Republic Bancorp (RBCAA) 8-K Results of Operations and Financial Condition

Exhibit 99.2

EARNINGS RELEASE FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

TABLE OF CONTENTS

YEAR TO YEAR COMPARISON	S-2
Balance Sheet Data	S-2
Average Balance Sheet Data	S-2
Income Statement Data	S-3
Selected Data and Ratios	S-4
Credit Quality Data and Ratios	S-5
QUARTERLY COMPARISON	S-6
Balance Sheet Data	S-6
Average Balance Sheet Data	S-6
Income Statement Data	S-7
Selected Data and Ratios	S-8
Credit Quality Data and Ratios	S-9
SEGMENT DATA	S-10
Quarter to Date Income Statement by Segment	S-11
Year to Date Income Statement by Segment	S-12
FOOTNOTES	S-13

S-1

Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020

(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

Balance Sheet Data
	Sep. 30, 2020			Dec. 31, 2019			Sep. 30, 2019
Assets:
Cash and cash equivalents	$	342,028		$	385,303		$	397,072
Investment securities, net of allowance for credit losses (1)		607,556			537,074			638,697
Loans held for sale		56,752			31,468			51,243
Loans held for sale upon branch divestiture		—			—			130,770
Loans		4,994,374			4,433,151			4,664,054
Allowance for credit losses (1)		(59,891	)		(43,351	)		(46,932	)
Loans, net		4,934,483			4,389,800			4,617,122
Federal Home Loan Bank stock, at cost		19,634			30,831			32,242
Premises and equipment, net		40,946			46,196			46,735
Right-of-use assets		43,643			35,206			36,051
Goodwill		16,300			16,300			16,300
Other real estate owned ("OREO")		2,056			113			119
Bank owned life insurance ("BOLI")		67,617			66,433			66,037
Other assets and accrued interest receivable		109,431			81,595			71,259
Total assets	$	6,240,446		$	5,620,319		$	6,103,647
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	1,876,418		$	1,033,379		$	1,031,553
Interest-bearing		3,115,911			2,752,629			2,703,199
Deposits held for assumption upon branch divestiture		—			—			142,384
Total deposits		4,992,329			3,786,008			3,877,136
Securities sold under agreements to repurchase and other short-term borrowings		126,172			167,617			167,949
Operating lease liabilities		44,710			36,530			37,391
Federal Home Loan Bank advances		132,500			750,000			1,170,000
Subordinated note		41,240			41,240			41,240
Other liabilities and accrued interest payable		93,133			74,680			65,484
Total liabilities		5,430,084			4,856,075			5,359,200
Stockholders' equity		810,362			764,244			744,447
Total liabilities and stockholders' equity	$	6,240,446		$	5,620,319		$	6,103,647

Average Balance Sheet Data
	Three Months Ended Sep. 30,				Nine Months Ended Sep. 30,
	2020		2019		2020		2019
Assets:
Federal funds sold and other interest-earning deposits	$	313,281	$	302,156	$	273,604	$	296,474
Investment securities, including FHLB stock		600,943		547,281		575,575		541,739
Loans, including loans held for sale		4,907,106		4,606,139		4,756,507		4,430,518
Total interest-earning assets		5,821,330		5,455,576		5,605,686		5,268,731
Total assets		6,152,043		5,711,636		5,958,513		5,557,116
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits, including those held for assumption	$	1,846,552	$	1,065,904	$	1,598,635	$	1,140,355
Interest-bearing deposits, including those held for assumption		2,939,063		2,833,632		2,891,966		2,684,825
Securities sold under agreements to
repurchase and other short-term borrowings		213,010		246,889		199,556		232,949
Federal Reserve Paycheck Protection Program Liquidity Facility		53,338		—		58,683		—
Federal Home Loan Bank advances		126,250		690,457		253,157		638,237
Subordinated note		41,240		41,240		41,240		41,240
Total interest-bearing liabilities		3,372,901		3,812,218		3,444,602		3,597,251
Stockholders' equity		811,351		742,176		795,883		726,019

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

Income Statement Data
	Three Months Ended Sep. 30,						Nine Months Ended Sep. 30,
	2020			2019			2020			2019
Total interest income (2)	$	56,038		$	68,059		$	194,288		$	216,356
Total interest expense		3,786			12,573			17,093			34,625
Net interest income		52,252			55,486			177,195			181,731
Provision for expected credit loss expense (1)		1,500			3,153			30,794			24,844
Noninterest income:
Service charges on deposit accounts		3,017			3,749			8,604			10,650
Net refund transfer fees		1,152			317			19,888			21,046
Mortgage banking income		10,775			3,064			23,968			7,019
Interchange fee income		2,911			3,031			8,271			9,045
Program fees		1,487			1,317			5,249			3,428
Increase in cash surrender value of BOLI		400			394			1,184			1,154
Net gains on OREO		(14	)		267			(10	)		487
Net gain (loss) on branch divestiture		—			(119	)		—			(119	)
Other		869			791			2,763			2,643
Total noninterest income		20,597			12,811			69,917			55,353
Noninterest expense:
Salaries and employee benefits		26,667			24,822			79,613			75,184
Occupancy and equipment, net		6,780			6,571			20,341			19,627
Communication and transportation		1,147			1,017			3,789			3,249
Marketing and development		919			1,420			2,770			3,800
FDIC insurance expense		345			—			644			743
Bank franchise tax expense		974			935			4,394			4,366
Data processing		3,340			2,344			8,632			6,657
Interchange related expense		1,056			1,138			3,305			3,755
Supplies		326			292			1,317			1,358
Other real estate owned and other repossession expense		6			130			45			324
Legal and professional fees		1,248			1,026			3,510			2,756
Other		2,715			2,716			8,957			9,529
Total noninterest expense		45,523			42,411			137,317			131,348
Income before income tax expense		25,826			22,733			79,001			80,892
Income tax expense		5,437			4,325			16,111			14,961
Net income	$	20,389		$	18,408		$	62,890		$	65,931

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

Selected Data and Ratios
	Three Months Ended Sep. 30,						Nine Months Ended Sep. 30,
	2020			2019			2020			2019
Per Share Data:
Basic weighted average shares outstanding		21,026			21,036			21,031			21,014
Diluted weighted average shares outstanding		21,046			21,137			21,068			21,132
Period-end shares outstanding:
Class A Common Stock		18,715			18,744			18,715			18,744
Class B Common Stock		2,200			2,208			2,200			2,208
Book value per share (3)	$	38.75		$	35.53		$	38.75		$	35.53
Tangible book value per share (3)		37.63			34.47			37.63			34.47
Earnings per share ("EPS"):
Basic EPS - Class A Common Stock	$	0.98		$	0.88		$	3.02		$	3.17
Basic EPS - Class B Common Stock		0.89			0.80			2.75			2.88
Diluted EPS - Class A Common Stock		0.98			0.88			3.02			3.15
Diluted EPS - Class B Common Stock		0.89			0.80			2.74			2.87
Cash dividends declared per Common share:
Class A Common Stock	$	0.286		$	0.264		$	0.858		$	0.792
Class B Common Stock		0.260			0.240			0.780			0.720
Performance Ratios:
Return on average assets		1.33	%		1.29	%		1.41	%		1.58	%
Return on average equity		10.05			9.92			10.54			12.11
Efficiency ratio (4)		62			62			56			55
Yield on average interest-earning assets (2)		3.85			4.99			4.62			5.48
Cost of average interest-bearing liabilities		0.45			1.32			0.66			1.28
Cost of average deposits (5)		0.24			0.82			0.38			0.76
Net interest spread (2)		3.40			3.67			3.96			4.20
Net interest margin - Total Company (2)		3.59			4.07			4.21			4.60
Net interest margin - Core Bank (6)		3.25			3.56			3.37			3.63
Other Information:
End of period FTEs (7) - Total Company		1,085			1,093			1,085			1,093
End of period FTEs - Core Bank		993			1,013			993			1,013
Number of full-service banking centers		42			45			42			45

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

Credit Quality Data and Ratios	As of and for the						As of and for the
	Three Months Ended Sep. 30,						Nine Months Ended Sep. 30,
	2020			2019			2020			2019
Credit Quality Asset Balances:
Nonperforming Assets - Total Company:
Loans on nonaccrual status	$	20,910		$	20,574		$	20,910		$	20,574
Loans past due 90-days-or-more and still on accrual		175			175			175			175
Total nonperforming loans		21,085			20,749			21,085			20,749
OREO		2,056			119			2,056			119
Total nonperforming assets	$	23,141		$	20,868		$	23,141		$	20,868
Nonperforming Assets - Core Bank (6):
Loans on nonaccrual status	$	20,910		$	20,574		$	20,910		$	20,574
Loans past due 90-days-or-more and still on accrual		—			—			—			—
Total nonperforming loans		20,910			20,574			20,910			20,574
OREO		2,056			119			2,056			119
Total nonperforming assets	$	22,966		$	20,693		$	22,966		$	20,693
Delinquent loans:
Delinquent loans - Core Bank	$	11,069		$	13,496		$	11,069		$	13,496
Delinquent loans - RPG (8)		5,984			6,876			5,984			6,876
Total delinquent loans - Total Company	$	17,053		$	20,372		$	17,053		$	20,372
Credit Quality Ratios - Total Company:
Nonperforming loans to total loans		0.42	%		0.44	%		0.42	%		0.44	%
Nonperforming assets to total loans (including OREO)		0.46			0.45			0.46			0.45
Nonperforming assets to total assets		0.37			0.34			0.37			0.34
Allowance for credit losses to total loans		1.20			1.01			1.20			1.01
Allowance for credit losses to nonperforming loans		284			226			284			226
Delinquent loans to total loans (9)		0.34			0.44			0.34			0.44
Net charge-offs (recoveries) to average loans (annualized)		(0.27	)		0.19			0.58			0.68
Credit Quality Ratios - Core Bank:
Nonperforming loans to total loans		0.43	%		0.45	%		0.43	%		0.45	%
Nonperforming assets to total loans (including OREO)		0.47			0.45			0.47			0.45
Nonperforming assets to total assets		0.39			0.35			0.39			0.35
Allowance for credit losses to total loans		1.05			0.73			1.05			0.73
Allowance for credit losses to nonperforming loans		245			163			245			163
Delinquent loans to total loans		0.23			0.30			0.23			0.30
Net charge-offs to average loans (annualized)		0.03			0.15			0.01			0.08

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

Balance Sheet Data
	Quarterly Comparison
	Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sep. 30, 2019
Assets:
Cash and cash equivalents	$	342,028		$	560,195		$	316,263		$	385,303		$	397,072
Investment securities, net of allowance for credit losses (1)		607,556			545,607			608,330			537,074			638,697
Loans held for sale		56,752			52,992			54,904			31,468			51,243
Loans held for sale upon branch divestiture		—			—			—			—			130,770
Loans		4,994,374			5,065,092			4,515,599			4,433,151			4,664,054
Allowance for credit losses (1)		(59,891	)		(55,097	)		(70,431	)		(43,351	)		(46,932	)
Loans, net		4,934,483			5,009,995			4,445,168			4,389,800			4,617,122
Federal Home Loan Bank stock, at cost		19,634			25,629			38,900			30,831			32,242
Premises and equipment, net		40,946			42,753			44,215			46,196			46,735
Right-of-use assets		43,643			34,450			34,349			35,206			36,051
Goodwill		16,300			16,300			16,300			16,300			16,300
Other real estate owned		2,056			2,194			85			113			119
Bank owned life insurance		67,617			67,217			66,822			66,433			66,037
Other assets and accrued interest receivable		109,431			103,243			96,697			81,595			71,259
Total assets	$	6,240,446		$	6,460,575		$	5,722,033		$	5,620,319		$	6,103,647
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing	$	1,876,418		$	1,821,400		$	1,300,891		$	1,033,379		$	1,031,553
Interest-bearing		3,115,911			3,196,685			2,770,566			2,752,629			2,703,199
Deposits held for assumption upon branch divestiture		—			—			—			—			142,384
Total deposits		4,992,329			5,018,085			4,071,457			3,786,008			3,877,136
Securities sold under agreements to
repurchase and other short-term borrowings		126,172			177,397			126,080			167,617			167,949
Operating lease liabilities		44,710			35,571			35,537			36,530			37,391
Federal Reserve Paycheck Protection Program Liquidity Facility		—			169,209			—			—			—
Federal Home Loan Bank advances		132,500			137,500			572,500			750,000			1,170,000
Subordinated note		41,240			41,240			41,240			41,240			41,240
Other liabilities and accrued interest payable		93,133			85,954			91,173			74,680			65,484
Total liabilities		5,430,084			5,664,956			4,937,987			4,856,075			5,359,200
Stockholders' equity		810,362			795,619			784,046			764,244			744,447
Total liabilities and stockholders' equity	$	6,240,446		$	6,460,575		$	5,722,033		$	5,620,319		$	6,103,647

Average Balance Sheet Data
	Quarterly Comparison
	Sep. 30, 2020		Jun. 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sep. 30, 2019
Assets:
Federal funds sold and other interest-earning deposits	$	313,281	$	299,760	$	207,335	$	152,286	$	302,156
Investment securities, including FHLB stock		600,943		605,776		519,726		632,559	��	547,281
Loans, including loans held for sale		4,907,106		4,867,622		4,493,137		4,588,538		4,606,139
Total interest-earning assets		5,821,330		5,773,158		5,220,198		5,373,383		5,455,576
Total assets		6,152,043		6,094,421		5,626,946		5,638,498		5,711,636
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits, including those held for assumption	$	1,846,552	$	1,697,603	$	1,249,025	$	1,062,010	$	1,065,904
Interest-bearing deposits, including those held for assumption		2,939,063		2,880,988		2,855,332		2,966,993		2,833,632
Securities sold under agreements to
repurchase and other short-term borrowings		213,010		176,541		208,969		248,558		246,889
Federal Reserve Paycheck Protection Program Liquidity Facility		53,338		122,769		—		—		—
Federal Home Loan Bank advances		126,250		263,296		371,319		469,130		690,457
Subordinated note		41,240		41,240		41,240		41,240		41,240
Total interest-bearing liabilities		3,372,901		3,484,834		3,476,860		3,725,921		3,812,218
Stockholders' equity		811,351		797,227		778,900		758,740		742,176

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

Income Statement Data
	Three Months Ended
	Sep. 30, 2020			Jun. 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sep. 30, 2019
Total interest income (2)	$	56,038		$	57,091	$	81,159	$	64,527	$	68,059
Total interest expense		3,786			4,886		8,421		10,132		12,573
Net interest income		52,252			52,205		72,738		54,395		55,486
Provision for expected credit loss expense (1)		1,500			6,534		22,760		914		3,153
Noninterest income:
Service charges on deposit accounts		3,017			2,451		3,136		3,547		3,749
Net refund transfer fees		1,152			2,913		15,823		112		317
Mortgage banking income		10,775			8,398		4,795		2,480		3,064
Interchange fee income		2,911			2,808		2,552		2,814		3,031
Program fees		1,487			1,138		2,624		1,284		1,317
Increase in cash surrender value of BOLI		400			395		389		397		394
Net gains on OREO		(14	)		1		3		53		267
Net gain (loss) on branch divestiture		—			—		—		7,948		(119	)
Other		869			647		1,247		1,020		791
Total noninterest income		20,597			18,751		30,569		19,655		12,811
Noninterest expense:
Salaries and employee benefits		26,667			26,324		26,622		23,997		24,822
Occupancy and equipment, net		6,780			6,715		6,846		6,497		6,571
Communication and transportation		1,147			1,353		1,289		1,198		1,017
Marketing and development		919			1,018		833		1,223		1,420
FDIC insurance expense		345			299		—		—		—
Bank franchise tax expense		974			914		2,506		927		935
Data processing		3,340			2,753		2,539		2,532		2,344
Interchange related expense		1,056			1,173		1,076		1,115		1,138
Supplies		326			539		452		335		292
OREO expense		6			21		18		2		130
Legal and professional fees		1,248			1,025		1,237		601		1,026
Other		2,715			2,691		3,551		2,408		2,716
Total noninterest expense		45,523			44,825		46,969		40,835		42,411
Income before income tax expense		25,826			19,597		33,578		32,301		22,733
Income tax expense		5,437			3,793		6,881		6,533		4,325
Net income	$	20,389		$	15,804	$	26,697	$	25,768	$	18,408

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

Selected Data and Ratios
	��	As of and for the Three Months Ended
		Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sep. 30, 2019
Per Share Data:
Basic weighted average shares outstanding			21,026			21,004			21,035			21,036			21,036
Diluted weighted average shares outstanding			21,046			21,029			21,094			21,133			21,137
Period-end shares outstanding:
Class A Common Stock			18,715			18,708			18,687			18,737			18,744
Class B Common Stock			2,200			2,200			2,200			2,206			2,208
Book value per share (3)		$	38.75		$	38.05		$	37.54		$	36.49		$	35.53
Tangible book value per share (3)			37.63			36.93			36.45			35.41			34.47
Earnings per share ("EPS"):
Basic EPS - Class A Common Stock		$	0.98		$	0.77		$	1.29		$	1.23		$	0.88
Basic EPS - Class B Common Stock			0.89			0.69			1.17			1.13			0.80
Diluted EPS - Class A Common Stock			0.98			0.76			1.28			1.23			0.88
Diluted EPS - Class B Common Stock			0.89			0.69			1.16			1.12			0.80
Cash dividends declared per Common share:
Class A Common Stock		$	0.286		$	0.286		$	0.286		$	0.264		$	0.264
Class B Common Stock			0.260			0.260			0.260			0.240			0.240
Performance Ratios:
Return on average assets			1.33	%		1.04	%		1.90	%		1.83	%		1.29	%
Return on average equity			10.05			7.93			13.71			13.58			9.92
Efficiency ratio (4)			62			63			45			62			62
Yield on average interest-earning assets (2)			3.85			3.96			6.22			4.80			4.99
Cost of average interest-bearing liabilities			0.45			0.56			0.97			1.09			1.32
Cost of average deposits (5)			0.24			0.32			0.61			0.74			0.82
Net interest spread (2)			3.40			3.40			5.25			3.71			3.67
Net interest margin - Total Company (2)			3.59			3.62			5.57			4.05			4.07
Net interest margin - Core Bank (6)			3.25			3.23			3.65			3.56			3.56
Other Information:
End of period FTEs (7) - Total Company			1,085			1,094			1,077			1,080			1,093
End of period FTEs - Core Bank			993			1,001			994			997			1,013
Number of full-service banking centers			42			42			42			41			45

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

(all amounts other than per share amounts, number of employees, and number of banking centers are expressed in thousands unless otherwise noted)

Credit Quality Data and Ratios
	As of and for the Three Months Ended
	Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sep. 30, 2019
Credit Quality Asset Balances:
Nonperforming Assets - Total Company:
Loans on nonaccrual status	$	20,910		$	19,884		$	20,358		$	23,332		$	20,574
Loans past due 90-days-or-more and still on accrual		175			535			495			157			175
Total nonperforming loans		21,085			20,419			20,853			23,489			20,749
OREO		2,056			2,194			85			113			119
Total nonperforming assets	$	23,141		$	22,613		$	20,938		$	23,602		$	20,868
Nonperforming Assets - Core Bank (6):
Loans on nonaccrual status	$	20,910		$	19,884		$	20,358		$	23,332		$	20,574
Loans past due 90-days-or-more and still on accrual		—			—			—			—			—
Total nonperforming loans		20,910			19,884			20,358			23,332			20,574
OREO		2,056			2,194			85			113			119
Total nonperforming assets	$	22,966		$	22,078		$	20,443		$	23,445		$	20,693
Delinquent Loans:
Delinquent loans - Core Bank	$	11,069		$	7,861		$	11,863		$	13,042		$	13,496
Delinquent loans - RPG (8) (10)		5,984			6,185			30,764			7,762			6,876
Total delinquent loans - Total Company	$	17,053		$	14,046		$	42,627		$	20,804		$	20,372
Credit Quality Ratios - Total Company:
Nonperforming loans to total loans		0.42	%		0.40	%		0.46	%		0.53	%		0.44	%
Nonperforming assets to total loans (including OREO)		0.46			0.45			0.46			0.53			0.45
Nonperforming assets to total assets		0.37			0.35			0.37			0.42			0.34
Allowance for credit losses to total loans		1.20			1.09			1.56			0.98			1.01
Allowance for credit losses to nonperforming loans		284			270			338			185			226
Delinquent loans to total loans (9) (10)		0.34			0.28			0.94			0.47			0.44
Net charge-offs (recoveries) to average loans (annualized)		(0.27	)		1.80			0.19			0.39			0.19
Credit Quality Ratios - Core Bank:
Nonperforming loans to total loans		0.43	%		0.40	%		0.46	%		0.54	%		0.45	%
Nonperforming assets to total loans (including OREO)		0.47			0.44			0.47			0.54			0.45
Nonperforming assets to total assets		0.39			0.36			0.38			0.43			0.35
Allowance for credit losses to total loans		1.05			0.92			0.97			0.70			0.73
Allowance for credit losses to nonperforming loans		245			230			210			129			163
Delinquent loans to total loans		0.23			0.16			0.27			0.30			0.30
Net charge-offs (recoveries) to average loans (annualized)		0.03			0.04			(0.03	)		0.19			0.15

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Table of Contents

Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

Segment Data:

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

As of September 30, 2020, the Company was divided into five reportable segments: Traditional Banking, Warehouse Lending (“Warehouse”), Mortgage Banking, Tax Refund Solutions (“TRS”), and Republic Credit Solutions (“RCS”). Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last two segments collectively constitute Republic Processing Group (“RPG”) operations. MemoryBank^®, the Company’s national branchless banking platform is part of the Traditional Banking segment.

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

Reportable Segment:	Nature of Operations:	Primary Drivers of Net Revenue:
Core Banking:
Traditional Banking	Provides traditional banking products to clients in its market footprint primarily via its network of banking centers and to clients outside of its market footprint primarily via its digital delivery channels.	Loans, investments, and deposits.
Warehouse Lending	Provides short-term, revolving credit facilities to mortgage bankers across the United States.	Mortgage warehouse lines of credit.
Mortgage Banking	Primarily originates, sells and services long-term, single-family, first-lien residential real estate loans primarily to clients in the Bank's market footprint.	Loan sales and servicing.
Republic Processing Group:
Tax Refund Solutions	TRS offers tax-related credit products and facilitates the receipt and payment of federal and state tax refunds through Refund Transfer products. The RPS division of TRS offers general-purpose reloadable cards. TRS and RPS products are primarily provided to clients outside of the Bank’s market footprint.	Loans, refund transfers, and prepaid cards.
Republic Credit Solutions	Offers consumer credit products. RCS products are primarily provided to clients outside of the Bank’s market footprint, with a substantial portion of RCS clients considered subprime or near-prime borrowers.	Unsecured, consumer loans.

The accounting policies used for Republic’s reportable segments are the same as those described in the summary of significant accounting policies in the Company’s 2019 Annual Report on Form 10-K. Republic evaluates segment performance using operating income. The Company allocates goodwill to the Traditional Banking segment. Republic generally allocates income taxes based on income before income tax expense unless reasonable and specific segment allocations can be made. The Company makes transactions among reportable segments at carrying value.

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Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

Segment information for the three and nine months ended September 30, 2020 and 2019 follows:

	Three Months Ended September 30, 2020
	Core Banking												Republic Processing Group ("RPG")
										Total			Tax			Republic
	Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	38,753		$	7,345		$	300		$	46,398		$	878		$	4,976		$	5,854		$	52,252
Provision for expected credit loss expense		5,857			(3	)		—			5,854			(4,342	)		(12	)		(4,354	)		1,500
Net refund transfer fees		—			—			—			—			1,152			—			1,152			1,152
Mortgage banking income		—			—			10,775			10,775			—			—			—			10,775
Program fees		—			—			—			—			643			844			1,487			1,487
Other noninterest income		7,138			(21	)		21			7,138			45			—			45			7,183
Total noninterest income		7,138			(21	)		10,796			17,913			1,840			844			2,684			20,597
Total noninterest expense		36,415			1,875			2,832			41,122			3,226			1,175			4,401			45,523
Income before income tax expense		3,619			5,452			8,264			17,335			3,834			4,657			8,491			25,826
Income tax expense		558			1,226			1,736			3,520			843			1,074			1,917			5,437
Net income	$	3,061		$	4,226		$	6,528		$	13,815		$	2,991		$	3,583		$	6,574		$	20,389
Period-end assets	$	4,769,848		$	1,026,790		$	61,809		$	5,858,447		$	269,337		$	112,662		$	381,999		$	6,240,446
Net interest margin		3.22	%		3.41	%	NM				3.25	%	NM			NM			NM				3.59	%
Net-revenue concentration*		63	%		10	%		15	%		88	%		4	%		8	%		12	%		100	%

	Three Months Ended September 30, 2019
	Core Banking												Republic Processing Group ("RPG")
										Total			Tax			Republic
	Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	42,879		$	4,329		$	212		$	47,420		$	295		$	7,771		$	8,066		$	55,486
Provision for expected credit loss expense		1,555			620			—			2,175			(2,008	)		2,986			978			3,153
Net refund transfer fees		—			—			—			—			317			—			317			317
Mortgage banking income		—			—			3,064			3,064			—			—			—			3,064
Program fees		—			—			—			—			122			1,195			1,317			1,317
Net gain (loss) on branch divestiture		(119	)		—			—			(119	)		—			—			—			(119	)
Other noninterest income		8,221			(79	)		66			8,208			24			—			24			8,232
Total noninterest income		8,102			(79	)		3,130			11,153			463			1,195			1,658			12,811
Total noninterest expense		35,882			886			1,637			38,405			3,047			959			4,006			42,411
Income (loss) before income tax expense		13,544			2,744			1,705			17,993			(281	)		5,021			4,740			22,733
Income tax expense (benefit)		2,244			617			358			3,219			(67	)		1,173			1,106			4,325
Net income (loss)	$	11,300		$	2,127		$	1,347		$	14,774		$	(214	)	$	3,848		$	3,634		$	18,408
Period-end assets	$	4,960,737		$	973,716		$	40,209		$	5,974,662		$	24,296		$	104,689		$	128,985		$	6,103,647
Net interest margin		3.76	%		2.30	%	NM				3.56	%	NM			NM			NM				4.07	%
Net-revenue concentration*		75	%		6	%		5	%		86	%		1	%		13	%		14	%		100	%

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

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Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

	Nine Months Ended September 30, 2020
	Core Banking												Republic Processing Group ("RPG")
										Total			Tax			Republic
	Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	118,409		$	17,715		$	932		$	137,056		$	22,484		$	17,655		$	40,139		$	177,195
Provision for expected credit loss expense		14,526			778			—			15,304			15,239			251			15,490			30,794
Net refund transfer fees		—			—			—			—			19,888			—			19,888			19,888
Mortgage banking income		—			—			23,968			23,968			—			—			—			23,968
Program fees		—			—			—			—			1,573			3,676			5,249			5,249
Other noninterest income		20,499			7			53			20,559			253			—			253			20,812
Total noninterest income		20,499			7			24,021			44,527			21,714			3,676			25,390			69,917
Total noninterest expense		109,750			3,489			7,517			120,756			13,589			2,972			16,561			137,317
Income before income tax expense		14,632			13,455			17,436			45,523			15,370			18,108			33,478			79,001
Income tax expense		1,747			3,027			3,662			8,436			3,487			4,188			7,675			16,111
Net income	$	12,885		$	10,428		$	13,774		$	37,087		$	11,883		$	13,920		$	25,803		$	62,890
Period-end assets	$	4,769,848		$	1,026,790		$	61,809		$	5,858,447		$	269,337		$	112,662		$	381,999		$	6,240,446
Net interest margin		3.41	%		3.07	%	NM				3.37	%	NM			NM			NM				4.21	%
Net-revenue concentration*		56	%		7	%		10	%		73	%		18	%		9	%		27	%		100	%

	Nine Months Ended September 30, 2019
	Core Banking												Republic Processing Group ("RPG")
										Total			Tax			Republic
	Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	126,103		$	11,181		$	484		$	137,768		$	21,443		$	22,520		$	43,963		$	181,731
Provision for expected credit loss expense		3,171			1,262			—			4,433			11,818			8,593			20,411			24,844
Net refund transfer fees		—			—			—			—			21,046			—			21,046			21,046
Mortgage banking income		—			—			7,019			7,019			—			—			—			7,019
Program fees		—			—			—			—			318			3,110			3,428			3,428
Net gain (loss) on branch divestiture		(119	)		—			—			(119	)		—			—			—			(119	)
Other noninterest income		22,970			(56	)		162			23,076			244			659			903			23,979
Total noninterest income		22,851			(56	)		7,181			29,976			21,608			3,769			25,377			55,353
Total noninterest expense		109,196			2,436			4,311			115,943			13,010			2,395			15,405			131,348
Income before income tax expense		36,587			7,427			3,354			47,368			18,223			15,301			33,524			80,892
Income tax expense		4,753			1,671			704			7,128			4,251			3,582			7,833			14,961
Net income	$	31,834		$	5,756		$	2,650		$	40,240		$	13,972		$	11,719		$	25,691		$	65,931
Period-end assets	$	4,960,737		$	973,716		$	40,209		$	5,974,662		$	24,296		$	104,689		$	128,985		$	6,103,647
Net interest margin		3.75	%		2.49	%	NM				3.63	%	NM			NM			NM				4.60	%
Net-revenue concentration*		63	%		5	%		3	%		71	%		18	%		11	%		29	%		100	%

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

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Republic Bancorp, Inc.

Earnings Release Financial Supplement

Third Quarter 2020 (continued)

Footnotes:

 

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

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

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

 

(2) The amount of loan fee income can meaningfully impact total interest income, loan yields, net interest margin, and net interest spread. The amount of loan fee income included in total interest income was $7.9 million and $9.1 million for the quarters ended September 30, 2020 and 2019. The amount of loan fee income included in total interest income was $44.1 million and $46.0 million for the nine months ended September 30, 2020 and 2019.

 

The amount of loan fee income included in total interest income per quarter was as follows: $7.9 million (quarter ended September 30, 2020); $7.8 million (quarter ended June 30, 2020); $28.5 million (quarter ended March 31, 2020); $8.5 million (quarter ended December 31, 2019); and $9.1 million (quarter ended September 30, 2019).

Included in the above totals, fee income recognized on PPP loans totaled $2.1 million for the quarter and $3.8 million for the nine months ended September 30, 2020.

 

Interest income for Easy Advances (“EAs”) is composed entirely of loan fees. The loan fees disclosed above included EA fees of $19.6 million and $19.1 million for the nine months ended September 30, 2020 and 2019.  EA’s are only offered during the first two months of each year.

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(3) The following table provides a reconciliation of total stockholders’ equity in accordance with GAAP to tangible stockholders’ equity in accordance with applicable regulatory requirements, a non-GAAP disclosure. The Company provides the tangible book value per share, a non-GAAP measure, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy.

	Quarterly Comparison
(dollars in thousands, except per share data)	Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sep. 30, 2019
Total stockholders' equity - GAAP (a)	$	810,362		$	795,619		$	784,046		$	764,244		$	744,447
Less: Goodwill		16,300			16,300			16,300			16,300			16,300
Less: Mortgage servicing rights		6,674			6,711			5,994			5,888			5,483
Less: Core deposit intangible		283			377			423			469			516
Tangible stockholders' equity - Non-GAAP (c)	$	787,105		$	772,231		$	761,329		$	741,587		$	722,148
Total assets - GAAP (b)	$	6,240,446		$	6,460,575		$	5,722,033		$	5,620,319		$	6,103,647
Less: Goodwill		16,300			16,300			16,300			16,300			16,300
Less: Mortgage servicing rights		6,674			6,711			5,994			5,888			5,483
Less: Core deposit intangible		283			377			423			469			516
Tangible assets - Non-GAAP (d)	$	6,217,189		$	6,437,187		$	5,699,316		$	5,597,662		$	6,081,348
Total stockholders' equity to total assets - GAAP (a/b)		12.99	%		12.31	%		13.70	%		13.60	%		12.20	%
Tangible stockholders' equity to tangible assets - Non-GAAP (c/d)		12.66	%		12.00	%		13.36	%		13.25	%		11.87	%
Number of shares outstanding (e)		20,915			20,908			20,887			20,943			20,952
Book value per share - GAAP (a/e)	$	38.75		$	38.05		$	37.54		$	36.49		$	35.53
Tangible book value per share - Non-GAAP (c/e)		37.63			36.93			36.45			35.41			34.47

(4) The efficiency ratio, a non-GAAP measure with no GAAP comparable, equals total noninterest expense divided by the sum of net interest income and noninterest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities and the Company’s net gain from its November 2019 branch divestiture.

	Three Months Ended Sep. 30,						Nine Months Ended Sep. 30,
(dollars in thousands)	2020			2019			2020			2019
Net interest income	$	52,252		$	55,486		$	177,195		$	181,731
Noninterest income		20,597			12,811			69,917			55,353
Less: Net loss on branch divestiture		—			(119	)		—			(119	)
Less: Net gain (loss) on sales, calls, and impairment of debt and equity securities		5			19			5			89
Total adjusted revenue - Non-GAAP (a)	$	72,844		$	68,397		$	247,107		$	237,114
Noninterest expense (b)	$	45,523		$	42,411		$	137,317		$	131,348
Efficiency Ratio - Non-GAAP (b/a)		62	%		62	%		56	%		55	%

	Three Months Ended
(dollars in thousands)	Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020*			Dec. 31, 2019			Sep. 30, 2019
Net interest income	$	52,252		$	52,205		$	72,738		$	54,395		$	55,486
Noninterest income		20,597			18,751			30,569			19,655			12,811
Less: Net gain (loss) on branch divestiture		—			—			—			7,948			(119	)
Less: Net gain (loss) on sales, calls, and impairment of debt and equity securities		5			16			40			(12	)		19
Total adjusted revenue - Non-GAAP (a)	$	72,844		$	70,940		$	103,267		$	66,114		$	68,397
Noninterest expense (b)	$	45,523		$	44,825		$	46,969		$	40,835		$	42,411
Efficiency Ratio - Non-GAAP (b/a)		62	%		63	%		45	%		62	%		62	%

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

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

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

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

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

(9) The delinquent loans to total loans ratio equals loans 30-days-or-more past due divided by total loans. Depending on loan class, loan delinquency is determined by the number of days or the number of payments past due.

(10) Delinquent loans for the RPG segment included $23 million of EA’s at March 31, 2020. EA’s are only offered during the first two months of each year. EA’s do not have a contractual due date but are eligible for delinquency consideration three weeks after the taxpayer-customer’s tax return is submitted to the applicable tax authority.  All unpaid EA’s are charged-off by the end of the second quarter of each year.

NM – Not meaningful

NA – Not applicable

CONTACT:

Republic Bancorp, Inc.

Kevin Sipes

Executive Vice President & Chief Financial Officer

(502) 560-8628

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