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Republic Bancorp, Inc. Reports Second Quarter Net Income Of $6.1 Million And Year To Date Net Income Of $19.5 Million

Republic Bancorp, Inc. (“Republic” or the “Company”) is pleased to report net income of $6.1 million for the second quarter of 2013 resulting in Diluted Earnings per Class A Common Share of $0.30. Return on average assets (“ROA”) and return on average equity (“ROE”) were 0.73% and 4.46%, respectively, for the quarter. Net income for the first six months of 2013 was $19.5 million, with diluted Earnings per Class A Common share of $0.94. ROA and ROE for the first six months of 2013 were 1.14% and 7.13%, respectively.

“Net income for the second quarter and first six months of 2013 continued to benefit from growth in net interest income and low loan loss provisions as credit quality remained sound. Comparability between the first six months of 2013 and the first six months of 2012 were negatively impacted by the fact that we haven’t been able to repeat our overwhelming successes from 2012, which included a near-record tax season within our Republic Processing Group (‘RPG’) business segment and a large bargain purchase gain earned from the acquisition of a failed bank in Tennessee,” commented Steve Trager, Chairman & CEO of Republic.

In line with Republic’s non-traditional banking growth objectives, the Company announced on July 11, 2013, that its wholly-owned subsidiary, Republic Bank & Trust Company (“RB&T”), has entered into a Purchase and Assumption Agreement (the “Agreement”) to acquire certain assets and substantially all of the deposits of H&R Block Bank. As part of that announcement, the Company also disclosed that RB&T and H&R Block, Inc. and its affiliates are currently in separate contract negotiations to enter into a Joint Marketing Master Services Agreement (“MSA”), pursuant to which RB&T would offer H&R Block-branded financial services products to H&R Block’s clients. For additional information on the Agreement and the on-going contract negotiations for the MSA, see Republic’s Form 8-K filed with the Securities and Exchange Commission on July 11, 2013.

Republic Bancorp, Inc. (NASDAQ: RBCAA), headquartered in Louisville, Kentucky, is the holding company for RB&T and Republic Bank.

The following chart highlights Republic’s second quarter and year-to-date 2013 financial performance compared to the same period in 2012:
  Three Months Ended   %   Six Months Ended   %
(dollars in thousands, except per share data) 6/30/13   6/30/12 Change 6/30/13   6/30/12 Change
Income before income taxes $ 8,946 $ 14,481 -38 % $ 29,924 $ 142,187 -79 %
Net Income $ 6,119 $ 9,578 -36 % $ 19,475 $ 92,050 -79 %
Diluted Earnings per Class A Share $ 0.30 $ 0.46 -35 % $ 0.94 $ 4.38 -79 %
ROA 0.73 % 1.16 % -37 % 1.14 % 4.94 % -77 %
ROE 4.46 % 7.17 % -38 % 7.13 % 35.19 % -80 %

Results of Operations for the Second Quarter of 2013 Compared to the Second Quarter of 2012

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

Net income from Core Banking was $7.0 million for the second quarter of 2013, a decrease of 3% from a solid second quarter of 2012. The Company’s second quarter 2013 operating results were negatively impacted compared to the second quarter of 2012 by higher overhead costs, which were partially offset by an increase in net interest income, along with growth in mortgage banking income and service charges on deposits.

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