Republic Bancorp, Inc. Reports Fourth Quarter 2024 Net Income of $19.0 Million and Full Year Net Income of $101.4 million
Logan Pichel, President & CEO of Republic Bank & Trust Company commented, “We are pleased to report another strong performance for the fourth quarter, particularly within our Core Bank, as its net income increased
In addition to our solid Core Bank net interest income, credit quality continued to remain solid at the Core Bank. The Core Bank’s net charge-offs to average loans was
Net income from our Republic Processing Group (“RPG”) declined
Based on the prior tax season economics, during the fourth quarter of 2024 we revised our agreement with our largest third-party marketer-servicer for Refund Advances (“RAs”) and ERAs for the current tax filing season beginning in December 2024. Under this revised agreement:
- we received a loss cap guarantee specific to ERAs for the current tax filing season;
- we will receive an enhanced fee specific to ERAs for the current tax filing season; and
- we will receive a reduced fee applicable to in-season RAs for the current tax filing season.
We are pleased with this new arrangement as we believe it provides better alignment between the economics and the downside risk to the Company. We estimate the revised contract will provide approximately
We continued to add additional on-balance-sheet liquidity during the year with our Total Company period-end deposits, excluding wholesale brokered deposits, growing by a net
In regards to our total year, we had many notable highlights for the year. These highlights include the following:
-
Increased Total Company Net Income for 2024 by
$11.0 million 12% , over 2023. -
Generated a one-year total return on our stock of
30.3% in 2024 versus a total return of20.6% for the NASDAQ Bank Index during the same period. Additionally, Republic generated a two-year total return of81.5% as of December 31, 2024 compared to the NASDAQ Bank Index of16.4% for the same period. We are very proud of the recognition the market has given us through the performance of our stock price. -
Continued to drive strong performance for the Total Company through our diversified business model as three of our five business segments reported an increase in net income for the year. These increases included:
-
Traditional Banking reported net income of
$56.4 million $9.7 million 21% , increase in net income over 2023. -
Warehouse Lending reported net income of
$6.5 million $1.8 million 37% , increase in net income over 2023. -
Republic Credit Solutions (“RCS”) reported net income of
$23.5 million $5.2 million 28% , increase in net income over 2023.
-
Traditional Banking reported net income of
-
Grew December 31, 2024 Traditional Bank period-end deposits, excluding wholesale brokered deposits,
5% over December 31, 2023 period-end balances. -
Managed expenses prudently with Total Company non-interest expenses increasing
1.7% from 2023, while our Core Bank noninterest expenses increased just0.7% for the same time period. -
Achieved a Total Company efficiency ratio, which measures the amount of noninterest expense it takes to generate
one dollar of net revenue, of52.68% , a 267-basis-point positive decrease from the55.35% result for 2023. -
Increased our 2024 Total Company operating leverage, which measures the growth of revenue to the growth of noninterest expense, by
5% over 2023. -
Maintained industry-strong credit quality with Core Bank net charge-offs for the year of
0.05% . - Our Net Promoter Score (“NPS”) increased from 38 in 1st quarter 2023 to 75 in 3rd quarter 2024. Our score of 75 is three times (3x) the Banking Industry average. A score of 80 is considered World Class, and we have our sights set on achieving this lofty score.
2024 was a year in which we made continuous enhancements to our client experiences, saw a marked improvement in our client satisfaction scores, generated strong financial results, and enjoyed tremendous stockholder returns. Without the strong support of our shareholders, our clients and our associates, our success would not be possible. We do not take this support for granted and we will continue to do our absolute best to earn your loyalty each and every day,” Pichel concluded.
The following table highlights Republic’s key metrics for the three months ended December 31, 2024 and 2023. 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 January 24, 2025.
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Total Company Financial Performance Highlights |
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Three Months Ended Dec. 31, |
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$ |
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% |
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Years Ended Dec. 31, |
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$ |
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% |
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(dollars in thousands, except per share data) |
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2024 |
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2023 |
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Change |
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Change |
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2024 |
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2023 |
|
Change |
|
Change |
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Income Before Income Tax Expense |
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$ |
23,050 |
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$ |
23,519 |
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$ |
(469 |
) |
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(2) |
% |
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$ |
127,703 |
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$ |
113,213 |
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$ |
14,490 |
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13 |
% |
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Net Income |
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19,016 |
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19,659 |
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(643 |
) |
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(3) |
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101,371 |
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90,374 |
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10,997 |
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12 |
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Diluted EPS |
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0.98 |
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1.01 |
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(0.03 |
) |
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(3) |
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5.21 |
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4.62 |
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0.59 |
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13 |
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Return on Average Assets ("ROA") |
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1.10 |
% |
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1.21 |
% |
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NA |
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(9) |
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1.47 |
% |
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1.44 |
% |
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NA |
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2 |
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Return on Average Equity ("ROE") |
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7.63 |
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8.68 |
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NA |
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(12) |
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10.50 |
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10.10 |
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NA |
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4 |
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NA – Not applicable |
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Results of Operations for the Fourth quarter of 2024 Compared to the Fourth quarter of 2023
Core Bank(1)
Net income for the Core Bank was
Net Interest Income – Core Bank net interest income was
The Core Bank’s NIM increased from
Specific items of note impacting the Core Bank’s change in net interest income and NIM between the fourth quarter of 2023 and the fourth quarter of 2024 were as follows:
-
Average outstanding Warehouse balances increased from
$370 million $552 million $1.0 billion $942 million 37% during the fourth quarter of 2023 to59% for the fourth quarter of 2024. -
Traditional Bank average loans grew from
$4.56 billion 5.32% during the fourth quarter of 2023 to$4.57 billion 5.57% during the fourth quarter of 2024. Average Loans for the fourth quarter of 2024 were negatively impacted by the sale in early 2024 of$67 million -
Average interest-earning cash was
$584 million 4.81% during the fourth quarter of 2024 compared to$201 million 5.45% for the fourth quarter of 2023. During the first nine months of 2024, the Company maintained higher cash balances due to the inverted yield curve and the more attractive pricing for interest-earning cash as compared to longer-term securities. While the yield curve began to steepen during the fourth quarter of 2024, the Company continued to maintain higher cash balances during the quarter, in general, due to near-term funding requirements for tax loans related to the upcoming first quarter 2025 tax season. -
Average investments were
$595 million 3.16% during the fourth quarter of 2024 compared to$769 million 3.02% for the fourth quarter of 2023. As noted in the paragraph above, the Company generally deployed its proceeds from maturing investments during 2024 into interest-earning cash for better yield and near-term liquidity needs. -
As it relates to the Core Bank’s total dollar increase for its cost of interest-bearing liabilities:
-
The weighted-average cost of total interest-bearing deposits increased from
2.36% during the fourth quarter of 2023 to2.43% for the fourth quarter of 2024, while average interest-bearing deposit balances grew$410 million $309 million -
The average balance of FHLB borrowings increased from
$357 million $371 million 4.62% to4.34% for the same time periods. The decrease in the overall weighted-average cost of FHLB borrowings resulted from previous term-extension strategies implemented earlier in 2024 to take advantage of the then-inverted yield curve.
-
The weighted-average cost of total interest-bearing deposits increased from
-
Average noninterest-bearing deposits decreased
$68 million
The following tables present by reportable segment the overall changes in the Core Bank’s net interest income, net interest margin, as well as average and period-end loan balances:
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Net Interest Income |
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Net Interest Margin |
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(dollars in thousands) |
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Three Months Ended Dec. 31, |
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Three Months Ended Dec. 31, |
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Reportable Segment |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
|
Change |
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Traditional Banking |
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$ |
53,942 |
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$ |
48,394 |
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$ |
5,548 |
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3.73 |
% |
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3.47 |
% |
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0.26 |
% |
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Warehouse Lending |
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3,718 |
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|
2,251 |
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1,467 |
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2.68 |
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2.41 |
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0.27 |
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Total Core Bank |
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$ |
57,660 |
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$ |
50,645 |
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$ |
7,015 |
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3.64 |
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3.40 |
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0.24 |
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Average Loan Balances |
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Period-End Loan Balances |
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(dollars in thousands) |
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Three Months Ended Dec. 31, |
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Dec. 31, |
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Dec. 31, |
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Reportable Segment |
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2024 |
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2023 |
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$ Change |
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% Change |
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2024 |
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2023 |
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$ Change |
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% Change |
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Traditional Banking |
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$ |
4,569,224 |
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$ |
4,560,572 |
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$ |
8,652 |
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0 |
% |
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$ |
4,569,179 |
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$ |
4,618,569 |
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$ |
(49,390 |
) |
(1 |
)% |
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Warehouse Lending |
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|
552,856 |
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|
370,169 |
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|
182,687 |
|
49 |
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550,760 |
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|
339,723 |
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|
211,037 |
|
62 |
|
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Total Core Bank |
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$ |
5,122,080 |
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$ |
4,930,741 |
|
$ |
191,339 |
|
4 |
|
|
|
$ |
5,119,939 |
|
$ |
4,958,292 |
|
$ |
161,647 |
|
3 |
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Provision for Expected Credit Loss Expense – The Core Bank’s Provision was a net charge of
The net charge of
-
The Core Bank recorded a net charge to the Provision of
$277,000 -
The Core Bank recorded a net charge to the Provision of
$270,000 $2 million -
The Core Bank recorded a net credit to the Provision of
$112,000 $44 million
The net charge during the fourth quarter of 2023 was primarily driven by the following:
-
The Core Bank recorded a net charge to the Provision of
$2.1 million $123 million -
The Core Bank recorded a net credit to the Provision of
$296,000 $118 million
As a percentage of total loans, the Core Bank’s Allowance(2) decreased 2 basis points from December 31, 2023 to December 31, 2024, driven by a change in loan mix toward loans with lower overall reserve requirements. The table below provides a view of the Company’s percentage of Allowance-to-total-loans by reportable segment.
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As of Dec. 31, 2024 |
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As of Dec. 31, 2023 |
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Year-over-Year Change |
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(dollars in thousands) |
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|
|
Allowance |
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|
Allowance |
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|
Allowance |
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Reportable Segment |
|
Gross Loans |
|
Allowance |
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to Loans |
|
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Gross Loans |
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Allowance |
|
to Loans |
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to Loans |
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% Change |
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Traditional Bank |
|
$ |
4,569,179 |
|
$ |
59,756 |
1.31 |
% |
|
$ |
4,618,569 |
|
$ |
58,998 |
1.28 |
% |
|
0.03 |
% |
2 |
% |
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Warehouse Lending |
|
|
550,760 |
|
|
1,374 |
|
0.25 |
|
|
|
|
339,723 |
|
|
847 |
|
0.25 |
|
|
|
— |
|
|
— |
|
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Total Core Bank |
|
|
5,119,939 |
|
|
61,130 |
|
1.19 |
|
|
|
|
4,958,292 |
|
|
59,845 |
|
1.21 |
|
|
|
(0.02 |
) |
|
(2 |
) |
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|
|
|
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|
|
Tax Refund Solutions |
|
|
190,794 |
|
|
9,861 |
|
5.17 |
|
|
|
|
149,207 |
|
|
3,990 |
|
2.67 |
|
|
|
2.50 |
|
|
94 |
|
|
Republic Credit Solutions |
|
|
128,733 |
|
|
20,987 |
|
16.30 |
|
|
|
|
132,362 |
|
|
18,295 |
|
13.82 |
|
|
|
2.48 |
|
|
18 |
|
|
Total Republic Processing Group |
|
|
319,527 |
|
|
30,848 |
|
9.65 |
|
|
|
|
281,569 |
|
|
22,285 |
|
7.91 |
|
|
|
1.74 |
|
|
22 |
|
|
|
|
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Total Company |
|
$ |
5,439,466 |
|
$ |
91,978 |
1.69 |
% |
|
$ |
5,239,861 |
|
$ |
82,130 |
1.57 |
% |
|
0.12 |
% |
8 |
% |
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ACLL Roll-Forward |
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Three Months Ended December 31, |
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2024 |
|
2023 |
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(dollars in thousands) |
|
Beginning |
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|
Charge- |
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Ending |
|
Beginning |
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|
Charge- |
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Ending |
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Reportable Segment |
|
Balance |
|
Provision |
|
offs |
|
Recoveries |
|
Balance |
|
Balance |
|
Provision |
|
offs |
|
Recoveries |
|
Balance |
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|
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Traditional Bank |
|
$ |
59,549 |
|
$ |
484 |
|
|
$ |
(441 |
) |
|
$ |
164 |
|
$ |
59,756 |
|
$ |
56,931 |
|
$ |
2,287 |
|
|
$ |
(449 |
) |
|
$ |
229 |
|
$ |
58,998 |
Warehouse Lending |
|
|
1,486 |
|
|
(112 |
) |
|
|
— |
|
|
|
— |
|
|
1,374 |
|
|
1,143 |
|
|
(296 |
) |
|
|
— |
|
|
|
— |
|
|
847 |
Total Core Bank |
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|
61,035 |
|
|
372 |
|
|
|
(441 |
) |
|
|
164 |
|
|
61,130 |
|
|
58,074 |
|
|
1,991 |
|
|
|
(449 |
) |
|
|
229 |
|
|
59,845 |
|
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|
||||
Tax Refund Solutions |
|
|
1 |
|
|
7,701 |
|
|
|
— |
|
|
|
2,159 |
|
|
9,861 |
|
|
1 |
|
|
2,937 |
|
|
|
— |
|
|
|
1,052 |
|
|
3,990 |
Republic Credit Solutions |
|
|
21,122 |
|
|
4,883 |
|
|
|
(5,357 |
) |
|
|
339 |
|
|
20,987 |
|
|
16,501 |
|
|
6,061 |
|
|
|
(4,453 |
) |
|
|
186 |
|
|
18,295 |
Total Republic Processing Group |
|
|
21,123 |
|
|
12,584 |
|
|
|
(5,357 |
) |
|
|
2,498 |
|
|
30,848 |
|
|
16,502 |
|
|
8,998 |
|
|
|
(4,453 |
) |
|
|
1,238 |
|
|
22,285 |
|
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|
||||
Total Company |
|
$ |
82,158 |
|
$ |
12,956 |
|
|
$ |
(5,798 |
) |
|
$ |
2,662 |
|
$ |
91,978 |
|
$ |
74,576 |
|
$ |
10,989 |
|
|
$ |
(4,902 |
) |
|
$ |
1,467 |
|
$ |
82,130 |
|
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|
||||
The table below presents the Core Bank’s credit quality metrics:
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|
|
As of and for the: |
|||||||||||||
|
Quarters Ended: |
Years Ended: |
||||||||||||
|
Dec. 31, |
|
Sep. 30, |
|
Jun. 30, |
|
Mar. 31, |
|
Dec. 31, |
Dec. 31, |
Dec. 31, |
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Core Banking Credit Quality Ratios |
2024 |
2024 |
2024 |
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2023 |
2024 |
2023 |
2022 |
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Nonperforming loans to total loans |
0.44 |
% |
0.38 |
% |
0.39 |
% |
0.38 |
% |
0.44 |
% |
0.39 |
% |
0.37 |
% |
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Nonperforming assets to total loans (including OREO) |
0.46 |
|
0.40 |
|
0.41 |
|
0.41 |
|
0.46 |
|
0.41 |
|
0.40 |
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Delinquent loans* to total loans |
0.20 |
|
0.19 |
|
0.18 |
|
0.15 |
|
0.20 |
|
0.16 |
|
0.14 |
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Net charge-offs to average loans |
0.02 |
|
0.14 |
|
0.02 |
|
0.01 |
|
0.05 |
|
0.01 |
|
0.00 |
|
(Quarterly rates annualized) |
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OREO = Other Real Estate Owned |
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*Loans 30-days-or-more past due at the time the second contractual payment is past due. |
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Noninterest Income – Core Bank noninterest income slightly decreased by
Noninterest Expense – The Core Bank’s noninterest expenses were
-
Salaries and benefits increased
$4.6 million $3.9 million $342,000 $3.6 million
The net credit during the fourth quarter of 2023 adjusted the liability for accrued bonuses to be in-line with lower expected payouts related to the 2023 calendar year. Conversely, the higher net charge during the fourth quarter of 2024 adjusted the liability for accrued bonuses to be in-line with greater payouts related to the 2024 calendar year as the Company’s second half results allowed it to reach higher full-year 2024 payout targets than previously projected earlier in the year.
Republic Processing Group(3)
RPG reported net income of
Tax Refund Solutions
TRS experienced a net loss of
Altogether, TRS originated
Republic Payment Solutions
Net income at RPS was
Republic Credit Solutions
Net income at RCS increased
Republic Bancorp, Inc. (the “Company”) is the parent company of Republic Bank & Trust Company (the “Bank”). The Bank currently has 47 banking centers in communities within five metropolitan statistical areas (“MSAs”) across five states: 22 banking centers located within the Louisville MSA in
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, future loan fees to be earned, and future loan losses, related to ERAs and RAs originated through the Company’s largest marketer-servicer within TRS; the ability of the Company to enforce the loss cap guarantee related to ERAs from its largest marketer-servicer within TRS; 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
Footnotes:
| (1) | “Core Bank” or “Core Banking” operations consist of the Traditional Banking and Warehouse Lending segments. |
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| (2) | Provision – Provision for Expected Credit Loss Expense Allowance – Allowance for Credit Losses on Loans |
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| (3) | Republic Processing Group operations consist of the TRS, RPS, and RCS segments. |
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| NM – Not meaningful | ||
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| NA – Not applicable | ||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250124606677/en/
Republic Bancorp, Inc.
Kevin Sipes
Executive Vice President & Chief Financial Officer
(502) 560-8628
Source: Republic Bancorp, Inc.
