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Republic Bancorp Reports a 25% Increase in Second Quarter Net Income

LOUISVILLE, Ky.--(BUSINESS WIRE)-- (鈥淩epublic鈥� or the 鈥淐ompany鈥�) reported second quarter 2025 net income and Diluted Earnings per Class A Common Share (鈥淒iluted EPS鈥�) of $31.5 million and $1.61 per share, representing increases of 25% and 24%, over the $25.2 million and $1.30 per share reported for the second quarter of 2024. As a result, the Company achieved a return on average assets (鈥淩OA鈥�) and a return on average equity (鈥淩OE鈥�) of 1.79% and 11.96% for the second quarter of 2025.

Logan Pichel, President & CEO of Republic Bank & Trust Company commented, 鈥淲e are pleased to report strong second quarter operating results, highlighted by (1) solid earnings metrics, (2) Core Bank balance sheet expansion, (3) robust capital levels and solid liquidity, and most importantly, (4) continued favorably low loan charge-offs within our Core Bank. Our second quarter results benefited from our diversified earnings platform, with all five of our reporting segments posting strong results for the quarter. Within our Core Bank, our strategic pricing discipline continued to produce results 鈥� driving increased asset yields and cost of funds moderation. As a result, we achieved solid Core Bank Net Interest Margin (鈥淣IM鈥�) expansion during the quarter, a feat that we are extremely proud of in a challenging interest rate environment.

In addition to the strong financial results for the quarter, we also introduced our new branding initiative, tag line and marketing campaign during June that illustrates our unyielding commitment to our clients, Company, associates, and the communities we proudly serve. Republic Bank. Time to Thrive.鈩� perfectly encapsulates our mission, underscoring the importance of the community relationships the Bank has established, nurtured, and helped thrive since its founding,鈥� Pichel concluded.

The following table highlights Republic鈥檚 key metrics for the three and six months ended June 30, 2025, and 2024. Additional financial details, including segment-level data, are provided in the financial supplement to this release. The attached digital version of this release includes the financial supplement as an appendix. The financial supplement may also be found as Exhibit 99.2 of the Company鈥檚 Form 8-K filed with the SEC on July 18, 2025.

Results of Operations for the Second Quarter of 2025 Compared to the Second Quarter of 2024

Core Bank⁽¹⁾

Net income for the Core Bank was $18.7 million for the second quarter of 2025, a $3.7 million, or 25%, increase over the $15.0 million earned for the second quarter of 2024. As discussed in more detail below, a solid increase in net interest income combined with a modest Provision in both periods drove the quarter-over-quarter net income growth.

Net Interest Income 鈥� Core Bank net interest income was $59.9 million for the second quarter of 2025, a $7.1 million, or 13%, increase over the $52.8 million achieved during the second quarter of 2024. The rise in net interest income for the quarter was driven primarily by a meaningful increase in the Core Bank鈥檚 NIM. Overall, the Core Bank鈥檚 NIM rose from 3.46% during the second quarter of 2024 to 3.72% during the second quarter of 2025 benefiting from a notable decrease in the Core Bank鈥檚 cost of deposits, further complemented by an increase in Core Bank鈥檚 interest-earning asset yield.

Specific items of note impacting the Core Bank鈥檚 change in net interest income and NIM between the second quarter of 2025 and the second quarter of 2024 were as follows:

Interest-Earning Assets

• Average outstanding Warehouse balances increased $110 million, or 24%, from $457 million during the second quarter of 2024 to $567 million for the second quarter of 2025. Average committed Warehouse lines increased from $940 million to $995 million during these same periods, while higher demand caused average usage rates for Warehouse lines to increase from 49% during the second quarter of 2024 to 57% for the second quarter of 2025.
• Traditional Bank average loans declined from $4.62 billion with a weighted-average yield of 5.57% during the second quarter of 2024 to $4.59 billion with a weighted average yield of 5.69% during the second quarter of 2025. The comparison of average loans for the Traditional Bank was negatively impacted by the sale of residential real estate loans during the second quarter of 2024 that were previously held for investment.
• Average interest-earning cash was $623 million with a weighted-average yield of 4.45% during the second quarter of 2025 compared to $393 million with a weighted-average yield of 5.46% for the second quarter of 2024. In addition, average investments totaled $686 million with a weighted-average yield of 3.71% during the second quarter of 2025 compared to $670 million with a weighted-average yield of 3.09% for the second quarter of 2024. In general, the Company strategically deployed a higher percentage of its proceeds from deposit growth over the past year into interest-earning cash.

Funding Liabilities (Deposits and Borrowings)

• As it relates to the Core Bank鈥檚 decrease in interest expense and cost of interest-bearing liabilities:
  • The weighted-average cost of total interest-bearing deposits decreased from 2.79% during the second quarter of 2024 to 2.34% for the second quarter of 2025, while average interest-bearing deposit balances grew $224 million, or 6%, for the same periods. Included within this growth in interest-bearing deposits was a $280 million net increase in the average balances for business and consumer money market accounts, which generally pay premium rates. The increase in money market balances was partially offset by an $85 million decrease in the average balance of third-party listing service deposits.
  • The average balance of FHLB borrowings increased from $306 million for the second quarter of 2024 to $370 million for the second quarter of 2025, while the weighted-average cost of these borrowings increased from 4.29% to 4.35% for the same time periods.
• Average noninterest-bearing deposits decreased $29 million from the second quarter of 2024 to the second quarter of 2025. The decline in noninterest-bearing deposits is an ongoing trend for banks, in general, dating back to the fourth quarter of 2022, as the overall interest rate environment highlighted by an inverted yield curve, combined with the competition for deposits, continued to make premium-rate interest-bearing checking and savings deposits a more attractive alternative for consumer and business clients.

The following tables present by reportable segment the overall changes in the Core Bank鈥檚 net interest income, net interest margin, as well as average and period-end loan balances:

Provision for Expected Credit Losses 鈥� The Core Bank鈥檚 Provision⁽²⁾ was a net charge of $772,000 for the second quarter of 2025 compared to a net charge of $1.1 million for the second quarter of 2024.

The net charge of $772,000 for the second quarter of 2025 was driven by the following:

• The Traditional Bank recorded a net charge to the Provision of $517,000 during the second quarter of 2025 related to a change in loan mix toward loans with higher formula reserve requirements in addition to $313,000 in net charge-offs. While loan balances at the Traditional Bank increased only $16 million during the second quarter, growth occurred in categories such as construction and land development, with higher loan loss reserve requirements.
• Warehouse recorded a net charge to the Provision of $255,000 resulting from general formula reserves applied to a $102 million increase in the outstanding Warehouse period-end balances during the second quarter of 2025.

The net charge of $1.1 million during the second quarter of 2024 was driven by the following:

• The Traditional Bank recorded a net charge to the Provision of $915,000 during the second quarter of 2024 substantially related to general formula reserves in addition to $232,000 in net charge-offs. While loan balances at the Traditional Bank increased only $16 million during the second quarter, the segment continued to experience a change in loan mix, growing in categories with higher loan loss reserve requirements.
• The Core Bank recorded a net charge to the Provision of $214,000 resulting from general formula reserves applied to an $86 million increase in outstanding Warehouse balances during the quarter.

As a percentage of total loans, the Core Bank鈥檚 Allowance⁽²⁾ decreased 3 basis points from June 30, 2024, to June 30, 2025. The table below provides a view of the Company鈥檚 percentage of Allowance-to-total-loans by reportable segment.

The table below presents the Core Bank鈥檚 credit quality metrics:

Noninterest Income 鈥� Core Bank noninterest income increased by $409,000 from $10.1 million in the second quarter of 2024 to $10.5 million for the second quarter of 2025. The drivers of this increase were as follows:

• Mortgage Banking income increased $284,000 from the second quarter of 2024 to the second quarter of 2025, as the Bank experienced a modest period-over-period improvement in pricing received on fixed rate loans sold into the secondary market.
• Other income increased $281,000 for the quarter and was driven primarily by a $328,000 net gain on sale of the Bank鈥檚 consumer credit card portfolio which was completed during the second quarter of 2025.

Noninterest Expense 鈥� The Core Bank鈥檚 noninterest expenses were $45.6 million for the second quarter of 2025, an increase of $2.9 million over the second quarter of 2024. Notable line-item variances within the noninterest expense category included:

• Salaries and employee benefits increased by a combined $1.2 million, or 5%, driven by a $691,000 increase in estimated bonus-related expenses and a $524,000 increase in health insurance claims. The larger estimated bonus-related expenses for the second quarter of 2025 were due to an increased probability of a larger bonus payout for the year based on the Company鈥檚 strong operating results.
• Technology expenses increased $1.0 million, or 16%, over the second quarter of 2024. The increase in Technology expense was driven by enhanced security and new ancillary systems, including additional costs resulting from the transition to a new call center management system. Management expects to incur a net benefit in technology and communication costs in the future as a result of the new call center management system.

Republic Processing Group⁽³⁾

RPG reported net income of $12.8 million for the second quarter of 2025, a $2.6 million, or 25%, increase over the $10.2 million reported for the second quarter of 2024. RPG鈥檚 performance for the second quarter of 2025 compared to the second quarter of 2024, by operating segment, was as follows:

Tax Refund Solutions

TRS recorded net income of $3.3 million during the second quarter of 2025 compared to net income of $3.1 million for the second quarter of 2024. The overall increase in TRS net income for the quarter was driven by a $3.9 million net credit to the Provision, as net charge-offs for Refund Advances (鈥淩As鈥�) during the quarter were favorably lower than the Company鈥檚 preliminary estimated loan loss reserves as of March 31, 2025. The positive benefit TRS received from a lower Provision was partially offset by a $1.2 million decrease in Net Refund Transfer (鈥淩T鈥�) fees, as well as a $560,000 yield enhancement payment received during the second quarter of 2024, which was eliminated for 2025. The lower Net RT Fees collected was attributed to the decline in the number of tax refunds processed during the second quarter of 2025 versus the second quarter of 2024 and a greater percentage of the RTs received and processed during 2025 occurring in the first quarter.

Republic Payment Solutions

Net income at RPS was $2.4 million for the second quarter of 2025, a $342,000 increase from the second quarter of 2024. The increase in net income at RPS was primarily the result of the favorable impact of no revenue-share being recorded during the second quarter of 2025 compared to $1.3 million recorded during the second quarter of 2024.

Partially offsetting the positive benefit of the change in revenue share, RPS earned a lower yield of 4.28% for its $350 million in average prepaid program balances for the second quarter of 2025 compared to a yield of 5.03% for the $360 million in average prepaid card balances for the second quarter of 2024. The lower yield was driven by a decrease in the Federal Funds Target Rate of 100 basis points from the second quarter of 2024 to the second quarter of 2025.

Republic Credit Solutions

Net income at RCS increased $2.0 million, or 40% from $5.0 million for the second quarter of 2024 to $7.0 million for the second quarter of 2025. The increase in RCS net income was primarily due to growth in profitability of one of its Line-of-Credit (鈥淟OC鈥�) products, which had an increase in net income of $1.9 million from the second quarter of 2024 to the second quarter of 2025. The rise in net income for this LOC product was driven primarily by $388,000 period-over-period increase in net interest income, a $436,000 favorable decline in Provision, and a $1.7 million favorable decline in marketing expenses. The favorable decline in Marketing expenses included a $763,000 reimbursement for a prior period billing dispute.

Republic Bancorp, Inc. (the 鈥淐ompany鈥�) is the parent company of Republic Bank & Trust Company (the 鈥淏ank鈥�). The Bank currently has 47 banking centers in communities within five metropolitan statistical areas (鈥淢SAs鈥�) across five states: 22 banking centers located within the Louisville MSA in Louisville, Prospect, Shelbyville, and Shepherdsville in Kentucky, and Floyds Knobs, Jeffersonville, and New Albany in Indiana; six banking centers within the Lexington MSA in Georgetown and Lexington in Kentucky; eight banking centers within the Cincinnati MSA in Cincinnati and West Chester in Ohio, and Bellevue, Covington, Crestview Hills, and Florence in Kentucky; seven banking centers within the Tampa MSA in Largo, New Port Richey, St. Petersburg, Seminole, and Tampa in Florida; and four banking centers within the Nashville MSA in Franklin, Murfreesboro, Nashville and Spring Hill, Tennessee. In addition, Republic Bank Finance has one loan production office in St. Louis, Missouri. The Bank offers online banking at . The Company is headquartered in Louisville, Kentucky, and as of June 30, 2025, had approximately $7.0 billion in total assets. The Company鈥檚 Class A Common Stock is listed under the symbol 鈥淩BCAA鈥� on the NASDAQ Global Select Market.

Republic Bank. Time to Thrive.鈩�

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鈥檚 long-term strategic goals, the ability of the Company to achieve savings from its new call center management system; 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鈥檚 filings with the U.S. Securities and Exchange Commission, including those factors set forth as 鈥淩isk Factors鈥� in the Company鈥檚 Annual Report on Form 10-K for the period ended December 31, 2024. The Company undertakes no obligation to update any forward-looking statements, except as required by applicable law.

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View source version on businesswire.com:

Republic Bancorp, Inc.

Kevin Sipes

Executive Vice President & Chief Financial Officer

(502) 560-8628

Source: Republic Bancorp, Inc.