Republic Bancorp (RBCAA) 8-K Republic Bancorp, Inc. Reports Substantial Growth in Third Quarter Net Income

Exhibit 99.1

Republic Bancorp, Inc. Reports Substantial Growth in Third Quarter Net Income

LOUISVILLE, Ky.--(BUSINESS WIRE)--October 21, 2016--Republic Bancorp, Inc. (NASDAQ: RBCAA), headquartered in Louisville, Kentucky, is the holding company of Republic Bank & Trust Company (the “Bank”).

Republic Bancorp, Inc. (“Republic” or the “Company”) is pleased to report third quarter net income of $9.8 million, a $4.2 million, or 74%, increase from the same period in 2015, resulting in Diluted Earnings per Class A Common Share of $0.47. Year-to-date net income was $35.9 million, an $8.2 million, or 29%, increase from the same period in 2015, resulting in a return on average assets (“ROA”) and a return on average equity (“ROE”) of 1.08% and 8.04% for the first nine months of 2016.

Steve Trager, Republic’s Chairman and Chief Executive Officer, commented: “While we are very pleased with our increase in quarterly net income, when compared to the third quarter of the previous year, we are even more pleased to see solid net income growth spread across all four of our major operating segments. More specifically,

• Within our Traditional Banking segment, net income grew 13%, partially due to a full quarter of accretive benefits from our Cornerstone Bancorp (‘Cornerstone’) acquisition and partially from meaningful organic growth over the previous 12 months.
• Our Warehouse Lending (‘Warehouse’) segment had a $178 million increase in quarter over quarter growth in average outstanding balances, which drove a 47% increase in its net income.
• The Company’s Mortgage Banking segment experienced higher origination volume, and in addition, benefited nicely from a bulk loan sale during the quarter.
• Despite a nominal net loss for the third quarter of 2016, our Republic Processing Group (‘RPG’) segment reflected a $1.3 million improvement in its net income for the quarter, thanks to meaningful growth in its Republic Credit Solutions (‘RCS’) division.

These achievements, combined with our attractive footprint and best-in-class team, give me much confidence about the things happening at Republic.”

The following tables highlight Republic’s financial performance for the third quarter and first nine months of 2016 compared to the same periods in 2015:

dollars in thousands, except per-share data
	Highlights of Financial Performance
	Three Months Ended											Nine Months Ended
	Sept. 30, 2016			Sept. 30, 2015			$ Change			% Change		Sept. 30, 2016			Sept. 30, 2015			$ Change			% Change
Income before income taxes	$	14,676		$	8,759		$	5,917		68	%	$	54,003		$	41,982		$	12,021		29	%
Net Income*		9,828			5,640			4,188		74	%		35,903			27,748			8,155		29	%
Diluted Earnings per Class A Share		0.47			0.27			0.20		74	%		1.73			1.34			0.39		29	%
ROA		0.87	%		0.57	%	NA			53	%		1.08	%		0.94	%	NA			15	%
ROE		6.54	%		3.91	%	NA			67	%		8.04	%		6.45	%	NA			25	%
dollars in thousands
	Core Banking Net Income by Origination Channel
	Three Months Ended											Nine Months Ended
Segment/Origination Channel	Sept. 30, 2016			Sept. 30, 2015			$ Change			% Change		Sept. 30, 2016			Sept. 30, 2015			$ Change			% Change
Traditional Banking segment*:
Traditional Network	$	5,584		$	4,782		$	802		17	%	$	16,543		$	14,261		$	2,282		16	%
Correspondent Lending		301			125			176		141	%		688			221			467		211	%
2016-Cornerstone Acquisition		353			-			353		NM			(131	)		-			(131	)	NM
2012-FDIC-Acquired Loans		200			494			(294	)	-60	%		1,462			2,090			(628	)	-30	%
Digital Bank Initiative		(340	)		-			(340	)	NM			(754	)		-			(754	)	NM
Total Traditional Banking segment		6,098			5,401			697		13	%		17,808			16,572			1,236		7	%
Warehouse Lending segment*		2,520			1,717			803		47	%		5,366			4,610			756		16	%
Mortgage Banking segment*		1,320			(23	)		1,343		NM			1,746			163			1,583		971	%
Total Core Banking*	$	9,938		$	7,095		$	2,843		40	%	$	24,920		$	21,345		$	3,575		17	%
*See Segment Data in the back of this Earnings Release
NA – Not applicable
NM – Not meaningful

Results of Operations for the Third Quarter of 2016 Compared to the Third Quarter of 2015

Core Bank⁽¹⁾ – Net income from Core Banking was $9.9 million for the third quarter of 2016, an increase of $2.8 million, or 40%, from the third quarter of 2015. Strong growth in net interest income, continued favorably-low loan loss provisions and solid mortgage banking income were all major contributors to the Core Bank’s performance for the quarter.

Net interest income at the Core Bank increased to $36.1 million during the third quarter of 2016, a $5.1 million, or 17%, increase over the third quarter of 2015. The increase in net interest income was primarily the result of a $456 million, or 14%, year-over-year increase in the Core Bank’s quarterly average loans from the third quarter of 2015 to the third quarter of 2016. The strong growth in average loans outstanding was supplemented by an increase of nine basis points to the Core Bank’s net interest margin during the same periods.

The overall change in the Core Bank’s average loan balances and net interest income by origination channel is presented below:

	Average		Average							Net Interest		Net Interest
	Loans		Loans							Income		Income
(in thousands)	3rd Qtr		3rd Quarter		$			%		3rd Qtr		3rd Quarter		$			%
Origination Channel	2016		2015		Change			Change		2016		2015		Change			Change
Traditional Network	$	2,753,663	$	2,587,067	$	166,596		6	%	$	28,629	$	26,130	$	2,499		10	%
Warehouse Lending		542,894		365,291		177,603		49	%		4,924		3,308		1,616		49	%
Correspondent Lending		178,385		245,114		(66,729	)	-27	%		395		404		(9	)	-2	%
2016-Cornerstone Acquisition		189,647		-		189,647		NM			1,919		-		1,919		NM
2012-FDIC Acquired Loans		18,649		29,268		(10,619	)	-36	%		267		1,145		(878	)	-77	%
Total	$	3,683,238	$	3,226,740	$	456,498		14	%	$	36,134	$	30,987	$	5,147		17	%
NM – Not meaningful

The following factors were the primary drivers of the changes in the Core Bank’s average loan balances and net interest income by origination channel for the third quarter of 2016 as compared to the third quarter of 2015:

• The Core Bank’s Traditional Network experienced solid overall loan growth, with particularly strong growth in the quarterly average balance from the third quarter of 2015 to the third quarter of 2016 for the following portfolios: $67 million in Commercial Real Estate (“CRE”); $43 million in Commercial & Industrial (“C&I”); $37 million in Home Equity Lines of Credit (“HELOCs”); and $35 million in Indirect Auto. Growth in the commercial-related categories was primarily driven by the Core Bank’s Commercial and Corporate Banking Department. Year-over-year growth in HELOCs was driven primarily by a successful first-year-introductory-rate promotion, while growth in Indirect Auto loans was driven by reintroduction of the product in 2015.
• Within the Warehouse segment, net interest income grew 49% from the third quarter of 2015, as client usage of the Bank’s Warehouse lines of credit increased from 56% for the third quarter of 2015 to 62% for the third quarter of 2016. In addition, the Bank also increased its committed Warehouse lines of credit from $653 million at September 30, 2015 to $915 million at September 30, 2016. As a result of these factors, average Warehouse line-of-credit balances for the third quarter of 2016 were $543 million, a $178 million increase from a strong third quarter in 2015. The yield for Warehouse lines of credit during the third quarter of 2016 increased 16 basis points from the same period in 2015, as Warehouse yields were positively impacted by an increase in short-term interest rates.
• The third quarter of 2016 represented the first full quarter of earnings impact from the Company’s May 2016 Cornerstone acquisition. As expected, the acquired Cornerstone franchise provided a solid contribution to the Company’s overall earnings with an impact of $1.9 million to net interest income for the third quarter driven by average loans of $190 million.

The Core Bank’s favorably-low provision expense for the quarter resulted primarily from growth in the overall loan portfolio, while the Bank’s charge-off trends continued to show general improvement from its already favorably-low historical charge-off levels.

The table below illustrates the Core Bank’s credit quality ratios for the most recent quarter ends and the previous three calendar year ends:

	As of and for the:
	Quarter Ending:						Year Ending:
	Sep 30		Jun 30		Mar 31		Dec 31		Dec 31		Dec 31
Core Banking Credit Quality Ratios	2016		2016		2016		2015		2014		2013
Nonperforming loans to total loans	0.47	%	0.54	%	0.60	%	0.66	%	0.78	%	0.81	%
Nonperforming assets to total loans (including OREO)	0.53	%	0.58	%	0.63	%	0.70	%	1.15	%	1.47	%
Delinquent loans to total loans	0.21	%	0.28	%	0.25	%	0.35	%	0.52	%	0.63	%
Net charge-offs to average loans	0.03	%	0.05	%	0.04	%	0.05	%	0.08	%	0.18	%
(Annualized as of 9/30/16, 6/30/16 and 3/31/16)
OREO = Other Real Estate Owned

Noninterest income for the Core Bank was $10.0 million during the third quarter of 2016 compared to $7.2 million for the third quarter of 2015. Impacting the Core Bank’s noninterest income comparisons between the third quarters of 2016 and 2015 were the following:

• Mortgage banking income increased $2.1 million from the third quarter of 2015. Approximately $1.1 million of this increase was attributable to a bulk loan sale of $71 million during the third quarter of 2016, representing a portion of the Company’s correspondent loan portfolio. The remainder of the increase in mortgage banking income was primarily due to a rise in refinance activity resulting from a downturn in long-term interest rates. As a result, secondary-market loan originations increased from $32 million during the third quarter of 2015 to $59 million for the third quarter of 2016.
• Interchange fees increased $499,000, mainly due to an increase in debit card interchange revenue. The higher revenue for debit card related transactions was primarily the result of growth in retail checking accounts and an increase in customer use of signature-based transactions.

Core Bank noninterest expenses increased $4.9 million, or 19%, from the third quarter of 2015 to the same period in 2016, primarily driven by the following:

• Salaries and benefits expense increased $2.4 million, primarily due to an increase of 118 full-time-equivalent (“FTE”) employees from September 30, 2015 to September 30, 2016. A total of 36 of these additions was directly attributable to the Company’s Cornerstone acquisition. The remaining 82 increase in FTEs was driven by additional staffing needed to implement the Company’s strategic initiatives.
• Data processing expenses increased $645,000, with $212,000 of the increase attributable to the Company’s Cornerstone acquisition. The remainder of the increase was spread across multiple loan and deposit platforms and was due to growth in the Company’s overall customer base.
• The Core Bank incurred a prepayment penalty of $846,000 during the quarter related to the payoff of $50 million in long-term Federal Home Loan Bank advances. The Core Bank expects to recover the amount of this penalty through a reduction in interest expense over what would have been the remaining original term of these advances. These advances carried an interest rate of 4.39% and had an original maturity of March 9, 2017.

Republic Processing Group (“RPG”)

The overall profitability of the RPG segment has historically been driven by its largest division, Tax Refund Solutions (“TRS”). TRS derives substantially all of its revenues during the first and second quarters of the year and historically operates at a net loss during the second half of the year, as the Company prepares for the next tax season. During the second half of 2015, the Company began to more meaningfully grow the Republic Credit Solutions (“RCS”) small dollar loan division of RPG. As a result of strong growth in profitability within the RCS division, the overall profitability of the RPG segment has continued to improve during 2016.

During the third quarter of 2016, RPG recorded a nominal net loss of $110,000 compared to a net loss of $1.5 million during the third quarter of 2015. More specifically within the RCS division, RCS contributed net income of $1.0 million during the third quarter of 2016 compared to a net loss of $366,000 during the third quarter of 2015. The increased profitability within the RCS division resulted primarily from a $56 million increase in small-dollar loans originated for sale, which generated a strong increase in fee income. In addition, the balances for the RCS loans retained on balance sheet by the Company increased from $5 million at September 30, 2015 to $16 million at September 30, 2016, contributing to a solid increase in net interest income for the quarter.

Conclusion

“It has been an exciting year thus far at Republic. While the current environment has headwinds providing constant challenges in the financial service industry, we are driven to make the Company more agile in order to meet these challenges. Our on-going strategic initiatives remain focused on providing the Company’s shareholders an industry leading return, while responsibly serving the needs of our clients.

“Going forward, our team will continue to evaluate acquisition opportunities, both whole-bank and nonbank, that we believe present the best overall synergies for Republic. Furthermore, our digital banking team remains excited and continues to work hard on our new branchless banking platform, which is scheduled to launch by the end of October. We believe this new digital banking platform will provide the most cost effective way for the Company to expand its geographic reach.

“In an ever-evolving banking landscape, our successful results and our promising initiatives, together with our attractive footprint and best-in-class team, give me much excitement about Republic and its long-term future,” concluded Steve Trager.

Republic Bancorp, Inc. (the “Company”) is the parent company of Republic Bank & Trust Company (the “Bank”). The Bank currently has 44 banking centers: 32 banking centers in 12 Kentucky communities - Covington, Crestwood, Elizabethtown, Florence, Frankfort, Georgetown, Independence, Lexington, Louisville, Owensboro, Shelbyville and Shepherdsville; three banking centers in southern Indiana – Floyds Knobs, Jeffersonville and New Albany; six banking centers in five Florida communities – Largo, Port Richey, St. Petersburg, Seminole, Temple Terrace; two banking centers in Tennessee – Cool Springs (Franklin) and Green Hills (Nashville); and one banking center in Norwood (Cincinnati), Ohio. The Bank offers internet banking at www.republicbank.com. The Company has $4.8 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 the 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. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the actual timing, magnitude and frequency of interest rate changes, as well as the actual changes in market conditions and the application and timing of various management strategies as compared to those projected in our interest rate model. Additionally, 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, 2015. The Company undertakes no obligation to update any forward-looking statements. These forward-looking statements are made only as of the date of this release, and the Company undertakes no obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this release.

Republic Bancorp, Inc. Financial Information Third quarter 2016 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
	Sept. 30, 2016			Dec. 31, 2015			Sept. 30, 2015
Assets:
Cash and cash equivalents	$	302,167		$	210,082		$	90,731
Investment securities		524,444			555,785			502,599
Loans held for sale		11,226			4,597			12,326
Loans		3,823,031			3,326,610			3,297,874
Allowance for loan and lease losses		(30,436	)		(27,491	)		(26,959	)
Loans, net		3,792,595			3,299,119			3,270,915
Federal Home Loan Bank stock, at cost		28,208			28,208			28,208
Premises and equipment, net		43,385			31,106			31,095
Goodwill		16,300			10,168			10,168
Other real estate owned ("OREO")		2,435			1,220			2,832
Bank owned life insurance ("BOLI")		61,392			52,817			52,465
Other assets and accrued interest receivable		45,125			37,187			34,638
Total assets	$	4,827,277		$	4,230,289		$	4,035,977
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	947,602		$	634,863		$	637,875
Interest-bearing		2,188,291			1,852,614			1,729,955
Total deposits		3,135,893			2,487,477			2,367,830
Securities sold under agreements to repurchase and other short-term borrowings		152,458			395,433			309,624
Federal Home Loan Bank advances		862,500			699,500			711,500
Subordinated note		41,240			41,240			41,240
Other liabilities and accrued interest payable		34,626			30,092			31,071
Total liabilities		4,226,717			3,653,742			3,461,265
Stockholders' equity		600,560			576,547			574,712
Total liabilities and Stockholders' equity	$	4,827,277		$	4,230,289		$	4,035,977

Average Balance Sheet Data
	Three Months Ended Sept. 30,		Nine Months Ended Sept. 30,
	2016	2015	2016	2015
Assets:
Investment securities, including FHLB stock	$ 554,508	$ 533,956	$ 571,740	$ 530,114
Federal funds sold and other interest-earning deposits	58,910	30,633	147,180	67,960
Loans and fees, including loans held for sale	3,702,093	3,235,057	3,492,997	3,148,838
Total interest-earning assets	4,315,511	3,799,646	4,211,917	3,746,912
Total assets	4,531,958	3,971,501	4,440,881	3,947,210
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits	$ 900,432	$ 609,641	$ 874,060	$ 643,128
Interest-bearing deposits	2,155,289	1,740,553	2,014,197	1,693,888
Securities sold under agreements to repurchase and other short-term borrowings	215,343	363,905	296,574	363,518
Federal Home Loan Bank advances	584,946	616,509	588,109	610,571
Subordinated note	44,288	41,240	42,926	41,240
Total interest-bearing liabilities	2,999,866	2,762,207	2,941,806	2,709,217
Stockholders' equity	601,043	577,185	595,236	573,482

Republic Bancorp, Inc. Financial Information Third quarter 2016 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 Sept. 30,						Nine Months Ended Sept. 30,
	2016			2015			2016		2015
Total interest income(2)	$	43,934		$	36,107		$	128,089	$	105,590
Total interest expense		4,536			4,683			13,680		14,086
Net interest income		39,398			31,424			114,409		91,504
Provision for loan and lease losses		2,489			2,233			9,489		3,322
Noninterest income:
Service charges on deposit accounts		3,416			3,399			9,838		9,685
Net refund transfer fees		132			97			19,119		17,339
Mortgage banking income		3,081			972			5,902		3,549
Interchange fee income		2,415			1,967			6,755		6,205
Republic Processing Group program fees		979			474			1,942		871
Gain on call of security available for sale		-			-			-		88
Net gains (losses) on OREO		(137	)		(8	)		191		(282	)
Increase in cash surrender value of BOLI		406			348			1,114		1,050
Other		1,009			557			2,163		1,772
Total noninterest income		11,301			7,806			47,024		40,277
Noninterest expenses:
Salaries and employee benefits		18,068			15,297			52,965		44,897
Occupancy and equipment, net		5,631			5,217			16,159		15,560
Communication and transportation		1,029			951			2,974		2,768
Marketing and development		1,076			756			2,773		2,318
FDIC insurance expense		345			474			1,483		1,622
Bank franchise tax expense		846			846			3,944		4,094
Data processing		1,659			959			4,535		3,017
Interchange related expense		1,118			909			3,069		2,847
Supplies		280			229			969		809
OREO expense		159			146			355		485
Legal and professional fees		539			653			1,965		2,796
FHLB advance prepayment penalty		846			-			846		-
Other		1,938			1,801			5,904		5,264
Total noninterest expenses		33,534			28,238			97,941		86,477
Income before income tax expense		14,676			8,759			54,003		41,982
Income tax expense		4,848			3,119			18,100		14,234
Net income	$	9,828		$	5,640		$	35,903	$	27,748

Republic Bancorp, Inc. Financial Information Third quarter 2016 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 Statistics
	As of and for the						As of and for the
	Three Months Ended Sept. 30,						Nine Months Ended Sept. 30,
	2016			2015			2016			2015
Per Share Data:
Basic average shares outstanding		20,925			20,848			20,946			20,856
Diluted average shares outstanding		20,938			20,934			20,957			20,936
End of period shares outstanding:
Class A Common Stock		18,617			18,603			18,617			18,603
Class B Common Stock		2,245			2,245			2,245			2,245
Book value per share(3)	$	28.79		$	27.57		$	28.79		$	27.57
Tangible book value per share(3)		27.70			26.84			27.70			26.84
Earnings per share:
Basic earnings per Class A Common Stock	$	0.47		$	0.27		$	1.73		$	1.34
Basic earnings per Class B Common Stock		0.43			0.25			1.58			1.22
Diluted earnings per Class A Common Stock		0.47			0.27			1.73			1.34
Diluted earnings per Class B Common Stock		0.43			0.25			1.57			1.22
Cash dividends declared per share:
Class A Common Stock	$	0.209		$	0.198		$	0.616		$	0.583
Class B Common Stock		0.190			0.180			0.560			0.530
Performance Ratios:
Return on average assets		0.87	%		0.57	%		1.08	%		0.94	%
Return on average equity		6.54			3.91			8.04			6.45
Efficiency ratio(4)		66			72			61			66
Yield on average interest-earning assets		4.07			3.80			4.05			3.76
Cost of interest-bearing liabilities		0.60			0.68			0.62			0.69
Cost of deposits(5)		0.21			0.18			0.20			0.18
Net interest spread		3.47			3.12			3.43			3.07
Net interest margin - Total Company		3.65			3.31			3.62			3.26
Net interest margin - Core Bank(1)		3.38			3.29			3.26			3.26
Other Information:
End of period FTEs(6) - Total Company		899			769			899			769
End of period FTEs(6) - Core Bank		830			712			830			712
Number of banking centers		44			40			44			40

Republic Bancorp, Inc. Financial Information Third quarter 2016 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 Statistics	As of and for the						As of and for the
	Three Months Ended Sept. 30,						Nine Months Ended Sept. 30,
	2016			2015			2016			2015
Credit Quality Asset Balances:
Loans on nonaccrual status	$	17,769		$	23,143		$	17,769		$	23,143
Loans past due 90-days-or-more and still on accrual		34			43			34			43
Total nonperforming loans		17,803			23,186			17,803			23,186
OREO		2,435			2,832			2,435			2,832
Total nonperforming assets	$	20,238		$	26,018		$	20,238		$	26,018
Total delinquent loans	$	8,714		$	11,996		$	8,714		$	11,996
Credit Quality Ratios - Total Company:
Nonperforming loans to total loans		0.47	%		0.70	%		0.47	%		0.70	%
Nonperforming assets to total loans (including OREO)		0.53			0.79			0.53			0.79
Nonperforming assets to total assets		0.42			0.64			0.42			0.64
Allowance for loan and lease losses to total loans		0.80			0.82			0.80			0.82
Allowance for loan and lease losses to nonperforming loans		171			116			171			116
Delinquent loans to total loans(7)		0.23			0.36			0.23			0.36
Net charge-offs to average loans (annualized)		0.15			0.06			0.25			0.03
Credit Quality Ratios - Core Bank(1):
Nonperforming loans to total loans		0.47	%		0.70	%		0.47	%		0.70	%
Nonperforming assets to total loans (including OREO)		0.53			0.79			0.53			0.79
Nonperforming assets to total assets		0.42			0.65			0.42			0.65
Allowance for loan and lease losses to total loans		0.71			0.78			0.71			0.78
Allowance for loan and lease losses to nonperforming loans		152			111			152			111
Delinquent loans to total loans(7)		0.21			0.36			0.21			0.36
Net charge-offs to average loans (annualized)		0.03			0.05			0.04			0.04

Republic Bancorp, Inc. Financial Information Third quarter 2016 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
	Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015			Sept. 30, 2015
Assets:
Cash and cash equivalents	$	302,167		$	142,979		$	198,172		$	210,082		$	90,731
Investment securities		524,444			551,027			556,605			555,785			502,599
Loans held for sale		11,226			94,658			8,129			4,597			12,326
Loans		3,823,031			3,691,323			3,351,969			3,326,610			3,297,874
Allowance for loan and lease losses		(30,436	)		(29,308	)		(31,475	)		(27,491	)		(26,959	)
Loans, net		3,792,595			3,662,015			3,320,494			3,299,119			3,270,915
Federal Home Loan Bank stock, at cost		28,208			28,208			28,208			28,208			28,208
Premises and equipment, net		43,385			42,956			30,277			31,106			31,095
Goodwill		16,300			16,313			10,168			10,168			10,168
Other real estate owned		2,435			1,503			1,280			1,220			2,832
Bank owned life insurance		61,392			60,986			53,156			52,817			52,465
Other assets and accrued interest receivable		45,125			46,277			40,276			37,187			34,638
Total assets	$	4,827,277		$	4,646,922		$	4,246,765		$	4,230,289		$	4,035,977
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	947,602		$	867,095		$	800,946		$	634,863		$	637,875
Interest-bearing		2,188,291			1,988,952			1,935,700			1,852,614			1,729,955
Total deposits		3,135,893			2,856,047			2,736,646			2,487,477			2,367,830
Securities sold under agreements to repurchase and other short-term borrowings		152,458			126,124			319,893			395,433			309,624
Federal Home Loan Bank advances		862,500			987,500			517,500			699,500			711,500
Subordinated note		41,240			45,364			41,240			41,240			41,240
Other liabilities and accrued interest payable		34,626			36,864			39,929			30,092			31,071
Total liabilities		4,226,717			4,051,899			3,655,208			3,653,742			3,461,265
Stockholders' equity		600,560			595,023			591,557			576,547			574,712
Total liabilities and Stockholders' equity	$	4,827,277		$	4,646,922		$	4,246,765		$	4,230,289		$	4,035,977
Average Balance Sheet Data
	Quarterly Comparison
	Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015			Sept. 30, 2015
Assets:
Investment securities, including FHLB stock	$	554,508		$	579,027		$	581,869		$	595,739		$	533,956
Federal funds sold and other interest-earning deposits		58,910			95,204			298,250			71,480			30,633
Loans and fees, including loans held for sale		3,702,093			3,479,397			3,292,689			3,249,595			3,235,057
Total interest-earning assets		4,315,511			4,153,628			4,172,808			3,916,814			3,799,646
Total assets		4,531,958			4,351,843			4,436,843			4,088,016			3,971,501
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits	$	900,432		$	805,718		$	916,691		$	675,500		$	609,641
Interest-bearing deposits		2,155,289			1,980,310			1,903,721			1,774,526			1,740,553
Securities sold under agreements to repurchase and other short-term borrowings		215,343			267,574			407,698			426,833			363,905
Federal Home Loan Bank advances		584,946			627,335			552,082			567,163			616,509
Subordinated note		44,288			43,234			41,240			41,240			41,240
Total interest-bearing liabilities		2,999,866			2,918,453			2,904,741			2,809,762			2,762,207
Stockholders' equity		601,043			596,795			587,593			578,573			577,185

Republic Bancorp, Inc. Financial Information Third quarter 2016 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
	Sept. 30, 2016			Jun. 30, 2016		Mar. 31, 2016		Dec. 31, 2015			Sept. 30, 2015
Total interest income(2)	$	43,934		$	40,140	$	44,015	$	36,842		$	36,107
Total interest expense		4,536			4,563		4,581		4,376			4,683
Net interest income		39,398			35,577		39,434		32,466			31,424
Provision for loan and lease losses		2,489			1,814		5,186		2,074			2,233
Noninterest income:
Service charges on deposit accounts		3,416			3,282		3,140		3,330			3,399
Net refund transfer fees		132			1,909		17,078		49			97
Mortgage banking income		3,081			1,560		1,261		862			972
Interchange fee income		2,415			2,217		2,123		2,148			1,967
Republic Processing Group program fees		979			664		319		329			474
Net gains (losses) on OREO		(137	)		80		248		(19	)		(8	)
Increase in cash surrender value of BOLI		406			369		339		353			348
Other		1,009			721		413		665			557
Total noninterest income		11,301			10,802		24,921		7,717			7,806
Noninterest expenses:
Salaries and employee benefits		18,068			17,814		17,083		13,194			15,297
Occupancy and equipment, net		5,631			5,109		5,419		5,129			5,217
Communication and transportation		1,029			872		1,073		984			951
Marketing and development		1,076			1,190		507		843			756
FDIC insurance expense		345			480		658		462			474
Bank franchise tax expense		846			647		2,451		640			846
Data processing		1,659			1,543		1,333		1,323			959
Interchange related expense		1,118			1,047		904		1,026			909
Supplies		280			240		449		292			229
OREO expense		159			116		80		250			146
Legal and professional fees		539			604		823		510			653
FHLB advance prepayment penalty		846			-		-		-			-
Other		1,938			2,204		1,761		2,194			1,801
Total noninterest expenses		33,534			31,866		32,541		26,847			28,238
Income before income tax expense		14,676			12,699		26,628		11,262			8,759
Income tax expense		4,848			4,359		8,893		3,844			3,119
Net income	$	9,828		$	8,340	$	17,735	$	7,418		$	5,640

Republic Bancorp, Inc. Financial Information Third quarter 2016 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 Statistics
	As of and for the Three Months Ended
	Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015			Sept. 30, 2015
Per Share Data:
Basic average shares outstanding		20,925			20,947			20,904			20,876			20,848
Diluted average shares outstanding		20,938			20,958			21,009			20,953			20,934
End of period shares outstanding:
Class A Common Stock		18,617			18,617			18,659			18,652			18,603
Class B Common Stock		2,245			2,245			2,245			2,245			2,245
Book value per share(3)	$	28.79		$	28.52		$	28.30		$	27.59		$	27.57
Tangible book value per share(3)		27.70			27.44			27.58			26.87			26.84
Earnings per share:
Basic earnings per Class A Common Stock	$	0.47		$	0.40		$	0.86		$	0.36		$	0.27
Basic earnings per Class B Common Stock		0.43			0.37			0.78			0.33			0.25
Diluted earnings per Class A Common Stock		0.47			0.40			0.85			0.36			0.27
Diluted earnings per Class B Common Stock		0.43			0.37			0.77			0.33			0.25
Cash dividends declared per share:
Class A Common Stock	$	0.209		$	0.209		$	0.198		$	0.198		$	0.198
Class B Common Stock		0.190			0.190			0.180			0.180			0.180
Performance Ratios:
Return on average assets		0.87	%		0.77	%		1.60	%		0.73	%		0.57	%
Return on average equity		6.54			5.59			12.07			5.13			3.91
Efficiency ratio(4)		66			69			51			67			72
Yield on average interest-earning assets		4.07			3.87			4.22			3.76			3.80
Cost of interest-bearing liabilities		0.60			0.63			0.63			0.62			0.68
Cost of deposits(5)		0.21			0.19			0.20			0.19			0.18
Net interest spread		3.47			3.24			3.59			3.14			3.12
Net interest margin - Total Company		3.65			3.43			3.78			3.32			3.31
Net interest margin - Core Bank(1)		3.38			3.28			3.12			3.17			3.29
Other Information:
End of period FTEs(6) - Total Company		899			883			817			785			769
End of period FTEs(6) - Core Bank		830			818			756			726			712
Number of banking centers		44			44			40			40			40

Republic Bancorp, Inc. Financial Information Third quarter 2016 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 Statistics
	As of and for the Three Months Ended
	Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015			Sept. 30, 2015
Credit Quality Asset Balances:
Loans on nonaccrual status	$	17,769		$	18,778		$	19,907		$	21,712		$	23,143
Loans past due 90-days-or-more and still on accrual		34			1,178			-			224			43
Total nonperforming loans		17,803			19,956			19,907			21,936			23,186
OREO		2,435			1,503			1,280			1,220			2,832
Total nonperforming assets	$	20,238		$	21,459		$	21,187		$	23,156		$	26,018
Total delinquent loans	$	8,714		$	10,607		$	8,657		$	11,731		$	11,996
Credit Quality Ratios - Total Company:
Nonperforming loans to total loans		0.47	%		0.54	%		0.59	%		0.66	%		0.70	%
Nonperforming assets to total loans (including OREO)		0.53			0.58			0.63			0.70			0.79
Nonperforming assets to total assets		0.42			0.46			0.50			0.55			0.64
Allowance for loan and lease losses to total loans		0.80			0.79			0.94			0.83			0.82
Allowance for loan and lease losses to nonperforming loans		171			147			158			125			116
Delinquent loans to total loans(7)		0.23			0.29			0.26			0.35			0.36
Net charge-offs to average loans (annualized)		0.15			0.46			0.15			0.19			0.06
Credit Quality Ratios - Core Bank(1):
Nonperforming loans to total loans		0.47	%		0.54	%		0.60	%		0.66	%		0.70	%
Nonperforming assets to total loans (including OREO)		0.53			0.58			0.63			0.70			0.79
Nonperforming assets to total assets		0.42			0.47			0.51			0.55			0.65
Allowance for loan and lease losses to total loans		0.71			0.73			0.78			0.78			0.78
Allowance for loan and lease losses to nonperforming loans		152			135			131			117			111
Delinquent loans to total loans(7)		0.21			0.28			0.25			0.35			0.36
Net charge-offs to average loans (annualized)		0.03			0.05			0.04			0.10			0.05

Republic Bancorp, Inc. Financial Information
Third quarter 2016 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 customers are similar.

As of September 30, 2016, the Company was divided into four distinct operating segments: Traditional Banking, Warehouse Lending (“Warehouse”), Mortgage Banking and Republic Processing Group (“RPG”). Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” activities. Correspondent Lending operations are considered part of the Traditional Banking segment. The RPG segment includes the following divisions: Tax Refund Solutions (“TRS”), Republic Payment Solutions (“RPS”) and Republic Credit Solutions (“RCS”). TRS generates the majority of RPG’s income, with the relatively smaller divisions of RPG, RPS and RCS, considered immaterial for separate and independent segment reporting. All divisions of the RPG segment operate through the Bank.

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

	Segment:	Nature of Operations:	Primary Drivers of Net Revenues:
Core Banking:
	Traditional Banking	Provides traditional banking products to clients primarily in its market footprint via its network of banking centers and primarily to clients outside of its market footprint via its Internet and Correspondent Lending delivery channels.	Loans, investments and deposits
	Warehouse Lending	Provides short-term, revolving credit facilities to mortgage bankers across the Nation.	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 its market footprint.	Loan sales and servicing
	Republic Processing Group	The TRS division facilitates the receipt and payment of federal and state tax refund products. The RPS division offers general purpose reloadable cards. The RCS division offers short-term credit products. RPG products are primarily provided to clients outside of the Bank’s market footprint.	Refund transfers and 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 2015 Annual Report on Form 10-K. Segment performance is evaluated using operating income. Goodwill is not allocated. Income taxes are generally allocated based on income before income tax expense unless specific segment allocations can be reasonably made. Transactions among reportable segments are made at carrying value.

Republic Bancorp, Inc. Financial Information Third quarter 2016 Earnings Release (continued)
Segment information for the three and nine months ended September 30, 2016 and 2015 follows:
	Three Months Ended September 30, 2016
	Core Banking
(dollars in thousands)	Traditional Banking			Warehouse Lending			Mortgage Banking			Total Core Banking			Republic Processing Group			Total Company
Net interest income	$	31,134		$	4,924		$	76		$	36,134		$	3,264		$	39,398
Provision for loan and lease losses		289			188			-			477			2,012			2,489
Net refund transfer fees		-			-			-			-			132			132
Mortgage banking income		-			-			3,081			3,081			-			3,081
Republic Processing Group program fees		-			-			-			-			979			979
Other noninterest income		6,899			4			57			6,960			149			7,109
Total noninterest income		6,899			4			3,138			10,041			1,260			11,301
Total noninterest expenses		28,939			727			1,184			30,850			2,684			33,534
Income (loss) before income tax expense		8,805			4,013			2,030			14,848			(172	)		14,676
Income tax expense (benefit)		2,707			1,493			710			4,910			(62	)		4,848
Net income (loss)	$	6,098		$	2,520		$	1,320		$	9,938		$	(110	)	$	9,828
Segment end-of-period assets	$	4,109,464		$	660,410		$	15,003		$	4,784,877		$	42,400		$	4,827,277
Net interest margin		3.35	%		3.63	%		NM			3.38	%		NM			3.65	%
	Three Months Ended September 30, 2015
	Core Banking
(dollars in thousands)	Traditional Banking			Warehouse Lending			Mortgage Banking			Total Core Banking			Republic Processing Group			Total Company
Net interest income	$	27,612		$	3,308		$	67		$	30,987		$	437		$	31,424
Provision for loan and lease losses		1,338			(238	)		-			1,100			1,133			2,233
Net refund transfer fees		-			-			-			-			97			97
Mortgage banking income		-			-			972			972			-			972
Republic Processing Group program fees		-			-			-			-			474			474
Other noninterest income		6,115			8			76			6,199			64			6,263
Total noninterest income		6,115			8			1,048			7,171			635			7,806
Total noninterest expenses		24,109			663			1,151			25,923			2,315			28,238
Income (loss) before income tax expense		8,280			2,891			(36	)		11,135			(2,376	)		8,759
Income tax expense (benefit)		2,879			1,174			(13	)		4,040			(921	)		3,119
Net income (loss)	$	5,401		$	1,717		$	(23	)	$	7,095		$	(1,455	)	$	5,640
Segment end-of-period assets	$	3,600,230		$	393,110		$	13,832		$	4,007,172		$	28,805		$	4,035,977
Net interest margin		3.25	%		3.62	%		NM			3.29	%		NM			3.31	%

Republic Bancorp, Inc. Financial Information Third quarter 2016 Earnings Release (continued)
	Nine Months Ended September 30, 2016
	Core Banking
(dollars in thousands)	Traditional Banking			Warehouse Lending			Mortgage Banking		Total Core Banking			Republic Processing Group		Total Company
Net interest income	$	89,279		$	11,369		$	148	$	100,796		$	13,613	$	114,409
Provision for loan and lease losses		1,567			686			-		2,253			7,236		9,489
Net refund transfer fees		-			-			-		-			19,119		19,119
Mortgage banking income		-			-			5,902		5,902			-		5,902
Republic Processing Group program fees		-			-			-		-			1,942		1,942
Other noninterest income		19,380			14			212		19,606			455		20,061
Total noninterest income		19,380			14			6,114		25,508			21,516		47,024
Total noninterest expenses		81,551			2,157			3,576		87,284			10,657		97,941
Income before income tax expense		25,541			8,540			2,686		36,767			17,236		54,003
Income tax expense		7,733			3,174			940		11,847			6,253		18,100
Net income	$	17,808		$	5,366		$	1,746	$	24,920		$	10,983	$	35,903
Segment end-of-period assets	$	4,109,464		$	660,410		$	15,003	$	4,784,877		$	42,400	$	4,827,277
Net interest margin		3.22	%		3.64	%		NM		3.26	%		NM		3.62	%
	Nine Months Ended September 30, 2015
	Core Banking
(dollars in thousands)	Traditional Banking			Warehouse Lending			Mortgage Banking		Total Core Banking			Republic Processing Group		Total Company
Net interest income	$	80,369		$	9,354		$	180	$	89,903		$	1,601	$	91,504
Provision for loan and lease losses		2,007			185			-		2,192			1,130		3,322
Net refund transfer fees		-			-			-		-			17,339		17,339
Mortgage banking income		-			-			3,549		3,549			-		3,549
Republic Processing Group program fees		-			-			-		-			871		871
Gain on call of security available for sale		88			-			-		88			-		88
Other noninterest income		17,286			19			231		17,536			894		18,430
Total noninterest income		17,374			19			3,780		21,173			19,104		40,277
Total noninterest expenses		71,351			1,846			3,710		76,907			9,570		86,477
Income before income tax expense		24,385			7,342			250		31,977			10,005		41,982
Income tax expense		7,813			2,732			87		10,632			3,602		14,234
Net income	$	16,572		$	4,610		$	163	$	21,345		$	6,403	$	27,748
Segment end-of-period assets	$	3,600,230		$	393,110		$	13,832	$	4,007,172		$	28,805	$	4,035,977
Net interest margin		3.23	%		3.58	%		NM		3.26	%		NM		3.26	%

Republic Bancorp, Inc. Financial Information
Third quarter 2016 Earnings Release (continued)

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

(2) The amount of loan fee income included in total interest income was $4.8 million and $2.5 million for the quarters ended September 30, 2016 and 2015. The amount of loan fee income included in total interest income was $18.3 million and $7.2 million for the nine months ended September 30, 2016 and 2015.

The amount of loan fee income included in total interest income per quarter was as follows: $4.8 million (quarter ended September 30, 2016); $3.7 million (quarter ended June 30, 2016); $9.8 million (quarter ended March 31, 2016); $3.1 million (quarter ended December 31, 2015); and $2.5 million (quarter ended September 30, 2015).

(3) 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, 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)	Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015			Sept. 30, 2015
Total stockholders' equity (a)	$	600,560		$	595,023		$	591,557		$	576,547		$	574,712
Less: Goodwill		16,300			16,313			10,168			10,168			10,168
Less: Mortgage servicing rights		5,338			4,998			4,891			4,912			4,968
Less: Core deposit intangible		1,121			1,171			-			-			-
Tangible stockholders' equity (c)	$	577,801		$	572,541		$	576,498		$	561,467		$	559,576
Total assets (b)	$	4,827,277		$	4,646,922		$	4,246,765		$	4,230,289		$	4,035,977
Less: Goodwill		16,300			16,313			10,168			10,168			10,168
Less: Mortgage servicing rights		5,338			4,998			4,891			4,912			4,968
Less: Core deposit intangible		1,121			1,171			-			-			-
Tangible assets (d)	$	4,804,518		$	4,624,440		$	4,231,706		$	4,215,209		$	4,020,841
Total stockholders' equity to total assets (a/b)		12.44	%		12.80	%		13.93	%		13.63	%		14.24	%
Tangible stockholders' equity to tangible assets (c/d)		12.03	%		12.38	%		13.62	%		13.32	%		13.92	%
Number of shares outstanding (e)		20,862			20,862			20,904			20,897			20,848
Book value per share (a/e)	$	28.79		$	28.52		$	28.30		$	27.59		$	27.57
Tangible book value per share (c/e)		27.70			27.44			27.58			26.87			26.84

(4) 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.

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

(6) FTEs – Full time equivalent employees.

(7) 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.

NM – Not meaningful

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