Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

REPUBLIC BANCORP, INC.

(RBCAA)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

REPUBLIC BANCORP : KY/ Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

08/06/2021 | 09:02am EDT
The consolidated financial statements include the accounts of Republic Bancorp,
Inc. (the "Parent Company") and its wholly-owned subsidiaries, Republic Bank &
Trust Company and Republic Insurance Services, Inc. As used in this filing, the
terms "Republic," the "Company," "we," "our," and "us" refer to Republic
Bancorp, Inc., and, where the context requires, Republic Bancorp, Inc. and its
subsidiaries. The term the "Bank" refers to the Company's subsidiary bank:
Republic Bank & Trust Company. The term the "Captive" refers to the Company's
insurance subsidiary: Republic Insurance Services, Inc. All significant
intercompany balances and transactions are eliminated in consolidation.



Republic is a financial holding company headquartered in Louisville, Kentucky.
The Bank is a Kentucky-based, state-chartered non-member financial institution
that provides both traditional and non-traditional banking products through five
reportable segments using a multitude of delivery channels. While the Bank
operates primarily in its market footprint, its non-brick-and-mortar delivery
channels allow it to reach clients across the U.S. The Captive is a
Nevada-based, wholly-owned insurance subsidiary of the Company. The Captive
provides property and casualty insurance coverage to the Company and the Bank as
well, as a group of third-party insurance captives for which insurance may not
be available or economically feasible.



Republic Bancorp Capital Trust is a Delaware statutory business trust that is a wholly-owned unconsolidated finance subsidiary of Republic Bancorp, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations of Republic should be read in conjunction with Part I Item 1 "Financial Statements."




Forward-looking statements discuss matters that are not historical facts. As
forward-looking statements discuss future events or conditions, the statements
often include words such as "anticipate," "believe," "estimate," "expect,"
"intend," "plan," "project," "target," "can," "could," "may," "should," "will,"
"would," "potential," or similar expressions. Do not rely on forward-looking
statements. Forward-looking statements detail management's expectations
regarding the future and are not guarantees. Forward-looking statements are
assumptions based on information known to management only as of the date the
statements are made and management undertakes no obligation to update
forward-looking statements, except as required by applicable law.



Broadly speaking, forward-looking statements include:

? the potential impact of the COVID-19 pandemic on Company operations;

? projections of revenue, income, expenses, losses, earnings per share, capital

expenditures, dividends, capital structure, or other financial items;

? descriptions of plans or objectives for future operations, products, or

services;

? forecasts of future economic performance;

? statements relating to the completion of the Sale Transaction and the potential

timing thereof; and

? descriptions of assumptions underlying or relating to any of the foregoing.

Forward-looking statements involve known and unknown risks, uncertainties, and
other factors that may cause actual results, performance, or achievements to be
materially different from future results, performance, or achievements expressed
or implied by the forward-looking statements. Actual results may differ
materially from those expressed or implied as a result of certain risks and
uncertainties, including, but not limited to the following:



? the impact of the COVID-19 pandemic on the Company's operations and credit

losses;

? the ability of borrowers who received COVID-19 loan accommodations to resume

repaying their loans upon maturity of such accommodations;

? natural disasters impacting the Company's operations;

? changes in political and economic conditions;

? the magnitude and frequency of changes to the FFTR implemented by the FOMC of

the FRB;

? long-term and short-term interest rate fluctuations as well as the overall

steepness of the U.S. Treasury yield curve;

? competitive product and pricing pressures in each of the Company's five

reportable segments;

? equity and fixed income market fluctuations;

? client bankruptcies and loan defaults;


 ? inflation;


                                       71

  Table of Contents

 ? recession;


 ? future acquisitions;

? integrations of acquired businesses;

? changes in technology;

? changes in applicable laws and regulations or the interpretation and

enforcement thereof;

? changes in fiscal, monetary, regulatory and tax policies;

? changes in accounting standards;

? monetary fluctuations;

? changes to the Company's overall internal control environment;

? success in gaining regulatory approvals when required;

? the Company's ability to qualify for future R&D federal tax credits;

? risks related to the completion of the proposed Sale Transaction and the

potential timing thereof?

? the occurrence of any event, change or other circumstances that could give rise

to the termination of the Purchase Agreement?

disruption from the proposed Sale Transaction making it difficult to maintain

? business and operational relationships, including retaining and hiring key

personnel and maintaining relationships with the Bank's customers, vendors and

others with whom the Bank does business?

? the risk of litigation and/or regulatory actions related to the proposed Sale

Transaction?

? information security breaches or cyber security attacks involving either the

Company or one of the Company's third-party service providers; and

other risks and uncertainties reported from time to time in the Company's

? filings with the SEC, including Part 1 Item 1A "Risk Factors" of the Company's

Annual Report on Form 10-K for the year ended December 31, 2020 and Part II

   Item 1A "Risk Factors" of the current filing.




Accounting Standards Update



For disclosure regarding the impact to the Company's financial statements of ASUs, see Footnote 1 "Basis of Presentation and Summary of Significant Accounting Policies" of Part I Item 1 "Financial Statements."

CRITICAL ACCOUNTING POLICIES AND ESTIMATES




Republic's consolidated financial statements and accompanying footnotes have
been prepared in accordance with GAAP. The preparation of these financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of revenue and expenses during the reported periods.



A summary of the Company's significant accounting policies is set forth in Part
II "Item 8. Financial Statements and Supplementary Data" of its Annual Report on
Form 10-K for the fiscal year ended December 31, 2020.



Management continually evaluates the Company's accounting policies and estimates
that it uses to prepare the consolidated financial statements. In general,
management's estimates and assumptions are based on historical experience,
accounting and regulatory guidance, and information obtained from independent
third-party professionals. Actual results may differ from those estimates made
by management.



Critical accounting policies are those that management believes are the most
important to the portrayal of the Company's financial condition and operating
results and require management to make estimates that are difficult, subjective
and complex. Most accounting policies are not considered by management to be
critical accounting policies. Several factors are considered in determining
whether or not a policy is critical in the preparation of the financial
statements. These factors include, among other things, whether the estimates
have a significant impact on the financial statements, the nature of the
estimates, the ability to readily validate the estimates with other information
including independent third parties or available pricing, sensitivity of the
estimates to changes in economic conditions and whether alternative methods of
accounting may be utilized under GAAP. Management has discussed each critical
accounting policy and the methodology for the identification and determination
of critical accounting policies with the Company's Audit Committee.



Republic believes its critical accounting policies and estimates relate to its ACLL and Provision.





                                       72

  Table of Contents

ACLL and Provision - As of June 30, 2021, the Bank maintained an ACLL for
expected credit losses inherent in the Bank's loan portfolio, which includes
overdrawn deposit accounts. Management evaluates the adequacy of the ACLL
monthly and presents and discusses the ACLL with the Audit Committee and the
Board of Directors quarterly.



Effective January 1, 2020, the Company adopted ASC 326 Financial Instruments -
Credit Losses, which replaced the pre-January 1, 2020 "probable-incurred" method
for calculating the Company's ACL with the 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.



When 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, 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
U.S. national unemployment rate as its primary forecasting tool. For its CRE
loan pool, the Company employed a one-year forecast of CRE vacancy rates through
March 31, 2021 but discontinued use of this forecast during the second quarter
of 2021 in favor of a one-year forecast of general CRE values. This change in
forecast method had no material impact on the Company's ACLL.



Management's evaluation of the appropriateness of the ACLL is often the most
critical accounting estimate for a financial institution, as the ACLL requires
significant reliance on the use of estimates and significant judgment as to the
reliance on historical loss rates, consideration of quantitative and qualitative
economic factors, and the reliance on a reasonable and supportable forecast.



Adjustments to the historical loss rate for current conditions include
differences in underwriting standards, portfolio mix or term, delinquency level,
as well as for changes in environmental conditions, such as changes in property
values or other relevant factors. One-year forecast adjustments to the
historical loss rate are based on the U.S. national unemployment rate and CRE
values. Subsequent to the one-year forecasts, loss rates are assumed to
immediately revert back to long-term historical averages.



The impact of utilizing the CECL approach to calculate the ACLL is significantly
influenced by the composition, characteristics and quality of the Company's loan
portfolio, as well as the prevailing economic conditions and forecasts utilized.
Material changes to these and other relevant factors may result in greater
volatility to the ACLL, and therefore, greater volatility to the Company's
reported earnings.



See additional detail regarding the Company's adoption of ASC 326 and the CECL
method under Footnote 1"Summary of Significant Accounting Policies" of Part II
Item 8 "Financial Statements and Supplementary Data" of the Company's Annual
Report on Form 10-K for the year ended December 31, 2020.







                                       73

  Table of Contents



BUSINESS SEGMENT COMPOSITION


As of June 30, 2021, the Company was divided into five reportable segments:
Traditional Banking, Warehouse, Mortgage Banking, TRS, and RCS. Management
considers the first three segments to collectively constitute "Core Bank" or
"Core Banking" operations, while the last two segments collectively constitute
RPG operations.


(I) Traditional Banking segment




The Traditional Banking segment provides traditional banking products primarily
to customers in the Company's market footprint. As of June 30, 2021, Republic
had 42 full-service banking centers with locations as follows:



 ? Kentucky - 28

? Metropolitan Louisville - 18


 ? Central Kentucky - 7


 ? Georgetown - 1


 ? Lexington - 5


 ? Shelbyville - 1


 ? Northern Kentucky - 3


 ? Covington - 1


 ? Crestview Hills - 1


 ? Florence - 1


 ? Southern Indiana - 3


 ? Floyds Knobs - 1


 ? Jeffersonville - 1


 ? New Albany - 1

? Metropolitan Tampa, Florida - 7

? Metropolitan Cincinnati, Ohio - 2

? Metropolitan Nashville, Tennessee - 2

Republic's headquarters are in Louisville, which is the largest city in Kentucky based on population.

The Bank's principal lending activities consist of the following:

Retail Mortgage Lending - Through its retail banking centers and its online
Consumer Direct channel, the Bank originates single-family, residential real
estate loans. In addition, the Bank originates HEALs and HELOCs through its
retail banking centers. Such loans are generally collateralized by
owner-occupied, residential real estate properties. For those loans originated
through the Bank's retail banking centers, the collateral is predominately
located in the Bank's market footprint, while loans originated through the
Consumer Direct channel are generally secured by owner occupied-collateral
located outside of the Bank's market footprint.



Commercial Lending - The Bank conducts commercial lending activities primarily through Corporate Banking, Commercial Banking, Business Banking, and Retail Banking channels.

In general, commercial lending credit approvals and processing are prepared and
underwritten through the Bank's Commercial Credit Administration Department.
Clients are generally located within the Bank's market footprint or in areas
nearby the market footprint.



Construction and Land Development Lending - The Bank originates business loans
for the construction of both single-family, residential properties and
commercial properties (apartment complexes, shopping centers, office buildings).
While not a focus for the Bank, the Bank may originate loans for the acquisition
and development of residential or commercial land into buildable lots.



Consumer Lending - Traditional Banking consumer loans made by the Bank include
home improvement and home equity loans, other secured and unsecured personal
loans, and credit cards. Except for home equity loans, which are actively
marketed in conjunction with single family, first lien residential real estate
loans, other Traditional Banking consumer loan products (not including products
offered through RPG), while available, are not and have not been actively
promoted in the Bank's markets.



                                       74

  Table of Contents

Aircraft Lending - In October 2017, the Bank created an Aircraft Lending
division. Aircraft loans are typically made to purchase or refinance personal
aircrafts, along with engine overhauls and avionic upgrades. The aircraft loan
program is open to all states, except for Alaska and Hawaii.



The credit characteristics of an aircraft borrower are higher than a typical
consumer in that they must demonstrate and indicate a higher degree of credit
worthiness for approval.


The Bank's other Traditional Banking activities generally consist of the following:




Private Banking - The Bank provides financial products and services to
high-net-worth individuals through its Private Banking department. The Bank's
Private Banking officers have extensive banking experience and are trained to
meet the unique financial needs of this clientele.



Treasury Management Services - The Bank provides various deposit products
designed for commercial business clients located throughout its market
footprint. Lockbox processing, remote deposit capture, business on-line banking,
account reconciliation, and ACH processing are additional services offered to
commercial businesses through the Bank's Treasury Management department.



Internet Banking - The Bank expands its market penetration and service delivery
of its RB&T brand by offering clients Internet Banking services and products
through its website, www.republicbank.com.



Mobile Banking - The Bank allows clients to easily and securely access and manage their accounts through its mobile banking application.

Other Banking Services - The Bank also provides title insurance and other financial institution related products and services.

Bank Acquisitions - The Bank maintains an acquisition strategy to selectively grow its franchise as a complement to its organic growth strategies.

See additional detail regarding the Traditional Banking segment under Footnote 16 "Segment Information" of Part I Item 1 "Financial Statements."



(II)  Warehouse Lending segment


The Core Bank provides short-term, revolving credit facilities to mortgage
bankers across the United States through mortgage warehouse lines of credit.
These credit facilities are primarily secured by single-family, first-lien
residential real estate loans. The credit facility enables the mortgage banking
clients to close single-family, first-lien residential real estate loans in
their own name and temporarily fund their inventory of these closed loans until
the loans are sold to investors approved by the Bank. Individual loans are
expected to remain on the warehouse line for an average of 15 to 30 days.
Reverse mortgage loans typically remain on the line longer than conventional
mortgage loans. Interest income and loan fees are accrued for each individual
loan during the time the loan remains on the warehouse line and collected when
the loan is sold. The Core Bank receives the sale proceeds of each loan directly
from the investor and applies the funds to pay off the warehouse advance and
related accrued interest and fees. The remaining proceeds are credited to the
mortgage-banking client.


See additional detail regarding the Warehouse Lending segment under Footnote 16 "Segment Information" of Part I Item 1 "Financial Statements."



(III)  Mortgage Banking segment



Mortgage Banking activities primarily include 15-, 20- and 30-year fixed-term
single-family, first-lien residential real estate loans that are originated and
sold into the secondary market, primarily to the FHLMC and the FNMA. The Bank
typically retains servicing on loans sold into the secondary market for loans
generated in states within its footprint and generally sells servicing for loans
generated in states outside of its footprint. Administration of loans with
servicing retained by the Bank includes collecting principal and interest
payments, escrowing funds for property taxes and property insurance, and
remitting payments to secondary market investors. The Bank receives fees for
performing these standard servicing functions.



See additional detail regarding the Mortgage Banking segment under Footnote 11
"Mortgage Banking Activities" and Footnote 16 "Segment Information" of Part I
Item 1 "Financial Statements."

                                       75

  Table of Contents



(IV)  Tax Refund Solutions segment



Tax Refund Solutions segment - On May 13, 2021, the Bank entered into an Asset Purchase Agreement (the "Purchase Agreement") with Green Dot to sell substantially all of the assets and operations of the Bank's Tax Refund Solutions business (the "Sale Transaction").




As a result of the Purchase Agreement, the results of operations for the Company
and its TRS segment are presented within this filing to reflect continuing
versus discontinued operations. TRS's continuing operations include its
immaterial RPS division and certain overhead costs previously allocated to TRS
that will remain with the Bank. Discontinued operations are those sold to Green
Dot.


See additional detail regarding the Bank's agreement to sell TRS under Footnote 17 "Discontinued Operations" of Part I Item 1 "Financial Statements."

Republic Payment Solutions division - RPS is currently managed and operated
within the TRS segment's continuing operations. The RPS division offers
general-purpose reloadable prepaid cards as an issuing bank through third-party
service providers. For the projected near-term, as the prepaid card program
matures, the operating results of the RPS division are expected to be immaterial
to the Company's overall results of operations and will be reported as part of
the TRS segment's continuing operations. The RPS division will not be considered
a separate reportable segment until such time, if any, that it meets
quantitative reporting thresholds.



The Company reports fees related to RPS programs under Program fees. Additionally, the Company's portion of interchange revenue generated by prepaid card transactions is reported as noninterest income under "Interchange fee income."

(V) Republic Credit Solutions segment




Through the RCS segment, the Bank offers consumer credit products. In general,
the credit products are unsecured, small dollar consumer loans that are
dependent on various factors. RCS loans typically earn a higher yield but also
have higher credit risk compared to loans originated through the Traditional
Banking segment, with a significant portion of RCS clients considered subprime
or near-prime borrowers. The Bank uses third-party service providers for certain
services such as marketing and loan servicing of RCS loans. Additional
information regarding consumer loan products offered through RCS follows:



RCS line-of-credit products - Using separate third-party service providers, the

Bank originates two line-of-credit products to generally subprime borrowers in

? multiple states. The first of these two products (the "LOC I") has been

originated by the Bank since 2014. The second (the "LOC II") was introduced in

   January 2021.




   RCS's LOC I represents the substantial majority of RCS activity. Elastic

Marketing, LLC and Elevate Decision Sciences, LLC, are third-party service

providers for the product and are subject to the Bank's oversight and

supervision. Together, these companies provide the Bank with certain marketing,

o servicing, technology, and support services, while a separate third party

provides customer support, servicing, and other services on the Bank's

behalf. The Bank is the lender for this product and is marketed as such.

Further, the Bank controls the loan terms and underwriting guidelines, and the

   Bank exercises consumer compliance oversight of the product.



The Bank sells participation interests in this product. These participation
interests are a 90% interest in advances made to borrowers under the borrower's
line-of-credit account, and the participation interests are generally sold three
business days following the Bank's funding of the associated advances. Although
the Bank retains a 10% participation interest in each advance, it maintains 100%
ownership of the underlying LOC I account with each borrower. Loan balances held
for sale through this program are carried at the lower of cost or fair value.



In January 2021, RCS began originating balances through its LOC II. One of

RCS's existing third-party service providers, subject to the Bank's oversight

and supervision, provides the Bank with marketing services and loan servicing

o for the LOC II product. The Bank is the lender for this product and is marketed

   as such. Furthermore, the Bank controls the loan terms and underwriting
   guidelines, and the Bank exercises consumer compliance oversight of this
   product.




                                       76

  Table of Contents
The Bank sells participation interests in this product. These participation
interests are a 95% interest in advances made to borrowers under the borrower's
line-of-credit account, and the participation interests are generally sold three
business days following the Bank's funding of the associated advances. Although
the Bank retains a 5% participation interest in each advance, it maintains 100%
ownership of the underlying LOC II account with each borrower. Loan balances
held for sale through this program are carried at the lower of cost or fair
value.



RCS installment loan product - In December 2019, through RCS, the Bank began

offering installment loans with terms ranging from 12 to 60 months to borrowers

in multiple states. The same third-party service provider for RCS's LOC II is

the third-party provider for the installment loans. This third-party provider

is subject to the Bank's oversight and supervision and provides the Bank with

marketing services and loan servicing for these RCS installment loans. The Bank

is the lender for these RCS installment loans and is marketed as such.

? Furthermore, the Bank controls the loan terms and underwriting guidelines, and

the Bank exercises consumer compliance oversight of this RCS installment loan

product. Currently, all loan balances originated under this RCS installment

loan program are carried as "held for sale" on the Bank's balance sheet, with

the intention to sell these loans to its third-party service provider generally

within sixteen days following the Bank's origination of the loans. Loans

originated under this RCS installment loan program are carried at fair value

   under a fair-value option, with the portfolio marked to market monthly.




   RCS healthcare receivables products - The Bank originates
   healthcare-receivables products across the U.S. through two different

third-party service providers. In one program, the Bank retains 100% of the

? receivables originated. In the other program, the Bank retains 100% of the

receivables originated in some instances, and in other instances, sells 100% of

the receivables within one month of origination. Loan balances held for sale

   through this program are carried at the lower of cost or fair value.



The Company reports interest income and loan origination fees earned on RCS loans under "Loans, including fees," while any gains or losses on sale and mark-to-market adjustments of RCS loans are reported as noninterest income under "Program fees."

OVERVIEW (Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020)

Total Company net income for the second quarter of 2021 was $23.9 million, an
$8.1 million, or 51%, increase from the same period in 2020. Diluted EPS
increased to $1.16 for the three months ended June 30, 2021 compared to $0.76
for the same period in 2020. The increase in net income reflected a $9.4 million
increase in net income from discontinued operations, driven by a $10.2 million
positive swing in Provision resulting from significantly higher Easy Advance
repayments during the second quarter of 2021 compared to the same period in
2020.



Net income from continuing operations was $16.5 million for the second quarter
of 2021, a $1.3 million decrease from the same period in 2020. Diluted EPS from
continuing operations were $0.80 for the three months ended June 30, 2021
compared to $0.86 for the same period in 2020. The decrease in net income from
continuing operations generally reflected a decrease in net interest income
partially offset by a positive reduction in Provision.



The following are general highlights by reportable segment. Discontinued operations for the periods discussed relate entirely to the TRS segment.

See additional detail regarding the Bank's agreement to sell TRS under Footnote 17 "Discontinued Operations" of Part I Item 1 "Financial Statements."



Traditional Banking segment


? Net income increased $3.2 million, or 68%, for the second quarter of 2021

   compared to the same period in 2020.



Net interest income decreased $757,000, or 2%, for the second quarter of 2021

? compared to the same period in 2020. The Traditional Bank's net interest margin

   decreased 29 basis points to 2.97% for the second quarter of 2021.



Provision decreased $3.2 million to a net credit of $77,000 for the second

? quarter of 2021 compared to a net charge of $3.1 million for the same period in

   2020.




? Noninterest income increased $1.8 million, or 30%, for the second quarter of

2021 compared to the same period in 2020.




                                       77

  Table of Contents

? Total noninterest expense increased $249,000, or 1%, for the second quarter of

   2021 compared to same period in 2020.




Warehouse Lending segment



? Net income increased $375,000, or 10%, for the second quarter of 2021 compared

to the same period in 2020.

? Net interest income increased $261,000, or 4%, for the second quarter of 2021

compared to the same period in 2020.

? The Warehouse Provision was a net credit of $65,000 for the second quarter of

2021 compared to a net charge of $449,000 for the same period in 2020.

? Average committed Warehouse lines increased to $1.4 billion during the second

quarter of 2021 from $1.2 billion during the same period in 2020.

? Average line usage was 51% during the second quarter of 2021 compared to 68%

   during the same period in 2020.




Mortgage Banking segment



Within the Mortgage Banking segment, mortgage banking income decreased $4.2

? million, or 50%, during the second quarter of 2021 compared to the same period

   in 2020.



Overall, Republic's originations of secondary market loans totaled $141 million

? during the second quarter of 2021 compared to $219 million during the same

period in 2020, with the Company's gain-as-a-percent-of-loans-sold decreasing

   from 3.98% to 2.84% from period to period.




Tax Refund Solutions segment



Continuing Operations


Net loss from continuing operations was $244,000 for the second quarter of 2021

compared to a net loss of $615,000 for the same period in 2020. The higher loss

during the second quarter of 2020 primarily reflected general operating losses

? related to TRS's prepaid card division, with such losses substantially

occurring prior to May 1, 2020. On May 1, 2020, the RPS division added a large

   depository relationship that significantly improved profitability on a
   subsequent basis.




Discontinued Operations



? Net income from discontinued operations increased $9.4 million for the second

quarter of 2021 compared to the same period in 2020.

Overall, TRS recorded a net credit to the Provision from discontinued

? operations of $5.8 million during the second quarter of 2021 compared to a net

   charge to the Provision of $4.4 million for the same period in 2020.

? Noninterest income from discontinued operations increased $3.0 million, or 99%,

for the second quarter of 2021 compared to the same period in 2020.

? Net RT revenue from discontinued operations increased $3.0 million, or 103%,

for the second quarter of 2021 compared to the same period in 2020.

? Noninterest expense from discontinued operations was $2.4 million for the

second quarter of 2021 compared to $1.6 million for the same period in 2020.

Republic Credit Solutions segment

? Net income decreased $1.4 million, or 27%, for the second quarter of 2021

compared to the same period in 2020.

? Net interest income decreased $931,000, or 17%, for the second quarter of 2021

   compared to the same period in 2020.


                                       78

  Table of Contents


Overall, RCS recorded a net charge to the Provision of $1.6 million during the

? second quarter of 2021 compared to a net credit of $1.4 million for the same

   period in 2020.




? Noninterest income increased $2.3 million from the second quarter of 2020 to

the second quarter of 2021.

? Noninterest expense was $950,000 for the second quarter of 2021 compared to

   $903,000 for the same period in 2020.



RESULTS OF OPERATIONS (Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020)




Net Interest Income



Banking operations are significantly dependent upon net interest income. Net
interest income is the difference between interest income on interest-earning
assets, such as loans and investment securities and the interest expense on
interest-bearing liabilities used to fund those assets, such as interest-bearing
deposits, securities sold under agreements to repurchase, and FHLB advances. Net
interest income is impacted by both changes in the amount and composition of
interest-earning assets and interest-bearing liabilities, as well as market
interest rates.



See the section titled "Asset/Liability Management and Market Risk" in this section of the filing regarding the Bank's interest rate sensitivity.




A large amount of the Company's financial instruments track closely with, or are
primarily indexed to, either the FFTR, Prime, or LIBOR. These market rates
trended lower since the first quarter of 2020 and the onset of COVID-19
pandemic, as the FOMC reduced the FFTR to approximately 25 basis points during
2020. The FOMC has provided on-going guidance that it is unlikely the FFTR will
be increased in the near term.



Additional increases in short-term interest rates and overall market rates are
generally believed by management to be favorable to the Bank's net interest
income and net interest margin in the near term, while additional decreases in
short-term interest rates and overall market rates are generally believed by
management to be unfavorable to the Bank's net interest income and net interest
margin in the near term. Increases in short-term interest rates, however, could
have a negative impact on net interest income and net interest margin if the
Bank is unable to maintain its deposit balances and the cost of those deposits
at the levels assumed in its interest-rate-risk model. In addition, a flattening
or inversion of the yield curve, causing the spread between long-term interest
rates and short-term interest rates to decrease, could negatively impact the
Company's net interest income and net interest margin. Unknown variables, which
may impact the Company's net interest income and net interest margin in the
future, include, but are not limited to, the actual steepness of the yield
curve, future demand for the Bank's financial products and the Bank's overall
future liquidity needs.


Total Company net interest income from continuing operations decreased $2.2
million, or 4%, during the second quarter of 2021 compared to the same period in
2020. Total Company net interest margin from continuing operations decreased to
3.27% during the second quarter of 2021 compared to 3.58% for the same period in
2020. Net interest income from discontinued operations was $403,000 during the
second quarter of 2021 compared to $393,000 during the second quarter of 2020.



The following were the most significant components affecting the Company's net interest income by reportable segment:



Traditional Banking segment


The Traditional Banking's net interest income decreased $757,000, or 2%, for the second quarter of 2021 compared to the same period in 2020. Traditional Banking's net interest margin was 2.97% for the second quarter of 2021, a decrease of 29 basis points from the same period in 2020.

Table 1 - Traditional Bank Net Interest Income and Net Interest Margin Excluding PPP (Non-GAAP)




Due to the short-term nature of the PPP, management believes Traditional Bank
net interest income excluding PPP lender fees is a more appropriate measure to
analyze the Traditional Bank's net interest income and net interest margin. The
following table reconciles Traditional Bank net interest income and net interest
margin to Traditional Bank net interest income and net interest margin excluding
PPP lender fees, a non-GAAP measure. Net interest margin excluding PPP lender
fees presented below also excludes average PPP loans of $350 million and $387
million for the quarters ended June 30, 2021 and 2020.



                                       79

  Table of Contents





                                                                         Net Interest Income                                       Net Interest Margin
                                                          Three Months Ended Jun. 30,                                    Three Months Ended Jun. 30,
(dollars in thousands)                                     2021                 2020        $ Change    % Change          2021              2020        

Change

Traditional Banking - GAAP                            $       38,278       $       39,035   $   (757)        (2) %         2.97 %             3.26 %      (0.29) %
Less: PPP lender fees                                          3,676                1,599       2,077        130           0.16             (0.05)      

0.21

Traditional Banking ex PPP lender fees - non-GAAP $ 34,602 $ 37,436 $ (2,834) (8) % 2.81

               3.31        (0.50)




The decrease in the Traditional Bank's net interest income and net interest margin during the second quarter of 2021 was primarily attributable to the following factors:

Excluding accreted PPP lender fees, net interest income decreased $2.8 million,

or 8%, from the second quarter 2020, as the Traditional Bank's net interest

margin, excluding PPP loans and related fees, declined from 3.31% for the

second quarter of 2020 to 2.81% for the second quarter of 2021. The decline in

? the net interest margin was substantially driven by a 56-basis point decline in

the Traditional Bank's yield on its average interest-earning assets from the

second quarter of 2020 to the second quarter of 2021, as the majority of the

Traditional Bank's growth in interest-earning assets during the previous 12

months was in lower-yielding cash or cash equivalent investments instead of

   loans.



Partially offsetting the Traditional Bank's margin compression, the Traditional

Bank recognized $3.7 million of fee income on its PPP portfolio during the

second quarter of 2021 compared to $1.6 million of similar fees during the same

period in 2020. The $2.1 million increase in PPP fee income was driven

significantly by the forgiveness, payoff, and paydown of $166 million of PPP

loans during the second quarter of 2021. As of June 30, 2021, net PPP loans of

? $251 million remained on the Core Bank's balance sheet, including $53 million

in loan balances originated during 2020, $207 million in loan balances

originated during 2021, and $9 million of unaccreted PPP lender fees reported

as a credit offset to these originated balances. Unaccreted PPP lender fees

will generally be recognized into income over the estimated remaining life of

the PPP portfolio, with fee recognition accelerated if loans are forgiven or

   repaid earlier than estimated.




Warehouse Lending segment



Net interest income from the Warehouse segment increased $261,000, or 4%, from
the second quarter of 2020 to the second quarter of 2021 driven by an improved
net interest margin. Overall the net interest margin for the Warehouse segment
improved from 3.01% during the second quarter of 2020 to 3.48% during the second
quarter of 2021, as many of the Bank's Warehouse clients reached contractual
interest rate floors on their lines-of-credit during the second quarter of 2020
preventing further declines in the segment's loan yields, while the segment's
cost of funds continued to decline.



The improved margin overcame a decrease in average outstanding balances, which
declined from $807 million during the second quarter of 2020 to $727 million for
the second quarter of 2021, as home-mortgage refinancing dipped from record
highs during 2020. Committed Warehouse lines-of-credit grew to $1.4 billion as
of June 30, 2021 from $1.2 billion as of June 30, 2020, while average usage
rates for Warehouse lines were 51% and 68%, respectively, during the second
quarters of 2021 and 2020.



Republic Credit Solutions segment




RCS's net interest income decreased $931,000, or 17%, from the second quarter of
2020 to the second quarter of 2021. The decrease was driven primarily by a
decline in fee income from RCS's LOC I product. Loan fees on this product,
recorded as interest income on loans, decreased to $3.6 million during the
second quarter of 2021 compared to $4.6 million during the same period in 2020
and accounted for 74% and 79% of all RCS interest income on loans during the
periods. The decrease in loan fees was the direct result of a decline in
balances for RCS's LOC I product following a reduction of marketing for this
product during the second and third quarters of 2020. While the marketing for
this product was reinstated during the fourth quarter of 2020, management
believes the ongoing impact of government stimulus payments continued to reduce
demand for this product during the current period.



Future loan fee income from RCS's LOC I product will likely continue to be negatively impacted by the on-going COVID-19 pandemic.





                                       80

  Table of Contents

Table 2 - Total Company Average Balance Sheets and Interest Rates from
Continuing Operations





                                           Three Months Ended June 30, 2021                 Three Months Ended June 30, 2020
                                           Average                      Average             Average                      Average
(dollars in thousands)                     Balance         Interest      Rate               Balance         Interest      Rate

ASSETS (1)

Interest-earning assets:
Federal funds sold and other
interest-earning deposits               $      938,728     $     262      

0.11 % $ 299,760 $ 87 0.12 % Investment securities, including FHLB stock (2)

                                 562,509         1,912       1.36                 605,776         2,819       1.86
Intercompany funds loaned to
discontinued operations                         49,443            31       0.25                  31,584            20       0.25
RCS LOC I product (3) (7)                       15,107         3,569      94.50                  19,971         4,647      93.07
Other RPG loans (7)                            105,685         1,190       4.50                  92,488         1,046       4.52
Outstanding Warehouse lines of
credit (4) (7)                                 727,091         6,824       3.75                 806,771         7,294       3.62
Paycheck Protection Program loans
(5) (7)                                        349,643         4,582       5.24                 386,664         2,652       2.74
All other Core Bank loans (6) (7)            3,331,114        32,914       3.95               3,539,379        38,339       4.33

Total interest-earning assets                6,079,320        51,284       3.37               5,782,393        56,904       3.94

Allowance for credit losses                   (59,555)                                         (55,310)

Noninterest-earning assets:
Noninterest-earning cash and cash
equivalents                                    112,928                                          103,390
Premises and equipment, net                     39,117                                           43,733
Bank owned life insurance                       97,257                     
                     67,079
Other assets (2)                               166,355                                          146,867
Total assets                            $    6,435,422                                   $    6,088,152

LIABILITIES AND STOCKHOLDERS' EQUITY
(1)

Interest-bearing liabilities:
Transaction accounts                    $    1,599,721     $      93      

0.02 % $ 1,264,581 $ 159 0.05 % Money market accounts

                          773,838            93       0.05                 727,516           248       0.14
Time deposits                                  303,468           930       1.23                 424,190         2,188       2.06
Reciprocal money market and time
deposits                                       319,509           206       0.26                 289,804           435       0.60
Brokered deposits                               23,632             2       0.03                 121,333           380       1.25
Total interest-bearing deposits              3,020,168         1,324       0.18               2,827,424         3,410       0.48

SSUARs                                         169,888             8       0.02                 176,541            17       0.04
Intercompany funds borrowed from
discontinued operations                         84,015           135       0.64                 140,141           443       1.26
Federal Reserve PPP Liquidity
Facility                                             -             -          -                 122,769           105       0.34
Federal Home Loan Bank advances                 25,000            10       0.16                 263,296           822       1.25
Subordinated note                               41,240           169       1.64                  41,240           295       2.86

Total interest-bearing liabilities           3,340,311         1,646       0.20               3,571,411         5,092       0.57

Noninterest-bearing liabilities and
Stockholders' equity:
Noninterest-bearing deposits                 2,142,055                                        1,611,026
Other liabilities                              103,751                                          108,488
Stockholders' equity                           849,305                                          797,227
Total liabilities and stockholders'
equity                                  $    6,435,422                                   $    6,088,152

Net interest income                                        $  49,638                                        $  51,812

Net interest spread                                                        3.17 %                                           3.37 %

Net interest margin                                                        3.27 %                                           3.58 %




    The table above excludes average assets, average liabilities, interest

income, and interest expense for discontinued operations; however, loans to

and borrowings from discontinued operations are included above based on the (1) Company's funds transfer pricing methodology. Net interest income would be

$50.0 million and $52.2 million and net interest margin would be 3.31% and

3.62% for the quarters ended June 30, 2021 and 2020 if continuing and

discontinued operations were consolidated above.

(2) For the purpose of this calculation, the fair market value adjustment on debt

securities is included as a component of other assets.

(3) Interest income is entirely composed of loan fees.

(4) Interest income includes loan fees of $789,000 and $791,000 for the quarters

ended June 30, 2021 and 2020.

(5) Interest income includes loan fees of $3.7 million and $1.6 million for the

quarters ended June 30, 2021 and 2020.

(6) Interest income includes loan fees of $968,000 and $511,000 for the quarters

ended June 30, 2021 and 2020.

Average balances for loans include the principal balance of nonaccrual loans (7) and loans held for sale, and are inclusive of all loan premiums, discounts,

    fees and costs.




                                       81

  Table of Contents

Table 3 illustrates the extent to which changes in interest rates and changes in
the volume of interest-earning assets and interest-bearing liabilities impacted
Republic's interest income and interest expense from continuing operations
during the periods indicated. Information is provided in each category with
respect to (i) changes attributable to changes in volume (changes in volume
multiplied by prior rate), (ii) changes attributable to changes in rate (changes
in rate multiplied by prior volume), and (iii) net change. The changes
attributable to the combined impact of volume and rate have been allocated
proportionately to the changes due to volume and the changes due to rate.



Table 3 - Total Company Volume/Rate Variance Analysis from Continuing Operations




                                                Three Months Ended June 30, 2021
                                                           Compared to
                                                Three Months Ended June 30, 2020
                                       Total Net          Increase / (Decrease) Due to
(in thousands)                           Change             Volume              Rate

Interest income:

Federal funds sold and other
interest-earning deposits             $        175     $            179     $         (4)
Investment securities, including
FHLB stock                                   (907)                (190)             (717)
Intercompany funds loaned to
discontinued operations                         11                   11                 -
RCS LOC I product                          (1,078)              (1,148)                70
Other RPG loans                                144                  149               (5)
Outstanding Warehouse lines of
credit                                       (470)                (740)    

270

Paycheck Protection Program loans            1,930                (276)    
        2,206
All other Core Bank loans                  (5,425)              (2,176)           (3,249)
Net change in interest income              (5,620)              (4,191)           (1,429)

Interest expense:

Transaction accounts                          (66)                   35             (101)
Money market accounts                        (155)                   15             (170)
Time deposits                              (1,258)                (518)             (740)
Reciprocal money market and time
deposits                                     (229)                   41             (270)
Brokered deposits                            (379)                (172)             (207)
SSUARs                                         (9)                  (1)               (8)
Intercompany funds borrowed from
discontinued operations                      (309)                (139)             (170)
Federal Reserve PPP Liquidity
Facility                                     (105)                (105)                 -
Federal Home Loan Bank advances              (813)                (414)    

(399)

Subordinated note                            (123)                    -    

(123)

Net change in interest expense             (3,446)              (1,258)    

(2,188)

Net change in net interest income $ (2,174) $ (2,933) $ 759

* The table above does not consider average assets, average liabilities, interest income, and interest expense for discontinued operations.



                                       82

  Table of Contents

Provision


Total Company Provision from continuing operations was a net charge of $1.5
million for the second quarter of 2021 compared to a net charge of $2.1 million
for the same period in 2020. Provision from discontinued operations was a net
credit of $5.8 million for the second quarter of 2021 compared to a net charge
of $4.4 million for the same period in 2020.



The following were the most significant components comprising the Company's Provision by reportable segment:



Traditional Banking segment



The Traditional Banking Provision during the second quarter of 2021 was a net
credit of $77,000 compared to a net charge of $3.1 million for the second
quarter of 2020. An analysis of the Provision for the second quarter of 2021
compared to the same period in 2020 follows:



For the second quarter of 2021, the Traditional Bank Provision was a net

credit, generally based on an improving economic outlook in conjunction with

limited charge-offs incurred by the Traditional Bank since making significant

? life-of-loan reserves during 2020 following the onset of the pandemic. The net

credit recorded during the second quarter of 2021 primarily included ACLL

releases for the residential real estate, CRE, and HELOC portfolios offset by

additional reserves for certain Special Mention loans with continued signs of

   pandemic-related hardship through June 30, 2021.



During the second quarter of 2020, the Traditional Bank recorded $4.6 million

of additional Provision due to the expected economic impact of the COVID-19

? pandemic. Offsetting the increase in Provision due to the impact of the

COVID-19 pandemic during the second quarter of 2020 was a reduction in

Provision of $1.2 million consistent with a $112 million decrease in

Traditional Bank loan spot balances during the same quarter.





As a percentage of total loans, the Traditional Banking ACLL was 1.37% as of
June 30, 2021 compared to 1.34% as of December 31, 2020 and 1.10% as of June 30,
2020. The Company believes, based on information presently available, that it
has adequately provided for Traditional Banking loan losses as of June 30, 2021.



See the sections titled "Allowance for Credit Losses" and "Asset Quality" in this section of the filing under "Comparison of Financial Condition" for additional discussion regarding the Provision and the Bank's credit quality.




Warehouse Lending segment



Warehouse recorded a net credit to the Provision of $65,000 for the second quarter of 2021 compared to a net charge of $449,000 for the same period in 2020. Provision for both periods reflected changes in general reserves consistent with changes in outstanding period-end balances. Outstanding Warehouse period-end balances decreased $26 million during the second quarter of 2021 compared to an increase of $179 million during the second quarter of 2020.

As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was
0.25% as of June 30, 2021, December 31, 2020, and June 30, 2020. The Company
believes, based on information presently available, that it has adequately
provided for Warehouse loan losses as of June 30, 2021.



Tax Refund Solutions segment



Discontinued Operations


TRS recorded a net credit to the Provision from discontinued operations of $5.8 million during the second quarter of 2021 compared to a net charge of $4.4 million for the same period in 2020. Substantially all TRS Provision from discontinued operations in both periods was related to its EA product.




The TRS Provision from discontinued operations swung from a net charge of $4.4
million during the second quarter of 2020 to a net credit of $5.8 million during
the second quarter of 2021. The credit to the Provision during the second
quarter of 2021 resulted from repayment rates on EA loans from the U.S. Treasury
that significantly exceeded those during the second quarter of 2020. Management
believes the slower repayment rate from the U.S. Treasury during the second
quarter of 2020 was directly related to the impact of the COVID-19 pandemic and
the resulting delay in tax-return processing by the IRS for certain types of tax
returns that require further taxpayer communication and verification.

                                       83

  Table of Contents




The Company completely charged-off all remaining unpaid EAs as of June 30, 2021,
in-line with its customary June 30th charge-off policy for EA loans. Any EA
payments received after June 30th will be credited as a direct recovery to the
Provision in the period it is received for the remainder of 2021.



See additional detail regarding the EA product under Footnote 4 "Loans and Allowance for Credit Losses" of Part I Item 1 "Financial Statements."

Republic Credit Solutions segment

As illustrated in Table 4 below, RCS recorded a net charge to the Provision of
$1.6 million during the second quarter of 2021 compared to a net credit to the
Provision of $1.4 million for the same period in 2020. The negative swing in the
Provision was driven by an increase in outstanding balances for RCS's lines of
credit during the second quarter of 2021 compared to a decrease in similar
balances during the second quarter of 2020. The Company reduced marketing for
its LOC I product during the second and third quarters of 2020, then began
incrementally increasing such marketing during the fourth quarter of 2020. The
Company began offering its LOC II product during the first quarter of 2021.



While RCS loans generally return higher yields, they also present a greater
credit risk than Traditional Banking loan products. As a percentage of total RCS
loans, the RCS ACLL was 7.68% as of June 30, 2021, 7.94% as of December 31, 2020
and 9.21% as of June 30, 2020. The Company believes, based on information
presently available, that it has adequately provided for RCS loan losses as
of
June 30, 2021.


The following table presents net charges to the RCS Provision from continuing operations by product:

Table 4 - RCS Provision by Product




                         Three Months Ended Jun. 30,
(in thousands)             2021              2020          $ Change    % Change
Product:
Lines of credit        $      1,581    $        (1,454)   $    3,035      (209) %
Hospital receivables             11                  11            -          -
Total                  $      1,592    $        (1,443)   $    3,035      (210) %






                                       84

  Table of Contents

Table 5 - Summary of Loan and Lease Loss Experience




                                                             Three Months Ended
                                                                 June 30,
(dollars in thousands)                                      2021           2020

ACLL at beginning of period                              $    75,336    $    70,431

Charge-offs:

Traditional Banking:
Commercial real estate                                             -          (270)
Commercial & industrial                                            -          (192)
Consumer                                                       (161)          (238)
Total Traditional Banking                                      (161)          (700)
Warehouse lines of credit                                          -              -
Total Core Banking                                             (161)          (700)

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                               (10,256)       (19,575)
Other TRS loans                                                 (30)           (28)
Republic Credit Solutions                                      (597)        (2,008)
Total Republic Processing Group                             (10,883)      
(21,611)
Total charge-offs                                           (11,044)       (22,311)

Recoveries:

Traditional Banking:
Residential real estate                                           19             45
Commercial real estate                                            12              2
Commercial & industrial                                            4             41
Home equity                                                       34             12
Consumer                                                          97            119
Total Traditional Banking                                        166            219
Warehouse lines of credit                                          -              -
Total Core Banking                                               166            219

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                                     30              -
Other TRS loans                                                    -              1
Republic Credit Solutions                                         79            199
Total Republic Processing Group                                  109       
    200

Total recoveries                                                 275            419
Net loan recoveries (charge-offs)                           (10,769)      

(21,892)

Provision from continuing operations- Core Banking              (95)       

3,553

Provision from continuing operations - RPG                     1,592       

(1,443)

Provision from discontinued operations - RPG                 (5,773)       
  4,448
Total Provision                                              (4,276)          6,558
ACLL at end of period                                    $    60,291    $    55,097

Credit Quality Ratios - Total Company:

ACLL to total loans                                             1.32 %         1.09 %
ACLL to nonperforming loans                                      270       

270

Net loan charge-offs to average loans                           0.95       

1.80

Net loan charge-offs from continuing operations to
average loans                                                   0.05       

0.19

Credit Quality Ratios - Core Banking:

ACLL to total loans                                             1.16 %         0.92 %
ACLL to nonperforming loans                                      238       

230

Net loan charge-offs to average loans                              -       
   0.04






                                       85

  Table of Contents

Noninterest Income



Total Company noninterest income from continuing operations increased $78,000
during the second quarter of 2021 compared to the same period in 2020.
Noninterest income from discontinued operations increased $3.0 million, or
99%
comparing the same periods.


The following were the most significant components comprising the total Company's noninterest income by reportable segment:



Traditional Banking segment



Traditional Banking's noninterest income increased $1.8 million, or 30%, for the
second quarter of 2021 compared to the same period in 2020. Interchange Fee
Income increased $643,000 from the second quarter of 2020 to the same period in
2021, while Service Charges on Deposit Accounts increased $623,000 comparing the
same periods. Service Charges on Deposit Accounts were below normal levels
during the second quarter of 2020, as a pandemic-driven rise in the consumer
savings rates drove a reduction in the Bank's overdraft-related fees. Both
Interchange Fee Income and Service Charges on Deposits began to rise towards
normal levels during the first quarter of 2021 following the removal of many
pandemic-related restrictions.



The Bank earns a substantial majority of its fee income related to its overdraft
service program from the per item fee it assesses its customers for each
insufficient-funds check or electronic debit presented for payment. The total
per item fees, net of refunds, included in Service Charges on Deposits Accounts
for the three months ended June 30, 2021 and 2020 were $1.3 million and
$893,000. The total daily overdraft charges, net of refunds, included in
interest income for the three months ended June 30, 2021 and 2020 were $257,000
and $0. The Bank suspended its daily overdraft charges during 2020 to soften the
economic hardship of the COVID-19 pandemic on its clients. The Bank reinstituted
the charging of its daily overdraft fee on September 1, 2020.



Mortgage Banking segment


Within the Mortgage Banking segment, mortgage banking income decreased $4.2
million, or 50%, during the second quarter of 2021 compared to the same period
in 2020. For the second quarter of 2021, the Core Bank originated $141 million
in secondary market loans and achieved an average
gain-as-a-percent-of-loans-sold during the period of 2.84%, with comparable
originations of $219 million and comparable gains of 3.98% during the second
quarter of 2020. Favorable market conditions drove a higher gain percentage for
the Core Bank during the last nine months of 2020 and for a portion of the first
quarter of 2021, with these favorable conditions beginning to normalize during
February 2021. Management believes these favorable conditions could continue to
normalize during the remainder of 2021 potentially bringing the Core Bank's
gain-as-a-percent-of-loans-sold closer to normal historical levels at, or below,
2.50%.


Tax Refund Solutions segment



Discontinued Operations



TRS's noninterest income from discontinued operations increased $3.0 million
during the second quarter of 2021 compared to the same period in 2020. This
increase reflected a $3.0 million increase in net RT fees, as delays in the 2021
tax season drove a larger share of RT volume into the second quarter of the
year.



Republic Credit Solutions segment




RCS's noninterest income increased $2.3 million during the second quarter of
2021 compared to the same period in 2020, with program fees representing the
entirety of RCS's noninterest income. Pandemic-driven restrictions negatively
impacted RCS program fees during the second quarter of 2020, with those program
fees beginning to normalize during 2021 following the removal of restrictions.





                                       86

  Table of Contents

The following table presents RCS program fees by product:

Table 6 - RCS Program Fees by Product





                          Three Months Ended Jun. 30,
(in thousands)               2021               2020         $ Change    % Change
Product:
Lines of credit        $          1,354     $         529   $      825        156 %
Hospital receivables                 63              (10)           73      (730)
Installment loans*                1,417                 1        1,416         NM
Total                  $          2,834     $         520   $    2,314        445 %




* The Company has elected the fair value option for this product, with

mark-to-market adjustments recorded as a component of program fees.




Noninterest Expense



Total Company noninterest expense from continuing operations increased $89,000
during the second quarter of 2021 compared to the same period in 2020.
Noninterest expense from discontinued operations increased $742,000, or 46%,
comparing the same periods.


The following were the most significant components comprising the increase in noninterest expense by reportable segment:



Traditional Banking segment


Traditional Banking noninterest expense increased $249,000, or 1%, for the second quarter of 2021 compared to the same period in 2020. The following primarily drove the change in noninterest expense:

Technology, Equipment, and Communication expense increased $628,000, as the

? Traditional Bank strategically added 30 Interactive Teller Machines over the

previous 12 months, bringing its ITM fleet to over 70 ITMs as of June 30, 2021.

Partially offsetting the increase above, Bank Franchise Tax expense decreased

? $474,000. As previously reported, Kentucky enacted HB354 in March 2019 and as a

   result, the Bank transitioned from a capital-based bank franchise tax to
   corporate income tax on January 1, 2021 for Kentucky state taxes.




Tax Refund Solutions segment



Discontinued Operations



TRS's noninterest expense from discontinued operations increased $742,000 during
the second quarter of 2021 compared to the same period in 2020. This increase
reflected approximately $1.0 million in legal costs associated with the Bank's
sale of its TRS operations.







                                       87

  Table of Contents

OVERVIEW (Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020)




Total Company net income for the first six months of 2021 was $50.0 million, a
$7.5 million, or 18%, increase from the same period in 2020. Diluted EPS
increased to $2.41 for the six months of June 30, 2021 compared to $2.04 for the
same period in 2020.



Net income from continuing operations was $36.8 million for the first six months
of 2021, a $4.8 million increase from the same period in 2020. Diluted EPS from
continuing operations were $1.78 for the six months ended June 30, 2021 compared
to $1.54 for the same period in 2020. The increase in net income and net income
from continuing operations primarily reflected a positive reduction in Provision
partially offset by a decrease in net interest income.



The following are general highlights by reportable segment. Discontinued operations for the periods discussed relate entirely to the TRS segment.

See additional detail regarding the Bank's agreement to sell TRS under Footnote 17 "Discontinued Operations" of Part I Item 1 "Financial Statements."



Traditional Banking segment


? Net income increased $6.4 million, or 66%, for the first six months of 2021

compared to the same period in 2020.

? Net interest income decreased $276,000 for the first six months of 2021

compared to the same period in 2020.

Provision decreased $8.8 million to a net credit of $82,000 for the first six

? months of 2021 compared to a net charge of $8.7 million for the same period in

   2020.




? Noninterest income increased $1.4 million, or 10%, for the first six months of

2021 compared to the same period in 2020.

? Total noninterest expense increased $930,000, or 1%, for the first six months

of 2021 compared to same period in 2020.

? Total Traditional Bank loans decreased $117 million, or 3%, during the first

six months of 2021, driven by a $141 million decrease in PPP loans.

? Total nonperforming loans to total loans for the Traditional Banking segment

was 0.60% as of June 30, 2021 compared to 0.63% as of December 31, 2020.

? Delinquent loans to total loans for the Traditional Banking segment was 0.28%

as of June 30, 2021 compared to 0.26% as of December 31, 2020.

? As of June 30, 2021, $25 million, or 1%, of Traditional Banking loans remained

under a COVID-19 hardship accommodation.

? Total Traditional Bank deposits increased $238 million, or 6%, during the first

   six months of 2021.




Warehouse Lending segment



? Net income increased $2.5 million, or 40%, for the first six months of 2021

compared to the same period in 2020.

? Net interest income increased $2.7 million, or 26%, for the first six months of

2021 compared to the same period in 2020.

? The Warehouse Provision was a net credit of $307,000 for the first six months

of 2021 compared to a net charge of $781,000 for the same period in 2020.

? Average committed Warehouse lines increased to $1.4 billion during the first

   six months of 2021 from $1.1 billion during the same period in 2020.

? Average line usage was 52% during the first six months of 2021 compared to 63%

   during the same period in 2020.


                                       88

  Table of Contents



Mortgage Banking segment



Within the Mortgage Banking segment, mortgage banking income decreased $1.8

? million, or 14%, during the first six months of 2021 compared to the same

   period in 2020.



Overall, Republic's originations of secondary market loans totaled $355 million

? during the first six months of 2021 compared to $344 million during the same

period in 2020, with the Company's gain-as-a-percent-of-loans-sold decreasing

   from 3.93% to 3.10% from period to period.




Tax Refund Solutions segment



Continuing Operations


Net loss from continuing operations was $562,000 for the first six months of

2021 compared to a net loss of $1.5 million for the same period in 2020. The

higher loss during the first six months of 2020 primarily reflected general

? operating losses related to TRS's prepaid card division, with such losses

substantially occurring prior to May 1, 2020. On May 1, 2020, the RPS division

added a large depository relationship that significantly improved profitability

   on a subsequent basis.




Discontinued Operations


? Net income from discontinued operations increased $2.7 million for the first

six months of 2021 compared to the same period in 2020.

? Net interest income from discontinued operations decreased $5.9 million for the

first six months of 2021 compared to the same period in 2020.

? Total EA originations were $250 million during the first six months of 2021

compared to $388 million for the first six months of 2020.

Overall, TRS recorded a net charge to the Provision from discontinued

? operations of $10.1 million during the first six months of 2021 compared to a

net charge to the Provision of $19.6 million for the same period in 2020.

? Noninterest income from discontinued operations decreased $71,000 for the first

six months of 2021 compared to the same period in 2020.

? Net RT revenue decreased $94,000 for the first six months of 2021 compared to

   the same period in 2020.




? Noninterest expense from discontinued operations was $6.1 million for the first

   six months of 2021 compared to $6.5 million for the same period in 2020.



Republic Credit Solutions segment

? Net income decreased $2.5 million, or 24%, for the first six months of 2021

compared to the same period in 2020.

? Net interest income decreased $3.2 million, or 25%, for the first six months of

   2021 compared to the same period in 2020.



Overall, RCS recorded a net charge to the Provision of $1.2 million during the

? first six months of 2021 compared to a net charge of $263,000 for the same

   period in 2020.




? Noninterest income increased $1.3 million, or 47%, from the first six months of

2020 to the first six months of 2021.

? Noninterest expense was $2.0 million for the first six months of 2021 compared

to $1.8 million for the same period in 2020.

? Total nonperforming loans to total loans for the RCS segment was 0.63% as of

June 30, 2021 compared to 0.04% as of December 31, 2020.


                                       89

  Table of Contents


? Delinquent loans to total loans for the RCS segment was 7.66% as of June 30,

   2021 compared to 9.23% as of December 31, 2020.



RESULTS OF OPERATIONS (Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020)




Net Interest Income



Banking operations are significantly dependent upon net interest income. Net
interest income is the difference between interest income on interest-earning
assets, such as loans and investment securities and the interest expense on
interest-bearing liabilities used to fund those assets, such as interest-bearing
deposits, securities sold under agreements to repurchase, and FHLB advances. Net
interest income is impacted by both changes in the amount and composition of
interest-earning assets and interest-bearing liabilities, as well as market
interest rates.



See the section titled "Asset/Liability Management and Market Risk" in this section of the filing regarding the Bank's interest rate sensitivity.




A large amount of the Company's financial instruments track closely with, or are
primarily indexed to, either the FFTR, Prime, or LIBOR. These market rates
trended lower since the first quarter of 2020 and the onset of COVID-19
pandemic, as the FOMC reduced the FFTR to approximately 25 basis points during
2020. The FOMC has provided on-going guidance that it is unlikely the FFTR will
be increased in the near term.



Additional increases in short-term interest rates and overall market rates are
generally believed by management to be favorable to the Bank's net interest
income and net interest margin in the near term, while additional decreases in
short-term interest rates and overall market rates are generally believed by
management to be unfavorable to the Bank's net interest income and net interest
margin in the near term. Increases in short-term interest rates, however, could
have a negative impact on net interest income and net interest margin if the
Bank is unable to maintain its deposit balances and the cost of those deposits
at the levels assumed in its interest-rate-risk model. In addition, a flattening
or inversion of the yield curve, causing the spread between long-term interest
rates and short-term interest rates to decrease, could negatively impact the
Company's net interest income and net interest margin. Unknown variables, which
may impact the Company's net interest income and net interest margin in the
future, include, but are not limited to, the actual steepness of the yield
curve, future demand for the Bank's financial products and the Bank's overall
future liquidity needs.


Total Company net interest income from continuing operations decreased $1.3
million, or 1%, during the first six months of 2021 compared to the same period
in 2020. Total Company net interest margin from continuing operations decreased
to 3.42% during the first six months of 2021 compared to 3.75% for the same
period in 2020. Net interest income from discontinued operations was $14.8
million during the first six months of 2021 compared to $20.7 million during the
same period in 2020.


The following were the most significant components affecting the Company's net interest income by reportable segment:



Traditional Banking segment



The Traditional Banking's net interest income decreased $276,000 for the first
six months of 2021 compared to the same period in 2020. Traditional Banking's
net interest margin was 3.21% for the first six months of 2021, a decrease of 31
basis points from the same period in 2020.



Table 7 - Traditional Bank Net Interest Income and Net Interest Margin Excluding PPP (Non-GAAP)




Due to the short-term nature of the PPP, management believes Traditional Bank
net interest income excluding PPP lender fees is a more appropriate measure to
analyze the Traditional Bank's net interest income and net interest margin. The
following table reconciles Traditional Bank net interest income and net interest
margin to Traditional Bank net interest income and net interest margin excluding
PPP lender fees, a non-GAAP measure. Net interest margin excluding PPP lender
fees presented below also excludes average PPP loans of $357 million and $193
million for the six months ended June 30, 2021 and 2020.



                                       90

  Table of Contents





                                                                        Net Interest Income                                     Net Interest Margin
                                                          Six Months Ended Jun. 30,                                    Six Months Ended Jun. 30,
(dollars in thousands)                                    2021                2020        $ Change    % Change          2021             2020          Change

Traditional Banking - GAAP                            $      79,380       $      79,656   $   (276)        (0) %         3.21 %            3.52 %     (0.31) %
Less: PPP lender fees                                         9,433               1,599       7,834        490           0.24            (0.03)         0.27

Traditional Banking ex PPP lender fees - non-GAAP $ 69,947 $

     78,057   $ (8,110)       (10) %         2.97              3.55       (0.58)




The decrease in the Traditional Bank's net interest income and net interest margin during the first six months of 2021 was primarily attributable to the following factors:

Excluding accreted PPP lender fees, net interest income decreased $8.1 million,

or 10%, from the first six months of 2020, as the Traditional Bank's net

interest margin, excluding PPP loans and related fees, declined from 3.55% for

the first six months of 2020 to 2.97% for the first six months of 2021. The

? decline in the net interest margin was substantially driven by a 22-basis point

decline in the Traditional Bank's yield on its average interest-earning assets

from the first six months of 2020 to the first six months of 2021, as the

majority of the Traditional Bank's growth in interest-earning assets during the

previous 12 months was in lower-yielding cash or cash equivalents instead of

   loans.



Partially offsetting the Traditional Bank's margin compression, the Traditional

Bank recognized $9.4 million of fee income on its PPP portfolio during the

first six months of 2021 compared to $1.6 million of similar fees during the

same period in 2020. The $7.8 million increase in PPP fee income was driven

significantly by the forgiveness, payoff, and paydown of $348 million of PPP

loans during the first six months of 2021. As of June 30, 2021, net PPP loans

? of $251 million remained on the Core Bank's balance sheet, including $53

million in loan balances originated during 2020, $207 million in loan balances

originated during 2021, and $9 million of unaccreted PPP lender fees reported

as a credit offset to these originated balances. Unaccreted PPP lender fees

will generally be recognized into income over the estimated remaining life of

the PPP portfolio, with fee recognition accelerated if loans are forgiven or

   repaid earlier than estimated.




Warehouse Lending segment



Net interest income increased $2.7 million, or 26%, for the first six months of 2021 compared to the same period in 2020.


Average committed Warehouse lines increased to $1.4 billion during the first six
months of 2021 from $1.2 billion during the same period in 2020, while overall
usage rates on Warehouse lines of credit were 52% and 63%, respectively for the
same periods. In addition, the Warehouse net interest margin increased to 3.45%
for the first six months of 2021 compared to 2.86% for the first six months of
2020, as many of the Bank's Warehouse client reached contractual interest rate
floors on their lines-of-credit during the first six months of 2020 preventing
further declines in the segment's loan yields, while the segment's cost of
funds
continued to decline.



Tax Refund Solutions segment



Discontinued Operations



TRS's net interest income from discontinued operations decreased $5.9 million
for the first six months of 2021 compared to the same period in 2020. TRS's EA
product earned $13.1 million in interest income during the first six months of
2021, a $6.4 million decrease from the first six months of 2020 resulting
primarily from a $138 million decrease in EA originations from period to period.
Management believes that economic impact (stimulus) payments, pandemic health
risks, and a two-week delay in the start to the 2021 tax season, all, in varying
degrees, negatively impacted demand for its EA product during the first six
months of 2021.



See additional detail regarding the EA product under Footnote 4 "Loans and Allowance for Credit Losses" of Part I Item 1 "Financial Statements."





                                       91

  Table of Contents

Republic Credit Solutions segment




RCS's net interest income decreased $3.2 million, or 25%, from the first six
months of 2020 to the first six months of 2021. The decrease was driven
primarily by a decline in fee income from RCS's LOC I product. Loan fees on this
product, recorded as interest income on loans, decreased to $7.3 million during
the first six months of 2021 compared to $10.7 million during the same period in
2020 and accounted for 75% and 79% of all RCS interest income on loans during
the periods. The decrease in loan fees was the direct result of a decline in
balances for RCS's LOC I product following a reduction of marketing for this
product during the second and third quarters of 2020. While the marketing for
this product was reinstated during the fourth quarter of 2020, management
believes the ongoing impact of government stimulus payments continued to reduce
demand for this product during the current period.



Future loan fee income from RCS's LOC I product will likely continue to be negatively impacted by the on-going COVID-19 pandemic.





                                       92

  Table of Contents

Table 8 - Total Company Average Balance Sheets and Interest Rates




                                        Six Months Ended June 30, 2021               Six Months Ended June 30, 2020
                                       Average                    Average           Average                    Average
(dollars in thousands)                 Balance       Interest      Rate    

Balance Interest Rate

ASSETS (1)

Interest-earning assets:
Federal funds sold and other
interest-earning deposits            $    725,764    $     416       0.11 %       $    253,548    $     724       0.57 %
Investment securities, including
FHLB stock (2)                            563,243        3,931       1.40              562,751        5,828       2.07
Intercompany funds loaned to
discontinued operations                   160,208          195       0.24              154,561        1,130       1.46
RCS LOC I product (3) (7)                  15,692        7,338      93.53               23,287       10,697      91.87
Other RPG loans (7)                       103,247        2,328       4.51               90,511        2,383       5.27
Outstanding Warehouse lines of
credit (4) (7)                            758,493       14,194       3.74              724,977       14,339       3.96
Paycheck Protection Program loans
(5) (7)                                   357,163       11,280       6.32              193,332        2,650       2.74

All other Core Bank loans (6) (7) 3,337,969 66,884 4.01

3,554,117 80,786 4.55

Total interest-earning assets           6,021,779      106,566       3.54  

5,557,084 118,537 4.27

Allowance for credit loss                (60,235)                          

(51,357)


Noninterest-earning assets:
Noninterest-earning cash and cash
equivalents                               109,641                                       95,663
Premises and equipment, net                39,151                                       44,680
Bank owned life insurance                  82,837                                       66,866
Other assets (2)                          167,361                                      132,861
Total assets                         $  6,360,534                                 $  5,845,797

LIABILITIES AND STOCKHOLDERS'
EQUITY (1)

Interest-bearing liabilities:
Transaction accounts                 $  1,542,685    $     175       0.02 %       $  1,196,681    $     841       0.14 %
Money market accounts                     753,198          196       0.05              744,745        1,490       0.40
Time deposits                             309,155        2,035       1.32              421,257        4,345       2.06
Reciprocal money market and time
deposits                                  316,493          461       0.29              248,887        1,053       0.85
Brokered deposits                          43,369           22       0.10              196,414        1,693       1.72

Total interest-bearing deposits 2,964,900 2,889 0.19

2,807,984 9,422 0.67


Securities sold under agreements
to repurchase and other short-term
borrowings                                181,216           17       0.02              192,755          136       0.14
Intercompany funds borrowed from
discontinued operations                   132,144          262       0.40              184,950        1,473       1.59
Federal Reserve PPP Liquidity
Facility                                        -            -          -               61,384          105       0.34
Federal Home Loan Bank advances            34,033           41       0.24              317,307        2,470       1.56
Subordinated note                          41,240          341       1.65               41,240          647       3.14

Total interest-bearing liabilities 3,353,533 3,550 0.21

3,605,620 14,253 0.79


Noninterest-bearing liabilities
and Stockholders' equity:
Noninterest-bearing deposits            2,054,131                                    1,348,541
Other liabilities                         110,044                                      103,572
Stockholders' equity                      842,826                                      788,064
Total liabilities and
stock-holders' equity                $  6,360,534                                 $  5,845,797

Net interest income                                  $ 103,016                                    $ 104,284

Net interest spread                                                  3.33 %                                       3.48 %

Net interest margin                                                  3.42 %                                       3.75 %



    The table above excludes average assets, average liabilities, interest

income, and interest expense for discontinued operations; however, loans to

and borrowings from discontinued operations are included above based on the (1) Company's funds transfer pricing methodology. Net interest income would be

$117.8 million and $124.9 million and net interest margin would be 3.97% and

4.55% for the six months ended June 30, 2021 and 2020 if continuing and

discontinued operations were consolidated above.

(2) For the purpose of this calculation, the fair market value adjustment on debt

securities is included as a component of other assets.

(3) Interest income is composed entirely of loan fees.

(4) Interest income includes loan fees of $1.7 million and $1.4 million for the

six months ended June 30, 2021 and 2020.

(5) Interest income includes loan fees of $9.4 million and $1.6 million for the

six months ended June 30, 2021 and 2020.

(6) Interest income includes loan fees of $1.9 million and $1.7 million for the

six months ended June 30, 2021 and 2020.

Average balances for loans include the principal balance of nonaccrual loans (7) and loans held for sale, and are inclusive of all loan premiums, discounts,

    fees and costs.


                                       93

  Table of Contents

Table 9 illustrates the extent to which changes in interest rates and changes in
the volume of interest-earning assets and interest-bearing liabilities impacted
Republic's interest income and interest expense during the periods indicated.
Information is provided in each category with respect to (i) changes
attributable to changes in volume (changes in volume multiplied by prior rate),
(ii) changes attributable to changes in rate (changes in rate multiplied by
prior volume), and (iii) net change. The changes attributable to the combined
impact of volume and rate have been allocated proportionately to the changes due
to volume and the changes due to rate.



Table 9 - Total Company Volume/Rate Variance Analysis




                                                  Six Months Ended June 30, 2021
                                                           Compared to
                                                  Six Months Ended June 30, 2020
                                        Total Net          Increase / (Decrease) Due to
(in thousands)                           Change             Volume               Rate

Interest income:

Federal funds sold and other
interest-earning deposits             $       (308)     $          595      $        (903)
Investment securities, including
FHLB stock                                  (1,897)                  5             (1,902)
Intercompany funds loaned to
discontinued operations                       (935)                 40               (975)
RCS LOC I product                           (3,359)            (5,045)               1,686
Other RPG loans                                (55)                312               (367)
Outstanding Warehouse lines of
credit                                        (145)                647     

(792)

Paycheck Protection Program loans             8,630              3,399     
         5,231
All other Core Bank loans                  (13,902)            (4,716)             (9,186)
Net change in interest income              (11,971)            (4,763)             (7,208)

Interest expense:

Transaction accounts                          (666)                191               (857)
Money market accounts                       (1,294)                 17             (1,311)
Time deposits                               (2,310)              (979)             (1,331)
Reciprocal money market and time
deposits                                      (592)                231     

(823)

Brokered deposits                           (1,671)              (757)     

(914)

Securities sold under agreements to
repurchase and other short-term
borrowings                                    (119)                (7)     

(112)

Intercompany funds borrowed from
discontinued operations                     (1,211)              (334)               (877)
Federal Reserve PPP Liquidity
Facility                                      (105)              (105)                   -
Federal Home Loan Bank advances             (2,429)            (1,247)     

(1,182)

Subordinated note                             (306)                  -     

(306)

Net change in interest expense             (10,703)            (2,990)     

(7,713)

Net change in net interest income $ (1,268) $ (1,773) $ 505

* The table above does not consider average assets, average liabilities, interest income, and interest expense for discontinued operations.



                                       94

  Table of Contents

Provision



Total Company Provision from continuing operations was a net charge of $828,000
for the first six months of 2021 compared to a net charge of $9.7 million for
the same period in 2020. Total Company Provision from discontinued operations
was a net charge of $10.1 million for the first six months of 2021 compared to a
net charge of $19.6 million for the same period in 2020.



The following were the most significant components comprising the Company's Provision by reportable segment:



Traditional Banking segment


The Traditional Banking Provision during the first six months of 2021 was a net
credit of $82,000 compared to an $8.7 million net charge for the first six
months of 2020. An analysis of the Provision for the first six months of 2021
compared to the same period in 2020 follows:



For the first six months of 2021, there was a minimal net credit to the

Traditional Bank Provision, generally based on an improving economic outlook in

conjunction with limited charge-offs incurred by the Traditional Bank since

? making significant life-of-loan reserves during 2020 following the onset of the

pandemic. The net credit recorded during the first six months of 2021 primarily

included ACLL releases for the residential real estate, CRE, and HELOC

portfolios offset by additional reserves for certain Special Mention loans with

   continued signs of pandemic-related hardship through June 30, 2021.




   During the first six months of 2020, the Traditional Bank recorded $10.9

million of additional Provision due to the expected economic impact of the

? COVID-19 pandemic. Offsetting the increase in Provision due to the impact of

the COVID-19 pandemic during the first six months of 2020 was a reduction in

Provision of $2.0 million consistent with a $170 million decrease in

Traditional Bank loan spot balances from December 31, 2019 to June 30, 2020.





As a percentage of total loans, the Traditional Banking ACLL was 1.37% as of
June 30, 2021 compared to 1.34% as of December 31, 2020 and 1.10% as of June 30,
2020. The Company believes, based on information presently available, that it
has adequately provided for Traditional Banking loan losses as of June 30, 2021.



See the sections titled "Allowance for Credit Losses" and "Asset Quality" in this section of the filing under "Comparison of Financial Condition" for additional discussion regarding the Provision and the Bank's credit quality.




Warehouse Lending segment



Warehouse recorded a net credit to the Provision of $307,000 for the first six
months of 2021 compared to a net charge of $781,000 for the same period in 2020.
Provision for both periods reflected changes in general reserves consistent with
changes in outstanding period-end balances. Outstanding Warehouse period-end
balances decreased $123 million during the first six months of 2021 compared to
an increase of $312 million during the first six months of 2020.



As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was
0.25% as of June 30, 2021, December 31, 2020, and June 30, 2020. The Company
believes, based on information presently available, that it has adequately
provided for Warehouse loan losses as of June 30, 2021.



Tax Refund Solutions segment



Discontinued Operations


TRS recorded a net charge to the Provision from discontinued operations of $10.1
million during the first six months of 2021 compared to a net charge of $19.6
million for the same period in 2020. Substantially all TRS Provision in both
periods was related to its EA product.



TRS's Provision for EA loan losses was $10.2 million, or 4.1% of its $250
million in EAs originated during the first six months of 2021, compared to a
Provision of $19.5 million, or 5.0% of its $388 million in EAs originated during
the first six months of 2020. The lower Provision during the first six months of
2021 resulted from repayment rates on EA loans from the U.S. Treasury that
exceeded those during the first six months of 2020. Management believes the
slower repayment rates from the U.S. Treasury during the first six months of
2020 was directly related to the impact of the COVID-19 pandemic and the
resulting delay in tax-return processing by the IRS for certain types of tax
returns that required further taxpayer communication and verification.

                                       95

  Table of Contents


EAs are only originated during the first two months of each year, with all
uncollected EAs charged off by June 30th of each year. EAs collected during the
second half of each year are recorded as recoveries of previously charged-off
loans.


See additional detail regarding the EA product under Footnote 4 "Loans and Allowance for Credit Losses" of Part I Item 1 "Financial Statements."

Republic Credit Solutions segment




As illustrated in Table 10 below, RCS recorded a net charge to the Provision of
$1.2 million during the first six months of 2021 compared to a net charge to the
Provision of $263,000 for the same period in 2020. The increase in the Provision
was driven by an increase in outstanding balances for RCS's lines of credit
during the first six months of 2021 compared to a decrease in similar balances
during the same period in 2020. The Company reduced marketing for its LOC I
product during the second and third quarters of 2020, then began incrementally
increasing such marketing during the fourth quarter of 2020. The Company began
offering its LOC II product during the first quarter of 2021.



While RCS loans generally return higher yields, they also present a greater
credit risk than Traditional Banking loan products. As a percentage of total RCS
loans, the RCS ACLL was 7.68% as of June 30, 2021, 7.94% as of December 31,
2020, and 9.21% as of June 30, 2020. The Company believes, based on information
presently available, that it has adequately provided for RCS loan losses as
of
June 30, 2021.


The following table presents net charges to the RCS Provision by product:

Table 10 - RCS Provision by Product





                           Six Months Ended Jun. 30,
(in thousands)              2021                 2020      $ Change    % Change
Product:
Lines of credit        $         1,207     $         253   $     954      377 %
Hospital receivables                10                10           -        -
Total                  $         1,217     $         263   $     954      363 %






                                       96

  Table of Contents

Table 11 - Summary of Loan and Lease Loss Experience




                                                              Six Months Ended
                                                                 June 30,
(dollars in thousands)                                      2021           2020

ACLL at beginning of period                              $    61,067    $    43,351

Adoption of ASC 326                                                -          6,734

Charge-offs:

Traditional Banking:
Residential real estate                                            -           (27)
Commercial real estate                                         (428)          (270)
Commercial & industrial                                            -          (192)
Consumer                                                       (370)          (733)
Total Traditional Banking                                      (798)        (1,222)
Warehouse lines of credit                                          -              -
Total Core Banking                                             (798)        (1,222)

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                               (10,256)       (19,575)
Commercial & industrial                                         (51)           (72)
Republic Credit Solutions                                    (1,362)        (4,717)
Total Republic Processing Group                             (11,669)      
(24,364)
Total charge-offs                                           (12,467)       (25,586)

Recoveries:

Traditional Banking:
Residential real estate                                           46             86
Commercial real estate                                            80            473
Commercial & industrial                                           11             44
Home equity                                                       41             87
Consumer                                                         243            323
Total Traditional Banking                                        421          1,013
Warehouse lines of credit                                          -              -
Total Core Banking                                               421          1,013

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                                     30             42
Commercial & industrial                                            8              1
Republic Credit Solutions                                        171            470
Total Republic Processing Group                                  209       
    513
Total recoveries                                                 630          1,526

Net loan charge-offs                                        (11,837)       (24,060)
Provision from continuing operations- Core Banking             (267)       

9,228

Provision from continuing operations - RPG                     1,217       

263

Provision from discontinued operations - RPG                  10,111       
 19,581
Total Provision                                               11,061         29,072
ACLL at end of period                                    $    60,291    $    55,097

Credit Quality Ratios - Total Company:

ACLL to total loans                                             1.32 %         1.09 %
ACLL to nonperforming loans                                      270       

270

Net loan charge-offs to average loans                           0.51       

1.03

Net loan charge-offs from continuing operations to
average loans                                                   0.07       

0.20

Credit Quality Ratios - Core Banking:

ACLL to total loans                                             1.16 %         0.92 %
ACLL to nonperforming loans                                      238       

230

Net loan charge-offs to average loans                           0.02       
   0.01




                                       97

  Table of Contents

Noninterest Income


Total Company noninterest income from continuing operations increased $1.6
million, or 5%, during the first six months of 2021 compared to the same period
in 2020. Total Company noninterest income from discontinued operations decreased
$71,000 during the first six months of 2021 compared to the same period in 2020.



The following were the most significant components comprising the total Company's noninterest income by reportable segment:



Traditional Banking segment



Traditional Banking's noninterest income increased $1.4 million, or 10%, for the
first six months of 2021 compared to the same period in 2020. Interchange Fee
Income increased $1.1 million from the first six months of 2020 to the same
period in 2021, while Service Charges on Deposit Accounts increased $350,000
comparing the same periods. Service Charges on Deposit Accounts were below
normal levels during the first six months of 2020, as a pandemic-driven rise in
the consumer savings rate drove a reduction in the Bank's overdraft-related
fees. Both Interchange Fee Income and Service Charges on Deposits began to rise
towards normal levels during the first quarter of 2021 following the removal of
pandemic-related restrictions.



The Bank earns a substantial majority of its fee income related to its overdraft
service program from the per item fee it assesses its customers for each
insufficient-funds check or electronic debit presented for payment. The total
per item fees, net of refunds, included in service charges on deposits for the
six months ended June 30, 2021 and 2020 were $2.5 million and $2.7 million. The
total daily overdraft charges, net of refunds, included in interest income for
the six months ended June 30, 2021 and 2020 were $506,000 and $417,000. The Bank
suspended its daily overdraft charges during the first six months of 2020 to
soften the economic hardship of the COVID-19 pandemic on its clients. The Bank
reinstituted the charging of its daily overdraft fee on September 1, 2020.


Mortgage Banking segment


Within the Mortgage Banking segment, mortgage banking income decreased $1.8
million, or 14%, during the first six months of 2021 compared to the same period
in 2020. For the first six months of 2021, the Core Bank originated $355 million
in secondary market loans and achieved an average
gain-as-a-percent-of-loans-sold during the period of 3.10%, with comparable
originations of $344 million and comparable gains of 3.93% during the first six
months of 2020. Favorable market conditions drove a higher gain percentage for
the Core Bank during the last nine months of 2020 and for a portion of the first
six months of 2021, with these favorable conditions beginning to normalize
during February 2021. Management believes these favorable conditions could
continue to normalize during the remainder of 2021 potentially bringing the Core
Bank's gain-as-a-percent-of-loans-sold closer to normal historical levels near
2.50%.







                                       98

  Table of Contents

Republic Credit Solutions segment




RCS's noninterest income increased $1.3 million, or 47%, during the first six
months of 2021 compared to the same period in 2020, with program fees
representing the entirety of RCS's noninterest income. Pandemic-driven
restrictions negatively impacted RCS program fees during the first six months of
2020, with those program fees beginning to normalize during 2021 following
the
removal of restrictions.


The following table presents RCS program fees by product:

Table 12 - RCS Program Fees by Product




                         Six Months Ended Jun. 30,
(in thousands)             2021             2020         $ Change    % Change
Product:
Lines of credit        $       2,122    $       1,448   $      674        47 %
Hospital receivables             111                8          103     1,288
Installment loans*             1,930            1,376          554        NM
Total                  $       4,163    $       2,832   $    1,331        47 %


* The Company has elected the fair value option for this product, with

mark-to-market adjustments recorded as a component of program fees.




Noninterest Expense


Total Company noninterest expense from continuing operations increased $2.1 million, or 2%, during the first six months of 2021 compared to the same period in 2020. Total Company noninterest expense from discontinued operations decreased $416,000 during the first six months of 2021 compared to the same period in 2020.

The following were the most significant components comprising the increase in noninterest expense by reportable segment:



Traditional Banking segment


Traditional Banking noninterest expense increased $930,000 for the first six months of 2021 compared to the same period in 2020. The following primarily drove the change in noninterest expense:

Salaries and benefits expense increased approximately $1.8 million, or 4%,

? primarily driven by annual merit increases and increases in contract labor,

equity compensation, payroll taxes, and health benefits from period to period.

Technology, Equipment, and Communication expense increased $736,000, as the

? Traditional Bank strategically added 30 Interactive Teller Machines over the

previous 12 months, bringing its ITM fleet to over 70 ITMs as of June 30, 2021.

Occupancy expense increased $436,000, or 7%, driven primarily by increases in

? snow removal and pandemic-driven janitorial and cleaning costs from period to

   period.



Partially offsetting the increases above, Bank Franchise Tax expense decreased

? $906,000. As previously reported, Kentucky enacted HB354 in March 2019 and as a

result, the Bank transitioned from a capital-based bank franchise tax to the

Kentucky corporate income tax on January 1, 2021.

Legal and professional fees decreased $472,000 driven by estimated

? pandemic-related costs during 2020, including consumer compliance

   consultations.



Supplies, meals, entertainment, mileage, and travel costs decreased $540,000,

? in total, resulting from continuing pandemic-driven restrictions on these

   activities.




Mortgage Banking segment



Noninterest expense at the Mortgage Banking segment increased $1.4 million, or
31%, during the first six months of 2021 compared to the same period in 2020,
primarily due to higher mortgage commissions recorded during 2021.

                                       99

Table of Contents

COMPARISON OF FINANCIAL CONDITION AS OF JUNE 30, 2021 AND DECEMBER 31, 2020



Cash and Cash Equivalents



Cash and cash equivalents include cash, deposits with other financial
institutions with original maturities less than 90 days and federal funds sold.
Republic had $747 million in cash and cash equivalents as of June 30, 2021
compared to $486 million as of December 31, 2020. The Company continues to
maintain a relatively high cash balance on its balance sheet as deposit balances
have continued to grow and loan balances have continued to generally decline.



For cash held at the FRB, the Bank earns a yield on amounts more than required
reserves. This yield was a weighted-average 0.11% for the first six months of
2021. For cash held within the Bank's banking center and ATM networks, the
Bank
does not earn interest.


Table 13 - Loan Portfolio Composition





(in thousands)                            June 30, 2021      December 31, 2020     $ Change     % Change

Traditional Banking:
Residential real estate:
Owner occupied                           $       852,947    $           879,800   $  (26,853)        (3) %
Nonowner occupied                                289,290                264,780        24,510          9
Commercial real estate                         1,389,003              1,349,085        39,918          3
Construction & land development                   95,180                 98,674       (3,494)        (4)
Commercial & industrial                          330,302                325,596         4,706          1
Paycheck Protection Program                      250,933                392,319     (141,386)       (36)
Lease financing receivables                        9,249                 10,130         (881)        (9)
Aircraft                                         121,112                101,375        19,737         19
Home equity                                      217,621                240,640      (23,019)       (10)
Consumer:
Credit cards                                      14,754                 14,196           558          4
Overdrafts                                           717                    587           130         22
Automobile loans                                  21,190                 30,300       (9,110)       (30)
Other consumer                                     6,796                  8,167       (1,371)       (17)
Total Traditional Banking                      3,599,094              3,715,649     (116,555)        (3)
Warehouse lines of credit*                       840,155                962,796     (122,641)       (13)
Total Core Banking                             4,439,249              4,678,445     (239,196)        (5)

Republic Processing Group*:
Tax Refund Solutions:
Easy Advances                                          -                      -             -         NA
Other TRS loans                                        -                      -             -         NA
Republic Credit Solutions                        114,949                110,893         4,056          4
Total Republic Processing Group                  114,949                110,893         4,056          4

Total loans**                                  4,554,198              4,789,338     (235,140)        (5)
Allowance for credit losses                     (60,291)               (61,067)           776        (1)

Total loans, net                         $     4,493,907    $         4,728,271   $ (234,364)        (5) %

*Identifies loans to borrowers located primarily outside of the Bank's market footprint.

**Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs.

Gross loans decreased by $235 million, or 5%, during the first six months of 2021 to $4.6 billion as of June 30, 2021. The most significant components comprising the change in loans by reportable segment follow:





                                      100

  Table of Contents

Traditional Banking segment


Period-end balances for Traditional Banking loans decreased $117 million, or 3%, from December 31, 2020 to June 30, 2021. The following primarily drove the change in loan balances during the first six months of 2021:

During the first six months of 2021, the Core Bank's PPP portfolio decreased

? $141 million, primarily reflecting the forgiveness and payoff of $348 million

of 2020 PPP originations and the origination of $208 million of PPP loans

   during the first six months of 2021.




The CARES Act was enacted in March 2020 and provided for the SBA's PPP, which
allowed the Bank to lend to its qualifying small business clients to assist them
in their efforts to meet their cash-flow needs during the COVID-19 pandemic. The
Economic Aid Act was enacted in December 2020 and provided for a second round of
PPP loans. PPP loans are fully backed by the SBA and may be entirely forgiven if
the loan client uses loan funds for qualifying reasons. As of June 30, 2021, net
PPP loans of $251 million remained on the Core Bank's balance sheet, including
$53 million in loan balances originated during 2020, $207 million in loan
balances originated during the first six months of 2021, and $9 million of
unaccreted PPP lender fees reported as a credit offset to these originated
balances. Unaccreted PPP lender fees will generally be recognized into income
over the estimated remaining life of the PPP portfolio, with fee recognition
accelerated if loans are forgiven or repaid earlier than estimated. While no
guarantee can be made as to the overall remaining life of these loans,
management believes the loans are likely to remain on the Company's balance
sheet less than one year, as it expects the substantial majority of its clients
to request forgiveness for their loans at the earliest possible time, presuming
these clients achieve the required program metrics.



PPP loans have a stated maturity of two to five years, an annualized fixed coupon rate of 1.0% to the client, are 100% guaranteed by the SBA, and 100% forgivable to the client if certain program metrics are met. The Bank earns an origination fee of 1%, 3%, or 5% based on the size of the loan.

The owner-occupied residential real estate and home equity categories decreased

$27 million and $23 million. These decreases largely reflect a sharp drop in

? long-term market interest rates during the previous 12 months that drove an

increase in refinance volume for residential mortgages, with much of the

refinance activity going into fixed-rate products sold on the secondary market.

Offsetting the decreases above, the CRE category increased $40 million and the

? Aircraft category increased $20 million, as lending activity began normalizing

following the removal of pandemic-driven restrictions during the first six

   months of 2021.




Warehouse Lending segment



Outstanding Warehouse period end balances decreased $123 million from December
31, 2020 to June 30, 2021. Due to the volatility and seasonality of the mortgage
market, it is difficult to project future outstanding balances of Warehouse
lines of credit. The growth of the Bank's Warehouse Lending business greatly
depends on the overall mortgage market and typically follows industry trends.
Since its entrance into this business during 2011, the Bank has experienced
volatility in the Warehouse portfolio consistent with overall demand for
mortgage products. Weighted average quarterly usage rates on the Bank's
Warehouse lines have ranged from a low of 31% during the fourth quarter of 2013
to a high of 71% during the fourth quarter of 2019. On an annual basis, weighted
average usage rates on the Bank's Warehouse lines have ranged from a low of 40%
during 2013 to a high of 66% during 2020.



Allowance for Credit Losses

As of June 30, 2021, the Bank maintained an ACLL for expected credit losses
inherent in the Bank's loan portfolio, which includes overdrawn deposit
accounts. The Bank also maintained an ACLS and an ACLC for expected losses in
its securities portfolio and its off-balance sheet credit exposures,
respectively. Management evaluates the adequacy of the ACLL monthly, and the
adequacy of the ACLS and ACLC quarterly. All ACLs are presented and discussed
with the Audit Committee and the Board of Directors quarterly.



The Company's ACLL decreased $1 million from $61 million as of December 31, 2020
to $60 million as of June 30, 2021. As a percent of total loans, the total
Company's ACLL increased to 1.32% as of June 30, 2021 compared to 1.27% as of
December 31, 2020. An analysis of the ACL by reportable segment follows:





                                      101

  Table of Contents

Traditional Banking segment


The Traditional Banking ACLL decreased approximately $337,000 to $49 million as

? of June 30, 2021 driven primarily by net charge-offs during the first six

   months of 2021.



The Traditional Bank decreased its ACLS $122,000 during the first six months of

? 2021 to $56,000 based on improved PD and LGD expectations on its corporate bond

   portfolios.




? The Traditional Bank decreased its ACLC $55,000 during the first six months of

   2021 to $934,000 based on improving economic outlook.




Warehouse Lending segment



The Warehouse ACLL decreased to approximately $2.1 million, and the Warehouse
ACLL to total Warehouse loans remained at 0.25% when comparing June 30, 2021 to
December 31, 2020. As of June 30, 2021, the Warehouse ACLL was entirely
qualitative in nature with no adjustments to the qualitative reserve percentage
required for the first six months of 2021.



Republic Credit Solutions segment

The RCS ACLL remained at $9 million from December 31, 2020 to June 30, 2021.

RCS maintained an ACLL for two distinct credit products offered as of June 30,
2021, including its line-of-credit products and its healthcare-receivables
products. As of June 30, 2021, the ACLL to total loans estimated for each RCS
product ranged from as low as 0.25% for its healthcare-receivables products to
as high as 49% for its line-of-credit products. The lower reserve percentage of
0.25% was provided for RCS's healthcare receivables, as such receivables have
recourse back to the third-party providers.





                                      102

  Table of Contents

Asset Quality



COVID-19 Loan Accommodations


The CARES Act provided several forms of economic relief designed to defray the
impact of COVID-19. In April 2020, through its own independent relief efforts
and CARES Act provisions, the Company began offering loan accommodations through
deferrals and forbearances. These accommodations were generally under
three-month terms for commercial clients, with residential and consumer
accommodations in line with prevailing regulatory and legal parameters. Loans
that received an accommodation were generally not considered troubled debt
restructurings by the Company if such loans were not greater than 30 days past
due as of December 31, 2019.



As of June 30, 2021, $25 million, or 1% of the Company's Traditional Bank portfolio remained under a COVID-19 hardship accommodation.




The ultimate impact of the above accommodated loan balances on the Company's
Classified, Special Mention, nonperforming, and delinquent loans is currently
uncertain. When evaluating its borrowers for further accommodation, the Bank
considers prudent options based on the borrower's credit risk; applicable
federal and state laws and regulations, including COVID-related accommodations
provided by applicable federal, state, and local laws; and the Bank's ability to
ease cash flow pressures on the affected borrowers while improving the Bank's
likelihood of collection on its loans. If enough borrowers were unable to meet
their loan payment obligations at the end of their accommodation periods and
were also unable to further extend their accommodation arrangements with the
Bank, the Bank's Classified, Special Mention, nonperforming, and delinquent
loans would increase and negatively impact the Company's overall operating
performance.



Classified and Special Mention Loans

The Bank applies credit quality indicators, or ratings, to individual loans
based on internal Bank policies. Such internal policies are informed by
regulatory standards. Loans rated "Loss," "Doubtful," "Substandard," and
PCD-Substandard are considered "Classified." Loans rated "Special Mention" or
PCD-Special Mention are considered Special Mention. The Bank's Classified and
Special Mention loans increased approximately $20 million during the first six
months of 2021, driven primarily by commercial-purpose loans within the
hospitality and leisure industry downgraded to Special Mention during the first
six months of 2021. As previously mentioned, the ultimate impact of loans
accommodated due to COVID-19 on the Company's Classified and Special Mention
loans is currently uncertain.


See Footnote 4 "Loans and Allowance for Credit Losses" of Part I Item 1 "Financial Statements" for additional discussion regarding Classified and Special Mention loans.

Table 14 - Classified and Special Mention Loans




(in thousands)                        June 30, 2021      December 31, 2020     $ Change    % Change

Loss                                 $             -    $                 -   $        -          -
Doubtful                                           -                      -            -          -
Substandard                                   26,426                 30,193      (3,767)       (12) %
PCD - Substandard                              1,788                  1,887         (99)        (5)
Total Classified Loans                        28,214                 32,080      (3,866)       (12)

Special Mention                              113,137                 89,206       23,931         27
PCD - Special Mention                            853                    895         (42)        (5)
Total Special Mention Loans                  113,990                 90,101       23,889         27

Total Classified and Special
Mention Loans                        $       142,204    $           122,181   $   20,023         16










                                      103

  Table of Contents

Nonperforming Loans



Nonperforming loans include loans on nonaccrual status and loans past due
90-days-or-more and still accruing. The nonperforming loan category includes
TDRs totaling approximately $7 million and $7 million as of June 30, 2021 and
December 31, 2020.


Nonperforming loans to total loans remained at 0.49% from December 31, 2020 to
June 30, 2021. As previously mentioned, the ultimate impact of loans
accommodated due to COVID-19 on the Company's nonperforming loans is currently
uncertain.


Table 15 - Nonperforming Loans and Nonperforming Assets Summary




(in thousands)                                 June 30, 2021         December 31, 2020

Loans on nonaccrual status*                  $          21,621      $            23,548
Loans past due 90-days-or-more and still
on accrual**                                               723                       47
Total nonperforming loans                               22,344                   23,595
Other real estate owned                                  1,898                    2,499
Total nonperforming assets                   $          24,242      $            26,094

Credit Quality Ratios - Total Company:
Nonperforming loans to total loans                        0.49 %                   0.49 %
Nonperforming assets to total loans
(including OREO)                                          0.53             

0.54

Nonperforming assets to total assets                      0.39             

0.42


Credit Quality Ratios - Core Bank:
Nonperforming loans to total loans                        0.49 %                   0.50 %
Nonperforming assets to total loans
(including OREO)                                          0.53             

0.56

Nonperforming assets to total assets                      0.42             

0.45

Loans on nonaccrual status include collateral-dependent loans. See Footnote 4 * "Loans and Allowance for Credit Losses" of Part I Item 1 "Financial Statements"

for additional discussion regarding collateral-dependent loans.



** Loans past due 90-days-or-more and still accruing consist of smaller balance
   consumer loans.






                                      104

  Table of Contents

Table 16 - Nonperforming Loan Composition




                                        June 30, 2021             December 31, 2020
                                                 Percent of                  Percent of
                                                   Total                       Total
(in thousands)                      Balance      Loan Class    Balance       Loan Class

Traditional Banking:
Residential real estate:
Owner occupied                       $ 13,181      1.55 %       $  14,328      1.63 %
Nonowner occupied                         102      0.04                81      0.03
Commercial real estate                  6,548      0.47             6,762      0.50
Construction & land development             -         -                 -  
      -
Commercial & industrial                    50      0.02                55      0.02
Paycheck Protection Program                 -         -                 -         -
Lease financing receivables                 -         -                 -         -
Aircraft                                    -         -                 -         -
Home equity                             1,626      0.75             2,141      0.89
Consumer:
Credit cards                                -         -                 5      0.04
Overdrafts                                  -         -                 -         -
Automobile loans                          108      0.51               170      0.56
Other consumer                              6      0.09                11      0.13
Total Traditional Banking              21,621      0.60            23,553      0.63
Warehouse lines of credit                   -         -                 -         -
Total Core Banking                     21,621      0.49            23,553      0.50

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                               -         -                 -         -
Other TRS loans                             -         -                 -         -
Republic Credit Solutions                 723      0.63                42      0.04
Total Republic Processing Group           723      0.63                42  
   0.04

Total nonperforming loans            $ 22,344      0.49 %       $  23,595      0.49 %







                                      105

  Table of Contents

Table 17 - Stratification of Nonperforming Loans





                                                  Number of Nonperforming 

Loans and Recorded Investment

                                                                  Balance
June 30, 2021                               Balance              > $100 &               Balance                 Total
(dollars in thousands)              No.     <= $100       No.     <= $500       No.      > $500        No.     Balance

Traditional Banking:
Residential real estate:
Owner occupied                       144    $  4,738       28    $   4,889        4    $    3,554       176    $ 13,181
Nonowner occupied                      3         102        -            -        -             -         3         102
Commercial real estate                 -           -        4          809        3         5,739         7       6,548
Construction & land development        -           -        -            -        -             -         -           -
Commercial & industrial                1          50        -            -        -             -         1          50
Paycheck Protection Program            -           -        -            -        -             -         -           -
Lease financing receivables            -           -        -            - 
      -             -         -           -
Aircraft                               -           -        -            -        -             -         -           -
Home equity                           27         693        4          933        -             -        31       1,626
Consumer:
Credit cards                           -           -        -            -        -             -        NM           -
Overdrafts                             -           -        -            -        -             -         -           -
Automobile loans                      12         108        -            -        -             -        12         108
Other consumer                         7           6        -            -        -             -         7           6
Total Traditional Banking            194       5,697       36        6,631        7         9,293       237      21,621
Warehouse lines of credit              -           -        -            -        -             -         -           -
Total Core Banking                   194       5,697       36        6,631 

7 9,293 237 21,621


Republic Processing Group:
Tax Refund Solutions:
Easy Advances                          -           -        -            -        -             -         -           -
Other TRS loans                        -           -        -            -        -             -         -           -
Republic Credit Solutions             NM         723        -            -        -             -        NM         723
Total Republic Processing Group       NM         723        -            - 
      -             -        NM         723

Total                                194    $  6,420       36    $   6,631        7    $    9,293       237    $ 22,344






                                                  Number of Nonperforming

Loans and Recorded Investment

                                                                  Balance
December 31, 2020                           Balance              > $100 &              Balance                 Total
(dollars in thousands)              No.     <= $100       No.     <= $500       No.     > $500        No.     Balance

Traditional Banking:
Residential real estate:
Owner occupied                       146    $  5,110       27    $   4,966        5    $   4,252       178    $ 14,328
Nonowner occupied                      3          81        -            -        -            -         3          81
Commercial real estate                 2          45        3          925        3        5,792         8       6,762
Construction & land development        -           -        -            - 
      -            -         -           -
Commercial & industrial                2          55        -            -        -            -         2          55
                                       -           -        -            -        -            -
Lease financing receivables            -           -        -            - 
      -            -         -           -
Aircraft                               -           -        -            -        -            -         -           -
Home equity                           26         867        6        1,274        -            -        32       2,141
Consumer:
Credit cards                          NM           5        -            -        -            -        NM           5
Overdrafts                             -           -        -            -        -            -         -           -
Automobile loans                      14         170        -            -        -            -        14         170
Other consumer                         7          11        -            -        -            -         7          11
Total Traditional Banking            200       6,344       36        7,165        8       10,044       244      23,553
Warehouse lines of credit              -           -        -            -        -            -         -           -
Total Core Banking                   200       6,344       36        7,165 

8 10,044 244 23,553


Republic Processing Group:
Tax Refund Solutions:
Easy Advances                          -           -        -            -        -            -         -           -
Other TRS loans                        -           -        -            -        -            -         -           -
Republic Credit Solutions             NM          42        -            -        -            -        NM          42
Total Republic Processing Group       NM          42        -            - 
      -            -        NM          42

Total                                200    $  6,386       36    $   7,165        8    $  10,044       244    $ 23,595







                                      106

  Table of Contents

Table 18 - Rollforward of Nonperforming Loans




                                             Three Months Ended         Six Months Ended
                                                 June 30,                   June 30,
(in thousands)                               2021          2020         2021        2020

Nonperforming loans at the beginning
of the period                             $    22,520    $  20,853    $  23,595   $  23,489
Loans added to nonperforming status
during the period that remained
nonperforming at the end of the period          1,042        3,069        1,772       4,658
Loans removed from nonperforming
status during the period that were
nonperforming at the beginning of the
period (see table below)                        (934)      (2,981)      (2,838)     (7,898)
Principal balance paydowns of loans
nonperforming at both period ends               (490)        (561)        (860)       (208)
Net change in principal balance of
other loans nonperforming at both
period ends*                                      206           39         

675 378


Nonperforming loans at the end of the
period                                    $    22,344    $  20,419    $  

22,344 $ 20,419

* Includes relatively small consumer portfolios, e.g., RCS loans.

Table 19 - Detail of Loans Removed from Nonperforming Status




                                              Three Months Ended         Six Months Ended
                                                  June 30,                  June 30,
(in thousands)                                2021         2020         2021         2020

Loans charged off                           $       -    $   (273)    $       -    $     (2)
Loans transferred to OREO                           -      (2,109)            -      (2,109)
Loans refinanced at other institutions          (752)        (490)      (2,650)      (2,445)
Loans returned to accrual status                (182)        (109)        

(188) (3,342)


Total loans removed from nonperforming
status during the period that were
nonperforming at the beginning of the
period                                      $   (934)    $ (2,981)    $ (2,838)    $ (7,898)



Based on the Bank's review as of June 30, 2021, management believes that its reserves are adequate to absorb expected losses on all nonperforming loans.



Delinquent Loans



Total Company delinquent loans to total loans remained at 0.41% from December
31, 2020 to June 30, 2021. Core Bank delinquent loans to total Core Bank loans
increased to 0.22% as of June 30, 2021 from 0.21% as of December 31, 2020. With
the exception of small-dollar consumer loans, all Traditional Bank loans past
due 90-days-or-more as of June 30, 2021 and December 31, 2020 were on nonaccrual
status. As previously mentioned, the ultimate impact of loans accommodated due
to COVID-19 on the Company's delinquent loans is currently uncertain.



                                      107

  Table of Contents

Table 20 - Delinquent Loan Composition*




                                         June 30, 2021           December 31, 2020
                                                 Percent of                Percent of
                                                    Total                     Total
(in thousands)                       Balance     Loan Class    Balance     Loan Class

Traditional Banking:
Residential real estate:
Owner occupied                        $  2,608       0.31 %     $  3,260       0.37 %
Nonowner occupied                            -          -              -          -
Commercial real estate                   6,816       0.49          5,457       0.40
Construction & land development              -          -              -   
      -
Commercial & industrial                     12       0.00             12       0.00
Paycheck Protection Program                  -          -              -          -
Lease financing receivables                  -          -              -          -
Aircraft                                     -          -              -          -
Home equity                                249       0.11            702       0.29
Consumer:
Credit cards                                64       0.43             73       0.51
Overdrafts                                 145      20.22            147      25.04
Automobile loans                            11       0.05             56       0.18
Other consumer                               4       0.06              6       0.07
Total Traditional Banking                9,909       0.28          9,713       0.26
Warehouse lines of credit                    -          -              -          -
Total Core Banking                       9,909       0.22          9,713       0.21

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                -          -              -          -
Other TRS loans                              -          -              -          -
Republic Credit Solutions                8,809       7.66         10,234       9.23

Total Republic Processing Group 8,809 7.66 10,234

   9.23

Total delinquent loans                $ 18,718       0.41 %     $ 19,947       0.42 %



* Represents total loans 30-days-or-more past due. Delinquent status may be determined by either the number of days past due or number of payments past due.





                                      108

  Table of Contents

Table 21 - Rollforward of Delinquent Loans




                                              Three Months Ended          Six Months Ended
                                                   June 30,                  June 30,
(in thousands)                                2021          2020         2021         2020

Delinquent loans at the beginning of the
period                                      $  14,986    $   42,627    $  19,947    $  20,804
Loans added to delinquency status during
the period and remained in delinquency
status at the end of the period                 2,717         2,823        3,276        3,080
Loans removed from delinquency status
during the period that were in
delinquency status at the beginning of
the period (see table below)                  (1,425)      (29,901)      (3,016)      (7,513)
Principal balance paydowns of loans
delinquent at both period ends                   (31)       (1,394)         (54)      (2,189)
Net change in principal balance of other
loans delinquent at both period ends*           2,471         (109)      

(1,435) (136) Delinquent loans at the end of period $ 18,718 $ 14,046 $ 18,718 $ 14,046

* Includes relatively-small consumer portfolios, e.g., RCS loans.

Table 22 - Detail of Loans Removed from Delinquent Status




                                             Three Months Ended          Six Months Ended
                                                  June 30,                  June 30,
(in thousands)                               2021          2020         2021         2020

Loans charged off                          $     (2)    $      (2)    $     (1)    $     (2)
Easy Advances paid-off or charged-off              -      (23,467)            -            -
Loans transferred to OREO                          -       (2,109)            -      (2,109)
Loans refinanced at other institutions         (667)       (1,270)      (1,796)      (3,012)
Loans paid current                             (756)       (3,053)      

(1,219) (2,390)


Total loans removed from delinquency
status during the period that were in
delinquency status at the beginning of
the period                                 $ (1,425)    $ (29,901)    $ (3,016)    $ (7,513)



Collateral Dependent Loans and Troubled Debt Restructurings




When management determines that a loan is collateral dependent and foreclosure
is probable, expected credit losses are based on the fair value of the
collateral at the reporting date, adjusted for selling costs if appropriate. The
Bank's policy is to charge-off all or that portion of its recorded investment in
collateral-dependent loans upon a determination that it expects the full amount
of contractual principal and interest will not be collected.



A TDR is a situation where, due to a borrower's financial difficulties, the Bank
grants a concession to the borrower that the Bank would not otherwise have
considered. The majority of the Bank's TDRs involve a restructuring of loan
terms such as a temporary reduction in the payment amount to require only
interest and escrow (if required), reducing the loan's interest rate and/or
extending the maturity date of the debt. Nonaccrual loans modified as TDRs
remain on nonaccrual status and continue to be reported as nonperforming loans.
Accruing loans modified as TDRs are evaluated for nonaccrual status based on a
current evaluation of the borrower's financial condition and ability and
willingness to service the modified debt.



Table 23 - Collateral-Dependent Loans and Troubled Debt Restructurings




(in thousands)                         June 30, 2021      December 31, 2020      $ Change      % Change

Cashflow-dependent TDRs               $         8,807    $            10,938   $    (2,131)      (19)  %
Collateral-dependent TDRs                       9,506                  9,840          (334)       (3)
Total TDRs                                     18,313                 20,778        (2,465)      (12)
Collateral dependent loans (which
are not TDRs)                                  15,468                 20,806        (5,338)      (26)
Total recorded investment in TDRs
and collateral-dependent loans        $        33,781    $            41,584   $    (7,803)      (19)  %



See Footnote 4 "Loans and Allowance for Credit Losses" of Part I Item 1 "Financial Statements" for additional discussion regarding collateral-dependent loans and TDRs.







                                      109

  Table of Contents



Deposits



Table 24 - Deposit Composition




(in thousands)                       June 30, 2021      December 31, 2020     $ Change    % Change

Core Bank:
Demand                              $     1,231,449    $         1,217,263   $   14,186          1 %
Money market accounts                       810,307                712,824       97,483         14
Savings                                     281,164                236,335       44,829         19
Individual retirement accounts
(1)                                          46,694                 47,889      (1,195)        (2)
Time deposits, $250 and over (1)             78,702                 83,448      (4,746)        (6)
Other certificates of deposit
(1)                                         171,995                199,214     (27,219)       (14)
Reciprocal money market and time
deposits (1)                                301,384                314,109     (12,725)        (4)
Brokered deposits (1)                        30,000                 25,010        4,990         20
Total Core Bank interest-bearing
deposits                                  2,951,695              2,836,092      115,603          4
Total Core Bank
noninterest-bearing deposits              1,622,279              1,503,662      118,617          8
Total Core Bank deposits                  4,573,974              4,339,754      234,220          5

Republic Processing Group:
Money market accounts                         3,450                  6,673      (3,223)       (48)
Total RPG interest-bearing
deposits                                      3,450                  6,673      (3,223)       (48)
Brokered prepaid card deposits              334,967                257,856       77,111         30
Other noninterest-bearing
deposits                                     58,203                110,021     (51,818)       (47)
Total RPG noninterest-bearing
deposits                                    393,170                367,877       25,293          7
Total RPG deposits                          396,620                374,550       22,070          6

Deposits of discontinued
operations (2)                               46,984                 18,877       28,107        149

Total deposits                      $     5,017,578    $         4,733,181   $  284,397          6 %


(1) Includes time deposit

(2) See additional detail regarding the Bank's agreement to sell TRS under

    Footnote 17 "Discontinued Operations" in this section of the filing.



Total Company deposits increased $284 million, or 6%, from December 31, 2020 to $5.0 billion as of June 30, 2021.

Total Core Bank deposits increased $234 million, or 5%, with the following primarily driving growth:

Management believes its deposit balances continue to be the beneficiary of

Federal government stimulus brought about by the COVID-19 pandemic. During the

? first six months of 2021, the Federal government issued two rounds of economic

   stimulus payments. At this time, management is uncertain how long these
   stimulus funds may remain at the Bank.



The Core Bank originated $208 million of PPP loans during the first six months

? of 2021, with PPP borrowers generally retaining their loan proceeds within a

   deposit account at the Bank.




   Management believes that much of the growth in noninterest-bearing and

interest-bearing deposits at the Core Bank has been, and continues to be, a

? flight to safety brought about by the COVID-19 pandemic. At this time,

management is unable to predict how long these funds might remain at the Bank

due to the uncertain economic environment for many of the depositors, including

   the depositors' short-term and long-term cash needs.



Total RPG deposits from continuing operations increased $22 million, or 6%, for the first six months of 2021, with the following primarily driving growth:

? RPG noninterest-bearing deposits growth was primarily driven by the following:

RPG prepaid card balances within its RPS division increased $77 million, driven

? by government stimulus funds applied to prepaid card deposit balances. At this

   time, management is uncertain how long these stimulus funds may remain at the
   Bank.




                                      110

  Table of Contents

? RPG other noninterest-bearing deposits decreased $52 million, driven by an

outflow of funds associated with the RCS segment's line-of-credit products.

Federal Home Loan Bank Advances




FHLB advances declined by $210 million from December 31, 2020 to June 30, 2021,
as the Bank continued to maintain sufficient deposit balances to meet its
current liquidity needs. The Bank held $25 million in overnight advances at a
rate of 0.15% as of June 30, 2021, compared to $225 million in overnight
advances at a rate of 0.16% as of December 31, 2020. Given the overall amount of
liquidity on the Company's balance sheet as of June 30, 2021, management does
not anticipate that FHLB term or overnight advances will likely be utilized to
any material extent over the near term.



Overall use of FHLB advances during a given year is dependent upon many factors
including asset growth, deposit growth, current earnings, and expectations of
future interest rates, among others.



Interest Rate Swaps


The Bank enters into interest rate swaps to facilitate client transactions and
meet their financing needs. Upon entering into these instruments, the Bank
enters into offsetting positions in order to minimize the Bank's interest rate
risk. These swaps are derivatives, but are not designated as hedging
instruments, and therefore changes in fair value are reported in current year
earnings.


See Footnote 12 "Interest Rate Swaps" of Part I Item 1 "Financial Statements" for additional discussion regarding the Bank's interest rate swaps.



Liquidity



The Company had a loan to deposit ratio (excluding brokered deposits) of 98% as
of June 30, 2021 and 108% as of December 31, 2020. As of June 30, 2021 and
December 31, 2020, the Company had cash and cash equivalents on-hand of $747
million and $486 million. The Bank also had available borrowing capacity of $909
million and $683 million from the FHLB as of June 30, 2021 and December 31,
2020. In addition, the Bank's liquidity resources included unencumbered debt
securities of $280 million and $274 million as of June 30, 2021 and December 31,
2020 and unsecured lines of credit of $125 million available through various
other financial institutions as of the same period-ends.



The Bank maintains sufficient liquidity to fund routine loan demand and routine
deposit withdrawal activity. Liquidity is managed by maintaining sufficient
liquid assets in the form of investment securities. Funding and cash flows can
also be realized by the sale of AFS debt securities, principal paydowns on loans
and mortgage-backed securities, and proceeds realized from loans held for sale.
The Bank's liquidity is impacted by its ability to sell certain investment
securities, which is limited due to the level of investment securities that are
needed to secure public deposits, securities sold under agreements to
repurchase, FHLB borrowings, and for other purposes, as required by law. As of
June 30, 2021 and December 31, 2020, these pledged investment securities had a
fair value of $291 million and $304 million. Republic's banking centers and its
website, www.republicbank.com, provide access to retail deposit markets. These
retail deposit products, if offered at attractive rates, have historically been
a source of additional funding when needed. If the Bank were to lose a
significant funding source, such as a few major depositors, or if any of its
lines of credit were canceled, or if the Bank cannot obtain brokered deposits,
the Bank would be compelled to offer market leading deposit interest rates to
meet its funding and liquidity needs.



As of June 30, 2021, the Bank had approximately $1.5 billion in deposits from
242 large non-sweep deposit relationships, including reciprocal deposits, where
the individual relationship exceeded $2 million. The 20 largest non-sweep
deposit relationships represented approximately $637 million, or 13%, of the
Company's total deposit balances as of June 30, 2021. These accounts do not
require collateral; therefore, cash from these accounts can generally be
utilized to fund the loan portfolio. If any of these balances were moved from
the Bank, the Bank would likely utilize overnight borrowing lines in the
short-term to replace the balances. On a longer-term basis, the Bank would
likely utilize wholesale-brokered deposits to replace withdrawn balances, or
alternatively, higher-cost internet-sourced deposits. Based on past experience
utilizing brokered deposits and internet-sourced deposits, the Bank believes it
can quickly obtain these types of deposits if needed. The overall cost of
gathering these types of deposits, however, could be substantially higher than
the Traditional Bank deposits they replace, potentially decreasing the Bank's
earnings.









                                      111

  Table of Contents

Capital



Total stockholders' equity increased from $823 million as of December 31, 2020
to $845 million as of June 30, 2021. The increase in stockholders' equity was
primarily attributable to net income earned during 2021 reduced primarily by
cash dividends declared and Class A common stock repurchased.



See Part II, Item 2. "Unregistered Sales of Equity Securities and Use of Proceeds" for additional detail regarding stock repurchases and stock buyback programs.




Common Stock - The Class A Common shares are entitled to cash dividends equal to
110% of the cash dividend paid per share on Class B Common Stock. Class A Common
shares have one vote per share and Class B Common shares have ten votes per
share. Class B Common shares may be converted, at the option of the holder, to
Class A Common shares on a share for share basis. The Class A Common shares are
not convertible into any other class of Republic's capital stock.



Dividend Restrictions - The Parent Company's principal source of funds for
dividend payments are dividends received from RB&T. Banking regulations limit
the amount of dividends that may be paid to the Parent Company by the Bank
without prior approval of the respective states' banking regulators. Under these
regulations, the amount of dividends that may be paid in any calendar year is
limited to the current year's net profits, combined with the retained net
profits of the preceding two years. As of June 30, 2021, RB&T could, without
prior approval, declare dividends of approximately $163 million. Any payment of
dividends in the future will depend, in large part, on the Company's earnings,
capital requirements, financial condition, and other factors considered relevant
by the Company's Board of Directors.



Regulatory Capital Requirements - The Company and the Bank are subject to
capital regulations in accordance with Basel III, as administered by banking
regulators. Regulatory agencies measure capital adequacy within a framework that
makes capital requirements, in part, dependent on the individual risk profiles
of financial institutions. Failure to meet minimum capital requirements can
initiate certain mandatory and possibly additional discretionary actions by
regulators that, if undertaken, could have a direct material effect on
Republic's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Parent Company and the
Bank must meet specific capital guidelines that involve quantitative measures of
the Company's assets, liabilities and certain off-balance sheet items, as
calculated under regulatory accounting practices. The capital amounts and
classification are also subject to qualitative judgments by the regulators
regarding components, risk weightings and other factors.



Banking regulators have categorized the Bank as well-capitalized. For prompt
corrective action, the regulations in accordance with Basel III define "well
capitalized" as a 10.0% Total Risk-Based Capital ratio, a 6.5% Common Equity
Tier 1 Risk-Based Capital ratio, an 8.0% Tier 1 Risk-Based Capital ratio, and a
5.0% Tier 1 Leverage ratio. Additionally, in order to avoid limitations on
capital distributions, including dividend payments and certain discretionary
bonus payments to executive officers, the Company and Bank must hold a capital
conservation buffer of 2.5% composed of Common Equity Tier 1 Risk-Based Capital
above their minimum risk-based capital requirements.



Republic continues to exceed the regulatory requirements for Total Risk Based
Capital, Common Equity Tier I Risk Based Capital, Tier I Risk Based Capital and
Tier I Leverage Capital. Republic and the Bank intend to maintain a capital
position that meets or exceeds the "well-capitalized" requirements as defined by
the FRB and the FDIC, in addition to the Capital Conservation Buffer. Republic's
average stockholders' equity to average assets ratio was 13.25% as of
June 30, 2021 compared to 13.35% as of December 31, 2020. Formal measurements of
the capital ratios for Republic and the Bank are performed by the Company at
each quarter end.



In 2005, RBCT, an unconsolidated trust subsidiary of Republic, was formed and
issued $40 million in TPS. The sole asset of RBCT represents the proceeds of the
offering loaned to Republic in exchange for a subordinated note with similar
terms to the TPS. The RBCT TPS are treated as part of Republic's Tier I Capital.



The subordinated note and related interest expense are included in Republic's
consolidated financial statements. The subordinated note paid a fixed interest
rate of 6.015% through September 30, 2015 and adjusted to 3-month LIBOR plus
1.42% on a quarterly basis thereafter. The subordinated note matures on
December 31, 2035 and is redeemable at the Company's option on a quarterly
basis. In July 2021, the Company's board approved the redemption of the RBCT TPS
and the repayment of the subordinated note for the end of the third quarter
of
2021.



                                      112

  Table of Contents

Table 25 - Capital Ratios (1)




                                           As of June 30, 2021         As of December 31, 2020
(dollars in thousands)                       Amount        Ratio         Amount           Ratio

Total capital to risk-weighted assets
Republic Bancorp, Inc.                    $    920,201     18.93 %   $      896,053         18.52 %
Republic Bank & Trust Company                  833,178     17.15           

796,114 16.46


Common equity tier 1 capital to
risk-weighted assets
Republic Bancorp, Inc.                    $    868,526     17.04 %   $      803,682         16.61 %
Republic Bank & Trust Company                  781,503     16.09            743,743         15.38

Tier 1 (core) capital to risk-weighted
assets
Republic Bancorp, Inc.                    $    828,526     17.86 %   $      843,682         17.43 %
Republic Bank & Trust Company                  781,503     16.09            743,743         15.38

Tier 1 leverage capital to average
assets
Republic Bancorp, Inc.                    $    828,526     13.51 %   $      843,682         13.70 %
Republic Bank & Trust Company                  781,503     12.17            743,743         12.11




    The Company and the Bank elected in 2020 to defer the impact of CECL on

regulatory capital. The deferral period is five years, with the total (1) estimated CECL impact 100% deferred for the first two years, then phased in

over the next three years. If not for this election, the Company's regulatory

capital ratios would have been approximately 15 basis points lower than those

    presented in the table above as of June 30, 2021.


                                      113

  Table of Contents

Asset/Liability Management and Market Risk




Asset/liability management is designed to ensure safety and soundness, maintain
liquidity, meet regulatory capital standards, and achieve acceptable net
interest income based on the Bank's risk tolerance. Interest rate risk is the
exposure to adverse changes in net interest income as a result of market
fluctuations in interest rates. The Bank, on an ongoing basis, monitors interest
rate and liquidity risk in order to implement appropriate funding and balance
sheet strategies. Management considers interest rate risk to be a significant
risk to the Bank's overall earnings and balance sheet.



The interest sensitivity profile of the Bank at any point in time will be impacted by a number of factors. These factors include the mix of interest sensitive assets and liabilities, as well as their relative pricing schedules. It is also influenced by changes in market interest rates, deposit and loan balances, and other factors.




The Bank utilizes earnings simulation models as tools to measure interest rate
sensitivity, including both a static and dynamic earnings simulation model. A
static simulation model is based on current exposures and assumes a constant
balance sheet. In contrast, a dynamic simulation model relies on detailed
assumptions regarding changes in existing business lines, new business, and
changes in management and customer behavior. While the Bank runs the static
simulation model as one measure of interest rate risk, historically, the Bank
has utilized its dynamic earnings simulation model as its primary interest rate
risk tool to measure the potential changes in market interest rates and their
subsequent effects on net interest income for a one-year time period. This
dynamic model projects a "Base" case net interest income over the next 12 months
and the effect on net interest income of instantaneous movements in interest
rates between various basis point increments equally across all points on the
yield curve. Many assumptions based on growth expectations and on the historical
behavior of the Bank's deposit and loan rates and their related balances in
relation to changes in interest rates are incorporated into this dynamic model.
These assumptions are inherently uncertain and, as a result, the dynamic model
cannot precisely measure future net interest income or precisely predict the
impact of fluctuations in market interest rates on net interest income. Actual
results will differ from the model's simulated results due to the actual timing,
magnitude and frequency of interest rate changes, the actual timing and
magnitude of changes in loan and deposit balances, as well as the actual changes
in market conditions and the application and timing of various management
strategies as compared to those projected in the various simulated models.
Additionally, actual results could differ materially from the model if interest
rates do not move equally across all points on the yield curve.



As of June 30, 2021, a dynamic simulation model was run for interest rate
changes from "Down 100" basis points to "Up 400" basis points. The following
table illustrates the Bank's projected percent change from its Base net interest
income over the period beginning July 1, 2021 and ending June 30, 2022 based on
instantaneous movements in interest rates from Down 100 to Up 400 basis points
equally across all points on the yield curve. The Bank's dynamic earnings
simulation model includes secondary market loan fees and excludes Traditional
Bank loan fees.


Table 26 - Bank Interest Rate Sensitivity (Continuing Operations)




                                                                       Change in Rates
                                          -100             +100             +200             +300             +400
                                      Basis Points     Basis Points    

Basis Points Basis Points Basis Points


% Change from base net interest
income as of June 30, 2021                    (1.0) %          (1.7) %          (1.4) %            2.4 %            6.5 %
% Change from base net interest
income as of December 31, 2020                  0.4 %          (4.5) %     
    (7.0) %          (5.7) %          (4.2) %



The Bank's dynamic simulation model run for June 2021 projected a decrease in
the Bank's net interest income plus secondary market loan fees for the
"Down-100", "Up-100" and "Up-200" scenarios, while the "Up-300" and "Up-400"
rate scenarios projected increases. The projections as of December 2020
reflected a modest increase in the Down-100 scenario and decreases in all
Up-rate scenarios.



As compared to December 2020, the deterioration in the Down-100 rate scenario
for June 2021 was generally because the Bank had less ability in June 2021 than
December to reprice its liabilities downward.  The improvement in the Up-rate
scenarios was due partially to growth in interest-earning assets and partially
to a smaller projected falloff in secondary market fees for the June 2021
simulation than previously projected for the December 2020 simulation.



For additional discussion regarding the Bank's net interest income, see the sections titled "Net Interest Income" in this section of the filing under "RESULTS OF OPERATIONS (Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020) and "RESULTS OF OPERATIONS (Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020."



                                      114

  Table of Contents

© Edgar Online, source Glimpses

All news about REPUBLIC BANCORP, INC.
10/22REPUBLIC BANCORP : Reports Higher Q3 Earnings, Revenue Falls
MT
10/22REPUBLIC BANCORP : Reports 7% Increase in Third Quarter Net Income from Continuing Operati..
PU
10/22REPUBLIC BANCORP INC /KY/ : Results of Operations and Financial Condition, Financial State..
AQ
10/22REPUBLIC BANCORP, INC. : Reports 7% Increase in Third Quarter Net Income from Continuing O..
BU
10/15REPUBLIC BANCORP INC /KY/ : Change in Directors or Principal Officers (form 8-K)
AQ
10/15REPUBLIC BANCORP : Bank Named a Best Bank in America by Newsweek
BU
10/05REPUBLIC BANCORP INC /KY/ : Other Events (form 8-K)
AQ
10/05Lack of Fed Approval Scuttles Green Dot Buy of Republic Unit
DJ
09/16REPUBLIC BANCORP, INC. : Ex-dividend day for
FA
09/15REPUBLIC BANCORP : Bank & Trust Company Announces CEO Transition and Director Appointment ..
PU
More news
Financials (USD)
Sales 2021 204 M - -
Net income 2021 - - -
Net Debt 2021 - - -
P/E ratio 2021 15,0x
Yield 2021 2,30%
Capitalization 1 089 M 1 089 M -
Capi. / Sales 2021 5,35x
Capi. / Sales 2022 5,80x
Nbr of Employees 1 094
Free-Float 46,1%
Chart REPUBLIC BANCORP, INC.
Duration : Period :
Republic Bancorp, Inc. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends REPUBLIC BANCORP, INC.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 1
Last Close Price 53,39 $
Average target price 59,00 $
Spread / Average Target 10,5%
EPS Revisions
Managers and Directors
Logan M. Pichel President, Chief Executive Officer & Director
Kevin D. Sipes CFO, Treasurer, Chief Accounting Officer & EVP
Steven E. Trager Executive Chairman
Michael T. Rust Independent Director
Susan Stout Tamme Independent Director
Sector and Competitors