Republic Bancorp, Inc. Reports a 22% Year-Over-Year Increase in Fourth Quarter Pre-Tax Net Income

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Republic Bancorp, Inc. Reports a 22% Year-Over-Year Increase in Fourth Quarter Pre-Tax Net Income

Company Release - 1/25/2019 8:05 AM ET

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

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Republic Bancorp, Inc. (“Republic” or the “Company”) is pleased to report fourth quarter net income of $17.3 million, a 258% increase over the fourth quarter of 2017, resulting in Diluted Earnings per Class A Common Share (“Diluted EPS”) of $0.83. Year-to-date net income was $77.9 million, a $32.2 million, or 71%, increase from the same period in 2017, resulting in a return on average assets (“ROA”) and a return on average equity (“ROE”) of 1.52% and 11.67% for 2018.

Steve Trager, Chairman & CEO of Republic commented, “With the change in the tax law during 2018 playing such a large role in the comparability of our quarterly and year-over-year net income metrics, we have focused the benchmarks for our 2018 results using pre-tax net income, as we believe this is more reflective of the true operating performance of the Company on a comparable basis. I am excited about these results, as we were able to grow our pre-tax net income to $20.3 million for the fourth quarter of 2018, an increase of 22% over the fourth quarter of 2017. In addition, pre-tax net income for the year ended December 31, 2018 increased $15.9 million, or 20%, over the year ended December 31, 2017. A healthy expansion in our net interest margin was the primary driver for the increase in our net interest income and our solid year-over-year performance, despite less growth in our Core Bank loan portfolio than the recent past. We were able to achieve these results in our net interest margin thanks to our strong balance sheet management strategies and continued success in maintaining our noninterest-bearing deposit base.

“Looking ahead to 2019, an increase in short-term interest rates, a continued flattening of the yield curve, and stiff competition for lower-cost core deposits are all expected in the market for the coming year. We believe these projected headwinds will be a stern challenge for all in the banking industry. We further believe, however, that we are well positioned to face these challenges thanks to a strong management team and our 1,000+ dedicated associates that are willing to go the extra mile each and every day, in our efforts to make Republic one of the best performing banks in the industry,” concluded Steve Trager.

The following table highlights Republic’s financial performance for the fourth quarters and years ended December 31, 2018 and 2017:



	Total Company Financial Performance Highlights
		Three Months Ended Dec. 31,										Year Ended Dec. 31,
(dollars in thousands, except per share data)		2018			2017			$ Change		% Change		2018				2017			$ Change		% Change

Income Before Income Taxes*		$	20,328		$	16,612		$	3,716	22	%		$	94,263		$	78,386		$	15,877	20	%
Net Income*			17,306			4,838			12,468	258				77,852			45,632			32,220	71
Diluted Earnings per Class A Common Stock			0.83			0.23			0.60	261				3.74			2.20			1.54	70
Return on Average Assets			1.37	%		0.39	%		NA	251				1.52	%		0.95	%		NA	60
Return on Average Equity			10.07			3.02			NA	233				11.67			7.26			NA	61

NA – Not applicable

*See Segment Data at the End of this Earnings Release

Results of Operations for the Fourth Quarter of 2018 Compared to the Fourth Quarter of 2017

Core Bank⁽¹⁾– Net income from Core Banking was $16.2 million for the fourth quarter of 2018, an increase of $9.2 million, or 134%, over the fourth quarter of 2017. The Core Bank’s pre-tax net income for the fourth quarter of 2018 increased $1.7 million, or 10%, over the same period in 2017, benefitting from growth in net interest income and noninterest income, as well as continued strong credit quality.

Core Bank net interest income increased $2.0 million, or 4%, over the fourth quarter of 2017 driven by a 13 basis-point expansion in the Core Bank’s net interest margin and further complemented by an increase of $92 million, or 2%, in quarterly average Core Bank loans. The table below presents the overall change in the Core Bank’s net interest income, as well as average and period-end loan balances by origination channel:


	Net Interest Income
	for the
(dollars in thousands)	Three Months Ended Dec. 31,
Origination Channel	2018			2017	$ Change			% Change

Traditional Network	$	41,964	$	37,529	$	4,435		12		%
Warehouse Lending		3,557		4,460		(903	)	(20	)
Correspondent Lending		248		247		1		0
2012-FDIC Acquired Loans		89		1,648		(1,559	)	(95	)
Total Core Bank	$	45,858	$	43,884	$	1,974		4



	Average Loan Balances										Period-End Loan Balances
(dollars in thousands)	Three Months Ended Dec. 31,										Dec. 31,
Origination Channel		2018		2017	$ Change			% Change				2018		2017	$ Change			% Change

Traditional Network	$	3,434,020	$	3,247,472	$	186,548		6		%	$	3,475,999	$	3,286,582	$	189,417		6		%
Warehouse Lending		453,794		523,725		(69,931	)	(13	)			469,695		525,573		(55,878	)	(11	)
Correspondent Lending		97,252		120,734		(23,482	)	(19	)			94,827		116,792		(21,965	)	(19	)
2012-FDIC Acquired Loans		5,448		6,836		(1,388	)	(20	)			5,218		6,551		(1,333	)	(20	)
Total Core Bank	$	3,990,514	$	3,898,767	$	91,747		2			$	4,045,739	$	3,935,498	$	110,241		3

The primary drivers of the changes in the Core Bank’s average loan balances and net interest income for the fourth quarter of 2018, as compared to the fourth quarter of 2017, follow:

The difference between the Core Bank’s net interest margin and net interest spread was 32 basis points during the fourth quarter of 2018 compared to 22 basis points during the fourth quarter of 2017. The differential between the net interest margin and net interest spread represents the value of the Core Bank’s noninterest-bearing deposits and stockholders’ equity to its net interest margin. Because of rising short-term interest rates from December 31, 2017 to December 31, 2018, as measured by the increase of 100 basis points in the Federal Funds Target Rate during this period, the contribution of the Core Bank’s noninterest-bearing deposits and stockholders’ equity to the net interest margin increased significantly.
The Traditional Network experienced solid growth in average loan balances of $187 million, or 6%, from the fourth quarter of 2017 to the fourth quarter of 2018. This growth was largely concentrated in the commercial loan sector, with average commercial real estate balances growing $43 million, or 4%, and average commercial and industrial balances growing $63 million, or 21%.
During the fourth quarter of 2017, the Core Bank’s Traditional Network received a favorable payoff of a purchased credit-impaired loan acquired in the Company’s 2016 acquisition of Cornerstone Bancorp, Inc. This favorable payoff contributed approximately $670,000 of non-recurring interest income and approximately six basis points of net interest margin to the Core Bank for the fourth quarter of 2017.
The Core Bank’s 2012 FDIC-Acquired loans contributed $1.6 million less in net interest income during the fourth quarter of 2018 compared to the same period in 2017. During the fourth quarter of 2017, a purchased credit-impaired loan paid off contributing approximately $1.6 million of non-recurring interest income and approximately 13 basis points of net interest margin to the Core Bank for the fourth quarter of 2017. Substantially all discount on the Core Bank’s 2012 FDIC-Acquired loans had been accreted by December 31, 2017.

Average Warehouse Lending (“Warehouse”) balances decreased $70 million from the fourth quarter of 2017 to the fourth quarter of 2018, as increasing home-mortgage interest rates during 2018 drove an overall decline in demand for residential mortgage loans. Additionally, an internal change in the way the Company assigns a cost of funds to Warehouse through its Funds Transfer Pricing (“FTP”) methodology resulted in a portion of the Warehouse segment’s fluctuation in net interest income. Effective January 1, 2018, the Company changed its Warehouse FTP methodology to be more consistent with the FTP methodology used for other Core Bank loan products with similar pricing and duration characteristics. This change in FTP methodology had a $287,000 negative comparable impact on the Warehouse net interest income for the fourth quarter of 2018 and a corresponding positive comparable impact of $287,000 to the Traditional Network’s net interest income.

The Core Bank’s provision for loan and lease losses (“Provision”) increased to $1.3 million for the fourth quarter of 2018 from $1.2 million for the same period in 2017. Overall, the Core Bank’s credit quality metrics remained strong from period to period, with the Core Bank’s ratios of nonperforming loans to total loans and delinquent loans to total loans remaining near historically low levels.

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


	As of and for the:
	Quarters Ended:								Years Ended:
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Dec. 31,		Dec. 31,
Core Banking Credit Quality Ratios	2018		2018		2018		2018		2018		2017		2016

Nonperforming loans to total loans	0.40	%	0.42	%	0.43	%	0.37	%	0.40	%	0.36	%	0.42	%

Nonperforming assets to total loans (including OREO)	0.40		0.42		0.43		0.38		0.40		0.36		0.46

Delinquent loans to total loans(2)	0.22		0.29		0.21		0.21		0.22		0.21		0.18

Net charge-offs to average loans	0.12		0.04		—		0.06		0.06		0.04		0.05
(Quarterly rates annualized)

OREO = Other Real Estate Owned

Noninterest income for the Core Bank was $8.9 million during the fourth quarter of 2018, a $986,000, or 13%, increase from the $7.9 million achieved during the fourth quarter of 2017. The following primarily drove this increase:

Service charges on deposits increased $240,000, or 7%, consistent with an 8% increase in transactional accounts from December 31, 2017 to December 31, 2018.
Mortgage banking income increased $194,000, with secondary market loan originations increasing slightly from $43 million during the fourth quarter of 2017 to $44 million during the fourth quarter of 2018.
Interchange fee income increased $327,000, or 13%, driven primarily by a 9% year-over-year increase in active debit cards.

Core Bank noninterest expenses increased $1.1 million, or 3%, during the fourth quarter of 2018 compared to the fourth quarter of 2017. The following primarily drove the increase:

Salaries and employee benefits expense increased $1.4 million, or 8%. This change was driven primarily by an increase of $1.3 in employee base-salary expense resulting from an increase of 53 Core Bank full-time-equivalent employees (“FTEs”) from December 31, 2017 to December 31, 2018.
Marketing expense declined $282,000 primarily due to a reduction in marketing spend for the Core Bank’s separately branded digital banking product offerings.
Data processing expense decreased $376,000, with a large portion of this decrease due to estimated conversion-related expenses recorded during the fourth quarter of 2017 for a change to the Company’s digital-banking platform for its commercial clients.
Interchange-related expenses increased $323,000, driven primarily by a 9% year-over-year increase in active debit cards.

Republic Processing Group⁽³⁾

Republic Processing Group (“RPG”) reported net income of $1.2 million for the fourth quarter of 2018 compared to a net loss of $2.0 million for the same period in 2017. RPG reported pre-tax net income of $1.5 million for the fourth quarter of 2018 compared to a pre-tax loss of $493,000 for the same period in 2017. Revenue growth within the Republic Credit Solutions (“RCS”) line-of-credit product drove the overall improvement in RPG profitability, increasing $1.5 million, or 22%, over the fourth quarter of 2017.

Total Company Income Taxes⁽⁴⁾

As with the previous quarters of 2018, the Company’s performance metrics and the comparability of those metrics for both the fourth quarter and the 12 months ending December 31, 2018 were positively impacted by the 2017 Tax Cuts and Jobs Act (“TCJA”). The TCJA, among other things, lowered the federal statutory corporate tax rate from 35% to 21%, effective for all of 2018. Along with the 14% lower 2018 statutory corporate tax rate, comparability between the fourth quarter of 2018 and the same period in 2017 was impacted by a $6.3 million charge during the fourth quarter of 2017 representing the decrease in the value of Republic’s net deferred tax assets (“DTAs”) as a result of the passage of the TCJA in December 2017.

The Company estimates that the charge recorded during the fourth quarter of 2017 had a negative impact to the fourth quarter 2017 net income of $6.3 million, a negative impact to fourth quarter 2017 Diluted EPS of $0.30, and a reduction to fourth quarter 2017 ROA of 0.51% and ROE of 3.95%. Conversely, the on-going decrease in the federal statutory tax rate of 35% to 21% during 2018 benefitted the Company’s fourth quarter 2018 net income approximately $3.2 million, Diluted EPS by $0.14, ROA by 0.25%, and ROE by 1.85%.

In addition to the TCJA, the income tax expense line item for the fourth quarters and years ended December 31, 2018 and 2017 contained other items impacting the overall effective tax rate for the Company. See Footnote 4 of this earnings release for a high-level summary of those items and their overall impact to the effective income tax rates of the Company for the fourth quarters and years ended December 31, 2018 and 2017.

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 one loan production office 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; 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 $5.2 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 ability to develop products and strategies in order to meet the Company’s long-term strategic goals, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Actual results could differ materially based upon factors disclosed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission, including those factors set forth as “Risk Factors” in the Company’s Annual Report on Form 10-K for the period ended December 31, 2017.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 Fourth Quarter 2018 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
	Dec. 31, 2018			Dec. 31, 2017
Assets:
Cash and cash equivalents	$	351,474		$	299,351
Investment securities		543,771			591,458
Loans held for sale		21,809			16,989
Loans		4,148,227			4,014,034
Allowance for loan and lease losses		(44,675	)		(42,769	)
Loans, net		4,103,552			3,971,265
Federal Home Loan Bank stock, at cost		32,067			32,067
Premises and equipment, net		44,820			45,605
Goodwill		16,300			16,300
Other real estate owned ("OREO")		160			115
Bank owned life insurance ("BOLI")		64,883			63,356
Other assets and accrued interest receivable		61,568			48,856
Total assets	$	5,240,404		$	5,085,362

Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	1,003,969		$	1,022,042
Interest-bearing		2,452,176			2,411,116
Total deposits		3,456,145			3,433,158

Securities sold under agreements to repurchase and other short-term borrowings		182,990			204,021
Federal Home Loan Bank advances		810,000			737,500
Subordinated note		41,240			41,240
Other liabilities and accrued interest payable		60,095			37,019
Total liabilities		4,550,470			4,452,938

Stockholders' equity		689,934			632,424
Total liabilities and stockholders' equity	$	5,240,404		$	5,085,362


Average Balance Sheet Data
	Three Months Ended Dec. 31,				Year Ended Dec. 31,
	2018		2017		2018		2017
Assets:
Investment securities, including FHLB stock	$	579,429	$	559,381	$	542,258	$	574,027
Federal funds sold and other interest-earning deposits		199,134		229,638		255,708		188,427
Loans, including loans held for sale		4,092,004		3,967,211		4,094,918		3,831,406
Total interest-earning assets		4,870,567		4,756,230		4,892,884		4,593,860
Total assets		5,070,845		4,953,134		5,130,628		4,826,208

Liabilities and Stockholders' Equity:
Noninterest-bearing deposits	$	1,050,236	$	1,045,939	$	1,147,432	$	1,073,181
Interest-bearing deposits		2,477,962		2,383,196		2,445,385		2,267,663
Securities sold under agreements to repurchase and other short-term borrowings		252,073		271,434		225,145		219,515
Federal Home Loan Bank advances		515,413		537,326		557,090		563,552
Subordinated note		41,240		41,240		41,240		41,240
Total interest-bearing liabilities		3,286,688		3,233,196		3,268,860		3,091,970
Stockholders' equity		687,156		640,686		666,979		628,329


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 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 Dec. 31,					Year Ended Dec. 31,
	2018		2017			2018		2017

Total interest income(5)	$	62,902	$	56,349		$	256,181	$	218,778
Total interest expense		8,626		5,711			30,123		20,258
Net interest income		54,276		50,638			226,058		198,520

Provision for loan and lease losses		5,104		6,071			31,368		27,704

Noninterest income:
Service charges on deposit accounts		3,565		3,325			14,273		13,357
Net refund transfer fees		55		171			20,029		18,500
Mortgage banking income		1,129		935			4,825		4,642
Interchange fee income		2,844		2,533			11,159		9,881
Program fees		1,520		1,851			6,225		5,824
Increase in cash surrender value of BOLI		392		384			1,527		1,562
Losses on available-for-sale debt securities		—		(136	)		—		(136	)
Net gains on OREO		29		254			729		676
Other		585		873			4,658		4,108
Total noninterest income		10,119		10,190			63,425		58,414

Noninterest expense:
Salaries and employee benefits		21,743		20,502			91,189		82,233
Occupancy and equipment, net		6,474		6,518			25,365		25,194
Communication and transportation		1,115		1,261			4,785		4,711
Marketing and development		784		1,098			4,432		5,188
FDIC insurance expense		264		328			1,494		1,378
Bank franchise tax expense		863		652			4,951		4,626
Data processing		2,434		2,606			9,613		7,748
Interchange related expense		1,237		931			4,480		3,988
Supplies		446		565			1,444		1,594
OREO expense		31		104			94		388
Legal and professional fees		753		616			3,459		2,410
Other		2,819		2,964			12,546		11,386
Total noninterest expense		38,963		38,145			163,852		150,844

Income before income tax expense		20,328		16,612			94,263		78,386
Income tax expense(4)		3,022		11,774			16,411		32,754

Net income	$	17,306	$	4,838		$	77,852	$	45,632


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 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 Dec. 31,						Year Ended Dec. 31,
	2018			2017			2018			2017
Per Share Data:

Basic weighted average shares outstanding		20,975			21,149			20,960			20,921
Diluted weighted average shares outstanding		21,113			21,258			21,065			21,007

Period-end shares outstanding:
Class A Common Stock		18,675			18,607			18,675			18,607
Class B Common Stock		2,213			2,243			2,213			2,243

Book value per share(6)	$	33.03		$	30.33		$	33.03		$	30.33
Tangible book value per share(6)		31.98			29.27			31.98			29.27

Earnings per share ("EPS"):
Basic EPS - Class A Common Stock	$	0.83		$	0.23		$	3.76		$	2.21
Basic EPS - Class B Common Stock		0.76			0.21			3.41			2.01
Diluted EPS - Class A Common Stock		0.83			0.23			3.74			2.20
Diluted EPS - Class B Common Stock		0.75			0.21			3.40			2.00

Cash dividends declared per Common share:
Class A Common Stock	$	0.242		$	0.220		$	0.968		$	0.869
Class B Common Stock		0.220			0.200			0.880			0.790

Performance Ratios:

Return on average assets		1.37	%		0.39	%		1.52	%		0.95	%
Return on average equity		10.07			3.02			11.67			7.26
Efficiency ratio(7)		61			63			57			59
Yield on average interest-earning assets(5)		5.17			4.74			5.24			4.76
Cost of average interest-bearing liabilities		1.05			0.71			0.92			0.66
Cost of average deposits(8)		0.59			0.35			0.47			0.29
Net interest spread(5)		4.12			4.03			4.32			4.10
Net interest margin - Total Company(5)		4.46			4.26			4.62			4.32
Net interest margin - Core Bank(1)		3.85			3.72			3.70			3.55

Other Information:

End of period FTEs(9) - Total Company		1,051			997			1,051			997
End of period FTEs - Core Bank		968			915			968			915
Number of full-service banking centers		45			45			45			45


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 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 Dec. 31,						Year Ended Dec. 31,
	2018			2017			2018			2017
Credit Quality Asset Balances:

Nonperforming Assets - Total Company:
Loans on nonaccrual status	$	15,993		$	14,118		$	15,993		$	14,118
Loans past due 90-days-or-more and still on accrual		145			956			145			956
Total nonperforming loans		16,138			15,074			16,138			15,074
OREO		160			115			160			115
Total nonperforming assets	$	16,298		$	15,189		$	16,298		$	15,189

Nonperforming Assets - Core Bank(1):
Loans on nonaccrual status	$	15,993		$	14,118		$	15,993		$	14,118
Loans past due 90-days-or-more and still on accrual		13			19			13			19
Total nonperforming loans		16,006			14,137			16,006			14,137
OREO		160			115			160			115
Total nonperforming assets	$	16,166		$	14,252		$	16,166		$	14,252

Delinquent loans:
Delinquent loans - Core Bank	$	8,875		$	8,460		$	8,875		$	8,460
Delinquent loans - RPG(3)		7,087			5,641			7,087			5,641
Total delinquent loans - Total Company	$	15,962		$	14,101		$	15,962		$	14,101


Credit Quality Ratios - Total Company:

Nonperforming loans to total loans		0.39	%		0.38	%		0.39	%		0.38	%
Nonperforming assets to total loans (including OREO)		0.39			0.38			0.39			0.38
Nonperforming assets to total assets		0.31			0.30			0.31			0.30
Allowance for loan and lease losses to total loans		1.08			1.07			1.08			1.07
Allowance for loan and lease losses to nonperforming loans		277			284			277			284
Delinquent loans to total loans(2)		0.38			0.35			0.38			0.35
Net charge-offs to average loans (annualized)		0.42			0.35			0.72			0.47

Credit Quality Ratios - Core Bank:

Nonperforming loans to total loans		0.40	%		0.36	%		0.40	%		0.36	%
Nonperforming assets to total loans (including OREO)		0.40			0.36			0.40			0.36
Nonperforming assets to total assets		0.31			0.28			0.31			0.28
Allowance for loan and lease losses to total loans		0.78			0.77			0.78			0.77
Allowance for loan and lease losses to nonperforming loans		197			213			197			213
Delinquent loans to total loans		0.22			0.21			0.22			0.21
Net charge-offs to average loans (annualized)		0.12			0.06			0.06			0.04


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 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
	Dec. 31, 2018			Sep. 30, 2018			Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017
Assets:
Cash and cash equivalents	$	351,474		$	365,512		$	386,956		$	362,122		$	299,351
Investment securities		543,771			513,766			485,622			483,573			591,458
Loans held for sale		21,809			28,899			26,337			14,295			16,989
Loans		4,148,227			4,136,195			4,195,984			4,052,500			4,014,034
Allowance for loan and lease losses		(44,675	)		(43,824	)		(45,047	)		(52,341	)		(42,769	)
Loans, net		4,103,552			4,092,371			4,150,937			4,000,159			3,971,265
Federal Home Loan Bank stock, at cost		32,067			32,067			32,067			32,067			32,067
Premises and equipment, net		44,820			45,945			46,485			46,792			45,605
Goodwill		16,300			16,300			16,300			16,300			16,300
Other real estate owned		160			70			—			160			115
Bank owned life insurance		64,883			64,491			64,106			63,727			63,356
Other assets and accrued interest receivable		61,568			62,933			57,135			59,139			48,856
Total assets	$	5,240,404		$	5,222,354		$	5,265,945		$	5,078,334		$	5,085,362

Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	1,003,969		$	1,103,461		$	1,061,182		$	1,241,127		$	1,022,042
Interest-bearing		2,452,176			2,463,224			2,412,187			2,476,496			2,411,116
Total deposits		3,456,145			3,566,685			3,473,369			3,717,623			3,433,158

Securities sold under agreements to repurchase and other short-term borrowings		182,990			163,768			175,291			175,682			204,021
Federal Home Loan Bank advances		810,000			715,000			860,000			440,000			737,500
Subordinated note		41,240			41,240			41,240			41,240			41,240
Other liabilities and accrued interest payable		60,095			58,851			52,037			50,535			37,019
Total liabilities		4,550,470			4,545,544			4,601,937			4,425,080			4,452,938

Stockholders' equity		689,934			676,810			664,008			653,254			632,424
Total liabilities and stockholders' equity	$	5,240,404		$	5,222,354		$	5,265,945		$	5,078,334		$	5,085,362

Average Balance Sheet Data
		Quarterly Comparison
	Dec. 31, 2018			Sep. 30, 2018			Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017
Assets:
Investment securities, including FHLB stock	$	579,429		$	530,468		$	506,209		$	552,760		$	559,381
Federal funds sold and other interest-earning deposits		199,134			265,111			276,246			283,161			229,638
Loans, including loans held for sale		4,092,004			4,112,926			4,092,388			4,082,050			3,967,211
Total interest-earning assets		4,870,567			4,908,505			4,874,843			4,917,971			4,756,230
Total assets		5,070,845			5,101,286			5,074,781			5,278,204			4,953,134

Liabilities and Stockholders' Equity:
Noninterest-bearing deposits	$	1,050,236		$	1,076,967		$	1,146,403		$	1,319,860		$	1,045,939
Interest-bearing deposits		2,477,962			2,476,088			2,410,330			2,416,142			2,383,196
Securities sold under agreements to repurchase and other short-term borrowings		252,073			213,195			178,063			257,439			271,434
Federal Home Loan Bank advances		515,413			574,130			593,187			545,778			537,326
Subordinated note		41,240			41,240			41,240			41,240			41,240
Total interest-bearing liabilities		3,286,688			3,304,653			3,222,820			3,260,599			3,233,196
Stockholders' equity		687,156			675,470			663,077			641,624			640,686


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 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
	Dec. 31, 2018			Sep. 30, 2018		Jun. 30, 2018	Mar. 31, 2018		Dec. 31, 2017

Total interest income(5)	$	62,902	$	61,090	$	58,356	$	73,833	$	56,349
Total interest expense		8,626		8,057		7,272		6,168		5,711
Net interest income		54,276		53,033		51,084		67,665		50,638

Provision for loan and lease losses		5,104		4,077		4,932		17,255		6,071

Noninterest income:
Service charges on deposit accounts		3,565		3,579		3,574		3,555		3,325
Net refund transfer fees		55		149		3,473		16,352		171
Mortgage banking income		1,129		1,360		1,316		1,020		935
Interchange fee income		2,844		2,757		2,891		2,667		2,533
Program fees		1,520		1,686		1,323		1,696		1,851
Increase in cash surrender value of BOLI		392		385		379		371		384
Losses on available-for-sale debt securities		—		—		—		—		(136	)
Net gains on OREO		29		248		320		132		254
Other		585		1,301		1,020		1,752		873
Total noninterest income		10,119		11,465		14,296		27,545		10,190

Noninterest expense:
Salaries and employee benefits		21,743		22,846		22,766		23,834		20,502
Occupancy and equipment, net		6,474		6,279		6,391		6,221		6,518
Communication and transportation		1,115		1,047		1,241		1,382		1,261
Marketing and development		784		1,449		1,283		916		1,098
FDIC insurance expense		264		360		345		525		328
Bank franchise tax expense		863		710		860		2,518		652
Data processing		2,434		2,350		2,443		2,386		2,606
Interchange related expense		1,237		1,138		1,098		1,007		931
Supplies		446		314		303		381		565
OREO expense		31		2		16		45		104
Legal and professional fees		753		935		728		1,043		616
Other		2,819		3,782		3,158		2,787		2,964
Total noninterest expense		38,963		41,212		40,632		43,045		38,145

Income before income tax expense		20,328		19,209		19,816		34,910		16,612
Income tax expense(4)		3,022		1,798		4,150		7,441		11,774

Net income	$	17,306	$	17,411	$	15,666	$	27,469	$	4,838


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 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
		Dec. 31, 2018			Sep. 30, 2018			Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017
Per Share Data:

Basic weighted average shares outstanding		20,975			20,962			21,187			20,920			21,149
Diluted weighted average shares outstanding		21,113			21,120			21,331			21,018			21,258

Period-end shares outstanding:
Class A Common Stock		18,675			18,682			18,677			18,645			18,607
Class B Common Stock		2,213			2,213			2,215			2,243			2,243

Book value per share(6)	$	33.03		$	32.39		$	31.78		$	31.27		$	30.33
Tangible book value per share(6)		31.98			31.34			30.73			30.22			29.27

Earnings per share ("EPS"):
Basic EPS - Class A Common Stock	$	0.83		$	0.84		$	0.75		$	1.32		$	0.23
Basic EPS - Class B Common Stock		0.76			0.76			0.68			1.21			0.21
Diluted EPS - Class A Common Stock		0.83			0.83			0.74			1.32			0.23
Diluted EPS - Class B Common Stock		0.75			0.76			0.68			1.20			0.21

Cash dividends declared per Common share:
Class A Common Stock	$	0.242		$	0.242		$	0.242		$	0.242		$	0.220
Class B Common Stock		0.220			0.220			0.220			0.220			0.200

Performance Ratios:

Return on average assets		1.37	%		1.37	%		1.23	%		2.08	%		0.39	%
Return on average equity		10.07			10.31			9.45			17.12			3.02
Efficiency ratio(7)		61			64			62			45			63
Yield on average interest-earning assets(5)		5.17			4.98			4.79			6.01			4.74
Cost of average interest-bearing liabilities		1.05			0.98			0.90			0.76			0.71
Cost of average deposits(8)		0.59			0.51			0.44			0.36			0.35
Net interest spread(5)		4.12			4.00			3.89			5.25			4.03
Net interest margin - Total Company(5)		4.46			4.32			4.19			5.50			4.26
Net interest margin - Core Bank(1)		3.85			3.76			3.64			3.55			3.72

Other Information:

End of period FTEs(9) - Total Company		1,051			1,034			1,013			1,003			997
End of period FTEs - Core Bank		968			953			933			922			915
Number of full-service banking centers		45			45			45			45			45


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 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
	Dec. 31, 2018			Sep. 30, 2018			Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017
Credit Quality Asset Balances:

Nonperforming Assets - Total Company:
Loans on nonaccrual status	$	15,993		$	17,015		$	17,502		$	14,849		$	14,118
Loans past due 90-days-or-more and still on accrual		145			254			858			1,279			956
Total nonperforming loans		16,138			17,269			18,360			16,128			15,074
OREO		160			70			—			160			115
Total nonperforming assets	$	16,298		$	17,339		$	18,360		$	16,288		$	15,189

Nonperforming Assets - Core Bank(1):
Loans on nonaccrual status	$	15,993		$	17,015		$	17,502		$	14,849		$	14,118
Loans past due 90-days-or-more and still on accrual		13			5			22			27			19
Total nonperforming loans		16,006			17,020			17,524			14,876			14,137
OREO		160			70			—			160			115
Total nonperforming assets	$	16,166		$	17,090		$	17,524		$	15,036		$	14,252

Delinquent Loans:
Delinquent loans - Core Bank	$	8,875		$	11,840		$	8,703		$	8,303		$	8,460
Delinquent loans - RPG(3)(10)		7,087			5,986			4,429			17,530			5,641
Total delinquent loans - Total Company	$	15,962		$	17,826		$	13,132		$	25,833		$	14,101


Credit Quality Ratios - Total Company:

Nonperforming loans to total loans		0.39	%		0.42	%		0.44	%		0.40	%		0.38	%
Nonperforming assets to total loans (including OREO)		0.39			0.42			0.44			0.40			0.38
Nonperforming assets to total assets		0.31			0.33			0.35			0.32			0.30
Allowance for loan and lease losses to total loans		1.08			1.06			1.07			1.29			1.07
Allowance for loan and lease losses to nonperforming loans		277			254			245			325			284
Delinquent loans to total loans(2)(10)		0.38			0.43			0.31			0.64			0.35
Net charge-offs to average loans (annualized)		0.42			0.52			1.19			0.75			0.35

Credit Quality Ratios - Core Bank:

Nonperforming loans to total loans		0.40	%		0.42	%		0.43	%		0.37	%		0.36	%
Nonperforming assets to total loans (including OREO)		0.40			0.42			0.43			0.38			0.36
Nonperforming assets to total assets		0.31			0.33			0.34			0.31			0.28
Allowance for loan and lease losses to total loans		0.78			0.78			0.76			0.77			0.77
Allowance for loan and lease losses to nonperforming loans		197			184			179			205			213
Delinquent loans to total loans		0.22			0.29			0.21			0.21			0.21
Net charge-offs to average loans (annualized)		0.12			0.04			—			0.06			0.06

Republic Bancorp, Inc. Financial Information
Fourth Quarter 2018 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 December 31, 2018, 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 refund 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 2017 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 Republic can reasonably make specific segment allocations. The Company makes transactions among reportable segments at carrying value.


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 Earnings Release (continued) Segment information for the quarters and years ended December 31, 2018 and 2017 follows:

		Three Months Ended December 31, 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	$	42,207		$	3,557			$	94			$	45,858		$	76			$	8,342			$	8,418			$	54,276

Provision for loan and lease losses		1,552			(230	)			—				1,322			(554	)			4,336				3,782				5,104

Net refund transfer fees		—			—				—				—			55				—				55				55
Mortgage banking income		—			—				1,129				1,129			—				—				—				1,129
Program fees		—			—				—				—			19				1,501				1,520				1,520
Other noninterest income		7,374			10				339				7,723			17				(325	)			(308	)			7,415
Total noninterest income		7,374			10				1,468				8,852			91				1,176				1,267				10,119

Total noninterest expense		32,785			844				905				34,534			3,232				1,197				4,429				38,963

Income (loss) before income tax expense		15,244			2,953				657				18,854			(2,511	)			3,985				1,474				20,328
Income tax expense (benefit)		1,913			676				138				2,727			(631	)			926				295				3,022
Net income (loss)	$	13,331		$	2,277			$	519			$	16,127		$	(1,880	)		$	3,059			$	1,179			$	17,306

Period-end assets	$	4,647,037		$	470,126			$	14,246			$	5,131,409		$	20,288			$	88,707			$	108,995			$	5,240,404

Net interest margin		3.92	%		3.14		%		NM				3.85	%		NM				NM				NM				4.46	%

Net-revenue concentration*		77	%		6		%		2		%		85	%		—		%		15		%		15		%		100	%

		Three Months Ended December 31, 2017
		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	$	39,333		$	4,460			$	91			$	43,884		$	18			$	6,736			$	6,754			$	50,638

Provision for loan and lease losses		1,312			(114	)			—				1,198			(228	)			5,101				4,873				6,071

Net refund transfer fees		—			—				—				—			171				—				171				171
Mortgage banking income		—			—				935				935			—				—				—				935
Program fees		—			—				—				—			73				1,778				1,851				1,851
Other noninterest income		6,834			10				87				6,931			12				290				302				7,233
Total noninterest income		6,834			10				1,022				7,866			256				2,068				2,324				10,190

Total noninterest expense		31,085			944				1,418				33,447			3,600				1,098				4,698				38,145

Income (loss) before income tax expense		13,770			3,640				(305	)			17,105			(3,098	)			2,605				(493	)			16,612
Income tax expense (benefit)		9,518			1,512				(808	)			10,222			(1,125	)			2,677				1,552				11,774
Net income (loss)	$	4,252		$	2,128			$	503			$	6,883		$	(1,973	)		$	(72	)		$	(2,045	)		$	4,838

Period-end assets	$	4,470,932		$	525,246			$	11,115			$	5,007,293		$	12,450			$	65,619			$	78,069			$	5,085,362

Net interest margin		3.76	%		3.41		%		NM				3.72	%		NM				NM				NM				4.26	%

Net-revenue concentration*		77	%		7		%		2		%		86	%		—		%		14		%		14		%		100	%
_______________
*Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue.


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 Earnings Release (continued)

		Year Ended December 31, 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	$	160,398		$	15,726			$	402			$	176,526		$	19,203		$	30,329		$	49,532			$	226,058

Provision for loan and lease losses		3,710			(142	)			—				3,568			10,919			16,881			27,800				31,368

Net refund transfer fees		—			—				—				—			20,029			—			20,029				20,029
Mortgage banking income		—			—				4,825				4,825			—			—			—				4,825
Program fees		—			—				—				—			295			5,930			6,225				6,225
Other noninterest income		29,965			40				550				30,555			1,229			562			1,791				32,346
Total noninterest income		29,965			40				5,375				35,380			21,553			6,492			28,045				63,425

Total noninterest expense		136,439			3,367				4,356				144,162			14,686			5,004			19,690				163,852

Income before income tax expense		50,214			12,541				1,421				64,176			15,151			14,936			30,087				94,263
Income tax expense		6,819			2,869				298				9,986			3,033			3,392			6,425				16,411
Net income	$	43,395		$	9,672			$	1,123			$	54,190		$	12,118		$	11,544		$	23,662			$	77,852

Period-end assets	$	4,647,037		$	470,126			$	14,246			$	5,131,409		$	20,288		$	88,707		$	108,995			$	5,240,404

Net interest margin		3.76	%		3.17		%		NM				3.70	%		NM			NM			NM				4.62	%

Net-revenue concentration*		66	%		5		%		2		%		73	%		14	%		13	%		27	%			100	%

		Year Ended December 31, 2017
		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	$	142,823		$	17,533			$	346			$	160,702		$	15,197		$	22,621		$	37,818			$	198,520

Provision for loan and lease losses		3,923			(150	)			—				3,773			6,535			17,396			23,931				27,704

Net refund transfer fees		—			—				—				—			18,500			—			18,500				18,500
Mortgage banking income		—			—				4,642				4,642			—			—			—				4,642
Program fees		—			—				—				—			176			5,648			5,824				5,824
Other noninterest income		27,452			37				279				27,768			164			1,516			1,680				29,448
Total noninterest income		27,452			37				4,921				32,410			18,840			7,164			26,004				58,414

Total noninterest expense		124,637			3,392				4,765				132,794			14,491			3,559			18,050				150,844

Income before income tax expense		41,715			14,328				502				56,545			13,011			8,830			21,841				78,386
Income tax expense		18,202			5,421				(526	)			23,097			4,721			4,936			9,657				32,754
Net income	$	23,513		$	8,907			$	1,028			$	33,448		$	8,290		$	3,894		$	12,184			$	45,632

Period-end assets	$	4,470,932		$	525,246			$	11,115			$	5,007,293		$	12,450		$	65,619		$	78,069			$	5,085,362

Net interest margin		3.55	%		3.53		%		NM				3.55	%		NM			NM			NM				4.32	%

Net-revenue concentration*		66	%		7		%		2		%		75	%		13	%		12	%		25		%		100	%
_______________
*Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue.


Republic Bancorp, Inc. Financial Information Fourth Quarter 2018 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 2017 Tax Cuts and Jobs Act (“TCJA”), enacted on December 22, 2017, lowered the federal corporate tax rate from 35% to 21%, effective January 1, 2018. With the TCJA’s meaningful impact during 2018 and the fourth quarter of 2017, the Company’s effective tax rate per quarter was as follows: 14.9% (quarter ended December 31, 2018); 9.4% (quarter ended September 30, 2018); 20.9% (quarter ended June 30, 2018); 21.3% (quarter ended March 31, 2018); and 70.9% (quarter ended December 31, 2017).

	In addition to the TCJA lowering the Company’s 2018 federal income tax rate, Republic’s relatively low effective tax rate during the third quarter of 2018 was driven by approximately $2.8 million in income tax benefits recognized during the third quarter of 2018 as part of preparing the Company’s fiscal-year 2017 federal tax return due October 15, 2018. The Company considers approximately $2.6 million of the $2.8 million in federal income tax benefits to be nonrecurring in nature, with a portion of the remaining benefits to be realizable in the future.

	A $6.3 million charge to income tax expense upon remeasurement of the Company’s deferred tax assets and liabilities at a 21% corporate tax rate drove the relatively high effective tax rate for the fourth quarter of 2017.

	The following table reflects the impact of the TCJA on Republic’s income tax expense and effective tax rate for the fourth quarters and years ended December 31, 2018 and 2017.


	Three Months Ended Dec. 31,												Year Ended Dec. 31,
	2018						2017						2018						2017
				Effective						Effective						Effective						Effective
(in thousands)	Amount			Tax Rate				Amount		Tax Rate			Amount			Tax			Amount			Tax Rate

Income before income tax expense	$	20,328					$	16,612					$	94,263					$	78,386

Income tax expense, before adjusting items	$	4,269		21.00		%	$	5,814		35.00		%	$	19,795		21.00		%	$	27,435		35.00		%
Adjustments relating to:
Enactment of the TCJA		(389	)	(1.91	)			6,327		38.09				(2,762	)	(2.93	)			6,327		8.07
Nontaxable Income		(250	)	(1.23	)			(405	)	(2.44	)			(933	)	(0.99	)			(1,488	)	(1.90	)
State Taxes, net of federal benefit		422		2.08				174		1.05				1,569		1.66				700		0.89
General business tax credits		(213	)	(1.05	)			—		—				(1,355	)	(1.44	)			—		—
Tax Benefit of Vesting Employee Benefits		(191	)	(0.94	)			(243	)	(1.46	)			(191	)	(0.20	)			(243	)	(0.31	)
Reduction of uncertain tax positions		(210	)	(1.03	)			(433	)	(2.61	)			(210	)	(0.22	)			(433	)	(0.55	)
Other, net		(416	)	(2.05	)			540		3.25				498		0.53				456		0.58
Total Adjustments		(1,247	)	(6.13	)			5,960		35.88				(3,384	)	(3.59	)			5,319		6.79

Income tax expense, as reported	$	3,022		14.87		%	$	11,774		70.88		%	$	16,411		17.41		%	$	32,754		41.79		%

(5)	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 $9.4 million and $9.4 million for the quarters ended December 31, 2018 and 2017. The amount of loan fee income included in total interest income was $53.8 million and $46.2 million for the years ended December 31, 2018 and 2017.

	The amount of loan fee income included in total interest income per quarter was as follows: $9.4 million (quarter ended December 31, 2018); $9.0 million (quarter ended September 30, 2018); $8.5 million (quarter ended June 30, 2018); $26.9 million (quarter ended March 31, 2018); and $9.4 million (quarter ended December 31, 2017).

	Interest income for Easy Advances (“EAs”) is composed entirely of loan fees. The loan fees disclosed above included EA fees of $17.8 million and $14.2 million for the years ended December 31, 2018 and 2017. EAs are only offered during the first two months of each year.

(6)	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)	Dec. 31, 2018			Sep. 30, 2018				Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017

Total stockholders' equity - GAAP (a)	$	689,934		$	676,810		$	664,008		$	653,254		$	632,424
Less: Goodwill		16,300			16,300			16,300			16,300			16,300
Less: Mortgage servicing rights		4,919			4,925			4,914			4,925			5,044
Less: Core deposit intangible		654			705			756			807			858
Tangible stockholders' equity - Non-GAAP (c)	$	668,061		$	654,880		$	642,038		$	631,222		$	610,222

Total assets - GAAP (b)	$	5,240,404		$	5,222,354		$	5,265,945		$	5,078,334		$	5,085,362
Less: Goodwill		16,300			16,300			16,300			16,300			16,300
Less: Mortgage servicing rights		4,919			4,925			4,914			4,925			5,044
Less: Core deposit intangible		654			705			756			807			858
Tangible assets - Non-GAAP (d)	$	5,218,531		$	5,200,424		$	5,243,975		$	5,056,302		$	5,063,160

Total stockholders' equity to total assets - GAAP (a/b)		13.17	%		12.96	%		12.61	%		12.86	%		12.44	%
Tangible stockholders' equity to tangible assets - Non-GAAP (c/d)		12.80	%		12.59	%		12.24	%		12.48	%		12.05	%

Number of shares outstanding (e)		20,888			20,895			20,892			20,888			20,850

Book value per share - GAAP (a/e)	$	33.03		$	32.39		$	31.78		$	31.27		$	30.33
Tangible book value per share - Non-GAAP (c/e)		31.98			31.34			30.73			30.22			29.27

(7)	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.

(8)	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.

(9)	FTEs – Full-time-equivalent employees.

(10)	Delinquent loans for the RPG segment included $13 million of EAs at March 31, 2018. EAs were only offered during the first two months of 2018. 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

View source version on businesswire.com: https://www.businesswire.com/news/home/20190125005005/en/

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

Source: Republic Bancorp, Inc.