Republic Bancorp, Inc. · NASDAQ:RBCAA
Republic Bancorp — Shareholder Meeting (April 2019)
46 slides from Republic Bancorp's shareholder meeting presentation, Apr 24, 2019
Slide 1: Annual Meeting of Shareholders April 24, 2019
Annual Meeting of Shareholders April 24, 2019
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: Market Presence
REPUBLIC BANCORP Market Presence
Slide 5: Republic Bank Retail Footprint
Republic Bank Retail Footprint 5
Slide 6: Republic Bank Mortgage
REPUBLIC BANCORP Republic Bank Mortgage
Slide 7: RPG and MemoryBank
REPUBLIC BANCORP RPG and MemoryBank
Slide 8: Stock Information
REPUBLIC BANCORP Stock Information
Slide 9: Stock Overview – March 31, 2019
• $44.72 per Class A Common ShareStock Price • 21.0 Million SharesShares Outstanding • $935 MillionMarket Capitalization • $34.29Book Value Per Share • $33.25Tangible Book Value Per Share • 134.5%Price / Tangible Book Value Per Share • 11.7 X (trailing 12 months)Price / Earnings Ratio • 18,690 share
Slide 10: 20-Year Anniversary on NASDAQ
20-YR Anniversary on NASDAQ • On July 23rd, 2018 we celebrated 20 years as a NASDAQ listed company ▪ Split adjusted IPO price $10.69 ▪ 20 years of increasing dividend ▪ Expanded into Northern Kentucky, Tennessee, Florida, Ohio 10
Slide 11: Total Returns 7/21/1998 - 3/31/2019
165.6% 78.8% 609.0% CBNK Bank Index KBW Bank Index Republic Bancorp, Inc. Total Returns* 7/21/1998 - 3/31/2019 * - gross dividends assumed reinvested 11
Slide 12: Stock Price and Cash Dividend 20-Year History
Stock Price and Cash Dividend 20-Year History *Stock price for 2019 reflects value as of March 31, 2019. Regular dividend for 2019 reflects annualized 1st quarter 2019 dividend declared. 12 $0.09$0.10$0.12$0.15$0.17 $0.21 $0.25 $0.31 $0.36 $0.42 $0.47 $0.52 $0.56 $0.61 $0.65 $0.69 $0.74 $0.78 $0.83
Slide 13: Highlights Year ended December 31, 2018
Highlights Year ended December 31, 2018 13
Slide 14: 2018 Highlights – Pre-Tax Net Income Growth
$51.6 $56.5 $64.2 $17.3 $21.8 $30.1 $69.0 $78.4 $94.3 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 2016 2017 2018 Millions Core Bank Republic Processing Group 2018 Highlights – Pre-Tax Net Income Growth *Due to rounding, parts may not sum to total 14 14% 20%
Slide 15: 2018 Highlights – Net Interest Income Growth
$138.4 $160.7 $176.5 $24.6 $37.8 $49.5 $0 $50 $100 $150 $200 $250 2016 2017 2018 Millions Core Bank Republic Processing Group $163.0 $198.5 $226.0 2018 Highlights – Net Interest Income Growth 15 22% 14%
Slide 16: 2018 Highlights – Core Bank Net Interest Margin Expansion
3.16% 3.32% 3.53% 0.11% 0.14% 0.15% 0.03% 0.09% 0.02% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 3.60% 3.70% 3.80% 2016 2017 2018 Basic Net Interest Income Loan Fees Purchase Accretion 3.70% 15 bps 2018 Highlights – Core Bank Net Interest Margin Expansion 16 3.30% 3.55% 25 bps
Slide 17: 2018 Highlights – Republic Processing Group
Pre-Tax Net Income (000) % Contribution Year over Year Segment Primary Products 2018 2017 2018 2017 $ Change % Change TRS(1) Tax-refund and prepaid card products $15,151 $13,011 50% 60% $2,140 16% RCS(2) Consumer loans 14,936 8,830 50% 40% 6,106 69% Total RPG $30,087 $21,841 100% 100% $8,246 38% 201
Slide 18: Balance Sheet
REPUBLIC BANCORP Balance Sheet
Slide 19: Core Bank - Loan Mix 2014 versus 2018
Residential Real Estate 31% Other Commercial Sector Portfolios 45% Home Equity 8% Consumer Other 1% Warehouse Lines of Credit 12% Dealer Services 3% Core Bank - Loan Mix 2014 versus 2018 Commercial-sector loans grew $154 million, or 9%, during 2018. Residential Real Estate 47% Commercial Sector Port
Slide 20: Funding Mix 2014 versus 2018
Noninterest- bearing deposits 22% Interest-bearing deposits 55% Repurchase agreements 4% FHLB Borrowings 18% Trust Preferred 1% Funding Mix 2014 versus 2018 Noninterest-bearing deposits 16% Interest-bearing deposits 49% Repurchase agreements 11% FHLB Borrowings 22% Trust Preferred 1% 20 Funding Dec.
Slide 21: Strong Capital Levels
Capital Ratio 12/31/2018 Republic Bancorp Peer1 Well Capitalized Minimum Requirement2 Tier 1 Leverage 14.11% 10.44% 5.00% CET 1 Risk Based 14.92% 13.27% 6.50% Tier 1 Risk Based 15.81% 13.29% 8.00% Total Risk Based 16.80% 14.29% 10.00% Strong Capital Levels 1 Peer data obtained from the December 31,
Slide 22: Continued Strong Credit Quality
Continued Strong Credit Quality 22
Slide 23: Core Bank Credit Quality Trends
As of and for the Years Ended Ratio 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 Nonperforming Loans / Total Loans 0.78% 0.66% 0.42% 0.36% 0.40% Nonperforming Assets / Total Assets 0.93% 0.55% 0.36% 0.28% 0.32% Delinquent Loans / Total Loans 0.52% 0.35% 0.18% 0.21% 0.22% Allowance / Nonper
Slide 24: Interest Rate Management Strategy
Interest Rate Management Strategy 24
Slide 25: Asset and Liability Repricing
• Asset Repricing ▪ 87% of our total loan portfolio reprices within 5 years as of December 31, 2018. ▪ 87% of the Commercial Real Estate portfolio reprices within 5 years. ▪ 95% of the Commercial & Industrial portfolio reprices within 5 years. ▪ Mortgage Warehouse balances, which reprice immediately
Slide 26: Interest Rate Sensitivity – Cumulative Loan Repricing
26 Interest Rate Sensitivity at December 31, 2018 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Within 30 Days < 1 Year** < 5 Years** Cumulative Loan Repricing Characteristics Residential & HELOC CRE C&I, C&D Warehouse Other *The above is based on the Bank’s dynamic simulation model and assumes prepay
Slide 27: Interest Rate Sensitivity – Cumulative Deposit Repricing
27 Interest Rate Sensitivity at December 31, 2018 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Non Maturity Deposits & Overnight Funding Term < 2yrs** Term <4yrs** Cumulative Deposit Repricing Characteristics Interest Bearing Non-Interest Bearing *Term includes CDs, IRAs, CDARS CDs, FHLB borrowings &
Slide 28: Strategic Achievements
REPUBLIC BANCORP Strategic Achievements
Slide 29: Investments in Talent and Technology
• Talent ▪ Added 17 new mortgage originators across our footprint, with a focus in our Florida and Tennessee markets ▪ M&A disruption has allowed us to lift out a season team of originators and treasury management professionals • Technology ▪ Upgraded mortgage origination platform ▪ Implemented a di
Slide 30: Investment in New Offices
▪ 2018 • Relocated Northern, Kentucky location to Crestview Hills in March 2018 • Opened Westshore (Tampa), Florida location in May 2018 ▪ 2019 • Opened Oldsmar (Tampa), Florida loan production office in April 2019 • Plan to relocate Port Richey and Temple Terrace locations in Tampa, Florida • Exami
Slide 31: Cultural Highlights
Cultural Highlights 31
Slide 32: Impact
• In 2018 offered qualifying associates a $750 forgivable loan (Tax effected $1,000) • In 2018 we introduced Dollars4Doers, awarding $20,000 in grants to nonprofits where our associates volunteer • In 2018 Republic Bank and our related foundation gave $2.78 million in grants to nonprofits in our com
Slide 33: Best Places to Work
Best Places to Work 33 For the 3rd year in a row Republic Bank was recognized as a “Best Place to Work”. The recognition is bestowed by the Kentucky Chamber of Commerce and Kentucky S.H.R.M after an anonymous survey of our associates.
Slide 34: Highlights First Quarter 2019
Highlights First Quarter 2019 34
Slide 35: 1Q 2019 Highlights – Net Income Growth
$8.5 $11.1 $12.5 $11.5 $16.3 $17.0$20.0 $27.5 $29.5 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 1Q 2017 1Q 2018* 1Q 2019* Millions Core Bank Republic Processing Group 37% 7% 1Q 2019 Highlights – Net Income Growth *Includes the benefit of a 21% federal statutory income tax rate, with a 35% comparab
Slide 36: 1Q19 Highlights – Net Interest Income Growth
$36.6 $41.9 $44.3 $19.8 $25.8 $28.0 $0 $10 $20 $30 $40 $50 $60 $70 $80 1Q2017 1Q2018 1Q2019 Millions Core Bank Republic Processing Group $56.4 $67.7 $72.3 1Q19 Highlights – Net Interest Income Growth 36 20% 7%
Slide 37: 1Q19 Highlights – Core Bank Net Interest Margin Expansion
3.18% 3.40% 3.62%0.12% 0.14% 0.12% 0.03% 0.01% 0.02% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 3.60% 3.70% 3.80% 3.90% 1Q17 1Q18 1Q19 Basic Net Interest Income Loan Fees Purchase Accretion 3.76% 21 bps 1Q19 Highlights – Core Bank Net Interest Margin Expansion 37 3.33% 3.55% 22 bps
Slide 38: 1Q 2019 Highlights – Core Bank Loan Balances
(dollars in thousands) Period-End Balances Average Quarterly Balances Origination Channel 3/31/2019 3/31/2018 $ Change 1Q2019 1Q2018 $ Change Traditional Network $3,528,727 $3,322,017 $206,710 $3,500,974 $3,307,756 $193,218 Warehouse Lending 559,787 534,959 24,828 407,341 448,039 (40,698) Correspond
Slide 39: 1Q 2019 Highlights – Core Bank Deposit Balances
(dollars in thousands) Period-End Balances Average Quarterly Balances Origination Channel 3/31/2019 3/31/2018 $ Change 1Q2019 1Q2018 $ Change Noninterest-Bearing Deposits $1,003,834 $1,065,902 $(62,068) $975,727 $1,004,807 $(29,080) Interest-Bearing DDA/SAV/MMDA 1,901,344 1,731,095 170,249 1,861,707
Slide 40: MemoryBank Growth
$0 $20 $40 $60 $80 $100 $120 3/31/2018 6/30/2018 9/30/2018 12/31/2018 3/31/2019 Millions Total Deposits 40 MemoryBank Growth +$63.7M
Slide 41: 1Q 2019 Other Highlights – Core Bank
• Return On Average Assets of 2.16% • Return On Average Equity of 16.70% • Capital ratios continued to exceed “well capitalized” • Increased quarterly cash dividend by 10%, representing the 20th consecutive increase since 1999 • Credit metrics continue to outperform peer 1Q 2019 Other Highlights – C
Slide 42: 1Q 2019 Highlights – Republic Processing Group
(in thousands) 1Q2019 1Q2018 Unit Change % Change Number of RTs Processed 2,253 2,293 (40) (2)% Net RT Revenue $17,100 $16,352 $748 5% EAs Originated $388,970 $430,210 $(41,240) (10)% EA Fees $18,856 $17,792 $1,064 6% Net EA Loan Loss Provision (13,381) (13,277) (104) 1% Net EA Revenue $5,475 $4,515
Slide 43: 1Q 2019 Highlights – RPG Period-End and Average Loans
(dollars in thousands) Period-Ending Balance Average Quarterly Balance Origination Channel 3/31/2019 3/31/2018 $ Change 1Q2019 1Q2018 $ Change Tax Refund Solutions $23,270 $15,793 $ 7,477 $149,163 $132,982 $16,181 Republic Credit Solutions 92,996 62,403 30,593 101,688 72,674 29,014 Total RPG $116,26
Slide 44: 2019 Initiatives
• Grow commercial-sector loan portfolio • Expand secondary market lending • Focus on analytics to drive product profitability • Substantial growth in Core Deposits • Continue to expand Deposit base with MemoryBank • Further season the Dealer Services division • Continue to evaluate opportunities for
Slide 45: Republic Bancorp
REPUBLIC BANCORP
Slide 46: Thank You
REPUBLIC BANCORP Thank You