
of 2022, with the Warehouse net interest margin decreasing 79 basis
points from 3.48% during the second quarter of 2021 to 2.69% during
the second quarter of 2022. Committed Warehouse lines of credit
remained at $1.4 billion from June 30, 2021 to June 30, 2022, while
average usage rates for Warehouse lines were 41% and 51%,
respectively, during the second quarters of 2022 and 2021.
In general, the decline in net interest
income within Warehouse Lending was driven largely by a sharp rise
in long-term interest rates during the first half of 2022, which
led to a decrease in mortgage refinancing demand, a sharp drop in
Warehouse line usage, and an overall decrease in outstanding
Warehouse balances. In addition, Warehouse’s net interest margin
was negatively impacted during the second quarter of 2022, as many
adjustable rate Warehouse lines remained below their interest rate
floors. These interest rate floors, which benefitted Warehouse’s
net interest margin significantly during 2020 and 2021 when market
rates declined to historical lows, negatively impacted its net
interest margin during the first half of 2022, as its cost of
funding rose while its loan yield remained relatively stable. The
negative impact of these floors is expected to diminish in the near
term as interest rates on many Warehouse lines are expected to
begin exceeding their floors during the third quarter of 2022,
assuming currently projected FFTR increases come to fruition.
The following tables present by reportable segment the overall
changes in the Core Bank’s net interest income, net interest
margin, as well as average and period-end loan balances:
Net Interest Income
Net Interest Margin
(dollars in thousands)
Three Months Ended Jun.
30,
Three Months Ended Jun.
30,
Reportable Segment
2022
2021
Change
2022
2021
Change
Traditional Banking - excluding PPP
$
38,991
$
33,696
$
5,295
3.06
%
2.81
%
0.25
%
Traditional Banking - PPP
167
4,582
(4,415)
NM
NM
NM
Warehouse Lending
3,886
6,324
(2,438)
2.69
3.48
(0.79)
Mortgage Banking*
153
140
13
NM
NM
NM
Total Core Bank
$
43,197
$
44,742
$
(1,545)
3.02
3.03
(0.01)
Average Loan Balances
Period-End Loan
Balances
(dollars in thousands)
Three Months Ended Jun.
30,
Jun. 30,
Reportable Segment
2022
2021
$ Change
% Change
2022
2021
$ Change
% Change
Traditional Banking - excluding PPP
$
3,603,093
$
3,302,374
$
300,719
9
%
$
3,658,933
$
3,348,161
$
310,772
9
%
Traditional Banking - PPP
16,668
349,643
(332,975)
(95)
14,657
250,933
(236,276)
(94)
Warehouse Lending
578,676
727,091
(148,415)
(20)
596,678
840,155
(243,477)
(29)
Mortgage Banking*
10,189
28,740
(18,551)
(65)
8,491
32,401
(23,910)
(74)
Total Core Bank
$
4,208,626
$
4,407,848
$
(199,222)
(5)
$
4,278,759
$
4,471,650
$
(192,891)
(4)
*Includes loans held for sale NM – Not
meaningful
Provision for Expected Credit Loss Expense – The Core Bank’s
Provision(4) was a net credit of $88,000 for the second quarter of
2022 compared to a net credit of $142,000 for the second quarter of
2021. The net credit during the second quarter of 2022 was
primarily driven by the following:
- The Core Bank recorded a credit to the Provision of $1.4
million during the second quarter of 2022 following the payoff or
upgrade of loans previously downgraded during the height of the
pandemic.
- The Core Bank recorded a credit to the Provision of $234,000
during the second quarter of 2022 resulting from formula reserves
applied to a decrease in outstanding Warehouse balances from $690
million as of March 31, 2022 to $597 million as of June 30,
2022.
- Offsetting the above, the Core Bank recorded a net charge to
the Provision of $1.5 million during the second quarter of 2022
resulting primarily from formula reserves applied to $106 million
of growth in non-PPP Traditional Bank loans from March 31, 2022 to
June 30, 2022.
The credit to the Core Bank Provision during the second quarter
of 2021 generally reflected an improving economy following the
lifting of many pandemic-related restrictions. As of June 30, 2022,
while the Core Bank’s credit metrics remained solid, the Company’s
Allowance(4) remained generally elevated compared to historical
levels due to continued economic uncertainty resulting from
inflation not seen in the United States since the early 1980s.
As a percentage of total loans, the Core Bank’s Allowance
increased from 1.16% as of June 30, 2021 to 1.20% as of June 30,
2022. The table below provides a view of the Company’s percentage
of Allowance-to-total-loans by reportable segment.
As of Jun. 30, 2022
As of Jun. 30, 2021
Year-over-Year Change
(dollars in thousands)
Allowance
Allowance
Allowance
Reportable Segment
Gross Loans
Allowance
to Loans
Gross Loans
Allowance
to Loans
to Loans
% Change
Traditional Bank, Less PPP
$
3,658,933
$
49,727
1.36
%
$
3,348,161
$
49,362
1.47
%
(0.11)
%
(7)
%
Plus: Paycheck Protection Program
14,657
—
250,933
—
Traditional Bank
$
3,673,590
$
49,727
1.35
3,599,094
49,362
1.37
(0.02)
(1)
Warehouse Lending
596,678
1,491
0.25
840,155
2,100
0.25
—
—
Total Core Bank
4,270,268
51,218
1.20
4,439,249
51,462
1.16
0.04
3
Tax Refund Solutions
149
—
—
23
—
—
—
—
Republic Credit Solutions
91,816
13,231
14.41
114,949
8,829
7.68
6.73
88
Total Republic Processing Group
91,965
13,231
14.39
114,972
8,829
7.68
6.71
87
Total Company
$
4,362,233
$
64,449
1.48
$
4,554,221
$
60,291
1.32
0.16
12
The table below presents the Core Bank’s credit quality
metrics:
Quarters Ended:
Years Ended:
Jun. 30,
Mar. 31,
Dec. 31,
Dec. 31,
Dec. 31,
Core Banking Credit Quality
Ratios
2022
2022
2021
2020
2019
Nonperforming loans to total loans
0.38
%
0.40
%
0.47
%
0.50
%
0.54
%
Nonperforming assets to total loans
(including OREO)
0.42
0.44
0.51
0.56
0.54
Delinquent loans* to total loans
0.13
0.14
0.17
0.21
0.30
Net charge-offs to average loans
—
0.01
0.01
0.03
0.11
(Quarterly rates annualized)
OREO = Other Real Estate Owned
*Loans 30-days-or-more past due
Noninterest Income – Core Bank noninterest income was $9.5
million during the second quarter of 2022, a decrease of $2.7
million, or 22%, from the second quarter of 2021. The decrease in
noninterest income was driven primarily by the following:
- A significant and rapid rise in long-term interest rates during
2022 led to a significant slowdown in the origination and
subsequent sale of mortgage loans into the secondary market for the
Core Bank. As of June 30, 2022, the 30-year mortgage rate was
hovering near levels not generally seen since 2008. As a result,
Mortgage Banking income decreased from $4.2 million during the
second quarter of 2021 to $1.8 million for the second quarter of
2022. For the second quarter of 2022, the Core Bank sold $68
million in secondary market loans and achieved an average
cash-gain-as-a-percent-of-loans-sold during the quarter of 2.85%.
During the second quarter of 2021, however, with long-term mortgage
interest rates substantially lower, secondary market loan sales
were $176 million with comparable
cash-gain-as-a-percent-of-loans-sold consistent at 2.85%.
- Additionally, the Core Bank’s Other Noninterest Income for the
second quarter of 2021 included a $399,000 non-recurring gain
recognized from the sale of a former banking center property in
Hudson, Florida.
Noninterest Expense – Core Bank noninterest expense was $42.2
million for the second quarter of 2022 compared to $41.0 million
for the second quarter of 2021, an increase of 3%. The increase in
noninterest income was driven primarily by the following:
- Salaries and Benefits expense increased $817,000, or 3%, to
$25.0 million for the second quarter of 2022, driven primarily by
higher health-benefits costs and annual merit increases and
partially offset by a 52-count reduction in full-time equivalent
employees.
- Other noninterest expense increased $744,000, or 25%, to $3.7
million for the second quarter of 2022, driven primarily by an
increase in the following:
- Meals, Entertainment, and Travel expenses increased $309,000,
with in-person community outreach and business related travel
increasing toward pre-pandemic levels during 2022.
- Provision for losses on off-balance sheet commitments increased
$141,000, driven primarily by an increase in the Bank’s committed
but unused lines of credit during the previous 12 months.
Republic Processing
Group(5)
The Republic Processing Group (“RPG”) reported net income of
$15.4 million for the second quarter of 2022 compared to $10.9
million for the same period in 2021. RPG adjusted net income(1) for
the second quarter of 2022, which excludes a previously disclosed
$13.0 million pre-tax legal settlement paid to Republic Bank &
Trust Company (“RB&T”), as well as $699,000 in related
expenses, was $6.2 million. Notable items impacting net income for
each of the RPG reporting segments during the second quarters of
2022 and 2021 were as follows:
Tax Refund Solutions (“TRS”)
The TRS segment derives substantially all of its revenues during
the first and second quarters of the year. TRS recorded net income
of $12.1 million for the second quarter of 2022 compared to $7.2
million for the same period in 2021. The following primarily drove
the increase in TRS’s net income for the quarter:
- TRS recorded $13.0 million of noninterest income during the
second quarter of 2022, partially offset by $699,000 in related
expenses, resulting from the previously disclosed legal-settlement
payment to RB&T. This second quarter 2022 legal-settlement
payment to RB&T was in addition to the related $5.0 million
contract termination fee paid to RB&T during the first quarter
of 2022. For more information on RB&T’s now-settled lawsuit,
see the Company’s Form 8-K filed with the SEC on June 3, 2022.
- Partially offsetting the above, TRS recorded a $6.1 million
negative swing in its Provision expense from the second quarter of
2021 to the second quarter of 2022. While the overall net total
Provision is a positive benefit on a year-to-date basis, the later
timing of payments received during 2021 versus 2022 resulted in a
large credit to the Provision during the second quarter of 2021
versus a minimal additional expense to the Provision during the
second quarter of 2022. Easy Advances (“EAs”) are originated only
during the first two months of each year, with losses on those
originations initially estimated during the same two-month
origination period. All unpaid EAs are charged off by June 30th of
each year, with first quarter loss estimates trued-up to actual
charge-offs incurred through a second quarter Provision charge or
credit. EAs collected during the second half of each year are
recorded as recoveries of previously charged-off loans. During the
second quarter of 2022, TRS trued-up its first quarter EA loss
estimate with a charge to the Provision of $564,000, increasing its
weighted average net EA loss rate from an estimated 2.67% as of
March 31, 2022 to 2.85% as of June 30, 2022. During the second
quarter of 2021, TRS trued-up its first quarter EA loss estimate
with a credit to the Provision of $5.8 million, decreasing its
estimated net EA loss rate from 6.41% as of March 31, 2021 to 4.10%
as of June 30, 2021. The significant true-up credit to the
Provision during the second quarter of 2021 resulted primarily from
a higher volume of loan payments received by the Company during the
second quarter, exceeding the conservative estimates originally
made by the Company during the first quarter of 2021 when the tax
season experienced a two-week delay to its start.
For the 2022 and 2021 tax seasons, the following table presents
information regarding EA originations, actual charge-offs, first
quarter Provision estimates, and second quarter Provision
true-ups:
(dollars in thousands)
2022 Tax Season
2021 Tax Season
2022/2021 Change
EAs originated during the first two
months of the year
(a)
$
311,207
$
250,045
$
61,162
Actual EA losses incurred compared to
loss estimates ($):
Actual losses recognized for the first six
months ended June 30,
(b)
$
8,879
$
10,226
$
(1,347
)
First quarter Provision estimate made
during three months ended March 31,
(c)
8,315
16,019
(7,704
)
Second quarter Provision true-up for three
months ended June 30,
(d)
$
564
$
(5,793
)
$
6,357
EA actual losses incurred compared to
loss estimates (%):
Actual losses recognized for the first six
months ended June 30,
(b)/(a)
2.85
%
4.09
%
(1.24
)%
First quarter Provision estimate made
during three months ended March 31,
(c)/(a)
2.67
6.41
(3.74
)
Second quarter Provision true-up for three
months ended June 30,
(d)/(a)
0.18
%
(2.32
)
%
2.50
%
- TRS’s Net Refund Transfer (“RT”) fees decreased $2.0 million,
or 33%, from $5.9 million for the second quarter of 2021 to $4.0
million for the same period in 2022. The decrease was primarily
driven by an 8% overall decrease in RT volume from the 2021 to the
2022 tax season, with 4% of that decrease driven by the loss of one
of TRS’s tax providers following the announcement of the
now-cancelled May 2021 Asset Purchase Agreement. Also impacting the
decrease in net RT fees from the second quarter of 2021 to the
second quarter of 2022 was the previously mentioned two-week delay
in the 2021 tax season, which pushed a greater percentage of RT
volume into the second quarter of 2021.
Republic Credit Solutions
(“RCS”)
Net income at RCS decreased to $3.2 million for the second
quarter of 2022 from $3.7 million for the second quarter of 2021.
The decrease in RCS’s net income primarily resulted from higher
Provisions on its line-of-credit products, as the net charge-offs
and the required up-front loan loss reserves for the programs have
increased as the combined total outstanding balances of the
programs approach pre-pandemic levels.
Republic Bancorp, Inc. (the “Company”) is the parent company of
Republic Bank & Trust Company (the “Bank”). The Bank currently
has 42 full-service banking centers throughout five states:
twenty-eight banking centers in eight Kentucky communities –
Covington, Crestview Hills, Florence, Georgetown, Lexington,
Louisville, Shelbyville, and Shepherdsville; three banking centers
in southern Indiana – Floyds Knobs, Jeffersonville, and New Albany;
seven banking centers in six Florida communities (Tampa MSA) –
Largo, New Port Richey, St. Petersburg, Seminole, Tampa, and Temple
Terrace; two banking centers in two Tennessee communities
(Nashville MSA) – Cool Springs and Green Hills; and two banking
centers in two Ohio communities (Cincinnati MSA) – Norwood and West
Chester. The Bank offers internet banking at www.republicbank.com.
The Company has $6.1 billion in assets and is headquartered in
Louisville, Kentucky. The Company’s Class A Common Stock is listed
under the symbol “RBCAA” on the NASDAQ Global Select Market.
Republic Bank. It’s just easier here. ®
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. The forward-looking statements in the preceding paragraphs
are based on our current expectations and assumptions regarding our
business, the future impact to our balance sheet and income
statement resulting from changes in interest rates, the yield
curve, the ability to develop products and strategies in order to
meet the Company’s long-term strategic goals, the economy, other
future conditions, and the impact of the COVID pandemic. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict. Our actual results may differ materially
from those contemplated by forward-looking statements. We caution
you therefore against relying on any of these forward-looking
statements. They are neither statements of historical fact nor
guarantees or assurances of future performance. Actual results
could differ materially based upon factors disclosed from time to
time in the Company’s filings with the U.S. Securities and Exchange
Commission, including those factors set forth as “Risk Factors” in
the Company’s Annual Report on Form 10-K for the period ended
December 31, 2021. The Company undertakes no obligation to update
any forward-looking statements, except as required by applicable
law.
Footnotes:
(1)
The following table provides a
reconciliation of financial measures in accordance with GAAP to the
Company’s adjusted results, which are non-GAAP measures that
exclude significant, unusual items. Management uses these non-GAAP
measures to evaluate the on-going performance of the Company.
Non-GAAP measures are not formally defined by GAAP or codified in
the federal banking regulations, and other entities may use
calculation methods that differ from those used by the Company.
NON-GAAP RECONCILIATION BY
SEGMENT
(dollars in thousands)
Three Months Ended Jun.
30,
Reportable Segment
2022
2021
$ Change
% Change
Income Before Income Tax
Expense:
Traditional Banking - GAAP
$
8,429
$
9,388
$
(959
)
(10
)%
Less: Net interest income from PPP fees
and interest
167
4,582
(4,415
)
(96
)
Traditional Banking - Non-GAAP
$
8,262
$
4,806
$
3,456
72
TRS - GAAP
$
15,610
$
9,502
$
6,108
64
%
Less: Noninterest income related to TRS
Transaction*
13,000
—
13,000
NM
Add: Noninterest expense related to TRS
Transaction*
699
1,000
(301
)
NM
TRS - Non-GAAP
$
3,309
$
10,502
$
(7,193
)
(68
)
RPG - GAAP
$
19,784
$
14,470
$
5,314
37
%
Less: Noninterest income related to TRS
Transaction*
13,000
—
13,000
NM
Add: Noninterest expense related to TRS
Transaction*
699
1,000
(301
)
NM
RPG - Non-GAAP
$
7,483
$
15,470
$
(7,987
)
(52
)
Net Income:
Traditional Banking - GAAP
$
6,782
$
7,833
$
(1,051
)
(13
)%
Less: Impact of net interest income from
PPP fees and interest
125
3,437
(3,312
)
(96
)
Traditional Banking - Non-GAAP
$
6,657
$
4,396
$
2,261
51
TRS - GAAP
$
12,145
$
7,176
$
4,969
69
%
Less: Noninterest income related to TRS
Transaction* (tax effected)
9,750
—
9,750
NM
Add: Noninterest expense related to TRS
Transaction* (tax effected)
524
752
(228
)
NM
TRS - Non-GAAP
$
2,919
$
7,928
$
(5,009
)
(63
)
RPG - GAAP
$
15,393
$
10,914
$
4,479
41
%
Less: Noninterest income related to TRS
Transaction* (tax effected)
9,750
—
9,750
NM
Add: Noninterest expense related to TRS
Transaction* (tax effected)
524
752
(228
)
NM
RPG - Non-GAAP
$
6,167
$
11,666
$
(5,499
)
(47
)
*The TRS Transaction relates to the
now-cancelled May 13, 2021 Asset Purchase Agreement for the sale of
substantially all of TRS assets and operations. During the second
quarter of 2022, RB&T received a pre-tax $13 million legal
settlement payment and incurred $699,000 of related expenses in
relation to the TRS Transaction. During the second quarter of 2021,
RB&T incurred $1.0 million of expenses related to the TRS
Transaction.
NM – Not meaningful
(2)
“Core Bank” or “Core Banking” operations
consist of the Traditional Banking, Warehouse Lending, and Mortgage
Banking segments.
(3)
PPP – The U.S. Small Business
Administration’s Paycheck Protection Program
The Company earns lender fees and 1.0% coupon interest on
its PPP portfolio. Due to the short-term nature of the PPP,
management believes Traditional Bank net interest income excluding
PPP fees and interest is a more appropriate measure to analyze the
Traditional Bank’s net interest income and net interest margin. The
following table reconciles Traditional Bank net interest income and
net interest margin to Traditional Bank net interest income and net
interest margin excluding PPP fees and interest, a non-GAAP
measure.
Net Interest Income
Interest-Earning
Assets
Net Interest Margin
Three Months Ended Jun.
30,
Three Months Ended Jun.
30,
Three Months Ended Jun.
30,
(dollars in thousands)
2022
2021
$ Change
% Change
2022
2021
$ Change
% Change
2022
2021
% Change
Traditional Banking - GAAP
$
39,158
$
38,278
$
880
2
%
$
5,121,492
$
5,149,602
$
(28,110
)
(1
)%
3.06
%
2.97
%
0.09
%
Less: Impact of PPP fees and interest
167
4,582
(4,415
)
(96
)
16,668
349,643
(332,975
)
(95
)
—
0.16
(0.16
)
Traditional Banking ex PPP fees and
interest - non-GAAP
$
38,991
$
33,696
$
5,295
16
$
5,104,824
$
4,799,959
$
304,865
6
3.06
2.81
0.25
(4)
Provision – Provision for Expected Credit
Loss Expense
Allowance – Allowance for Credit Losses on
Loans
(5)
Republic Processing Group operations
consist of the Tax Refund Solutions and Republic Credit Solutions
segments.
NM – Not meaningful
NA – Not applicable
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220722005009/en/
Republic Bancorp, Inc. Kevin Sipes Executive Vice President
& Chief Financial Officer (502) 560-8628
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