Republic Bancorp, Inc. · NASDAQ:RBCAA
Republic Bancorp — Shareholder Meeting (April 2018)
46 slides from Republic Bancorp's shareholder meeting presentation, Apr 19, 2018
Slide 1: Annual Meeting of Shareholders April 19, 2018
Annual Meeting of Shareholders April 19, 2018 republic Bancorp It’s just easier here. RBCAA NASDAQ LISTED
Slide 2: Safe Harbor
During the course of this presentation, we will be providing you with a discussion of some of the factors we currently anticipate may influence the future results of Republic Bancorp, Inc. (“Republic” or the “Company”), as well as certain financial projections. We want to emphasize that these forwar
Slide 3: Steve Trager, Chairman and Chief Executive Officer
STEVE TRAGER Chairman and Chief Executive Officer 3
Slide 4: Stock Price – 5yr History
4 Stock Price – 5yr History $45.0 $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 3/31/13 5/31/13 7/31/13 9/30/13 11/30/13 1/31/14 3/31/14 5/31/14 7/31/14 9/30/14 11/30/14 1/31/15 3/31/15 5/31/15 7/31/15 9/30/15 11/30/15 1/31/16 3/31/16 5/31/16 7/31/16 9/30/16 11/30/16 1/31/17 3/31/17 5/31/17 7/31/17 9/30/17 11
Slide 5: Cash Dividends Per Class A Common Share
5 Cash Dividends Per Class A Common Share (adjusted for all stock dividends) Ordinary dividend Special dividend $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $0.09 $0.10 $0.12 $0.15 $0.17 $0.21 $0.25 $0.3
Slide 6: Stock Overview
6 Stock Overview 1998 – IPO completed 2.6 million shares issued (adjusted) NASDAQ Symbol RBCAA Shares Outstanding – 12/31/17 20.9 million Market Capitalization – 12/31/17 $793 million Average Daily Volume 18,745 shares (trailing 12 months at 12/31/17) Stock Price – 3/31/18 $38.30 Stock Price – 12/31
Slide 7: Highlights Year ended December 31, 2017
Highlights Year ended December 31, 2017 7
Slide 8: 2017 Highlights
2017 Highlights Pre-tax earnings increased 14% to $78.4 million while net income and Diluted Earnings per Class A Common Share decreased slightly to $45.6 million and $2.20 New TCJA tax law had a one-time negative impact of $6.3 million on net income and $0.30 on Diluted Earnings per Class A Common
Slide 9: 2017 Highlights – Pre-Tax Earnings
9 2017 Highlights *Due to rounding, parts may not sum to total Pre-Tax Earnings* Core Bank Republic Processing Group $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 $53.0 $8.3 $44.9 2015 $69.0 $17.3 $51.6 2016 $78.4 $21.8 $56.5 2017 Millions
Slide 10: 2017 Highlights - Core Bank
10 2017 Highlights - Core Bank *See Appendix A for a reconciliation of total deposits in accordance with Generally Accepted Accounting Principles (“GAAP”) to total core deposits, a non-GAAP measure. Net Interest Income increased $22.3MM, or 16% Core Deposits* grew $195MM, or 7% CRE Loans grew $147MM
Slide 11: 2017 Highlights – Core Bank
11 2017 Highlights – Core Bank 17% 15% 1 See Appendix B for a reconciliation to net interest income in accordance with GAAP. $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $116.7 2015 2016 2017 $136.1 $156.6
Slide 12: 2017 Highlights – Core Bank Net Interest Income Increase
12 2017 Highlights – Core Bank Millions Margin expansion played a greater role during 2017 2017 - Organic growth 2016 - Acquisition and organic 1 See Appendix B for a reconciliation to net interest income in accordance with GAAP. $19.4 $20.5 $0.0 $50.0 $10.0 $15.0 $20.0 $25.0 2015 to 2016 NII increa
Slide 13: 2017 Highlights - RPG
Republic Processing Group (“RPG”) Tax Refund Solutions (“TRS”) Grew the Easy Advance (“EA”) product to $329 million in total originations from $123 million in 2016, with net revenues after provisions for loan loss increasing to $7.4 million in 2017 from $2.2 million in 2016 Republic Credit Solutions
Slide 14: 2017 Highlights - RPG Segment Contribution
Pre-Tax Earnings (000) % Contribution Year over Year Segment Primary Products 2017 2016 2017 2016 $ Change % Change TRS Tax-refund and prepaid card products $13,011 $11,773 60% 68% $1,238 11% RCS Consumer loans 8,830 5,554 40% 32% 3,276 59% Total RPG $21,841 $17,327 100% 100% $4,514 26% 14 2017 High
Slide 15: Balance Sheet
REPUBLIC BANCORP Balance Sheet
Slide 16: Strong Capital Foundation
Capital Ratio 12/31/2017 Republic Bancorp Peer1 Well Capitalized Minimum Requirement2 Tier 1 Leverage 13.21% 10.04% 5.00% CET 1 Risk Based 14.15% 12.77% 6.50% Tier 1 Risk Based 15.06% 12.83% 8.00% Total Risk Based 16.04% 13.92% 10.00% 16 Strong Capital Foundation 1Peer data obtained from the Decembe
Slide 17: Core Bank Loans
17 Core Bank Loans *CRE – Commercial Real Estate, C&I – Commercial and Industrial, C&D – Construction and Development, LFR – Lease Financing Receivables, HEQ – Home Equity Lines of Credit Commercial Sector On-Balance Sheet Focus Residential Sector Secondary-Market Focus Billions $0.0 $0.2 $0.4 $0.6
Slide 18: Core Bank Deposits
18 Core Bank Deposits *NIB – Noninterest-Bearing Demand Deposits, IB – Interest-Bearing Demand Deposits, MMDA/SAV – Money Market Deposit Accounts and Savings Accounts, Brokered – Brokered MMDA and Time Deposits, Time – Certificates of Deposit and Individual Retirement Accounts, Focus on lower-cost b
Slide 19: Industry Strong Credit Quality
Industry Strong Credit Quality 19
Slide 20: Core Bank Credit Quality Trends
As of and for the Years Ended Ratio 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Nonperforming Loans / Total Loans 0.81% 0.78% 0.66% 0.42% 0.36% Nonperforming Assets / Total Assets 1.13% 0.93% 0.55% 0.36% 0.28% Delinquent Loans / Total Loans 0.63% 0.52% 0.35% 0.18% 0.21% Allowance / Nonper
Slide 21: Interest Rate Management Strategy
Interest Rate Management Strategy 21
Slide 22: Interest Rate Sensitivity at December 31, 2017
Asset Repricing 89% of total loan portfolio reprices within five years 88% of the Commercial Real Estate portfolio reprices within five years 97% of the Commercial & Industrial portfolio reprices within five years Mortgage Warehouse balances, which reprice immediately, averaged $497 million during 2
Slide 23: Strategic Investments
REPUBLIC BANCORP Strategic Investments
Slide 24: Investments in Talent and Technology
Talent The Company invested in 59 additional full-time-equivalent employees during 2017 to service growth and implement our strategic goals Employee Stock Purchase Plan submitted for approval today Technology Officially launched a new Client Relationship Management platform Developed a product-profi
Slide 25: Cultural Highlights
Cultural Highlights 25
Slide 26: Company culture values
Innovate for Future Make it Easy Provide Exceptional service Acknowledge & Celebrate Success Commit to Caring Thrive Together Welcome 2017 Roar winners celebration 26
Slide 27: Best Places to Work in Kentucky 2018 Winner
Best Places to Work IN KENTUCKY 2018 WINNER 27
Slide 28: Encouraging Community Service
Associates logged over 15,000 community service hours The foundation donated nearly $1 million to causes that are important to the communities we serve 28 Encouraging Community Service
Slide 29: Republic Bank Foundation YMCA
29 Republic Bank Foundation YMCA A truly transformational neighborhood project
Slide 30: Highlights First Quarter 2018
Highlights First Quarter 2018 30
Slide 31: 1Q 2018 Highlights
Net income of $27.5 million, an increase of 37% over the first quarter of 2017 Return On Average Assets of 2.08% Return On Average Equity of 17.12% Capital ratios continued to exceed “well capitalized” Increased quarterly cash dividend by 10%, representing the 19th consecutive increase since 1999, a
Slide 32: 1Q 2018 Highlights – Pre-Tax Earnings
32 1Q 2018 Highlights *Due to rounding, parts may not sum to total Pre-Tax Earnings* Core Bank Republic Processing Group $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $26.6 $15.2 $11.5 $30.1 $18.1 $12.0 $34.9 $21.4 $13.5 1Q 2016 1Q 2017 1Q 2018
Slide 33: 1Q 2018 Highlights – Core Bank
Net income of $11.1 million, an increase of 31% over the first quarter of 2017 Net interest income of $41.9 million, a 14% increase over the first quarter of 2017 Credit metrics continue to outperform peer Noninterest income of $8.3 million, a 5% increase over the first quarter of 2017 Core Deposits
Slide 34: Republic Bank Opens Banking Center in Crestview Hills
New location in Northern Kentucky/Cincinnati MSA Added six Interactive Teller Machines Introduced advanced mobile alerts and controls 34 1Q 2018 Highlights – Core Bank Republic Bank Opens Banking Center in Crestview Hills
Slide 35: 1Q 2018 Highlights – Core Bank Net Interest Income
35 1Q 2018 Highlights – Core Bank 1 See Appendix B for a reconciliation to net interest income in accordance with GAAP. $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 1Q16 2Q17 1Q18 $30.2 20% $36.2 15% $41.8 Core Bank Net Interest Income (excluding FDIC-assisted transaction1)
Slide 36: 1Q 2018 Highlights – Core Bank NII Increase
36 1Q 2018 Highlights – Core Bank Millions 1 See Appendix B for a reconciliation to net interest income in accordance with GAAP. $6.0 $5.6 $2.9 $2.7 $3.4 $2.6 1Q16 to 1Q17 NII Increase 1Q17 to 1Q18 NII Increase $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0
Slide 37: Core Bank Period-End and Average Loan Balances
(dollars in thousands) Period-End Balances Average Quarterly Balances Origination Channel 3/31/2018 3/31/2017 $ Change 1Q2018 1Q2017 $ Change Traditional Network $3,322,017 $3,017,051 $304,966 $3,307,756 $3,033,392 $274,364 Warehouse Lending 534,959 495,165 39,794 448,039 436,459 11,580 Corresponden
Slide 38: Core Bank Period-End and Average Deposit Balances
(dollars in thousands) Period-End Balances Average Quarterly Balances Origination Channel 3/31/2018 3/31/2017 $ Change 1Q2018 1Q2017 $ Change Noninterest-Bearing Deposits $1,065,902 $934,787 $131,115 $1,004,807 $893,715 $111,092 Interest-Bearing DDA/SAV/MMDA 1,731,095 1,673,067 58,028 1,675,420 1,60
Slide 39: 1Q 2018 Highlights - RPG
Republic Processing Group Net Refund Transfer revenues increased 6% Sales of RCS short-term consumer loan products grew to $168 million, a 33% increase from 1Q2017 RCS loan balances grew to $62 million at March 31, 2018 from $32 million at March 31, 2017 39 1Q 2018 Highlights - RPG
Slide 40: TRS Refund Transfers and Easy Advances
(dollars in thousands) 1Q2018 1Q2017 Unit Change % Change Number of RTs Processed 2,278 2,148 130 6% Net RT Revenue $16,351 $15,382 $969 6% EAs Originated $430,212 $328,519 $101,693 31% EA Fees $17,792 $14,216 $3,576 25% Net EA Loan Loss Provision (13,277) *(8,601) (4,676) 54% Net EA Revenue $4,515
Slide 41: RPG Period-End and Average Loans
(dollars in thousands) Period-Ending Balance Average Quarterly Balance Origination Channel 3/31/2018 3/31/2017 $ Change 1Q2018 1Q2017 $ Change Tax Refund Solutions $15,793 $10,686 $ 5,107 $132,982 $87,715 $45,267 Republic Credit Solutions 62,403 32,021 30,382 72,674 32,733 39,941 Total RPG $78,196 $
Slide 42: 2018 Initiatives
Grow commercial-sector loan portfolio Expand secondary market lending Focus on analytics to drive product profitability Substantial growth in Core Deposits Further season the Dealer Services division Strategically develop MemoryBank® brand Promote Mobile Alert benefits 42 2018 Initiatives
Slide 43: It's just easier here.
It’s just easier here. REPUBLIC BANK 43
Slide 44: Thank You
REPUBLIC BANCORP Thank You
Slide 45: Appendix A Non-GAAP Disclosures Core Deposits
(in thousands) Origination Channel 12/31/17 12/31/16 $ Change 3/31/18 12/31/17 $ Change Total Deposits – GAAP $3,433,158 $3,160,692 $272,466 $3,717,623 $3,433,158 $284,465 Less: Total RPG Deposits 35,146 28,493 6,653 176,866 35,146 141,720 Less: Time Deposits >= $250,000 77,891 37,200 40,691 77,234
Slide 46: Appendix B Non-GAAP Disclosures Net Interest Income
Appendix B Non-GAAP Disclosures Net Interest Income (excluding FDIC-assisted transactions) 1 Management believes that excluding the impact of the Company’s 2012 FDIC-assisted transactions provides a more meaningful measure of the Bank’s performance. Future interest income from the 2012 FDIC-assisted