Le Lézard
Classified in: Business
Subjects: EARNINGS, Photo/Multimedia

Republic Bancorp, Inc.'s Third Quarter Net Income from Continuing Operations Increases 7%


Republic Bancorp, Inc. (NASDAQ: RBCAA), headquartered in Louisville, Kentucky, is the holding company of Republic Bank & Trust Company (the "Bank").

Republic Bancorp, Inc. ("Republic" or the "Company") is pleased to report third quarter net income from continuing operations of $17.5 million, a 7% increase over the third quarter of 2018, resulting in Diluted Earnings per Class A Common Share ("Diluted EPS") from continuing operations of $0.83. Year-to-date net income from continuing operations was $63.0 million, which is a 10% increase from the same period in 2018. The Company's return on average assets ("ROA") and return on average equity ("ROE") was 1.58% and 12.11% for the first nine months of 2019.

Steve Trager, Chairman & CEO of Republic commented, "With $2.8 million of primarily nonrecurring tax benefits recorded during the third quarter of 2018 reducing comparability of our quarterly and year-to-date net income metrics, we have benchmarked our 2019 results using pre-tax net income. In addition, the July 2019 sale announcement by the Company of four banking centers created a discontinued operations reporting requirement for these units. As a result, we view our pre-tax net income from continuing operations to be more reflective of our true operating performance for the third quarters and nine months ended September 30, 2019 and 2018.

"As it relates to our pre-tax net income from continuing operations, we are excited about these results. Overall pre-tax net income from continuing operations increased to $21.7 million for the third quarter of 2019, an increase of 20% over the third quarter of 2018. Healthy growth in net interest income, a strong increase in mortgage banking income, and a positive reduction in provision for loan losses within the Republic Processing Group drove the overall results for the quarter," concluded Steve Trager.

The following table highlights Republic's financial performance for the third quarters and nine months ended September 30, 2019 and 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company Financial Performance Highlights

 

 

 

Three Months Ended Sep. 30,

 

 

 

 

Nine Months Ended Sep. 30,

 

 

 

(dollars in thousands, except per share data)

 

 

2019

 

2018

 

$ Change

 

% Change

 

 

2019

 

2018

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Income Tax Expense*:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing Operations

 

 

$

21,660

 

 

$

18,037

 

 

$

3,623

 

20

%

 

 

$

77,543

 

 

$

70,593

 

 

$

6,950

 

10

%

 

Discontinued Operations

 

 

 

1,073

 

 

 

1,172

 

 

 

(99)

 

(8)

 

 

 

 

3,349

 

 

 

3,342

 

 

 

7

 

?

 

 

Total Income Before Income Tax Expense

 

 

$

22,733

 

 

$

19,209

 

 

$

3,524

 

18

 

 

 

$

80,892

 

 

$

73,935

 

 

$

6,957

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income*:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing Operations

 

 

$

17,457

 

 

$

16,322

 

 

$

1,135

 

7

%

 

 

$

63,030

 

 

$

57,537

 

 

$

5,493

 

10

%

 

Discontinued Operations

 

 

 

951

 

 

 

1,089

 

 

 

(138)

 

(13)

 

 

 

 

2,901

 

 

 

3,009

 

 

 

(108)

 

(4)

 

 

Total Net Income

 

 

$

18,408

 

 

$

17,411

 

 

$

997

 

6

 

 

 

$

65,931

 

 

$

60,546

 

 

$

5,385

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS**:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing Operations

 

 

$

0.83

 

 

$

0.78

 

 

$

0.05

 

6

%

 

 

$

3.01

 

 

$

2.76

 

 

$

0.25

 

9

%

 

Discontinued Operations

 

 

 

0.05

 

 

 

0.05

 

 

 

0.00

 

?

 

 

 

 

0.14

 

 

 

0.14

 

 

 

(0.00)

 

?

 

 

Diluted EPS

 

 

$

0.88

 

 

$

0.83

 

 

$

0.05

 

6

 

 

 

$

3.15

 

 

$

2.90

 

 

$

0.25

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Assets

 

 

 

1.29

%

 

 

1.37

%

 

 

NA

 

(6)

%

 

 

 

1.58

%

 

 

1.57

%

 

 

NA

 

1

%

 

Return on Average Equity

 

 

 

9.92

 

 

 

10.31

 

 

 

NA

 

(4)

 

 

 

 

12.11

 

 

 

12.23

 

 

 

NA

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NA ? Not applicable

*See segment-level data below

**Diluted EPS = Diluted Earnings per Class A Common Share

Results of Operations for the Third Quarter of 2019 Compared to the Third Quarter of 2018

The following tables present segment-level pre-tax and after-tax net income results for the third quarters and nine months ended September 30, 2019 and 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX EXPENSE

(dollars in thousands)

 

 

Three Months Ended Sep. 30,

 

 

 

 

Nine Months Ended Sep. 30,

 

 

 

Reportable Segment

 

 

2019

 

2018

 

$ Change

 

% Change

 

 

2019

 

2018

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traditional Banking

 

 

$

12,471

 

$

11,804

 

$

667

 

6

%

 

 

$

33,238

 

$

31,628

 

$

1,610

 

5

%

 

Warehouse Lending

 

 

 

2,744

 

 

3,774

 

 

(1,030)

 

(27)

 

 

 

 

7,427

 

 

9,588

 

 

(2,161)

 

(23)

 

 

Mortgage Banking

 

 

 

1,705

 

 

546

 

 

1,159

 

212

 

 

 

 

3,354

 

 

764

 

 

2,590

 

339

 

 

Core Banking from Continuing Operations

 

 

 

16,920

 

 

16,124

 

 

796

 

5

 

 

 

 

44,019

 

 

41,980

 

 

2,039

 

5

 

 

Tax Refund Solutions

 

 

 

(281)

 

 

(1,251)

 

 

970

 

78

 

 

 

 

18,223

 

 

17,662

 

 

561

 

3

 

 

Republic Credit Solutions

 

 

 

5,021

 

 

3,164

 

 

1,857

 

59

 

 

 

 

15,301

 

 

10,951

 

 

4,350

 

40

 

 

Republic Processing Group from Continuing Operations

 

 

 

4,740

 

 

1,913

 

 

2,827

 

148

 

 

 

 

33,524

 

 

28,613

 

 

4,911

 

17

 

 

Total Company from Continuing Operations

 

 

 

21,660

 

 

18,037

 

 

3,623

 

20

 

 

 

 

77,543

 

 

70,593

 

 

6,950

 

10

 

 

Discontinued Operations

 

 

 

1,073

 

 

1,172

 

 

(99)

 

(8)

 

 

 

 

3,349

 

 

3,342

 

 

7

 

?

 

 

Total Company

 

 

$

22,733

 

$

19,209

 

$

3,524

 

18

 

 

 

$

80,892

 

$

73,935

 

$

6,957

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

(dollars in thousands)

 

 

Three Months Ended Sep. 30,

 

 

 

 

Nine Months Ended Sep. 30,

 

 

 

Reportable Segment

 

 

2019

 

2018

 

$ Change

 

% Change

 

 

2019

 

2018

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traditional Banking

 

 

$

10,349

 

$

10,921

 

$

(572)

 

(5)

%

 

 

$

28,933

 

$

27,055

 

$

1,878

 

7

%

 

Warehouse Lending

 

 

 

2,127

 

 

2,910

 

 

(783)

 

(27)

 

 

 

 

5,756

 

 

7,395

 

 

(1,639)

 

(22)

 

 

Mortgage Banking

 

 

 

1,347

 

 

432

 

 

915

 

212

 

 

 

 

2,650

 

 

604

 

 

2,046

 

339

 

 

Core Banking from Continuing Operations

 

 

 

13,823

 

 

14,263

 

 

(440)

 

(3)

 

 

 

 

37,339

 

 

35,054

 

 

2,285

 

7

 

 

Tax Refund Solutions

 

 

 

(214)

 

 

(452)

 

 

238

 

53

 

 

 

 

13,972

 

 

13,998

 

 

(26)

 

?

 

 

Republic Credit Solutions

 

 

 

3,848

 

 

2,511

 

 

1,337

 

53

 

 

 

 

11,719

 

 

8,485

 

 

3,234

 

38

 

 

Republic Processing Group from Continuing Operations

 

 

 

3,634

 

 

2,059

 

 

1,575

 

76

 

 

 

 

25,691

 

 

22,483

 

 

3,208

 

14

 

 

Total Company from Continuing Operations

 

 

 

17,457

 

 

16,322

 

 

1,135

 

7

 

 

 

 

63,030

 

 

57,537

 

 

5,493

 

10

 

 

Discontinued Operations

 

 

 

951

 

 

1,089

 

 

(138)

 

(13)

 

 

 

 

2,901

 

 

3,009

 

 

(108)

 

(4)

 

 

Total Company

 

 

$

18,408

 

$

17,411

 

$

997

 

6

 

 

 

$

65,931

 

$

60,546

 

$

5,385

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Bank(1) ? While third quarter 2019 Core Bank net income from continuing operations declined by 3% from the third quarter of 2018 due primarily to the previously mentioned tax benefits recorded during the third quarter of 2018, Core Bank pre-tax net income from continuing operations increased a solid 5% over the third quarter of 2018. Benefits from continued growth in net interest income and strong mortgage banking income, partially offset by increases in provision for loan losses ("Provision") and noninterest expense, drove the overall increase in pre-tax net income from continuing operations.

Driven by 12% growth in average loan balances, Core Bank net interest income from continuing operations grew $2.2 million, or 5%, for the third quarter of 2019. The benefit to net interest income resulting from the strong loan growth was partially offset by compression within the Core Bank's net interest margin.

The following tables present the overall changes in the Core Bank's net interest income, net interest margin, as well as average and period-end loan balances by reportable segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

 

Net Interest Margin

 

(dollars in thousands)

 

 

Three Months Ended Sep. 30,

 

 

 

 

 

Three Months Ended Sep. 30,

 

 

 

 

Reportable Segment

 

 

2019

 

2018

 

Change

 

 

2019

 

2018

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traditional Banking*

 

 

$

41,334

 

$

39,083

 

$

2,251

 

 

3.77

%

 

3.83

%

 

(0.06)

%

 

Warehouse Lending

 

 

 

4,329

 

 

4,414

 

 

(85)

 

 

2.30

 

 

3.26

 

 

(0.96)

 

 

Mortgage Banking*

 

 

 

212

 

 

133

 

 

79

 

 

NM

 

 

NM

 

 

NM

 

 

Total Core Bank from Continuing Operations

 

 

 

45,875

 

 

43,630

 

 

2,245

 

 

3.56

 

 

3.77

 

 

(0.21)

 

 

Discontinued Operations

 

 

 

1,545

 

 

1,572

 

 

(27)

 

 

3.50

 

 

3.54

 

 

(0.04)

 

 

Total Core Bank

 

 

$

47,420

 

$

45,202

 

$

2,218

 

 

3.56

 

 

3.76

 

 

(0.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Includes loans held for sale

NM ? Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Loan Balances

 

 

Period-End Loan Balances

 

(dollars in thousands)

 

Three Months Ended Sep. 30,

 

 

 

 

Sep. 30,

 

 

 

Reportable Segment

 

 

2019

 

 

2018

 

$ Change

 

% Change

 

 

 

2019

 

 

2018

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traditional Banking*

 

$

3,581,744

 

$

3,336,633

 

$

245,111

 

7

%

 

 

$

3,590,469

 

$

3,361,158

 

$

229,311

 

7

%

 

Warehouse Lending

 

 

752,089

 

 

541,592

 

 

210,497

 

39

 

 

 

 

973,588

 

 

560,814

 

 

412,774

 

74

 

 

Mortgage Banking*

 

 

17,500

 

 

8,763

 

 

8,737

 

100

 

 

 

 

32,739

 

 

7,862

 

 

24,877

 

316

 

 

Total Core Bank from Continuing Operations

 

 

4,351,333

 

 

3,886,988

 

 

464,345

 

12

 

 

 

 

4,596,796

 

 

3,929,834

 

 

666,962

 

17

 

 

Discontinued Operations

 

 

128,187

 

 

128,190

 

 

(3)

 

?

 

 

 

 

130,770

 

 

129,257

 

 

1,513

 

1

 

 

Total Core Bank

 

$

4,479,520

 

$

4,015,178

 

$

464,342

 

12

 

 

 

$

4,727,566

 

$

4,059,091

 

$

668,475

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Includes loans held for sale

The primary drivers of the changes in the Core Bank's net interest income from continuing operations for the third quarter of 2019, as compared to the third quarter of 2018, were as follows:

Traditional Banking

Driven by growth in average loan balances of $245 million, or 7%, partially offset by net interest margin compression of six basis points, net interest income from continuing operations at the Traditional Banking segment increased $2.3 million, or 6%, over the third quarter of 2018. The primary contributors for the increase in the quarter-over-quarter average loan balances were commercial real estate loans, which grew $94 million, and commercial and industrial loans, which grew $83 million.

The quarter-over-quarter margin compression within the Traditional Banking segment primarily reflected the negative impact of the flat, and in some instances, inverted U.S. Treasury yield curve during 2019 in which short-term and long-term U.S. Treasury yields remained similar to each other. As is generally the case with all banks, the Traditional Bank's asset yields and liability funding costs are substantially determined by the shape of the U.S. Treasury yield curve. As a result, the flat or inverted yield curve continued to place market-based pressure on the Traditional Bank during the quarter thus raising the overall cost of its funding liabilities, which are generally tied to short-term market rates. Concurrently, the Traditional Bank also continued to experience market-based pressures during the quarter to reduce its new loan yields, which are generally tied to longer-term rates. Management expects margin compression challenges to remain in the future as long as the overall U.S. Treasury yield curve remains flat or inverted.

Warehouse Lending

Despite a significant increase in average outstanding Warehouse Lending balances during the third quarter of 2019 compared to the third quarter of 2018, on-going margin compression in the Warehouse segment's net interest margin during the same period drove an $85,000 decrease in its net interest income. The following factors led to the overall changes in the Warehouse segment's net interest income and net interest margin:

The Core Bank's Provision increased to $2.0 million for the third quarter of 2019 from $474,000 for the same period in 2018. The difference in the Provision between the two periods primarily reflected the partial charge-off of one large commercial-related loan that defaulted during the third quarter of 2019.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended:

Years Ended:

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Dec. 31,

 

Dec. 31,

 

Core Banking Credit Quality Ratios

2019

 

2019

 

2019

 

2018

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

0.45

%

0.45

%

0.38

%

0.41

%

0.37

%

0.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total loans (including OREO)

0.45

 

0.47

 

0.38

 

0.41

 

0.37

 

0.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquent loans to total loans (2)

0.30

 

0.29

 

0.19

 

0.23

 

0.22

 

0.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans

0.15

 

0.04

 

0.04

 

0.06

 

0.04

 

0.05

 

(Quarterly rates annualized)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OREO = Other Real Estate Owned

 

 

 

 

 

 

 

 

 

 

 

 

Core Bank noninterest income from continuing operations was $10.7 million during the third quarter of 2019, a $1.9 million, or 21%, increase from the $8.9 million achieved during the third quarter of 2018. Driving the increase in noninterest income was a $1.7 million rise in mortgage banking income, which resulted from a $75 million increase in secondary market loans originated from period to period combined with a $40 million increase in the Bank's pipeline of secondary market loans in process from September 30, 2018 to September 30, 2019. A sharp decline in long-term mortgage rates during the previous nine months, combined with the Bank's continued investments in mortgage resources, contributed to the increased quarter-over-quarter mortgage activity.

Core Bank noninterest expense from continuing operations increased $1.8 million, or 5%, during the third quarter of 2019 compared to the third quarter of 2018 resulting primarily from a $1.3 million, or 7%, increase in salaries and benefits expense. Annual merit increases, as well as, the addition of 60 Core Bank full-time-equivalent employees ("FTEs") from September 30, 2018 to September 30, 2019 primarily drove the increase.

The Core Bank's noninterest expense during the third quarter of 2019 was positively impacted by a $349,000 reduction in FDIC insurance costs. Because the FDIC's Deposit Insurance Fund ("DIF") exceeded a reserve ratio of 1.38% by June 30, 2019, the Bank was able to apply its Small Bank Assessment Credits against its most recent FDIC insurance premium payment.

Republic Processing Group(3)

The Republic Processing Group ("RPG") reported pre-tax net income from continuing operations of $4.7 million for the third quarter of 2019 compared to $1.9 million for the same period in 2018. The positive increase in pre-tax net income at RPG for the quarter can be further segmented by a $1.9 million increase in pre-tax net income from continuing operations for Republic Credit Solutions ("RCS"), and a $970,000 positive swing in pre-tax net loss from continuing operations for Tax Refund Solutions ("TRS").

RCS's increase in pre-tax net income from continuing operations was primarily driven by a $1.6 million reduction in Provision expense resulting from lower Provisions of $1.2 million and $459,000 for RCS's line-of-credit product and its discontinued credit card product, respectively. The overall improvement in the Provision for the line-of-credit product was driven by a decline in its annualized historical loss rate combined with a year-to-year decrease in average outstanding balances. The decrease in losses within the RCS credit-card portfolio was due to the discontinuance of the program, effective January 2019.

Within TRS, a positive change in Provision expense from a net credit of $1.0 million during the third quarter of 2018 to a net credit of $2.0 million during the third quarter of 2019 drove the segment's overall positive swing in net income. These credits to the Provision primarily reflected recoveries on Easy Advance ("EA") loans charged off during the first half of the year. While TRS experienced a higher rate of EAs charged-off from January 1, 2019 to June 30, 2019 than the comparable six months in 2018, it also experienced a higher rate of EA recoveries during the third quarter of 2019 than during the third quarter of 2018.

With the third quarter EA paydowns, the percent of unpaid EAs to total EAs originated was 2.91% at September 30, 2019. This compares to 2.64% at September 30, 2018, a difference of 27 basis points. By comparison, the unpaid EA percentage was 5.84% at March 31, 2019, compared to 4.49% at March 31, 2018, representing a difference of 135 basis points. With all unpaid EAs having been charged off as of June 30, 2019, any EA payments received during the fourth quarter of 2019 will continue to represent recovery credits directly to income.

Discontinued Operations ? Agreement to Sell Four Banking Centers(4)

In July 2019, the Bank entered into a definitive agreement to sell its four banking centers located in the Kentucky cities of Owensboro, Elizabethtown and Frankfort to Limestone Bank ("Limestone"), a subsidiary of Limestone Bancorp, Inc. The agreement provides that Limestone will acquire loans, with balances of approximately $131 million as of September 30, 2019, and assume deposits with balances of approximately $142 million as of the same date, associated with the four banking centers. The $131 million of loan balances to be sold include approximately $20 million of additional loans, primarily mortgage-related, that Republic and Limestone have further agreed to include in the transaction since the date of the original announcement and have been reduced by approximately $965,000 of credit card balances that Republic and Limestone have agreed to remove from the transaction.

In addition to the sale of loans and assumption of deposits, Limestone will also acquire substantially all of the fixed assets of these locations, which had a book value of $1.3 million as of September 30, 2019. Based on the September 30, 2019 deposits, the all-in blended premium for the transaction is expected to be near 6% of the total deposits transferred. The final calculated premium will be primarily based on the trailing 10-day average amount of the deposits as of the closing date, as well as the branch location for the deposits. The transaction is subject to customary closing conditions and is anticipated to be completed in the fourth quarter of 2019.

Total Company Income Taxes

The comparability of the Company's performance metrics for the third quarters and nine months ending September 30, 2019 and 2018 was impacted by additional federal income tax benefits of approximately $2.8 million recorded during the third quarter of 2018 as part of Company's preparation of its fiscal-year 2017 federal tax return. Approximately $2.6 million of those benefits was considered nonrecurring. The specifics of these federal income tax benefits are outlined in the following two paragraphs.

During the third quarter of 2018, the Company completed two separate studies and a tax-accounting-method change that positively impacted income taxes for its 2017 federal tax return and amended filings dating back to fiscal year 2014. As it relates to the two separate studies, the Company recorded benefits for both a fixed asset cost-segregation study and a Research and Development ("R&D") tax-credit study. The R&D tax-credit study resulted in the recognition of R&D credits dating back to 2014. Due to the innovative nature of its business operations, the Company is optimistic that it will continue to qualify for a portion of these federal tax credits annually into the future. The Company also recorded a nonrecurring tax benefit as a result of a cost-segregation study that assigned revised tax lives to select fixed assets based on a detailed engineering-based analysis. The more detailed classification of fixed assets allowed the Company a large one-time recognition of additional depreciation expense for its 2017 federal tax return at a 35% income tax rate, as opposed to the Tax Cuts and Jobs Act rate of 21% it previously expected to receive for these deductions in the future.

In addition to the two studies, the Company also filed for an automatic change in accounting method in combination with its 2017 federal tax return related to the immediate recognition of loan origination costs for income tax purposes, as opposed to the amortization of those costs over the life of the loan. The Company estimates that the $2.8 million benefit of all three of these distinct tax-related items also increased its third quarter 2018 Diluted EPS by $0.13, ROA by 22 basis points, and ROE by 168 basis points.

Republic Bancorp, Inc. (the "Company") is the parent company of Republic Bank & Trust Company (the "Bank"). The Bank currently has 45 full-service banking centers and two loan production offices throughout five states: 32 banking centers in 11 Kentucky communities - Covington, Crestview Hills, Elizabethtown, Florence, Frankfort, Georgetown, Lexington, Louisville, Owensboro, Shelbyville, and Shepherdsville; three banking centers in southern Indiana ? Floyds Knobs, Jeffersonville, and New Albany; seven banking centers in six Florida communities (Tampa MSA) ? Largo, Port Richey, St. Petersburg, Seminole, Tampa, and Temple Terrace and one loan production office in Oldsmar; two banking centers in Tennessee (Nashville MSA) ? Cool Springs (Franklin) and Green Hills (Nashville), and one loan production office in Brentwood; and one banking center in Norwood (Cincinnati), Ohio. The Bank offers internet banking at www.republicbank.com. The Bank also offers separately branded, nation-wide digital banking at www.mymemorybank.com. The Company has $6.1 billion in assets and is headquartered in Louisville, Kentucky. The Company's Class A Common Stock is listed under the symbol "RBCAA" on the NASDAQ Global Select Market.

Republic Bank. It's just easier here. ®

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in the preceding paragraphs are based on our current expectations and assumptions regarding our business, the future impact to our balance sheet and income statement resulting from changes in interest rates, the yield curve, the ability to develop products and strategies in order to meet the Company's long-term strategic goals, the ability to recover previously charged-off Easy Advances, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Actual results could differ materially based upon factors disclosed from time to time in the Company's filings with the U.S. Securities and Exchange Commission, including those factors set forth as "Risk Factors" in the Company's Annual Report on Form 10-K for the period ended December 31, 2018 and Quarterly Report on Form 10-Q for the period ended June 30, 2019. The Company undertakes no obligation to update any forward-looking statements. These forward-looking statements are made only as of the date of this release, and the Company undertakes no obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this release.

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

Sep. 30, 2019

 

Dec. 31, 2018

 

Sep. 30, 2018

 

Assets:

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

397,072

 

$

351,474

 

$

365,512

 

Investment securities

 

 

638,697

 

 

543,771

 

 

513,766

 

Loans held for sale

 

 

51,243

 

 

21,809

 

 

28,899

 

Loans of discontinued operations (4)

 

 

130,770

 

 

123,119

 

 

129,257

 

Loans

 

 

4,664,054

 

 

4,025,108

 

 

4,006,938

 

Allowance for loan and lease losses

 

 

(46,932)

 

 

(44,675)

 

 

(43,824)

 

Loans, net

 

 

4,617,122

 

 

3,980,433

 

 

3,963,114

 

Federal Home Loan Bank stock, at cost

 

 

32,242

 

 

32,067

 

 

32,067

 

Premises and equipment, net

 

 

46,735

 

 

44,820

 

 

45,945

 

Right-of-use assets (5)

 

 

36,051

 

 

?

 

 

?

 

Goodwill

 

 

16,300

 

 

16,300

 

 

16,300

 

Other real estate owned ("OREO")

 

 

119

 

 

160

 

 

70

 

Bank owned life insurance ("BOLI")

 

 

66,037

 

 

64,883

 

 

64,491

 

Other assets and accrued interest receivable

 

 

71,259

 

 

61,568

 

 

62,933

 

Total assets

 

$

6,103,647

 

$

5,240,404

 

$

5,222,354

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

1,031,553

 

$

968,031

 

$

1,065,459

 

Interest-bearing

 

 

2,703,199

 

 

2,348,128

 

 

2,357,926

 

Deposits of discontinued operations (4)

 

 

142,384

 

 

139,986

 

 

143,300

 

Total deposits

 

 

3,877,136

 

 

3,456,145

 

 

3,566,685

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase and other short-term borrowings

 

 

167,949

 

 

182,990

 

 

163,768

 

Operating lease liabilities (5)

 

 

37,391

 

 

?

 

 

?

 

Federal Home Loan Bank advances

 

 

1,170,000

 

 

810,000

 

 

715,000

 

Subordinated note

 

 

41,240

 

 

41,240

 

 

41,240

 

Other liabilities and accrued interest payable

 

 

65,484

 

 

60,095

 

 

58,851

 

Total liabilities

 

 

5,359,200

 

 

4,550,470

 

 

4,545,544

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

744,447

 

 

689,934

 

 

676,810

 

Total liabilities and stockholders' equity

 

$

6,103,647

 

$

5,240,404

 

$

5,222,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended Sep. 30,

 

Nine Months Ended Sep. 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold and other interest-earning deposits

 

$

302,156

 

$

265,111

 

$

296,474

 

$

274,773

 

Investment securities, including FHLB stock

 

 

547,281

 

 

530,468

 

 

541,739

 

 

529,731

 

Loans, including loans held for sale and of discontinued operations

 

 

4,606,139

 

 

4,112,926

 

 

4,430,518

 

 

4,095,901

 

Total interest-earning assets

 

 

5,455,576

 

 

4,908,505

 

 

5,268,731

 

 

4,900,405

 

Total assets

 

 

5,711,636

 

 

5,101,286

 

 

5,557,116

 

 

5,150,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits, including those of discontinued operations

 

$

1,065,904

 

$

1,076,967

 

$

1,140,355

 

$

1,180,187

 

Interest-bearing deposits, including those of discontinued operations

 

 

2,833,632

 

 

2,476,088

 

 

2,684,825

 

 

2,434,407

 

Securities sold under agreements to

 

 

 

 

 

 

 

 

 

 

 

 

 

repurchase and other short-term borrowings

 

 

246,889

 

 

213,195

 

 

232,949

 

 

216,070

 

Federal Home Loan Bank advances

 

 

690,457

 

 

574,130

 

 

638,237

 

 

571,136

 

Subordinated note

 

 

41,240

 

 

41,240

 

 

41,240

 

 

41,240

 

Total interest-bearing liabilities

 

 

3,812,218

 

 

3,304,653

 

 

3,597,251

 

 

3,262,853

 

Stockholders' equity

 

 

742,176

 

 

675,470

 

 

726,019

 

 

660,179

 

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended Sep. 30,

 

Nine Months Ended Sep. 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income (6)

 

$

65,514

 

$

58,490

 

$

208,571

 

$

186,090

 

Total interest expense

 

 

11,573

 

 

7,029

 

 

31,636

 

 

18,729

 

Net interest income

 

 

53,941

 

 

51,461

 

 

176,935

 

 

167,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

 

3,014

 

 

4,038

 

 

24,510

 

 

26,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

3,499

 

 

3,337

 

 

9,917

 

 

10,005

 

Net refund transfer fees

 

 

317

 

 

149

 

 

21,046

 

 

19,974

 

Mortgage banking income

 

 

3,063

 

 

1,357

 

 

7,008

 

 

3,685

 

Interchange fee income

 

 

2,761

 

 

2,514

 

 

8,255

 

 

7,608

 

Program fees

 

 

1,317

 

 

1,686

 

 

3,428

 

 

4,705

 

Increase in cash surrender value of BOLI

 

 

394

 

 

385

 

 

1,153

 

 

1,135

 

Net gains on OREO

 

 

267

 

 

248

 

 

487

 

 

700

 

Other

 

 

777

 

 

1,285

 

 

2,617

 

 

4,024

 

Total noninterest income

 

 

12,395

 

 

10,961

 

 

53,911

 

 

51,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

24,462

 

 

22,489

 

 

74,083

 

 

68,461

 

Occupancy and equipment, net

 

 

6,415

 

 

6,115

 

 

19,144

 

 

18,408

 

Communication and transportation

 

 

994

 

 

1,038

 

 

3,178

 

 

3,639

 

Marketing and development

 

 

1,420

 

 

1,420

 

 

3,776

 

 

3,583

 

FDIC insurance expense

 

 

(8)

 

 

353

 

 

716

 

 

1,205

 

Bank franchise tax expense

 

 

899

 

 

678

 

 

4,264

 

 

3,992

 

Data processing

 

 

2,305

 

 

2,308

 

 

6,542

 

 

7,041

 

Interchange related expense

 

 

1,051

 

 

1,045

 

 

3,435

 

 

2,974

 

Supplies

 

 

286

 

 

306

 

 

1,333

 

 

977

 

Other real estate owned and other repossession expense

 

 

130

 

 

2

 

 

324

 

 

63

 

Legal and professional fees

 

 

1,026

 

 

936

 

 

2,757

 

 

2,699

 

Other

 

 

2,682

 

 

3,657

 

 

9,241

 

 

9,417

 

Total noninterest expense

 

 

41,662

 

 

40,347

 

 

128,793

 

 

122,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax expense

 

 

21,660

 

 

18,037

 

 

77,543

 

 

70,593

 

Income tax expense

 

 

4,203

 

 

1,715

 

 

14,513

 

 

13,056

 

Net income from continuing operations

 

 

17,457

 

 

16,322

 

 

63,030

 

 

57,537

 

Net income from discontinued operations, net of tax (4)

 

 

951

 

 

1,089

 

 

2,901

 

 

3,009

 

Net income

 

$

18,408

 

$

17,411

 

$

65,931

 

$

60,546

 

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Data and Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended Sep. 30,

 

Nine Months Ended Sep. 30,

 

 

2019

 

2018

 

2019

 

2018

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

21,036

 

 

 

20,962

 

 

 

21,014

 

 

 

20,950

 

Diluted weighted average shares outstanding

 

 

21,137

 

 

 

21,120

 

 

 

21,132

 

 

 

21,093

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period-end shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

 

18,744

 

 

 

18,682

 

 

 

18,744

 

 

 

18,682

 

Class B Common Stock

 

 

2,208

 

 

 

2,213

 

 

 

2,208

 

 

 

2,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share (7)

 

$

35.53

 

 

$

32.39

 

 

$

35.53

 

 

$

32.39

 

Tangible book value per share (7)

 

 

34.47

 

 

 

31.34

 

 

 

34.47

 

 

 

31.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share ("EPS") from continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS - Class A Common Stock

 

$

0.83

 

 

$

0.79

 

 

$

3.03

 

 

$

2.78

 

Basic EPS - Class B Common Stock

 

 

0.76

 

 

 

0.72

 

 

 

2.76

 

 

 

2.52

 

Diluted EPS - Class A Common Stock

 

 

0.83

 

 

 

0.78

 

 

 

3.01

 

 

 

2.76

 

Diluted EPS - Class B Common Stock

 

 

0.76

 

 

 

0.71

 

 

 

2.74

 

 

 

2.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from discontinued operations (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS - Class A Common Stock

 

$

0.05

 

 

$

0.05

 

 

$

0.14

 

 

$

0.14

 

Basic EPS - Class B Common Stock

 

 

0.04

 

 

 

0.04

 

 

 

0.12

 

 

 

0.13

 

Diluted EPS - Class A Common Stock

 

 

0.05

 

 

 

0.05

 

 

 

0.14

 

 

 

0.14

 

Diluted EPS - Class B Common Stock

 

 

0.04

 

 

 

0.05

 

 

 

0.13

 

 

 

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS - Class A Common Stock

 

$

0.88

 

 

$

0.84

 

 

$

3.17

 

 

$

2.92

 

Basic EPS - Class B Common Stock

 

 

0.80

 

 

 

0.76

 

 

 

2.88

 

 

 

2.65

 

Diluted EPS - Class A Common Stock

 

 

0.88

 

 

 

0.83

 

 

 

3.15

 

 

 

2.90

 

Diluted EPS - Class B Common Stock

 

 

0.80

 

 

 

0.76

 

 

 

2.87

 

 

 

2.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per Common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

$

0.264

 

 

$

0.242

 

 

$

0.792

 

 

$

0.726

 

Class B Common Stock

 

 

0.240

 

 

 

0.220

 

 

 

0.720

 

 

 

0.660

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.29

%

 

 

1.37

%

 

 

1.58

%

 

 

1.57

%

Return on average equity

 

 

9.92

 

 

 

10.31

 

 

 

12.11

 

 

 

12.23

 

Efficiency ratio (8)

 

 

63

 

 

 

65

 

 

 

56

 

 

 

56

 

Yield on average interest-earning assets (6)

 

 

4.99

 

 

 

4.98

 

 

 

5.48

 

 

 

5.26

 

Cost of average interest-bearing liabilities

 

 

1.32

 

 

 

0.98

 

 

 

1.28

 

 

 

0.88

 

Cost of average deposits (9)

 

 

0.82

 

 

 

0.51

 

 

 

0.76

 

 

 

0.44

 

Net interest spread (6)

 

 

3.67

 

 

 

4.00

 

 

 

4.20

 

 

 

4.38

 

Net interest margin - Total Company (6)

 

 

4.07

 

 

 

4.32

 

 

 

4.60

 

 

 

4.67

 

Net interest margin - Core Bank (1)

 

 

3.56

 

 

 

3.76

 

 

 

3.63

 

 

 

3.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

End of period FTEs (10) - Total Company

 

 

1,093

 

 

 

1,034

 

 

 

1,093

 

 

 

1,034

 

End of period FTEs - Core Bank

 

 

1,013

 

 

 

953

 

 

 

1,013

 

 

 

953

 

Number of full-service banking centers (11)

 

 

45

 

 

 

45

 

 

 

45

 

 

 

45

 

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Data and Ratios

 

As of and for the

 

As of and for the

 

 

Three Months Ended Sep. 30,

 

Nine Months Ended Sep. 30,

 

 

2019

 

2018

 

2019

 

2018

Credit Quality Asset Balances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Assets - Total Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans on nonaccrual status

 

$

20,574

 

 

$

17,015

 

 

$

20,574

 

 

$

17,015

 

Loans past due 90-days-or-more and still on accrual

 

 

175

 

 

 

254

 

 

 

175

 

 

 

254

 

Total nonperforming loans

 

 

20,749

 

 

 

17,269

 

 

 

20,749

 

 

 

17,269

 

OREO

 

 

119

 

 

 

70

 

 

 

119

 

 

 

70

 

Total nonperforming assets

 

$

20,868

 

 

$

17,339

 

 

$

20,868

 

 

$

17,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Assets - Core Bank (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans on nonaccrual status

 

$

20,574

 

 

$

17,015

 

 

$

20,574

 

 

$

17,015

 

Loans past due 90-days-or-more and still on accrual

 

 

?

 

 

 

5

 

 

 

?

 

 

 

5

 

Total nonperforming loans

 

 

20,574

 

 

 

17,020

 

 

 

20,574

 

 

 

17,020

 

OREO

 

 

119

 

 

 

70

 

 

 

119

 

 

 

70

 

Total nonperforming assets

 

$

20,693

 

 

$

17,090

 

 

$

20,693

 

 

$

17,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquent loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquent loans - Core Bank

 

$

13,496

 

 

$

11,840

 

 

$

13,496

 

 

$

11,840

 

Delinquent loans - RPG (3)

 

 

6,876

 

 

 

5,986

 

 

 

6,876

 

 

 

5,986

 

Total delinquent loans - Total Company

 

$

20,372

 

 

$

17,826

 

 

$

20,372

 

 

$

17,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios - Total Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

 

0.44

%

 

 

0.43

%

 

 

0.44

%

 

 

0.43

%

Nonperforming assets to total loans (including OREO)

 

 

0.45

 

 

 

0.43

 

 

 

0.45

 

 

 

0.43

 

Nonperforming assets to total assets

 

 

0.34

 

 

 

0.33

 

 

 

0.34

 

 

 

0.33

 

Allowance for loan and lease losses to total loans

 

 

1.01

 

 

 

1.09

 

 

 

1.01

 

 

 

1.09

 

Allowance for loan and lease losses to nonperforming loans

 

 

226

 

 

 

254

 

 

 

226

 

 

 

254

 

Delinquent loans to total loans (2)

 

 

0.44

 

 

 

0.44

 

 

 

0.44

 

 

 

0.44

 

Net charge-offs to average loans (annualized)

 

 

0.19

 

 

 

0.52

 

 

 

0.68

 

 

 

0.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios - Core Bank:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

 

0.45

%

 

 

0.43

%

 

 

0.45

%

 

 

0.43

%

Nonperforming assets to total loans (including OREO)

 

 

0.45

 

 

 

0.44

 

 

 

0.45

 

 

 

0.44

 

Nonperforming assets to total assets

 

 

0.35

 

 

 

0.33

 

 

 

0.35

 

 

 

0.33

 

Allowance for loan and lease losses to total loans

 

 

0.73

 

 

 

0.80

 

 

 

0.73

 

 

 

0.80

 

Allowance for loan and lease losses to nonperforming loans

 

 

163

 

 

 

185

 

 

 

163

 

 

 

185

 

Delinquent loans to total loans

 

 

0.30

 

 

 

0.30

 

 

 

0.30

 

 

 

0.30

 

Net charge-offs to average loans (annualized)

 

 

0.15

 

 

 

0.04

 

0.08

0.04

 

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Comparison

 

 

 

Sep. 30, 2019

 

Jun. 30, 2019

 

Mar. 31, 2019

 

Dec. 31, 2018

 

Sep. 30, 2018

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

397,072

 

$

473,779

 

$

345,512

 

$

351,474

 

$

365,512

 

 

Investment securities

 

 

638,697

 

 

447,512

 

 

498,318

 

 

543,771

 

 

513,766

 

 

Loans held for sale

 

 

51,243

 

 

63,949

 

 

24,177

 

 

21,809

 

 

28,899

 

 

Loans of discontinued operations (4)

 

 

130,770

 

 

131,881

 

 

129,105

 

 

123,119

 

 

129,257

 

 

Loans

 

 

4,664,054

 

 

4,390,533

 

 

4,169,605

 

 

4,025,108

 

 

4,006,938

 

 

Allowance for loan and lease losses

 

 

(46,932)

 

 

(45,983)

 

 

(57,961)

 

 

(44,675)

 

 

(43,824)

 

 

Loans, net

 

 

4,617,122

 

 

4,344,550

 

 

4,111,644

 

 

3,980,433

 

 

3,963,114

 

 

Federal Home Loan Bank stock, at cost

 

 

32,242

 

 

32,242

 

 

29,965

 

 

32,067

 

 

32,067

 

 

Premises and equipment, net

 

 

46,735

 

 

44,199

 

 

43,527

 

 

44,820

 

 

45,945

 

 

Right-of-use assets (5)

 

 

36,051

 

 

37,450

 

 

38,738

 

 

?

 

 

?

 

 

Goodwill

 

 

16,300

 

 

16,300

 

 

16,300

 

 

16,300

 

 

16,300

 

 

Other real estate owned

 

 

119

 

 

1,095

 

 

216

 

 

160

 

 

70

 

 

Bank owned life insurance

 

 

66,037

 

 

65,642

 

 

65,265

 

 

64,883

 

 

64,491

 

 

Other assets and accrued interest receivable

 

 

71,259

 

 

64,535

 

 

63,001

 

 

61,568

 

 

62,933

 

 

Total assets

 

$

6,103,647

 

$

5,723,134

 

$

5,365,768

 

$

5,240,404

 

$

5,222,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

1,031,553

 

$

1,003,793

 

$

1,141,764

 

$

968,031

 

$

1,065,459

 

 

Interest-bearing

 

 

2,703,199

 

 

2,557,127

 

 

2,485,240

 

 

2,348,128

 

 

2,357,926

 

 

Deposits of discontinued operations (4)

 

 

142,384

 

 

152,954

 

 

147,312

 

 

139,986

 

 

143,300

 

 

Total deposits

 

 

3,877,136

 

 

3,713,874

 

 

3,774,316

 

 

3,456,145

 

 

3,566,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

repurchase and other short-term borrowings

 

 

167,949

 

 

226,002

 

 

173,168

 

 

182,990

 

 

163,768

 

 

Operating lease liabilities (5)

 

 

37,391

 

 

38,852

 

 

40,203

 

 

?

 

 

?

 

 

Federal Home Loan Bank advances

 

 

1,170,000

 

 

915,000

 

 

560,000

 

 

810,000

 

 

715,000

 

 

Subordinated note

 

 

41,240

 

 

41,240

 

 

41,240

 

 

41,240

 

 

41,240

 

 

Other liabilities and accrued interest payable

 

 

65,484

 

 

56,738

 

 

59,750

 

 

60,095

 

 

58,851

 

 

Total liabilities

 

 

5,359,200

 

 

4,991,706

 

 

4,648,677

 

 

4,550,470

 

 

4,545,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

744,447

 

 

731,428

 

 

717,091

 

 

689,934

 

 

676,810

 

 

Total liabilities and stockholders' equity

 

$

6,103,647

 

$

5,723,134

 

$

5,365,768

 

$

5,240,404

 

$

5,222,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Comparison

 

 

 

Sep. 30, 2019

 

Jun. 30, 2019

 

Mar. 31, 2019

 

Dec. 31, 2018

 

Sep. 30, 2018

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold and other interest-earning deposits

 

$

302,156

 

$

297,205

 

$

289,928

 

$

199,134

 

$

265,111

 

 

Investment securities, including FHLB stock

 

 

547,281

 

 

514,366

 

 

563,752

 

 

579,429

 

 

530,468

 

 

Loans, including loans held for sale and of discontinued operations

 

 

4,606,139

 

 

4,424,905

 

 

4,256,673

 

 

4,092,004

 

 

4,112,926

 

 

Total interest-earning assets

 

 

5,455,576

 

 

5,236,476

 

 

5,110,353

 

 

4,870,567

 

 

4,908,505

 

 

Total assets

 

 

5,711,636

 

 

5,480,525

 

 

5,476,671

 

 

5,070,845

 

 

5,101,286

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits, including those of discontinued operations

 

$

1,065,904

 

$

1,098,817

 

$

1,258,461

 

$

1,050,236

 

$

1,076,967

 

 

Interest-bearing deposits, including those of discontinued operations

 

 

2,833,632

 

 

2,588,836

 

 

2,629,765

 

 

2,477,962

 

 

2,476,088

 

 

Securities sold under agreements to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

repurchase and other short-term borrowings

 

 

246,889

 

 

220,189

 

 

231,602

 

 

252,073

 

 

213,195

 

 

Federal Home Loan Bank advances

 

 

690,457

 

 

710,879

 

 

511,408

 

 

515,413

 

 

574,130

 

 

Subordinated note

 

 

41,240

 

 

41,240

 

 

41,240

 

 

41,240

 

 

41,240

 

 

Total interest-bearing liabilities

 

 

3,812,218

 

 

3,561,144

 

 

3,414,015

 

 

3,286,688

 

 

3,304,653

 

 

Stockholders' equity

 

 

742,176

 

 

728,723

 

 

706,833

 

 

687,156

 

 

675,470

 

 

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Sep. 30, 2019

 

 

Jun. 30, 2019

 

 

Mar. 31, 2019

 

 

Dec. 31, 2018

 

 

Sep. 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income (6)

 

$

65,514

 

$

62,982

 

$

80,075

 

$

60,195

 

$

58,490

 

 

Total interest expense

 

 

11,573

 

 

10,688

 

 

9,375

 

 

7,573

 

 

7,029

 

 

Net interest income

 

 

53,941

 

 

52,294

 

 

70,700

 

 

52,622

 

 

51,461

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

 

3,014

 

 

4,362

 

 

17,134

 

 

5,130

 

 

4,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

3,499

 

 

3,348

 

 

3,070

 

 

3,307

 

 

3,337

 

 

Net refund transfer fees

 

 

317

 

 

3,629

 

 

17,100

 

 

55

 

 

149

 

 

Mortgage banking income

 

 

3,063

 

 

2,410

 

 

1,535

 

 

1,126

 

 

1,357

 

 

Interchange fee income

 

 

2,761

 

 

2,977

 

 

2,517

 

 

2,587

 

 

2,514

 

 

Program fees

 

 

1,317

 

 

1,037

 

 

1,074

 

 

1,520

 

 

1,686

 

 

Increase in cash surrender value of BOLI

 

 

394

 

 

377

 

 

382

 

 

392

 

 

385

 

 

Net gains on OREO

 

 

267

 

 

90

 

 

130

 

 

29

 

 

248

 

 

Other

 

 

777

 

 

715

 

 

1,125

 

 

572

 

 

1,285

 

 

Total noninterest income

 

 

12,395

 

 

14,583

 

 

26,933

 

 

9,588

 

 

10,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

24,462

 

 

24,952

 

 

24,669

 

 

21,423

 

 

22,489

 

 

Occupancy and equipment, net

 

 

6,415

 

 

6,311

 

 

6,418

 

 

6,299

 

 

6,115

 

 

Communication and transportation

 

 

994

 

 

1,040

 

 

1,144

 

 

1,104

 

 

1,038

 

 

Marketing and development

 

 

1,420

 

 

1,269

 

 

1,087

 

 

763

 

 

1,420

 

 

FDIC insurance expense

 

 

(8)

 

 

285

 

 

439

 

 

254

 

 

353

 

 

Bank franchise tax expense

 

 

899

 

 

898

 

 

2,467

 

 

832

 

 

678

 

 

Data processing

 

 

2,305

 

 

2,178

 

 

2,059

 

 

2,394

 

 

2,308

 

 

Interchange related expense

 

 

1,051

 

 

1,181

 

 

1,203

 

 

1,127

 

 

1,045

 

 

Supplies

 

 

286

 

 

571

 

 

476

 

 

439

 

 

306

 

 

OREO expense

 

 

130

 

 

148

 

 

46

 

 

31

 

 

2

 

 

Legal and professional fees

 

 

1,026

 

 

845

 

 

886

 

 

753

 

 

936

 

 

Other

 

 

2,682

 

 

2,876

 

 

3,683

 

 

2,715

 

 

3,657

 

 

Total noninterest expense

 

 

41,662

 

 

42,554

 

 

44,577

 

 

38,134

 

 

40,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax expense

 

 

21,660

 

 

19,961

 

 

35,922

 

 

18,946

 

 

18,037

 

 

Income tax expense

 

 

4,203

 

 

3,008

 

 

7,302

 

 

2,867

 

 

1,715

 

 

Net income from continuing operations

 

 

17,457

 

 

16,953

 

 

28,620

 

 

16,079

 

 

16,322

 

 

Net income from discontinued operations, net of tax (4)

 

 

951

 

 

1,054

 

 

896

 

 

1,227

 

 

1,089

 

 

Net income

 

$

18,408

 

$

18,007

 

$

29,516

 

$

17,306

 

$

17,411

 

 

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Data and Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

 

 

 

Sep. 30, 2019

 

 

 

Jun. 30, 2019

 

 

 

Mar. 31, 2019

 

 

 

Dec. 31, 2018

 

 

 

Sep. 30, 2018

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

21,036

 

 

 

21,016

 

 

 

20,973

 

 

 

20,975

 

 

 

20,962

 

 

Diluted weighted average shares outstanding

 

 

21,137

 

 

 

21,138

 

 

 

21,106

 

 

 

21,113

 

 

 

21,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period-end shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

 

18,744

 

 

 

18,740

 

 

 

18,698

 

 

 

18,675

 

 

 

18,682

 

 

Class B Common Stock

 

 

2,208

 

 

 

2,208

 

 

 

2,213

 

 

 

2,213

 

 

 

2,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share (7)

 

$

35.53

 

 

$

34.92

 

 

$

34.29

 

 

$

33.03

 

 

$

32.39

 

 

Tangible book value per share (7)

 

 

34.47

 

 

 

33.87

 

 

 

33.25

 

 

 

31.98

 

 

 

31.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share ("EPS") from continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS - Class A Common Stock

 

$

0.83

 

 

$

0.81

 

 

$

1.37

 

 

$

0.78

 

 

$

0.79

 

 

Basic EPS - Class B Common Stock

 

 

0.76

 

 

 

0.74

 

 

 

1.25

 

 

 

0.71

 

 

 

0.72

 

 

Diluted EPS - Class A Common Stock

 

 

0.83

 

 

 

0.81

 

 

 

1.37

 

 

 

0.78

 

 

 

0.78

 

 

Diluted EPS - Class B Common Stock

 

 

0.76

 

 

 

0.74

 

 

 

1.25

 

 

 

0.71

 

 

 

0.71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from discontinued operations (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS - Class A Common Stock

 

$

0.05

 

 

$

0.05

 

 

$

0.05

 

 

$

0.05

 

 

$

0.05

 

 

Basic EPS - Class B Common Stock

 

 

0.04

 

 

 

0.05

 

 

 

0.04

 

 

 

0.05

 

 

 

0.04

 

 

Diluted EPS - Class A Common Stock

 

 

0.05

 

 

 

0.05

 

 

 

0.04

 

 

 

0.05

 

 

 

0.05

 

 

Diluted EPS - Class B Common Stock

 

 

0.04

 

 

 

0.04

 

 

 

0.03

 

 

 

0.04

 

 

 

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS - Class A Common Stock

 

$

0.88

 

 

$

0.86

 

 

$

1.42

 

 

$

0.83

 

 

$

0.84

 

 

Basic EPS - Class B Common Stock

 

 

0.80

 

 

 

0.79

 

 

 

1.29

 

 

 

0.76

 

 

 

0.76

 

 

Diluted EPS - Class A Common Stock

 

 

0.88

 

 

 

0.86

 

 

 

1.41

 

 

 

0.83

 

 

 

0.83

 

 

Diluted EPS - Class B Common Stock

 

 

0.80

 

 

 

0.78

 

 

 

1.28

 

 

 

0.75

 

 

 

0.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per Common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

$

0.264

 

 

$

0.264

 

 

$

0.264

 

 

$

0.242

 

 

$

0.242

 

 

Class B Common Stock

 

 

0.240

 

 

 

0.240

 

 

 

0.240

 

 

 

0.220

 

 

 

0.220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.29

%

 

 

1.31

%

 

 

2.16

%

 

 

1.37

%

 

 

1.37

%

 

Return on average equity

 

 

9.92

 

 

 

9.88

 

 

 

16.70

 

 

 

10.07

 

 

 

10.31

 

 

Efficiency ratio (8)

 

 

63

 

 

 

63

 

 

 

46

 

 

 

61

 

 

 

65

 

 

Yield on average interest-earning assets (6)

 

 

4.99

 

 

 

5.02

 

 

 

6.47

 

 

 

5.17

 

 

 

4.98

 

 

Cost of average interest-bearing liabilities

 

 

1.32

 

 

 

1.32

 

 

 

1.21

 

 

 

1.05

 

 

 

0.98

 

 

Cost of average deposits (9)

 

 

0.82

 

 

 

0.75

 

 

 

0.69

 

 

 

0.59

 

 

 

0.51

 

 

Net interest spread (6)

 

 

3.67

 

 

 

3.70

 

 

 

5.26

 

 

 

4.12

 

 

 

4.00

 

 

Net interest margin - Total Company (6)

 

 

4.07

 

 

 

4.12

 

 

 

5.66

 

 

 

4.46

 

 

 

4.32

 

 

Net interest margin - Core Bank (1)

 

 

3.56

 

 

 

3.62

 

 

 

3.76

 

 

 

3.85

 

 

 

3.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

End of period FTEs (10) - Total Company

 

 

1,093

 

 

 

1,089

 

 

 

1,073

 

 

 

1,051

 

 

 

1,034

 

 

End of period FTEs - Core Bank

 

 

1,013

 

 

 

1,012

 

 

 

997

 

 

 

968

 

 

 

953

 

 

Number of full-service banking centers (11)

 

 

45

 

 

 

45

 

 

 

45

 

 

 

45

 

 

 

45

 

 

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Data and Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

Sep. 30, 2019

 

Jun. 30, 2019

 

Mar. 31, 2019

 

Dec. 31, 2018

 

Sep. 30, 2018

Credit Quality Asset Balances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Assets - Total Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans on nonaccrual status

 

$

20,574

 

 

$

19,238

 

 

$

15,361

 

 

$

15,993

 

 

$

17,015

 

Loans past due 90-days-or-more and still on accrual

 

 

175

 

 

 

166

 

 

 

199

 

 

 

145

 

 

 

254

 

Total nonperforming loans

 

 

20,749

 

 

 

19,404

 

 

 

15,560

 

 

 

16,138

 

 

 

17,269

 

OREO

 

 

119

 

 

 

1,095

 

 

 

216

 

 

 

160

 

 

 

70

 

Total nonperforming assets

 

$

20,868

 

 

$

20,499

 

 

$

15,776

 

 

$

16,298

 

 

$

17,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Assets - Core Bank (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans on nonaccrual status

 

$

20,574

 

 

$

19,238

 

 

$

15,361

 

 

$

15,993

 

 

$

17,015

 

Loans past due 90-days-or-more and still on accrual

 

 

?

 

 

 

?

 

 

 

4

 

 

 

13

 

 

 

5

 

Total nonperforming loans

 

 

20,574

 

 

 

19,238

 

 

 

15,365

 

 

 

16,006

 

 

 

17,020

 

OREO

 

 

119

 

 

 

1,095

 

 

 

216

 

 

 

160

 

 

 

70

 

Total nonperforming assets

 

$

20,693

 

 

$

20,333

 

 

$

15,581

 

 

$

16,166

 

 

$

17,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquent Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquent loans - Core Bank

 

$

13,496

 

 

$

12,524

 

 

$

7,727

 

 

$

8,875

 

 

$

11,840

 

Delinquent loans - RPG (3) (12)

 

 

6,876

 

 

 

6,802

 

 

 

26,460

 

 

 

7,087

 

 

 

5,986

 

Total delinquent loans - Total Company

 

$

20,372

 

 

$

19,326

 

 

$

34,187

 

 

$

15,962

 

 

$

17,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios - Total Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

 

0.44

%

 

 

0.44

%

 

 

0.37

%

 

 

0.40

%

 

 

0.43

%

Nonperforming assets to total loans (including OREO)

 

 

0.45

 

 

 

0.47

 

 

 

0.38

 

 

 

0.40

 

 

 

0.43

 

Nonperforming assets to total assets

 

 

0.34

 

 

 

0.36

 

 

 

0.29

 

 

 

0.31

 

 

 

0.33

 

Allowance for loan and lease losses to total loans

 

 

1.01

 

 

 

1.05

 

 

 

1.39

 

 

 

1.11

 

 

 

1.09

 

Allowance for loan and lease losses to nonperforming loans

 

 

226

 

 

 

237

 

 

 

373

 

 

 

277

 

 

 

254

 

Delinquent loans to total loans (2) (12)

 

 

0.44

 

 

 

0.44

 

 

 

0.82

 

 

 

0.40

 

 

 

0.44

 

Net charge-offs to average loans (annualized)

 

 

0.19

 

 

 

1.49

 

 

 

0.19

 

 

 

0.42

 

 

 

0.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios - Core Bank:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

 

0.45

%

 

 

0.45

%

 

 

0.38

%

 

 

0.41

%

 

 

0.43

%

Nonperforming assets to total loans (including OREO)

 

 

0.45

 

 

 

0.47

 

 

 

0.38

 

 

 

0.41

 

 

 

0.44

 

Nonperforming assets to total assets

 

 

0.35

 

 

 

0.37

 

 

 

0.31

 

 

 

0.32

 

 

 

0.33

 

Allowance for loan and lease losses to total loans

 

 

0.73

 

 

 

0.77

 

 

 

0.78

 

 

 

0.80

 

 

 

0.80

 

Allowance for loan and lease losses to nonperforming loans

 

 

163

 

 

 

171

 

 

 

205

 

 

 

197

 

 

 

185

 

Delinquent loans to total loans

 

 

0.30

 

 

 

0.29

 

 

 

0.18

 

 

 

0.23

 

 

 

0.30

 

Net charge-offs to average loans (annualized)

 

 

0.15

 

 

 

0.04

 

 

 

0.04

 

 

 

0.12

 

 

 

0.04

 

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
Segment Data:

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

As of September 30, 2019, the Company was divided into five reportable segments: Traditional Banking, Warehouse Lending ("Warehouse"), Mortgage Banking, Tax Refund Solutions ("TRS"), and Republic Credit Solutions ("RCS"). Management considers the first three segments to collectively constitute "Core Bank" or "Core Banking" operations, while the last two segments collectively constitute Republic Processing Group ("RPG") operations. The Bank's Correspondent Lending channel and the Company's national branchless banking platform, MemoryBank®, are considered part of the Traditional Banking segment.

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

 

 

 

 

 

Reportable Segment:

 

Nature of Operations:

 

Primary Drivers of Net Revenue:

 

 

 

 

 

Core Banking:

 

 

 

 

 

 

 

 

 

Traditional Banking

 

Provides traditional banking products to clients in its market footprint primarily via its network of banking centers and to clients outside of its market footprint primarily via its Digital and Correspondent Lending delivery channels.

 

Loans, investments, and deposits.

 

 

 

 

 

Warehouse Lending

 

Provides short-term, revolving credit facilities to mortgage bankers across the United States.

 

Mortgage warehouse lines of credit.

 

 

 

 

 

Mortgage Banking

 

Primarily originates, sells and services long-term, single family, first lien residential real estate loans primarily to clients in the Bank's market footprint.

 

Loan sales and servicing.

 

 

 

 

 

Republic Processing Group:

 

 

 

 

 

 

 

 

 

Tax Refund Solutions

 

TRS offers tax-related credit products and facilitates the receipt and payment of federal and state tax refunds through Refund Transfer products. The RPS division of TRS offers general-purpose reloadable cards. TRS and RPS products are primarily provided to clients outside of the Bank's market footprint.

 

Loans, refund transfers, and prepaid cards.

 

 

 

 

 

Republic Credit Solutions

 

Offers consumer credit products. RCS products are primarily provided to clients outside of the Bank's market footprint, with a substantial portion of RCS clients considered subprime or near-prime borrowers.

 

Unsecured, consumer loans.

The accounting policies used for Republic's reportable segments are the same as those described in the summary of significant accounting policies in the Company's 2018 Annual Report on Form 10-K. Republic evaluates segment performance using operating income. The Company allocates goodwill to the Traditional Banking segment. Republic generally allocates income taxes based on income before income tax expense unless reasonable and specific segment allocations can be made. The Company makes transactions among reportable segments at carrying value.

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)
Segment information for the quarters and nine months ended September 30, 2019 and 2018 follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2019

 

 

 

Core Banking

 

 

Republic Processing Group ("RPG")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Tax

 

 

Republic

 

 

 

 

 

 

 

 

 

 

Traditional

 

 

 

Warehouse

 

 

 

Mortgage

 

 

 

Core

 

 

 

Refund

 

 

Credit

 

 

Total

 

 

 

Total

 

(dollars in thousands)

 

Banking

 

 

 

Lending

 

 

 

Banking

 

 

 

Banking

 

 

 

Solutions

 

 

Solutions

 

 

RPG

 

 

 

Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

41,334

 

 

$

4,329

 

 

$

212

 

 

$

45,875

 

 

$

295

 

$

7,771

 

$

8,066

 

 

$

53,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

1,416

 

 

 

620

 

 

 

?

 

 

 

2,036

 

 

 

(2,008)

 

 

2,986

 

 

978

 

 

 

3,014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net refund transfer fees

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

317

 

 

?

 

 

317

 

 

 

317

 

Mortgage banking income

 

?

 

 

 

?

 

 

 

3,063

 

 

 

3,063

 

 

 

?

 

 

?

 

 

?

 

 

 

3,063

 

Program fees

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

122

 

 

1,195

 

 

1,317

 

 

 

1,317

 

Other noninterest income

 

7,686

 

 

 

(79)

 

 

 

67

 

 

 

7,674

 

 

 

24

 

 

?

 

 

24

 

 

 

7,698

 

Total noninterest income

 

7,686

 

 

 

(79)

 

 

 

3,130

 

 

 

10,737

 

 

 

463

 

 

1,195

 

 

1,658

 

 

 

12,395

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

35,133

 

 

 

886

 

 

 

1,637

 

 

 

37,656

 

 

 

3,047

 

 

959

 

 

4,006

 

 

 

41,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income tax expense

 

12,471

 

 

 

2,744

 

 

 

1,705

 

 

 

16,920

 

 

 

(281)

 

 

5,021

 

 

4,740

 

 

 

21,660

 

Income tax expense (benefit)

 

2,122

 

 

 

617

 

 

 

358

 

 

 

3,097

 

 

 

(67)

 

 

1,173

 

 

1,106

 

 

 

4,203

 

Net income (loss) from continuing operations

 

10,349

 

 

 

2,127

 

 

 

1,347

 

 

 

13,823

 

 

 

(214)

 

 

3,848

 

 

3,634

 

 

 

17,457

 

Net income from discontinued operations, net of tax (4)

 

951

 

 

 

?

 

 

 

?

 

 

 

951

 

 

 

?

 

 

?

 

 

?

 

 

 

951

 

Net income (loss)

$

11,300

 

 

$

2,127

 

 

$

1,347

 

 

$

14,774

 

 

$

(214)

 

$

3,848

 

$

3,634

 

 

$

18,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period-end assets

$

4,960,737

 

 

$

973,716

 

 

$

40,209

 

 

$

5,974,662

 

 

$

24,296

 

$

104,689

 

$

128,985

 

 

$

6,103,647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin - Continuing Operations

 

3.77

%

 

 

2.30

%

 

 

NM

 

 

 

3.56

%

 

 

NM

 

 

NM

 

 

NM

 

 

 

4.09

%

Net interest margin - Discontinued Operations

 

3.50

 

 

 

NA

 

 

 

NM

 

 

 

3.50

 

 

 

NM

 

 

NM

 

 

NM

 

 

 

3.50

 

Net interest margin

 

3.76

 

 

 

2.30

 

 

 

NM

 

 

 

3.56

 

 

 

NM

 

 

NM

 

 

NM

 

 

 

4.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net-revenue concentration*

 

74

%

 

 

6

%

 

 

5

%

 

 

85

%

 

 

1

%

 

14

%

 

15

%

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

 

 

Core Banking

 

 

Republic Processing Group ("RPG")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Tax

 

 

Republic

 

 

 

 

 

 

 

 

 

 

Traditional

 

 

 

Warehouse

 

 

 

Mortgage

 

 

 

Core

 

 

 

Refund

 

 

Credit

 

 

Total

 

 

 

Total

 

(dollars in thousands)

 

Banking

 

 

 

Lending

 

 

 

Banking

 

 

 

Banking

 

 

 

Solutions

 

 

Solutions

 

 

RPG

 

 

 

Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

39,083

 

 

$

4,414

 

 

$

133

 

 

$

43,630

 

 

$

113

 

$

7,718

 

$

7,831

 

 

$

51,461

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

657

 

 

 

(183)

 

 

 

?

 

 

 

474

 

 

 

(1,028)

 

 

4,592

 

 

3,564

 

 

 

4,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net refund transfer fees

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

149

 

 

?

 

 

149

 

 

 

149

 

Mortgage banking income

 

?

 

 

 

?

 

 

 

1,357

 

 

 

1,357

 

 

 

?

 

 

?

 

 

?

 

 

 

1,357

 

Program fees

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

93

 

 

1,593

 

 

1,686

 

 

 

1,686

 

Other noninterest income

 

7,360

 

 

 

11

 

 

 

127

 

 

 

7,498

 

 

 

22

 

 

249

 

 

271

 

 

 

7,769

 

Total noninterest income

 

7,360

 

 

 

11

 

 

 

1,484

 

 

 

8,855

 

 

 

264

 

 

1,842

 

 

2,106

 

 

 

10,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

33,982

 

 

 

834

 

 

 

1,071

 

 

 

35,887

 

 

 

2,656

 

 

1,804

 

 

4,460

 

 

 

40,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income tax expense

 

11,804

 

 

 

3,774

 

 

 

546

 

 

 

16,124

 

 

 

(1,251)

 

 

3,164

 

 

1,913

 

 

 

18,037

 

Income tax expense (benefit)

 

883

 

 

 

864

 

 

 

114

 

 

 

1,861

 

 

 

(799)

 

 

653

 

 

(146)

 

 

 

1,715

 

Net income (loss) from continuing operations

 

10,921

 

 

 

2,910

 

 

 

432

 

 

 

14,263

 

 

 

(452)

 

 

2,511

 

 

2,059

 

 

 

16,322

 

Net income from discontinued operations, net of tax (4)

 

1,089

 

 

 

?

 

 

 

?

 

 

 

1,089

 

 

 

?

 

 

?

 

 

?

 

 

 

1,089

 

Net income (loss)

$

12,010

 

 

$

2,910

 

 

$

432

 

 

$

15,352

 

 

$

(452)

 

$

2,511

 

$

2,059

 

 

$

17,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period-end assets

$

4,537,971

 

 

$

561,625

 

 

$

13,251

 

 

$

5,112,847

 

 

$

15,991

 

$

93,516

 

$

109,507

 

 

$

5,222,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin - Continuing Operations

 

3.83

%

 

 

3.26

%

 

 

NM

 

 

 

3.77

%

 

 

NM

 

 

NM

 

 

NM

 

 

 

4.35

%

Net interest margin - Discontinued Operations

 

3.54

 

 

 

NA

 

 

 

NM

 

 

 

3.54

 

 

 

NM

 

 

NM

 

 

NM

 

 

 

3.54

 

Net interest margin

 

3.82

 

 

 

3.26

%

 

 

NM

 

 

 

3.76

 

 

 

NM

 

 

NM

 

 

NM

 

 

 

4.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net-revenue concentration*

 

74

%

 

 

7

%

 

 

3

%

 

 

84

%

 

 

1

%

 

15

%

 

16

%

 

 

100

%

_____________________________________

*Net revenues represent total net interest income plus noninterest income.

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2019

 

 

 

Core Banking

 

 

Republic Processing Group ("RPG")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Tax

 

 

Republic

 

 

 

 

 

 

 

 

 

 

Traditional

 

 

 

Warehouse

 

 

 

Mortgage

 

 

 

Core

 

 

 

Refund

 

 

Credit

 

 

Total

 

 

 

Total

 

(dollars in thousands)

 

Banking

 

 

 

Lending

 

 

 

Banking

 

 

 

Banking

 

 

 

Solutions

 

 

Solutions

 

 

RPG

 

 

 

Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

121,307

 

 

$

11,181

 

 

$

484

 

 

$

132,972

 

 

$

21,443

 

$

22,520

 

$

43,963

 

 

$

176,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

2,837

 

 

 

1,262

 

 

 

?

 

 

 

4,099

 

 

 

11,818

 

 

8,593

 

 

20,411

 

 

 

24,510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net refund transfer fees

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

21,046

 

 

?

 

 

21,046

 

 

 

21,046

 

Mortgage banking income

 

?

 

 

 

?

 

 

 

7,008

 

 

 

7,008

 

 

 

?

 

 

?

 

 

?

 

 

 

7,008

 

Program fees

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

318

 

 

3,110

 

 

3,428

 

 

 

3,428

 

Other noninterest income

 

21,409

 

 

 

(56)

 

 

 

173

 

 

 

21,526

 

 

 

244

 

 

659

 

 

903

 

 

 

22,429

 

Total noninterest income

 

21,409

 

 

 

(56)

 

 

 

7,181

 

 

 

28,534

 

 

 

21,608

 

 

3,769

 

 

25,377

 

 

 

53,911

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

106,641

 

 

 

2,436

 

 

 

4,311

 

 

 

113,388

 

 

 

13,010

 

 

2,395

 

 

15,405

 

 

 

128,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax expense

 

33,238

 

 

 

7,427

 

 

 

3,354

 

 

 

44,019

 

 

 

18,223

 

 

15,301

 

 

33,524

 

 

 

77,543

 

Income tax expense

 

4,305

 

 

 

1,671

 

 

 

704

 

 

 

6,680

 

 

 

4,251

 

 

3,582

 

 

7,833

 

 

 

14,513

 

Net income from continuing operations

 

28,933

 

 

 

5,756

 

 

 

2,650

 

 

 

37,339

 

 

 

13,972

 

 

11,719

 

 

25,691

 

 

 

63,030

 

Net income from discontinued operations, net of tax (4)

 

2,901

 

 

 

?

 

 

 

?

 

 

 

2,901

 

 

 

?

 

 

?

 

 

?

 

 

 

2,901

 

Net income

$

31,834

 

 

$

5,756

 

 

$

2,650

 

 

$

40,240

 

 

$

13,972

 

$

11,719

 

$

25,691

 

 

$

65,931

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period-end assets

$

4,960,737

 

 

$

973,716

 

 

$

40,209

 

 

$

5,974,662

 

 

$

24,296

 

$

104,689

 

$

128,985

 

 

$

6,103,647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin - Continuing Operations

 

3.75

%

 

 

2.49

%

 

 

NM

 

 

 

3.65

%

 

 

NM

 

 

NM

 

 

NM

 

 

 

4.62

%

Net interest margin - Discontinued Operations

 

3.60

 

 

 

NA

 

 

 

NM

 

 

 

3.60

 

 

 

NM

 

 

NM

 

 

NM

 

 

 

3.60

 

Net interest margin

 

3.75

 

 

 

2.49

 

 

 

NM

 

 

 

3.63

 

 

 

NM

 

 

NM

 

 

NM

 

 

 

4.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net-revenue concentration*

 

62

%

 

 

5

%

 

 

3

%

 

 

70

%

 

 

19

%

 

11

%

 

30

%

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

 

 

Core Banking

 

 

Republic Processing Group ("RPG")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Tax

 

 

Republic

 

 

 

 

 

 

 

 

 

 

Traditional

 

 

 

Warehouse

 

 

 

Mortgage

 

 

 

Core

 

 

 

Refund

 

 

Credit

 

 

Total

 

 

 

Total

 

(dollars in thousands)

 

Banking

 

 

 

Lending

 

 

 

Banking

 

 

 

Banking

 

 

 

Solutions

 

 

Solutions

 

 

RPG

 

 

 

Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

113,770

 

 

$

12,169

 

 

$

308

 

 

$

126,247

 

 

$

19,127

 

$

21,987

 

$

41,114

 

 

$

167,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

2,039

 

 

 

88

 

 

 

?

 

 

 

2,127

 

 

 

11,473

 

 

12,545

 

 

24,018

 

 

 

26,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net refund transfer fees

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

19,974

 

 

?

 

 

19,974

 

 

 

19,974

 

Mortgage banking income

 

?

 

 

 

?

 

 

 

3,685

 

 

 

3,685

 

 

 

?

 

 

?

 

 

?

 

 

 

3,685

 

Program fees

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

276

 

 

4,429

 

 

4,705

 

 

 

4,705

 

Other noninterest income

 

21,121

 

 

 

30

 

 

 

222

 

 

 

21,373

 

 

 

1,212

 

 

887

 

 

2,099

 

 

 

23,472

 

Total noninterest income

 

21,121

 

 

 

30

 

 

 

3,907

 

 

 

25,058

 

 

 

21,462

 

 

5,316

 

 

26,778

 

 

 

51,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

101,224

 

 

 

2,523

 

 

 

3,451

 

 

 

107,198

 

 

 

11,454

 

 

3,807

 

 

15,261

 

 

 

122,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax expense

 

31,628

 

 

 

9,588

 

 

 

764

 

 

 

41,980

 

 

 

17,662

 

 

10,951

 

 

28,613

 

 

 

70,593

 

Income tax expense

 

4,573

 

 

 

2,193

 

 

 

160

 

 

 

6,926

 

 

 

3,664

 

 

2,466

 

 

6,130

 

 

 

13,056

 

Net income from continuing operations

 

27,055

 

 

 

7,395

 

 

 

604

 

 

 

35,054

 

 

 

13,998

 

 

8,485

 

 

22,483

 

 

 

57,537

 

Net income from discontinued operations, net of tax (4)

 

3,009

 

 

 

?

 

 

 

?

 

 

 

3,009

 

 

 

?

 

 

?

 

 

?

 

 

 

3,009

 

Net income

$

30,064

 

 

$

7,395

 

 

$

604

 

 

$

38,063

 

 

$

13,998

 

$

8,485

 

$

22,483

 

 

$

60,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period-end assets

$

4,537,971

 

 

$

561,625

 

 

$

13,251

 

 

$

5,112,847

 

 

$

15,991

 

$

93,516

 

$

109,507

 

 

$

5,222,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin - Continuing Operations

 

3.72

%

 

 

3.18

%

 

 

NM

 

 

 

3.69

%

 

 

NM

 

 

NM

 

 

NM

 

 

 

4.68

%

Net interest margin - Discontinued Operations

 

3.44

 

 

 

NA

 

 

 

NM

 

 

 

3.44

 

 

 

NM

 

 

NM

 

 

NM

 

 

 

3.44

 

Net interest margin

 

3.71

 

 

 

3.18

 

 

 

NM

 

 

 

3.65

 

 

 

NM

 

 

NM

 

 

NM

 

 

 

4.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net-revenue concentration*

 

61

%

 

 

6

%

 

 

2

%

 

 

69

%

 

 

19

%

 

12

%

 

31

%

 

 

100

%

_____________________________________

*Net revenues represent total net interest income plus noninterest income.

Republic Bancorp, Inc. Financial Information
Third Quarter 2019 Earnings Release (continued)

(1)

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

 

 

(2)

The delinquent loans to total loans ratio equals loans 30-days-or-more past due divided by total loans. Depending on loan class, loan delinquency is determined by the number of days or the number of payments past due.

 

 

(3)

Republic Processing Group operations consist of the Tax Refund Solutions and Republic Credit Solutions segments.

 

 

(4)

The Bank's sale of its Owensboro, Elizabethtown and Frankfort banking centers to Limestone Bank is expected to close during the fourth quarter of 2019. Loans and deposits projected to be sold to Limestone are reported on the Company's balance sheets as loans of discontinued operations and deposits of discontinued operations. Income and expense items directly associated with banking centers to be sold are reported within the Company's income statements as net income from discontinued operations, net of tax. All prior-period balance sheets and income statements have been re-presented to reflect the Company's current intent to sell these banking centers. Amounts currently classified within discontinued items are subject to final settlement terms.

 

 

(5)

The Company adopted Accounting Standard Update 2016-02, effective January 1, 2019. ASU 2016-02 requires the Company, as lessee, to record the present value of its expected operating lease payments on its balance sheet as operating lease liabilities, with offsetting right-of-use assets for the respective leased property. Prior to January 1, 2019, operating leases were not recorded on a lessee's balance sheet in this manner.

 

 

(6)

The amount of loan fee income can meaningfully impact total interest income, loan yields, net interest margin, and net interest spread. The amount of loan fee income included in total interest income was $9.1 million and $9.0 million for the quarters ended September 30, 2019 and 2018. The amount of loan fee income included in total interest income was $46.0 million and $44.4 million for the nine months ended September 30, 2019 and 2018.

 

The amount of loan fee income included in total interest income per quarter was as follows: $9.1 million (quarter ended September 30, 2019); $8.4 million (quarter ended June 30, 2019); $28.6 million (quarter ended March 31, 2019); $9.4 million (quarter ended December 31, 2018); and $9.0 million (quarter ended September 30, 2018).

 

Interest income for Easy Advances ("EAs") is composed entirely of loan fees. The loan fees disclosed above included EA fees of $19.1 million and $17.8 million for the first nine months ended September 30, 2019 and 2018. EAs are only offered during the first two months of each year.

?

 

(7)

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

 

Quarterly Comparison

(dollars in thousands, except per share data)

 

Sep. 30, 2019

 

Jun. 30, 2019

 

Mar. 31, 2019

 

Dec. 31, 2018

 

Sep. 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity - GAAP (a)

 

$

744,447

 

 

$

731,428

 

 

$

717,091

 

 

$

689,934

 

 

$

676,810

 

Less: Goodwill

 

 

16,300

 

 

 

16,300

 

 

 

16,300

 

 

 

16,300

 

 

 

16,300

 

Less: Mortgage servicing rights

 

 

5,483

 

 

 

5,158

 

 

 

4,935

 

 

 

4,919

 

 

 

4,925

 

Less: Core deposit intangible

 

 

516

 

 

 

562

 

 

 

608

 

 

 

654

 

 

 

705

 

Tangible stockholders' equity - Non-GAAP (c)

 

$

722,148

 

 

$

709,408

 

 

$

695,248

 

 

$

668,061

 

 

$

654,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets - GAAP (b)

 

$

6,103,647

 

 

$

5,723,134

 

 

$

5,365,768

 

 

$

5,240,404

 

 

$

5,222,354

 

Less: Goodwill

 

 

16,300

 

 

 

16,300

 

 

 

16,300

 

 

 

16,300

 

 

 

16,300

 

Less: Mortgage servicing rights

 

 

5,483

 

 

 

5,158

 

 

 

4,935

 

 

 

4,919

 

 

 

4,925

 

Less: Core deposit intangible

 

 

516

 

 

 

562

 

 

 

608

 

 

 

654

 

 

 

705

 

Tangible assets - Non-GAAP (d)

 

$

6,081,348

 

 

$

5,701,114

 

 

$

5,343,925

 

 

$

5,218,531

 

 

$

5,200,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity to total assets - GAAP (a/b)

 

 

12.20

%

 

 

12.78

%

 

 

13.36

%

 

 

13.17

%

 

 

12.96

%

Tangible stockholders' equity to tangible assets - Non-GAAP (c/d)

 

 

11.87

%

 

 

12.44

%

 

 

13.01

%

 

 

12.80

%

 

 

12.59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares outstanding (e)

 

 

20,952

 

 

 

20,948

 

 

 

20,911

 

 

 

20,888

 

 

 

20,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share - GAAP (a/e)

 

$

35.53

 

 

$

34.92

 

 

$

34.29

 

 

$

33.03

 

 

$

32.39

 

Tangible book value per share - Non-GAAP (c/e)

 

 

34.47

 

 

 

33.87

 

 

 

33.25

 

 

 

31.98

 

 

 

31.34

 

(8)

The efficiency ratio, a non-GAAP measure, equals total noninterest expense divided by the sum of net interest income and noninterest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities, if applicable.

 

 

(9)

The cost of average deposits ratio equals annualized total interest expense on deposits divided by total average interest-bearing deposits plus total average noninterest-bearing deposits.

 

 

(10)

FTEs ? Full-time-equivalent employees. Company FTEs include those of continuing and discontinued operations.

 

 

(11)

Company banking centers include those of continuing and discontinued operations.

 

 

(12)

Delinquent loans for the RPG segment included $19 million of EAs at March 31, 2019. EAs are only offered during the first two months of each year. EAs do not have a contractual due date but are eligible for delinquency consideration three weeks after the taxpayer-customer's tax return is submitted to the applicable tax authority. All unpaid EAs are charged-off by the end of the second quarter of each year.

NM ? Not meaningful

 


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