Republic Bancorp, Inc. Reports Record 2011 Net Income Of $94.1 Million, A 45% Increase Over 2010. Fourth Quarter 2011 Net Income Increases 40% Over Fourth Quarter 2010.

Republic Bancorp, Inc. is pleased to announce its fourth consecutive year of increased earnings by completing 2011 with net income of $94.1 million, a $29.4 million, or 45%, increase over 2010. Diluted Earnings per Class A Common Share increased 45% for the year ended December 31, 2011 to $4.49. For the fourth quarter of 2011, Republic earned net income of $6.2 million, a 40% increase over the fourth quarter of 2010. Diluted Earnings per Class A Common Share increased 43% to $0.30 for the quarter.

Steve Trager, Republic’s President and CEO, commented: “It gives me great pleasure to report another solid quarter of operating results, capping off a good year of earnings in 2011. In addition, I’m proud that our associates were able to generate core deposit and loan growth of 9% and 5% during the year, while maintaining good credit quality and high capital standards. With core capital and credit quality among the very best in the banking industry, we remain well-positioned to take advantage of unique opportunities that often arise in an uncertain economy.”

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

The following table highlights Republic’s fourth quarter and annual financial performance for 2011 compared to the same periods in 2010:
  Three Months Ended   %   Year Ended   %
(dollars in thousands, except per share data) 12/31/11   12/31/10 Increase 12/31/11   12/31/10 Increase
 
Net Income $ 6,204 $ 4,418 40 % $ 94,149 $ 64,753 45 %
Diluted Earnings per Class A Share $ 0.30 $ 0.21 43 % $ 4.49 $ 3.10 45 %
ROA 0.76 % 0.54 % 41 % 2.76 % 1.85 % 49 %
ROE 5.46 % 4.75 % 15 % 21.42 % 17.92 % 20 %

Year in Review

The year 2011 represented another successful year for Republic. In addition to strong earnings results for the year, the Company also achieved many other successes while positioning itself well for the future. Following are a few brief highlights from 2011:

Resolution with the Federal Deposit Insurance Corporation (“FDIC”) regarding Tax Refund Solutions (“TRS”) – RB&T settled its disagreement with the FDIC regarding the offering of Refund Anticipation Loans (“RALs”) through the TRS business segment. As a result of the resolution, RB&T is immediately positioned to resume traditional banking expansionary activities and will no longer offer RALs after April 30, 2012. For additional information regarding RB&T’s resolution with the FDIC, see the Company’s Form 8-K filed with the Securities and Exchange Commission on December 9, 2011.

Improved Credit Quality – As it has throughout the Company’s history, credit quality remains a primary focus at Republic. The Company continued to dedicate many resources and high level associates to improving its already industry solid credit metrics in 2011. As a result of the efforts of all Republic associates, the Traditional Banking credit metrics continued to improve significantly from peak levels reached in 2009 as illustrated below:
  As of and for the Year Ending
Traditional Banking Credit Quality Ratios 12/31/11   12/31/10   12/31/09
 
Non-performing loans / Total loans 1.02% 1.30% 1.90%
 
Non-performing assets / Total loans (including OREO) 1.49% 1.84% 2.11%
 
Delinquent loans / Total loans 1.07% 1.24% 1.98%
 
Net loan charge-offs / Average loans 0.24% 0.51% 0.34%
         
OREO = Other Real Estate Owned        

Traditional Bank Deposit Growth – As it was during 2010, the year 2011 represented another solid year of core deposit growth. Despite historically low interest rates, the Traditional Bank was able to grow its low cost core deposit account base by $110 million during the year. The Company was able to attract these low cost deposit accounts by capitalizing on its attractive technology offerings, such as business on-site deposit and business on-line banking, in combination with superior customer service and the safety and soundness of a high performing institution.

Mortgage Warehouse Lending Division - In June 2011, the Bank commenced business in its newly established warehouse lending division. As of December 31, 2011, warehouse lines of credit outstanding were $41 million from total credit commitments of $80 million. Through this division, the Bank provides short-term, revolving credit facilities to mortgage banking companies secured by single family first lien residential real estate loans.

Increased Cash Dividends – Despite continued uncertainty in the economic environment, Republic once again increased its cash dividend by 8% in the second quarter of 2011 thanks to its strong earnings and strong capital position. This represents the 12th consecutive year that the Company has increased its quarterly cash dividend.

National Recognition – In July 2011, Sandler O'Neil & Partners released its annual rankings of the top 150 financial institutions in Bank Director Magazine, and for the second consecutive year, ranked Republic as the 5 th best performing bank in the country based on total assets, profitability, capital adequacy and asset quality.

Republic Bank Foundation – In March 2010, the Company created the Republic Bank Foundation with a $5 million initial contribution. The Republic Bank Foundation was created to ensure the on-going legacy of giving that Republic has displayed throughout its 30-year history. Thanks to another strong year in 2011, Republic was able to further its support of the Foundation with another $5 million contribution during the year.

Sale of Bowling Green Banking Center – During the third quarter of 2011, the Bank completed the sale of its Bowling Green, Kentucky, banking center. As a result of the sale, the Company recorded a pre-tax gain of $2.9 million. Republic sold its Bowling Green banking center to enable the Company to more efficiently deploy its capital.

Tax Refund Solutions (“TRS”) – TRS completed another record year in 2011 generating net income of $67.3 million, as it processed over $15 billion in tax refunds for 3.9 million clients across the United States.

Results of Operations for the Fourth Quarter of 2011 Compared to the Fourth Quarter of 2010

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

Net income from Core Banking rose from $6.8 million during the fourth quarter of 2010 to $7.8 million during the fourth quarter of 2011, an increase of 14%. As it did during the third quarter of 2011, the Core Bank continued to achieve positive operating results by increasing net interest income and reducing its provision for loan losses.

Net interest income within the Core Bank rose to $26.9 million for the fourth quarter of 2011, an increase of $1.4 million, or 5%, from the fourth quarter of 2010. The increase in net interest income for the quarter was attributable to continued positive results from strategies implemented by the Bank during 2011, which reversed a previously negative trend for net interest income, and contributed to a second consecutive quarterly increase in net interest income over prior year same quarter.

More specifically contributing to the increase in the Core Bank’s net interest income for the quarter was year-over-year growth in the loan portfolio combined with the continued redeployment of excess cash into higher-yielding investment securities. Overall, total loans increased $110 million, or 5%, for 2011, despite the loss of $13 million in loans associated with the sale of the Bank’s Bowling Green banking center. Supplementing the Bank’s internally-originated loan growth for the year was the purchase of $33 million in commercial real estate loans during the second quarter of 2011. The growth in the loan portfolio during the year was further complemented by Republic’s continued deployment of its excess cash into higher-yielding investment alternatives, such as 5/1 agency hybrid mortgage-backed securities and callable agency securities. As a result of the loan growth and strategic investment decisions, the Core Bank’s net interest margin increased from 3.40% for the fourth quarter of 2010 to 3.56% for the fourth quarter of 2011.

The Core Bank’s provision for loan losses decreased $1.1 million during the fourth quarter of 2011 compared to the fourth quarter of 2010. In general, the Core Bank’s provision continued to benefit from improvement in its credit quality metrics. Improvements continued to be recognized in the Core Bank’s ratio of delinquent loans to total loans, which was 1.07% at December 31, 2011 compared to 1.24% at December 31, 2010. In addition, the Core Bank’s ratio of nonperforming loans to total loans was 1.02% at December 31, 2011 compared to 1.30% at December 31, 2010.

Non-interest income, while lower compared to a strong fourth quarter 2010, contributed $6.3 million to the Core Banking segment for the fourth quarter of 2011. Notable activity within non-interest income during the quarter included mortgage banking income and service charges on deposits. Mortgage banking income, while contributing $807,000 during the fourth quarter of 2011, was negatively impacted by a slowdown in consumer refinance activity as compared to the fourth quarter of 2010. Overall, the Bank originated $41 million of secondary market loans during the fourth quarter of 2011 compared to $92 million during the fourth quarter of 2010.

Deposit fee income continued to be a significant contributor to the Core Bank’s bottom line. While lower compared to the fourth quarter of 2010 due to recently enacted regulatory constraints on consumer checking accounts, deposit fees generated $3.5 million in revenue for the quarter. Included in the figure for the quarter was approximately $488,000 in additional deposit fee income resulting from the Core Bank’s retail deposit account restructuring, which implemented new fees for many accounts based on transaction activity and account balances. These new fees were primarily implemented on August 1, 2011 and helped partially offset a reduction in the Bank’s other deposit fee categories as compared to the fourth quarter of 2010.

Core Banking non-interest expenses decreased $251,000 for the fourth quarter of 2011 to $20.6 million. Non-interest expenses benefited during the fourth quarter of 2011 from a $1.9 million credit to salary expense as the Company finalized its incentive compensation payouts for the year. By comparison, the Company recorded a $2.2 million credit to salary expense for reduced incentive compensation accruals during the fourth quarter of 2010.

TRS

TRS, which derives substantially all of its revenues during the first and second quarters of the year, historically operates at a net loss during the third and fourth quarters, as the Company prepares for the upcoming tax season. The net loss for TRS was $1.5 million for the fourth quarter of 2011 compared to a net loss of $2.4 million for the same period in 2010. TRS’ net loss during the fourth quarter of 2011 benefited from a $1.1 million credit to non–interest expense related to a previously disclosed Civil Money Penalty (“CMP”) assessed by the FDIC. The Company accrued $2.0 million for the full amount of the CMP during the second quarter of 2011 and reached a final settlement with the FDIC for $900,000 during the fourth quarter of 2011. Other items impacting the comparability of financial results for TRS during the fourth quarter of 2011 included higher legal fees for the Company’s now-settled disagreement with the FDIC regarding RALs and higher salary costs for TRS staff.

Conclusion

“As we look to the promise of a new year, I am more excited than ever about the prospects for Republic. The landscape for growth combined with Republic’s strong capital levels is reason for great optimism, as we seek to expand the Company through strategic acquisition opportunities and new business lines such as Mortgage Warehouse Lending. As always, we will be assertive as we embark on new opportunities, but cautious as well, keeping the long-term success of the Company and the long-term interests of the shareholder in mind. It’s this long standing and proven approach to business that allows us to continue to say: “ 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 42 banking centers and is the parent company of Republic Bank & Trust Company and Republic Bank. Republic Bank & Trust Company has 34 banking centers in 12 Kentucky communities - 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 $3.4 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. ®

Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those contemplated by the forward-looking statements. The Company cautions you therefore against relying on any of these forward-looking statements, which speak only as of the date on which they are made. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include factors disclosed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission, including those factors set forth as “Risk Factors” in the Company’s Form 10-Q for the quarter ended September 30, 2011. The Company undertakes no obligation to update any forward-looking statements.

Republic Bancorp, Inc. Financial Information

Fourth 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        
Dec. 31, 2011 Dec. 31, 2010
Assets:
Cash and cash equivalents $ 362,971 $ 786,371
Investment securities 674,022 542,694
Mortgage loans held for sale 4,392 15,228
Loans 2,285,295 2,175,240
Allowance for loan losses (24,063 ) (23,079 )
Federal Home Loan Bank stock, at cost 25,980 26,212
Premises and equipment, net 34,681 37,770
Goodwill 10,168 10,168
Other assets and accrued interest receivable   46,545     52,099  
Total assets $ 3,419,991   $ 3,622,703  
 
Liabilities and Stockholders' Equity:
Deposits:
Non interest-bearing $ 408,483 $ 325,375
Interest-bearing   1,325,495     1,977,317  
Total deposits 1,733,978 2,302,692
 
Securities sold under agreements to repurchase and other short-term borrowings 230,231 319,246
Federal Home Loan Bank advances 934,630 564,877
Subordinated note 41,240 41,240
Other liabilities and accrued interest payable   27,545     23,272  
Total liabilities 2,967,624 3,251,327
 
Stockholders' equity   452,367     371,376  
Total liabilities and Stockholders' equity $ 3,419,991   $ 3,622,703  
Average Balance Sheet Data          
Three Months Ended Dec. 31, Year Ended Dec. 31,
2011 2010 2011 2010
Assets:
Investment securities, including FHLB stock $ 735,336 $ 627,434 $ 678,804 $ 561,273
Federal funds sold and other interest-earning deposits 126,045 335,593 315,530 473,137
Loans and fees, including loans held for sale 2,255,757 2,188,937 2,246,259 2,338,990
Total earning assets 3,117,138 3,151,964 3,240,593 3,373,400
Total assets 3,246,296 3,283,198 3,416,921 3,503,886
 
Liabilities and Stockholders' Equity:
Non interest-bearing deposits $ 430,705 $ 341,556 $ 509,457 $ 421,162
Interest-bearing deposits 1,379,159 1,579,281 1,540,515 1,725,891

Securities sold under agreements to repurchase and other short-term borrowings
275,085 352,890 278,861 330,154
Federal Home Loan Bank advances 625,047 565,314 558,249 574,181
Subordinated note 41,240 41,240 41,240 41,240
Total interest-bearing liabilities 2,320,531 2,538,725 2,418,865 2,671,466
Stockholders' equity 454,343 372,222 439,636 361,357

Republic Bancorp, Inc. Financial Information

Fourth Quarter 2011 Earnings Release (continued)
       
Income Statement Data
Three Months Ended Dec. 31, Year Ended Dec. 31,
2011 2010 2011 2010
 
Total interest income (1) $ 33,607 $ 34,087 $ 195,115 $ 193,473
Total interest expense   6,710     8,652     30,255   36,661  
 
Net interest income 26,897 25,435 164,860 156,812
 
Provision for loan losses 463 1,748 17,966 19,714
 
Non interest income:
Service charges on deposit accounts 3,524 3,860 14,105 15,562
Electronic refund check fees 124 276 88,195 58,789
Net RAL securitization income 4 37 207 265
Mortgage banking income 807 1,703 3,899 5,797
Debit card interchange fee income 1,399 1,322 5,791 5,067
Gain on sale of banking center - - 2,856 -
Net gain (loss) on sales, calls and impairment of securities 77 (95 ) 2,006 (221 )
Other   533     551     2,565   2,399  
Total non interest income   6,468     7,654     119,624   87,658  
 
Non interest expenses:
Salaries and employee benefits 11,332 11,503 54,966 55,246
Occupancy and equipment, net 5,277 5,373 21,713 21,958
Communication and transportation 1,227 1,343 5,695 5,418
Marketing and development 729 697 3,237 10,813
FDIC insurance expense 707 670 4,425 3,155
Bank franchise tax expense 653 755 3,645 3,187
Data processing 855 719 3,207 2,697
Debit card interchange expense 549 507 2,239 1,741
Supplies 736 762 2,353 2,359
Other real estate owned expense 889 464 2,356 1,829
Charitable contributions 223 168 5,933 6,232
Legal expense 846 727 3,969 1,832
FDIC civil money penalty (1,100 ) - 900 -
FHLB advance prepayment penalty - - - 1,531
Other   1,616     1,729     7,683   8,325  
Total non interest expenses   24,539     25,417     122,321   126,323  
 
Income before income tax expense 8,363 5,924 144,197 98,433
Income tax expense   2,159     1,506     50,048   33,680  
 
Net income $ 6,204   $ 4,418   $ 94,149 $ 64,753  

Republic Bancorp, Inc. Financial Information

Fourth Quarter 2011 Earnings Release (continued)
 

As of and for the
 

As of and for the

 
Three Months Ended Dec. 31, Year Ended Dec. 31,
2011   2010 2011   2010
Per Share Data:
Basic average shares outstanding 20,954 20,935 20,945 20,877
Diluted average shares outstanding 20,996 21,001 20,993 20,960
 
End of period shares outstanding:
Class A Common Stock 18,652 18,628 18,652 18,628
Class B Common Stock 2,300 2,307 2,300 2,307
 
Book value per share $ 21.59 $ 17.74 $ 21.59 $ 17.74
Tangible book value per share (2) 20.81 16.88 20.81 16.88
 
Earnings per share:
Basic earnings per Class A Common Stock 0.30 0.21 4.50 3.11
Basic earnings per Class B Common Stock 0.28 0.20 4.45 3.06
Diluted earnings per Class A Common Stock 0.30 0.21 4.49 3.10
Diluted earnings per Class B Common Stock 0.28 0.20 4.44 3.04
 
Cash dividends declared per share:
Class A Common Stock 0.154 0.143 0.605 0.561
Class B Common Stock 0.140 0.130 0.550 0.510
 
Performance Ratios:
Return on average assets 0.76 % 0.54 % 2.76 % 1.85 %
Return on average equity 5.46 4.75 21.42 17.92
Efficiency ratio (3) 74 77 43 52
Yield on average interest-earning assets 4.31 4.33 6.02 5.74
Cost of interest-bearing liabilities 1.16 1.36 1.25 1.37
Net interest spread 3.15 2.97 4.77 4.37
Net interest margin - Total Company 3.45 3.23 5.09 4.65
Net interest margin - Traditional Banking 3.56 3.40 3.55 3.57
 
Asset Quality Ratios:
Loans on non-accrual status $ 23,306 $ 28,317 $ 23,306 $ 28,317
Loans past due 90 days or more and still on accrual - - - -
Total non-performing loans 23,306 28,317 23,306 28,317
Other real estate owned 10,956 11,969 10,956 11,969
Total non-performing assets 34,262 40,286 34,262 40,286
 
Total Company Credit Quality Ratios:
Non-performing loans to total loans 1.02 % 1.30 % 1.02 % 1.30 %
Non-performing assets to total loans (including OREO) 1.49 1.84 1.49 1.84
Non-performing assets to total assets 1.00 1.11 1.00 1.11
Allowance for loan losses to total loans 1.05 1.06 1.05 1.06
Allowance for loan losses to non-performing loans 103 82 103 82
Delinquent loans to total loans (4) 1.07 1.24 1.07 1.24
Net loan charge-offs to average loans (annualized) 0.06 0.59 0.76 0.83
 
Traditional Banking Credit Quality Ratios:
Non-performing loans to total loans 1.02 1.30 1.02 1.30
Non-performing assets to total loans (including OREO) 1.49 1.84 1.49 1.84
Non-performing assets to total assets 1.10 1.32 1.10 1.32
Allowance for loan losses to total loans 1.05 1.06 1.05 1.06
Allowance for loan losses to non-performing loans 103 82 103 82
Delinquent loans to total loans (4) 1.07 1.24 1.07 1.24
Net loan charge-offs to average loans (annualized) 0.15 0.65 0.24 0.51
 
Other Information:
End of period full-time equivalent employees 710 744 710 744
Number of banking centers 42 43 42 43

Republic Bancorp, Inc. Financial Information

Fourth Quarter 2011 Earnings Release (continued)
         
Balance Sheet Data
Quarterly Comparison
Dec. 31, 2011 Sept. 30, 2011 June 30, 2011 March 31, 2011 Dec. 31, 2010
Assets:
Cash and cash equivalents $ 362,971 $ 75,573 $ 130,262 $ 472,315 $ 786,371
Investment securities 674,022 702,142 633,959 645,636 542,694
Loans held for sale 4,392 4,721 21,456 1,381 15,228
Loans 2,285,295 2,219,916 2,222,697 2,178,886 2,175,240
Allowance for loan losses (24,063 ) (23,945 ) (25,931 ) (29,144 ) (23,079 )
Federal Home Loan Bank stock, at cost 25,980 26,153 26,153 26,213 26,212
Premises and Equipment, net 34,681 34,044 36,183 36,734 37,770
Goodwill 10,168 10,168 10,168 10,168 10,168
Other assets and interest receivable   46,545     46,369     49,623     53,555     52,099  
Total assets $ 3,419,991   $ 3,095,141   $ 3,104,570   $ 3,395,744   $ 3,622,703  
 
Liabilities and Stockholders' Equity:
Deposits:
Non interest-bearing $ 408,483 $ 385,511 $ 380,970 $ 561,095 $ 325,375
Interest-bearing   1,325,495     1,416,887     1,409,691     1,463,616     1,977,317  
Total deposits 1,733,978 1,802,398 1,790,661 2,024,711 2,302,692
 
Deposits held for sale - - 35,383 - -

Securities sold under agreements to repurchase and other short-term borrowings
230,231 227,504 218,227 259,722 319,246
Federal Home Loan Bank advances 934,630 524,731 519,799 554,837 564,877
Subordinated note 41,240 41,240 41,240 41,240 41,240
Other liabilities and accrued interest payable   27,545     46,197     53,517     74,799     23,272  
Total liabilities 2,967,624 2,642,070 2,658,827 2,955,309 3,251,327
 
Stockholders' equity   452,367     453,071     445,743     440,435     371,376  
Total liabilities and Stockholders' equity $ 3,419,991   $ 3,095,141   $ 3,104,570   $ 3,395,744   $ 3,622,703  
 
 
 
Average Balance Sheet Data
Quarterly Comparison
Dec. 31, 2011 Sept. 30, 2011 June 30, 2011 March 31, 2011 Dec. 31, 2010
Assets:
Investment securities, including FHLB stock $ 735,336 $ 711,050 $ 652,693 $ 614,454 $ 627,434
Federal funds sold and other interest-earning deposits 126,045 68,108 221,695 856,579 335,593
Loans and fees, including loans held for sale 2,255,757 2,237,559 2,192,819 2,299,479 2,188,937
Total earning assets 3,117,138 3,016,717 3,067,207 3,770,512 3,151,964
Total assets 3,246,296 3,147,230 3,208,936 4,077,318 3,283,198
 
Liabilities and Stockholders' Equity:
Non interest-bearing deposits $ 430,705 $ 396,568 $ 409,391 $ 806,532 $ 341,556
Interest-bearing deposits 1,379,159 1,444,577 1,454,006 1,890,993 1,579,281

Securities sold under agreements to repurchase and other short-term borrowings
275,085 249,002 274,074 318,083 352,890
Federal Home Loan Bank advances 625,047 517,739 527,669 562,294 565,314
Subordinated note 41,240 41,240 41,240 41,240 41,240
Total interest-bearing liabilities 2,320,531 2,252,558 2,296,989 2,812,610 2,538,725
Stockholders' equity 454,343 449,177 446,132 408,328 372,222

Republic Bancorp, Inc. Financial Information

Fourth Quarter 2011 Earnings Release (continued)
         
Income Statement Data
Three Months Ended
Dec. 31, 2011 Sept. 30, 2011 June 30, 2011 March 31, 2011 Dec. 31, 2010
 
Total interest income (5) $ 33,607 $ 34,426 $ 34,459 $ 92,623 $ 34,087
Total interest expense   6,710     7,263     7,630     8,652     8,652  
Net interest income 26,897 27,163 26,829 83,971 25,435
 
Provision for loan losses 463 (140 ) (439 ) 18,082 1,748
 
Non interest income:
Service charges on deposit accounts 3,524 3,421 3,736 3,424 3,860
Electronic refund check fees 124 425 6,584 81,062 276
Net RAL securitization income 4 5 19 179 37
Mortgage banking income 807 1,352 924 816 1,703
Debit card interchange fee income 1,399 1,415 1,493 1,484 1,322
Gain on sale of banking center - 2,856 - - -

Net gain (loss) on sales, calls and impairment of securities
77 301 1,907 (279 ) (95 )
Other   533     701     705     626     551  
Total non interest income   6,468     10,476     15,368     87,312     7,654  
 
Non interest expenses:
Salaries and employee benefits 11,332 13,145 13,250 17,239 11,503
Occupancy and equipment, net 5,277 5,138 5,001 6,297 5,373
Communication and transportation 1,227 1,081 878 2,509 1,343
Marketing and development 729 736 868 904 697
FDIC insurance expense 707 918 1,165 1,635 670
Bank franchise tax expense 653 713 714 1,565 755
Data processing 855 787 817 748 719
Debit card interchange expense 549 566 601 523 507
Supplies 736 409 314 894 762
Other real estate owned expense 889 608 378 481 464
Charitable contributions 223 178 234 5,298 168
Legal expense 846 784 979 1,360 727
FDIC civil money penalty (1,100 ) - 2,000 - -
Other   1,616     1,375     1,327     3,365     1,729  
Total non interest expenses   24,539     26,438     28,526     42,818     25,417  
 
Income before income tax expense 8,363 11,341 14,110 110,383 5,924
Income tax expense   2,159     3,471     5,447     38,971     1,506  
 
Net income $ 6,204   $ 7,870   $ 8,663   $ 71,412   $ 4,418  

Republic Bancorp, Inc. Financial Information

Fourth Quarter 2011 Earnings Release (continued)
       
As of and for the Three Months Ended
Dec. 31, 2011   Sept. 30, 2011

June 30, 2011

March 31, 2011
Dec. 31, 2010
Per Share Data:
Basic average shares outstanding 20,954 20,953 20,936 20,938 20,935
Diluted average shares outstanding 20,996 20,994 20,994 20,991 21,001
 
End of period shares outstanding:
Class A Common Stock 18,652 18,655 18,635 18,633 18,628
Class B Common Stock 2,300 2,300 2,300 2,304 2,307
 
Book value per share $ 21.59 $ 21.62 $ 21.29 $ 21.04 $ 17.74
Tangible book value per share (2) 20.81 20.81 20.46 20.18 16.88
 
Earnings per share:
Basic earnings per Class A Common Stock 0.30 0.38 0.42 3.41 0.21
Basic earnings per Class B Common Stock 0.28 0.36 0.40 3.40 0.20
Diluted earnings per Class A Common Stock 0.30 0.38 0.41 3.40 0.21
Diluted earnings per Class B Common Stock 0.28 0.36 0.40 3.39 0.20
 
Cash dividends declared per share:
Class A Common Stock 0.154 0.154 0.154 0.143 0.143
Class B Common Stock 0.140 0.140 0.140 0.130 0.130
 
Performance Ratios:
Return on average assets 0.76% 1.00% 1.08% 7.01% 0.54%
Return on average equity 5.46 7.01 7.77 69.96 4.75
Efficiency ratio (3) 74 71 71 25 77
Yield on average interest-earning assets 4.31 4.56 4.49 9.83 4.33
Cost of interest-bearing liabilities 1.16 1.29 1.33 1.23 1.36
Net interest spread 3.15 3.27 3.16 8.60 2.97
Net interest margin - Total Company 3.45 3.60 3.50 8.91 3.23
Net interest margin - Traditional Banking 3.56 3.61 3.50 3.33 3.40
 
Asset Quality Data:
Loans on non-accrual status $ 23,306 $ 23,822 $ 28,499 $ 26,668 $ 28,317
Loans past due 90 days or more and still on accrual - - - - -
Total non-performing loans 23,306 23,822 28,499 26,668 28,317
Other real estate owned 10,956 11,185 12,012 14,761 11,969
Total non-performing assets 34,262 35,007 40,511 41,429 40,286
 
Total Company Credit Quality Ratios:
Non-performing loans to total loans 1.02% 1.07% 1.28% 1.22% 1.30%
Non-performing assets to total loans (including OREO) 1.49 1.57 1.81 1.89 1.84
Non-performing assets to total assets 1.00 1.13 1.30 1.22 1.11
Allowance for loan losses to total loans 1.05 1.08 1.17 1.34 1.06
Allowance for loan losses to non-performing loans 103 101 91 109 82
Delinquent loans to total loans (4) 1.07 0.90 1.28 1.04 1.24
Net loan charge-offs to average loans (annualized) 0.06 0.33 0.51 2.09 0.59
 
Traditional Banking Credit Quality Ratios:
Non-performing loans to total loans 1.02 1.07 1.28 1.23 1.30
Non-performing assets to total loans (including OREO) 1.49 1.57 1.81 1.89 1.84
Non-performing assets to total assets 1.10 1.14 1.31 1.14 1.32
Allowance for loan losses to total loans 1.05 1.08 1.17 1.21 1.06
Allowance for loan losses to non-performing loans 103 101 91 109 82
Delinquent loans to total loans (4) 1.07 0.90 1.28 1.04 1.24
Net loan charge-offs to average loans (annualized) 0.15 0.45 0.17 0.21 0.65
 
Other Information:
End of period full-time equivalent employees 710 705 733 758 744
Number of banking centers 42 42 43 43 43

Republic Bancorp, Inc. Financial InformationFourth 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 months and years ended December 31, 2011 and 2010 follows:

Republic Bancorp, Inc. Financial Information

Fourth Quarter 2011 Earnings Release (continued)
 
Three Months Ended December 31, 2011
(dollars in thousands) Traditional Banking   Mortgage Banking   Tax Refund Solutions   Total Company
 
Net interest income $ 26,766 $ 110 $ 21 $ 26,897
 
Provision for loan losses 952 - (489 ) 463
 
Electronic refund check fees - - 124 124
Net RAL securitization income - - 4 4
Mortgage banking income - 807 - 807

Net gain on sales, calls and impairment of securities
77 - - 77
Other non interest income   5,426     27     3     5,456  
Total non interest income 5,503 834 131 6,468
 
Total non interest expenses   19,549     1,094     3,896     24,539  
 
Gross operating profit (loss) 11,768 (150 ) (3,255 ) 8,363
Income tax expense (benefit)   3,920     (52 )   (1,709 )   2,159  
Net income (loss) $ 7,848   $ (98 ) $ (1,546 ) $ 6,204  
 
Segment end of period assets $ 3,099,426 $ 10,880 $ 309,685 $ 3,419,991
 
Net interest margin 3.56 % NM NM 3.45 %
 
Three Months Ended December 31, 2010
(dollars in thousands) Traditional Banking Mortgage Banking Tax Refund Solutions Total Company
 
Net interest income $ 25,321 $ 184 $ (70 ) $ 25,435
 
Provision for loan losses 2,069 - (321 ) 1,748
 
Electronic refund check fees - - 276 276
Net RAL securitization income - - 37 37
Mortgage banking income - 1,703 - 1,703

 

Net gain on sales, calls and impairment of securities
(95 ) - - (95 )
Other non interest income   5,716     14     3     5,733  
Total non interest income 5,621 1,717 316 7,654
 
Total non interest expenses   20,401     493     4,523     25,417  
 
Gross operating profit (loss) 8,472 1,408 (3,956 ) 5,924
Income tax expense (benefit)   2,752     331     (1,577 )   1,506  
Net income (loss) $ 5,720   $ 1,077   $ (2,379 ) $ 4,418  
 
Segment end of period assets $ 3,026,628 $ 23,359 $ 572,716 $ 3,622,703
 
Net interest margin 3.40 % NM NM 3.23 %

Republic Bancorp, Inc. Financial Information

Fourth Quarter 2011 Earnings Release (continued)
   
Year Ended December 31, 2011
(dollars in thousands) Traditional Banking   Mortgage Banking   Tax Refund Solutions Total Company
 
Net interest income $ 105,346 $ 401 $ 59,113 $ 164,860
 
Provision for loan losses 6,406 - 11,560 17,966
 
Electronic refund check fees - - 88,195 88,195
Net RAL securitization income - - 207 207
Mortgage banking income - 3,899 - 3,899

Net gain on sales, calls and impairment of securities
2,006 - - 2,006
Other non interest income   25,089     78   150   25,317  
Total non interest income 27,095 3,977 88,552 119,624
 
Total non interest expenses   87,389     3,849   31,083   122,321  
 
Gross operating profit (loss) 38,646 529 105,022 144,197
Income tax expense (benefit)   12,183     185   37,680   50,048  
Net income (loss) $ 26,463   $ 344 $ 67,342 $ 94,149  
 
Segment end of period assets $ 3,099,426 $ 10,880 $ 309,685 $ 3,419,991
 
Net interest margin 3.55 % NM NM 5.09 %
Year Ended December 31, 2010
(dollars in thousands) Traditional Banking   Mortgage Banking   Tax Refund Solutions   Total Company
 
Net interest income $ 105,685 $ 468 $ 50,659 $ 156,812
 
Provision for loan losses 11,571 - 8,143 19,714
 
Electronic refund check fees - - 58,789 58,789
Net RAL securitization income - - 265 265
Mortgage banking income - 5,797 - 5,797

Net gain on sales, calls and impairment of securities
(221 ) - - (221 )
Other non interest income   22,899     73   56   23,028  
Total non interest income 22,678 5,870 59,110 87,658
 
Total non interest expenses   90,968     2,559   32,796   126,323  
 
Gross operating profit (loss) 25,824 3,779 68,830 98,433
Income tax expense (benefit)   7,929     1,161   24,590   33,680  
Net income (loss) $ 17,895   $ 2,618 $ 44,240 $ 64,753  
 
Segment end of period assets $ 3,026,628 $ 23,359 $ 572,716 $ 3,622,703
 
Net interest margin 3.57 % NM NM 4.65 %

Republic Bancorp, Inc. Financial Information

Fourth Quarter 2011 Earnings Release (continued)
   
 

(1) – The amount of loan fee income included in total interest income was $788,000 and $726,000 for the quarters ended December 31, 2011 and 2010. The amount of loan fee income included in total interest income was $62.3 million and $54.9 million for the years ended December 31, 2011 and 2010.

 
 

(2) – The following table provides a reconciliation of total stockholders' equity in accordance with GAAP to tangible stockholders’ equity in accordance with applicable regulatory requirements. The Company provides the tangible common equity ratio, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy.
Quarterly Comparison
(in thousands, except per share data) Dec. 31, 2011   Sept. 30, 2011   June 30, 2011   March 31, 2011   Dec. 31, 2010
Total stockholders' equity (a) $ 452,367 $ 453,071 $ 445,743 $ 440,435 $ 371,376
Less: Goodwill 10,168 10,168 10,168 10,168 10,168
Less: Core deposit intangible 58 73 87 102 117
Less: Mortgage servicing rights   6,087     6,688     7,169     7,573     7,800  

Tangible stockholders' equity (c)
$ 436,054   $ 436,142   $ 428,319   $ 422,592   $ 353,291  
 
Total assets (b) $ 3,419,991 $ 3,095,141 $ 3,104,570 $ 3,395,744 $ 3,622,703
Less: Goodwill 10,168 10,168 10,168 10,168 10,168
Less: Core deposit intangible 58 73 87 102 117
Less: Mortgage servicing rights   6,087     6,688     7,169     7,573     7,800  
Tangible assets (d) $ 3,403,678   $ 3,078,212   $ 3,087,146   $ 3,377,901   $ 3,604,618  
 
Total stockholders' equity to total assets (a/b) 13.23 % 14.64 % 14.36 % 12.97 % 10.25 %
Tangible stockholders' equity to tangible assets (c/d) 12.81 % 14.17 % 13.87 % 12.51 % 9.80 %
 
Number of shares outstanding (e)   20,952     20,955     20,935     20,937     20,935  
 
Book value per share (a/e) $ 21.59 $ 21.62 $ 21.29 $ 21.04 $ 17.74
Tangible book value per share (c/e) 20.81 20.81 20.46 20.18 16.88
 

(3) – 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.

 
 

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

 
 

(5) – The amount of loan fee income included in total interest income per quarter was as follows: $788,000 (quarter ended December 31, 2011), $1.1 million (quarter ended September 30, 2011), $1.1 million (quarter ended June 30, 2011), $59.3 million (quarter ended March 31, 2011) and $726,000 (quarter ended December 31, 2010).
 

NM – Not meaningful

Copyright Business Wire 2010

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