Republic Bancorp, Inc. · NASDAQ:RBCAA
Republic Bancorp — Shareholder Meeting (April 2023)
33 slides from Republic Bancorp's shareholder meeting presentation, Apr 20, 2023
Slide 1: Annual Meeting of Shareholders April 2023
Annual Meeting of Shareholders April 2023
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, Executive Chair
STEVE TRAGER Executive Chair, Republic Bancorp, Inc. 3
Slide 4: 2022 Highlights
2022 Net income increased 4% over 2021 Return on Average Assets and Return on Average Equity were 1.48% and 10.68% for 2022 compared to 1.39% and 10.37% for 2021 Net Interest Margin Expansion: • Core Bank net interest margin (“NIM”) increased 12 basis points over 2021 to 3.32% • 4Q 2022 NIM of 3.82%
Slide 5: Year ended December 31, 2022 Financial Highlights
Year ended December 31, 2022 Financial Highlights 5
Slide 6: 2022 Financial Highlights: Net Income
2022 Financial Highlights • Net income for 2022 was $91.1 million, a $3.5 million, or 4%, increase over 2021 6 ($000s) 2022 2021 Core Bank $ 47,342 $ 59,052 Republic Processing Group (RPG) 43,764 28,559 Total Company $ 91,106 $ 87,611 +4% over 2021 EPS 2022 2021 Diluted Earnings Per Class A Common S
Slide 7: Expansion of Core Bank Net Interest Income/Margin
2022 Financial Highlights • Expansion of Core Bank Net Interest Income/Margin 7 ($000s) 2022 2021 2022 2021 Total Core Bank $185,791 $183,548 3.32% 3.20% Republic Processing Group (RPG) 50,900 39,192 NM NM Total Company $236,691 $222,740 4.12% 3.79% NM = Not Meaningful Net Interest Income Net Intere
Slide 8: Low Cost of Deposits in 2022
($ in thousands) Quarter to Quarter to Quarter to Weighted Weighted Quarter Quarter Quarter Cost Average Average Average Average Avg. Balance Cost Change as a % of Balances Cost Balances Cost Change Change Change in FFTR Total Interest-Bearing Deposits/Weighted Average Cost $ 2,704,764 0.46% $ 2,857
Slide 9: Core Bank Net Charge-offs Remain Low
2022 Financial Highlights • Core Bank net charge-offs remain favorably low at Republic and across the industry 9 0.06% 0.11% 0.03% 0.01% 0.00% 0.10% 0.11% 0.11% 0.05% 0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 2018 2019 2020 2021 2022 Core Bank Peer (1) (1) Represents all commercial banks with total assets
Slide 10: 2022 Noninterest Income Mix
Mortgage Banking Income, $6MM Net Refund Transfer Fees, $17MM RPG Program Fees, $16MM Service Charges on Deposits, $14MM Interchange Fees, $13MM Other, $24MM 2022 Noninterest Income Mix 2022 Financial Highlights Total Noninterest Income 2022 - $90 Million 2021 - $87 Million • Noninterest income posi
Slide 11: 2022 Noninterest Expense Mix
Salaries and Employee Benefits, $111MM Technology, Communication, and Equipment, $29MM Occupancy, $13MM Other, $34MM 2022 Noninterest Expense Mix 2022 Financial Highlights Total Noninterest Expense 2022 - $187 Million, +2% 2021 - $183 Million 11 • Total Company expenses well managed: 2% increase vs.
Slide 12: Balance Sheet
REPUBLIC BANCORP Balance Sheet 12
Slide 13: Loan Growth
Loan Growth Residential Real Estate, $1,233 Traditional Commercial Portfolios, $2,172 Home Equity, $242 Consumer Other, $24 Aircraft, $180 $ in millions Traditional Bank Loan Portfolio (ex-PPP*) Dec. 31, 2022 Total Traditional Bank Loans (ex-PPP*) Dec. 31, 2022 - $3.85 Billion • Diversified loan gro
Slide 14: Allowance for Credit Losses
Balance Sheet • Allowance remained elevated due to economic uncertainty and prudent risk management 14 Reportable Segment (in 000s) Allowance Allowance to Loans Allowance Allowance to Loans Traditional Bank $ 50,709 1.32% $ 49,047 1.41% Warehouse Lending $ 1,009 0.25% $ 2,126 0.25% Total Core Bank $
Slide 15: Core Bank Credit Quality
Balance Sheet • Continued strong Core Bank credit quality – 0 basis points of net charge-offs during 2022 • Delinquent loans/total loans and non-performing loans/total loans remain near all-time favorable lows as of December 31, 2022 15 Ratio 12/31/2022 12/31/2021 Nonperforming Loans / Total Loans 0
Slide 16: Deposit Portfolio
Balance Sheet Core Bank - Time and Brokered Deposits, 5% RPG NIB Deposits, 10% Core Bank - NIB Transactional Deposits, 32% Core Bank - IB Transactional Deposits, 53% Deposit Portfolio Dec. 31, 2022 IB – Interest Bearing NIB – Noninterest Bearing • Deposit balances up $751 million since December 31,
Slide 17: Capital Levels Above Minimum Requirements
Balance Sheet 1. The Company is still in the process of preparing its March 31, 2022 regulatory capital ratios but expects them to remain above well capitalized levels. 2. Peer data obtained from the FDIC’s December 31, 2022 Uniform Bank Performance Report (“UBPR”) Peer Group #3. 17 • Capital Levels
Slide 18: Long History of Solid Dividend Increases
$0.09 $0.12 $0.14 $0.16 $0.20 $0.24 $0.29 $0.35 $0.41 $0.46 $0.51 $0.55 $0.59 $0.64 $0.68 $0.73 $0.77 $0.81 $0.86 $0.95 $1.03 $1.12 $1.23 $1.36 $1.50 $0.21 $1.10 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 Cash Dividend Paid Regular Dividend Special Dividend • Long History of Solid Dividen
Slide 19: Peer Analysis – 1-Year Annual Return
Financial Highlights Peer Analysis – 1-Year Annual Return Analysis* as of 3/31/23 *Assumes dividends reinvested Annualized Peer Return City Holding Company (CHCO) 18.93% SY Bancorp (SYBT) 6.24% Republic Bancorp Inc (RBCAA) -2.40% Community Trust Bancorp (CTBI) -4.01% 1st Source Corp (SRCE) -4.29% Pa
Slide 20: Cultural Highlights
REPUBLIC BANCORP Cultural Highlights
Slide 21: Cultural Highlights
Cultural Highlights 40 Acts of Service to Celebrate 40th Anniversary 2022 American Bankers Association Foundation Community Commitment Award Louisville Business First’s 2022 Business Impact Award Newsweek’s Best Banks in America 2022 2022 Best Places to Work Kentucky 21
Slide 22: Logan Pichel, President and CEO
LOGAN PICHEL President and Chief Executive Officer, Republic Bank & Trust Company 22
Slide 23: First Quarter Results and Strategic Initiatives
First Quarter Results and Strategic Initiatives Quarter ended March 31, 2023 23
Slide 24: 1st Quarter 2023 Financial Highlights
1st Quarter 2023 Financial Highlights • Adjusted Net income for 1Q 2023 was $31.8 million, a $7.2 million, or 29%, increase over 1Q 2022 24 ($000s, except per share data) 1Q 2023 1Q 2022 1Q 2023 1Q 2022 1Q 2023 1Q 2022 1Q 2023 1Q 2022 Net Income/Diluted EPS, As Reported $ 10,308 $ 7,608 $ 17,784 $ 2
Slide 25: Continued Expansion of Core Bank Net Interest Margin
1st Quarter 2023 Financial Highlights – • Continued Expansion of Core Bank Net Interest Income/Margin 25 ($000s) 1Q 2023 1Q 2022 1Q 2023 1Q 2022 Total Core Bank $ 52,255 $ 40,867 3.98% 2.92% Republic Processing Group (RPG) 40,387 22,300 NM NM Total Company $ 92,642 $ 63,167 6.52% 4.34% NM = Not Mean
Slide 26: CBank Acquisition
• Completed acquisition on March 15, 2023 • $220 million in Loans/Leases • $220 million in Deposits • 15 Bank associates, 12 Equipment Finance associates • Adds additional density in Cincinnati/Northern Kentucky: • $647 million in total loans • $444 million in total deposits • Conservative credit cu
Slide 27: 1st Quarter 2023 Banking Environment
Two notable bank failures during the first quarter of 2023 Probable causes: • Hyper growth in deposits between 1/1/2020 and 12/31/2022 • Significant concentration of uninsured deposits as a percentage of total deposits • Excessive risk of rising interest rates within investment portfolios (long dura
Slide 28: Strategic Priorities
Strategic Priorities – (18) Key Initiatives Improve Customer Satisfaction - Credit/Debit Cards Execute on a Company-Wide Digital Strategy Enhance Talent Development and Associate Satisfaction Continue to Enhance and Adjust Work Environment Increase Revenue-Generating Activities Improve Operational E
Slide 29: In Summary
In Summary Prudent Loan Growth Credit Performance Expense Management Strong Capital Growth Focus/New Initiatives Deposits: Run-off and Pricing Will Credit be Challenged? Working Well Challenges 29
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Slide 31: Thank You
Thank You 31
Slide 32: Annual Meeting of Shareholders April 2023
Annual Meeting of Shareholders April 2023
Slide 33: Appendix – Non-GAAP Disclosure
Appendix – Non-GAAP Disclosure 33 Due to the short-term nature of the PPP, management believes total loans excluding its PPP portfolio is a more appropriate measure to analyze the Bank’s loan portfolio ($000s) 2022 2021 Total Traditional Bank Loans - GAAP $ 3,855,142 $ 3,501,959 Less: PPP portfolio