REPUBLIC BANCORP INC /KY/ - FORM 8-K - EX-99.2 - EXHIBIT 99.2

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EX-99.1 - EXHIBIT 99.1 - REPUBLIC BANCORP INC /KY/	a52368627ex99_1.htm
8-K - REPUBLIC BANCORP, INC. 8-K - REPUBLIC BANCORP INC /KY/	a52368627.htm

Exhibit 99.2

EARNINGS RELEASE FINANCIAL SUPPLEMENT

FOURTH QUARTER 2020

TABLE OF CONTENTS


	YEAR TO YEAR COMPARISON	S-2

	Balance Sheet Data	S-2
	Average Balance Sheet Data	S-2
	Income Statement Data	S-3
	Selected Data and Ratios	S-4
	Credit Quality Data and Ratios	S-5

	QUARTERLY COMPARISON	S-6

	Balance Sheet Data	S-6
	Average Balance Sheet Data	S-6
	Income Statement Data	S-7
	Selected Data and Ratios	S-8
	Credit Quality Data and Ratios	S-9

	SEGMENT DATA	S-10

	Quarter to Date Income Statement by Segment	S-11
	Year to Date Income Statement by Segment	S-12

	FOOTNOTES	S-13

S-1

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020

(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, 2020			Dec. 31, 2019
Assets:
Cash and cash equivalents	$	485,587		$	385,303
Investment securities, net of allowance for credit losses (1)		580,270			537,074
Loans held for sale		51,643			31,468
Loans		4,813,103			4,433,151
Allowance for credit losses (1)		(61,067	)		(43,351	)
Loans, net		4,752,036			4,389,800
Federal Home Loan Bank stock, at cost		17,397			30,831
Premises and equipment, net		39,512			46,196
Right-of-use assets		43,345			35,206
Goodwill		16,300			16,300
Other real estate owned ("OREO")		2,499			113
Bank owned life insurance ("BOLI")		68,018			66,433
Other assets and accrued interest receivable		111,718			81,595
Total assets	$	6,168,325		$	5,620,319

Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	1,890,416		$	1,033,379
Interest-bearing		2,842,765			2,752,629
Total deposits		4,733,181			3,786,008

Securities sold under agreements to repurchase and other short-term borrowings		211,026			167,617
Operating lease liabilities		44,340			36,530
Federal Home Loan Bank advances		235,000			750,000
Subordinated note		41,240			41,240
Other liabilities and accrued interest payable		80,215			74,680
Total liabilities		5,345,002			4,856,075

Stockholders' equity		823,323			764,244
Total liabilities and stockholders' equity	$	6,168,325		$	5,620,319

Average Balance Sheet Data
	Three Months Ended Dec. 31,				Years Ended Dec. 31,
	2020		2019		2020		2019
Assets:
Federal funds sold and other interest-earning deposits	$	311,584	$	152,286	$	283,151	$	260,131
Investment securities, including FHLB stock		610,287		632,559		584,300		564,631
Loans, including loans held for sale		4,916,968		4,588,538		4,796,841		4,470,347
Total interest-earning assets		5,838,839		5,373,383		5,664,292		5,295,109
Total assets		6,170,766		5,638,498		6,011,865		5,577,643

Liabilities and Stockholders' Equity:
Noninterest-bearing deposits, including those held for assumption	$	1,892,259	$	1,062,010	$	1,672,442	$	1,120,608
Interest-bearing deposits, including those held for assumption		2,977,579		2,966,993		2,913,486		2,755,946
Securities sold under agreements to
repurchase and other short-term borrowings		220,406		248,558		204,797		236,883
Federal Reserve Paycheck Protection Program Liquidity Facility		—		—		43,932		—
Federal Home Loan Bank advances		88,533		469,130		211,776		595,613
Subordinated note		41,240		41,240		41,240		41,240
Total interest-bearing liabilities		3,327,758		3,725,921		3,415,231		3,629,682
Stockholders' equity		823,109		758,740		802,726		734,281

S-2

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (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,					Years Ended Dec. 31,
	2020			2019		2020			2019

Total interest income (2)	$	57,970		$	64,527	$	252,258		$	280,883
Total interest expense		2,850			10,132		19,943			44,757
Net interest income		55,120			54,395		232,315			236,126

Provision for expected credit loss expense (1)		484			914		31,278			25,758

Noninterest income:
Service charges on deposit accounts		3,011			3,547		11,615			14,197
Net refund transfer fees		409			112		20,297			21,158
Mortgage banking income		7,879			2,480		31,847			9,499
Interchange fee income		2,917			2,814		11,188			11,859
Program fees		1,846			1,284		7,095			4,712
Increase in cash surrender value of BOLI		401			397		1,585			1,550
Net gains (losses) on OREO		(30	)		53		(40	)		540
Net gain on branch divestiture		—			7,948		—			7,829
Other		703			1,020		3,466			3,664
Total noninterest income		17,136			19,655		87,053			75,008

Noninterest expense:
Salaries and employee benefits		26,553			23,997		106,166			99,181
Occupancy and equipment, net		7,157			6,497		27,498			26,124
Communication and transportation		1,153			1,198		4,942			4,447
Marketing and development		1,261			1,223		4,031			5,023
FDIC insurance expense		366			—		1,010			743
Bank franchise tax expense		975			927		5,369			5,293
Data processing		3,434			2,532		12,066			9,189
Interchange related expense		998			1,115		4,303			4,870
Supplies		400			335		1,717			1,693
Other real estate owned and other repossession expense		1			2		46			326
Legal and professional fees		734			601		4,244			3,357
FHLB advance prepayment penalties		2,108			—		2,108			—
Other		3,000			2,408		11,957			11,937
Total noninterest expense		48,140			40,835		185,457			172,183

Income before income tax expense		23,632			32,301		102,633			113,193
Income tax expense		3,276			6,533		19,387			21,494
Net income	$	20,356		$	25,768	$	83,246		$	91,699

S-3

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (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,						Years Ended Dec. 31,
	2020			2019			2020			2019
Per Share Data:

Basic weighted average shares outstanding		21,037			21,036			21,039			21,023
Diluted weighted average shares outstanding		21,072			21,133			21,069			21,135

Period-end shares outstanding:
Class A Common Stock		18,697			18,737			18,697			18,737
Class B Common Stock		2,199			2,206			2,199			2,206

Book value per share (3)	$	39.40		$	36.49		$	39.40		$	36.49
Tangible book value per share (3)		38.27			35.41			38.27			35.41

Earnings per share ("EPS"):
Basic EPS - Class A Common Stock	$	0.98		$	1.23		$	4.00		$	4.41
Basic EPS - Class B Common Stock		0.89			1.13			3.64			4.01
Diluted EPS - Class A Common Stock		0.98			1.23			3.99			4.39
Diluted EPS - Class B Common Stock		0.89			1.12			3.63			3.99

Cash dividends declared per Common share:
Class A Common Stock	$	0.286		$	0.264		$	1.144		$	1.056
Class B Common Stock		0.260			0.240			1.040			0.960

Performance Ratios:

Return on average assets		1.32	%		1.83	%		1.38	%		1.64	%
Return on average equity		9.89			13.58			10.37			12.49
Efficiency ratio (4)		67			62			58			57
Yield on average interest-earning assets (2)		3.97			4.80			4.45			5.30
Cost of average interest-bearing liabilities		0.34			1.09			0.58			1.23
Cost of average deposits (5)		0.19			0.74			0.33			0.75
Net interest spread (2)		3.63			3.71			3.87			4.07
Net interest margin - Total Company (2)		3.78			4.05			4.10			4.46
Net interest margin - Core Bank (6)		3.48			3.56			3.39			3.61

Other Information:

End of period FTEs (7) - Total Company		1,094			1,080			1,094			1,080
End of period FTEs - Core Bank		997			997			997			997
Number of full-service banking centers		42			41			42			41

S-4

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (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,						Years Ended Dec. 31,
	2020			2019			2020			2019
Credit Quality Asset Balances:

Nonperforming Assets - Total Company:
Loans on nonaccrual status	$	23,548		$	23,332		$	23,548		$	23,332
Loans past due 90-days-or-more and still on accrual		47			157			47			157
Total nonperforming loans		23,595			23,489			23,595			23,489
OREO		2,499			113			2,499			113
Total nonperforming assets	$	26,094		$	23,602		$	26,094		$	23,602

Nonperforming Assets - Core Bank (6):
Loans on nonaccrual status	$	23,548		$	23,332		$	23,548		$	23,332
Loans past due 90-days-or-more and still on accrual		5			—			5			—
Total nonperforming loans		23,553			23,332			23,553			23,332
OREO		2,499			113			2,499			113
Total nonperforming assets	$	26,052		$	23,445		$	26,052		$	23,445

Delinquent loans:
Delinquent loans - Core Bank	$	9,713		$	13,042		$	9,713		$	13,042
Delinquent loans - RPG (8)		10,234			7,762			10,234			7,762
Total delinquent loans - Total Company	$	19,947		$	20,804		$	19,947		$	20,804


Credit Quality Ratios - Total Company:

Nonperforming loans to total loans		0.49	%		0.53	%		0.49	%		0.53	%
Nonperforming assets to total loans (including OREO)		0.54			0.53			0.54			0.53
Nonperforming assets to total assets		0.42			0.42			0.42			0.42
Allowance for credit losses to total loans		1.27			0.98			1.27			0.98
Allowance for credit losses to nonperforming loans		259			185			259			185
Delinquent loans to total loans (9)		0.41			0.47			0.41			0.47
Net charge-offs (recoveries) to average loans (annualized)		(0.04	)		0.39			0.42			0.61

Credit Quality Ratios - Core Bank:

Nonperforming loans to total loans		0.50	%		0.54	%		0.50	%		0.54	%
Nonperforming assets to total loans (including OREO)		0.56			0.54			0.56			0.54
Nonperforming assets to total assets		0.45			0.43			0.45			0.43
Allowance for credit losses to total loans		1.11			0.70			1.11			0.70
Allowance for credit losses to nonperforming loans		221			129			221			129
Delinquent loans to total loans		0.21			0.30			0.21			0.30
Net charge-offs to average loans (annualized)		0.07			0.19			0.03			0.11

S-5

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (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, 2020			Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019
Assets:
Cash and cash equivalents	$	485,587		$	342,028		$	560,195		$	316,263		$	385,303
Investment securities, net of allowance for credit losses (1)		580,270			607,556			545,607			608,330			537,074
Loans held for sale		51,643			56,752			52,992			54,904			31,468
Loans		4,813,103			4,994,374			5,065,092			4,515,599			4,433,151
Allowance for credit losses (1)		(61,067	)		(59,891	)		(55,097	)		(70,431	)		(43,351	)
Loans, net		4,752,036			4,934,483			5,009,995			4,445,168			4,389,800
Federal Home Loan Bank stock, at cost		17,397			19,634			25,629			38,900			30,831
Premises and equipment, net		39,512			40,946			42,753			44,215			46,196
Right-of-use assets		43,345			43,643			34,450			34,349			35,206
Goodwill		16,300			16,300			16,300			16,300			16,300
Other real estate owned		2,499			2,056			2,194			85			113
Bank owned life insurance		68,018			67,617			67,217			66,822			66,433
Other assets and accrued interest receivable		111,718			109,431			103,243			96,697			81,595
Total assets	$	6,168,325		$	6,240,446		$	6,460,575		$	5,722,033		$	5,620,319

Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	1,890,416		$	1,876,418		$	1,821,400		$	1,300,891		$	1,033,379
Interest-bearing		2,842,765			3,115,911			3,196,685			2,770,566			2,752,629
Total deposits		4,733,181			4,992,329			5,018,085			4,071,457			3,786,008

Securities sold under agreements to
repurchase and other short-term borrowings		211,026			126,172			177,397			126,080			167,617
Operating lease liabilities		44,340			44,710			35,571			35,537			36,530
Federal Reserve Paycheck Protection Program Liquidity Facility		—			—			169,209			—			—
Federal Home Loan Bank advances		235,000			132,500			137,500			572,500			750,000
Subordinated note		41,240			41,240			41,240			41,240			41,240
Other liabilities and accrued interest payable		80,215			93,133			85,954			91,173			74,680
Total liabilities		5,345,002			5,430,084			5,664,956			4,937,987			4,856,075

Stockholders' equity		823,323			810,362			795,619			784,046			764,244
Total liabilities and stockholders' equity	$	6,168,325		$	6,240,446		$	6,460,575		$	5,722,033		$	5,620,319

Average Balance Sheet Data
	Quarterly Comparison
	Dec. 31, 2020		Sep. 30, 2020		Jun. 30, 2020		Mar. 31, 2020		Dec. 31, 2019
Assets:
Federal funds sold and other interest-earning deposits	$	311,584	$	313,281	$	299,760	$	207,335	$	152,286
Investment securities, including FHLB stock		610,287		600,943		605,776		519,726		632,559
Loans, including loans held for sale		4,916,968		4,907,106		4,867,622		4,493,137		4,588,538
Total interest-earning assets		5,838,839		5,821,330		5,773,158		5,220,198		5,373,383
Total assets		6,170,766		6,152,043		6,094,421		5,626,946		5,638,498

Liabilities and Stockholders' Equity:
Noninterest-bearing deposits, including those held for assumption	$	1,892,259	$	1,846,552	$	1,697,603	$	1,249,025	$	1,062,010
Interest-bearing deposits, including those held for assumption		2,977,579		2,939,063		2,880,988		2,855,332		2,966,993
Securities sold under agreements to
repurchase and other short-term borrowings		220,406		213,010		176,541		208,969		248,558
Federal Reserve Paycheck Protection Program Liquidity Facility		—		53,338		122,769		—		—
Federal Home Loan Bank advances		88,533		126,250		263,296		371,319		469,130
Subordinated note		41,240		41,240		41,240		41,240		41,240
Total interest-bearing liabilities		3,327,758		3,372,901		3,484,834		3,476,860		3,725,921
Stockholders' equity		823,109		811,351		797,227		778,900		758,740

S-6

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (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, 2020			Sep. 30, 2020			Jun. 30, 2020		Mar. 31, 2020		Dec. 31, 2019

Total interest income (2)	$	57,970		$	56,038		$	57,091	$	81,159	$	64,527
Total interest expense		2,850			3,786			4,886		8,421		10,132
Net interest income		55,120			52,252			52,205		72,738		54,395

Provision for expected credit loss expense (1)		484			1,500			6,534		22,760		914

Noninterest income:
Service charges on deposit accounts		3,011			3,017			2,451		3,136		3,547
Net refund transfer fees		409			1,152			2,913		15,823		112
Mortgage banking income		7,879			10,775			8,398		4,795		2,480
Interchange fee income		2,917			2,911			2,808		2,552		2,814
Program fees		1,846			1,487			1,138		2,624		1,284
Increase in cash surrender value of BOLI		401			400			395		389		397
Net gains (losses) on OREO		(30	)		(14	)		1		3		53
Net gain on branch divestiture		—			—			—		—		7,948
Other		703			869			647		1,247		1,020
Total noninterest income		17,136			20,597			18,751		30,569		19,655

Noninterest expense:
Salaries and employee benefits		26,553			26,667			26,324		26,622		23,997
Occupancy and equipment, net		7,157			6,780			6,715		6,846		6,497
Communication and transportation		1,153			1,147			1,353		1,289		1,198
Marketing and development		1,261			919			1,018		833		1,223
FDIC insurance expense		366			345			299		—		—
Bank franchise tax expense		975			974			914		2,506		927
Data processing		3,434			3,340			2,753		2,539		2,532
Interchange related expense		998			1,056			1,173		1,076		1,115
Supplies		400			326			539		452		335
OREO expense		1			6			21		18		2
Legal and professional fees		734			1,248			1,025		1,237		601
FHLB advance prepayment penalties		2,108			—			—		—		—
Other		3,000			2,715			2,691		3,551		2,408
Total noninterest expense		48,140			45,523			44,825		46,969		40,835

Income before income tax expense		23,632			25,826			19,597		33,578		32,301
Income tax expense		3,276			5,437			3,793		6,881		6,533
Net income	$	20,356		$	20,389		$	15,804	$	26,697	$	25,768

S-7

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (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, 2020			Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019
Per Share Data:

Basic weighted average shares outstanding		21,037			21,026			21,004			21,035			21,036
Diluted weighted average shares outstanding		21,072			21,046			21,029			21,094			21,133

Period-end shares outstanding:
Class A Common Stock		18,697			18,715			18,708			18,687			18,737
Class B Common Stock		2,199			2,200			2,200			2,200			2,206

Book value per share (3)	$	39.40		$	38.75		$	38.05		$	37.54		$	36.49
Tangible book value per share (3)		38.27			37.63			36.93			36.45			35.41

Earnings per share ("EPS"):
Basic EPS - Class A Common Stock	$	0.98		$	0.98		$	0.77		$	1.29		$	1.23
Basic EPS - Class B Common Stock		0.89			0.89			0.69			1.17			1.13
Diluted EPS - Class A Common Stock		0.98			0.98			0.76			1.28			1.23
Diluted EPS - Class B Common Stock		0.89			0.89			0.69			1.16			1.12

Cash dividends declared per Common share:
Class A Common Stock	$	0.286		$	0.286		$	0.286		$	0.286		$	0.264
Class B Common Stock		0.260			0.260			0.260			0.260			0.240

Performance Ratios:

Return on average assets		1.32	%		1.33	%		1.04	%		1.90	%		1.83	%
Return on average equity		9.89			10.05			7.93			13.71			13.58
Efficiency ratio (4)		67			62			63			45			62
Yield on average interest-earning assets (2)		3.97			3.85			3.96			6.22			4.80
Cost of average interest-bearing liabilities		0.34			0.45			0.56			0.97			1.09
Cost of average deposits (5)		0.19			0.24			0.32			0.61			0.74
Net interest spread (2)		3.63			3.40			3.40			5.25			3.71
Net interest margin - Total Company (2)		3.78			3.59			3.62			5.57			4.05
Net interest margin - Core Bank (6)		3.48			3.25			3.23			3.65			3.56

Other Information:

End of period FTEs (7) - Total Company		1,094			1,085			1,094			1,077			1,080
End of period FTEs - Core Bank		997			993			1,001			994			997
Number of full-service banking centers		42			42			42			42			41

S-8

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (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, 2020			Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019
Credit Quality Asset Balances:

Nonperforming Assets - Total Company:
Loans on nonaccrual status	$	23,548		$	20,910		$	19,884		$	20,358		$	23,332
Loans past due 90-days-or-more and still on accrual		47			175			535			495			157
Total nonperforming loans		23,595			21,085			20,419			20,853			23,489
OREO		2,499			2,056			2,194			85			113
Total nonperforming assets	$	26,094		$	23,141		$	22,613		$	20,938		$	23,602

Nonperforming Assets - Core Bank (6):
Loans on nonaccrual status	$	23,548		$	20,910		$	19,884		$	20,358		$	23,332
Loans past due 90-days-or-more and still on accrual		5			—			—			—			—
Total nonperforming loans		23,553			20,910			19,884			20,358			23,332
OREO		2,499			2,056			2,194			85			113
Total nonperforming assets	$	26,052		$	22,966		$	22,078		$	20,443		$	23,445

Delinquent Loans:
Delinquent loans - Core Bank	$	9,713		$	11,069		$	7,861		$	11,863		$	13,042
Delinquent loans - RPG (8) (10)		10,234			5,984			6,185			30,764			7,762
Total delinquent loans - Total Company	$	19,947		$	17,053		$	14,046		$	42,627		$	20,804


Credit Quality Ratios - Total Company:

Nonperforming loans to total loans		0.49	%		0.42	%		0.40	%		0.46	%		0.53	%
Nonperforming assets to total loans (including OREO)		0.54			0.46			0.45			0.46			0.53
Nonperforming assets to total assets		0.42			0.37			0.35			0.37			0.42
Allowance for credit losses to total loans		1.27			1.20			1.09			1.56			0.98
Allowance for credit losses to nonperforming loans		259			284			270			338			185
Delinquent loans to total loans (9) (10)		0.41			0.34			0.28			0.94			0.47
Net charge-offs (recoveries) to average loans (annualized)		(0.04	)		(0.27	)		1.80			0.19			0.39

Credit Quality Ratios - Core Bank:

Nonperforming loans to total loans		0.50	%		0.43	%		0.40	%		0.46	%		0.54	%
Nonperforming assets to total loans (including OREO)		0.56			0.47			0.44			0.47			0.54
Nonperforming assets to total assets		0.45			0.39			0.36			0.38			0.43
Allowance for credit losses to total loans		1.11			1.05			0.92			0.97			0.70
Allowance for credit losses to nonperforming loans		221			245			230			210			129
Delinquent loans to total loans		0.21			0.23			0.16			0.27			0.30
Net charge-offs (recoveries) to average loans (annualized)		0.07			0.03			0.04			(0.03	)		0.19

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (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, 2020, 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. MemoryBank^®, the Company’s national branchless banking platform is 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 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 2019 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.

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (continued)

Segment information for the quarters and years ended December 31, 2020 and 2019 follows:

	Three Months Ended December 31, 2020
	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	$	40,972		$	8,242		$	430		$	49,644		$	488		$	4,988		$	5,476		$	55,120

Provision for expected credit loss expense		1,731			(165	)		—			1,566			(2,050	)		968			(1,082	)		484

Net refund transfer fees		—			—			—			—			409			—			409			409
Mortgage banking income		—			—			7,879			7,879			—			—			—			7,879
Program fees		—			—			—			—			620			1,226			1,846			1,846
Other noninterest income		6,905			17			50			6,972			30			—			30			7,002
Total noninterest income		6,905			17			7,929			14,851			1,059			1,226			2,285			17,136

Total noninterest expense		39,311			898			3,243			43,452			3,925			763			4,688			48,140

Income (loss) before income tax expense		6,835			7,526			5,116			19,477			(328	)		4,483			4,155			23,632
Income tax expense (benefit)		(352	)		1,694			1,074			2,416			(164	)		1,024			860			3,276
Net income (loss)	$	7,187		$	5,832		$	4,042		$	17,061		$	(164	)	$	3,459		$	3,295		$	20,356

Period-end assets	$	4,750,460		$	962,692		$	62,400		$	5,775,552		$	285,612		$	107,161		$	392,773		$	6,168,325

Net interest margin		3.46	%		3.51	%	NM				3.48	%	NM			NM			NM				3.78	%

Net-revenue concentration*		66	%		11	%		12	%		89	%		2	%		9	%		11	%		100	%

	Three Months Ended December 31, 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	$	41,973		$	4,620		$	213		$	46,806		$	183		$	7,406		$	7,589		$	54,395

Provision for expected credit loss expense		(727	)		(640	)		—			(1,367	)		(569	)		2,850			2,281			914

Net refund transfer fees		—			—			—			—			112			—			112			112
Mortgage banking income		—			—			2,480			2,480			—			—			—			2,480
Program fees		—			—			—			—			119			1,165			1,284			1,284
Net gain on branch divestiture		7,948			—			—			7,948			—			—			—			7,948
Other noninterest income		7,754			10			51			7,815			16			—			16			7,831
Total noninterest income		15,702			10			2,531			18,243			247			1,165			1,412			19,655

Total noninterest expense		34,475			832			1,801			37,108			3,529			198			3,727			40,835

Income (loss) before income tax expense		23,927			4,438			943			29,308			(2,530	)		5,523			2,993			32,301
Income tax expense (benefit)		4,898			999			198			6,095			(797	)		1,235			438			6,533
Net income (loss)	$	19,029		$	3,439		$	745		$	23,213		$	(1,733	)	$	4,288		$	2,555		$	25,768

Period-end assets	$	4,684,116		$	717,994		$	26,469		$	5,428,579		$	86,849		$	104,891		$	191,740		$	5,620,319

Net interest margin		3.80	%		2.27	%	NM				3.56	%	NM			NM			NM				4.05	%

Net-revenue concentration*		77	%		6	%		4	%		87	%		1	%		12	%		13	%		100	%

_____________________________

*Net revenues represent total net interest income plus noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue.

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (continued)

	Year Ended December 31, 2020
	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	$	159,381		$	25,957		$	1,362		$	186,700		$	22,972		$	22,643		$	45,615		$	232,315

Provision for expected credit loss expense		16,257			613			—			16,870			13,189			1,219			14,408			31,278

Net refund transfer fees		—			—			—			—			20,297			—			20,297			20,297
Mortgage banking income		—			—			31,847			31,847			—			—			—			31,847
Program fees		—			—			—			—			2,193			4,902			7,095			7,095
Other noninterest income		27,404			24			103			27,531			283			—			283			27,814
Total noninterest income		27,404			24			31,950			59,378			22,773			4,902			27,675			87,053

Total noninterest expense		149,061			4,387			10,760			164,208			17,514			3,735			21,249			185,457

Income before income tax expense		21,467			20,981			22,552			65,000			15,042			22,591			37,633			102,633
Income tax expense		1,395			4,721			4,736			10,852			3,323			5,212			8,535			19,387
Net income	$	20,072		$	16,260		$	17,816		$	54,148		$	11,719		$	17,379		$	29,098		$	83,246

Period-end assets	$	4,750,460		$	962,692		$	62,400		$	5,775,552		$	285,612		$	107,161		$	392,773		$	6,168,325

Net interest margin		3.42	%		3.19	%	NM				3.39	%	NM			NM			NM				4.10	%

Net-revenue concentration*		59	%		8	%		10	%		77	%		14	%		9	%		23	%		100	%

	Year Ended December 31, 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	$	168,076		$	15,801		$	697		$	184,574		$	21,626		$	29,926		$	51,552		$	236,126

Provision for expected credit loss expense		2,444			622			—			3,066			11,249			11,443			22,692			25,758

Net refund transfer fees		—			—			—			—			21,158			—			21,158			21,158
Mortgage banking income		—			—			9,499			9,499			—			—			—			9,499
Program fees		—			—			—			—			437			4,275			4,712			4,712
Net gain on branch divestiture		7,829			—			—			7,829			—			—			—			7,829
Other noninterest income		30,724			(46	)		213			30,891			260			659			919			31,810
Total noninterest income		38,553			(46	)		9,712			48,219			21,855			4,934			26,789			75,008

Total noninterest expense		143,671			3,268			6,112			153,051			16,539			2,593			19,132			172,183

Income before income tax expense		60,514			11,865			4,297			76,676			15,693			20,824			36,517			113,193
Income tax expense		9,651			2,670			902			13,223			3,454			4,817			8,271			21,494
Net income	$	50,863		$	9,195		$	3,395		$	63,453		$	12,239		$	16,007		$	28,246		$	91,699

Period-end assets	$	4,684,116		$	717,994		$	26,469		$	5,428,579		$	86,849		$	104,891		$	191,740		$	5,620,319

Net interest margin		3.76	%		2.42	%	NM				3.61	%	NM			NM			NM				4.46	%

Net-revenue concentration*		67	%		5	%		3	%		75	%		14	%		11	%		25	%		100	%

______________________________

*Net revenues represent total net interest income plus noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue.

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Fourth Quarter 2020 (continued)

Footnotes:

(1)

Effective January 1, 2020, the Company adopted Accounting Standards Codification (“ASC”) 326 Financial Instruments – Credit Losses, which replaces the pre-January 1, 2020 “probable-incurred” method for calculating the Company’s Allowance for Credit Losses (“ACL”) with the current expected credit losses (“CECL”) method. CECL is applicable to financial assets measured at amortized cost, including loan and lease receivables and held-to-maturity debt securities. CECL also applies to certain off-balance sheet credit exposures. In addition to CECL, ASC 326 made changes to the accounting for Available-for-Sale (“AFS”) debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on AFS debt securities that the Company does not intend or will likely not be compelled to sell.

When measuring an ACL, CECL primarily differs from the probable-incurred method by: a) incorporating a lower “expected” threshold for loss recognition versus a higher “probable” threshold; b) requiring life-of-loan considerations; and c) requiring reasonable and supportable forecasts. The Company’s CECL method is a “static-pool” method that analyzes historical closed pools of loans over their expected lives to attain a loss rate, which is then adjusted for current conditions and reasonable and supportable forecasts prior to being applied to the current balance of the analyzed pools. Due to its reasonably strong correlation to the Company's historical net loan losses, the Company has chosen to use the national unemployment rate as its primary forecasting tool. During the third quarter of 2020, the Company began incorporating forecasted vacancy rates on commercial real estate into its CECL model.

In accord with the adoption of ASC 326 and CECL, the Company recorded on January 1, 2020 a $6.7 million, or 16%, increase in the ACL for its loans and leases, a $51,000 ACL for its investment debt securities, and an approximate $456,000 ACL for its off-balance sheet exposures. This adoption also reduced the Company’s retained earnings on a tax-effected basis, with no impact on 2020 earnings. The adoption date increase in ACL for the Company’s loans and leases primarily reflects additional ACL for longer duration loan portfolios, such as the Company's residential real estate and consumer loan portfolios. No additional segmentation of the Bank's loan portfolios was deemed necessary upon adoption.

(2)

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 $10.8 million and $8.5 million for the quarters ended December 31, 2020 and 2019. The amount of loan fee income included in total interest income was $55.0 million and $54.5 million for the years ended December 31, 2020 and 2019.

The amount of loan fee income included in total interest income per quarter was as follows: $10.8 million (quarter ended December 31, 2020); $7.9 million (quarter ended September 30, 2020); $7.8 million (quarter ended June 30, 2020); $28.5 million (quarter ended March 31, 2020); and $8.5 million (quarter ended December 31, 2019).

Included in the above totals, fee income recognized on PPP loans totaled $4.8 million for the quarter and $8.6 million for the year ended December 31, 2020.

Interest income for Easy Advances (“EAs”) is composed entirely of loan fees. The loan fees disclosed above included EA fees of $19.7 million and $19.1 million for the years ended December 31, 2020 and 2019. EA’s are only offered during the first two months of each year.

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Table of Contents

(3)

The following table provides a reconciliation of total stockholders’ equity in accordance with 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, 2020			Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019

Total stockholders' equity - GAAP (a)	$	823,323		$	810,362		$	795,619		$	784,046		$	764,244
Less: Goodwill		16,300			16,300			16,300			16,300			16,300
Less: Mortgage servicing rights		7,095			6,674			6,711			5,994			5,888
Less: Core deposit intangible		189			283			377			423			469
Tangible stockholders' equity - Non-GAAP (c)	$	799,739		$	787,105		$	772,231		$	761,329		$	741,587

Total assets - GAAP (b)	$	6,168,325		$	6,240,446		$	6,460,575		$	5,722,033		$	5,620,319
Less: Goodwill		16,300			16,300			16,300			16,300			16,300
Less: Mortgage servicing rights		7,095			6,674			6,711			5,994			5,888
Less: Core deposit intangible		189			283			377			423			469
Tangible assets - Non-GAAP (d)	$	6,144,741		$	6,217,189		$	6,437,187		$	5,699,316		$	5,597,662

Total stockholders' equity to total assets - GAAP (a/b)		13.35	%		12.99	%		12.31	%		13.70	%		13.60	%
Tangible stockholders' equity to tangible assets - Non-GAAP (c/d)		13.02	%		12.66	%		12.00	%		13.36	%		13.25	%

Number of shares outstanding (e)		20,896			20,915			20,908			20,887			20,943

Book value per share - GAAP (a/e)	$	39.40		$	38.75		$	38.05		$	37.54		$	36.49
Tangible book value per share - Non-GAAP (c/e)		38.27			37.63			36.93			36.45			35.41

(4)

The efficiency ratio, a non-GAAP measure with no GAAP comparable, 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 and the Company’s net gain from its November 2019 branch divestiture.

	Three Months Ended Dec. 31,						Years Ended Dec. 31,
(dollars in thousands)	2020			2019			2020			2019

Net interest income - GAAP	$	55,120		$	54,395		$	232,315		$	236,126
Noninterest income - GAAP		17,136			19,655			87,053			75,008
Less: Net gain on branch divestiture		—			7,948			—			7,829
Less: Net gain (loss) on sales, calls, and impairment of debt and equity securities		(12	)		(12	)		49			78
Total adjusted income - Non-GAAP (a)	$	72,268		$	66,114		$	319,319		$	303,227

Noninterest expense - GAAP (b)	$	48,140		$	40,835		$	185,457		$	172,183

Efficiency Ratio - Non-GAAP (b/a)		67	%		62	%		58	%		57	%

	Three Months Ended
(dollars in thousands)	Dec. 31, 2020			Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020*			Dec. 31, 2019

Net interest income - GAAP	$	55,120		$	52,252		$	52,205		$	72,738		$	54,395
Noninterest income - GAAP		17,136			20,597			18,751			30,569			19,655
Less: Net gain on branch divestiture		—			—			—			—			7,948
Less: Net gain (loss) on sales, calls, and impairment of debt and equity securities		(12	)		5			16			40			(12	)
Total adjusted income - Non-GAAP (a)	$	72,268		$	72,844		$	70,940		$	103,267		$	66,114

Noninterest expense - GAAP (b)	$	48,140		$	45,523		$	44,825		$	46,969		$	40,835

Efficiency Ratio - Non-GAAP (b/a)		67	%		62	%		63	%		45	%		62	%

___________________________

*The Company’s efficiency ratio for the first quarter of each year traditionally benefits from seasonal revenues from its TRS segment.

(5)	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.

(6)	“Core Bank” or “Core Banking” operations consist of the Traditional Banking, Warehouse Lending, and Mortgage Banking segments.

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

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

(9)	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.

(10)

Delinquent loans for the RPG segment included $23 million of EA’s at March 31, 2020. EA’s are only offered during the first two months of each year. EA’s 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 EA’s are charged-off by the end of the second quarter of each year.

NM – Not meaningful

NA – Not applicable

CONTACT:

Republic Bancorp, Inc.

Kevin Sipes

Executive Vice President & Chief Financial Officer

(502) 560-8628

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REPUBLIC BANCORP INC /KY/ - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - January 29, 2021

Attached files

REPUBLIC BANCORP INC /KY/ Reports