REPUBLIC BANCORP INC /KY/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 21, 2011

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Exhibit 99.1

Republic Bancorp, Inc. Reports a 51% Increase in Year-to-Date Net Income with a 3% Increase in Second Quarter Net Income

LOUISVILLE, Ky.--(BUSINESS WIRE)--July 21, 2011--Republic Bancorp, Inc. is pleased to report net income of $80.1 million for the first six months of 2011, representing a $27.1 million, or 51%, increase over the first six months of 2010. Return on average assets (“ROA”) and return on average equity (“ROE”) were both industry-strong at 4.40% and 37.48%, respectively, for the first six months of 2011. For the second quarter of 2011, Republic earned $8.7 million, a $266,000 increase over the second quarter of 2010. Diluted Earnings per Class A Common Share increased to $0.41 for the quarter. Return on average assets (“ROA”) and return on average equity (“ROE”) were both solid during the quarter at 1.08% and 7.77%, respectively.

Steve Trager, Republic’s President & CEO, said: “We completed another solid quarter with an increase in net income over the same quarter in 2010, a continued year-over-year improvement in credit quality, and a strong capital base that ranks Republic as one of the best-capitalized financial institutions in the country. As a result of our continued strong performance, we were able to give back, once again, to our shareholders as the Company announced an 8% increase to its quarterly cash dividend payable in July 2011. This marks the eleventh consecutive year we have raised payouts to our shareholders.

“In addition, the Company also continued to give back to the communities it serves. The Republic Bank Foundation (the “Foundation”), a private charitable foundation that recently received a second $5 million contribution from Republic Bank & Trust Company, donated $180,000 to the WHAS Crusade for Children (the “Crusade”), ensuring that the Crusade’s 2011 campaign exceeded 2010. Moreover, the Foundation announced the first winners of its inaugural scholarship program granted to 20 students from the Commonwealth to help them attend the University of Kentucky. We’ve always said what we make here stays here. This means investing in our communities even during uncertain economic times.”

Republic Bancorp, Inc. (“Republic” or the “Company”) (NASDAQ: RBCAA), headquartered in Louisville, Kentucky, is the holding company for Republic Bank & Trust Company and Republic Bank.

The following chart highlights Republic’s second quarter and year-to-date 2011 financial performance compared to the same period in 2010:

 
    Three Months Ended     %         Six Months Ended     %
(dollars in thousands, except per share data) 6/30/11     6/30/10 Increase 6/30/11     6/30/10 Increase
 
Net Income $ 8,663 $ 8,397 3 % $ 80,075 $ 53,025 51 %
Diluted Earnings per Class A Share $ 0.41 $ 0.40 2 % $ 3.82 $ 2.54 50 %
ROA 1.08 % 1.07 % 1 % 4.40 % 2.80 % 57 %
ROE 7.77 % 9.22 % -16 % 37.48 % 30.15 % 24 %
 
 

Results of Operations for the Second quarter of 2011 Compared to the Second quarter of 2010

Traditional Banking and Mortgage Banking (collectively “Core Banking”)

Net income from Core Banking increased from $4.0 million during the second quarter of 2010 to $7.4 million during the second quarter of 2011. Net income for the quarter benefited from a lower provision for loan losses as a result of a meaningful year-over-year improvement in the Company’s overall credit quality metrics. In addition, a sale of a portion of the Company’s investment securities bolstered the Core Bank’s non-interest income for the quarter.

Net interest income within the Core Bank was $26.5 million for the second quarter 2011, a decline of $409,000, or 1.5%, from the second quarter of 2010, but an increase of $1.2 million from the first quarter of 2011. The Core Bank’s industry-solid net interest margin of 3.50% for the second quarter of 2011 represented a 17 basis point increase from the first quarter of 2011 and a modest decline of 15 basis points from the second quarter of 2010. As a result of the low interest rate environment and a general lack of demand for portfolio adjustable rate mortgage (“ARM”) products, Republic has continued to seek earning asset opportunities with limited credit risk in order to strengthen the Company’s net interest income. In June, the Company settled on such an opportunity by purchasing $37.5 million of commercial real estate loans at a 13% discount to par. The weighted average maturity of these loans is just under seven years with an expected yield-to-maturity of over 8.0%. Funds to purchase these loans came from excess cash at the Federal Reserve Bank which was earning 0.25%. Although the marketplace for assets that possess an acceptable price point and an acceptable level of credit risk is limited in the view of Company management, Republic will likely continue with this asset acquisition strategy for the foreseeable future.

Within the Core Banking segment, Republic’s percentage of delinquent loans past due 30-days or more as a percentage of total loans at June 30, 2011 declined to 1.28%, a decrease of 44 basis points compared to June 30, 2010, while nonperforming loans as a percentage of total loans declined nearly 43 basis points from June 30, 2010 to 1.28%. In addition, the Core Bank’s annualized net charge-offs as a percentage of average loans was 0.17% for the second quarter of 2011 compared to 0.40% for the second quarter of 2010. This improvement in credit quality contributed to a $4.4 million decline in the Core Bank’s provision for loan losses for the second quarter of 2011 compared to the same period in 2010. “While many negative environmental factors remain, our top-down management approach to dealing with problem assets has continued to pay dividends, as our credit metrics remain among the very best in the industry. Our cautious optimism for the Core Bank’s credit quality continues to grow as our already solid credit metrics improve,” said Trager.

Core Banking non-interest income increased by $1.5 million, or 21%, during the second quarter of 2011 to $8.7 million. The Core Bank shortened the duration of its investment portfolio by selling approximately $133 million of its longer-lived securities, and due to favorable market conditions, recorded a pre-tax investment security gain of $1.9 million during the second quarter of 2011. The gain on sale of securities more than offset a decline of $247,000 in service charges on deposits and a $479,000 decline in mortgage banking income for the quarter.

Tax Refund Solutions (“TRS”)

TRS net income was $1.3 million for the second quarter of 2011, a decrease of $3.1 million from the same quarter in 2010. The decrease in TRS net income versus the second quarter of 2010 was primarily driven by a previously-disclosed non tax-deductible expense of $2.0 million, representing the amount of a Civil Money Penalty (“CMP”) proposed by the FDIC against the Company’s subsidiary, Republic Bank & Trust Company. Republic accrued the expense for the CMP despite its decision to vigorously contest the CMP in an upcoming hearing before an Administrative Law Judge (“ALJ”). This accrued expense will remain a liability of the Company until it receives a final ruling at the conclusion of the adjudicatory process. If the CMP were eliminated or reduced, the Company would record a corresponding credit to income at that time.

In addition to the effect of the CMP, TRS recorded a net credit of $2.0 million to its provision for loan losses during the second quarter of 2010 compared to a net credit of $1.0 million for the second quarter of 2011. The net credit in both periods resulted from better-than-previously-projected paydowns within the Company’s Refund Anticipation Loan (“RAL”) portfolio. The Company was able to estimate its 2011 TRS provision for loan losses with greater precision than its 2010 estimate, in part, because of the 66% strategic reduction in RAL dollar volume from 2010 to 2011.

“The second quarter of the year marks the completion of the tax season for our TRS segment. We are proud of the performance of our tax business during the first six months of 2011. As we work toward the next tax season, TRS will continue to focus its efforts on working with tax preparation offices that reflect Republic’s core values of work-product quality, knowledge and understanding of banking regulations, and the application of those regulations to the various bank products marketed through their offices. In the meantime, we seek to resolve our respectful disagreement with the FDIC through the ALJ process. Our hearing before the ALJ is currently set to begin on February 6, 2012,” said Trager.

CONCLUSION

“Though challenges remain ahead, we believe sound financial management, outstanding client service and unwavering dedication to the communities we serve will carry us through to a successful 2011. Our strong business model and hard work has allowed us to continually maximize both shareholder value and client satisfaction. We are confident that we can continue to do both for many years to come. As we always remind our clients, associates and valued shareholders: ‘We were here for you yesterday. We are here for you today. We will be here for you tomorrow®,’” concluded Trager.

Republic Bancorp, Inc. (Republic) has 43 banking centers and is the parent company of Republic Bank & Trust Company and Republic Bank. Republic Bank & Trust Company has 35 banking centers in 13 Kentucky communities - Bowling Green, Covington, Crestwood, Elizabethtown, Florence, Frankfort, Georgetown, Independence, Lexington, Louisville, Owensboro, Shelbyville and Shepherdsville and three banking centers in southern Indiana – Floyds Knobs, Jeffersonville and New Albany. Republic Bank has banking centers in Hudson, Palm Harbor, Port Richey and Temple Terrace, Florida as well as Cincinnati, Ohio. Republic operates Tax Refund Solutions, a nationwide tax refund loan and check provider. Republic offers internet banking at www.republicbank.com. Republic has $3.1 billion in assets and $1 billion in trust assets under custody and management. Republic is headquartered in Louisville, Kentucky and Republic's Class A Common Stock is listed under the symbol “RBCAA” on the NASDAQ Global Select Market.

We were here for you yesterday. We are here for you today. We will be here for you tomorrow®.

Statements in this press release relating to Republic’s plans, objectives, or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations. Republic's actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties, including those discussed in Republic’s 2010 Form 10-K filed with the Securities and Exchange Commission.

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release

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

Balance Sheet Data            
June 30, 2011 Dec. 31, 2010 June 30, 2010
Assets:
Cash and cash equivalents $ 130,262 $ 786,371 $ 268,489
Investment securities 633,959 542,694 567,688
Loans held for sale 21,456 15,228 3,309
Loans 2,222,697 2,175,240 2,203,995
Allowance for loan losses (25,931 ) (23,079 ) (26,659 )
Federal Home Loan Bank stock, at cost 26,153 26,212 26,274
Premises and equipment, net 36,183 37,770 37,560
Goodwill 10,168 10,168 10,168
Other assets and accrued interest receivable   49,623     52,099     49,628  
Total assets $ 3,104,570   $ 3,622,703   $ 3,140,452  
 
Liabilities and Stockholders' Equity:
Deposits:
Non interest-bearing $ 380,970 $ 325,375 $ 355,761
Interest-bearing   1,409,691     1,977,317     1,470,092  
Total deposits 1,790,661 2,302,692 1,825,853
 
Deposits held for sale 35,383 - -
Securities sold under agreements to repurchase and other short-term borrowings 218,227 319,246 302,054
Federal Home Loan Bank advances 519,799 564,877 565,483
Subordinated note 41,240 41,240 41,240
Other liabilities and accrued interest payable   53,517     23,272     40,056  
Total liabilities 2,658,827 3,251,327 2,774,686
 
Stockholders' equity   445,743     371,376     365,766  
Total liabilities and Stockholders' equity $ 3,104,570   $ 3,622,703   $ 3,140,452  
 
 
Average Balance Sheet Data
    Three Months Ended June 30,     Six Months Ended June 30,
2011     2010 2011     2010
Assets:
Investment securities, including FHLB stock $ 652,693 $ 516,746 $ 633,679 $ 495,885
Federal funds sold and other interest-earning deposits 221,695 245,863 537,611 667,677
Loans and fees, including loans held for sale 2,192,819 2,247,410 2,245,854 2,495,786
Total earning assets 3,067,207 3,010,019 3,417,144 3,659,348
Total assets 3,208,936 3,147,246 3,640,771 3,789,124
 
Liabilities and Stockholders' Equity:
Non interest-bearing deposits $ 409,391 $ 382,006 $ 606,906 $ 499,843
Interest-bearing deposits 1,454,006 1,444,036 1,671,500 1,929,561

Securities sold under agreements to repurchase and other short-term borrowings

274,074 309,539 295,957 317,207
Federal Home Loan Bank advances 527,669 554,201 544,886 583,129
Subordinated note 41,240 41,240 41,240 41,240
Total interest-bearing liabilities 2,296,989 2,349,016 2,553,583 2,871,137
Stockholders' equity 446,132 364,288 427,334 351,704
 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

 
Income Statement Data
    Three Months Ended June 30,     Six Months Ended June 30,
2011     2010 2011     2010
 
Total interest income (1) $ 34,459 $ 36,887 $ 127,082 $ 124,116
Total interest expense   7,630     8,834     16,282   19,191  
 
Net interest income 26,829 28,053 110,800 104,925
 
Provision for loan losses (439 ) 2,980 17,643 19,770
 
Non interest income:
Service charges on deposit accounts 3,736 3,983 7,160 7,855
Electronic refund check fees 6,584 5,052 87,646 58,220
Net RAL securitization income 19 25 198 220
Mortgage banking income 924 1,403 1,740 2,415
Debit card interchange fee income 1,493 1,312 2,977 2,532
Net gain (loss) on sales, calls and impairment of securities 1,907 (57 ) 1,628 (126 )
Other   705     586     1,331   1,065  
Total non interest income   15,368     12,304     102,680   72,181  
 
Non interest expenses:
Salaries and employee benefits 13,250 12,966 30,489 30,344
Occupancy and equipment, net 5,001 5,053 11,298 11,471
Communication and transportation 878 719 3,387 3,188
Marketing and development 868 802 1,772 9,394
FDIC insurance expense 1,165 782 2,800 1,899
Bank franchise tax expense 714 645 2,279 1,790
Data processing 817 598 1,565 1,318
Debit card interchange expense 601 286 1,124 935
Supplies 314 346 1,208 1,378
Other real estate owned expense 378 502 859 803
Charitable contributions 234 296 5,532 5,782
Legal expense 979 740 2,339 740
Accrued FDIC civil money penalty 2,000 - 2,000 -
FHLB advance prepayment penalty - - - 1,531
Other   1,327     910     4,692   5,211  
Total non interest expenses   28,526     24,645     71,344   75,784  
 
Income before income tax expense 14,110 12,732 124,493 81,552
Income tax expense   5,447     4,335     44,418   28,527  
 
Net income $ 8,663   $ 8,397   $ 80,075 $ 53,025  
 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

 
    As of and for the     As of and for the
Three Months Ended June 30, Six Months Ended June 30,
2011     2010 2011     2010
Per Share Data:
Basic average shares outstanding 20,936 20,840 20,937 20,827
Diluted average shares outstanding 20,994 20,958 20,992 20,920
 
End of period shares outstanding:
Class A Common Stock 18,635 18,546 18,635 18,546
Class B Common Stock 2,300 2,308 2,300 2,308
 
Book value per share $ 21.29 $ 17.54 $ 21.29 $ 17.54
Tangible book value per share (5) 20.46 16.65 20.46 16.65
 
Earnings per share:
Basic earnings per Class A Common Stock 0.42 0.40 3.83 2.55
Basic earnings per Class B Common Stock 0.40 0.39 3.80 2.52
Diluted earnings per Class A Common Stock 0.41 0.40 3.82 2.54
Diluted earnings per Class B Common Stock 0.40 0.39 3.79 2.51
 
Cash dividends declared per share:
Class A Common Stock 0.154 0.143 0.297 0.275
Class B Common Stock 0.140 0.130 0.270 0.250
 
Performance Ratios:
Return on average assets 1.08 % 1.07 % 4.40 % 2.80 %
Return on average equity 7.77 9.22 37.48 30.15
Efficiency ratio (2) 71 61 33 43
 
Yield on average earning assets 4.49 4.90 7.44 6.78
Cost of interest-bearing liabilities 1.33 1.50 1.28 1.34
Net interest spread 3.16 3.40 6.16 5.44
Net interest margin 3.50 3.73 6.48 5.73
 
Asset Quality Ratios:
Loans on non-accrual status $ 28,499 $ 37,669 $ 28,499 $ 37,669
Loans past due 90 days or more and still on accrual   -     -     -     -  
Total non-performing loans 28,499 37,669 28,499 37,669
Other real estate owned   12,012     6,359     12,012     6,359  
Total non-performing assets $ 40,511   $ 44,028   $ 40,511   $ 44,028  
 
Non-performing loans to total loans 1.28 % 1.71 % 1.28 % 1.71 %
Non-performing loans to total loans - Traditional Banking 1.28 1.71 1.28 1.71
Non-performing assets to total loans (including OREO) 1.81 1.99 1.81 1.99
Allowance for loan losses to total loans 1.17 1.21 1.17 1.21
Allowance for loan losses to total loans - Traditional Banking 1.17 1.21 1.17 1.21
Allowance for loan losses to non-performing loans 91 71 91 71
Net loan charge-offs to average loans (annualized) 0.51 0.35 1.32 1.28
Net loan charge-offs to average loans-Traditional Banking (annualized) 0.17 0.40 0.19 0.35
Delinquent loans to total loans (3) 1.28 1.72 1.28 1.72
Delinquent loans to total loans - Traditional Banking (3) 1.28 1.72 1.28 1.72
 
Other Information:
End of period full-time equivalent employees 733 740 733 740
Number of banking centers 43 44 43 44
 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

 
Balance Sheet Data
    Quarterly Comparison
June 30, 2011     March 31, 2011     Dec. 31, 2010     Sept. 30, 2010     June 30, 2010
Assets:
Cash and cash equivalents $ 130,262 $ 472,315 $ 786,371 $ 171,024 $ 268,489
Investment securities 633,959 645,636 542,694 600,834 567,688
Loans held for sale 21,456 1,381 15,228 5,783 3,309
Loans 2,222,697 2,178,886 2,175,240 2,157,330 2,203,995
Allowance for loan losses (25,931 ) (29,144 ) (23,079 ) (24,566 ) (26,659 )
Federal Home Loan Bank stock, at cost 26,153 26,213 26,212 26,274 26,274
Premises and Equipment, net 36,183 36,734 37,770 38,171 37,560
Goodwill 10,168 10,168 10,168 10,168 10,168
Other assets and interest receivable   49,623     53,555     52,099     50,751     49,628  
Total assets $ 3,104,570   $ 3,395,744   $ 3,622,703   $ 3,035,769   $ 3,140,452  
 
Liabilities and Stockholders' Equity:
Deposits:
Non interest-bearing $ 380,970 $ 561,095 $ 325,375 $ 328,083 $ 355,761
Interest-bearing   1,409,691     1,463,616     1,977,317     1,409,019     1,470,092  
Total deposits 1,790,661 2,024,711 2,302,692 1,737,102 1,825,853
 
Deposits held for sale 35,383 - - - -

Securities sold under agreements to repurchase and other short-term borrowings

218,227 259,722 319,246 286,510 302,054
Federal Home Loan Bank advances 519,799 554,837 564,877 565,424 565,483
Subordinated note 41,240 41,240 41,240 41,240 41,240
Other liabilities and accrued interest payable   53,517     74,799     23,272     34,668     40,056  
Total liabilities 2,658,827 2,955,309 3,251,327 2,664,944 2,774,686
 
Stockholders' equity   445,743     440,435     371,376     370,825     365,766  
Total liabilities and Stockholders' equity $ 3,104,570   $ 3,395,744   $ 3,622,703   $ 3,035,769   $ 3,140,452  
 
 
Average Balance Sheet Data
Quarterly Comparison
June 30, 2011 March 31, 2011 Dec. 31, 2010 Sept. 30, 2010 June 30, 2010
Assets:
Investment securities, including FHLB stock $ 652,693 $ 614,454 $ 627,434 $ 623,758 $ 516,746
Federal funds sold and other interest-earning deposits 221,695 856,579 335,593 229,125 245,863
Loans and fees, including loans held for sale 2,192,819 2,299,479 2,188,937 2,180,565 2,247,410
Total earning assets 3,067,207 3,770,512 3,151,964 3,033,448 3,010,019
Total assets 3,208,936 4,077,318 3,283,198 3,163,734 3,147,246
 
Liabilities and Stockholders' Equity:
Non interest-bearing deposits $ 409,391 $ 806,532 $ 341,556 $ 345,970 $ 382,006
Interest-bearing deposits 1,454,006 1,890,993 1,579,281 1,471,806 1,444,036

Securities sold under agreements to repurchase and other short-term borrowings

274,074 318,083 352,890 333,299 309,539
Federal Home Loan Bank advances 527,669 562,294 565,314 565,445 554,201
Subordinated note 41,240 41,240 41,240 41,240 41,240
Total interest-bearing liabilities 2,296,989 2,812,610 2,538,725 2,411,790 2,349,016
Stockholders' equity 446,132 408,328 372,222 369,279 364,288
 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

 
Income Statement Data
    Three Months Ended
June 30, 2011     March 31, 2011     Dec. 31, 2010     Sept. 30, 2010     June 30, 2010
 
Total interest income (4) $ 34,459 $ 92,623 $ 34,087 $ 35,270 $ 36,887
Total interest expense   7,630     8,652     8,652     8,818     8,834  
Net interest income 26,829 83,971 25,435 26,452 28,053
 
Provision for loan losses (439 ) 18,082 1,748 (1,804 ) 2,980
 
Non interest income:
Service charges on deposit accounts 3,736 3,424 3,860 3,847 3,983
Electronic refund check fees 6,584 81,062 276 293 5,052
Net RAL securitization income 19 179 37 8 25
Mortgage banking income 924 816 1,703 1,679 1,403
Debit card interchange fee income 1,493 1,484 1,322 1,213 1,312

Net gain (loss) on sales, calls and impairment of securities

1,907 (279 ) (95 ) - (57 )
Other   705     626     551     783     586  
Total non interest income   15,368     87,312     7,654     7,823     12,304  
 
Non interest expenses:
Salaries and employee benefits 13,250 17,239 11,503 13,399 12,966
Occupancy and equipment, net 5,001 6,297 5,373 5,114 5,053
Communication and transportation 878 2,509 1,343 887 719
Marketing and development 868 904 697 722 802
FDIC insurance expense 1,165 1,635 670 586 782
Bank franchise tax expense 714 1,565 755 642 645
Data processing 817 748 719 660 598
Debit card interchange expense 601 523 507 299 286
Supplies 314 894 762 219 346
Other real estate owned expense 378 481 464 562 502
Charitable contributions 234 5,298 168 282 296
Legal expense 979 1,360 727 365 740
Accrued FDIC civil money penalty 2,000 - - - -
FHLB advance prepayment penalty - - - - -
Other   1,327     3,365     1,729     1,385     910  
Total non interest expenses   28,526     42,818     25,417     25,122     24,645  
 
Income before income tax expense 14,110 110,383 5,924 10,957 12,732
Income tax expense   5,447     38,971     1,506     3,647     4,335  
 
Net income $ 8,663   $ 71,412   $ 4,418   $ 7,310   $ 8,397  
 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

 
    As of and for the Three Months Ended
June 30, 2011     March 31, 2011     Dec. 31, 2010     Sept. 30, 2010     June 30, 2010
Per Share Data:
Basic average shares outstanding 20,936 20,938 20,935 20,917 20,840
Diluted average shares outstanding 20,994 20,991 21,001 20,988 20,958
 
End of period shares outstanding:
Class A Common Stock 18,635 18,633 18,628 18,627 18,546
Class B Common Stock 2,300 2,304 2,307 2,308 2,308
 
Book value per share $ 21.29 $ 21.04 $ 17.74 $ 17.71 $ 17.54
Tangible book value per share (5) 20.46 20.18 16.88 16.84 16.65
 
Earnings per share:
Basic earnings per Class A Common Stock 0.42 3.41 0.21 0.35 0.40
Basic earnings per Class B Common Stock 0.40 3.40 0.20 0.34 0.39
Diluted earnings per Class A Common Stock 0.41 3.40 0.21 0.35 0.40
Diluted earnings per Class B Common Stock 0.40 3.39 0.20 0.34 0.39
 
Cash dividends declared per share:
Class A Common Stock 0.154 0.143 0.143 0.143 0.143
Class B Common Stock 0.140 0.130 0.130 0.130 0.130
 
Performance Ratios:
Return on average assets 1.08 % 7.01 % 0.54 % 0.92 % 1.07 %
Return on average equity 7.77 69.96 4.80 7.92 9.22
Efficiency ratio (2) 71 25 77 73 61
 
Yield on average earning assets 4.49 9.83 4.33 4.65 4.90
Cost of interest-bearing liabilities 1.33 1.23 1.36 1.46 1.50
Net interest spread 3.16 8.60 2.97 3.19 3.40
Net interest margin 3.50 8.91 3.23 3.49 3.73
 
Asset Quality Data:
Loans on non-accrual status $ 28,499 $ 26,668 $ 28,317 $ 36,358 $ 37,669
Loans past due 90 days or more and still on accrual   -     -     -     -     -  
Total non-performing loans 28,499 26,668 28,317 36,358 37,669
Other real estate owned   12,012     14,761     11,969     6,203     6,359  
Total non-performing assets $ 40,511   $ 41,429   $ 40,286   $ 42,561   $ 44,028  
 
Non-performing loans to total loans 1.28 % 1.22 % 1.30 % 1.69 % 1.71 %
Non-performing loans to total loans - Traditional Banking 1.28 1.23 1.30 1.69 1.71
Non-performing assets to total loans (including OREO) 1.81 1.89 1.84 1.97 1.99
Allowance for loan losses to total loans 1.17 1.34 1.06 1.14 1.21
Allowance for loan losses to total loans - Traditional Banking 1.17 1.21 1.06 1.14 1.21
Allowance for loan losses to non-performing loans 91 109 82 68 71
Net loan charge-offs to average loans (annualized) 0.51 2.09 0.59 0.05 0.35
Net loan charge-offs to average loans-Trad. Banking (annualized) 0.17 0.21 0.65 0.70 0.40
Delinquent loans to total loans (3) 1.28 1.04 1.24 1.69 1.72
Delinquent loans to total loans - Traditional Banking (3) 1.28 1.04 1.24 1.69 1.72
 
Other Information:
End of period full-time equivalent employees 733 758 744 738 740
Number of banking centers 43 43 43 44 44
 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

Segment Data:

The reportable segments are determined by the type of products and services offered, distinguished among Traditional Banking, Mortgage Banking and Tax Refund Solutions (“TRS”). They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business (such as branches and subsidiary banks), which are then aggregated if operating performance, products/services, and customers are similar. Loans, investments and deposits provide the majority of the net revenue from Traditional Banking operations; servicing fees and loan sales provide the majority of revenue from Mortgage Banking operations; RAL fees and ERC/ERD fees provide the majority of the revenue from TRS. All Company operations are domestic.

Segment information for the three and six months ended June 30, 2011 and 2010 follows:

 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

 
    Three Months Ended June 30, 2011
           
(dollars in thousands)    

Traditional
Banking

   

Tax Refund
Solutions

   

Mortgage
Banking

    Total Company
 
Net interest income $ 26,393 $ 367 $ 69 $ 26,829
 
Provision for loan losses 585 (1,024 ) - (439 )
 
Electronic refund check fees - 6,584 - 6,584
Net RAL securitization income - 19 - 19
Mortgage banking income - - 924 924

Net loss on sales, calls and impairment of securities

1,907 - - 1,907
Other non interest income   5,893         18         23       5,934  
Total non interest income 7,800 6,621 947 15,368
 
Total non interest expenses   22,679         4,900         947       28,526  
 
Gross operating profit 10,929 3,112 69 14,110
Income tax expense   3,612         1,811         24       5,447  
Net income $ 7,317       $ 1,301       $ 45     $ 8,663  
 
Segment end of period assets $ 3,067,290 $ 22,585 $ 14,695 $ 3,104,570
 
Net interest margin 3.50 % NM NM 3.50 %
 
 
Three Months Ended June 30, 2010
 
(dollars in thousands)    

Traditional
Banking

   

Tax Refund
Solutions

   

Mortgage
Banking

    Total Company
 
Net interest income $ 26,762 $ 1,182 $ 109 $ 28,053
 
Provision for loan losses 4,999 (2,019 ) - 2,980
 
Electronic refund check fees - 5,052 - 5,052
Net RAL securitization income - 25 - 25
Mortgage banking income - - 1,403 1,403

Net loss on sales, calls and impairment of securities

(57 ) - - (57 )
Other non interest income   5,856         2         23       5,881  
Total non interest income 5,799 5,079 1,426 12,304
 
Total non interest expenses   22,481         1,492         672       24,645  
 
Gross operating profit 5,081 6,788 863 12,732
Income tax expense   1,627         2,406         302       4,335  
Net income $ 3,454       $ 4,382       $ 561     $ 8,397  
 
Segment end of period assets $ 3,103,946 $ 24,771 $ 11,735 $ 3,140,452
 
Net interest margin 3.65 % NM NM 3.73 %
 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

 
    Six Months Ended June 30, 2011
           
(dollars in thousands)    

Traditional
Banking

   

Tax Refund
Solutions

   

Mortgage
Banking

    Total Company
 
Net interest income $ 51,521 $ 59,088 $ 191 $ 110,800
 
Provision for loan losses 4,907 12,736 - 17,643
 
Electronic refund check fees - 87,646 - 87,646
Net RAL securitization income - 198 - 198
Mortgage banking income - - 1,740 1,740

Net loss on sales, calls and impairment of securities

1,628 - - 1,628
Other non interest income   11,296         147       25         11,468  
Total non interest income 12,924 87,991 1,765 102,680
 
Total non interest expenses   45,775         23,519       2,050         71,344  
 
Gross operating profit / (loss) 13,763 110,824 (94 ) 124,493
Income tax expense / (benefit)   3,970         40,481       (33 )       44,418  
Net income $ 9,793       $ 70,343     $ (61 )     $ 80,075  
 
Segment end of period assets $ 3,067,290 $ 22,585 $ 14,695 $ 3,104,570
 
Net interest margin 3.42 % NM NM 6.48 %
 
 
Six Months Ended June 30, 2010
 
(dollars in thousands)    

Traditional
Banking

   

Tax Refund
Solutions

   

Mortgage
Banking

    Total Company
 
Net interest income $ 54,023 $ 50,716 $ 186 $ 104,925
 
Provision for loan losses 7,776 11,994 - 19,770
 
Electronic refund check fees - 58,220 - 58,220
Net RAL securitization income - 220 - 220
Mortgage banking income - - 2,415 2,415

Net loss on sales, calls and impairment of securities

(126 ) - - (126 )
Other non interest income   11,419         10       23         11,452  
Total non interest income 11,293 58,450 2,438 72,181
 
Total non interest expenses   48,290         25,994       1,500         75,784  
 
Gross operating profit 9,250 71,178 1,124 81,552
Income tax expense   2,567         25,567       393         28,527  
Net income $ 6,683       $ 45,611     $ 731       $ 53,025  
 
Segment end of period assets $ 3,103,946 $ 24,771 $ 11,735 $ 3,140,452
 
Net interest margin 3.70 % NM NM 5.73 %
 

Republic Bancorp, Inc. Financial Information
Second Quarter 2011 Earnings Release (continued)

_____________________________________

(1) – The amount of loan fee income included in total interest income was $1.1 million and $2.1 million for the quarters ended June 30, 2011 and 2010. The amount of loan fee income included in total interest income was $60.4 million and $53.3 million for the six months ended June 30, 2011 and 2010.

(2) – Equals total non-interest expense divided by the sum of net interest income and non interest income. The ratio excludes net gain (loss) on sales, calls and impairment of investment securities.

(3) – Equals total loans over 30 days past due divided by total loans.

(4) – The amount of loan fee income included in total interest income per quarter was as follows: $1.1 million (quarter ended June 30, 2011), $59.3 million (quarter ended March 31, 2011), $726,000 (quarter ended December 31, 2010), $924,000 (quarter ended September 30, 2010), and $2.1 million (quarter ended June 30, 2010).

(5) – Represents total equity less goodwill, core deposit intangible asset, and mortgage servicing rights asset divided by total shares outstanding.

NM – Not meaningful

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

REPUBLIC BANCORP INC /KY/ Reports