Republic Bancorp, Inc. Reports First Quarter 2024 Net Income of $30.6 Million
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240425707368/en/
As has been widely publicized in the media, we are now in the midst of the longest inverted yield curve in
In addition to the pricing discipline of our new loans, we also continued to display good expense discipline. On a pure GAAP-accounting basis,
As it relates to our nontraditional division, the
We are certainly proud of our first quarter accomplishments and the financial results we continue to produce on a quarter-after-quarter basis. With industry-leading credit quality, capital levels and client satisfaction ratings, along with a well-diversified business model, we look forward to the remainder of 2024 with optimism. As always, I want to thank our clients for their business with us and our associates for their tremendous efforts in serving our clients. Without them, we would not be able to produce such solid results” concluded Pichel.
The following table highlights Republic’s key metrics for the three months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
||||||||||
(dollars in thousands, except per share data) |
|
2024 |
|
2023 |
|
$ Change |
|
% Change |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Tax Expense |
|
$ |
38,699 |
|
|
$ |
36,114 |
|
|
$ |
2,585 |
|
7 |
% |
|
Net Income |
|
|
30,606 |
|
|
|
28,092 |
|
|
|
2,514 |
|
9 |
|
|
Diluted EPS |
|
|
1.58 |
|
|
|
1.42 |
|
|
|
0.16 |
|
11 |
|
|
Return on Average Assets ("ROA") |
|
|
1.70 |
% |
|
|
1.81 |
% |
|
|
NA |
|
(6 |
) |
|
Return on Average Equity ("ROE") |
|
|
13.12 |
|
|
|
12.78 |
|
|
|
NA |
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA – Not applicable |
Results of Operations for the First Quarter of 2024 Compared to the First Quarter of 2023
Net income for the
Net Interest Income
–
The primary driver of this decrease in net interest income and net interest margin at the
Further impacting the Core Bank’s change in net interest income and NIM between the first quarter of 2023 and the first quarter of 2024 were the following:
-
Average outstanding Warehouse balances increased from
$330 million during the first quarter of 2023 to$340 million for the first quarter of 2024.Committed Warehouse lines declined from$1.0 billion to$932 million fromMarch 31, 2023 toMarch 31, 2024 , while a modest up-tick in demand caused average usage rates for Warehouse lines to increase from 31% during the first quarter of 2023 to 37% for the first quarter of 2024. -
Traditional Bank average loans grew from$3.9 billion with a weighted-average yield of 4.59% during the first quarter of 2023 to$4.6 billion with a weighted average yield of 5.45% during the first quarter of 2024. In general, the growth in average loan balances was primarily attributable to loan growth achieved during the last nine months of 2023, as the spot balances forTraditional Bank loans decreased$45 million , or 1%, fromDecember 31, 2023 toMarch 31, 2024 . -
Average investments were
$733 million with a weighted-average yield of 2.98% during the first quarter of 2024 compared to$773 million with a weighted-average yield of 2.61% for the first quarter of 2023. During the first quarter of 2024, theCore Bank continued to maintain an investment portfolio with a generally short overall duration, as part of its interest rate risk management strategy. As a result of this short duration, theCore Bank has approximately$210 million of investment securities scheduled to mature over the remaining nine months of 2024 with a weighted-average yield of 3.11%. -
Further segmenting the Core Bank’s increased cost of interest-bearing liabilities:
-
The weighted-average cost of interest-bearing deposits increased from 0.74% during the first quarter of 2023 to 2.68% for the first quarter of 2024, while average interest-bearing deposits grew
$746 million for the same periods. In addition to offsetting the decrease in its noninterest bearing deposits since 2023, theCore Bank also strategically raised additional non-retail, higher-costing interest-bearing deposits since the first quarter of 2023 to maintain strong liquidity. -
The average balance of FHLB borrowings increased from
$245 million for the first quarter of 2023 to$536 million for the first quarter of 2024. In addition, the weighted-average cost of these borrowings increased from 4.22% to 4.94% for the same time periods. This increase in the average balance of borrowings was generally driven by the above noted growth in period-to-period average loans.
-
The weighted-average cost of interest-bearing deposits increased from 0.74% during the first quarter of 2023 to 2.68% for the first quarter of 2024, while average interest-bearing deposits grew
-
Average interest-earning cash was
$454 million with a weighted-average yield of 5.57% during the first quarter of 2024 compared to$241 million with a weighted-average yield of 4.48% for the first quarter of 2023. The increase in average cash balances was a strategic decision for additional on-balance sheet liquidity above required minimums in response to the uncertainty of the economic environment.
The following tables present by reportable segment the overall changes in the Core Bank’s net interest income, net interest margin, as well as average and period-end loan balances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
Net Interest Income |
|
|
Net Interest Margin |
|
|||||||||||||||||
(dollars in thousands) |
|
|
Three Months Ended |
|
|
|
|
|
Three Months Ended |
|
|
|
||||||||||||
Reportable Segment |
|
|
2024 |
|
|
2023 |
|
Change |
|
|
2024 |
|
2023 |
|
Change |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Traditional Banking |
|
|
$ |
48,259 |
|
|
$ |
50,168 |
|
$ |
(1,909 |
) |
|
|
3.33 |
% |
|
4.07 |
% |
|
|
(0.74 |
)% |
|
Warehouse Lending |
|
|
|
2,257 |
|
|
|
2,087 |
|
|
170 |
|
|
|
2.67 |
|
|
2.53 |
|
|
|
0.14 |
|
|
|
|
|
$ |
50,516 |
|
|
$ |
52,255 |
|
$ |
(1,739 |
) |
|
|
3.30 |
|
|
3.98 |
|
|
|
(0.68 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Loan Balances |
|
|
Period-End Loan Balances |
|
||||||||||||||||||||
(dollars in thousands) |
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reportable Segment |
|
|
2024 |
|
|
2023 |
|
$ Change |
|
% Change |
|
|
|
2024 |
|
|
2023 |
|
$ Change |
|
% Change |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Traditional Banking |
|
$ |
4,634,948 |
|
$ |
3,913,388 |
|
$ |
721,560 |
|
18 |
% |
|
|
$ |
4,573,650 |
|
$ |
4,165,177 |
|
$ |
408,473 |
|
10 |
% |
|
Warehouse Lending |
|
|
340,433 |
|
|
329,716 |
|
|
10,717 |
|
3 |
|
|
|
|
463,249 |
|
|
457,365 |
|
|
5,884 |
|
1 |
|
|
|
|
$ |
4,975,381 |
|
$ |
4,243,104 |
|
$ |
732,277 |
|
17 |
|
|
|
$ |
5,036,899 |
|
$ |
4,622,542 |
|
$ |
414,357 |
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Includes loans held for sale |
||||||||||||||||||||||||||
NM – Not meaningful |
Provision for Expected Credit Loss Expense – The Core Bank’s Provision (2) was a net charge of
The net charge for the first quarter of 2024 was primarily driven by the following:
-
The
Core Bank recorded a net charge to the Provision of$820,000 during the first quarter of 2024 related to general formula reserves applied toTraditional Bank loans. While loan balances at theTraditional Bank decreased in total during the first quarter, the segment experienced a change in loan mix growing in loan categories, such as construction and land development, with higher loan loss reserve requirements. -
The
Core Bank recorded a net charge to the Provision of$309,000 resulting from general formula reserves applied to a$124 million increase in outstanding Warehouse balances during the quarter. -
Offsetting the above charges to Provision, the
Core Bank recorded a credit to the Provision of$631,000 as a result of a reclass of$69 million of correspondent mortgage loans from loans held for investment into loans held for sale.
The net charge during the first quarter of 2023 was primarily driven by the following:
-
The
Core Bank recorded a net charge to the Provision of$430,000 during the first quarter of 2023 related to general formula reserves applied to$92 million ofTraditional Bank loan growth for the quarter. -
The
Core Bank recorded a Day-1 net charge to the Provision of$2.7 million during the first quarter of 2023 related to its acquisition of CBank.
As a percentage of total loans, the Core Bank’s Allowance(2) decreased 2 basis points from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
As of |
|
|
As of |
|
|
Year-over-Year Change |
|
||||||||||||||||||
(dollars in thousands) |
|
|
|
|
|
|
|
Allowance |
|
|
|
|
|
|
|
|
Allowance |
|
|
Allowance |
|
|
|
||||
Reportable Segment |
|
Gross Loans |
|
Allowance |
|
to Loans |
|
|
Gross Loans |
|
Allowance |
|
to Loans |
|
|
to Loans |
|
% Change |
|
||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
$ |
4,573,650 |
|
$ |
59,176 |
1.29 |
% |
|
$ |
4,165,177 |
|
$ |
55,216 |
1.33 |
% |
|
(0.04 |
)% |
(3 |
)% |
|
|||||
Warehouse Lending |
|
|
463,249 |
|
|
1,156 |
|
0.25 |
|
|
|
|
457,365 |
|
|
1,144 |
|
0.25 |
|
|
|
— |
|
|
— |
|
|
|
|
|
5,036,899 |
|
|
60,332 |
|
1.20 |
|
|
|
|
4,622,542 |
|
|
56,360 |
|
1.22 |
|
|
|
(0.02 |
) |
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Tax Refund Solutions |
|
|
57,497 |
|
|
30,069 |
|
52.30 |
|
|
|
|
39,992 |
|
|
25,981 |
|
64.97 |
|
|
|
(12.67 |
) |
|
(20 |
) |
|
Republic |
|
|
129,896 |
|
|
18,301 |
|
14.09 |
|
|
|
|
111,700 |
|
|
13,780 |
|
12.34 |
|
|
|
1.75 |
|
|
14 |
|
|
|
|
|
187,393 |
|
|
48,370 |
|
25.81 |
|
|
|
|
151,692 |
|
|
39,761 |
|
26.21 |
|
|
|
(0.40 |
) |
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
$ |
5,224,292 |
|
$ |
108,702 |
2.08 |
% |
|
$ |
4,774,234 |
|
$ |
96,121 |
2.01 |
% |
|
0.07 |
% |
3 |
% |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
ACLL Roll-Forward |
|||||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|||||||||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|||||||||||||||||||||||||||||
(dollars in thousands) |
|
Beginning |
|
|
|
|
Charge- |
|
|
|
Ending |
|
Beginning |
|
CBank |
|
|
|
|
Charge- |
|
|
|
Ending |
|||||||||||
Reportable Segment |
|
Balance |
|
Provision |
|
offs |
|
Recoveries |
|
Balance |
|
Balance |
|
Adjustment* |
|
Provision |
|
offs |
|
Recoveries |
|
Balance |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
$ |
58,998 |
|
$ |
358 |
|
$ |
(382 |
) |
|
$ |
202 |
|
$ |
59,176 |
|
$ |
50,709 |
|
$ |
— |
|
$ |
2,984 |
|
$ |
(331 |
) |
|
$ |
254 |
|
$ |
53,616 |
Warehouse Lending |
|
|
847 |
|
|
309 |
|
|
— |
|
|
|
— |
|
|
1,156 |
|
|
1,009 |
|
|
1,600 |
|
|
135 |
|
|
— |
|
|
|
— |
|
|
2,744 |
|
|
|
59,845 |
|
|
667 |
|
|
(382 |
) |
|
|
202 |
|
|
60,332 |
|
|
51,718 |
|
|
1,600 |
|
|
3,119 |
|
|
(331 |
) |
|
|
254 |
|
|
56,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Tax Refund Solutions |
|
|
3,990 |
|
|
25,774 |
|
|
— |
|
|
|
305 |
|
|
30,069 |
|
|
3,888 |
|
|
— |
|
|
21,808 |
|
|
— |
|
|
|
285 |
|
|
25,981 |
Republic |
|
|
18,295 |
|
|
4,181 |
|
|
(4,545 |
) |
|
|
370 |
|
|
18,301 |
|
|
14,807 |
|
|
— |
|
|
1,839 |
|
|
(3,099 |
) |
|
|
233 |
|
|
13,780 |
|
|
|
22,285 |
|
|
29,955 |
|
|
(4,545 |
) |
|
|
675 |
|
|
48,370 |
|
|
18,695 |
|
|
— |
|
|
23,647 |
|
|
(3,099 |
) |
|
|
518 |
|
|
39,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
$ |
82,130 |
|
$ |
30,622 |
|
$ |
(4,927 |
) |
|
$ |
877 |
|
$ |
108,702 |
|
$ |
70,413 |
|
$ |
1,600 |
|
$ |
26,766 |
|
$ |
(3,430 |
) |
|
$ |
772 |
|
$ |
96,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
* The net fair value adjustment to ACLL includes an estimate of lifetime credit losses for Purchased Credit Deteriorated loans. |
The table below presents the Core Bank’s credit quality metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended: |
Years Ended: |
||||||||
|
|
|
|
|
|
|
|
|||
Core Banking Credit Quality Ratios |
2024 |
|
2023 |
|
2023 |
2022 |
2021 |
|||
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to total loans |
0.38 |
% |
0.34 |
% |
0.39 |
% |
0.37 |
% |
0.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to total loans (including OREO) |
0.41 |
|
0.38 |
|
0.41 |
|
0.40 |
|
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
Delinquent loans* to total loans |
0.15 |
|
0.12 |
|
0.16 |
|
0.14 |
|
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs to average loans |
0.01 |
|
0.01 |
|
0.01 |
|
0.00 |
|
0.01 |
|
(Quarterly rates annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO = Other Real Estate Owned |
|
|
|
|
|
|
|
|
|
|
*Loans 30-days-or-more past due at the time the second contractual payment is past due. |
Noninterest Income –
Noninterest Expense – As previously noted, the Core Bank’s noninterest expense was
RPG reported net income of
Republic Payment Solutions (“RPS”)
Net income at RPS was
Tax Refund Solutions (“TRS”)
TRS recorded net income of
Republic
Net income at RCS increased
Republic Bancorp, Inc. (the “Company”) is the parent company of
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 yield curve, 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 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
Footnotes:
(1) |
|
“Core Bank” or “Core Banking” operations consist of the Traditional Banking and Warehouse Lending segments. |
|
|
|
(2) |
|
Provision – Provision for Expected Credit Loss Expense
|
|
|
|
(3) |
|
|
NM – Not meaningful |
||
|
||
NA – Not applicable |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240425707368/en/
Republic Bancorp, Inc.
Executive Vice President & Chief Financial Officer
(502) 560-8628
Source: