Republic Bancorp (RBCAA) 8-K Republic Bancorp, Inc. Finishes 2016 with Strong Fourth Quarter and Annual Net Income Growth

Exhibit 99.1

Republic Bancorp, Inc. Finishes 2016 with Strong Fourth Quarter and Annual Net Income Growth

LOUISVILLE, Ky.--(BUSINESS WIRE)--January 27, 2017--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 fourth quarter net income of $10.0 million, a $2.6 million, or 35%, increase from the same period in 2015, resulting in Diluted Earnings per Class A Common Share of $0.48. Fiscal year 2016 net income was $45.9 million, a $10.7 million, or 31%, increase from fiscal year 2015, resulting in a return on average assets (“ROA”) and a return on average equity (“ROE”) of 1.02% and 7.68%, respectively, for 2016.

Steve Trager, Republic’s Chairman and Chief Executive Officer, commented: “We are very proud of our solid fourth quarter and the overall strong year we put together in 2016. We made meaningful progress toward many of our long-term goals during the year, including: (1) expanding our footprint in the Tampa-St. Pete market through a strategic acquisition; (2) launching a digital-only banking platform during the fourth quarter; (3) growing the contribution from our non-traditional business lines at the Republic Processing Group (“RPG”); and (4) further improving our ROA, ROE and our Efficiency Ratio. We are also very pleased that over the past year the market has recognized our strong performance and our future prospects as reflected by the 50% increase in our stock price during 2016. While strategic decisions for our Company will always be based on the long-term interests of our shareholders, and not the day-to-day fluctuations in our stock price, we are appreciative of the market’s recognition of the hard work by our 900+ associates and the strong results and future opportunities they have created.”

The following tables highlight Republic’s financial performance for the fourth quarters and years ended December 31, 2016 and 2015:

(dollars in thousands, except per-share data)
	Financial Performance Highlights
	Three Months Ended						$			%		Years Ended						$			%
	Dec. 31, 2016			Dec. 31, 2015			Change			Change		Dec. 31, 2016			Dec. 31, 2015			Change			Change
Income Before Income Taxes	$	14,960		$	11,262		$	3,698		33	%	$	68,963		$	53,244		$	15,719		30	%
Net Income*		10,000			7,418			2,582		35	%		45,903			35,166			10,737		31	%
Diluted Earnings per Class A Share		0.48			0.36			0.12		33	%		2.22			1.70			0.52		31	%
Return on Average Assets		0.87	%		0.73	%	NA			19	%		1.02	%		0.88	%	NA			16	%
Return on Average Equity		6.62	%		5.13	%	NA			29	%		7.68	%		6.12	%	NA			25	%
(dollars in thousands)
	Core Banking Net Income (Loss) by Origination Channel
	Three Months Ended						$			%		Years Ended						$			%
Segment*/Origination Channel	Dec. 31, 2016			Dec. 31, 2015			Change			Change		Dec. 31, 2016			Dec. 31, 2015			Change			Change
Traditional Banking segment:
Traditional Network	$	6,395		$	7,295		$	(900	)	-12	%	$	22,150		$	21,571		$	579		3	%
Correspondent Lending		150			162			(12	)	-7	%		1,620			384			1,236		322	%
2016-Cornerstone Acquisition		613			(280	)		893		NM			491			(284	)		775		NM
2012-FDIC-Acquired Loans		561			288			273		95	%		2,023			2,368			(345	)	-15	%
Digital Bank Initiative		(568	)		(118	)		(450	)	NM			(1,325	)		(120	)		(1,205	)	NM
Total Traditional Banking segment		7,151			7,347			(196	)	-3	%		24,959			23,919			1,040		4	%
Warehouse Lending segment		2,744			1,354			1,390		103	%		8,110			5,964			2,146		36	%
Mortgage Banking segment		44			(189	)		233		NM			1,790			(26	)		1,816		NM
Total Core Banking	$	9,939		$	8,512		$	1,427		17	%	$	34,859		$	29,857		$	5,002		17	%
*See Segment Data at the end of this Earnings Release NA – Not applicable NM – Not meaningful

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

Core Bank⁽¹⁾ – Net income from Core Banking was $9.9 million for the fourth quarter of 2016, an increase of $1.4 million, or 17%, over the fourth quarter of 2015. Strong growth in net interest income drove the Bank’s performance for the quarter, which was also further enhanced by continued favorably-low loan loss provisions.

Net interest income at the Core Bank increased to $37.6 million during the fourth quarter of 2016, a $6.8 million, or 22%, increase over the fourth quarter of 2015. The increase in net interest income was primarily the result of a $518 million, or 16%, year-over-year increase in the Core Bank’s quarterly average loans from the fourth quarter of 2015 to the fourth quarter of 2016. The strong growth in average loans outstanding was further supplemented by an increase of 25 basis points in the Core Bank’s net interest margin over the fourth quarter of 2015.

The overall change in the Core Bank’s net interest income, as well as, average and period-end loan balances by origination channel is presented below:

	Net Interest		Net Interest
	Income		Income
(dollars in thousands)	4th Qtr.		4th Qtr.		$			%
Origination Channel	2016		2015		Change			Change
Traditional Network	$	29,531	$	26,909	$	2,622		10	%
Warehouse Lending		5,160		2,855		2,305		81	%
Correspondent Lending		336		422		(86	)	-20	%
2016-Cornerstone Acquisition		2,073		-		2,073		NM
2012-FDIC Acquired Loans		525		642		(117	)	-18	%
Total Core Bank	$	37,625	$	30,828	$	6,797		22	%

	Average		Average							Period End		Period End
	Loans		Loans							Loans		Loans
(dollars in thousands)	4th Qtr.		4th Qtr.		$			%		4th Qtr.		4th Qtr.		$			%
Origination Channel	2016		2015		Change			Change		2016		2015		Change			Change
Traditional Network	$	2,803,712	$	2,650,942	$	152,770		6	%	$	2,822,220	$	2,658,711	$	163,509		6	%
Warehouse Lending		590,196		319,829		270,367		85	%		585,439		386,729		198,710		51	%
Correspondent Lending		152,481		247,775		(95,294	)	-38	%		149,028		249,344		(100,316	)	-40	%
2016-Cornerstone Acquisition		199,841		-		199,841		NM			200,085		-		200,085		NM
2012-FDIC Acquired Loans		15,672		25,574		(9,902	)	-39	%		15,059		24,520		(9,461	)	-39	%
Total Core Bank	$	3,761,902	$	3,244,120	$	517,782		16	%	$	3,771,831	$	3,319,304	$	452,527		14	%
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 fourth quarter of 2016 as compared to the fourth 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 fourth quarter of 2015 to the fourth quarter of 2016 in the following portfolios: $74 million in Commercial Real Estate; $44 million in Indirect Auto; $37 million in Home Equity Lines of Credit (“HELOCs”); and $19 million in Construction & Development. Growth in the commercial-related categories was primarily driven by the Core Bank’s Commercial and Corporate Banking Department, which grew its balances nearly $100 million during its second full year of operation. 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 re-introduction of the product in late 2015.
• Within the Warehouse segment, net interest income grew 81% from the fourth quarter of 2015, as client usage of the Bank’s Warehouse lines of credit increased from 50% for the fourth quarter of 2015 to 57% for the fourth quarter of 2016. In addition, the Bank also increased its committed Warehouse lines of credit from $670 million at December 31, 2015 to $1.0 billion at December 31, 2016. As a result of these factors, average outstanding Warehouse line-of-credit balances for the fourth quarter of 2016 were $590 million, a $270 million increase from a strong fourth quarter in 2015. The yield for Warehouse lines of credit during the fourth quarter of 2016 increased four basis points from the same period in 2015.

• The fourth quarter of 2016 represented the second 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 for the fourth quarter of 2016, with $2.1 million of net interest income for the quarter driven by average loans of $200 million.

The Core Bank’s credit quality metrics remained favorable, as indicated by the table below:

	As of and for the:
	Quarters Ending:				Years Ending:
	Dec. 31	Sep. 30	Jun. 30	Mar. 31	Dec. 31	Dec. 31	Dec. 31
Core Banking Credit Quality Ratios	2016	2016	2016	2016	2016	2015	2014
Nonperforming loans to total loans	0.42%	0.47%	0.54%	0.60%	0.42%	0.66%	0.78%
Nonperforming assets to total loans (including OREO)	0.46%	0.53%	0.58%	0.63%	0.46%	0.70%	1.15%
Delinquent loans to total loans	0.18%	0.21%	0.28%	0.25%	0.18%	0.35%	0.52%
Net charge-offs to average loans	0.09%	0.03%	0.05%	0.04%	0.05%	0.05%	0.08%
(Quarterly rates annualized)
OREO = Other Real Estate Owned

Noninterest income for the Core Bank was $7.8 million during the fourth quarter of 2016 compared to $7.3 million for the fourth quarter of 2015. Impacting the Core Bank’s noninterest income comparisons between the fourth quarters of 2016 and 2015 were the following:

• Interchange fees increased $122,000 primarily due to the following factors:
  • The Company experienced a 7% year-over-year growth in checking accounts, which helped to drive an 11% increase in the Company’s active debit cards and a 12% increase in total purchase activity.
  • Credit card interchange income benefited from a 10% increase in purchase volume.

• Mortgage banking income increased $118,000 from the fourth quarter of 2015, as secondary market originations increased over the fourth quarter of 2015. The additional revenue from the higher volume during the quarter was partially offset by a decrease in the Company’s margin on its loans originated for sale, as a significant fourth quarter increase in long-term interest rates negatively impacted overall pricing.

Core Bank noninterest expenses increased $4.6 million, or 19%, from the fourth quarter of 2015 to the same period in 2016. Comparability of noninterest expense between the two quarters was impacted by adjustments to the Core Bank’s incentive compensation accruals, which were made during both periods to bring accrual balances in line with projected payouts for the year. As a result of these adjustments, net incentive compensation expense was a net credit of $393,000 for the fourth quarter of 2016 compared to a net credit of $998,000 for the fourth quarter of 2015. Excluding the impact of the change in incentive compensation expense, noninterest expense increased $4.0 million, or 15%, for the fourth quarter of 2016, as compared to the fourth quarter of 2015 and was primarily driven by the following:

• Salaries and benefits expense, excluding incentive compensation adjustments, increased $2.6 million, primarily due to an increase of 143 full-time-equivalent (“FTE”) employees from December 31, 2015 to December 31, 2016. Thirty-six of these additions were directly attributable to the Company’s Cornerstone acquisition. The remaining increase was driven by additional staffing needed to implement the Company’s strategic initiatives.
• Occupancy and equipment expense increased $505,000 from the fourth quarter of 2015 to $5.4 million. Approximately $207,000 of this increase was directly attributable the facilities acquired in the Cornerstone acquisition. The remaining increase primarily reflects recent renovations to the Core Bank’s premises and equipment in the previous 12 months, which drove a 12% increase in depreciation expense.

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 fourth quarter of 2016, RPG recorded net income of $61,000 compared to a net loss of $1.1 million during the fourth quarter of 2015. Within the RCS division of RPG, RCS contributed net income of $1.6 million during the fourth quarter of 2016 compared to net income of $231,000 during the fourth quarter of 2015. The increased profitability within the RCS division resulted primarily from continued strong performance of its line-of-credit product and from the recognition of $1.2 million of income related to a first-year volume guarantee from the program sponsor for its installment credit product.

Regarding the overall operations of the division, RCS experienced an $86 million increase in small-dollar loans originated for sale over the same quarter as 2015, generating a strong increase in fee income. Furthermore, the balance for the RCS loans retained on balance sheet by the Company increased from $7 million at December 31, 2015 to $32 million at December 31, 2016, contributing to a solid increase in net interest income for the quarter.

Conclusion

“The year 2016 proved to be an exciting one at Republic, and we look forward to 2017 with guarded optimism. We are extremely proud of what we accomplished during 2016 and remain committed to creating future success within appropriate risk parameters.

While we are less optimistic about the availability of accretive acquisitions during the coming year, our team will continue to evaluate opportunities, both whole-bank and non-bank, that may arise and present the best overall synergies for Republic. In the meantime, we will continue to focus our resources inward, as we remain dedicated to growing and enhancing our current strategic initiatives, including our pilot programs at RPG, our dealer floorplan lending, our mortgage banking operations and our new digital banking platform, MemoryBank, to name a few. In order to achieve our strategic objectives, we recognize that Republic must be a great place to work for our associates, a great place to bank for our clients and a solid long-term investment for our shareholders,” 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 Bank also offers separately-branded, nation-wide digital banking at www.mymemorybank.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. 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 Fourth 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
	Dec. 31, 2016			Dec. 31, 2015
Assets:
Cash and cash equivalents	$	289,309		$	210,082
Investment securities		534,139			555,785
Loans held for sale		15,170			4,597
Loans		3,810,778			3,326,610
Allowance for loan and lease losses		(32,920	)		(27,491	)
Loans, net		3,777,858			3,299,119
Federal Home Loan Bank stock, at cost		28,208			28,208
Premises and equipment, net		42,869			31,106
Goodwill		16,300			10,168
Other real estate owned ("OREO")		1,391			1,220
Bank owned life insurance ("BOLI")		61,794			52,817
Other assets and accrued interest receivable		49,271			37,187
Total assets	$	4,816,309		$	4,230,289
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	971,937		$	634,863
Interest-bearing		2,188,755			1,852,614
Total deposits		3,160,692			2,487,477
Securities sold under agreements to repurchase and other short-term borrowings		173,473			395,433
Federal Home Loan Bank advances		802,500			699,500
Subordinated note		41,240			41,240
Other liabilities and accrued interest payable		33,998			30,092
Total liabilities		4,211,903			3,653,742
Stockholders' equity		604,406			576,547
Total liabilities and Stockholders' equity	$	4,816,309		$	4,230,289

Average Balance Sheet Data
	Three Months Ended Dec. 31,				Years Ended Dec. 31,
	2016		2015		2016		2015
Assets:
Investment securities, including FHLB stock	$	571,158	$	595,739	$	572,599	$	546,655
Federal funds sold and other interest-earning deposits		57,950		71,480		130,889		68,847
Loans and fees, including loans held for sale		3,792,902		3,249,595		3,568,383		3,174,234
Total interest-earning assets		4,422,010		3,916,814		4,271,871		3,789,736
Total assets		4,622,760		4,088,016		4,485,829		3,982,841
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits	$	950,020	$	675,500	$	894,049	$	651,275
Interest-bearing deposits		2,197,411		1,774,526		2,058,592		1,714,214
Securities sold under agreements to repurchase and other short-term borrowings		231,817		426,833		280,296		379,477
Federal Home Loan Bank advances		570,135		567,163		583,591		599,630
Subordinated note		41,240		41,240		42,502		41,240
Total interest-bearing liabilities		3,040,603		2,809,762		2,964,981		2,734,561
Stockholders' equity		604,095		578,573		597,463		574,766

Republic Bancorp, Inc. Financial Information Fourth 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 Dec. 31,					Years Ended Dec. 31,
	2016		2015			2016		2015
Total interest income(2)	$	45,903	$	36,842		$	173,992	$	142,432
Total interest expense		4,258		4,376			17,938		18,462
Net interest income		41,645		32,466			156,054		123,970
Provision for loan and lease losses		5,004		2,074			14,493		5,396
Noninterest income:
Service charges on deposit accounts		3,338		3,330			13,176		13,015
Net refund transfer fees		121		49			19,240		17,388
Mortgage banking income		980		862			6,882		4,411
Interchange fee income		2,254		2,148			9,009		8,353
Program fees		1,102		362			3,044		1,233
Increase in cash surrender value of BOLI		402		353			1,516		1,402
Gain on call of security available for sale		-		-			-		88
Net gains (losses) on OREO		53		(19	)		244		(301	)
Other		2,235		632			4,398		2,405
Total noninterest income		10,485		7,717			57,509		47,994
Noninterest expenses:
Salaries and employee benefits		16,917		13,194			69,882		58,091
Occupancy and equipment, net		5,618		5,129			21,777		20,689
Communication and transportation		1,282		984			4,256		3,752
Marketing and development		1,005		843			3,778		3,161
FDIC insurance expense		297		462			1,780		2,084
Bank franchise tax expense		813		640			4,757		4,734
Data processing		1,586		1,323			6,121		4,340
Interchange related expense		1,071		1,026			4,140		3,873
Supplies		437		292			1,406		1,101
OREO expense		148		250			503		735
Legal and professional fees		591		510			2,556		3,306
FHLB advance prepayment penalty		-		-			846		-
Other		2,401		2,194			8,305		7,458
Total noninterest expenses		32,166		26,847			130,107		113,324
Income before income tax expense		14,960		11,262			68,963		53,244
Income tax expense		4,960		3,844			23,060		18,078
Net income	$	10,000	$	7,418		$	45,903	$	35,166

Republic Bancorp, Inc. Financial Information Fourth 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 Ratios
	As of and for the						As of and for the
	Three Months Ended Dec. 31,						Years Ended Dec. 31,
	2016			2015			2016			2015
Per Share Data:
Basic weighted average shares outstanding		20,926			20,876			20,942			20,861
Diluted weighted average shares outstanding		20,941			20,953			20,954			20,942
End of period shares outstanding:
Class A Common Stock		18,615			18,652			18,615			18,652
Class B Common Stock		2,245			2,245			2,245			2,245
Book value per share(3)	$	28.97		$	27.59		$	28.97		$	27.59
Tangible book value per share(3)		27.89			26.87			27.89			26.87
Earnings per share:
Basic earnings per Class A Common Stock	$	0.48		$	0.36		$	2.22		$	1.70
Basic earnings per Class B Common Stock		0.44			0.33			2.02			1.55
Diluted earnings per Class A Common Stock		0.48			0.36			2.22			1.70
Diluted earnings per Class B Common Stock		0.44			0.33			2.01			1.54
Cash dividends declared per share:
Class A Common Stock	$	0.209		$	0.198		$	0.825		$	0.781
Class B Common Stock		0.190			0.180			0.750			0.710
Performance Ratios:
Return on average assets		0.87	%		0.73	%		1.02	%		0.88	%
Return on average equity		6.62			5.13			7.68			6.12
Efficiency ratio(4)		62			67			61			66
Yield on average interest-earning assets		4.15			3.76			4.07			3.76
Cost of average interest-bearing liabilities		0.56			0.62			0.60			0.68
Cost of average deposits(5)		0.22			0.19			0.21			0.19
Net interest spread		3.59			3.14			3.47			3.08
Net interest margin - Total Company		3.77			3.32			3.65			3.27
Net interest margin - Core Bank(1)		3.42			3.17			3.30			3.24
Other Information:
End of period FTEs(6) - Total Company		938			785			938			785
End of period FTEs(6) - Core Bank(1)		869			726			869			726
Number of banking centers		44			40			44			40

Republic Bancorp, Inc. Financial Information Fourth 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 Ratios	As of and for the						As of and for the
	Three Months Ended Dec. 31,						Years Ended Dec. 31,
	2016			2015			2016			2015
Credit Quality Asset Balances:
Loans on nonaccrual status	$	15,892		$	21,712		$	15,892		$	21,712
Loans past due 90-days-or-more and still on accrual		167			224			167			224
Total nonperforming loans		16,059			21,936			16,059			21,936
OREO		1,391			1,220			1,391			1,220
Total nonperforming assets	$	17,450		$	23,156		$	17,450		$	23,156
Total delinquent loans	$	8,958		$	11,731		$	8,958		$	11,731
Credit Quality Ratios - Total Company:
Nonperforming loans to total loans		0.42	%		0.66	%		0.42	%		0.66	%
Nonperforming assets to total loans (including OREO)		0.46			0.70			0.46			0.70
Nonperforming assets to total assets		0.36			0.55			0.36			0.55
Allowance for loan and lease losses to total loans		0.86			0.83			0.86			0.83
Allowance for loan and lease losses to nonperforming loans		205			125			205			125
Delinquent loans to total loans(7)		0.24			0.35			0.24			0.35
Net charge-offs to average loans (annualized)		0.27			0.19			0.25			0.07
Credit Quality Ratios - Core Bank(1):
Nonperforming loans to total loans		0.42	%		0.66	%		0.42	%		0.66	%
Nonperforming assets to total loans (including OREO)		0.46			0.70			0.46			0.70
Nonperforming assets to total assets		0.36			0.55			0.36			0.55
Allowance for loan and lease losses to total loans		0.74			0.78			0.74			0.78
Allowance for loan and lease losses to nonperforming loans		175			118			175			118
Delinquent loans to total loans(7)		0.18			0.35			0.18			0.35
Net charge-offs to average loans (annualized)		0.09			0.10			0.05			0.05

Republic Bancorp, Inc. Financial Information Fourth 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
	Dec. 31, 2016			Sep. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015
Assets:
Cash and cash equivalents	$	289,309		$	302,167		$	142,979		$	198,172		$	210,082
Investment securities		534,139			524,444			551,027			556,605			555,785
Loans held for sale		15,170			11,226			94,658			8,129			4,597
Loans		3,810,778			3,823,031			3,691,323			3,351,969			3,326,610
Allowance for loan and lease losses		(32,920	)		(30,436	)		(29,308	)		(31,475	)		(27,491	)
Loans, net		3,777,858			3,792,595			3,662,015			3,320,494			3,299,119
Federal Home Loan Bank stock, at cost		28,208			28,208			28,208			28,208			28,208
Premises and equipment, net		42,869			43,385			42,956			30,277			31,106
Goodwill		16,300			16,300			16,313			10,168			10,168
Other real estate owned		1,391			2,435			1,503			1,280			1,220
Bank owned life insurance		61,794			61,392			60,986			53,156			2,817
Other assets and accrued interest receivable		49,271			45,125			46,277			40,276			37,187
Total assets	$	4,816,309		$	4,827,277		$	4,646,922		$	4,246,765		$	4,230,289
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	971,937		$	947,602		$	867,095		$	800,946		$	634,863
Interest-bearing		2,188,755			2,188,291			1,988,952			1,935,700			1,852,614
Total deposits		3,160,692			3,135,893			2,856,047			2,736,646			2,487,477
Securities sold under agreements to repurchase and other short-term borrowings		173,473			152,458			126,124			319,893			395,433
Federal Home Loan Bank advances		802,500			862,500			987,500			517,500			699,500
Subordinated note		41,240			41,240			45,364			41,240			41,240
Other liabilities and accrued interest payable		33,998			34,626			36,864			39,929			30,092
Total liabilities		4,211,903			4,226,717			4,051,899			3,655,208			3,653,742
Stockholders' equity		604,406			600,560			595,023			591,557			576,547
Total liabilities and Stockholders' equity	$	4,816,309		$	4,827,277		$	4,646,922		$	4,246,765		$	4,230,289
Average Balance Sheet Data
	Quarterly Comparison
	Dec. 31, 2016			Sep. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015
Assets:
Investment securities, including FHLB stock	$	571,158		$	554,508		$	579,027		$	581,869		$	595,739
Federal funds sold and other interest-earning deposits		57,950			58,910			95,204			298,250			71,480
Loans and fees, including loans held for sale		3,792,902			3,702,093			3,479,397			3,292,689			3,249,595
Total interest-earning assets		4,422,010			4,315,511			4,153,628			4,172,808			3,916,814
Total assets		4,622,760			4,531,958			4,351,843			4,436,843			4,088,016
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits	$	950,020		$	900,432		$	805,718		$	916,691		$	675,500
Interest-bearing deposits		2,197,411			2,155,289			1,980,310			1,903,721			1,774,526
Securities sold under agreements to repurchase and other short-term borrowings		231,817			215,343			267,574			407,698			426,833
Federal Home Loan Bank advances		570,135			584,946			627,335			552,082			567,163
Subordinated note		41,240			44,288			43,234			41,240			41,240
Total interest-bearing liabilities		3,040,603			2,999,866			2,918,453			2,904,741			2,809,762
Stockholders' equity		604,095			601,043			596,795			587,593			578,573

Republic Bancorp, Inc. Financial Information Fourth 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
	Dec. 31, 2016		Sep. 30, 2016			Jun. 30, 2016		Mar. 31, 2016		Dec. 31, 2015
Total interest income(2)	$	45,903	$	43,934		$	40,140	$	44,015	$	36,842
Total interest expense		4,258		4,536			4,563		4,581		4,376
Net interest income		41,645		39,398			35,577		39,434		32,466
Provision for loan and lease losses		5,004		2,489			1,814		5,186		2,074
Noninterest income:
Service charges on deposit accounts		3,338		3,416			3,282		3,140		3,330
Net refund transfer fees		121		132			1,909		17,078		49
Mortgage banking income		980		3,081			1,560		1,261		862
Interchange fee income		2,254		2,415			2,217		2,123		2,148
Program fees		1,102		979			664		319		362
Increase in cash surrender value of BOLI		402		406			369		339		353
Net gains (losses) on OREO		53		(137	)		80		248		(19	)
Other		2,235		1,009			721		413		632
Total noninterest income		10,485		11,301			10,802		24,921		7,717
Noninterest expenses:
Salaries and employee benefits		16,917		18,068			17,814		17,083		13,194
Occupancy and equipment, net		5,618		5,631			5,109		5,419		5,129
Communication and transportation		1,282		1,029			872		1,073		984
Marketing and development		1,005		1,076			1,190		507		843
FDIC insurance expense		297		345			480		658		462
Bank franchise tax expense		813		846			647		2,451		640
Data processing		1,586		1,659			1,543		1,333		1,323
Interchange related expense		1,071		1,118			1,047		904		1,026
Supplies		437		280			240		449		292
OREO expense		148		159			116		80		250
Legal and professional fees		591		539			604		823		510
FHLB advance prepayment penalty		-		846			-		-		-
Other		2,401		1,938			2,204		1,761		2,194
Total noninterest expenses		32,166		33,534			31,866		32,541		26,847
Income before income tax expense		14,960		14,676			12,699		26,628		11,262
Income tax expense		4,960		4,848			4,359		8,893		3,844
Net income	$	10,000	$	9,828		$	8,340	$	17,735	$	7,418

Republic Bancorp, Inc. Financial Information Fourth 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 Ratios
	As of and for the Three Months Ended
	Dec. 31, 2016			Sep. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015
Per Share Data:
Basic weighted average shares outstanding		20,926			20,925			20,947			20,904			20,876
Diluted weighted average shares outstanding		20,941			20,938			20,958			21,009			20,953
End of period shares outstanding:
Class A Common Stock		18,615			18,617			18,617			18,659			18,652
Class B Common Stock		2,245			2,245			2,245			2,245			2,245
Book value per share(3)	$	28.97		$	28.79		$	28.52		$	28.30		$	27.59
Tangible book value per share(3)		27.89			27.70			27.44			27.58			26.87
Earnings per share:
Basic earnings per Class A Common Stock	$	0.48		$	0.47		$	0.40		$	0.86		$	0.36
Basic earnings per Class B Common Stock		0.44			0.43			0.37			0.78			0.33
Diluted earnings per Class A Common Stock		0.48			0.47			0.40			0.85			0.36
Diluted earnings per Class B Common Stock		0.44			0.43			0.37			0.77			0.33
Cash dividends declared per share:
Class A Common Stock	$	0.209		$	0.209		$	0.209		$	0.198		$	0.198
Class B Common Stock		0.190			0.190			0.190			0.180			0.180
Performance Ratios:
Return on average assets		0.87	%		0.87	%		0.77	%		1.60	%		0.73	%
Return on average equity		6.62			6.54			5.59			12.07			5.13
Efficiency ratio(4)		62			66			69			51			67
Yield on average interest-earning assets		4.15			4.07			3.87			4.22			3.76
Cost of average interest-bearing liabilities		0.56			0.60			0.63			0.63			0.62
Cost of average deposits(5)		0.22			0.21			0.19			0.20			0.19
Net interest spread		3.59			3.47			3.24			3.59			3.14
Net interest margin - Total Company		3.77			3.65			3.43			3.78			3.32
Net interest margin - Core Bank(1)		3.42			3.38			3.28			3.12			3.17
Other Information:
End of period FTEs(6) - Total Company		938			899			883			817			785
End of period FTEs(6) - Core Bank(1)		869			830			818			756			726
Number of banking centers		44			44			44			40			40

Republic Bancorp, Inc. Financial Information Fourth 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 Ratios
	As of and for the Three Months Ended
	Dec. 31, 2016			Sep. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015
Credit Quality Asset Balances:
Loans on nonaccrual status	$	15,892		$	17,769		$	18,778		$	19,907		$	21,712
Loans past due 90-days-or-more and still on accrual	��	167			223			1,178			-			224
Total nonperforming loans		16,059			17,992			19,956			19,907			21,936
OREO		1,391			2,435			1,503			1,280			1,220
Total nonperforming assets	$	17,450		$	20,427		$	21,459		$	21,187		$	23,156
Total delinquent loans	$	8,958		$	8,714		$	10,607		$	8,657		$	11,731
Credit Quality Ratios - Total Company:
Nonperforming loans to total loans		0.42	%		0.47	%		0.54	%		0.59	%		0.66	%
Nonperforming assets to total loans (including OREO)		0.46			0.53			0.58			0.63			0.70
Nonperforming assets to total assets		0.36			0.42			0.46			0.50			0.55
Allowance for loan and lease losses to total loans		0.86			0.80			0.79			0.94			0.83
Allowance for loan and lease losses to nonperforming loans		205			169			147			158			125
Delinquent loans to total loans(7)		0.24			0.23			0.29			0.26			0.35
Net charge-offs to average loans (annualized)		0.27			0.15			0.46			0.15			0.19
Credit Quality Ratios - Core Bank(1):
Nonperforming loans to total loans		0.42	%		0.47	%		0.54	%		0.60	%		0.66	%
Nonperforming assets to total loans (including OREO)		0.46			0.53			0.58			0.63			0.70
Nonperforming assets to total assets		0.36			0.43			0.47			0.51			0.55
Allowance for loan and lease losses to total loans		0.74			0.72			0.73			0.78			0.78
Allowance for loan and lease losses to nonperforming loans		175			152			135			131			118
Delinquent loans to total loans(7)		0.18			0.21			0.28			0.25			0.35
Net charge-offs to average loans (annualized)		0.09			0.03			0.05			0.04			0.10

Republic Bancorp, Inc. Financial Information
Fourth 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 December 31, 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 and the Company’s national branchless banking platform, MemoryBank, 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 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 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 allocated to Traditional Banking operations. 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 Fourth quarter 2016 Earnings Release (continued) Segment information for the three months and years ended December 31, 2016 and 2015 follows:
	Three Months Ended December 31, 2016
	Core Banking
	Traditional			Warehouse			Mortgage			Total			Republic			Total
(dollars in thousands)	Banking			Lending			Banking			Core Banking			Processing Group			Company
Net interest income	$	32,413		$	5,160		$	52		$	37,625		$	4,020		$	41,645
Provision for loan and lease losses		1,881			(189	)		-			1,692			3,312			5,004
Net refund transfer fees		-			-			-			-			121			121
Mortgage banking income		-			-			980			980			-			980
Program fees		-			-			-			-			1,102			1,102
Other noninterest income		6,710			4			148			6,862			1,420			8,282
Total noninterest income		6,710			4			1,128			7,842			2,643			10,485
Total noninterest expenses		26,809			985			1,112			28,906			3,260			32,166
Income before income tax expense		10,433			4,368			68			14,869			91			14,960
Income tax expense		3,282			1,624			24			4,930			30			4,960
Net income	$	7,151		$	2,744		$	44		$	9,939		$	61		$	10,000
Segment end-of-period assets	$	4,169,557		$	584,916		$	17,453		$	4,771,926		$	44,383		$	4,816,309
Net interest margin		3.41	%		3.50	%		NM			3.42	%		NM			3.77	%
	Three Months Ended December 31, 2015
	Core Banking
	Traditional			Warehouse			Mortgage			Total			Republic			Total
(dollars in thousands)	Banking			Lending			Banking			Core Banking			Processing Group			Company
Net interest income	$	27,934		$	2,855		$	39		$	30,828		$	1,638		$	32,466
Provision for loan and lease losses		890			(17	)		-			873			1,201			2,074
Net refund transfer fees		-			-			-			-			49			49
Mortgage banking income		-			-			862			862			-			862
Program fees		-			-			-			-			362			362
Other noninterest income		6,384			5			17			6,406			38			6,444
Total noninterest income		6,384			5			879			7,268			449			7,717
Total noninterest expenses		22,389			680			1,208			24,277			2,570			26,847
Income (loss) before income tax expense		11,039			2,197			(290	)		12,946			(1,684	)		11,262
Income tax expense (benefit)		3,692			843			(101	)		4,434			(590	)		3,844
Net income (loss)	$	7,347		$	1,354		$	(189	)	$	8,512		$	(1,094	)	$	7,418
Segment end-of-period assets	$	3,809,526		$	386,414		$	9,348		$	4,205,288		$	25,001		$	4,230,289
Net interest margin		3.13	%		3.57	%		NM			3.17	%		NM			3.32	%

Republic Bancorp, Inc. Financial Information Fourth quarter 2016 Earnings Release (continued)
	Year Ended December 31, 2016
	Core Banking
	Traditional			Warehouse			Mortgage			Total			Republic		Total
(dollars in thousands)	Banking			Lending			Banking			Core Banking			Processing Group		Company
Net interest income	$	121,692		$	16,529		$	200		$	138,421		$	17,633	$	156,054
Provision for loan and lease losses		3,448			497			-			3,945			10,548		14,493
Net refund transfer fees		-			-			-			-			19,240		19,240
Mortgage banking income		-			-			6,882			6,882			-		6,882
Program fees		-			-			-			-			3,044		3,044
Other noninterest income		26,090			18			360			26,468			1,875		28,343
Total noninterest income		26,090			18			7,242			33,350			24,159		57,509
Total noninterest expenses		108,360			3,142			4,688			116,190			13,917		130,107
Income before income tax expense		35,974			12,908			2,754			51,636			17,327		68,963
Income tax expense		11,015			4,798			964			16,777			6,283		23,060
Net income	$	24,959		$	8,110		$	1,790		$	34,859		$	11,044	$	45,903
Segment end-of-period assets	$	4,169,557		$	584,916		$	17,453		$	4,771,926		$	44,383	$	4,816,309
Net interest margin		3.26	%		3.59	%		NM			3.30	%		NM		3.65	%
	Year Ended December 31, 2015
	Core Banking
	Traditional			Warehouse			Mortgage			Total			Republic		Total
(dollars in thousands)	Banking			Lending			Banking			Core Banking			Processing Group		Company
Net interest income	$	108,303		$	12,209		$	219		$	120,731		$	3,239	$	123,970
Provision for loan and lease losses		2,897			168			-			3,065			2,331		5,396
Net refund transfer fees		-			-			-			-			17,388		17,388
Mortgage banking income		-			-			4,411			4,411			-		4,411
Program fees		-			-			-			-			1,233		1,233
Gain on call of security available for sale		88			-			-			88			-		88
Other noninterest income		23,670			24			248			23,942			932		24,874
Total noninterest income		23,758			24			4,659			28,441			19,553		47,994
Total noninterest expenses		93,740			2,526			4,918			101,184			12,140		113,324
Income (loss) before income tax expense		35,424			9,539			(40	)		44,923			8,321		53,244
Income tax expense (benefit)		11,505			3,575			(14	)		15,066			3,012		18,078
Net income (loss)	$	23,919		$	5,964		$	(26	)	$	29,857		$	5,309	$	35,166
Segment end-of-period assets	$	3,809,526		$	386,414		$	9,348		$	4,205,288		$	25,001	$	4,230,289
Net interest margin		3.20	%		3.58	%		NM			3.24	%		NM		3.27	%

Republic Bancorp, Inc. Financial Information
Fourth 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 $5.9 million and $3.1 million for the quarters ended December 31, 2016 and 2015. The amount of loan fee income included in total interest income was $24.2 million and $10.3 million for the years ended December 31, 2016 and 2015.
		The amount of loan fee income included in total interest income per quarter was as follows: $5.9 million (quarter ended December 31, 2016); $4.8 million (quarter ended September 30, 2016); $3.7 million (quarter ended June 30, 2016); $9.8 million (quarter ended March 31, 2016); and $3.1 million (quarter ended December 31, 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)	Dec. 31, 2016			Sep. 30, 2016			Jun. 30, 2016			Mar. 31, 2016			Dec. 31, 2015
Total stockholders' equity (a)	$	604,406		$	600,560		$	595,023		$	591,557		$	576,547
Less: Goodwill		16,300			16,300			16,313			10,168			10,168
Less: Mortgage servicing rights		5,180			5,338			4,998			4,891			4,912
Less: Core deposit intangible		1,070			1,121			1,171			-			-
Tangible stockholders' equity (c)	$	581,856		$	577,801		$	572,541		$	576,498		$	561,467
Total assets (b)	$	4,816,309		$	4,827,277		$	4,646,922		$	4,246,765		$	4,230,289
Less: Goodwill		16,300			16,300			16,313			10,168			10,168
Less: Mortgage servicing rights		5,180			5,338			4,998			4,891			4,912
Less: Core deposit intangible		1,070			1,121			1,171			-			-
Tangible assets (d)	$	4,793,759		$	4,804,518		$	4,624,440		$	4,231,706		$	4,215,209
Total stockholders' equity to total assets (a/b)		12.55	%		12.44	%		12.80	%		13.93	%		13.63	%
Tangible stockholders' equity to tangible assets (c/d)		12.14	%		12.03	%		12.38	%		13.62	%		13.32	%
Number of shares outstanding (e)		20,860			20,862			20,862			20,904			20,897
Book value per share (a/e)	$	28.97		$	28.79		$	28.52		$	28.30		$	27.59
Tangible book value per share (c/e)		27.89			27.70			27.44			27.58			26.87

	(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 average 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