Republic Bancorp, Inc. Reports Third Quarter 2024 Net Income of $26.5 Million, a 23% Increase Over the Third Quarter of 2023
Logan Pichel, President & CEO of the Republic Bank & Trust Company commented, “We are proud to report another strong performance for the third quarter. Our third quarter results reflect our on-going strategic initiatives to enhance revenue, while maintaining our expense discipline. Our success is particularly evident within our Core Bank, as our net interest margin (“NIM”) showed a marked expansion over the third quarter of 2023, while our total noninterest expenses were flat from the same period. Additionally, the diversification of our business segments remained a key component to our long-term strategy and our current success. Overall, four of our five reportable business segments produced solid increases in net income for the third quarter of 2024 versus the third quarter of 2023.
The Company’s balance sheet during the quarter continued to trend in a positive direction. Deposits grew by
We believe we are well-positioned to finish the year on a high note, as our capital levels remain strong, and our credit quality remains favorable. While we are proud of our past results, we remain optimistic about our future, given the strength of our balance sheet. We are focused on our mission of creating lasting value for our clients, our shareholders, our associates, and the communities we serve.” Pichel concluded.
The following table highlights Republic’s key metrics for the three months ended September 30, 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 October 18, 2024.
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Total Company Financial Performance Highlights |
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Three Months Ended Sep. 30, |
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Nine Months Ended Sep. 30, |
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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 |
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$ Change |
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% Change |
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Income Before Income Tax Expense |
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$ |
33,849 |
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$ |
27,072 |
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$ |
6,777 |
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25 |
% |
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$ |
104,653 |
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$ |
89,694 |
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$ |
14,959 |
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17 |
% |
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Net Income |
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26,543 |
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21,571 |
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4,972 |
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23 |
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82,355 |
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70,715 |
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11,640 |
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17 |
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Diluted EPS |
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1.37 |
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1.10 |
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0.27 |
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25 |
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4.24 |
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3.60 |
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0.64 |
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18 |
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Return on Average Assets ("ROA") |
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1.58 |
% |
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1.36 |
% |
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NA |
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16 |
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1.60 |
% |
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1.51 |
% |
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NA |
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6 |
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Return on Average Equity ("ROE") |
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10.88 |
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9.61 |
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NA |
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13 |
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11.53 |
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10.58 |
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NA |
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9 |
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NA – Not applicable |
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Results of Operations for the Third Quarter of 2024 Compared to the Third 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 third quarter of 2023 and the third quarter of 2024 were as follows:
-
Average outstanding Warehouse balances increased from
$423 million $528 million $1.0 billion $902 million 42% during the third quarter of 2023 to56% for the third quarter of 2024. -
Traditional Bank average loans grew from
$4.4 billion 5.23% during the third quarter of 2023 to$4.6 billion 5.63% during the third quarter of 2024. In general, the growth in average loan balances was primarily attributable to loan growth achieved during the last three months of 2023, as the spot balances for Traditional Bank loans decreased$52 million 1% , from December 31, 2023 to September 30, 2024. -
Average interest-earning cash, which is managed as a separate but complementary component of the Company’s overall investment portfolio, was
$458 million 5.36% during the third quarter of 2024 compared to$178 million 5.38% for the third quarter of 2023.
The increase in average interest-earning cash was a strategic decision primarily resulting from the inverted yield curve as the yield for overnight cash remained a more appealing option throughout the first nine months of 2024 than longer-term investment alternatives. Additionally, management also chose to maintain supplemental on-balance sheet liquidity during the first nine months of the year, above required minimums, in response to the uncertainty of the economic environment. -
Average investments were
$593 million 3.20% during the third quarter of 2024 compared to$771 million 2.75% for the third quarter of 2023. As noted above, the more attractive yield for cash generally led to a decrease in the Core Bank’s average investments throughout 2024. Overall, the Core Bank continued to maintain an investment portfolio with a short overall duration as part of its total balance sheet interest rate risk management strategy. -
Further segmenting the Core Bank’s increased cost of interest-bearing liabilities:
-
The weighted-average cost of total interest-bearing deposits increased from
2.08% during the third quarter of 2023 to2.77% for the third quarter of 2024, while average interest-bearing deposits grew$510 million $145 million -
The average balance of FHLB borrowings decreased from
$442 million $388 million 4.85% to4.41% for the same time periods. The decrease in the average balance of borrowings was driven primarily by the above noted growth in period-to-period average interest-bearing deposits, while the decrease in the overall weighted-average cost of FHLB borrowings resulted from term-extension strategies to take advantage of the inverted yield curve.
-
The weighted-average cost of total interest-bearing deposits increased from
-
Average noninterest-bearing deposits decreased
$176 million
The following tables present by reportable segment the overall changes in the Core Bank’s net interest income, net interest margin, as well as average and period-end loan balances:
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Net Interest Income |
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Net Interest Margin |
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(dollars in thousands) |
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Three Months Ended Sep. 30, |
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Three Months Ended Sep. 30, |
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Reportable Segment |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
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Change |
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Traditional Banking |
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$ |
51,023 |
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$ |
47,493 |
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$ |
3,530 |
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3.61 |
% |
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3.52 |
% |
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0.09 |
% |
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Warehouse Lending |
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3,580 |
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2,467 |
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1,113 |
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2.70 |
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2.33 |
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0.37 |
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Total Core Bank |
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$ |
54,603 |
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$ |
49,960 |
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$ |
4,643 |
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3.53 |
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3.43 |
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0.10 |
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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 Sep. 30, |
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Sep. 30, |
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Sep. 30, |
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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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$ |
4,579,371 |
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$ |
4,446,585 |
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$ |
132,786 |
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3 |
% |
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$ |
4,566,896 |
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$ |
4,496,743 |
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$ |
70,153 |
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2 |
% |
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Warehouse Lending |
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528,363 |
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423,141 |
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105,222 |
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25 |
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595,163 |
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457,033 |
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138,130 |
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30 |
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Total Core Bank |
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$ |
5,107,734 |
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$ |
4,869,726 |
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$ |
238,008 |
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5 |
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$ |
5,162,059 |
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$ |
4,953,776 |
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$ |
208,283 |
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4 |
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Provision for Expected Credit Loss Expense – The Core Bank’s Provision (2) was a net charge of
The net charge of
-
The Core Bank recorded a net credit to the Provision of
$442,000 $22 million -
The Core Bank recorded a loan loss Provision of
$1.9 million -
The Core Bank recorded a net charge to the Provision of
$116,000 $46 million
The net charge during the third quarter of 2023 was primarily driven by the following:
-
The Core Bank recorded a net charge to the Provision of
$1.6 million $101 million -
The Core Bank recorded a net credit to the Provision of
$203,000 $82 million
As a percentage of total loans, the Core Bank’s Allowance(2) increased 1 basis point from September 30, 2023 to September 30, 2024. The table below provides a view of the Company’s percentage of Allowance-to-total-loans by reportable segment.
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As of Sep. 30, 2024 |
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As of Sep. 30, 2023 |
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Year-over-Year Change |
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(dollars in thousands) |
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Allowance |
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Allowance |
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Allowance |
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Reportable Segment |
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Gross Loans |
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Allowance |
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to Loans |
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Gross Loans |
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Allowance |
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to Loans |
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to Loans |
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% Change |
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Traditional Bank |
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$ |
4,566,896 |
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$ |
59,549 |
1.30 |
% |
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$ |
4,496,743 |
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$ |
56,931 |
1.27 |
% |
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0.03 |
% |
2 |
% |
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Warehouse Lending |
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595,163 |
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|
1,486 |
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0.25 |
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|
457,033 |
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|
1,143 |
|
0.25 |
|
|
|
— |
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— |
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Total Core Bank |
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|
5,162,059 |
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|
61,035 |
|
1.18 |
|
|
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|
4,953,776 |
|
|
58,074 |
|
1.17 |
|
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|
0.01 |
|
|
1 |
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Tax Refund Solutions |
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|
302 |
|
|
1 |
|
0.33 |
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|
354 |
|
|
1 |
|
0.28 |
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|
0.05 |
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|
18 |
|
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Republic Credit Solutions |
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|
134,556 |
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|
21,122 |
|
15.70 |
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|
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|
126,969 |
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|
16,501 |
|
13.00 |
|
|
|
2.70 |
|
|
21 |
|
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Total Republic Processing Group |
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|
134,858 |
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|
21,123 |
|
15.66 |
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|
|
|
127,323 |
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|
16,502 |
|
12.96 |
|
|
|
2.70 |
|
|
21 |
|
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Total Company |
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$ |
5,296,917 |
|
$ |
82,158 |
1.55 |
% |
|
$ |
5,081,099 |
|
$ |
74,576 |
1.47 |
% |
|
0.08 |
% |
5 |
% |
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ACLL Roll-Forward |
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Three Months Ended September 30, |
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2024 |
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2023 |
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(dollars in thousands) |
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Beginning |
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Charge- |
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Ending |
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Beginning |
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Charge- |
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Ending |
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Reportable Segment |
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Balance |
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Provision |
|
offs |
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Recoveries |
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Balance |
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Balance |
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Provision |
|
offs |
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Recoveries |
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Balance |
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Traditional Bank |
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$ |
59,865 |
|
$ |
1,488 |
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$ |
(2,308 |
) |
|
$ |
504 |
|
$ |
59,549 |
|
$ |
55,567 |
|
$ |
1,567 |
|
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$ |
(332 |
) |
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$ |
129 |
|
$ |
56,931 |
Warehouse Lending |
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|
1,370 |
|
|
116 |
|
|
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— |
|
|
|
— |
|
|
1,486 |
|
|
1,346 |
|
|
(203 |
) |
|
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— |
|
|
|
— |
|
|
1,143 |
Total Core Bank |
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|
61,235 |
|
|
1,604 |
|
|
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(2,308 |
) |
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|
504 |
|
|
61,035 |
|
|
56,913 |
|
|
1,364 |
|
|
|
(332 |
) |
|
|
129 |
|
|
58,074 |
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Tax Refund Solutions |
|
|
— |
|
|
(2,310 |
) |
|
|
— |
|
|
|
2,311 |
|
|
1 |
|
|
— |
|
|
(1,967 |
) |
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|
— |
|
|
|
1,968 |
|
|
1 |
Republic Credit Solutions |
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|
19,452 |
|
|
6,365 |
|
|
|
(5,022 |
) |
|
|
327 |
|
|
21,122 |
|
|
15,289 |
|
|
4,333 |
|
|
|
(3,340 |
) |
|
|
219 |
|
|
16,501 |
Total Republic Processing Group |
|
|
19,452 |
|
|
4,055 |
|
|
|
(5,022 |
) |
|
|
2,638 |
|
|
21,123 |
|
|
15,289 |
|
|
2,366 |
|
|
|
(3,340 |
) |
|
|
2,187 |
|
|
16,502 |
|
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|
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||||
Total Company |
|
$ |
80,687 |
|
$ |
5,659 |
|
|
$ |
(7,330 |
) |
|
$ |
3,142 |
|
$ |
82,158 |
|
$ |
72,202 |
|
$ |
3,730 |
|
|
$ |
(3,672 |
) |
|
$ |
2,316 |
|
$ |
74,576 |
|
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||||
The table below presents the Core Bank’s credit quality metrics:
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Quarters Ended: |
Years Ended: |
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Sep. 30, |
Sep. 30, |
Dec. 31, |
Dec. 31, |
Dec. 31, |
|||||
Core Banking Credit Quality Ratios |
2024 |
2023 |
2023 |
2022 |
2021 |
|||||
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|
Nonperforming loans to total loans |
0.38 |
% |
0.37 |
% |
0.39 |
% |
0.37 |
% |
0.47 |
% |
|
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|
|
|
|
|
|
|
|
Nonperforming assets to total loans (including OREO) |
0.40 |
|
0.39 |
|
0.41 |
|
0.40 |
|
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
Delinquent loans* to total loans |
0.19 |
|
0.14 |
|
0.16 |
|
0.14 |
|
0.17 |
|
|
|
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|
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|
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|
|
|
|
Net charge-offs to average loans |
0.14 |
|
0.02 |
|
0.01 |
|
0.00 |
|
0.01 |
|
(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 increased
Noninterest Expense – The Core Bank’s noninterest expenses were essentially flat at
- Salaries and benefits were flat as a 41-count reduction in Core Bank FTEs from September 30, 2023 to September 30, 2024 was able to substantially offset the increase in salaries over the same periods resulting from annual merit increases.
-
Technology expenses declined
$358,000 $450,000
Republic Processing Group(3)
RPG reported net income of
Tax Refund Solutions
TRS recorded net income of
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, 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: |
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(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/20241018102681/en/
Republic Bancorp, Inc.
Kevin Sipes
Executive Vice President & Chief Financial Officer
(502) 560-8628
Source: Republic Bancorp, Inc.
