LOUISVILLE, Ky.--(BUSINESS WIRE)--Republic Bank & Trust Company ("Republic†or the "Bank†) is proud to announce the promotion of Emily Miller to Managing Director of Retail Banking. "Over the course of her tenure, Emily has embodied the values and standards of our organization and has consistently delivered outstanding results,†said Logan Pichel, President and CEO, Republic Bank. "Her leadership has consistently elevated her team's performance, fostered strong working relationships with he. ...

CINCINNATI--(BUSINESS WIRE)--Republic Bank & Trust Company ("Republic†or the "I'm excited to join Republic Bank and lead efforts in such vibrant and growing counties,†Etherington said. "Republic Bank's culture, community commitment, and client-centered approach align perfectly with my values. I look forward to serving our clients and helping businesses and families thrive.†Etherington will be based in Republic Bank's southwest Ohio market and will partner closely with local business, civic, and nonprofi ...

Core Viewpoint - Republic Bancorp (RBCAA) has been upgraded to a Zacks Rank 2 (Buy), reflecting an upward trend in earnings estimates, which significantly influences stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system tracks the Zacks Consensus Estimate, which is a measure of EPS estimates from sell-side analysts, for the current and following years [1]. - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [4]. - Institutional investors utilize earnings estimates to calculate the fair value of a company's shares, leading to stock price movements based on their buying or selling activities [4]. Business Outlook for Republic Bancorp - The upgrade in rating suggests an improvement in Republic Bancorp's underlying business, which should lead to an increase in stock price as investors respond positively [5]. - The Zacks Consensus Estimate for Republic Bancorp is projected at $6.85 per share for the fiscal year ending December 2025, with a 2.7% increase in estimates over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Republic Bancorp's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Financial Performance - Total Company net income for Q3 2025 was $29.7 million, an increase of $3.2 million, or 12%, compared to Q3 2024 [298]. - Diluted EPS increased 11% to $1.52 for Q3 2025 compared to $1.37 for the same period in 2024 [298]. - Total Company net income for the first nine months of 2025 was $108.5 million, a $26.1 million, or 32%, increase from the same period in 2024 [357]. - Diluted EPS increased 32% to $5.55 for the first nine months of 2025 compared to $4.24 for the same period in 2024 [357]. - Net income increased by $4.2 million, or 24%, for the first nine months of 2025 compared to the same period in 2024 [364]. Net Interest Income - Total Company net interest income increased by $5.7 million, or 8%, to $77.0 million in Q3 2025 compared to $71.3 million in Q3 2024 [308]. - Traditional Bank net interest income rose by $6.4 million, or 13%, to $57.4 million in Q3 2025 from $51.0 million in Q3 2024, driven by growth in average interest-earning assets and NIM expansion [309]. - Net interest income for the third quarter of 2025 was $76,970 thousand, up from $71,305 thousand in the third quarter of 2024, representing an increase of 8.73% [325]. - Total Company net interest income was $255.9 million during the first nine months of 2025, an increase of $19.1 million, or 8%, from the first nine months of 2024 [368]. - Traditional Bank net interest income increased by $17.9 million, or 12%, to $167.1 million for the first nine months of 2025 [369]. Loan Performance and Provisions - The Bank maintains an Allowance for Credit Losses on Loans (ACLL) for expected credit losses, which is evaluated monthly and discussed quarterly with the Audit Committee and Board of Directors [227]. - Provision for loan losses was a net charge of $4.0 million in Q3 2025, down from a net charge of $6.4 million in Q3 2024 [311]. - The total provision for credit losses was a net charge of $2.0 million in Q3 2025, significantly lower than the $5.7 million charge in Q3 2024, marking a decrease of 64.91% [329]. - The Traditional Banking segment recorded a net credit to the provision of $325,000 in Q3 2025, compared to a net charge of $1.5 million in Q3 2024, reflecting improved asset quality [330]. - The provision for credit losses decreased to $21.5 million in 2025 from $41.4 million in 2024, indicating a reduction of 48.00% [388]. Segment Performance - The Traditional Banking segment's performance is primarily driven by net interest income, which is the difference between interest income and fees on interest-earning assets and interest expense on interest-bearing liabilities [238]. - Traditional Banking segment net income increased $2.3 million, or 15%, from Q3 2024 to Q3 2025 [303]. - Republic Payment Solutions segment reported a decrease in noninterest income of $576,000, or 5%, from Q3 2024 to Q3 2025 [303]. - Republic Credit Solutions segment net income increased $72,000 from Q3 2024 to Q3 2025 [304]. - Tax Refund Solutions segment's net interest income decreased by $2.0 million, or 6%, from the first nine months of 2024 to the first nine months of 2025 [376]. Asset and Deposit Growth - Total assets increased to $6,991,878 thousand as of September 30, 2025, compared to $6,711,818 thousand in the same period of 2024, reflecting a growth of 4.16% [325]. - Total Traditional Bank deposits increased $337 million, or 7%, from December 31, 2024, to $4.91 billion as of September 30, 2025 [360]. - Average interest-bearing deposit balances grew by $260 million, or 7%, while the weighted-average cost of these deposits decreased from 2.77% in Q3 2024 to 2.32% in Q3 2025 [315]. Credit Quality - The RCS allowance for credit losses (ACLL) was 17.59% as of September 30, 2025, up from 15.70% a year earlier, reflecting a shift towards higher risk loan categories [341]. - Nonperforming loans to total loans for the RCS segment was 0.12% as of September 30, 2025, compared to 0.11% as of December 31, 2024 [364]. - Delinquent loans to total loans for the RCS segment decreased to 7.69% as of September 30, 2025, from 8.00% as of December 31, 2024 [364]. Tax Refund Solutions - The Bank's Tax Refund Solutions segment generates most of its revenue during the first half of the year, with RT revenue recognized immediately after the taxpayer's refund is disbursed [269][272]. - The ERA loan product allows taxpayers to borrow funds as an advance of their tax refund, with a maximum advance amount of $6,500 for the 2024 Tax Season [273]. - Total ERA/RA origination volume for the 2025 tax filing season totaled $802 million, representing a $72 million, or 8%, decline from $874 million originated for the 2024 tax filing season [361]. - RA origination volume totaled $663 million during the first nine months of 2025, a decrease from $771 million in the same period of 2024 [364].

分组1 - Republic Bancorp reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.38 per share, and showing an increase from $1.37 per share a year ago, resulting in an earnings surprise of +10.14% [1] - The company posted revenues of $93.54 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.67%, and an increase from $88.12 million year-over-year [2] - Over the last four quarters, Republic Bancorp has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] 分组2 - The stock has underperformed the market, losing about 2.1% since the beginning of the year compared to the S&P 500's gain of 12.7% [3] - The current consensus EPS estimate for the coming quarter is $1.27 on $92 million in revenues, and for the current fiscal year, it is $6.67 on $408 million in revenues [7] - The Zacks Industry Rank for Banks - Southeast is currently in the top 29% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[Balance Sheet Data](index=2&type=section&id=BALANCE%20SHEET%20DATA) Republic Bancorp, Inc.'s balance sheet data for the third quarter of 2025 shows a slight increase in total assets and stockholders' equity compared to the previous quarter, while total deposits also saw a modest rise | Metric (in thousands) | Sep. 30, 2025 | Jun. 30, 2025 | Sep. 30, 2024 | | :-------------------- | :------------ | :------------ | :------------ | | Total assets | $7,014,919 | $6,970,917 | $6,692,470 | | Loans, net | $5,201,509 | $5,291,260 | $5,214,759 | | Total deposits | $5,338,345 | $5,317,239 | $5,101,696 | | Stockholders' equity | $1,084,520 | $1,060,106 | $979,705 | - Total assets increased by **$44.0 million (0.63%)** from June 30, 2025, to September 30, 2025, and by **$322.4 million (4.82%)** year-over-year from September 30, 2024[4](index=4&type=chunk) - Total deposits increased by **$21.1 million (0.40%)** from June 30, 2025, to September 30, 2025, and by **$236.6 million (4.64%)** year-over-year from September 30, 2024[4](index=4&type=chunk) [Average Balance Sheet Data](index=3&type=section&id=AVERAGE%20BALANCE%20SHEET%20DATA) The average balance sheet data for the third quarter of 2025 shows a slight decrease in total average assets and interest-earning assets compared to the previous quarter, but an increase year-over-year | Metric (in thousands) | Three Months Ended Sep. 30, 2025 | Three Months Ended Jun. 30, 2025 | Three Months Ended Sep. 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total assets | $6,991,878 | $7,062,031 | $6,711,818 | | Total interest-earning assets | $6,564,354 | $6,627,798 | $6,312,419 | | Total interest-bearing liabilities | $4,524,343 | $4,538,969 | $4,281,727 | - Average total assets decreased by **$70.2 million (1.0%)** quarter-over-quarter but increased by **$280.1 million (4.2%)** year-over-year[6](index=6&type=chunk) - Average total interest-earning assets decreased by **$63.4 million (1.0%)** quarter-over-quarter but increased by **$251.9 million (4.0%)** year-over-year[6](index=6&type=chunk) [Total Company Average Balance Sheets and Interest Rates](index=4&type=section&id=TOTAL%20COMPANY%20AVERAGE%20BALANCE%20SHEETS%20AND%20INTEREST%20RATES) For the three months ended September 30, 2025, Republic Bancorp reported an increase in net interest income and net interest margin compared to the same period in 2024, driven by higher yields on investment securities and traditional bank loans | Metric | Three Months Ended Sep. 30, 2025 | Three Months Ended Sep. 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net interest income (in thousands) | $76,970 | $71,305 | | Net interest spread | 3.94 % | 3.59 % | | Net interest margin | 4.65 % | 4.49 % | | Average Rate - Total interest-earning assets | 6.24 % | 6.40 % | | Average Rate - Total interest-bearing liabilities | 2.30 % | 2.81 % | - Net interest income increased by **$5.665 million (7.9%)** year-over-year[7](index=7&type=chunk) - Net interest margin improved by **0.16 percentage points** year-over-year, reaching **4.65%**[7](index=7&type=chunk) - The average rate on total interest-earning assets decreased from **6.40% to 6.24%** year-over-year, while the cost of average interest-bearing liabilities decreased from **2.81% to 2.30%** year-over-year[7](index=7&type=chunk) [Income Statement Data](index=5&type=section&id=INCOME%20STATEMENT%20DATA) Republic Bancorp's Q3 2025 income statement shows a slight quarter-over-quarter net income decrease but a significant year-over-year increase, driven by improved net interest income and year-to-date noninterest income growth | Metric (in thousands) | Three Months Ended Sep. 30, 2025 | Three Months Ended Jun. 30, 2025 | Three Months Ended Sep. 30, 2024 | Nine Months Ended Sep. 30, 2025 | Nine Months Ended Sep. 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Total interest income | $103,239 | $102,203 | $101,546 | $335,280 | $329,878 | | Total interest expense | $26,269 | $26,001 | $30,241 | $79,420 | $93,118 | | Net interest income | $76,970 | $76,202 | $71,305 | $255,860 | $236,760 | | Total noninterest income | $16,568 | $17,644 | $16,813 | $67,366 | $58,532 | | Total noninterest expense | $53,753 | $51,633 | $48,609 | $163,594 | $149,214 | | Net income | $29,744 | $31,484 | $26,543 | $108,496 | $82,355 | - Net income for Q3 2025 was **$29.744 million**, a decrease from **$31.484 million** in Q2 2025, but an increase from **$26.543 million** in Q3 2024[10](index=10&type=chunk) - Year-to-date net income for Sep 30, 2025, was **$108.496 million**, a significant increase from **$82.355 million** for the same period in 2024[10](index=10&type=chunk) - Provision for expected credit loss expense decreased significantly year-to-date, from **$41.425 million** in 2024 to **$21.518 million** in 2025[10](index=10&type=chunk) [Selected Data and Ratios](index=6&type=section&id=SELECTED%20DATA%20AND%20RATIOS) Republic Bancorp's selected data and ratios for Q3 2025 indicate improved profitability and capital adequacy year-over-year, with higher book value per share and return on average assets, despite a slight increase in the efficiency ratio quarter-over-quarter [Per Share Data](index=6&type=section&id=Per%20Share%20Data) Book value per share and tangible book value per share continued to increase, reflecting growth in stockholders' equity, while basic and diluted EPS for Class A Common Stock showed a decrease quarter-over-quarter but a strong increase year-to-date | Metric | Sep. 30, 2025 | Jun. 30, 2025 | Sep. 30, 2024 | Sep. 30, 2025 (YTD) | Sep. 30, 2024 (YTD) | | :-------------------------- | :------------ | :------------ | :------------ | :------------------ | :------------------ | | Book value per share | $55.51 | $54.29 | $50.39 | $55.51 | $50.39 | | Tangible book value per share | $53.01 | $51.78 | $47.84 | $53.01 | $47.84 | | Basic EPS - Class A Common Stock | $1.53 | $1.62 | $1.37 | $5.57 | $4.25 | | Diluted EPS - Class A Common Stock | $1.52 | $1.61 | $1.37 | $5.55 | $4.24 | | Cash dividends declared per Class A Common share | $0.451 | $0.451 | $0.407 | $1.353 | $1.221 | - Book value per share increased by **$1.22 (2.25%)** quarter-over-quarter and **$5.12 (10.16%)** year-over-year[11](index=11&type=chunk) - Basic EPS for Class A Common Stock decreased from **$1.62** in Q2 2025 to **$1.53** in Q3 2025, but the year-to-date figure increased from **$4.25** in 2024 to **$5.57** in 2025[11](index=11&type=chunk) [Performance Ratios](index=6&type=section&id=Performance%20Ratios) Key performance ratios show an improvement in profitability metrics year-over-year, with Return on Average Assets and Return on Average Equity increasing, while the efficiency ratio slightly increased quarter-over-quarter but improved year-to-date | Metric | Sep. 30, 2025 | Jun. 30, 2025 | Sep. 30, 2024 | Sep. 30, 2025 (YTD) | Sep. 30, 2024 (YTD) | | :----------------------------------- | :------------ | :------------ | :------------ | :------------------ | :------------------ | | Return on average assets | 1.69 % | 1.79 % | 1.58 % | 2.03 % | 1.60 % | | Return on average equity | 10.91 % | 11.96 % | 10.88 % | 13.77 % | 11.53 % | | Efficiency ratio | 57.4 % | 55.0 % | 55.2 % | 49.7 % | 50.5 % | | Net interest margin - Total Company | 4.65 % | 4.61 % | 4.49 % | 5.18 % | 4.92 % | - Return on average assets increased from **1.58%** in Q3 2024 to **1.69%** in Q3 2025, and year-to-date from **1.60% to 2.03%**[11](index=11&type=chunk) - The efficiency ratio for Q3 2025 was **57.4%**, an increase from **55.0%** in Q2 2025, but the year-to-date efficiency ratio improved from **50.5%** in 2024 to **49.7%** in 2025[11](index=11&type=chunk) [Other Information](index=6&type=section&id=Other%20Information) The company maintained a stable number of full-time equivalent employees (FTEs) and banking centers, indicating consistent operational infrastructure | Metric | Sep. 30, 2025 | Jun. 30, 2025 | Sep. 30, 2024 | | :-------------------------- | :------------ | :------------ | :------------ | | End of period FTEs - Total Company | 978 | 974 | 992 | | Number of full-service banking centers | 47 | 47 | 47 | - Total Company FTEs slightly increased quarter-over-quarter from **974 to 978**, but decreased from **992** year-over-year[11](index=11&type=chunk) [Loan Composition and Allowance for Credit Losses on Loans](index=7&type=section&id=LOAN%20COMPOSITION) Republic Bancorp's loan portfolio shows a slight decrease in total loans quarter-over-quarter, primarily driven by a reduction in Warehouse lines of credit and Republic Processing Group loans, while the Allowance for Credit Losses on Loans also decreased [Loan Composition](index=7&type=section&id=Loan%20Composition) Traditional Banking loans remained relatively stable, while Warehouse lines of credit decreased, and Republic Processing Group loans saw a significant reduction, particularly in Tax Refund Solutions, compared to previous quarters | Loan Category (in thousands) | Sep. 30, 2025 | Jun. 30, 2025 | Sep. 30, 2024 | | :--------------------------- | :------------ | :------------ | :------------ | | Total Traditional Banking | $4,558,306 | $4,582,152 | $4,566,896 | | Warehouse lines of credit | $609,826 | $671,773 | $595,163 | | Total Core Banking | $5,168,132 | $5,253,925 | $5,162,059 | | Total Republic Processing Group | $113,242 | $119,095 | $134,858 | | Total Loans - Total Company | $5,281,374 | $5,373,020 | $5,296,917 | - Total loans decreased by **$91.6 million (1.7%)** quarter-over-quarter and by **$15.5 million (0.3%)** year-over-year[12](index=12&type=chunk) - Warehouse lines of credit decreased by **$61.9 million (9.2%)** quarter-over-quarter[12](index=12&type=chunk) [Allowance for Credit Losses on Loans](index=7&type=section&id=Allowance%20for%20Credit%20Losses%20on%20Loans) The total allowance for credit losses decreased quarter-over-quarter and year-over-year, with the allowance to total loans ratio for the Total Company remaining relatively stable, while the Tax Refund Solutions segment showed significant fluctuations | Metric (in thousands) | Sep. 30, 2025 | Jun. 30, 2025 | Sep. 30, 2024 | | :-------------------- | :------------ | :------------ | :------------ | | Total Allowance - Total Company | $79,865 | $81,760 | $82,158 | | Allowance to Total Loans - Total Company | 1.51 % | 1.52 % | 1.55 % | | Allowance to Total Loans - Tax Refund Solutions | 0.34 % | — % | 0.33 % | | Allowance to Total Loans - Republic Credit Solutions | 17.59 % | 17.67 % | 15.70 % | - Total Allowance for Credit Losses decreased by **$1.895 million (2.3%)** quarter-over-quarter and by **$2.293 million (2.8%)** year-over-year[12](index=12&type=chunk) - The Allowance to Total Loans for the Total Company slightly decreased from **1.52% to 1.51%** quarter-over-quarter and from **1.55%** year-over-year[12](index=12&type=chunk) [Credit Quality Data and Ratios](index=8&type=section&id=CREDIT%20QUALITY%20DATA%20AND%20RATIOS) Republic Bancorp's credit quality data for Q3 2025 shows a slight increase in nonperforming assets and delinquent loans quarter-over-quarter for the Total Company, but a decrease in annualized net charge-offs year-to-date, with the Core Bank generally maintaining stable credit quality | Metric (in thousands) | Sep. 30, 2025 | Jun. 30, 2025 | Sep. 30, 2024 | Sep. 30, 2025 (YTD) | Sep. 30, 2024 (YTD) | | :-------------------- | :------------ | :------------ | :------------ | :------------------ | :------------------ | | Total nonperforming assets - Total Company | $22,955 | $22,696 | $20,757 | $22,955 | $20,757 | | Total delinquent loans - Total Company | $19,382 | $19,086 | $20,950 | $19,382 | $20,950 | | Total NCOs (recoveries) - Total Company | $3,918 | $26,366 | $4,188 | $33,631 | $41,402 | | Nonperforming loans to total loans - Total Company | 0.41 % | 0.40 % | 0.37 % | 0.41 % | 0.37 % | | Annualized NCOs (recoveries) to average loans - Total Company | 0.29 % | 1.99 % | 0.32 % | 0.84 % | 1.04 % | - Total nonperforming assets for the Total Company increased by **$259 thousand (1.1%)** quarter-over-quarter and by **$2.198 million (10.6%)** year-over-year[14](index=14&type=chunk) - Total delinquent loans for the Total Company increased by **$296 thousand (1.6%)** quarter-over-quarter but decreased by **$1.568 million (7.5%)** year-over-year[14](index=14&type=chunk) - Annualized Net Charge-offs (NCOs) to average loans for the Total Company decreased significantly year-to-date from **1.04%** in 2024 to **0.84%** in 2025[14](index=14&type=chunk) [Segment Data](index=9&type=section&id=SEGMENT%20DATA) Republic Bancorp operates through five reportable segments: Traditional Banking, Warehouse Lending, Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions, with performance evaluated based on income before tax expense [Reportable Segments Overview](index=9&type=section&id=Reportable%20Segments%20Overview) The company's segments are categorized into Core Banking and Republic Processing Group, each with distinct operations and primary revenue drivers - Core Banking includes Traditional Banking (traditional products, net interest income) and Warehouse Lending (short-term revolving credit, net interest income)[18](index=18&type=chunk) - Republic Processing Group includes Tax Refund Solutions (tax-related credit, net interest income and net refund transfer fees), Republic Payment Solutions (general-purpose reloadable cards, net interest income and program fees), and Republic Credit Solutions (consumer credit products, net interest income and program fees)[18](index=18&type=chunk) - Management considers Traditional Banking and Warehouse Lending as 'Core Bank' operations, while Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions constitute 'Republic Processing Group' operations[16](index=16&type=chunk) [Segment Performance - Three Months Ended September 30, 2025](index=10&type=section&id=Segment%20Performance%20-%20Three%20Months%20Ended%20September%2030%2C%202025) For Q3 2025, Core Banking contributed the majority of net interest income and income before tax, with Republic Credit Solutions also showing significant contributions within the Republic Processing Group | Segment (in thousands) | Net interest income | Provision for expected credit loss expense | Income before income tax expense | Net income | Net-revenue concentration | | :--------------------- | :------------------ | :----------------------------------------- | :------------------------------- | :--------- | :------------------------ | | Traditional Banking | $57,424 | $(325) | $22,057 | $17,466 | 72 % | | Warehouse Lending | $3,805 | $(154) | $3,035 | $2,351 | 4 % | | Tax Refund Solutions | $280 | $(1,467) | $554 | $459 | 2 % | | Republic Payment Solutions | $3,193 | — | $2,870 | $2,246 | 4 % | | Republic Credit Solutions | $12,268 | $3,969 | $9,246 | $7,222 | 18 % | | Total Company | $76,970 | $2,023 | $37,762 | $29,744 | 100 % | - Core Banking segments (Traditional Banking and Warehouse Lending) generated **$61.229 million** in net interest income and **$25.092 million** in income before income tax expense[20](index=20&type=chunk) - Republic Credit Solutions was the largest contributor within the Republic Processing Group, with **$12.268 million** in net interest income and **$9.246 million** in income before income tax expense[20](index=20&type=chunk) [Segment Performance - Nine Months Ended September 30, 2025](index=11&type=section&id=Segment%20Performance%20-%20Nine%20Months%20Ended%20September%2030%2C%202025) For the nine months ended September 30, 2025, Core Banking remained the dominant segment, while Tax Refund Solutions and Republic Credit Solutions significantly contributed to overall company performance within the Republic Processing Group | Segment (in thousands) | Net interest income | Provision for expected credit loss expense | Income before income tax expense | Net income | Net-revenue concentration | | :--------------------- | :------------------ | :----------------------------------------- | :------------------------------- | :--------- | :------------------------ | | Traditional Banking | $167,125 | $(577) | $63,281 | $50,034 | 63 % | | Warehouse Lending | $10,382 | $148 | $7,530 | $5,833 | 3 % | | Tax Refund Solutions | $30,154 | $10,028 | $29,876 | $23,382 | 15 % | | Republic Payment Solutions | $10,750 | — | $9,691 | $7,582 | 4 % | | Republic Credit Solutions | $37,449 | $11,919 | $27,736 | $21,665 | 15 % | | Total Company | $255,860 | $21,518 | $138,114 | $108,496 | 100 % | - Core Banking segments contributed **$177.507 million** to net interest income and **$70.811 million** to income before income tax expense for the nine-month period[22](index=22&type=chunk) - Tax Refund Solutions showed a significant net interest income of **$30.154 million** and income before tax of **$29.876 million**, with a net-revenue concentration of **15%**[22](index=22&type=chunk) [Footnotes](index=12&type=section&id=FOOTNOTES) The footnotes provide crucial details on loan fee income, the nature of provision for credit loss expense, the treatment of mortgage and consumer loans held for sale, and reconciliations of non-GAAP financial measures [Loan Fee Income by Segment](index=12&type=section&id=Loan%20Fee%20Income%20by%20Segment) Loan fee income significantly impacts interest income and margins, with Republic Processing Group segments, particularly RCS and TRS, generating a substantial portion of total loan fees | Segment (in thousands) | Sep. 30, 2025 (QTD) | Sep. 30, 2024 (QTD) | Sep. 30, 2025 (YTD) | Sep. 30, 2024 (YTD) | | :--------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Traditional Banking | $1,393 | $1,518 | $4,051 | $4,165 | | Warehouse Lending | $364 | $392 | $1,043 | $977 | | TRS | $17 | $42 | $33,717 | $36,669 | | RCS | $12,123 | $12,935 | $36,794 | $35,579 | | Total loan fees - Total Company | $13,897 | $14,887 | $75,605 | $77,390 | - Total loan fees for the Total Company decreased by **$990 thousand (6.6%)** quarter-over-quarter and by **$1.785 million (2.3%)** year-to-date[23](index=23&type=chunk) - RCS consistently generated the largest portion of loan fees within the RPG segment, contributing **$12.123 million** in Q3 2025[23](index=23&type=chunk) [Mortgage and Consumer Loans Held for Sale](index=12&type=section&id=Mortgage%20and%20Consumer%20Loans%20Held%20for%20Sale) The company originates both mortgage and consumer loans with the intent to sell, primarily through the Traditional Banking and RCS segments, with net gains on sale contributing to noninterest income | Metric (in thousands) | Sep. 30, 2025 (QTD) | Sep. 30, 2024 (QTD) | Sep. 30, 2025 (YTD) | Sep. 30, 2024 (YTD) | | :-------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Mortgage Loans Held for Sale - Originations | $59,494 | $57,142 | $152,515 | $136,894 | | Mortgage Loans Held for Sale - Net gain on sale | $1,710 | $1,413 | $4,604 | $2,430 | | Consumer Loans Held for Sale - Originations | $271,718 | $350,413 | $859,496 | $940,901 | | Consumer Loans Held for Sale - Net gain on sale | $4,106 | $4,177 | $11,206 | $11,221 | - Mortgage loan originations held for sale increased by **$2.352 million (4.1%)** quarter-over-quarter and by **$15.621 million (11.4%)** year-to-date[25](index=25&type=chunk) - Consumer loan originations held for sale decreased by **$49.409 million (15.4%)** quarter-over-quarter and by **$81.405 million (8.7%)** year-to-date[25](index=25&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) The company provides reconciliations for non-GAAP measures like tangible stockholders' equity and adjusted efficiency ratio, offering a clearer view of capital adequacy and operational efficiency | Metric (in thousands) | Sep. 30, 2025 | Jun. 30, 2025 | Sep. 30, 2024 | | :-------------------- | :------------ | :------------ | :------------ | | Total stockholders' equity - GAAP | $1,084,520 | $1,060,106 | $979,705 | | Tangible stockholders' equity - Non-GAAP | $1,035,569 | $1,011,011 | $930,065 | | Book value per share - GAAP | $55.51 | $54.29 | $50.39 | | Tangible book value per share - Non-GAAP | $53.01 | $51.78 | $47.84 | - Tangible stockholders' equity increased by **$24.558 million (2.4%)** quarter-over-quarter and by **$105.504 million (11.3%)** year-over-year[28](index=28&type=chunk) | Metric | Sep. 30, 2025 (QTD) | Sep. 30, 2024 (QTD) | Sep. 30, 2025 (YTD) | Sep. 30, 2024 (YTD) | | :-------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Efficiency Ratio - GAAP-derived | 57.5 % | 55.2 % | 50.6 % | 50.5 % | | Adjusted Efficiency Ratio - Non-GAAP | 57.4 % | 55.2 % | 49.7 % | 50.5 % | - The Adjusted Efficiency Ratio for Q3 2025 was **57.4%**, an increase from **55.2%** in Q3 2024, but the year-to-date ratio improved from **50.5%** in 2024 to **49.7%** in 2025[29](index=29&type=chunk)

Group 1 - Investors in Republic Bancorp, Inc. (RBCAA) should monitor the stock due to significant activity in the options market, particularly the Sep 19, 2025 $70.00 Put, which has high implied volatility [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that a significant event may be anticipated that could lead to a major price change [2] - Republic Bancorp is currently rated as Zacks Rank 3 (Hold) in the Banks - Southeast industry, which is in the top 5% of the Zacks Industry Rank [3] Group 2 - Over the past 30 days, one analyst has raised earnings estimates for the current quarter, increasing the Zacks Consensus Estimate from $1.35 to $1.38 per share [3] - The high implied volatility may indicate a developing trade opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay [4]

Business Segments - As of June 30, 2025, Republic Bancorp operates five reportable segments: Traditional Banking, Warehouse Lending, TRS, RPS, and RCS[236]. - The Traditional Banking segment includes 47 full-service banking centers located primarily in Kentucky, with significant reliance on net interest income from investment securities and loans[240][241]. - Management has integrated mortgage banking results into the Traditional Banking segment due to its immateriality as a separate reportable segment[238]. - The Bank focuses on C&I lending, CRE, and multi-family lending, with targeted C&I credit sizes typically between $1 million and $10 million, and higher targets between $10 million and $35 million for Corporate Banking[255]. - The CRE Banking group, launched in 2022, targets large CRE projects typically ranging from $5 million to $25 million, focusing on established borrowers with low credit risk[256]. - The Business Banking group targets small businesses with annual revenues up to $10 million, offering loans between $350,000 and $1 million for various financing needs[258]. - The Bank is an SBA Preferred Lending Partner, allowing it to expedite the underwriting and approval of SBA loans, generally up to $3 million under the SBA "7A Program"[259]. Financial Performance - Total Company net income for Q2 2025 was $31.5 million, an increase of $6.3 million, or 25%, compared to Q2 2024[301]. - Diluted EPS increased to $1.61 for Q2 2025 from $1.30 in Q2 2024[301]. - Net interest income rose by $6.5 million, or 13%, from Q2 2024 to Q2 2025[304]. - Noninterest income decreased by $1.2 million, or 30%, from Q2 2024 to Q2 2025[310]. - Total Company net interest income increased by $7.7 million, or 11%, to $76.2 million in Q2 2025 from $68.5 million in Q2 2024[315]. - The Total Company net interest margin (NIM) rose by 25 basis points to 4.61% in Q2 2025 compared to 4.36% in Q2 2024[315]. - Total Company net income for the first six months of 2025 was $78.8 million, a $22.9 million, or 41% increase from the same period in 2024, with diluted EPS rising to $4.03 from $2.87[367]. - Net interest income for the Company was $178.9 million during the first six months of 2025, representing an increase of $13.4 million, or 8%, from the first six months of 2024[377]. Credit Losses and Provisions - The Bank's ACLL for expected credit losses is evaluated monthly, with significant reliance on historical loss rates and economic forecasts[230][231]. - The Company utilizes the U.S. national unemployment rate as a primary forecasting tool for its ACLL model, reflecting current economic conditions[232]. - The total company provision was a net charge of $1.8 million for Q2 2025, a decrease from $5.1 million in Q2 2024[337]. - The Traditional Banking segment's provision was a net charge of $517,000 in Q2 2025, down from $915,000 in Q2 2024, reflecting a change in loan mix[338]. - The Tax Refund Solutions segment recorded a net credit to the provision of $3.9 million in Q2 2025, up from $1.2 million in Q2 2024, primarily related to its RA and ERAs products[343]. - The ACLL (Allowance for Credit Losses) at the end of the period was $81.76 million, compared to $80.69 million at the end of Q2 2024[355]. - The company's ACLL to total loans ratio was 1.52% as of June 30, 2025, compared to 1.53% as of June 30, 2024[355]. - The total Provision for the first six months of 2025 was $19.5 million, compared to $35.8 million for the same period in 2024[416]. Tax Refund Solutions - The Tax Refund Solutions segment generates most of its business in the first half of the year, with limited revenue in the second half as it prepares for the next tax season[272]. - The RA product allows taxpayers to borrow funds as an advance of their tax refund, with maximum advance amounts of $6,500 for the 2024 Tax Season and $6,250 for the 2025 Tax Season[277]. - The ERA loan product, introduced in December 2022, allows advances up to $1,000 for the 2024 Tax Season and $2,000 for the 2025 Tax Season, with no recourse to the taxpayer if the refund is insufficient[278]. - Noninterest income for the Tax Refund Solutions segment decreased from $3.9 million in Q2 2024 to $2.7 million in Q2 2025, driven by a 17% decline in the number of tax refunds funded[363]. - Tax Refund Solutions segment net interest income decreased by $1.9 million, or 6%, due to an 8% decline in tax season origination volume[383]. - The incurred loss rate for TRS related to unguaranteed loans for the first quarter 2025 tax filing season was 2.81% of the $801 million total originations[410]. - Total ERA/RA volume for the 2025 tax filing season was $801 million, an 8% decline from $874 million in the 2024 tax filing season[409]. Asset and Liability Management - The Bank's interest-bearing liabilities primarily consist of interest-bearing deposit accounts and short-term and long-term borrowings, with FHLB advances serving as a significant liquidity source[241][243]. - Average interest-earning cash increased to $623 million with a yield of 4.45% in Q2 2025, compared to $393 million and 5.46% in Q2 2024[316]. - Average committed Warehouse lines of credit increased to $995 million in Q2 2025 from $940 million in Q2 2024[310]. - Average committed Warehouse lines of credit increased to $981 million for the first six months of 2025 from $935 million for the same period in 2024[370]. - Outstanding Warehouse period-end balances increased by $121 million in the first six months of 2025, compared to an increase of $209 million in the same period of 2024[403].

Financial Position - Total assets as of June 30, 2025, were $6,970,917, a decrease of 1.5% from $7,075,555 on March 31, 2025[4] - Total assets increased to $7,062,031,000 in Q2 2025 from $6,706,884,000 in Q2 2024, marking an increase of 5.3%[10] - Period-end assets as of June 30, 2025, totaled $6,970,917,000, an increase from $6,616,574,000 as of June 30, 2024, representing a growth of 5.4%[22] - Total liabilities decreased to $5,910,811 as of June 30, 2025, down 2.2% from $6,041,466 on March 31, 2025[4] - Total stockholders' equity increased to $1,060,106 as of June 30, 2025, up 2.9% from $1,034,089 on March 31, 2025[4] - Total stockholders' equity increased to $1.060 billion as of June 30, 2025, up from $1.034 billion at the end of Q1 2025[28] Loans and Credit Quality - Loans increased to $5,373,020 as of June 30, 2025, up 1.6% from $5,289,793 on March 31, 2025[4] - The average balance of loans, including loans held for sale, was $5,318,666 for the three months ended June 30, 2025[6] - Total Core Banking loans rose to $5,253,925 in Q2 2025 from $5,135,861 in Q1 2025, an increase of 2.3%[12] - Total nonperforming loans as of June 30, 2025, were $21,642, a decrease from $22,850 as of March 31, 2025, representing a reduction of approximately 5.3%[14] - The allowance for credit losses on loans was $81,760 as of June 30, 2025, compared to $106,303 on March 31, 2025, reflecting a reduction of 23.1%[4] - The allowance for credit losses to total loans ratio was 1.52% as of June 30, 2025, down from 2.01% as of March 31, 2025[14] - Provision for credit losses in Q2 2025 was $1,823,000, significantly lower than $5,143,000 in Q2 2024, indicating improved credit quality[10] - The annualized net charge-offs (NCOs) to average loans ratio was 1.99% for the second quarter of 2025, significantly up from 0.24% in the previous quarter[14] Income and Revenue - Total interest income for Q2 2025 was $102,203,000, an increase from $97,700,000 in Q2 2024, representing a 4.9% year-over-year growth[10] - Net interest income for Q2 2025 reached $76,202,000, compared to $68,536,000 in Q2 2024, reflecting an increase of 11.2%[10] - Noninterest income totaled $17,644,000 in Q2 2025, down from $18,346,000 in Q2 2024, a decrease of 3.8%[10] - Net income for Q2 2025 was $31,484,000, up from $25,206,000 in Q2 2024, representing a 25% increase[10] - Net income for the six months ended June 30, 2025, was $78,752,000, compared to $25,206,000 for the same period in 2024, indicating a significant increase of 212.5%[22] Efficiency and Ratios - The efficiency ratio increased to 55.0% in Q2 2025 from 40.3% in Q1 2025, showing a deterioration of 36.4%[11] - The net interest margin improved to 4.61% in Q2 2025 from 4.36% in Q2 2024[10] - The net interest margin for the total company was 4.61% in Q2 2025, down from 6.28% in Q1 2025, a decrease of 26.7%[11] - Basic EPS for Class A Common Stock decreased to $1.62 in Q2 2025 from $2.43 in Q1 2025, representing a decline of 33.4%[11] Segment Performance - The Republic Processing Group segments, including Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions, primarily drive net revenue through net interest income and program fees[16] - The Core Banking segments, Traditional Banking and Warehouse Lending, are primarily driven by net interest income[16] - As of June 30, 2025, the company had a total of 5 reportable segments, with Core Banking operations considered as Traditional Banking and Warehouse Lending[16] - The company reported a net-revenue concentration of 100% across its segments for Q2 2025, with core banking contributing 75%[20] Other Financial Metrics - The cost of average deposits was 1.62% in Q2 2025, slightly up from 1.57% in Q1 2025[11] - The tangible book value per share rose to $51.78 as of June 30, 2025, compared to $50.46 at the end of Q1 2025[28] - The company reported a net gain on the sale of mortgage loans of $1.483 million in Q2 2025, slightly up from $1.411 million in Q1 2025[27] - The company originated $51.788 million in mortgage loans and $321.127 million in consumer loans during Q2 2025, showing strong loan origination activity[27] - Total loan fees for the company reached $14.195 million in Q2 2025, compared to $47.513 million in Q1 2025, reflecting a significant decrease[25]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section details the unaudited financial statements and related notes for Republic Bancorp, Inc. [Item 1. Financial Statements.](index=4&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements of Republic Bancorp, Inc. and its subsidiaries for the period ended March 31, 2025, including balance sheets, income statements, comprehensive income statements, stockholders' equity statements, and cash flow statements. It also includes detailed notes on accounting policies, investment securities, loans, deposits, off-balance sheet risks, fair value measurements, mortgage banking activities, interest rate swaps, earnings per share, other comprehensive income, revenue from contracts with customers, segment information, and low-income housing tax credit investments. [Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS%20(UNAUDITED)) | ASSETS (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $793,020 | $432,151 | | Available-for-sale debt securities, at fair value | $609,327 | $584,155 | | Held-to-maturity debt securities | $5,612 | $10,778 | | Loans, net | $5,183,490 | $5,347,488 | | TOTAL ASSETS | $7,075,555 | $6,846,667 | | LIABILITIES (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total deposits | $5,405,892 | $5,210,546 | | Securities sold under agreements to repurchase and other short-term borrowings | $89,718 | $103,318 | | Federal Home Loan Bank advances | $370,000 | $395,000 | | Total liabilities | $6,041,466 | $5,854,638 | | STOCKHOLDERS' EQUITY (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total stockholders' equity | $1,034,089 | $992,029 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $7,075,555 | $6,846,667 | [Consolidated Statements of Income (Unaudited)](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20(UNAUDITED)) | (in thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Total interest income | $129,838 | $130,632 | | Total interest expense | $27,150 | $33,713 | | NET INTEREST INCOME | $102,688 | $96,919 | | Provision for expected credit loss expense | $17,672 | $30,622 | | NET INTEREST INCOME AFTER PROVISION | $85,016 | $66,297 | | Total noninterest income | $33,154 | $23,373 | | Total noninterest expense | $58,208 | $50,971 | | INCOME BEFORE INCOME TAX EXPENSE | $59,962 | $38,699 | | INCOME TAX EXPENSE | $12,694 | $8,093 | | NET INCOME | $47,268 | $30,606 | | BASIC EARNINGS PER SHARE: Class A Common Stock | $2.43 | $1.59 | | DILUTED EARNINGS PER SHARE: Class A Common Stock | $2.42 | $1.58 | [Consolidated Statements of Comprehensive Income (Unaudited)](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(UNAUDITED)) | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Net income | $47,268 | $30,606 | | Total other comprehensive income, net of tax | $2,573 | $486 | | COMPREHENSIVE INCOME | $49,841 | $31,092 | [Consolidated Statements of Stockholders' Equity (Unaudited)](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY%20(UNAUDITED)) - For the three months ended March 31, 2025, the total stockholders' equity increased from **$992,029 thousand** at January 1, 2025, to **$1,034,089 thousand**. This increase was primarily driven by net income of **$47,268 thousand** and a net change in Accumulated Other Comprehensive Income (AOCI) of **$2,573 thousand**, partially offset by dividends declared on Common Stock totaling **$8,681 thousand**[17](index=17&type=chunk) - For the three months ended March 31, 2024, total stockholders' equity increased from **$912,756 thousand** at January 1, 2024, to **$935,583 thousand**. This was mainly due to net income of **$30,606 thousand** and a net change in AOCI of **$486 thousand**, partially offset by dividends declared on Common Stock totaling **$7,782 thousand**[17](index=17&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20(UNAUDITED)) | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $93,189 | $71,224 | | Net cash (used in) provided by investing activities | $118,213 | $(77,744) | | Net cash provided by financing activities | $149,467 | $236,316 | | NET CHANGE IN CASH AND CASH EQUIVALENTS | $360,869 | $229,796 | | CASH AND CASH EQUIVALENTS AT END OF PERIOD | $793,020 | $546,363 | [Notes to Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=1.%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Republic Bancorp, Inc. is a financial holding company operating through five reportable segments: Traditional Banking, Warehouse Lending, Tax Refund Solutions (TRS), Republic Payment Solutions (RPS), and Republic Credit Solutions (RCS). The first two constitute 'Core Bank' and the latter three 'Republic Processing Group' (RPG). The financial statements are unaudited and prepared in accordance with U.S. GAAP for interim information. The Company adopted ASU 2024-02 on January 1, 2025, with immaterial impact, and is analyzing the impact of not-yet-effective ASUs 2023-09, 2024-03, and 2025-01. - Republic Bancorp, Inc. operates through five reportable segments: Traditional Banking, Warehouse Lending, Tax Refund Solutions (TRS), Republic Payment Solutions (RPS), and Republic Credit Solutions (RCS). Traditional Banking and Warehouse Lending form the 'Core Bank,' while TRS, RPS, and RCS form the 'Republic Processing Group' (RPG)[23](index=23&type=chunk) - The Company adopted ASU 2024-02, 'Codification Improvements—Amendments to Remove References to the Concepts Statements,' on January 1, 2025, with an immaterial financial statement impact[50](index=50&type=chunk) - The Company is currently analyzing the impact of not-yet-effective ASUs 2023-09 (Income Taxes), 2024-03 (Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures), and 2025-01 (Clarifying the Effective Date of ASU 2024-03) on its financial statements[52](index=52&type=chunk) [2. Investment Securities](index=19&type=section&id=2.%20INVESTMENT%20SECURITIES) The Company's investment portfolio includes Available-for-Sale (AFS) and Held-to-Maturity (HTM) debt securities, and equity securities. As of March 31, 2025, AFS debt securities had a fair value of $609.3 million with gross unrealized losses of $15.6 million, primarily due to interest rate changes. HTM debt securities totaled $5.6 million. There were no material gains or losses on sales of AFS debt securities. Equity securities, primarily Freddie Mac preferred stock, had a fair value of $724 thousand. Available-for-Sale Debt Securities (in thousands) | Available-for-Sale Debt Securities (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Amortized Cost | $622,748 | $602,493 | | Fair Value | $609,327 | $584,155 | | Gross Unrealized Gains | $2,190 | $1,825 | | Gross Unrealized Losses | $(15,611) | $(20,163) | - As of March 31, 2025, 103 out of 182 securities in the Bank's portfolio were in an unrealized loss position. These losses are attributed to changes in interest rates and illiquidity, not credit quality, and management does not intend to sell these securities before anticipated recovery[58](index=58&type=chunk)[60](index=60&type=chunk) Equity Securities (in thousands) | Equity Securities (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------- | :------------- | :---------------- | | Fair Value (Freddie Mac preferred stock) | $724 | $693 | | Unrealized Gains (Freddie Mac preferred stock) | $724 | $693 | | Total gains/losses recognized in income (3 months ended March 31) | $31 | $61 | [3. Loans Held for Sale](index=23&type=section&id=3.%20LOANS%20HELD%20FOR%20SALE) The Bank originates mortgage and consumer loans for sale. Mortgage loans held for sale are valued at fair value, while consumer loans held for sale are carried at either fair value (RCS installment loans) or the lower of cost or fair value (RCS line-of-credit and healthcare receivables). During Q1 2025, $5 million of consumer credit cards were reclassified from held for investment to held for sale. Consumer Loans Held for Sale, at Fair Value (in thousands) | Consumer Loans Held for Sale, at Fair Value (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------------- | :-------------------------------- | :-------------------------------- | | Balance, beginning of period | $5,443 | $7,914 | | Origination of consumer loans held for sale | $34,347 | $35,159 | | Proceeds from the sale of consumer loans held for sale | $(32,020) | $(38,011) | | Net gain on sale of consumer loans held for sale | $832 | $1,031 | | Balance, end of period | $8,602 | $6,093 | Consumer Loans Held for Sale, at Lower of Cost or Fair Value (in thousands) | Consumer Loans Held for Sale, at Lower of Cost or Fair Value (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Balance, beginning of period | $18,632 | $16,094 | | Origination of consumer loans held for sale | $232,304 | $153,188 | | Transferred from held for investment to held for sale | $4,977 | $0 | | Proceeds from the sale of consumer loans held for sale | $(234,613) | $(158,573) | | Net gain on sale of consumer loans held for sale | $2,223 | $2,374 | | Balance, end of period | $23,523 | $13,083 | - During March 2025, management agreed to sell **$5 million** of consumer credit cards previously classified as held for investment, transferring them to held for sale as of March 31, 2025. The sale is expected to complete in Q2 2025[69](index=69&type=chunk) [4. Loans and Allowance for Credit Losses](index=24&type=section&id=4.%20LOANS%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) The Company's total loans decreased by $149.7 million (2.8%) from December 31, 2024, to March 31, 2025, primarily due to significant paydowns in the Tax Refund Solutions (TRS) segment. The Allowance for Credit Losses on Loans (ACLL) increased by $14.3 million (15.6%) to $106.3 million, mainly driven by the TRS segment. Nonperforming loans slightly increased to 0.43% of total loans, while delinquent loans decreased to 0.33%. Loan modifications primarily involved principal deferrals for Republic Processing Group (RPG) loans. Loan Portfolio Composition (in thousands) | Loan Portfolio Composition (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Traditional Banking | $4,566,359 | $4,569,179 | | Warehouse lines of credit | $569,502 | $550,760 | | Tax Refund Solutions | $36,185 | $190,794 | | Republic Credit Solutions | $117,747 | $128,733 | | Total loans | $5,289,793 | $5,439,466 | | Allowance for credit losses | $(106,303) | $(91,978) | | Total loans, net | $5,183,490 | $5,347,488 | ACLL Roll-forward (in thousands) | ACLL Roll-forward (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------- | :-------------------------------- | :-------------------------------- | | Beginning Balance | $91,978 | $82,130 | | Provision | $17,672 | $30,622 | | Charge-offs | $(4,525) | $(4,927) | | Recoveries | $1,178 | $877 | | Ending Balance | $106,303 | $108,702 | Nonperforming Loans and Assets (in thousands) | Nonperforming Loans and Assets (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | | Total nonperforming loans | $22,850 | $22,760 | | Other real estate owned | $1,107 | $1,160 | | Total nonperforming assets | $23,957 | $23,920 | | Nonperforming loans to total loans | 0.43% | 0.42% | | ACLL to nonperforming loans | 465% | 404% | Delinquent Loans (30+ days past due, in thousands) | Delinquent Loans (30+ days past due, in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------- | :---------------- | | Total delinquent loans | $17,313 | $20,489 | | Delinquency ratio (Total loans 30+ days past due / Total loans) | 0.33% | 0.38% | - Loan modifications for borrowers experiencing financial difficulty during the three months ended March 31, 2025, primarily involved principal deferrals for **265 Republic Processing Group (RPG) loans**, totaling **$63 thousand** in amortized cost basis[96](index=96&type=chunk)[98](index=98&type=chunk) [5. Deposits](index=41&type=section&id=5.%20DEPOSITS) Total deposits increased by $195.3 million (4%) from December 31, 2024, to March 31, 2025, reaching $5.4 billion. Core Bank deposits grew by $175.4 million, with interest-bearing deposits increasing by $149.3 million, driven by money market accounts. Republic Processing Group (RPG) deposits increased by $19.9 million, reflecting a significant decrease in wholesale brokered deposits offset by growth in interest-bearing prepaid card deposits and other noninterest-bearing deposits. Deposit Composition (in thousands) | Deposit Composition (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------- | :------------- | :---------------- | | Core Bank: | | | | Noninterest-bearing | $1,149,353 | $1,123,208 | | Interest-bearing | $3,632,520 | $3,483,250 | | Total Core Bank deposits | $4,781,873 | $4,606,458 | | Republic Processing Group: | | | | Noninterest-bearing | $225,881 | $84,556 | | Interest-bearing | $398,138 | $519,532 | | Total RPG deposits | $624,019 | $604,088 | | Total deposits | $5,405,892 | $5,210,546 | - Core Bank interest-bearing deposits increased by **$149.3 million**, primarily due to a **$124 million** growth in interest-bearing IOLTA, business, and consumer money market accounts[107](index=107&type=chunk)[360](index=360&type=chunk) - RPG deposits saw a **$182.7 million** decrease in wholesale brokered deposits, offset by a **$61.7 million** increase in interest-bearing prepaid card deposits and a **$139.9 million** increase in other noninterest-bearing deposits[107](index=107&type=chunk) [6. Securities Sold Under Agreements to Repurchase and Other Short-Term Borrowings](index=42&type=section&id=6.%20SECURITIES%20SOLD%20UNDER%20AGREEMENTS%20TO%20REPURCHASE%20AND%20OTHER%20SHORT-TERM%20BORROWINGS) Securities sold under agreements to repurchase (SSUARs) and other short-term borrowings decreased to $89.7 million as of March 31, 2025, from $103.3 million at December 31, 2024. All SSUARs had overnight maturities. The weighted average interest rate at period-end was 0.58% (up from 0.53%), and the average outstanding balance during the quarter was $108.8 million. (dollars in thousands) | (dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------- | :------------- | :---------------- | | Outstanding balance at end of period | $89,718 | $103,318 | | Weighted average interest rate at end of period | 0.58% | 0.53% | | Fair value of securities pledged | $125,761 | $151,972 | (dollars in thousands) | (dollars in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--------------------- | :-------------------------------- | :-------------------------------- | | Average outstanding balance during the period | $108,760 | $102,592 | | Weighted average interest rate during the period | 0.51% | 0.51% | | Maximum outstanding at any month end during the period | $112,826 | $113,281 | [7. Federal Home Loan Bank Advances](index=43&type=section&id=7.%20FEDERAL%20HOME%20LOAN%20BANK%20ADVANCES) Federal Home Loan Bank (FHLB) advances decreased to $370 million as of March 31, 2025, from $395 million at December 31, 2024, with no overnight advances outstanding. The total weighted average cost of advances, including swaps, was 4.35%. The Bank had $722 million in available borrowing capacity from the FHLB and $100 million in unsecured lines of credit from other financial institutions. (in thousands) | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------- | :------------- | :---------------- | | Overnight advances | $0 | $25,000 | | Fixed interest rate advances | $370,000 | $370,000 | | Total FHLB advances | $370,000 | $395,000 | - As of March 31, 2025, Republic had available borrowing capacity of **$722 million** from the FHLB and **$100 million** in unsecured lines of credit from other financial institutions[112](index=112&type=chunk) - The Bank extended **$100 million** of FHLB borrowings in May/June 2024 through a fixed-rate swap, locking in an annualized cost of **4.42%** over five years. The total weighted average cost of all advances, including swaps, is **4.35%**[113](index=113&type=chunk) [8. Off Balance Sheet Risks, Commitments and Contingent Liabilities](index=45&type=section&id=8.%20OFF%20BALANCE%20SHEET%20RISKS,%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) The Company is exposed to off-balance sheet risks primarily through commitments to extend credit and standby letters of credit. Total commitments increased to $2.03 billion as of March 31, 2025, from $1.99 billion at December 31, 2024. The Allowance for Credit Losses on Off-Balance Sheet Credit Exposures (ACLC) increased by $20 thousand to $1.51 million, reflecting the increase in unused commitments. Commitments (in thousands) | Commitments (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------- | :------------- | :---------------- | | Unused warehouse lines of credit | $405,998 | $404,240 | | Unused home equity lines of credit | $481,676 | $478,040 | | Unused loan commitments - other | $1,128,625 | $1,093,990 | | Standby letters of credit | $11,070 | $11,282 | | Total commitments | $2,027,369 | $1,987,552 | ACLC Roll-forward (in thousands) | ACLC Roll-forward (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------- | :-------------------------------- | :-------------------------------- | | Beginning Balance | $1,490 | $1,340 | | Provision | $20 | $(110) | | Ending Balance | $1,510 | $1,230 | [9. Fair Value](index=47&type=section&id=9.%20FAIR%20VALUE) Fair value measurements are categorized into Level 1, 2, or 3 inputs. AFS debt securities are primarily valued using matrix pricing (Level 2), with U.S. Treasury securities at Level 1 and a private label mortgage-backed security and Trust Preferred Security at Level 3. Mortgage loans held for sale are Level 2, while consumer loans held for sale are Level 3. The Company also details fair value measurements for mortgage banking derivatives, interest rate swaps, collateral-dependent loans, and other real estate owned, with most non-recurring measurements falling into Level 3 due to unobservable inputs like appraisal discounts. - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs)[121](index=121&type=chunk)[122](index=122&type=chunk) - AFS debt securities are primarily valued using matrix pricing (Level 2), U.S. Treasury securities use quoted market prices (Level 1), and a private label mortgage-backed security and Trust Preferred Security are valued using Level 3 inputs due to illiquidity and unobservable bid prices[123](index=123&type=chunk)[124](index=124&type=chunk)[126](index=126&type=chunk) - Mortgage loans held for sale are classified as Level 2, while consumer loans held for sale (RCS installment loans) are Level 3, based on contractual sales terms[128](index=128&type=chunk) - Collateral-dependent loans and Other Real Estate Owned (OREO) are generally measured at fair value less costs to sell, often based on appraisals or BPOs with significant adjustments, resulting in Level 3 classification[132](index=132&type=chunk)[133](index=133&type=chunk) Fair Value Measurements (in thousands) | Fair Value Measurements (in thousands) | Level 1 | Level 2 | Level 3 | Total Fair Value | | :----------------------------------- | :------ | :------ | :------ | :--------------- | | **Financial Assets (March 31, 2025):** | | | | | | Available-for-sale debt securities | $54,761 | $548,978 | $5,588 | $609,327 | | Equity securities | $0 | $724 | $0 | $724 | | Mortgage loans held for sale | $0 | $9,140 | $0 | $9,140 | | Consumer loans held for sale | $0 | $0 | $8,602 | $8,602 | | Interest rate swap agreements | $0 | $6,723 | $0 | $6,723 | | **Financial Liabilities (March 31, 2025):** | | | | | | Mandatory forward contracts | $0 | $69 | $0 | $69 | | Interest rate swap agreements | $0 | $8,856 | $0 | $8,856 | [10. Mortgage Banking Activities](index=59&type=section&id=10.%20MORTGAGE%20BANKING%20ACTIVITIES) Mortgage banking activities include residential mortgage originations and servicing. Mortgage loans held for sale increased to $9.1 million as of March 31, 2025. Total mortgage banking income significantly increased to $1.8 million for Q1 2025 from $310 thousand in Q1 2024, driven by higher net gains on loan sales and fair value adjustments. The fair value of Mortgage Servicing Rights (MSRs) was $17.0 million, with a weighted average prepayment rate of 130%. The Bank uses mandatory forward sales contracts and interest rate lock loan commitments as derivatives to manage interest rate risk. Mortgage Loans Held for Sale Activity (in thousands) | Mortgage Loans Held for Sale Activity (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Balance, beginning of period | $8,312 | $3,227 | | Origination of mortgage loans held for sale | $41,233 | $27,046 | | Proceeds from the sale of mortgage loans held for sale | $(41,816) | $(18,773) | | Net gain (loss) on mortgage loans held for sale | $1,411 | $(80) | | Balance, end of period | $9,140 | $80,884 | Components of Mortgage Banking Income (in thousands) | Components of Mortgage Banking Income (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net gain (loss) recognized | $1,411 | $(80) | | Net servicing income recognized | $410 | $390 | | Total mortgage banking income | $1,821 | $310 | - The fair value of the mortgage servicing rights portfolio was **$16.975 million** as of March 31, 2025, with a monthly weighted average prepayment rate of **130%** and a weighted average life of **4.54 years**[155](index=155&type=chunk) - The Bank uses mandatory forward sales contracts and interest rate lock loan commitments as derivatives to manage interest rate risk on loans held for sale and rate lock commitments. These instruments typically expire within **90 days**[156](index=156&type=chunk)[158](index=158&type=chunk) [11. Interest Rate Swaps](index=63&type=section&id=11.%20INTEREST%20RATE%20SWAPS) The Bank uses interest rate swaps for both cash flow hedging and to facilitate client transactions. Three swaps designated as cash flow hedges for FHLB advances had a notional amount of $100 million and a fair value of $(2.1) million as of March 31, 2025. Non-hedge swaps, used for client transactions, had a total notional amount of $465.3 million, with offsetting positions to minimize risk, resulting in a net fair value of $0. Counterparties and the Bank are required to pledge collateral for net loss positions exceeding $250,000. - The Bank has three interest rate swap agreements designated as cash flow hedges for FHLB advances, with a notional amount of **$100 million** and a fair value of **$(2.133) million** as of March 31, 2025. The effective portion of unrealized gains/losses is recorded in OCI[161](index=161&type=chunk)[162](index=162&type=chunk) - Non-hedge interest rate swaps are used to facilitate client transactions, with offsetting positions to minimize the Bank's interest rate risk. Changes in their fair value are recognized in current period earnings[163](index=163&type=chunk) Non-hedge Interest Rate Swaps (in thousands) | Non-hedge Interest Rate Swaps (in thousands) | March 31, 2025 Notional Amount | March 31, 2025 Fair Value | December 31, 2024 Notional Amount | December 31, 2024 Fair Value | | :------------------------------------------- | :----------------------------- | :------------------------ | :----------------------------- | :------------------------ | | Interest rate swaps with Bank clients - Total | $232,660 | $(1,037) | $232,328 | $(4,448) | | Offsetting interest rate swaps with institutional swap dealer - Total | $232,660 | $1,037 | $232,328 | $4,448 | | Total | $465,320 | $0 | $464,656 | $0 | [12. Earnings Per Share](index=66&type=section&id=12.%20EARNINGS%20PER%20SHARE) The Company calculates earnings per share using the two-class method, distinguishing between Class A and Class B Common Stock due to a 10% cash dividend premium on Class A shares. For the three months ended March 31, 2025, basic EPS for Class A was $2.43 and diluted EPS was $2.42. For the same period in 2024, basic EPS for Class A was $1.59 and diluted EPS was $1.58. - The Company uses the two-class method for EPS calculation, allocating earnings based on dividends and participation rights, with Class A Common Stock receiving a **10% cash dividend premium** over Class B[167](index=167&type=chunk) Earnings Per Share (Class A Common Stock) | Earnings Per Share (Class A Common Stock) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Basic Earnings Per Share | $2.43 | $1.59 | | Diluted Earnings Per Share | $2.42 | $1.58 | - Antidilutive stock options excluded from the diluted EPS calculation were **43,612** for Q1 2025 and **52,781** for Q1 2024[169](index=169&type=chunk) [13. Other Comprehensive Income](index=67&type=section&id=13.%20OTHER%20COMPREHENSIVE%20INCOME) Total other comprehensive income (OCI), net of tax, was $2.573 million for the three months ended March 31, 2025, compared to $486 thousand for the same period in 2024. This change was primarily driven by a net unrealized gain on AFS debt securities of $3.687 million, partially offset by a net unrealized loss on derivatives of $(1.114) million, both net of tax. OCI Components (in thousands, net of tax) | OCI Components (in thousands, net of tax) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Unrealized gain on AFS debt securities | $3,687 | $486 | | Net losses on derivatives | $(1,114) | $0 | | Total other comprehensive income components, net of tax | $2,573 | $486 | AOCI Balances (in thousands, net of tax) | AOCI Balances (in thousands, net of tax) | December 31, 2024 | Change (Q1 2025) | March 31, 2025 | | :------------------------------------- | :---------------- | :--------------- | :------------- | | Unrealized gain (loss) on AFS debt securities | $(13,753) | $3,687 | $(10,066) | | Unrealized loss on derivatives | $(485) | $(1,114) | $(1,599) | | Total unrealized gain (loss) | $(14,238) | $2,573 | $(11,665) | [14. Revenue from Contracts with Customers](index=68&type=section&id=14.%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Total net revenue for the Company increased to $135.8 million for Q1 2025, up from $120.3 million in Q1 2024. Core Banking contributed 53% of net revenue, while Republic Processing Group (RPG) contributed 47%. Key revenue streams subject to ASC 606 include service charges on deposit accounts, net refund transfer fees, interchange fee income, and net gains/losses on other real estate owned (OREO). Total Net Revenue (in thousands) | Total Net Revenue (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------- | :-------------------------------- | :-------------------------------- | | Total net revenue | $135,842 | $120,292 | | Net-revenue concentration: | | | | Core Banking | 53% | 48% | | Republic Processing Group | 47% | 52% | - Service charges on deposit accounts are earned for account-based and event-driven services, recognized in close proximity to service performance or over the service period[173](index=173&type=chunk) - Net refund transfer fees are recognized immediately after a taxpayer's refund is disbursed, with the fee shared between the Bank and Tax Providers[174](index=174&type=chunk)[175](index=175&type=chunk) - Interchange fee income is earned as an 'issuing bank' on card transactions and recognized almost simultaneously upon transaction completion, presented net of cardholder reward costs[177](index=177&type=chunk)[178](index=178&type=chunk) - Net gains/losses on OREO reflect gains/losses upon executed deeds and mark-to-market write-downs during the holding period, with write-downs generally at least **10% annually**[179](index=179&type=chunk)[181](index=181&type=chunk) [15. Segment Information](index=71&type=section&id=15.%20SEGMENT%20INFORMATION) The Company operates through five reportable segments: Traditional Banking, Warehouse Lending (forming 'Core Banking'), Tax Refund Solutions (TRS), Republic Payment Solutions (RPS), and Republic Credit Solutions (RCS) (forming 'Republic Processing Group'). Segment performance is evaluated based on income before income taxes. Net interest income is allocated using an internal Funds Transfer Pricing (FTP) model. For Q1 2025, total net income was $47.3 million, with Core Banking contributing $17.4 million and RPG contributing $29.9 million. - The Company's five reportable segments are Traditional Banking, Warehouse Lending (Core Banking), Tax Refund Solutions (TRS), Republic Payment Solutions (RPS), and Republic Credit Solutions (RCS) (Republic Processing Group)[184](index=184&type=chunk) - Segment performance is evaluated using income before income tax expense, and net interest income is allocated based on underlying financial instruments and an internal Funds Transfer Pricing (FTP) model[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) Segment Net Income (in thousands) | Segment Net Income (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Traditional Banking | $15,712 | $12,283 | | Warehouse Lending | $1,649 | $839 | | Total Core Banking | $17,361 | $13,122 | | Tax Refund Solutions | $19,611 | $8,793 | | Republic Payment Solutions | $2,895 | $2,567 | | Republic Credit Solutions | $7,401 | $6,124 | | Total Republic Processing Group | $29,907 | $17,484 | | Total Company | $47,268 | $30,606 | [16. Low-Income Housing Tax Credit Investments](index=74&type=section&id=16.%20LOW-INCOME%20HOUSING%20TAX%20CREDIT%20INVESTMENTS) The Company invests in low-income housing partnerships, expecting to recover investments through tax credits. These investments are amortized as a component of income tax expense. As of March 31, 2025, net investments totaled $53.188 million, with unfunded obligations of $49.820 million. For Q1 2025, amortization expense was $2.305 million, and tax credits recognized were $(3.175) million. - The Company's low-income housing investments are accounted for using the proportional amortization method, with recovery expected through tax credits[190](index=190&type=chunk)[191](index=191&type=chunk) Low-Income Housing Tax Credit Investments (in thousands) | Low-Income Housing Tax Credit Investments (in thousands) | March 31, 2025 | December 31, 2024 | | :----------------------------------------------------- | :------------- | :---------------- | | Investments (Gross) | $77,392 | $72,415 | | Life-to-date amortization | $(24,204) | $(21,899) | | Investments (Net) | $53,188 | $50,516 | | Unfunded Obligations | $49,820 | $54,797 | Amortization and Tax Credits (in thousands) | Amortization and Tax Credits (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Amortization expense | $2,305 | $1,783 | | Tax credits recognized | $(3,175) | $(2,691) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=74&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the Company's financial performance and condition, including an overview of critical accounting policies, business segments, recent developments, and a detailed comparison of results of operations and financial condition for the three months ended March 31, 2025, versus March 31, 2024, and March 31, 2025, versus December 31, 2024. It also discusses forward-looking statements, critical accounting estimates related to the Allowance for Credit Losses (ACLL), and asset/liability management strategies. [Forward-looking Statements](index=74&type=section&id=Forward-looking%20statements) - Forward-looking statements discuss future events or conditions and include projections of financial items, descriptions of future plans, and management strategies. They are based on information known at the time and are not guarantees, subject to various known and unknown risks and uncertainties[195](index=195&type=chunk)[196](index=196&type=chunk)[198](index=198&type=chunk) - Key risks and uncertainties include inflation, litigation, natural disasters, changes in economic conditions, interest rate fluctuations, competitive pressures, market volatility, client bankruptcies, regulatory changes, accounting standard changes, cybersecurity attacks, and the success of new core system implementation[198](index=198&type=chunk)[200](index=200&type=chunk) [Critical Accounting Policies and Estimates](index=76&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) - The preparation of financial statements requires management to make estimates and assumptions, with critical accounting policies being those most important to financial condition and operating results, requiring difficult, subjective, and complex estimates[199](index=199&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - The Allowance for Credit Losses on Loans (ACLL) and Provision are considered critical accounting estimates, relying significantly on historical loss rates, quantitative and qualitative economic factors, and reasonable/supportable forecasts[204](index=204&type=chunk)[205](index=205&type=chunk) - During Q1 2025, the Commercial Real Estate portfolio was further segmented into Owner Occupied, Nonowner Occupied, and Multi-family to provide better granularity to the ACLL, though this did not have a material impact as of March 31, 2025[208](index=208&type=chunk) [Business Segment Composition](index=78&type=section&id=BUSINESS%20SEGMENT%20COMPOSITION) - The Company is divided into five reportable segments: Traditional Banking, Warehouse Lending (collectively 'Core Bank'), Tax Refund Solutions (TRS), Republic Payment Solutions (RPS), and Republic Credit Solutions (RCS) (collectively 'Republic Processing Group')[209](index=209&type=chunk) - Traditional Banking provides traditional banking products primarily to customers in its market footprint through **47 banking centers** across Kentucky, Indiana, Florida, Ohio, and Tennessee[211](index=211&type=chunk)[217](index=217&type=chunk) - Warehouse Lending offers short-term, revolving credit facilities to mortgage bankers nationwide, primarily secured by single-family, first-lien residential real estate loans, with individual loans typically on the line for **15-30 days**[228](index=228&type=chunk) - TRS facilitates federal and state tax refund products and offers Refund Advance (RA) and Early Season Refund Advance (ERA) credit products through Tax Providers, with most business occurring in the first half of the year[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk) - RPS offers prepaid and debit solutions (payroll and GPR cards, DDA/savings accounts) and money movement capabilities (ACH, wire transfer, check processing) to consumers through third-party providers[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) - RCS offers unsecured, small-dollar consumer credit products, including line-of-credit products (LOC I and LOC II with **90%** and **95%** participation interests sold, respectively) and installment loans, primarily to subprime or near-prime borrowers[243](index=243&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) [Recent Developments](index=90&type=section&id=Recent%20Developments) - The Company's largest Tax Provider contract within TRS, which expires in October 2025, is not expected to be renewed. This provider accounted for approximately **67%** of total ERA/RA originations and **22%** of net RT revenue for Q1 2025, representing about **26%** of TRS's pre-tax net income for the 12 months ended March 31, 2025[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) [Overview (Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024)](index=90&type=section&id=OVERVIEW%20(Three%20Months%20Ended%20March%2031,%202025%20Compared%20to%20Three%20Months%20Ended%20March%2031,%202024)) - Total Company net income for Q1 2025 increased by **$16.7 million (54.5%)** to **$47.3 million** compared to **$30.6 million** in Q1 2024. Diluted EPS rose from **$1.58** to **$2.42**[13](index=13&type=chunk)[251](index=251&type=chunk) - **Traditional Banking:** Net income increased **$3.4 million (28%)**, driven by a **$5.1 million (10%)** rise in net interest income and a **$7.1 million (85%)** increase in noninterest income, partially offset by an **$8.5 million (21%)** increase in noninterest expense[254](index=254&type=chunk) - **Warehouse Lending:** Net income increased **$810,000 (97%)**, with net interest income up **$771,000 (34%)** due to a **$118 million** increase in average outstanding balances and higher line usage (**47% vs. 37%**)[255](index=255&type=chunk) - **Tax Refund Solutions (TRS):** Net income increased **$10.8 million (123%)**, despite a **$1.1 million (4%)** decrease in net interest income. Noninterest income increased **$3.1 million (28%)**, primarily from net RT revenue, while noninterest expense decreased from **$4.5 million** to **$3.2 million**. Provision decreased from **$25.8 million** to **$15.4 million**[256](index=256&type=chunk) - **Republic Payment Solutions (RPS):** Net income increased **$328,000 (13%)**, with net interest income up **$486,000 (14%)**. Noninterest income remained stable, and noninterest expense slightly increased[257](index=257&type=chunk) - **Republic Credit Solutions (RCS):** Net income increased **$1.3 million (21%)**, with net interest income up **$548,000 (5%)**. Provision decreased from **$4.2 million** to **$3.0 million**, while noninterest income decreased **$351,000 (10%)**[258](index=258&type=chunk)[260](index=260&type=chunk) [Results of Operations (Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024)](index=92&type=section&id=RESULTS%20OF%20OPERATIONS%20(Three%20Months%20Ended%20March%2031,%202025%20Compared%20to%20Three%20Months%20Ended%20March%2031,%202024)) This section details the changes in net interest income, provision for credit losses, noninterest income, and noninterest expense for the three months ended March 31, 2025, compared to the same period in 2024. Net interest income increased by $5.8 million, driven by a higher net interest margin. The total provision for credit losses decreased significantly, primarily due to lower estimated loan losses in TRS. Noninterest income saw a substantial increase, mainly from mortgage banking and a gain on Visa shares, while noninterest expense rose due to higher salaries, technology costs, and core conversion fees. [Net Interest Income](index=92&type=section&id=Net%20Interest%20Income) - Total Company net interest income increased by **$5.8 million (6%)** to **$102.7 million** in Q1 2025, up from **$96.9 million** in Q1 2024. The net interest margin (NIM) increased by **41 basis points** to **6.28%**[267](index=267&type=chunk) - Traditional Banking's net interest income increased by **$5.1 million (10%)** to **$53.3 million**, with NIM rising from **3.33%** to **3.79%**. This was driven by a higher NIM and growth in average interest-earning assets[268](index=268&type=chunk) - Warehouse Lending's net interest income increased by **$771,000 (34%)**, primarily due to a **$118 million (35%)** increase in average outstanding Warehouse balances and higher average line usage (**47% vs. 37%**)[273](index=273&type=chunk) - Republic Payment Solutions' net interest income increased by **$486,000**, mainly due to a reduction in the segment's revenue share component, as the largest marketer-servicer did not meet contractual thresholds for revenue share in Q1 2025[276](index=276&type=chunk)[277](index=277&type=chunk) - Management believes future reductions to the Federal Funds Target Rate (FFTR) will likely negatively impact the Company's net interest income and NIM, especially for Traditional Banking, due to the continuing shift from noninterest-bearing to interest-bearing deposits and potential pricing floors[266](index=266&type=chunk)[271](index=271&type=chunk) Net Change in Net Interest Income (in thousands) | Net Change in Net Interest Income (in thousands) | Total Net Change | Increase / (Decrease) Due to Volume | Increase / (Decrease) Due to Rate | | :--------------------------------------------- | :--------------- | :---------------------------------- | :------------------------------ | | Net change in interest income | $(794) | $844 | $(1,638) | | Net change in interest expense | $(6,563) | $(178) | $(6,385) | | Net change in net interest income | $5,769 | $1,022 | $4,747 | [Provision for Expected Credit Loss Expense](index=101&type=section&id=Provision) - Total Company Provision was a net charge of **$17.7 million** for Q1 2025, a significant decrease from **$30.6 million** in Q1 2024[289](index=289&type=chunk) - **Traditional Banking:** Recorded a net credit of **$769,000** in Q1 2025 (vs. net charge of **$358,000** in Q1 2024), driven by a **$414,000** credit from reclassifying consumer credit cards to held for sale and a **$491,000** credit due to general improvement in historical loss rates[290](index=290&type=chunk) - **Warehouse Lending:** Recorded a net charge of **$47,000** in Q1 2025 (vs. **$309,000** in Q1 2024), reflecting changes in general reserves consistent with outstanding period-end balances[293](index=293&type=chunk) - **Tax Refund Solutions (TRS):** Recorded a net charge of **$15.4 million** in Q1 2025 (vs. **$25.8 million** in Q1 2024), primarily due to better U.S. Treasury payments and a larger percentage of ERA Provision recorded in Q4 2024[295](index=295&type=chunk) - **Republic Credit Solutions (RCS):** Recorded a net charge of **$3.0 million** in Q1 2025 (vs. **$4.2 million** in Q1 2024), mainly due to a **$1.1 million** decrease in Provision for the LOC II product, driven by declining period-end loan balances[297](index=297&type=chunk)[301](index=301&type=chunk) Credit Quality Ratios - Total Company | Credit Quality Ratios - Total Company | March 31, 2025 | March 31, 2024 | | :------------------------------------ | :------------- | :------------- | | ACLL to total loans | 2.01% | 2.08% | | ACLL to nonperforming loans | 465% | 509% | | Net loan charge-offs (recoveries) to average loans | 0.24% | 0.30% | - The Company's net charge-offs to average total Company loans decreased from **0.30%** in Q1 2024 to **0.24%** in Q1 2025, driven by a **$659,000** decrease in RPG net charge-offs[308](index=308&type=chunk) [Noninterest Income](index=107&type=section&id=Noninterest%20Income) - Total Company noninterest income increased by **$9.8 million** in Q1 2025 compared to Q1 2024[310](index=310&type=chunk) - **Traditional Banking:** Noninterest income increased **$7.1 million (85%)**, primarily due to a **$1.5 million** increase in Mortgage Banking income (including a negative fair value adjustment in Q1 2024), a **$4.1 million** gain on sale of Visa Class B-1 shares, and a **$1.6 million** insurance recovery[310](index=310&type=chunk)[312](index=312&type=chunk) - **Tax Refund Solutions (TRS):** Noninterest income increased from **$10.9 million** to **$13.9 million**, driven by a **$3.1 million** increase in net RT fees due to a **30%** increase in per-unit profitability from price increases and minimal changes in revenue sharing[315](index=315&type=chunk) [Noninterest Expense](index=107&type=section&id=Noninterest%20Expense) - Total Company noninterest expense increased to **$58.2 million** for Q1 2025, up from **$51.0 million** in Q1 2024[313](index=313&type=chunk) - **Traditional Banking:** Noninterest expense increased **$8.5 million (21%)**. Key drivers included a **$1.6 million (7%)** increase in salaries and employee benefits (due to higher bonus-related expenses), a **$296,000 (24%)** increase in equipment expenses (obsolete fixed assets write-down), and a **$625,000 (13%)** increase in technology expenses (enhanced security, new ancillary systems)[314](index=314&type=chunk)[316](index=316&type=chunk) - The Traditional Bank also recorded **$5.7 million** in Core Contract deconversion and consulting fees, including **$4.1 million** for contract negotiation assistance (based on anticipated savings of over **$16 million** over five years) and **$1.6 million** for data conversion and system migration costs for a new core system targeting Q3 2025 launch[321](index=321&type=chunk) [Comparison of Financial Condition as of March 31, 2025 and December 31, 2024](index=109&type=section&id=COMPARISON%20OF%20FINANCIAL%20CONDITION%20AS%20OF%20MARCH%2031,%202025%20AND%20DECEMBER%2031,%202024) This section compares the Company's financial condition at March 31, 2025, to December 31, 2024. Cash and cash equivalents significantly increased due to a strategic decision to hold more liquid assets. The investment portfolio grew slightly, while gross loans decreased, primarily in the Tax Refund Solutions segment. The Allowance for Credit Losses on Loans (ACLL) increased, mainly for Refund Advances. Asset quality metrics showed a slight increase in nonperforming loans but a decrease in delinquent loans. Deposits increased overall, with Core Bank growth and shifts within RPG. FHLB advances decreased, and liquidity remained strong with substantial borrowing capacity. Total stockholders' equity increased, and regulatory capital ratios exceeded 'well-capitalized' requirements. [Cash and Cash Equivalents](index=109&type=section&id=Cash%20and%20Cash%20Equivalents) - Cash and cash equivalents increased significantly to **$793 million** as of March 31, 2025, from **$432 million** at December 31, 2024. This increase was a strategic decision to maintain additional on-balance sheet liquidity due to the inverted yield curve, making overnight cash more appealing than longer-term investments[317](index=317&type=chunk)[318](index=318&type=chunk) - Average interest-earning cash and cash equivalent balances were **$517 million** for Q1 2025, compared to **$454 million** for Q1 2024, earning a weighted-average yield of **4.45%** for cash held at the FRB[317](index=317&type=chunk)[319](index=319&type=chunk) [Investment Securities](index=109&type=section&id=Investment%20Securities) - Republic's total investment portfolio increased by **$22 million** from December 31, 2024, to March 31, 2025, driven by **$135 million** in security purchases and **$2 million** in FHLB stock, partially offset by calls, maturities, and paydowns[320](index=320&type=chunk) Purchases of Investment Securities (in thousands) | Purchases of Investment Securities (in thousands) | Purchase Cost | Yield to Maturity | Estimated Weighted Average Life | | :---------------------------------------------- | :------------ | :---------------- | :------------------------------ | | U.S. Government Agencies | $55,000 | 5.01% | 4.86 yrs | | Mortgage-backed securities | $79,584 | 5.20% | 5.53 yrs | | Total | $134,584 | 5.12% | 5.26 yrs | [Loan Portfolio](index=111&type=section&id=Loan%20Portfolio) - Gross loans decreased by **$150 million (2.8%)** during Q1 2025 to **$5.3 billion** as of March 31, 2025[324](index=324&type=chunk) - **Traditional Banking:** Period-end balances decreased by **$3 million** (less than **1%**). Management maintained a stricter pricing strategy due to the inverted yield curve and elevated funding costs, potentially leading to further declines if payoffs outpace originations[324](index=324&type=chunk)[325](index=325&type=chunk) - **Warehouse Lending:** Outstanding balances increased by **$19 million**. The business is volatile and seasonal, highly dependent on the overall mortgage market and industry trends[327](index=327&type=chunk) - **Tax Refund Solutions (TRS):** Outstanding loans decreased by **$155 million**, primarily due to substantial paydowns of ERAs originated in December 2024 and commercial loans made to tax-related businesses[328](index=328&type=chunk)[329](index=329&type=chunk) Loan Portfolio Composition (in thousands) | Loan Portfolio Composition (in thousands) | March 31, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------------ | :------------- | :---------------- | :------- | :------- | | Traditional Banking | $4,566,359 | $4,569,179 | $(2,820) | (0.1)% | | Warehouse lines of credit | $569,502 | $550,760 | $18,742 | 3.4% | | Tax Refund Solutions | $36,185 | $138,614 | $(108,270) | (78.1)% | | Republic Credit Solutions | $117,747 | $128,733 | $(10,986) | (8.5)% | | Total loans | $5,289,793 | $5,439,466 | $(149,673) | (2.8)% | [Allowance for Credit Losses](index=113&type=section&id=Allowance%20for%20Credit%20Losses) - The Company's Allowance for Credit Losses on Loans (ACLL) increased to **$106 million** at March 31, 2025, from **$92 million** at December 31, 2024. As a percentage of total loans, ACLL increased from **1.69%** to **2.01%**[331](index=331&type=chunk) - **Traditional Banking:** ACLL decreased by approximately **$905,000** to **$59 million**, primarily due to a reduction in reserve requirements from a decrease in life-of-loan historical loss rates[331](index=331&type=chunk)[332](index=332&type=chunk) - **Warehouse Lending:** ACLL remained at approximately **$1 million**, or **0.25%** of total Warehouse loans, with no adjustments to the qualitative reserve percentage[333](index=333&type=chunk) - **Tax Refund Solutions (TRS):** ACLL increased, primarily for estimated Refund Advances (RAs) originated in Q1 2025. Total Allowance for RAs was **$26.0 million (3.22% of originations)** as of March 31, 2025. The final charge-off figures are finalized in Q2[334](index=334&type=chunk)[336](index=336&type=chunk) - **Republic Credit Solutions (RCS):** ACLL decreased by **$1 million** to **$20 million**, driven by a decrease in LOC I and LOC II spot loan balances. ACLL to total loans for RCS ranged from **0.25%** (healthcare receivables) to **70.63%** (line-of-credit products)[337](index=337&type=chunk) Management's Allocation of ACLL (in thousands) | Management's Allocation of ACLL (in thousands) | March 31, 2025 ACLL | March 31, 2025 % of Loans to Total | March 31, 2025 ACLL to Loan Class | December 31, 2024 ACLL | December 31, 2024 % of Loans to Total | December 31, 2024 ACLL to Loan Class | | :--------------------------------------------- | :------------------ | :---------------------------------- | :------------------------------- | :------------------- | :---------------------------------- | :------------------------------- | | Traditional Banking | $58,851 | 86% | 1.29% | $59,756 | 84% | 1.31% | | Warehouse lines of credit | $1,421 | 11% | 0.25% | $1,374 | 10% | 0.25% | | Tax Refund Solutions | $25,819 | 1% | 85.09% | $9,793 | 3% | 7.06% | | Republic Credit Solutions | $20,050 | 2% | 17.03% | $20,987 | 2% | 16.30% | | Total | $106,303 | 100% | 2.01% | $91,978 | 100% | 1.69% | [Asset Quality](index=116&type=section&id=Asset%20Quality) - Classified and Special Mention loans increased by approximately **$1.5 million** during Q1 2025, primarily due to a **$3.2 million** increase in residential real estate substandard loans[340](index=340&type=chunk) Classified and Special Mention Loans (in thousands) | Classified and Special Mention Loans (in thousands) | March 31, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------------------------ | :------------- | :---------------- | :------- | :------- | | Total Classified Loans | $31,730 | $28,728 | $3,002 | 10% | | Total Special Mention Loans | $52,756 | $54,283 | $(1,527) | (3)% | | Total Classified and Special Mention Loans | $84,486 | $83,011 | $1,475 | 2% | - Nonperforming loans to total loans increased slightly to **0.43%** as of March 31, 2025, from **0.42%** at December 31, 2024. The ACLL to total nonperforming loans increased to **465%** from **404%**[343](index=343&type=chunk)[344](index=344&type=chunk) Nonperforming Loans and Assets Summary (in thousands) | Nonperforming Loans and Assets Summary (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------------------------------- | :------------- | :---------------- | | Total nonperforming loans | $22,850 | $22,760 | | Nonperforming loans to total loans | 0.43% | 0.42% | | ACLL to nonperforming loans | 465% | 404% | - Total Company delinquent loans (**30+ days past due**) to total loans decreased to **0.33%** as of March 31, 2025, from **0.38%** at December 31, 2024[352](index=352&type=chunk) Delinquent Loan Composition (in thousands) | Delinquent Loan Composition (in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------- | :---------------- | | Total delinquent loans | $17,313 | $20,489 | | Delinquency ratio | 0.33% | 0.38% | [Deposits](index=121&type=section&id=Deposits) - Total period-end deposits increased by **$195 million (4%)** from December 31, 2024, to **$5.4 billion** as of March 31, 2025[359](index=359&type=chunk) - **Core Bank:** Deposits increased by **$175 million**, with interest-bearing deposits up **$149 million** (driven by IOLTA, business, and consumer money market accounts) and noninterest-bearing deposits up **$26 million**[359](index=359&type=chunk)[360](index=360&type=chunk) - **Republic Processing Group (RPG):** Deposits increased by **$20 million**, a net result of a **$161 million** increase in noninterest-bearing TRS deposits (from RTs), a **$200 million** decline in interest-bearing TRS brokered deposits, a **$7 million** increase in RCS deposits, and a **$51 million** increase in prepaid card balances[361](index=361&type=chunk)[366](index=366&type=chunk) Deposit Composition (in thousands) | Deposit Composition (in thousands) | March 31, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------- | :------------- | :---------------- | :------- | :------- | | Total Core Bank deposits | $4,781,873 | $4,606,458 | $175,415 | 4% | | Total Republic Processing Group deposits | $624,019 | $604,088 | $19,931 | 3% | | Total deposits | $5,405,892 | $5,210,546 | $195,346 | 4% | [Federal Home Loan Bank Advances](index=122&type=section&id=Federal%20Home%20Loan%20Bank%20Advances) - Total FHLB advances decreased to **$370 million** as of March 31, 2025, from **$395 million** at December 31, 2024, with no overnight borrowings outstanding. The weighted-average maturity was **3.11 years**, and the weighted-average cost was **4.35%** (including swaps)[362](index=362&type=chunk)[363](index=363&type=chunk) [Interest Rate Swaps](index=122&type=section&id=Interest%20Rate%20Swaps) - The Bank uses interest rate swaps for client transactions and to manage interest rate risk, entering into offsetting positions for non-hedge swaps. Additionally, **$100 million** in notional balance sheet related interest rate swaps were entered into in Q2 2024 to leverage attractive long-term pricing from the inverted yield curve[364](index=364&type=chunk)[365](index=365&type=chunk) [Liquidity](index=122&type=section&id=Liquidity) - The Bank maintains sufficient liquidity through liquid assets (cash, cash equivalents, unencumbered investment securities) and borrowing capacity (FHLB, Federal Reserve, unsecured credit lines). Total liquid assets and available borrowing capacity increased to **$2.1 billion** as of March 31, 2025, from **$1.77 billion** at December 31, 2024[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) Liquid Assets and Borrowing Capacity (in thousands) | Liquid Assets and Borrowing Capacity (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------- | :---------------- | | Total liquid assets | $1,201,797 | $864,334 | | Total available borrowing capacity | $896,758 | $901,168 | | Total liquid assets and available borrowing capacity | $2,098,555 | $1,765,502 | - The loan-to-deposit ratio (excluding brokered deposits) was **100%** as of March 31, 2025, down from **111%** at December 31, 2024. Uninsured deposits totaled **$1.9 billion (36% of total deposits)**[369](index=369&type=chunk)[370](index=370&type=chunk) [Capital](index=124&type=section&id=Capital) - Total stockholders' equity increased from **$992 million** at December 31, 2024, to **$1.0 billion** at March 31, 2025, primarily due to net income, offset by cash dividends[372](index=372&type=chunk) - The Company and the Bank exceed all 'well-capitalized' regulatory requirements under Basel III, including Total Risk-Based Capital, Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Tier 1 Leverage ratios[376](index=376&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk) Capital Ratios | Capital Ratios | March 31, 2025 Ratio | December 31, 2024 Ratio | | :----------------------------- | :------------------- | :-------------------- | | Total capital to risk-weighted assets (Republic Bancorp, Inc.) | 17.84% | 16.98% | | Common equity tier 1 capital to risk-weighted assets (Republic Bancorp, Inc.) | 16.58% | 15.73% | | Tier 1 (core) capital to risk-weighted assets (Republic Bancorp, Inc.) | 16.58% | 15.73% | | Tier 1 leverage capital to average assets (Republic Bancorp, Inc.) | 13.75% | 14.07% | - The deferral of CECL impact on regulatory capital (elected in 2020) resulted in regulatory capital ratios being approximately **0 basis points** lower at March 31, 2025, and **3 basis points** lower at December 31, 2024, if not for the deferral[381](index=381&type=chunk) [Asset/Liability Management and Market Risk](index=128&type=section&id=Asset%2FLiability%20Management%20and%20Market%20Risk) - Asset/liability management aims to ensure safety, liquidity, regulatory capital compliance, and acceptable net interest income. Interest rate risk is a significant concern, monitored through static and dynamic earnings simulation models[383](index=383&type=chunk)[385](index=385&type=chunk) Bank Interest Rate Sensitivity (% Change from base net interest income) | Bank Interest Rate Sensitivity (% Change from base net interest income) | -400 Basis Points | -300 Basis Points | -200 Basis Points | -100 Basis Points | +100 Basis Points | +200 Basis Points | +300 Basis Points | +400 Basis Points | | :------------------------------------------------------------------ | :---------------- | :---------------- | :---------------- | :---------------- | :---------------- | :---------------- | :---------------- | :---------------- | | As of March 31, 2025 | (2.3)% | (2.3)% | (5.5)% | (2.8)% | 3.0% | 6.1% | 8.9% | 12.0% | | As of December 31, 2024 | 3.4% | 4.4% | (0.2)% | 0.2% | 1.5% | 3.1% | 4.4% | 6.0% | - As of March 31, 2025, the Bank's earnings are more sensitive to fluctuations in short-term interest rates. Up-rate scenarios improved due to higher interest-earning cash balances, while down-rate scenarios deteriorated due to these same cash balances and lower deposit beta assumptions, partially offset by assumed increases in mortgage banking income[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk.](index=92&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) Information regarding quantitative and qualitative disclosures about market risk is incorporated by reference from Item 2, 'Management's Discussion and Analysis of Financial Condition and Results of Operations,' specifically the 'Asset/Liability Management and Market Risk' section. - Information required by this item is included under Part I, Item 2. 'Management's Discussion and Analysis of Financial Condition and Results of Operations,' specifically the 'Asset/Liability Management and Market Risk' section[390](index=390&type=chunk) [Item 4. Controls and Procedures.](index=92&type=section&id=Item%204.%20Controls%20and%20Procedures.) As of March 31, 2025, Republic Bancorp, Inc.'s management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective. No material changes to internal control over financial reporting occurred during the quarter. - As of March 31, 2025, the Company's disclosure controls and procedures were evaluated and deemed effective by management, including the CEO and CFO[391](index=391&type=chunk) - No material changes in the Company's internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025[391](index=391&type=chunk) [PART II — OTHER INFORMATION](index=92&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, other information, and exhibits. [Item 1. Legal Proceedings.](index=92&type=section&id=Item%201.%20Legal%20Proceedings.) In the ordinary course of business, Republic Bancorp, Inc. and its subsidiary bank are involved in various legal proceedings. Management is not aware of any pending or threatened litigation that, if decided adversely, would result in a material adverse change to the Company's business or consolidated financial position. - Republic and the Bank are defendants in various legal proceedings in the ordinary course of operations[392](index=392&type=chunk) - Management is not aware of any pending or threatened litigation where an adverse decision could materially impact the Company's business or financial position[392](index=392&type=chunk) [Item 1A. Risk Factors.](index=92&type=section&id=Item%201A.%20Risk%20Factors.) This section highlights additional risk factors beyond those disclosed in the 2024 Form 10-K, specifically focusing on the operational risks associated with the planned conversion of the Company's core customer operating system in Q3 2025. Potential adverse impacts include technology disruptions, data loss, transaction errors, reputational damage, customer loss, regulatory scrutiny, and financial liability. - The Company plans to convert its core customer operating system during Q3 2025, which poses significant operational risks[394](index=394&type=chunk) - Potential adverse developments from the core system conversion include