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

FORM 8-K

CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (date of earliest event reported): July 21, 2023

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

Kentucky
0-24649
61-0862051
(State or other jurisdiction (Commission File Number) (I.R.S. Employer Identification No.)
of incorporation)
 
 

601 West Market Street, Louisville, Kentucky 40202
(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code: (502) 584-3600

NOT APPLICABLE
(Former Name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR    240.14d-2(b))
 ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol
Name of each exchange on which registered
Class A Common
RBCAA
The Nasdaq Stock Market


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.

On July 21, 2023, Republic Bancorp, Inc. announced its results of operations for the quarter ended June 30, 2023. The public announcement was made by means of an earnings release, the text of which is set forth in Exhibit 99.1 hereto. A financial supplement to this earnings release is attached as Exhibit 99.2 hereto.

Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit
Number
 
Description
 
 
104
  
Cover Page Interactive Data File (formatted as Inline XBRL).

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
   
Republic Bancorp, Inc.
  
   
(Registrant)
  
       
       
Date: July 21, 2023
By:
/s/ Kevin Sipes
  
   
Executive Vice President, Chief Financial Officer & Chief Accounting Officer
  

Exhibit 99.1


Republic Bancorp, Inc. Reports Second Quarter 2023 Net Income of $21.1 Million

LOUISVILLE, Ky.--(BUSINESS WIRE)--July 21, 2023--Republic Bancorp, Inc. (NASDAQ: RBCAA), headquartered in Louisville, Kentucky, is the holding company of Republic Bank & Trust Company (the “Bank”).

Republic Bancorp, Inc. (“Republic” or the “Company”) reported second quarter 2023 net income and Diluted Earnings per Class A Common Share (“Diluted EPS”) of $21.1 million and $1.07 per share compared to $24.3 million and $1.22 per share for the second quarter of 2022. Adjusting for the infrequent items noted in the table below that are not considered to be part of the Company’s normal recurring operations, the most notable of which being a substantial legal settlement that positively impacted net income for the second quarter of 2022, Republic’s Total Company Operating net income (a non-GAAP metric) was $19.8 million for the second quarter of 2023, an increase of $5.0 million, or 34%, over its Total Company Operating net income for the second quarter of 2022.

The following table reconciles Republic’s Total Company GAAP and non-GAAP net incomes as described in the paragraph above.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Class A Common Share

 

 

 

Three Months Ended

 

 

 

Three Months Ended

 

 

(dollars in thousands, except per share data)

 

 

Jun. 30,

2023

 

Jun. 30, 2022

 

$

Change

 

%

Change

 

Jun. 30,

2023

 

Jun. 30,

2022

 

$

Change

 

%

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company Net Income, As Reported (GAAP)

 

 

$

21,052

 

 

 

$

24,347

 

 

$

(3,295

)

 

(14)

%

 

$

1.07

 

 

 

$

1.22

 

 

 

$

(0.15

)

 

(12)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add Back the Impact of CBank Merger Expenses, Net of Taxes

 

 

 

99

 

 

 

 

—

 

 

 

99

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reduce for the Impact of the Bank Owned Life Insurance ("BOLI") Benefit Payment Received, Net of Taxes

 

 

 

(1,347

)

 

 

 

—

 

 

 

(1,347

)

 

—

 

 

 

(0.07

)

 

 

 

—

 

 

 

 

(0.07

)

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reduce for the Impact of the Legal Settlement Received, Net of Taxes

 

 

 

—

 

 

 

 

(9,523

)

 

 

9,523

 

 

—

 

 

 

—

 

 

 

 

(0.47

)

 

 

 

0.47

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company Operating Net Income - non-GAAP

 

 

$

19,804

 

 

 

$

14,824

 

 

$

4,980

 

 

34

 

 

$

1.00

 

 

 

$

0.75

 

 

 

$

0.25

 

 

34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Republic’s Core Bank net income was $12.1 million for the second quarter of 2023 compared to net income of $8.5 million for the second quarter of 2022. Adjusting for the infrequent items noted in the table below that are not considered to be part of the Core Bank’s normal recurring operations, Republic’s Core Bank Operating net income (a non-GAAP metric) was $10.9 million for the second quarter of 2023, an increase of $2.4 million, or 28%, over its Total Company Operating net income for the second quarter of 2022.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

Three Months Ended Jun. 30,

 

 

$

 

 

%

 

(dollars in thousands)

 

 

 

2023

 

 

2022

 

 

Change

 

 

Change

 

 

 

 

 

 




 




 




 



Core Bank, Net Income, as reported (GAAP)

 

 

 

$

12,143

 

 

 

$

8,503


 

 

$

3,640

 

 

 

 

43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add Back the Impact of CBank Merger Expenses, Net of Taxes

 

 

 

 

99

 

 

 

 

-

 

 

 

 

99

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reduce for the Impact of the BOLI Benefit Payment Received, Net of Taxes

 

 

 

 

(1,347

)

 

 

 

-

 

 

 

 

(1,347

)

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Bank Adjusted Operating Net Income - Non GAAP

 

 

 

$

10,895

 



$

8,503

 



$

2,392

 

 

 

 

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Logan Pichel, President and CEO of the Bank commented, “Despite the uncertainty and headwinds in the current economic environment, we were able to produce solid operating results during the second quarter and first six months of 2023. Adjusting our 2022 and 2023 second quarter net incomes for the infrequent items we previously noted, our Operating net incomes for Total Company and the Core Bank during the second quarter of 2023 were significantly better than the comparable Operating net incomes for the same period in the prior year.

A contributing factor to our year-over-year earnings growth is the prudent loan growth within our Traditional Banking segment. Loan growth within this segment has maintained a positive trend since the fourth quarter of 2021. In addition to the $217 million of loans obtained as part of the first quarter 2023 CBank acquisition, legacy Traditional Bank loans increased $323 million for the first six months of 2023 with $226 million of this growth occurring in the second quarter. The breadth and diversification of our legacy loan growth across our various loan types and our geographic markets was also notable for the first six months of this year, with residential and commercial real estate being the primary growth categories.

In addition to the loan growth within our Traditional Bank, our average loan yield in this segment has also risen steadily since market interest rates generally began to rise in March of 2022. Overall, the Traditional Bank’s weighted-average loan yield was 4.98% for the second quarter of 2023, a 106-basis point increase over the 3.92% recorded during the second quarter of 2022.

We also continued to have disciplined expense control. Overall, Core Bank noninterest expense for the second quarter of 2023 increased $3.3 million, or 8%, over the second quarter of 2022. This increase, however, includes $2.0 million of noninterest expense associated with the newly acquired CBank operations, which was not part of the Company’s operations during the second quarter of 2022. When comparing our legacy Core Bank noninterest expenses for the quarter, which excludes those of the newly acquired CBank operations, expenses are up a modest $1.3 million, or 3%, over the second quarter of 2022. Noninterest expense control continues to be a primary focus across the organization and one that we expect to make on-going progress toward.

The biggest challenge that the banking industry has faced this year has been the competition for customer deposits, and even more specifically, low-cost deposits. Republic has not been immune from this challenge, as we also experienced a decline in deposit balances from mid-2022 into the second quarter of this year. This decline stabilized during the second quarter of 2023 as our Core Bank legacy deposits grew again in June. To achieve this, we did meaningfully raise the rates we pay on our deposits. As a result, our Core Bank’s net interest income and net interest margin, on linked-quarter basis, trended lower from the first quarter of 2023 to the second quarter of 2023, as our Core Bank’s overall funding costs rose more than the yields on our interest earning assets. These increased funding costs for deposits will likely continue to negatively impact our net interest margin and net interest income into the future.

Despite the headwinds in our industry, we are excited about our Company’s long-term outlook as we enter the second half of 2023. The credit quality of our Core Bank loan portfolio remains pristine, and each of our regulatory capital ratios place us well above those required to be considered “well capitalized”. While there remain hurdles ahead for financial institutions across the country, these safety and soundness measures continue to place us among the industry’s best and give us great optimism for whatever challenges the future might bring,” concluded Pichel.

The following table highlights Republic’s key metrics for the three and six months ended June 30, 2023 and 2022. 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 21, 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company Financial Performance Highlights

 

 

 

Three Months Ended Jun. 30,

 

 

 

 

Six Months Ended Jun. 30,

 

 

 

(dollars in thousands, except per share data)

 

 

2023

 

2022

 

$ Change

 

% Change

 

 

2023

 

2022

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Income Tax Expense

 

 

$

26,508

 

 

$

31,022

 

 

$

(4,514

)

 

(15

)%

 

 

$

62,622

 

 

$

67,391

 

 

$

(4,769

)

 

(7

)%

 

Net Income

 

 

 

21,052

 

 

 

24,347

 

 

 

(3,295

)

 

(14

)

 

 

 

49,144

 

 

 

52,697

 

 

 

(3,553

)

 

(7

)

 

Diluted EPS

 

 

 

1.07

 

 

 

1.22

 

 

 

(0.15

)

 

(12

)

 

 

 

1.07

 

 

 

1.22

 

 

 

(0.15

)

 

(12

)

 

Return on Average Assets ("ROA")

 

 

 

1.37

%

 

 

1.56

%

 

 

NA

 

(12

)

 

 

 

1.59

%

 

 

1.66

%

 

 

NA

 

(4

)

 

Return on Average Equity ("ROE")

 

 

 

9.41

 

 

 

11.42

 

 

 

NA

 

(18

)

 

 

 

11.08

 

 

 

12.39

 

 

 

NA

 

(11

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NA – Not applicable

Results of Operations for the Second Quarter of 2023 Compared to the Second Quarter of 2022

Core Bank(1)

Net income for the Core Bank was $12.1 million for the second quarter of 2023 compared to $8.5 million for the second quarter of 2022. An increase in Traditional Bank net interest income was the primary driver to the Core Bank’s earnings growth for the quarter and helped to offset declines in Mortgage Banking income and net interest income within the Warehouse Lending (“Warehouse”) segment.

Net Interest Income – Core Bank net interest income was $51.4 million for the second quarter of 2023, an $8.2 million, or 19%, increase over the second quarter of 2022. In addition, the Core Bank’s net interest margin (“NIM”) increased from 3.02% during the second quarter of 2022 to 3.65% during the second quarter of 2023. This increase was driven primarily by the following in each Core Bank segment:

Traditional Bank

Net interest income and NIM within the Traditional Bank were substantially higher from the second quarter of 2022 to the second quarter of 2023 as the increase in yield for its interest-earning assets substantially outpaced the increased cost of its interest-bearing liabilities on a year-over-year basis. Overall, the Traditional Bank’s net interest income increased $9.5 million, or 24%, and its NIM expanded 71 basis points from the second quarter of 2022 to 3.77% for the second quarter of 2023. Driving this change in net interest income and NIM between the second quarter of 2022 and the second quarter of 2023 were the following:

  • Traditional Bank average loans grew from $3.6 billion with a weighted-average yield of 3.92% during the second quarter of 2022 to $4.3 billion with a weighted average yield of 4.98% during the second quarter of 2023. As previously noted, loan growth remained particularly strong within the Traditional Bank during the first six months of 2023, while the acquisition of CBank added approximately $217 million to the Traditional Bank’s average loans during the second quarter of 2023.

  • Average investments grew to $775 million with a weighted-average yield of 2.73% during the second quarter of 2023 from $691 million with a weighted-average yield of 1.60% for the second quarter of 2022. As part of its overall interest rate risk management strategy, the Traditional Bank generally maintains an investment portfolio with a shorter overall duration as compared to its peers. This strategy is generally favorable to net interest income in a rising interest rate environment.

  • The Traditional Bank’s average noninterest-bearing deposits decreased from $1.6 billion during the second quarter of 2022 to $1.4 billion for the second quarter of 2023. This decrease in average noninterest-bearing deposits was funded through a decrease in interest-earning cash balances and an increase in FHLB borrowings.

  • The Traditional Bank’s weighted-average cost of interest-bearing liabilities increased from 0.09% during the second quarter of 2022 to 1.43% for the second quarter of 2023. Further segmenting the Traditional Bank’s interest-bearing liabilities:

    • The weighted-average cost of total interest-bearing deposits increased from 0.14% during the second quarter of 2022 to 1.59% for the second quarter of 2023. In addition, average interest-bearing deposits grew $53 million from the second quarter of 2022 to the second quarter of 2023.

    • The average balance of FHLB borrowings increased from $20 million for the second quarter of 2022 to $256 million for the second quarter of 2023. In addition, the weighted-average cost of these borrowings increased from 1.88% to 4.90% for the same time periods. As noted above, this increase in the average balance of borrowings was generally driven by a period-to-period decline in average deposit balances.

  • Average interest-earning cash was $111 million with a weighted-average yield of 5.63% during the second quarter of 2023 compared to $810 million with a weighted-average yield of 0.81% for the second quarter of 2022. The decline in average cash balances was driven generally by an increase in average loans for the same periods.

Warehouse Lending

Net interest income within the Warehouse segment decreased $1.2 million, or 32%, from the second quarter of 2022 to the second quarter of 2023, driven by decreases in average outstanding balances and net interest margin. Overall, average outstanding Warehouse balances declined from $579 million during the second quarter of 2022 to $462 million for the second quarter of 2023. Committed Warehouse lines of credit declined from $1.4 billion to $1.0 billion from June 30, 2022 to June 30, 2023 and average usage rates for Warehouse lines were 47% and 41%, respectively, during the second quarters of 2023 and 2022.

In addition, the Warehouse net interest margin decreased 41 basis points from 2.69% during the second quarter of 2022 to 2.28% during the second quarter of 2023. The decline in the Warehouse net interest margin generally occurred as the rise in its internal funding costs outpaced the increase in its loan yield since rates began rising in March of 2022.

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

 

 

2023

 

 

2022

 

Change

 

 

2023

 

2022

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traditional Banking

 

 

$

48,682


 

 

$

39,158


 

$

9,524

 

 

 

3.77

%

 

3.06

%

 

 

0.71

%

 

Warehouse Lending

 

 

 

2,642

 

 

 

 

3,886

 

 

 

(1,244

)

 

 

2.28

 

 

2.69

 

 

 

(0.41

)

 

Mortgage Banking*

 

 

 

61

 

 

 

 

153

 

 

 

(92

)

 

 

NM

 

 

NM

 

 

 

NM

 

 

Total Core Bank

 

 

$

51,385

 

 

 

$

43,197

 

 

$

8,188

 

 

 

3.65

 

 

3.02

 

 

 

0.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Loan Balances

 

 

Period-End Loan Balances

 

(dollars in thousands)

 

Three Months Ended Jun. 30,

 

 

 

 

 

Jun. 30,

 

 

Jun. 30,

 

 

 

Reportable Segment

 

 

2023

 

 

 

2022

 

 

$ Change

 

% Change

 

 

 

2023

 

 

 

2022

 

 

$ Change

 

% Change

 

 

 

 



 



 




 

 

 



 



 




 

Traditional Banking

 

$

4,277,004


 

$

3,619,761


 

$

657,243

 

 

18

%

 

 

$

4,394,668


 

$

3,665,099


 

$

729,569

 

 

20

%

 

Warehouse Lending

 

 

462,755

 

 

 

578,676

 

 

 

(115,921

)

 

(20

)

 

 

 

539,560

 

 

 

596,678

 

 

 

(57,118

)

 

(10

)

 

Mortgage Banking*

 

 

2,369

 


 

10,189

 


 

(7,820

)


(77

)

 

 

 

4,038

 


 

8,491

 


 

(4,453

)


(52

)

 

Total Core Bank

 

$

4,742,128

 

 

$

4,208,626

 

 

$

533,502

 

 

13

 

 

 

$

4,938,266

 

 

$

4,270,268

 

 

$

667,998

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Includes loans held for sale

NM – Not meaningful

Provision for Expected Credit Loss Expense – The Core Bank’s Provision(2) was a net charge of $2.1 million during the second quarter of 2023 compared to a net credit of $88,000 for the second quarter of 2022.

The net charge during the second quarter of 2023 was primarily driven by general formula reserves applied to $229 million of Traditional Bank loan growth from March 31, 2023 to June 30, 2023, as well as $82 million of spot balance warehouse loan growth during the same period. The net credit during the second quarter of 2022 was primarily driven by a $1.4 million credit to the provision for the payoff or upgrade of large commercial loans that were downgraded during the height of the pandemic and was partially offset by provision expense driven by formula reserve applied to $106 million of growth Traditional Bank loans. Overall, the Core Bank’s credit quality metrics remained strong as of June 30, 2023.

As a percentage of total loans, the Core Bank’s Allowance(2) decreased to 1.15% as of June 30, 2023. The table below provides a view of the Company’s percentage of Allowance-to-total-loans by reportable segment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of Jun. 30, 2023

 

 

As of Jun. 30, 2022

 

 

Quarterly Change

 

(dollars in thousands)

 

 

 

 

 

 

 

Allowance

 

 

 

 

 

 

 

 

Allowance

 

 

Allowance

 

 

 

Reportable Segment

 

Gross Loans

 

Allowance

 

to Loans

 

 

Gross Loans

 

Allowance

 

to Loans

 

 

to Loans

 

% Change

 

 

 

 



 







 



 










 

Traditional Bank

 

$

4,394,668


 

$

55,567



1.26

%

 


$

3,673,590


 

$

49,727



1.35

%

 


(0.09

)%


(7

)%

 

Warehouse Lending

 

 

539,560

 

 

 

1,346

 

 

0.25

 

 

 

 

596,678

 

 

 

1,491

 

 

0.25

 

 

 

—

 

 

—

 

 

Total Core Bank

 

 

4,934,228

 

 

 

56,913

 

 

1.15

 

 

 

 

4,270,268

 

 

 

51,218

 

 

1.20

 

 

 

(0.05

)

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Refund Solutions

 

 

193

 

 

 

—

 

 

—

 

 

 

 

149

 

 

 

—

 

 

—

 

 

 

—

 

 

—

 

 

Republic Credit Solutions

 

 

118,721

 

 

 

15,289

 

 

12.88

 

 

 

 

91,816

 

 

 

13,231

 

 

14.41

 

 

 

(1.53

)

 

(11

)

 

Total Republic Processing Group

 

 

118,914

 

 

 

15,289

 

 

12.86

 

 

 

 

91,965

 

 

 

13,231

 

 

14.39

 

 

 

(1.53

)

 

(11

)

 

 

 

 

 

 

 

 






 

 

 

 

 




 





 

Total Company

 

$

5,053,142

 

 

$

72,202

 


1.43

%

 


$

4,362,233

 

 

$

64,449

 


1.48

%

 


(0.05

)%


(3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACLL Roll-Forward

 

 

Three Months Ended June 30,

 

 

2023

 

 

 

 

 

2022

 

(dollars in thousands)

 

Beginning

 

CBank

 

 

 

 

Charge-

 

 

 

Ending

 

Beginning

 

 

 

 

Charge-

 

 

 

Ending

Reportable Segment

 

Balance

 

Adjustment*

 

Provision

 

offs

 

Recoveries

 

Balance

 

Balance

 

Provision

 

offs

 

Recoveries

 

Balance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traditional Bank

 

$

55,216


 

$

(1,384

)

 

$

1,860

 

 

$

(239

)

 

$

114


 

$

55,567


 

$

49,616


 

$

106

 

 

$

(245

)

 

$

250


 

$

49,727


Warehouse Lending

 

 

1,144

 

 

 

—

 

 

 

202

 

 

 

—

 

 

 

—

 

 

 

1,346

 

 

 

1,725

 

 

 

(234

)

 

 

—

 

 

 

—

 

 

 

1,491

 

Total Core Bank

 

 

56,360

 

 

 

(1,384

)

 

 

2,062

 

 

 

(239

)

 

 

114

 

 

 

56,913

 

 

 

51,341

 

 

 

(128

)

 

 

(245

)

 

 

250

 

 

 

51,218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Refund Solutions

 

 

25,981

 

 

 

—

 

 

 

(219

)

 

 

(25,950

)

 

 

188

 

 

 

—

 

 

 

8,370

 

 

 

360

 

 

 

(11,658

)

 

 

2,928

 

 

 

—

 

Republic Credit Solutions

 

 

13,780

 

 

 

—

 

 

 

4,296

 

 

 

(3,018

)

 

 

231

 

 

 

15,289

 

 

 

11,945

 

 

 

3,433

 

 

 

(2,411

)

 

 

264

 

 

 

13,231

 

Total Republic Processing Group

 

 

39,761

 

 

 

—

 

 

 

4,077

 

 

 

(28,968

)

 

 

419

 

 

 

15,289

 

 

 

20,315

 

 

 

3,793

 

 

 

(14,069

)

 

 

3,192

 

 

 

13,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

$

96,121

 

 

$

(1,384

)

 

$

6,139

 

 

$

(29,207

)

 

$

533

 

 

$

72,202

 

 

$

71,656

 

 

$

3,665

 

 

$

(14,314

)

 

$

3,442

 

 

$

64,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* The net fair value adjustment to ACLL includes an estimate of lifetime credit losses for Purchased Credit Deteriorated loans.

The table below presents the Core Bank’s credit quality metrics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended:

Years Ended:

 

Jun. 30,

 

Jun. 30,

 

Dec. 31,

Dec. 31,

Dec. 31,

Core Banking Credit Quality Ratios

2023

 

2022

 

2022

2021

2020

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

0.34

%

0.38

%

0.37

%

0.47

%

0.50

%

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total loans (including OREO)

0.37

 

0.42

 

0.40

 

0.51

 

0.56

 

 

 

 

 

 

 

 

 

 

 

 

Delinquent loans* to total loans

0.12

 

0.13

 

0.14

 

0.17

 

0.21

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans

0.01

 

—

 

0.00

 

0.01

 

0.03

 

(Quarterly rates annualized)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OREO = Other Real Estate Owned

 

 

 

 

 

 

 

 

 

 

*Loans 30-days-or-more past due at the time the second contractual payment is past due.

Noninterest Income – Core Bank noninterest income was $11.3 million during the second quarter of 2023, an increase of $1.7 million, or 18%, from the second quarter of 2022. The increase in noninterest income was primarily driven by $1.7 million of non-recurring revenue related to the BOLI.

Noninterest Expense – As previously noted, the Core Bank’s noninterest expense was $45.5 million for the second quarter of 2023 compared to $42.2 million for the second quarter of 2022, an increase of $3.3 million, or 8% for the quarter. Noninterest expenses for the second quarter of 2023 included $2.0 million of expense associated with the former CBank operations, which was acquired in March 2023. Noninterest expense for the Core Bank’s legacy operations, increased a modest $1.3 million, or 3%, from the second quarter of 2022 to the second quarter of 2023.

Republic Processing Group(3)

The Republic Processing Group (“RPG”) reported net income of $8.9 million for the second quarter of 2023 compared to $15.8 million for the same period in 2022 and adjusted net income of $6.2 million for the second quarter of 2022. RPG adjusted net income for the second quarter of 2022 excludes the previously disclosed $13.0 million pre-tax legal settlement received by Republic Bank & Trust Company (“RB&T”), net of $699,000 in related pre-tax expenses. The prepaid card business within the TRS segment was the primary driver for the quarter-over-quarter growth in adjusted net income at RPG.

Net interest income within the TRS segment was up $2.4 million from the second quarter of 2022 to the second quarter of 2023. The prepaid card product component of TRS drove a $3.3 million increase to net interest income for the segment, with an increase in the product’s applied yield to its noninterest-bearing funds driving the growth. Overall, a yield of 4.52% was applied to average prepaid card-related balances of $362 million during the second quarter of 2023 compared to yield of 0.83% applied to average prepaid card-related balances of $377 million during the second quarter of 2022.

Republic Bancorp, Inc. (the “Company”) is the parent company of Republic Bank & Trust Company (the “Bank”). The Bank currently has 46 banking centers in communities in four metropolitan statistical areas (“MSAs”) across five states: 22 banking centers located in the Louisville MSA in Louisville, Prospect, Shelbyville, and Shepherdsville in Kentucky, and Floyds Knobs, Jeffersonville, and New Albany in Indiana; six centers in the Lexington MSA in Georgetown and Lexington in Kentucky; eight banking centers in the Cincinnati MSA in Kenwood, Norwood and West Chester in Ohio, and Bellevue, Covington, Crestview Hills, and Florence in Kentucky; seven centers in the Tampa MSA in Largo, New Port Richey, St. Petersburg, Seminole, Tampa, and Temple Terrace in Florida; and three banking centers in the Nashville MSA in Cool Springs, Green Hills, and Spring Hill, Tennessee. In addition, the Bank has one loan production office in St. Louis, Missouri. The Bank offers internet banking at www.republicbank.com. As of June 30, 2023, the Company had approximately $6.4 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, and other future conditions. 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, 2022. The Company undertakes no obligation to update any forward-looking statements, except as required by applicable law.

Footnotes:

(1)

“Core Bank” or “Core Banking” operations consist of the Traditional Banking, Warehouse Lending, and Mortgage Banking segments.

 

 

(2)

Provision – Provision for Expected Credit Loss Expense

 

Allowance – Allowance for Credit Losses on Loans

 

 

(3)

Republic Processing Group operations consist of the TRS and Republic Credit Solutions (“RCS”) segments.

 

 

NM – Not meaningful

 

NA – Not applicable

 

Contacts

Republic Bancorp, Inc.
Kevin Sipes
Executive Vice President & Chief Financial Officer
(502) 560-8628

Exhibit 99.2


EARNINGS RELEASE FINANCIAL SUPPLEMENT

SECOND QUARTER 2023


TABLE OF CONTENTS

BALANCE SHEET DATA
S-2
   
AVERAGE BALANCE SHEET DATA
S-3
   
INCOME STATEMENT DATA
S-4
   
SELECTED DATA AND RATIOS
S-5
   
LOAN COMPOSITION
S-6
   
ALLOWANCE FOR CREDIT LOSSES ON LOANS
S-6
   
CREDIT QUALITY DATA AND RATIOS
S-7
   
SEGMENT DATA
S-8
   
FOOTNOTES
S-10

S-1
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

                                                   
                                                   
Balance Sheet Data
                                                  
   
As of
    
$ Change
      
$ Change
  
   
Jun. 30, 2023
  
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
    
From Dec. 31,2022
      
From Jun. 30, 2022
  
Assets:
                                                  
Cash and cash equivalents
  
$
 241,967
  
$
 249,289
  
$
 313,689
  
$
 754,393
  
$
 795,143
    
$
 (71,722)
      
$
 (553,176)
  
Investment securities, net of allowance for credit losses
    
 706,238
    
 725,163
    
 707,862
    
 662,750
    
 655,296
      
 (1,624)
        
 50,942
  
Loans held for sale
    
 25,582
    
 18,466
    
 19,177
    
 24,387
    
 39,727
      
 6,405
        
 (14,145)
  
Loans
    
 5,053,142
    
 4,774,234
    
 4,515,802
    
 4,289,450
    
 4,362,233
      
 537,340
        
 690,909
  
Allowance for credit losses
    
 (72,202)
    
 (96,121)
    
 (70,413)
    
 (64,919)
    
 (64,449)
      
 (1,789)
        
 (7,753)
  
Loans, net
    
 4,980,940
    
 4,678,113
    
 4,445,389
    
 4,224,531
    
 4,297,784
      
 535,551
        
 683,156
  
Federal Home Loan Bank stock, at cost
    
 29,395
    
 25,939
    
 9,146
    
 8,568
    
 10,311
      
 20,249
        
 19,084
  
Premises and equipment, net
    
 33,840
    
 33,672
    
 31,978
    
 32,813
    
 33,886
      
 1,862
        
 (46)
  
Right-of-use assets
    
 34,939
    
 36,245
    
 37,017
    
 41,303
    
 41,364
      
 (2,078)
        
 (6,425)
  
Goodwill
    
 40,516
    
 41,618
    
 16,300
    
 16,300
    
 16,300
      
 24,216
        
 24,216
  
Other real estate owned ("OREO")
    
 1,478
    
 1,529
    
 1,581
    
 1,634
    
 1,687
      
 (103)
        
 (209)
  
Bank owned life insurance ("BOLI")
    
 102,521
    
 102,322
    
 101,687
    
 101,013
    
 100,396
      
 834
        
 2,125
  
Low-income housing tax credit investments
    
 77,426
    
 73,901
    
 75,324
    
 63,319
    
 58,446
      
 2,102
        
 18,980
  
Other assets and accrued interest receivable
    
 94,937
    
 87,834
    
 76,393
    
 68,652
    
 62,136
      
 18,544
        
 32,801
  
Total assets
  
$
 6,369,779
  
$
 6,074,091
  
$
 5,835,543
  
$
 5,999,663
  
$
 6,112,476
    
$
 534,236
      
$
 257,303
  
                                                   
Liabilities and Stockholders' Equity:
                                                  
Deposits:
                                                  
Noninterest-bearing
  
$
 1,854,907
  
$
 2,013,957
  
$
 1,908,768
  
$
 2,013,337
  
$
 2,093,853
    
$
 (53,861)
      
$
 (238,946)
  
Interest-bearing
    
 2,874,374
    
 2,785,711
    
 2,629,077
    
 2,786,385
    
 2,733,093
      
 245,297
        
 141,281
  
Total deposits
    
 4,729,281
    
 4,799,668
    
 4,537,845
    
 4,799,722
    
 4,826,946
      
 191,436
        
 (97,665)
  
                                                   
Securities sold under agreements to
                                                  
   repurchase ("SSUAR") and other short-term borrowings
    
 92,093
    
 134,412
    
 216,956
    
 209,376
    
 303,315
      
 (124,863)
        
 (211,222)
  
Operating lease liabilities
    
 35,721
    
 37,031
    
 37,809
    
 42,109
    
 42,163
      
 (2,088)
        
 (6,442)
  
Federal Home Loan Bank advances
    
 520,000
    
 108,000
    
 95,000
    
 20,000
    
 20,000
      
 425,000
        
 500,000
  
Low-income housing tax credit obligations
    
 55,998
    
 42,437
    
 43,609
    
 32,224
    
 27,974
      
 12,389
        
 28,024
  
Other liabilities and accrued interest payable
    
 49,715
    
 70,341
    
 47,711
    
 53,169
    
 48,212
      
 2,004
        
 1,503
  
Total liabilities
    
 5,482,808
    
 5,191,889
    
 4,978,930
    
 5,156,600
    
 5,268,610
      
 503,878
        
 214,198
  
                                                   
Stockholders' equity
    
 886,971
    
 882,202
    
 856,613
    
 843,063
    
 843,866
      
 30,358
        
 43,105
  
Total liabilities and stockholders' equity
  
$
 6,369,779
  
$
 6,074,091
  
$
 5,835,543
  
$
 5,999,663
  
$
 6,112,476
    
$
 534,236
      
$
 257,303
  
                                                   

S-2
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023 (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

                                                       
Average Balance Sheet Data
                                                      
   
Three Months Ended
    
Six Months Ended
    
$ Change  (8)
  
   
Jun. 30, 2023
  
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
    
Jun. 30, 2023
  
Jun. 30, 2022
    
6M to 6M
  
Assets:
                                                      
                                                       
Interest-earning assets:
                                                      
Federal funds sold and other interest-earning deposits
  
$
 114,368
  
$
 241,211
  
$
 553,695
  
$
 727,626
  
$
 813,956
    
$
 177,439
  
$
 837,757
    
$
 (660,318)
  
Investment securities, including FHLB stock
    
 774,829
    
 773,172
    
 693,825
    
 694,781
    
 691,427
      
 774,006
    
 649,040
      
 124,966
  
Loans, including loans held for sale
    
 4,904,167
    
 4,665,543
    
 4,353,256
    
 4,306,169
    
 4,339,432
      
 4,785,513
    
 4,347,299
      
 438,214
  
Total interest-earning assets
    
 5,793,364
    
 5,679,926
    
 5,600,776
    
 5,728,576
    
 5,844,815
      
 5,736,958
    
 5,834,096
      
 (97,138)
  
                                                       
Allowance for credit losses
    
 (96,720)
    
 (83,195)
    
 (65,290)
    
 (65,262)
    
 (72,037)
      
 (89,995)
    
 (70,670)
      
 (19,325)
  
                                                       
Noninterest-earning assets:
                                                      
Noninterest-earning cash and cash equivalents
    
 113,865
    
 295,905
    
 115,416
    
 108,069
    
 172,382
      
 204,382
    
 262,772
      
 (58,390)
  
Premises and equipment, net
    
 33,967
    
 32,232
    
 32,518
    
 33,307
    
 34,322
      
 33,104
    
 34,888
      
 (1,784)
  
Bank owned life insurance
    
 102,599
    
 102,004
    
 101,361
    
 100,740
    
 100,152
      
 102,303
    
 99,844
      
 2,459
  
Other assets
    
 210,350
    
 186,169
    
 153,721
    
 171,392
    
 161,548
      
 198,327
    
 172,388
      
 25,939
  
                                                       
Total assets
  
$
 6,157,425
  
$
 6,213,041
  
$
 5,938,502
  
$
 6,076,822
  
$
 6,241,182
    
$
 6,185,079
  
$
 6,333,318
    
$
 (148,239)
  
                                                       
Liabilities and Stockholders' Equity:
                                                      
                                                       
Interest-bearing liabilities:
                                                      
Interest-bearing deposits
  
$
 2,828,733
  
$
 2,663,099
  
$
 2,704,764
  
$
 2,777,124
  
$
 2,779,941
    
$
 2,746,373
  
$
 2,803,587
    
$
 (57,214)
  
SSUARs and other short-term borrowings
    
 117,852
    
 202,910
    
 247,123
    
 220,149
    
 294,388
      
 160,146
    
 297,263
      
 (137,117)
  
Federal Home Loan Bank advances
    
 256,000
    
 245,344
    
 21,630
    
 20,000
    
 20,000
      
 250,702
    
 21,657
      
 229,045
  
Total interest-bearing liabilities
    
 3,202,585
    
 3,111,353
    
 2,973,517
    
 3,017,273
    
 3,094,329
      
 3,157,221
    
 3,122,507
      
 34,714
  
                                                       
Noninterest-bearing liabilities and Stockholders’ equity:
                                          
Noninterest-bearing deposits
    
 1,927,486
    
 2,089,162
    
 1,994,233
    
 2,096,206
    
 2,196,794
      
 2,007,877
    
 2,254,194
      
 (246,317)
  
Other liabilities
    
 132,687
    
 133,321
    
 114,196
    
 108,964
    
 100,118
      
 133,002
    
 106,320
      
 26,682
  
Stockholders' equity
    
 894,667
    
 879,205
    
 856,556
    
 854,379
    
 849,941
      
 886,979
    
 850,297
      
 36,682
  
                                                       
Total liabilities and stockholders’ equity
  
$
 6,157,425
  
$
 6,213,041
  
$
 5,938,502
  
$
 6,076,822
  
$
 6,241,182
    
$
 6,185,079
  
$
 6,333,318
    
$
 (148,239)
  
                                                       

S-3
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023 (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

                                                       
                                                       
Income Statement Data
                                                      
   
Three Months Ended
    
Six Months Ended
    
$ Change (8)
  
   
Jun. 30, 2023
  
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
    
Jun. 30, 2023
  
Jun. 30, 2022
    
6M to 6M
  
                                                       
Total interest income (1)
  
$
 79,054
  
$
 100,356
  
$
 66,555
  
$
 60,617
  
$
 52,902
    
$
 179,410
  
$
 117,012
    
$
 62,398
  
Total interest expense
    
 14,525
    
 7,714
    
 3,442
    
 2,020
    
 1,088
      
 22,239
    
 2,031
      
 20,208
  
Net interest income
    
 64,529
    
 92,642
    
 63,113
    
 58,597
    
 51,814
      
 157,171
    
 114,981
      
 42,190
  
                                                       
Provision (2)
    
 6,139
    
 26,766
    
 7,844
    
 1,573
    
 3,705
      
 32,905
    
 12,931
      
 19,974
  
                                                       
Noninterest income:
                                                      
Service charges on deposit accounts
    
 3,527
    
 3,299
    
 3,428
    
 3,409
    
 3,363
      
 6,826
    
 6,589
      
 237
  
Net refund transfer fees
    
 4,479
    
 10,807
    
 486
    
 593
    
 3,950
      
 15,286
    
 16,001
      
 (715)
  
Mortgage banking income (3)
    
 907
    
 800
    
 622
    
 1,154
    
 1,763
      
 1,707
    
 4,420
      
 (2,713)
  
Interchange fee income
    
 3,419
    
 3,051
    
 3,272
    
 3,322
    
 3,461
      
 6,470
    
 6,531
      
 (61)
  
Program fees (3)
    
 3,739
    
 3,241
    
 3,501
    
 4,932
    
 3,885
      
 6,980
    
 7,739
      
 (759)
  
Increase in cash surrender value of BOLI
    
 689
    
 635
    
 674
    
 617
    
 623
      
 1,324
    
 1,235
      
 89
  
Net losses on OREO
    
 (52)
    
 (53)
    
 (53)
    
 (53)
    
 (52)
      
 (105)
    
 (105)
      
 —
  
Contract termination fee
    
 —
    
 —
    
 —
    
 —
    
 —
      
 —
    
 5,000
      
 (5,000)
  
Legal settlement
    
 —
    
 —
    
 —
    
 —
    
 13,000
      
 —
    
 —
      
 —
  
Other
    
 2,943
    
 901
    
 1,194
    
 1,134
    
 576
      
 3,844
    
 14,168
      
 (10,324)
  
Total noninterest income
    
 19,651
    
 22,681
    
 13,124
    
 15,108
    
 30,569
      
 42,332
    
 61,578
      
 (19,246)
  
                                                       
Noninterest expense:
                                                      
Salaries and employee benefits
    
 30,764
    
 29,961
    
 25,763
    
 27,269
    
 28,896
      
 60,725
    
 58,208
      
 2,517
  
Technology, equipment, and communication
    
 6,920
    
 7,228
    
 7,276
    
 7,235
    
 7,229
      
 14,148
    
 14,443
      
 (295)
  
Occupancy
    
 3,591
    
 3,406
    
 3,139
    
 3,211
    
 3,224
      
 6,997
    
 6,664
      
 333
  
Marketing and development
    
 2,513
    
 1,574
    
 1,856
    
 1,951
    
 1,720
      
 4,087
    
 3,068
      
 1,019
  
FDIC insurance expense
    
 724
    
 637
    
 427
    
 423
    
 399
      
 1,361
    
 818
      
 543
  
Interchange related expense
    
 1,350
    
 1,499
    
 1,171
    
 1,221
    
 1,264
      
 2,849
    
 2,381
      
 468
  
Legal and professional fees
    
 829
    
 1,061
    
 951
    
 904
    
 804
      
 1,890
    
 2,169
      
 (279)
  
Merger expense
    
 127
    
 2,073
    
 —
    
 —
    
 —
      
 2,200
    
 —
      
 2,200
  
Other (2)
    
 4,715
    
 5,004
    
 4,322
    
 3,952
    
 4,120
      
 9,719
    
 8,486
      
 1,233
  
Total noninterest expense
    
 51,533
    
 52,443
    
 44,905
    
 46,166
    
 47,656
      
 103,976
    
 96,237
      
 7,739
  
                                                       
Income before income tax expense
    
 26,508
    
 36,114
    
 23,488
    
 25,966
    
 31,022
      
 62,622
    
 67,391
      
 (4,769)
  
Income tax expense
    
 5,456
    
 8,022
    
 4,975
    
 6,070
    
 6,675
      
 13,478
    
 14,694
      
 (1,216)
  
                                                       
Net income
  
$
 21,052
  
$
 28,092
  
$
 18,513
  
$
 19,896
  
$
 24,347
    
$
 49,144
  
$
 52,697
    
$
 (3,553)
  
                                                       

S-4
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023 (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

                                                                     
                                                                     
Selected Data and Ratios
                                                                    
     
As of and for the Three Months Ended
    
As of and for the Six Months Ended
    
Change (8)
  
     
Jun. 30, 2023
  
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
    
Jun. 30, 2023
  
Jun. 30, 2022
    
From Jun. 30,
2022 or 6M to 6M
  
Per Share Data:
                                                                    
                                                                     
Basic weighted average shares outstanding
    
 19,884
      
 19,935
      
 19,929
      
 19,919
      
 20,107
      
 19,909
      
 20,131
        
 (222)
    
Diluted weighted average shares outstanding
    
 19,906
      
 19,990
      
 19,981
      
 19,981
      
 20,169
      
 19,961
      
 20,202
        
 (241)
    
                                                                     
Period-end shares outstanding:
                                                                    
     Class A Common Stock
    
 17,447
      
 17,598
      
 17,587
      
 17,587
      
 17,629
      
 17,447
      
 17,629
        
 (182)
    
     Class B Common Stock
    
 2,157
      
 2,160
      
 2,160
      
 2,160
      
 2,161
      
 2,157
      
 2,161
        
 (4)
    
                                                                     
Book value per share (4)
  
$
 45.24
    
$
 44.65
    
$
 43.38
    
$
 42.69
    
$
 42.64
    
$
 45.24
    
$
 42.64
      
$
 2.60
    
Tangible book value per share (4)
    
 42.63
      
 41.98
      
 42.11
      
 41.40
      
 41.34
      
 42.63
      
 41.34
        
 1.29
    
                                                                     
Earnings per share ("EPS"):
                                                                    
     Basic EPS - Class A Common Stock
  
$
 1.07
    
$
 1.42
    
$
 0.94
    
$
 1.01
    
$
 1.23
    
$
 2.50
    
$
 2.65
      
$
 (0.15)
    
     Basic EPS - Class B Common Stock
    
 0.98
      
 1.30
      
 0.86
      
 0.92
      
 1.12
      
 2.27
      
 2.41
        
 (0.14)
    
     Diluted EPS - Class A Common Stock
    
 1.07
      
 1.42
      
 0.94
      
 1.01
      
 1.22
      
 2.50
      
 2.64
        
 (0.14)
    
     Diluted EPS - Class B Common Stock
    
 0.98
      
 1.29
      
 0.85
      
 0.92
      
 1.11
      
 2.27
      
 2.40
        
 (0.13)
    
                                                                     
Cash dividends declared per Common share:
                                                                    
     Class A Common Stock
  
$
 0.374
    
$
 0.374
    
$
 0.341
    
$
 0.341
    
$
 0.341
    
$
 0.748
    
$
 0.682
      
$
 0.066
    
     Class B Common Stock
    
 0.340
      
 0.340
      
 0.310
      
 0.310
      
 0.310
      
 0.680
      
 0.620
        
 0.060
    
                                                                     
Performance Ratios:
                                                                    
                                                                     
Return on average assets
    
 1.37
%
    
 1.81
%
    
 1.25
%
    
 1.28
%
    
 1.53
%
    
 1.59
%
    
 1.66
%
      
 (0.07)
%
  
Return on average equity
    
 9.41
      
 12.78
      
 8.65
      
 9.15
      
 11.23
      
 11.08
      
 12.39
        
 (1.31)
    
Efficiency ratio (5)
    
 62
      
 45
      
 59
      
 63
      
 68
      
 53
      
 60
        
 (7)
    
Yield on average interest-earning assets (1)
    
 5.46
      
 7.07
      
 4.75
      
 4.19
      
 3.58
      
 6.25
      
 4.01
        
 2.24
    
Cost of average interest-bearing liabilities
    
 1.81
      
 0.99
      
 0.46
      
 0.27
      
 0.14
      
 1.41
      
 0.13
        
 1.28
    
Cost of average deposits (6)
    
 0.94
      
 0.41
      
 0.26
      
 0.15
      
 0.08
      
 0.68
      
 0.07
        
 0.61
    
Net interest spread (1)
    
 3.65
      
 6.08
      
 4.29
      
 3.92
      
 3.44
      
 4.84
      
 3.88
        
 0.96
    
Net interest margin - Total Company (1)
    
 4.46
      
 6.52
      
 4.51
      
 4.05
      
 3.51
      
 5.48
      
 3.94
        
 1.54
    
Net interest margin - Core Bank
    
 3.65
      
 3.98
      
 3.82
      
 3.54
      
 3.02
      
 3.81
      
 2.97
        
 0.83
    
                                                                     
Other Information:
                                                                    
                                                                     
End of period FTEs (7) - Total Company
    
 1,043
      
 1,031
      
 998
      
 1,009
      
 1,020
      
 1,043
      
 1,020
        
 23
    
End of period FTEs - Core Bank
    
 985
      
 972
      
 932
      
 916
      
 929
      
 985
      
 929
        
 56
    
Number of full-service banking centers
    
 45
      
 44
      
 42
      
 42
      
 42
      
 45
      
 42
        
 3
    
                                                                     

S-5
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023 (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

                                                   
Loan Composition and Allowance for Credit Losses on Loans
                                      
   
As of
      
Change
    
Change
  
 
   
Jun. 30, 2023
   
Mar. 31, 2023
    
Dec. 31, 2022
    
Sep. 30, 2022
    
Jun. 30, 2022
 
  
    
From Dec. 31,2022
    
  
From Jun. 30, 2022
  
Loan Composition
                                                  
                                                   
Traditional Banking:
                                                  
Residential real estate:
                                                  
Owner occupied
  
$
 1,086,751
  
$
 972,214
  
$
 911,427
  
$
 863,899
  
$
 832,137
      
$
 175,324
    
$
 254,614
  
Nonowner occupied
  
 
 350,390
  
 
 328,529
  
 
 321,358
  
 
 321,037
  
 
 313,534
      
 
 29,032
    
 
 36,856
  
Commercial real estate
  
 
 1,727,092
  
 
 1,682,573
  
 
 1,599,510
  
 
 1,571,593
  
 
 1,569,119
      
 
 127,582
    
 
 157,973
  
Construction & land development
  
 
 179,479
  
 
 167,829
  
 
 153,875
  
 
 147,418
  
 
 137,452
      
 
 25,604
    
 
 42,027
  
Commercial & industrial
  
 
 478,759
  
 
 478,101
  
 
 413,387
    
 412,826
    
 408,832
      
 
 65,372
    
 
 69,927
  
Lease financing receivables
  
 
 79,804
  
 
 73,270
  
 
 10,505
  
 
 11,333
  
 
 11,345
      
 
 69,299
    
 
 68,459
  
Aircraft
    
 208,512
    
 184,344
    
 179,785
    
 166,313
    
 159,958
        
 28,727
      
 48,554
  
Home equity
  
 
 255,755
  
 
 250,050
  
 
 241,739
  
 
 229,038
  
 
 214,069
      
 
 14,016
    
 
 41,686
  
Consumer:
                                                  
Credit cards
  
 
 17,134
  
 
 16,775
  
 
 15,473
  
 
 14,897
  
 
 15,419
      
 
 1,661
    
 
 1,715
  
Overdrafts
  
 
 706
  
 
 775
  
 
 726
  
 
 723
  
 
 901
      
 
 (20)
    
 
 (195)
  
Automobile loans
  
 
 4,177
  
 
 5,267
  
 
 6,731
  
 
 7,890
  
 
 9,579
      
 
 (2,554)
    
 
 (5,402)
  
Other consumer
  
 
 6,109
  
 
 5,450
  
 
 626
  
 
 973
  
 
 1,245
      
 
 5,483
    
 
 4,864
  
Total Traditional Banking
    
 4,394,668
    
 4,165,177
    
 3,855,142
    
 3,747,940
    
 3,673,590
        
 539,526
      
 721,078
  
Warehouse lines of credit
  
 
 539,560
  
 
 457,365
  
 
 403,560
  
 
 442,238
  
 
 596,678
      
 
 136,000
    
 
 (57,118)
  
Total Core Banking
    
 4,934,228
    
 4,622,542
    
 4,258,702
    
 4,190,178
    
 4,270,268
        
 675,526
      
 663,960
  
                                                   
Republic Processing Group:
  
 
    
 
    
 
    
 
    
 
        
 
      
 
    
Tax Refund Solutions:
                                                  
Refund Advances
    
 —
    
 31,665
    
 97,505
    
 —
    
 —
        
 (97,505)
      
 —
  
Other TRS commercial & industrial loans
    
 193
    
 8,327
    
 51,767
    
 295
    
 149
        
 (51,574)
      
 44
  
Republic Credit Solutions
    
 118,721
    
 111,700
    
 107,828
    
 98,977
    
 91,816
        
 10,893
      
 26,905
  
Total Republic Processing Group
    
 118,914
    
 151,692
    
 257,100
    
 99,272
    
 91,965
        
 (138,186)
      
 26,949
  
                                                   
Total loans - Total Company
  
$
 5,053,142
  
$
 4,774,234
  
$
 4,515,802
  
$
 4,289,450
  
$
 4,362,233
      
$
 537,340
    
$
 690,909
  
                                                   
Allowance for Credit Losses on Loans ("Allowance")
                                      
                                                   
Traditional Banking
  
$
 55,567
  
$
 55,216
  
$
 50,709
  
$
 49,231
  
$
 49,727
      
$
 4,858
    
$
 5,840
  
Warehouse Lending
    
 1,346
    
 1,144
    
 1,009
    
 1,105
    
 1,491
        
 337
      
 (145)
  
Total Core Banking
    
 56,913
    
 56,360
    
 51,718
    
 50,336
    
 51,218
        
 5,195
      
 5,695
  
                                                   
Tax Refund Solutions
    
 —
    
 25,981
    
 3,888
    
 —
    
 —
        
 (3,888)
      
 —
  
Republic Credit Solutions
    
 15,289
    
 13,780
    
 14,807
    
 14,583
    
 13,231
        
 482
      
 2,058
  
Total Republic Processing Group
    
 15,289
    
 39,761
    
 18,695
    
 14,583
    
 13,231
        
 (3,406)
      
 2,058
  
                                                   
Total Allowance - Total Company
  
$
 72,202
  
$
 96,121
  
$
 70,413
  
$
 64,919
  
$
 64,449
      
$
 1,789
    
$
 7,753
  
                                                   
Allowance to Total Loans
                                      
                                                   
Traditional Banking
    
 1.26
%
  
 1.33
%
  
 1.32
%
  
 1.31
%
  
 1.35
%
      
 (0.06)
%
    
 (0.09)
%
Warehouse Lending
    
 0.25
    
 0.25
    
 0.25
    
 0.25
    
 0.25
        
 —
      
 —
  
Total Core Banking
    
 1.15
    
 1.22
    
 1.21
    
 1.20
    
 1.20
        
 (0.06)
      
 (0.05)
  
                                                   
Tax Refund Solutions
    
 —
    
 64.97
    
 2.60
    
 —
    
 —
        
 (2.60)
      
 —
  
Republic Credit Solutions
    
 12.88
    
 12.34
    
 13.73
    
 14.73
    
 14.41
        
 (0.85)
      
 (1.53)
  
Total Republic Processing Group
    
 12.86
    
 26.21
    
 7.27
    
 14.69
    
 14.39
        
 5.59
      
 (1.53)
  
                                                   
Total Company
    
 1.43
    
 2.01
    
 1.56
    
 1.51
    
 1.48
        
 (0.13)
      
 (0.05)
  
                                                   

S-6
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023 (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

                                                                     
                                                                     
Credit Quality Data and Ratios
                                                                    
   
As of and for the Three Months Ended
    
As of and for the Six Months Ended
    
Change (8)
  
   
Jun. 30, 2023
  
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
    
Jun. 30, 2023
  
Jun. 30, 2022
    
From Jun. 30,
2022 or 6M to 6M
  
Credit Quality Asset Balances and Net Charge-off ("NCO") Data:
                                                              
                                                                     
Nonperforming Assets - Total Company:
                                                                    
Loans on nonaccrual status
  
$
 16,957
    
$
 15,833
    
$
 15,562
    
$
 16,322
    
$
 16,168
      
$
 16,957
    
$
 16,168
      
$
 789
  
Loans past due 90-days-or-more and still on accrual
    
 547
      
 777
      
 756
      
 37
      
 42
        
 547
      
 42
        
 505
  
     Total nonperforming loans
    
 17,504
      
 16,610
      
 16,318
      
 16,359
      
 16,210
        
 17,504
      
 16,210
        
 1,294
  
OREO
    
 1,478
      
 1,529
      
 1,581
      
 1,634
      
 1,687
        
 1,478
      
 1,687
        
 (209)
  
     Total nonperforming assets
  
$
 18,982
    
$
 18,139
    
$
 17,899
    
$
 17,993
    
$
 17,897
      
$
 18,982
    
$
 17,897
      
$
 1,085
  
                                                                     
Nonperforming Assets - Core Bank:
                                                                    
Loans on nonaccrual status
  
$
 16,957
    
$
 15,833
    
$
 15,562
    
$
 16,322
    
$
 16,168
      
$
 16,957
    
$
 16,168
      
$
 789
  
Loans past due 90-days-or-more and still on accrual
    
 —
      
 —
      
 —
      
 —
      
 —
        
 —
      
 —
        
 —
  
     Total nonperforming loans
    
 16,957
      
 15,833
      
 15,562
      
 16,322
      
 16,168
        
 16,957
      
 16,168
        
 789
  
OREO
    
 1,478
      
 1,529
      
 1,581
      
 1,634
      
 1,687
        
 1,478
      
 1,687
        
 (209)
  
     Total nonperforming assets
  
$
 18,435
    
$
 17,362
    
$
 17,143
    
$
 17,956
    
$
 17,855
      
$
 18,435
    
$
 17,855
      
$
 580
  
                                                                     
Delinquent Loans:
                                                                    
Delinquent loans - Core Bank
  
$
 5,875
    
$
 5,537
    
$
 6,060
    
$
 4,368
    
$
 5,352
      
$
 5,875
    
$
 5,352
      
$
 523
  
RPG
    
 10,043
      
 30,587
      
 9,200
      
 7,522
      
 6,099
        
 10,043
      
 6,099
        
 3,944
  
Total delinquent loans - Total Company
  
$
 15,918
    
$
 36,124
    
$
 15,260
    
$
 11,890
    
$
 11,451
      
$
 15,918
    
$
 11,451
      
$
 4,467
  
                                                                     
NCOs (Recoveries) by Segment:
                                                                    
Traditional Bank
  
$
 125
    
$
 77
    
$
 238
    
$
 (187)
    
$
 (5)
      
$
 202
    
$
 113
      
$
 89
  
Warehouse Lending loans
    
 —
      
 —
      
 —
      
 —
      
 —
        
 —
      
 —
        
 —
  
Core Bank loans
    
 125
      
 77
      
 238
      
 (187)
      
 (5)
        
 202
      
 113
        
 89
  
Tax Refund Solutions
    
 25,762
      
 (285)
      
 (909)
      
 (1,296)
      
 8,730
        
 25,477
      
 8,368
        
 17,109
  
Republic Credit Solutions
    
 2,787
      
 2,866
      
 3,021
      
 2,656
      
 2,147
        
 5,653
      
 4,545
        
 1,108
  
RPG
    
 28,549
      
 2,581
      
 2,112
      
 1,360
      
 10,877
        
 31,130
      
 12,913
        
 18,217
  
     Total NCOs (recoveries) - Total Company
  
$
 28,674
    
$
 2,658
    
$
 2,350
    
$
 1,173
    
$
 10,872
      
$
 31,332
    
$
 13,026
      
$
 18,306
  
                                                                     
Credit Quality Ratios - Total Company:
                                                                    
                                                                     
Nonperforming loans to total loans
    
 0.35
%
    
 0.35
%
    
 0.36
%
    
 0.38
%
    
 0.37
%
      
 0.35
%
    
 0.37
%
      
 (0.02)
%
Nonperforming assets to total loans (including OREO)
    
 0.38
      
 0.38
      
 0.40
      
 0.42
      
 0.41
        
 0.38
      
 0.41
        
 (0.03)
  
Nonperforming assets to total assets
    
 0.30
      
 0.30
      
 0.31
      
 0.30
      
 0.29
        
 0.30
      
 0.29
        
 0.01
  
Allowance for credit losses to total loans
    
 1.43
      
 2.01
      
 1.56
      
 1.51
      
 1.48
        
 1.43
      
 1.48
        
 (0.05)
  
Allowance for credit losses to nonperforming loans
    
 412
      
 579
      
 432
      
 397
      
 398
        
 412
      
 398
        
 14
  
Delinquent loans to total loans (9)
    
 0.32
      
 0.76
      
 0.34
      
 0.28
      
 0.26
        
 0.32
      
 0.26
        
 0.06
  
NCOs (recoveries) to average loans (annualized)
    
 2.34
      
 0.23
      
 0.22
      
 0.11
      
 1.00
        
 1.31
      
 0.60
        
 0.71
  
                                                                     
Credit Quality Ratios - Core Bank:
                                                                    
                                                                     
Nonperforming loans to total loans
    
 0.34
%
    
 0.34
%
    
 0.37
%
    
 0.39
%
    
 0.38
%
      
 0.34
%
    
 0.38
%
      
 (0.04)
%
Nonperforming assets to total loans (including OREO)
    
 0.37
      
 0.38
      
 0.40
      
 0.43
      
 0.42
        
 0.37
      
 0.42
        
 (0.05)
  
Nonperforming assets to total assets
    
 0.32
      
 0.32
      
 0.32
      
 0.33
      
 0.32
        
 0.32
      
 0.32
        
 -
  
Allowance for credit losses to total loans
    
 1.15
      
 1.22
      
 1.21
      
 1.20
      
 1.20
        
 1.15
      
 1.20
        
 (0.05)
  
Allowance for credit losses to nonperforming loans
    
 336
      
 356
      
 332
      
 308
      
 317
        
 336
      
 317
        
 19
  
Delinquent loans to total loans
    
 0.12
      
 0.12
      
 0.14
      
 0.10
      
 0.13
        
 0.12
      
 0.13
        
 (0.01)
  
Annualized NCOs (recoveries) to average loans
    
 0.01
      
 0.01
      
 0.02
      
 (0.02)
      
 —
        
 0.01
      
 0.01
        
 0.00
  
                                                                     
TRS Refund Advances ("RAs")
                                                                    
                                                                     
RAs originated
  
$
 —
    
$
 737,047
    
$
 97,505
    
$
 —
    
$
 —
      
$
 737,047
    
$
 311,207
      
$
 425,840
  
Net (credit) charge to the Provision for RAs
    
 (161)
      
 21,715
      
 2,888
      
 (1,296)
      
 564
        
 21,554
      
 8,879
        
 12,675
  
RAs NCOs (recoveries)
    
 25,636
      
 (285)
      
 (909)
      
 (1,296)
      
 8,879
        
 25,351
      
 8,879
        
 16,472
  
                                                                     
                                                                     

S-7
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023 (continued)

Segment Data:

Reportable segments are determined by the type of products and services offered and the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business (such as banking centers and business units), which are then aggregated if operating performance, products/services, and clients are similar.

As of June 30, 2023, the Company was divided into five reportable segments: Traditional Banking, Warehouse Lending (“Warehouse”), Mortgage Banking, Tax Refund Solutions (“TRS”), and Republic Credit Solutions (“RCS”). Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last two segments collectively constitute Republic Processing Group (“RPG”) operations.

The nature of segment operations and the primary drivers of net revenues by reportable segment are provided below:

         
 Reportable Segment:
  
Nature of Operations:
  
Primary Drivers of Net Revenue:
         
Core Banking:
        
         
Traditional Banking
  
Provides traditional banking products to clients in its market footprint primarily via its network of banking centers and to clients outside of its market footprint primarily via its digital delivery channels.
  
Loans, investments, and deposits
         
Warehouse Lending
  
Provides short-term, revolving credit facilities to mortgage bankers across the United States.
  
Mortgage warehouse lines of credit
         
Mortgage Banking
  
Primarily originates, sells, and services long-term, single-family, first-lien residential real estate loans primarily to clients in the Bank's market footprint.
  
Loan sales and servicing
         
Republic Processing Group:
        
         
Tax Refund Solutions
  
TRS offers tax-related credit products and facilitates the receipt and payment of federal and state tax refunds through Refund Transfer products. The RPS division of TRS offers general-purpose reloadable cards. TRS and RPS products are primarily provided to clients outside of the Bank’s market footprint.
  
Loans, refund transfers, and prepaid cards.
         
Republic Credit Solutions
  
Offers consumer credit products. RCS products are primarily provided to clients outside of the Bank’s market footprint, with a substantial portion of RCS clients considered subprime or near-prime borrowers.
  
Unsecured, consumer loans

The accounting policies used for Republic’s reportable segments are the same as those described in the summary of significant accounting policies in the Company’s 2022 Annual Report on Form 10-K. Republic evaluates segment performance using operating income. The Company allocates goodwill to the Traditional Banking segment. Republic generally allocates income taxes based on income before income tax expense unless reasonable and specific segment allocations can be made. The Company makes transactions among reportable segments at carrying value.

S-8
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023 (continued)

Segment information for the quarters and years ended June 30, 2023 and 2022 follows:

                                                           
   
Three Months Ended June 30, 2023
  
   
Core Banking
    
Republic Processing Group
          
                           
Total
      
Tax
    
Republic
                
   
Traditional
      
Warehouse
      
Mortgage
      
Core
      
Refund
    
Credit
    
Total
      
Total
  
(dollars in thousands)
  
Banking
      
Lending
      
Banking
      
Banking
      
Solutions
    
Solutions
    
RPG
      
Company
  
                                                           
Net interest income
$
 48,682
    
$
 2,642
    
$
 61
    
$
 51,385
    
$
 4,010
  
$
 9,134
  
$
 13,144
    
$
 64,529
  
                                                           
Provision for expected credit loss expense
  
 1,860
      
 202
      
 —
      
 2,062
      
 (219)
    
 4,296
    
 4,077
      
 6,139
  
                                                           
Net refund transfer fees
  
 —
      
 —
      
 —
      
 —
      
 4,479
    
 —
    
 4,479
      
 4,479
  
Mortgage banking income
  
 —
      
 —
      
 907
      
 907
      
 —
    
 —
    
 —
      
 907
  
Program fees
  
 (1)
      
 —
      
 —
      
 (1)
      
 729
    
 3,011
    
 3,740
      
 3,739
  
Other noninterest income
  
 10,330
      
 11
      
 27
      
 10,368
      
 118
    
 40
    
 158
      
 10,526
  
Total noninterest income
  
 10,329
      
 11
      
 934
      
 11,274
      
 5,326
    
 3,051
    
 8,377
      
 19,651
  
                                                           
Total noninterest expense
  
 42,153
      
 1,008
      
 2,322
      
 45,483
      
 3,143
    
 2,907
    
 6,050
      
 51,533
  
                                                           
Income (loss) before income tax expense
  
 14,998
      
 1,443
      
 (1,327)
      
 15,114
      
 6,412
    
 4,982
    
 11,394
      
 26,508
  
Income tax expense (benefit)
  
 2,941
      
 322
      
 (292)
      
 2,971
      
 1,391
    
 1,094
    
 2,485
      
 5,456
  
                                                           
Net income (loss)
$
 12,057
    
$
 1,121
    
$
 (1,035)
    
$
 12,143
    
$
 5,021
  
$
 3,888
  
$
 8,909
    
$
 21,052
  
                                                           
Period-end assets
$
 5,271,050
    
$
 540,106
    
$
 16,147
    
$
 5,827,303
    
$
 415,428
  
$
 127,048
  
$
 542,476
    
$
 6,369,779
  
                                                           
Net interest margin
  
 3.77
%
    
 2.28
%
    
NM
      
 3.65
%
    
NM
    
NM
    
NM
      
 4.46
%
                                                           
Net-revenue concentration*
  
 71
%
    
 3
%
    
 1
%
    
 75
%
    
 11
%
  
 14
%
  
 25
%
    
 100
%


                                                           
   
Three Months Ended June 30, 2022
  
   
Core Banking
    
Republic Processing Group
          
                           
Total
      
Tax
    
Republic
                
   
Traditional
      
Warehouse
      
Mortgage
      
Core
      
Refund
    
Credit
    
Total
      
Total
  
(dollars in thousands)
  
Banking
      
Lending
      
Banking
      
Banking
      
Solutions
    
Solutions
    
RPG
      
Company
  
                                                           
Net interest income
$
 39,158
    
$
 3,886
    
$
 153
    
$
 43,197
    
$
 1,638
  
$
 6,979
  
$
 8,617
    
$
 51,814
  
                                                           
Provision for expected credit loss expense
  
 146
      
 (234)
      
 —
      
 (88)
      
 360
    
 3,433
    
 3,793
      
 3,705
  
                                                           
Net refund transfer fees
  
 —
      
 —
      
 —
      
 —
      
 3,950
    
 —
    
 3,950
      
 3,950
  
Mortgage banking income
  
 —
      
 —
      
 1,763
      
 1,763
      
 —
    
 —
    
 —
      
 1,763
  
Program fees
  
 —
      
 —
      
 —
      
 —
      
 736
    
 3,149
    
 3,885
      
 3,885
  
Contract termination fee
  
 —
      
 —
      
 —
      
 —
      
 5,000
    
 —
    
 5,000
      
 5,000
  
Legal settlement
  
 5,000
      
 —
      
 —
      
 5,000
      
 —
    
 —
    
 —
      
 5,000
  
Other noninterest income
  
 2,734
      
 12
      
 46
      
 2,792
      
 8,179
    
 —
    
 8,179
      
 10,971
  
Total noninterest income
  
 7,734
      
 12
      
 1,809
      
 9,555
      
 17,865
    
 3,149
    
 21,014
      
 30,569
  
                                                           
Total noninterest expense
  
 38,317
      
 1,035
      
 2,832
      
 42,184
      
 3,533
    
 1,939
    
 5,472
      
 47,656
  
                                                           
Income before income tax expense
  
 8,429
      
 3,097
      
 (870)
      
 10,656
      
 15,610
    
 4,756
    
 20,366
      
 31,022
  
Income tax expense
  
 1,652
      
 692
      
 (191)
      
 2,153
      
 3,465
    
 1,057
    
 4,522
      
 6,675
  
                                                           
Net income
$
 6,777
    
$
 2,405
    
$
 (679)
    
$
 8,503
    
$
 12,145
  
$
 3,699
  
$
 15,844
    
$
 24,347
  
                                                           
Period-end assets
$
 4,997,734
    
$
 596,031
    
$
 22,342
    
$
 5,616,107
    
$
 382,156
  
$
 114,213
  
$
 496,369
    
$
 6,112,476
  
                                                           
Net interest margin
  
 3.06
%
    
 2.69
%
    
NM
      
 3.02
%
    
NM
    
NM
    
NM
      
 3.55
%
                                                           
Net-revenue concentration*
  
 57
%
    
 5
%
    
 2
%
    
 64
%
    
 24
%
  
 12
%
  
 36
%
    
 100
%


*Net revenues represent total net interest income plus noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue.

S-9
Republic Bancorp, Inc.
Earnings Release Financial Supplement
Second Quarter 2023 (continued)
 
Footnotes:

(1) The amount of loan fee income can meaningfully impact total interest income, loan yields, net interest margin, and net interest spread. The following table presents the Company’s loan fees by segment:

                                                       
                                                       
   
Three Months Ended
    
Six Months Ended
    
$ Change (8)
  
(dollars in thousands)
  
Jun. 30, 2023
  
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
    
Jun. 30, 2023
  
Jun. 30, 2022
    
6M to 6M
  
                                                       
Traditional Banking
  
$
 1,311
  
$
 943
  
$
 943
  
$
 1,063
  
$
 1,669
    
$
 2,254
  
$
 3,999
    
$
 (1,745)
  
Warehouse Lending
    
 294
    
 248
    
 272
    
 402
    
 500
      
 542
    
 1,074
      
 (532)
  
Total Core Bank
    
 1,605
    
 1,191
    
 1,215
    
 1,465
    
 2,169
      
 2,796
    
 5,073
      
 (2,277)
  
TRS - Refund Advances
    
 41
    
 31,404
    
 50
    
 81
    
 81
      
 31,446
    
 13,525
      
 17,921
  
TRS - Other Loan Fees
    
 24
    
 933
    
 825
    
 (1)
    
 2
      
 956
    
 664
      
 292
  
RCS
    
 8,416
    
 7,962
    
 7,501
    
 7,196
    
 6,364
      
 16,378
    
 16,621
      
 (243)
  
Total RPG
    
 8,481
    
 40,299
    
 8,376
    
 7,276
    
 6,447
      
 48,780
    
 30,810
      
 17,970
  
                                                       
Total loan fees - Total Company
  
$
 10,086
  
$
 41,490
  
$
 9,591
  
$
 8,741
  
$
 8,616
    
$
 51,576
  
$
 35,883
    
$
 15,693
  
                                                       

(2) Provision for expected credit loss expense includes provisions for losses on on-balance sheet loans and investment securities. Provision expense for off-balance sheet credit exposures is a component of “Other” noninterest expense.

(3) In the ordinary course of business, the Bank originates for sale mortgage loans and consumer loans. Mortgage loans originated for sale are primarily originated and sold into the secondary market through the Bank’s Mortgage Banking segment, while consumer loans originated for sale are originated and sold through the RCS segment. Gains on sale of mortgage loans are recorded as a component of Mortgage Banking income. Gains on sale of consumer loans are recorded as a component of Program Fees.

                                                       
                                                       
   
As of and for the Three Months Ended
    
As of and for the Six Months Ended
    
$ Change (8)
  
(dollars in thousands)
  
Jun. 30, 2023
    
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
    
Jun. 30, 2023
  
Jun. 30, 2022
    
6M to 6M
  
                                                       
Mortgage Loans Held for Sale
                                                
                                                       
Balance, beginning of period
  
$
 1,034
  
$
 1,302
  
$
 2,912
  
$
 8,491
  
$
 13,302
    
$
 1,302
  
$
 29,393
    
$
 (28,091)
  
Originations
  
 
 13,948
  
 
 15,942
  
 
 10,359
  
 
 32,856
  
 
 61,489
    
 
 29,890
  
 
 162,150
    
 
 (132,260)
  
Proceeds from sales
  
 
 (11,483)
  
 
 (16,630)
  
 
 (12,207)
  
 
 (39,220)
  
 
 (67,759)
    
 
 (28,113)
  
 
 (186,971)
    
 
 158,858
  
Net gain on sale
  
 
 539
  
 
 420
  
 
 238
  
 
 785
  
 
 1,459
    
 
 959
  
 
 3,919
    
 
 (2,960)
  
Balance, end of period
  
$
 4,038
  
$
 1,034
  
$
 1,302
  
$
 2,912
  
$
 8,491
    
$
 4,038
  
$
 8,491
    
$
 (4,453)
  
                                                       
RCS Consumer Loans Held for Sale
                                          
                                                       
Balance, beginning of period
  
$
 17,432
  
$
 17,875
  
$
 21,475
  
$
 31,236
  
$
 14,735
    
$
 17,875
  
$
 22,684
    
$
 (4,809)
  
Originations
  
 
 262,404
  
 
 207,222
  
 
 225,588
  
 
 292,131
  
 
 282,782
    
 
 469,626
  
 
 527,996
    
 
 (58,370)
  
Proceeds from sales
  
 
 (261,301)
  
 
 (210,199)
  
 
 (231,999)
  
 
 (306,093)
  
 
 (269,429)
    
 
 (471,500)
  
 
 (525,709)
    
 
 54,209
  
Net gain on sale
  
 
 3,009
  
 
 2,534
  
 
 2,811
  
 
 4,201
  
 
 3,148
    
 
 5,543
  
 
 6,265
    
 
 (722)
  
Balance, end of period
  
$
 21,544
  
$
 17,432
  
$
 17,875
  
$
 21,475
  
$
 31,236
    
$
 21,544
  
$
 31,236
    
$
 (9,692)
  
                                                       

S-10
(4) The following table provides a reconciliation of total stockholders’ equity in accordance with GAAP to tangible stockholders’ equity in accordance with applicable regulatory requirements, a non-GAAP disclosure. The Company provides the tangible book value per share, a non-GAAP measure, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy.

                                         
   
As of
(dollars in thousands, except per share data)
  
Jun. 30, 2023
  
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
                                         
Total stockholders' equity - GAAP (a)
  
$
 886,971
    
$
 882,202
    
$
 856,613
    
$
 843,063
    
$
 843,866
  
Less: Goodwill
    
 40,516
      
 41,618
      
 16,300
      
 16,300
      
 16,300
  
Less: Mortgage servicing rights
    
 7,995
      
 8,406
      
 8,769
      
 9,177
      
 9,407
  
Less: Core deposit intangible
    
 2,713
      
 2,813
      
 —
      
 —
      
 —
  
Tangible stockholders' equity - Non-GAAP (c)
  
$
 835,747
    
$
 829,365
    
$
 831,544
    
$
 817,586
    
$
 818,159
  
                                         
Total assets - GAAP (b)
  
$
 6,369,779
    
$
 6,074,091
    
$
 5,835,543
    
$
 5,999,663
    
$
 6,112,476
  
Less: Goodwill
    
 40,516
      
 41,618
      
 16,300
      
 16,300
      
 16,300
  
Less: Mortgage servicing rights
    
 7,995
      
 8,406
      
 8,769
      
 9,177
      
 9,407
  
Less: Core deposit intangible
    
 2,713
      
 2,813
      
 —
      
 —
      
 —
  
Tangible assets - Non-GAAP (d)
  
$
 6,318,555
    
$
 6,021,254
    
$
 5,810,474
    
$
 5,974,186
    
$
 6,086,769
  
                                         
Total stockholders' equity to total assets - GAAP (a/b)
    
 13.92
%
    
 14.52
%
    
 14.68
%
    
 14.05
%
    
 13.81
%
Tangible stockholders' equity to tangible assets - Non-GAAP (c/d)
    
 13.23
%
    
 13.77
%
    
 14.31
%
    
 13.69
%
    
 13.44
%
                                         
Number of shares outstanding (e)
    
 19,604
      
 19,758
      
 19,747
      
 19,747
      
 19,790
  
                                         
Book value per share - GAAP (a/e)
  
$
 45.24
    
$
 44.65
    
$
 43.38
    
$
 42.69
    
$
 42.64
  
Tangible book value per share - Non-GAAP (c/e)
    
 42.63
      
 41.98
      
 42.11
      
 41.40
      
 41.34
  

(5) The efficiency ratio, a non-GAAP measure with no GAAP comparable, equals total noninterest expense divided by the sum of net interest income and noninterest income. The ratio excludes material nonrecurring revenues and expenses related to the CBank merger, the now-cancelled TRS Transaction, the BOLI benefit payment received, as well as net gains (losses) on sales, calls, and impairment of investment securities.

                                                           
                                                           
   
Three Months Ended
    
Six Months Ended June 30, 2023
(dollars in thousands)
  
Jun. 30, 2023
  
Mar. 31, 2023
  
Dec. 31, 2022
  
Sep. 30, 2022
  
Jun. 30, 2022
    
Jun. 30, 2023
    
Jun. 30, 2022
                                                           
Net interest income - GAAP
  
$
 64,529
    
$
 92,642
    
$
 63,113
    
$
 58,597
    
$
 51,814
      
$
 157,171
    
$
 114,981
  
Noninterest income - GAAP
    
 19,651
      
 22,681
      
 13,124
      
 15,108
      
 30,569
        
 42,332
      
 61,578
  
Less: Contract termination fee related to TRS Transaction
    
 —
      
 —
      
 —
      
 —
      
 —
        
 —
      
 5,000
  
Less: Legal settlement related to TRS Transaction
    
 —
      
 —
      
 —
      
 —
      
 13,000
        
 —
      
 13,000
  
Less: BOLI benefit payment received
    
 1,728
      
 —
      
 —
      
 —
      
 —
        
 1,728
      
 —
  
Less: Net gain (loss) on securities
    
 3
      
 1
      
 1
      
 2
      
 (102)
        
 4
      
 (222)
  
Total adjusted income - Non-GAAP (a)
  
$
 82,449
    
$
 115,322
    
$
 76,236
    
$
 73,703
    
$
 69,485
      
$
 197,771
    
$
 158,781
  
                                                           
                                                           
Noninterest expense - GAAP
  
$
 51,533
    
$
 52,443
    
$
 44,905
    
$
 46,166
    
$
 47,656
      
$
 103,976
    
$
 96,237
  
Less: Expenses related to CBank acquisition
    
 127
      
 2,073
                                            
Less: Expenses related to TRS Transaction
    
 —
      
 —
      
 —
      
 88
      
 699
        
 —
      
 699
  
Adjusted noninterest expense - Non-GAAP (b)
  
$
 51,406
    
$
 50,370
    
$
 44,905
    
$
 46,078
    
$
 46,957
      
$
 103,976
    
$
 95,538
  
                                                           
Efficiency Ratio - Non-GAAP (b/a)
    
 62
%
    
 44
%
    
 59
%
    
 63
%
    
 68
%
      
 53
%
    
 60
%
                                                           

(6) The cost of average deposits ratio equals annualized total interest expense on deposits divided by total average interest-bearing deposits plus total average noninterest-bearing deposits.
 
(7) FTEs – Full-time-equivalent employees.
 
(8) Quarter (“Q”) to Quarter changes compare the most recent quarter or quarter end to the same quarter or quarter end of a year prior. Year-to-date changes compare the most recent period or period end to the same period or period end of a year prior. Year-to-date changes are expressed as either 3M to 3M  (three months), 6M to 6M (six months), 9M to 9M (nine months), or 12M to 12M (twelve months).

(9) The delinquent loans to total loans ratio equals loans 30-days-or-more past due divided by total loans. Depending on loan class, loan delinquency is determined by the number of days or the number of payments past due. Delinquent loans as of June 30, 2023, included $0 of Refund Advances (“RA”), which do not have a contractual due date, but the Company considered an RA delinquent in 2023 if it remained unpaid 35 days after the taxpayer’s tax return was submitted to the applicable taxing authority.

S-11
NM – Not meaningful

NA – Not applicable

YTD – Year to date

CONTACT:
Republic Bancorp, Inc.
Kevin Sipes
Executive Vice President & Chief Financial Officer
(502) 560-8628

S-12
v3.23.2
Document and Entity Information
Jul. 21, 2023
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Jul. 21, 2023
Entity Registrant Name REPUBLIC BANCORP, INC.
Entity Incorporation, State or Country Code KY
Entity File Number 0-24649
Entity Tax Identification Number 61-0862051
Entity Address, Address Line One 601 West Market Street
Entity Address, City or Town Louisville
Entity Address, State or Province KY
Entity Address, Postal Zip Code 40202
City Area Code 502
Local Phone Number 584-3600
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000921557
Title of 12(b) Security Class A Common
Trading Symbol RBCAA
Security Exchange Name NASDAQ
Republic Bancorp (NASDAQ:RBCAA)
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From Jun 2024 to Jul 2024 Click Here for more Republic Bancorp Charts.
Republic Bancorp (NASDAQ:RBCAA)
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From Jul 2023 to Jul 2024 Click Here for more Republic Bancorp Charts.