Republic Bancorp (RBCAA) 8-K Republic Bancorp, Inc. Reports 37% Year-Over-Year Increase in First Quarter Net Income

Exhibit 99.1

Republic Bancorp, Inc. Reports 37% Year-Over-Year Increase in First Quarter Net Income

LOUISVILLE, Ky.--(BUSINESS WIRE)--April 19, 2018--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 first quarter net income of $27.5 million, a 37% increase over the first quarter of 2017, resulting in Diluted Earnings per Class A Common Share (“Diluted EPS”) of $1.32. Return on average assets (“ROA”) and return on average equity (“ROE”) were 2.08% and 17.12%, respectively, for the first quarter of 2018.

The Company’s performance metrics for the first quarter of 2018 were positively impacted by the 2017 Tax Cuts and Jobs Act (“TCJA”)⁽¹⁾, which, among other things, lowered the federal corporate tax rate from 35% to 21%, effective January 1, 2018. Pre-tax earnings increased 16% year over year, as the Company estimates that the lower effective tax rate benefitted its first quarter 2018 metrics by increasing net income approximately $4.0 million, Diluted EPS by $0.19, ROA by 0.30%, and ROE by 2.47%.

Steve Trager, Chairman & CEO of Republic commented, “I am delighted to see continued growth in our overall net income for the quarter. While we certainly welcome the after-tax benefits of the lower tax rate, I am particularly pleased with the 16% year-over-year growth in our pre-tax earnings, which reflects positively on our ability to execute our long-term growth strategies.

“As is typically the case during the first quarter of each year, our seasonally strong Tax Refund Solutions (‘TRS’) segment of our Republic Processing Group⁽²⁾ (‘RPG’) operations made a substantial contribution. TRS earned net income of $12.4 million for the first quarter of 2018 while completing the bulk of our tax season. Additionally, the Republic Credit Solutions (‘RCS’) segment of RPG continued to produce solid earnings, contributing $3.9 million to RPG’s net income for the quarter.

“In addition to the solid net income at RPG, first quarter 2018 Core Banking⁽³⁾ net income grew 31% over the first quarter of 2017, driven by net interest margin expansion, which was complemented by solid year-over-year growth in average outstanding loan balances,” concluded Steve Trager.

The following table highlights Republic’s financial performance for the first quarter of 2018 compared to the same period in 2017:

	(dollars in thousands, except per share data)
		Three Months Ended Mar. 31,
		2018			2017			$ Change		% Change
	Income Before Income Taxes*	$	34,910		$	30,071		$	4,839	16	%
	Net Income*		27,469			20,017			7,452	37
	Diluted Earnings per Class A Common Stock		1.32			0.96			0.36	38
	Return on Average Assets		2.08	%		1.65	%		NA	26
	Return on Average Equity		17.12			13.12			NA	30
NA – Not applicable *See Segment Data at the End of this Earnings Release

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

Core Bank⁽³⁾ – Net income from Core Banking was $11.1 million for the first quarter of 2018, an increase of $2.6 million, or 31%, over the first quarter of 2017, with the previously mentioned lower 2018 effective tax rate contributing approximately $1.5 million to the increase. In addition to the lower effective tax rate, the increase in net income at the Core Bank was primarily driven by strong growth in net interest income, which increased $5.2 million, or 14%, over the first quarter of 2017. The growth in net interest income was propelled by a 22-basis-point expansion of the Core Bank’s net interest margin for the first quarter of 2018 to 3.55% and further complemented by a $247 million, or 7%, increase in the Core Bank’s quarterly average loans.

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 Income
	for the
(dollars in thousands)	Three Months Ended Mar. 31,
Origination Channel	2018		2017		$ Change			% Change
Traditional Network	$	37,934	$	32,067	$	5,867		18	%
Warehouse Lending		3,591		3,900		(309	)	(8	)
Correspondent Lending		260		281		(21	)	(7	)
2012-FDIC Acquired Loans		66		380		(314	)	(83	)
Total Core Bank	$	41,851	$	36,628	$	5,223		14

	Average Loan Balances									Period-End Loan Balances
(dollars in thousands)	Three Months Ended Mar. 31,									Mar. 31,
Origination Channel	2018		2017		$ Change			% Change		2018		2017		$ Change			% Change
Traditional Network	$	3,307,756	$	3,033,392	$	274,364		9	%	$	3,322,017	$	3,017,051	$	304,966		10	%
Warehouse Lending		448,039		436,459		11,580		3			534,959		495,165		39,794		8
Correspondent Lending		114,156		145,068		(30,912	)	(21	)		111,263		141,375		(30,112	)	(21	)
2012-FDIC Acquired Loans		6,443		14,371		(7,928	)	(55	)		6,065		14,078		(8,013	)	(57	)
Total Core Bank	$	3,876,394	$	3,629,290	$	247,104		7		$	3,974,304	$	3,667,669	$	306,635		8

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

• The Traditional Network experienced solid growth in average loan balances of $274 million, or 9%, from the first quarter of 2017 to the first quarter of 2018. This growth was largely concentrated in the commercial loan sector, with average commercial real estate balances growing $169 million, or 16%, and average commercial and industrial balances growing $75 million, or 31%.
• The yield on the Traditional Network loans expanded 26 basis points to 4.51% during the first quarter of 2018 from 4.25% during the first quarter of 2017. As expected, yields on variable rate portfolios that frequently reprice to an index, such as the Wall Street Journal Prime Rate, reflected greater expansion than their fixed or adjustable rate counterparts.
• The fluctuation in net interest income related to the Warehouse Lending (“Warehouse”) segment was related to an internal change in the way the Company assigns a cost of funds to Warehouse through its Funds Transfer Pricing (“FTP”) methodology. The Company changed its Warehouse FTP methodology during the first quarter of 2018 to be more consistent with the FTP methodology used for other Core Bank loan products with similar pricing and duration characteristics.

The Core Bank’s provision for loan and lease losses (“Provision”) increased to $960,000 for the first quarter of 2018 from a very low $241,000 for the same period in 2017. The primary drivers of the increase in Provision expense were an increase of four basis points in annualized net charge-offs and higher general reserves related to stronger loan growth in the first quarter of 2018 as compared to the first quarter of 2017. Overall, the Core Bank’s credit quality metrics remained strong from period to period.

The Core Bank’s credit quality metrics are presented in the table below:

	As of and for the:
	Quarters Ended:				Years Ended:
	Mar. 31,		Mar. 31,		Dec. 31,		Dec. 31,		Dec. 31,
Core Banking Credit Quality Ratios	2018		2017		2017		2016		2015
Nonperforming loans to total loans	0.37	%	0.46	%	0.36	%	0.42	%	0.66	%
Nonperforming assets to total loans (including OREO)	0.38		0.50		0.36		0.46		0.70
Delinquent loans to total loans(4)	0.21		0.16		0.21		0.18		0.35
Net charge-offs to average loans	0.06		0.02		0.04		0.05		0.05
(Quarterly rates annualized)
OREO = Other Real Estate Owned

Noninterest income for the Core Bank was $8.3 million during the first quarter of 2018, a $425,000, or 5%, increase from the $7.9 million achieved during the first quarter of 2017. The increase was primarily driven by the following:

• Service charges on deposits increased $269,000, or 8%, consistent with an 8% increase in active checking accounts from March 31, 2017 to March 31, 2018.
• Interchange fee income increased $375,000, or 15%, with debit card interchange fees up $231,000, or 12%, and credit card interchange fees up $144,000, or 29%. The increase in interchange fees was driven by increases of 6% in active debit cards and 18% in active credit cards over the previous 12 months, as well as the corresponding usage on those cards.

Core Bank noninterest expenses increased $3.4 million, or 11%, during the first quarter of 2018 compared to the first quarter of 2017. The increase was primarily driven by the following:

• Salaries and employee benefits expense increased $2.1 million, or 11%, driven partially by annual merit increases, partially by an increase of approximately 21 Core Bank full-time-equivalent employees (“FTEs”) over the previously 12 months, and partially by a $763,000 increase in healthcare benefits. The additional FTEs were added primarily to support Core Bank strategic initiatives.
• Occupancy expense increased $339,000, or 8%, primarily driven by a 23% increase in depreciation expense associated with banking center renovations over the previous year.
• Data processing expenses increased $608,000, or 44%, driven by new and upgraded third-party technology implemented in the previous 12 months to support several key strategic Core Bank initiatives. Such initiatives include improving the Company’s client relationship management system, its online-banking functionality, and its overall information security.

Republic Processing Group⁽²⁾

Republic Processing Group (“RPG”) reported net income of $16.3 million for the first quarter of 2018 compared to $11.5 million for the same period in 2017, with the previously mentioned lower 2018 effective tax rate contributing approximately $2.5 million to the increase. In addition to the lower effective tax rate, RPG’s net income growth from the same quarter in 2017 was also driven by strong revenue growth within the RCS segment and partially by an increase in net Refund Transfer (“RT”) revenues within the TRS segment.

Within the RCS segment, net income increased $2.6 million and was driven by revenue growth from its short-term consumer loan products over the previous 12 months. Profitability growth was concentrated in RCS’s line-of-credit product, with loan fees for this product increasing $1.7 million, or 37%, from the first quarter of 2017. Additionally, Provision expense for RCS’s line-of-credit product decreased $1.3 million from the first quarter of 2017, as net charge-offs to-date within the portfolio have continued to season and have remained within an expectedly and relatively narrow range for a consistent period of time.

Within the TRS segment, net income increased $2.3 million compared to the same period in 2017. TRS experienced a $970,000, or 6%, increase in net RT revenues compared to the first quarter of 2017, consistent with a 6% increase in the number of RTs funded when comparing the two periods.

Offsetting the income growth discussed above, TRS’s net EA revenues (EA fees, less estimated loan loss provisions for EAs) was $1.1 million lower than the first quarter of 2017, as the Company has currently reserved higher amounts for estimated loan losses in the product. TRS originated $430 million of EAs during the first quarter of 2018 compared to $329 million for the same period in 2017. While the increase in EA originations drove an increase in EA fee income of $3.6 million, the Company has experienced, thus far, slower repayment of EAs from the federal government, resulting in higher estimated loan loss reserves. These higher estimated reserves drove a $4.7 million increase in EA Provision expense.

As of March 31, 2018, the Company had reserved through its loan loss provision approximately 3.09% of total EA originations for the first quarter of 2018 compared to 2.62% of total EA originations for the same period in 2017. Each 0.10% in estimated reserves equates to approximately $430,000 in Provision expense.

Republic Bancorp, Inc. (the “Company”) is the parent company of Republic Bank & Trust Company (the “Bank”). The Bank currently has 44 full-service banking centers and one loan production office throughout five states: 32 banking centers in 11 Kentucky communities - Covington, Crestview Hills, Elizabethtown, Florence, Frankfort, Georgetown, Lexington, Louisville, Owensboro, Shelbyville and Shepherdsville; three banking centers in southern Indiana – Floyds Knobs, Jeffersonville and New Albany; six banking centers in five Florida communities (Tampa MSA) – Largo, Port Richey, St. Petersburg, Seminole, and Temple Terrace; two banking centers in two Tennessee communities (Nashville MSA) – Cool Springs (Franklin) and Green Hills (Nashville) and one loan production office in Brentwood (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 $5.1 billion in assets and is headquartered in Louisville, Kentucky. The Company’s Class A Common Stock is listed under the symbol “RBCAA” on the NASDAQ Global Select Market.

Republic Bank. It’s just easier here.^®

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in the preceding paragraphs are based on our current expectations and assumptions regarding our business, the future impact to our balance sheet and income statement resulting from changes in interest rates, the ability to develop products and strategies in order to meet the Company’s long-term strategic goals, the economy, information concerning the impact of the TCJA, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Actual results could differ materially based upon factors disclosed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission, including those factors set forth as “Risk Factors” in the Company’s Annual Report on Form 10-K for the period ended December 31, 2017. The Company undertakes no obligation to update any forward-looking statements. These forward-looking statements are made only as of the date of this release, and the Company undertakes no obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this release.

Republic Bancorp, Inc. Financial Information First Quarter 2018 Earnings Release (all amounts other than per share amounts, number of employees and number of banking centers are expressed in thousands unless otherwise noted)
Balance Sheet Data
	Mar. 31, 2018			Dec. 31, 2017			Mar. 31, 2017
Assets:
Cash and cash equivalents	$	362,122		$	299,351		$	206,187
Investment securities		483,573			591,458			578,130
Loans held for sale		14,295			16,989			10,292
Loans		4,052,500			4,014,034			3,710,376
Allowance for loan and lease losses		(52,341	)		(42,769	)		(42,362	)
Loans, net		4,000,159			3,971,265			3,668,014
Federal Home Loan Bank stock, at cost		32,067			32,067			28,208
Premises and equipment, net		46,792			45,605			43,962
Goodwill		16,300			16,300			16,300
Other real estate owned ("OREO")		160			115			1,362
Bank owned life insurance ("BOLI")		63,727			63,356			62,185
Other assets and accrued interest receivable		59,139			48,856			50,152
Total assets	$	5,078,334		$	5,085,362		$	4,664,792
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	1,241,127		$	1,022,042		$	1,070,237
Interest-bearing		2,476,496			2,411,116			2,278,547
Total deposits		3,717,623			3,433,158			3,348,784
Securities sold under agreements to repurchase and other short-term borrowings		175,682			204,021			144,375
Federal Home Loan Bank advances		440,000			737,500			467,500
Subordinated note		41,240			41,240			41,240
Other liabilities and accrued interest payable		50,535			37,392			42,229
Total liabilities		4,425,080			4,453,311			4,044,128
Stockholders' equity		653,254			632,051			620,664
Total liabilities and Stockholders' equity	$	5,078,334		$	5,085,362		$	4,664,792
Average Balance Sheet Data
			Three Months Ended Mar. 31,
			2018				2017
Assets:
Investment securities, including FHLB stock			$	552,760			$	586,621
Federal funds sold and other interest-earning deposits				283,161				184,007
Loans and fees, including loans held for sale				4,082,050				3,749,738
Total interest-earning assets				4,917,971				4,520,366
Total assets				5,278,204				4,847,700
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits			$	1,319,860			$	1,132,591
Interest-bearing deposits				2,416,142				2,212,219
Securities sold under agreements to repurchase and other short-term borrowings				257,439				218,412
Federal Home Loan Bank advances				545,778				598,167
Subordinated note				41,240				41,240
Total interest-bearing liabilities				3,260,599				3,070,038
Stockholders' equity				641,624				610,429

Republic Bancorp, Inc. Financial Information First Quarter 2018 Earnings Release (continued) (all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)
Income Statement Data
	Three Months Ended Mar. 31,
	2018		2017
Total interest income(5)	$	73,833	$	60,883
Total interest expense		6,168		4,445
Net interest income		67,665		56,438
Provision for loan and lease losses		17,255		12,351
Noninterest income:
Service charges on deposit accounts		3,555		3,247
Net refund transfer fees		16,352		15,382
Mortgage banking income		1,020		1,160
Interchange fee income		2,944		2,549
Program fees		1,696		1,091
Increase in cash surrender value of BOLI		371		391
Net gains on OREO		132		142
Other		1,752		1,184
Total noninterest income		27,822		25,146
Noninterest expense:
Salaries and employee benefits		23,834		21,211
Occupancy and equipment, net		6,221		5,967
Communication and transportation		1,382		1,272
Marketing and development		916		1,004
FDIC insurance expense		525		450
Bank franchise tax expense		2,518		2,435
Data processing		2,386		1,652
Interchange related expense		1,284		1,281
Supplies		381		527
OREO expense		45		97
Legal and professional fees		1,043		752
Other		2,787		2,514
Total noninterest expense		43,322		39,162
Income before income tax expense		34,910		30,071
Total income tax expense(1)		7,441		10,054
Net income	$	27,469	$	20,017

Republic Bancorp, Inc. Financial Information First Quarter 2018 Earnings Release (continued) (all amounts other than per share amounts, number of employees and number of banking centers are expressed in thousands unless otherwise noted)
Selected Data and Ratios
	Three Months Ended Mar. 31,
	2018			2017
Per Share Data:
Basic weighted average shares outstanding		20,920			20,915
Diluted weighted average shares outstanding		21,018			20,996
Period-end shares outstanding:
Class A Common Stock		18,645			18,615
Class B Common Stock		2,243			2,243
Book value per share(6)	$	31.27		$	29.76
Tangible book value per share(6)		30.22			28.68
Earnings per share ("EPS"):
Basic EPS - Class A Common Stock	$	1.32		$	0.97
Basic EPS - Class B Common Stock		1.21			0.88
Diluted EPS - Class A Common Stock		1.32			0.96
Diluted EPS - Class B Common Stock		1.20			0.88
Cash dividends declared per Common share:
Class A Common Stock	$	0.242		$	0.209
Class B Common Stock		0.220			0.190
Performance Ratios:
Return on average assets		2.08	%		1.65	%
Return on average equity		17.12			13.12
Efficiency ratio(7)		45			48
Yield on average interest-earning assets(5)		6.01			5.39
Cost of average interest-bearing liabilities		0.76			0.58
Cost of average deposits(8)		0.36			0.22
Net interest spread(5)		5.25			4.81
Net interest margin - Total Company(5)		5.50			4.99
Net interest margin - Core Bank(3)		3.55			3.33
Other Information:
End of period FTEs(9) - Total Company		1,003			973
End of period FTEs - Core Bank		922			901
Number of full-service banking centers		45			45

Republic Bancorp, Inc. Financial Information First Quarter 2018 Earnings Release (continued) (all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)
Credit Quality Data and Ratios	As of and for the
	Three Months Ended Mar. 31,
	2018			2017
Credit Quality Asset Balances:
Nonperforming Assets - Total Company:
Loans on nonaccrual status	$	14,849		$	16,793
Loans past due 90-days-or-more and still on accrual		1,279			203
Total nonperforming loans		16,128			16,996
OREO		160			1,362
Total nonperforming assets	$	16,288		$	18,358
Nonperforming Assets - Core Bank(3):
Loans on nonaccrual status	$	14,849		$	16,793
Loans past due 90-days-or-more and still on accrual		27			81
Total nonperforming loans		14,876			16,874
OREO		160			1,362
Total nonperforming assets	$	15,036		$	18,236
Delinquent loans:
Delinquent loans - Core Bank	$	8,303		$	5,952
Delinquent loans - RPG(2)(10)		17,530			10,211
Total delinquent loans - Total Company	$	25,833		$	16,163
Credit Quality Ratios - Total Company:
Nonperforming loans to total loans		0.40	%		0.46	%
Nonperforming assets to total loans (including OREO)		0.40			0.49
Nonperforming assets to total assets		0.32			0.39
Allowance for loan and lease losses to total loans		1.29			1.14
Allowance for loan and lease losses to nonperforming loans		325			249
Delinquent loans to total loans(4)(10)		0.64			0.44
Net charge-offs to average loans (annualized)		0.75			0.31
Credit Quality Ratios - Core Bank:
Nonperforming loans to total loans		0.37	%		0.46	%
Nonperforming assets to total loans (including OREO)		0.38			0.50
Nonperforming assets to total assets		0.31			0.40
Allowance for loan and lease losses to total loans		0.77			0.76
Allowance for loan and lease losses to nonperforming loans		205			166
Delinquent loans to total loans		0.21			0.16
Net charge-offs to average loans (annualized)		0.06			0.02

Republic Bancorp, Inc. Financial Information First Quarter 2018 Earnings Release (continued) (all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)
Balance Sheet Data
	Quarterly Comparison
	Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017			Mar. 31, 2017
Assets:
Cash and cash equivalents	$	362,122		$	299,351		$	329,862		$	332,695		$	206,187
Investment securities		483,573			591,458			523,896			525,684			578,130
Loans held for sale		14,295			16,989			13,135			11,756			10,292
Loans		4,052,500			4,014,034			3,957,512			3,916,320			3,710,376
Allowance for loan and lease losses		(52,341	)		(42,769	)		(40,191	)		(37,898	)		(42,362	)
Loans, net		4,000,159			3,971,265			3,917,321			3,878,422			3,668,014
Federal Home Loan Bank stock, at cost		32,067			32,067			32,067			32,067			28,208
Premises and equipment, net		46,792			45,605			44,845			44,255			43,962
Goodwill		16,300			16,300			16,300			16,300			16,300
Other real estate owned		160			115			167			300			1,362
Bank owned life insurance		63,727			63,356			62,972			62,578			62,185
Other assets and accrued interest receivable		59,139			48,856			52,609			51,604			50,152
Total assets	$	5,078,334		$	5,085,362		$	4,993,174		$	4,955,661		$	4,664,792
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	1,241,127		$	1,022,042		$	1,040,414		$	1,061,637		$	1,070,237
Interest-bearing		2,476,496			2,411,116			2,309,315			2,072,301			2,278,547
Total deposits		3,717,623			3,433,158			3,349,729			3,133,938			3,348,784
Securities sold under agreements to repurchase and other short-term borrowings		175,682			204,021			173,311			113,334			144,375
Federal Home Loan Bank advances		440,000			737,500			757,500			1,002,500			467,500
Subordinated note		41,240			41,240			41,240			41,240			41,240
Other liabilities and accrued interest payable		50,535			37,392			38,107			37,758			42,229
Total liabilities		4,425,080			4,453,311			4,359,887			4,328,770			4,044,128
Stockholders' equity		653,254			632,051			633,287			626,891			620,664
Total liabilities and Stockholders' equity	$	5,078,334		$	5,085,362		$	4,993,174		$	4,955,661		$	4,664,792
Average Balance Sheet Data
	Quarterly Comparison
	Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017			Mar. 31, 2017
Assets:
Investment securities, including FHLB stock	$	552,760		$	559,381		$	552,821		$	597,818		$	586,621
Federal funds sold and other interest-earning deposits		283,161			229,638			208,688			130,650			184,007
Loans and fees, including loans held for sale		4,082,050			3,967,211			3,875,420			3,730,379			3,749,738
Total interest-earning assets		4,917,971			4,756,230			4,636,929			4,458,847			4,520,366
Total assets		5,278,204			4,953,134			4,834,653			4,668,048			4,847,700
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits	$	1,319,860		$	1,045,939		$	1,052,162		$	1,063,215		$	1,132,591
Interest-bearing deposits		2,416,142			2,383,196			2,249,436			2,224,127			2,212,219
Securities sold under agreements to repurchase and other short-term borrowings		257,439			271,434			208,160			179,594			218,412
Federal Home Loan Bank advances		545,778			537,326			618,750			500,027			598,167
Subordinated note		41,240			41,240			41,240			41,240			41,240
Total interest-bearing liabilities		3,260,599			3,233,196			3,117,586			2,944,988			3,070,038
Stockholders' equity		641,619			640,686			633,874			627,940			610,429

Republic Bancorp, Inc. Financial Information First Quarter 2018 Earnings Release (continued) (all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)
Income Statement Data
	Three Months Ended
	Mar. 31, 2018		Dec. 31, 2017			Sep. 30, 2017		Jun. 30, 2017		Mar. 31, 2017
Total interest income(5)	$	73,833	$	56,349		$	53,725	$	47,821	$	60,883
Total interest expense		6,168		5,711			5,418		4,684		4,445
Net interest income		67,665		50,638			48,307		43,137		56,438
Provision for loan and lease losses		17,255		6,071			4,221		5,061		12,351
Noninterest income:
Service charges on deposit accounts		3,555		3,325			3,395		3,390		3,247
Net refund transfer fees		16,352		171			177		2,770		15,382
Mortgage banking income		1,020		935			1,102		1,445		1,160
Interchange fee income		2,944		2,817			2,711		2,759		2,549
Program fees		1,696		1,851			1,597		1,284		1,091
Increase in cash surrender value of BOLI		371		384			394		393		391
Losses on available-for-sale debt securities		—		(136	)		—		—		—
Net gains on OREO		132		254			31		249		142
Other		1,752		873			1,203		849		1,184
Total noninterest income		27,822		10,474			10,610		13,139		25,146
Noninterest expense:
Salaries and employee benefits		23,834		20,502			20,505		20,015		21,211
Occupancy and equipment, net		6,221		6,518			6,806		5,903		5,967
Communication and transportation		1,382		1,261			1,239		939		1,272
Marketing and development		916		1,098			1,677		1,409		1,004
FDIC insurance expense		525		328			300		300		450
Bank franchise tax expense		2,518		652			749		790		2,435
Data processing		2,386		2,606			1,795		1,695		1,652
Interchange related expense		1,284		1,215			1,164		1,283		1,281
Supplies		381		565			241		261		527
OREO expense		45		104			55		132		97
Legal and professional fees		1,043		616			446		596		752
Other		2,787		2,964			3,285		2,623		2,514
Total noninterest expense		43,322		38,429			38,262		35,946		39,162
Income before income tax expense		34,910		16,612			16,434		15,269		30,071
Total income tax expense(1)		7,441		11,774			5,728		5,198		10,054
Net income	$	27,469	$	4,838		$	10,706	$	10,071	$	20,017

Republic Bancorp, Inc. Financial Information First Quarter 2018 Earnings Release (continued) (all amounts other than per share amounts, number of employees and number of banking centers are expressed in thousands unless otherwise noted)
Selected Data and Ratios
	As of and for the Three Months Ended
	Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017			Mar. 31, 2017
Per Share Data:
Basic weighted average shares outstanding		20,920			21,149			21,153			21,151			20,915
Diluted weighted average shares outstanding		21,018			21,258			21,236			21,230			20,996
Period-end shares outstanding:
Class A Common Stock		18,645			18,607			18,618			18,618			18,615
Class B Common Stock		2,243			2,243			2,243			2,243			2,243
Book value per share(6)	$	31.27		$	30.31		$	30.36		$	30.05		$	29.76
Tangible book value per share(6)		30.22			29.25			29.29			28.98			28.68
Earnings per share ("EPS"):
Basic EPS - Class A Common Stock	$	1.32		$	0.23		$	0.51		$	0.48		$	0.97
Basic EPS - Class B Common Stock		1.21			0.21			0.47			0.44			0.88
Diluted EPS - Class A Common Stock		1.32			0.23			0.51			0.48			0.96
Diluted EPS - Class B Common Stock		1.20			0.21			0.47			0.44			0.88
Cash dividends declared per Common share:
Class A Common Stock	$	0.242		$	0.220		$	0.220		$	0.220		$	0.209
Class B Common Stock		0.220			0.200			0.200			0.200			0.190
Performance Ratios:
Return on average assets		2.08	%		0.39	%		0.89	%		0.86	%		1.65	%
Return on average equity		17.12			3.02			6.76			6.42			13.12
Efficiency ratio(7)		45			63			65			64			48
Yield on average interest-earning assets(5)		6.01			4.74			4.63			4.29			5.39
Cost of average interest-bearing liabilities		0.76			0.71			0.70			0.64			0.58
Cost of average deposits(8)		0.36			0.35			0.31			0.28			0.22
Net interest spread(5)		5.25			4.03			3.93			3.65			4.81
Net interest margin - Total Company(5)		5.50			4.26			4.17			3.87			4.99
Net interest margin - Core Bank(3)		3.55			3.72			3.68			3.46			3.33
Other Information:
End of period FTEs(9) - Total Company		1,003			997			970			976			973
End of period FTEs - Core Bank		922			915			896			904			901
Number of full-service banking centers		45			45			45			45			45

Republic Bancorp, Inc. Financial Information First Quarter 2018 Earnings Release (continued) (all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)
Credit Quality Data and Ratios
	As of and for the Three Months Ended
	Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017			Mar. 31, 2017
Credit Quality Asset Balances:
Nonperforming Assets - Total Company:
Loans on nonaccrual status	$	14,849		$	14,118		$	15,475		$	15,467		$	16,793
Loans past due 90-days-or-more and still on accrual		1,279			956			906			335			203
Total nonperforming loans		16,128			15,074			16,381			15,802			16,996
OREO		160			115			167			300			1,362
Total nonperforming assets	$	16,288		$	15,189		$	16,548		$	16,102		$	18,358
Nonperforming Assets - Core Bank(3):
Loans on nonaccrual status	$	14,849		$	14,118		$	15,475		$	15,467		$	16,793
Loans past due 90-days-or-more and still on accrual		27			19			55			33			81
Total nonperforming loans		14,876			14,137			15,530			15,500			16,874
OREO		160			115			167			300			1,362
Total nonperforming assets	$	15,036		$	14,252		$	15,697		$	15,800		$	18,236
Delinquent Loans:
Delinquent loans - Core Bank	$	8,303		$	8,460		$	7,756		$	6,844		$	5,952
Delinquent loans - RPG(2)(10)		17,530			5,641			4,270			2,169			10,211
Total delinquent loans - Total Company	$	25,833		$	14,101		$	12,026		$	9,013		$	16,163
Credit Quality Ratios - Total Company:
Nonperforming loans to total loans		0.40	%		0.38	%		0.41	%		0.40	%		0.46	%
Nonperforming assets to total loans (including OREO)		0.40			0.38			0.42			0.41			0.49
Nonperforming assets to total assets		0.32			0.30			0.33			0.32			0.39
Allowance for loan and lease losses to total loans		1.29			1.07			1.02			0.97			1.14
Allowance for loan and lease losses to nonperforming loans		325			284			245			240			249
Delinquent loans to total loans(4)(10)		0.64			0.35			0.30			0.23			0.44
Net charge-offs to average loans (annualized)		0.75			0.35			0.20			1.02			0.31
Credit Quality Ratios - Core Bank:
Nonperforming loans to total loans		0.37	%		0.36	%		0.40	%		0.40	%		0.46	%
Nonperforming assets to total loans (including OREO)		0.38			0.36			0.40			0.41			0.50
Nonperforming assets to total assets		0.31			0.28			0.32			0.32			0.40
Allowance for loan and lease losses to total loans		0.77			0.77			0.76			0.76			0.76
Allowance for loan and lease losses to nonperforming loans		205			213			190			189			166
Delinquent loans to total loans		0.21			0.21			0.20			0.18			0.16
Net charge-offs to average loans (annualized)		0.06			0.06			0.03			0.05			0.02

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

Segment Data:

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

As of March 31, 2018, the Company was divided into five reportable segments: Traditional Banking, Warehouse Lending (“Warehouse”), Mortgage Banking, Tax Refund Solutions (“TRS”), and Republic Credit Solutions (“RCS”). Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last two segments collectively constitute Republic Processing Group (“RPG) operations. The Bank’s Correspondent Lending channel and the Company’s national branchless banking platform, MemoryBank^®, are considered part of the Traditional Banking segment.

Prior to the third quarter of 2017, management reported RPG as a segment consisting of its largest division, TRS, along with its relatively smaller divisions, Republic Payment Solutions (“RPS”), and RCS. During the third quarter of 2017, due to RCS’s growth in revenues relative to the total Company’s revenues, management identified TRS and RCS as separate reportable segments under the newly classified RPG operations. Also, as part of the updated segmentation, management will report the RPS division, which remained below thresholds to be classified a separate reportable segment, within the newly classified TRS segment. The reportable segments within RPG operations and divisions within those segments operate through the Bank. All prior periods have been reclassified to conform to the current presentation.

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

Reportable Segment:	Nature of Operations:	Primary Drivers of Net 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 United States.	Mortgage warehouse lines of credit.
Mortgage Banking	Primarily originates, sells and services long-term, single family, first lien residential real estate loans primarily to clients in the Bank's market footprint.	Loan sales and servicing.
Republic Processing Group:
Tax Refund Solutions	TRS offers tax-related credit products and facilitates the receipt and payment of federal and state tax refund products. The RPS division of TRS offers general-purpose reloadable cards. TRS and RPS products are primarily provided to clients outside of the Bank’s market footprint.	Loans, refund transfers, and prepaid cards.
Republic Credit Solutions	Offers short-term credit products. RCS products are primarily provided to clients outside of the Bank’s market footprint, with a substantial portion of RCS clients considered subprime or near prime borrowers.	Unsecured small-dollar, consumer loans.

The accounting policies used for Republic’s reportable segments are the same as those described in the summary of significant accounting policies in the Company’s 2017 Annual Report on Form 10-K. Segment performance is evaluated using operating income. Goodwill is allocated to the Traditional Banking segment. 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 First Quarter 2018 Earnings Release (continued) Segment information for the three months ended March 31, 2018 and 2017 follows:
		Three Months Ended March 31, 2018
		Core Banking											Republic Processing Group ("RPG")
											Total			Tax			Republic
		Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)		Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	38,188		$	3,591		$	72		$	41,851		$	18,686		$	7,128		$	25,814		$	67,665
Provision for loan and lease losses		939			21			—			960			13,389			2,906			16,295			17,255
Net refund transfer fees		—			—			—			—			16,352			—			16,352			16,352
Mortgage banking income		—			—			1,020			1,020			—			—			—			1,020
Program fees		—			—			—			—			59			1,637			1,696			1,696
Other noninterest income		7,279			8			38			7,325			1,110			319			1,429			8,754
Total noninterest income		7,279			8			1,058			8,345			17,521			1,956			19,477			27,822
Total noninterest expense		33,669			839			1,204			35,712			6,525			1,085			7,610			43,322
Income (loss) before income tax expense		10,859			2,739			(74	)		13,524			16,293			5,093			21,386			34,910
Total income tax expense (benefit)		1,772			627			(16	)		2,383			3,854			1,204			5,058			7,441
Net income (loss)	$	9,087		$	2,112		$	(58	)	$	11,141		$	12,439		$	3,889		$	16,328		$	27,469
Segment period-end assets	$	4,344,341		$	534,545		$	9,864		$	4,888,750		$	129,395		$	60,189		$	189,584		$	5,078,334
Net interest margin		3.59	%		3.21	%		NM			3.55	%		NM			NM			NM			5.50	%
Net-revenue concentration*		47	%		4	%		1	%		52	%		38	%		10	%		48	%		100	%
		Three Months Ended March 31, 2017
		Core Banking											Republic Processing Group ("RPG")
											Total			Tax			Republic
		Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)		Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	32,661		$	3,900		$	67		$	36,628		$	14,962		$	4,848		$	19,810		$	56,438
Provision for loan and lease losses		467			(226	)		—			241			8,341			3,769			12,110			12,351
Net refund transfer fees		—			—			—			—			15,382			—			15,382			15,382
Mortgage banking income		—			—			1,160			1,160			—			—			—			1,160
Program fees		—			—			—			—			(17	)		1,108			1,091			1,091
Other noninterest income		6,742			6			12			6,760			68			685			753			7,513
Total noninterest income		6,742			6			1,172			7,920			15,433			1,793			17,226			25,146
Total noninterest expense		30,311			777			1,214			32,302			6,069			791			6,860			39,162
Income before income tax expense		8,625			3,355			25			12,005			15,985			2,081			18,066			30,071
Income tax expense		2,262			1,227			9			3,498			5,801			755			6,556			10,054
Net income	$	6,363		$	2,128		$	16		$	8,507		$	10,184		$	1,326		$	11,510		$	20,017
Segment period-end assets	$	4,017,173		$	493,127		$	15,080		$	4,525,380		$	108,858		$	30,554		$	139,412		$	4,664,792
Net interest margin		3.30	%		3.57	%		NM			3.33	%		NM			NM			NM			4.99	%
Net-revenue concentration*		48	%		5	%		2	%		55	%		37	%		8	%		45	%		100	%
*Net revenues represent total net interest income plus noninterest income.

Republic Bancorp, Inc. Financial Information
First Quarter 2018 Earnings Release (continued)
	(1)	The 2017 Tax Cuts and Jobs Act (“TCJA”) was enacted on December 22, 2017 and, among other things, lowered the federal corporate tax rate from 35% to 21%, effective January 1, 2018. With the first quarter of 2018 and the fourth quarter of 2017 largely impacted by the TCJA, the Company’s effective tax rate per quarter was as follows: 21.3% (quarter ended March 31, 2018); 70.9% (quarter ended December 31, 2017); 34.9% (quarter ended September 30, 2017); 34.0% (quarter ended June 30, 2017); and 33.4% (quarter ended March 31, 2017).
		The relatively high effective tax rate for the fourth quarter of 2017 was driven by a $6.3 million charge to income tax expense due to the remeasurement of the Company’s deferred tax assets and liabilities at a 21% corporate tax rate.
	(2)	Republic Processing Group operations consist of the Tax Refund Solutions and Republic Credit Solutions segments.
	(3)	“Core Bank” or “Core Banking” operations consist of the Traditional Banking, Warehouse Lending, and Mortgage Banking segments.
	(4)	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.
	(5)	The amount of loan fee income can meaningfully impact total interest income, loan yields, net interest margin, and net interest spread. The amount of loan fee income included in total interest income per quarter was as follows: $26.9 million (quarter ended March 31, 2018); $9.4 million (quarter ended December 31, 2017); $9.1 million (quarter ended September 30, 2017); $6.4 million (quarter ended June 30, 2017); and $21.3 million (quarter ended March 31, 2017).
		Interest income for Easy Advances (“EAs”) is composed entirely of loan fees. The loan fees disclosed above included EA fees of $17.8 million and $14.2 million for the quarters ended March 31, 2018 and 2017. EAs are only offered during the first two months of each year.
	(6)	The following table provides a reconciliation of total stockholders’ equity in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) to tangible stockholders’ equity in accordance with applicable regulatory requirements, a non-GAAP disclosure. The Company provides the tangible book value per share, a non-GAAP measure, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy.

	Quarterly Comparison
(dollars in thousands, except per share data)	Mar. 31, 2018			Dec. 31, 2017				Sep. 30, 2017			Jun. 30, 2017			Mar. 31, 2017
Total stockholders' equity - GAAP (a)	$	653,254		$	632,051		$	633,287		$	626,891		$	620,664
Less: Goodwill		16,300			16,300			16,300			16,300			16,300
Less: Mortgage servicing rights		4,925			5,044			5,128			5,159			5,158
Less: Core deposit intangible		807			858			911			964			1,017
Tangible stockholders' equity - Non-GAAP (c)	$	631,222		$	609,849		$	610,948		$	604,468		$	598,189
Total assets - GAAP (b)	$	5,078,334		$	5,085,362		$	4,993,174		$	4,955,661		$	4,664,792
Less: Goodwill		16,300			16,300			16,300			16,300			16,300
Less: Mortgage servicing rights		4,925			5,044			5,128			5,159			5,158
Less: Core deposit intangible		807			858			911			964			1,017
Tangible assets - Non-GAAP (d)	$	5,056,302		$	5,063,160		$	4,970,835		$	4,933,238		$	4,642,317
Total stockholders' equity to total assets - GAAP (a/b)		12.86	%		12.43	%		12.68	%		12.65	%		13.31	%
Tangible stockholders' equity to tangible assets - Non-GAAP (c/d)		12.48	%		12.04	%		12.29	%		12.25	%		12.89	%
Number of shares outstanding (e)		20,888			20,850			20,861			20,861			20,858
Book value per share - GAAP (a/e)	$	31.27		$	30.31		$	30.36		$	30.05		$	29.76
Tangible book value per share - Non-GAAP (c/e)		30.22			29.25			29.29			28.98			28.68

	(7)	The efficiency ratio, a non-GAAP measure, equals total noninterest expense divided by the sum of net interest income and noninterest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities, if applicable.
	(8)	The cost of average deposits ratio equals annualized total interest expense on deposits divided by total average interest-bearing deposits plus total average noninterest-bearing deposits.
	(9)	FTEs – Full-time-equivalent employees.
	(10)	Delinquent loans for the RPG segment included $13 million and $8 million of EAs at March 31, 2018 and March 31, 2017. EAs were only offered during the first two months of 2018 and 2017. EAs do not have a contractual due date but are eligible for delinquency consideration three weeks after the taxpayer-customer’s tax return is submitted to the applicable tax authority. All unpaid EAs are charged-off by the end of the second quarter of each year.
NM – Not meaningful

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