Republic Bancorp, Inc. · NASDAQ:RBCAA
Republic Bancorp — Shareholder Meeting (April 2024)
40 slides from Republic Bancorp's shareholder meeting presentation, Apr 25, 2024
Slide 1: Annual Meeting of Shareholders April 25, 2024
Annual Meeting of Shareholders April 25, 2024
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: Overview and 2023 Financial Highlights
Executive Chair & CEO, Republic Bancorp Overview and 2023 Financial Highlights Steve Trager 3
Slide 4: Overview of Republic Bancorp
Overview of Republic Bancorp 4 Footprint in 5 States 47 Banking Centers ▪ Republic’s wholly owned subsidiary, Republic Bank & Trust Company (“RB&T”) , is headquartered in Louisville, Kentucky. RB&T was founded in 1982. ▪ $6.9 billion of total assets as of March 31, 2024. ▪ Republic’s Class A common
Slide 5: Peer comparison of market data and performance
After-Tax as % of LTM Div. YTD 1yr LLR / Total Inv. Common Total MKT LTM 2024E 2025E Div. Payout Total Total Effic. Core Core TCE/ Loans/ NPAs/ Gross (ex. Pre-Tax Total Equity Assets Cap TBV EPS EPS EPS Yield Ratio Return Return Ratio NIM ROAA ROAT CE TA Deps. Assets Loans AOCI) Assets (ex. AOCI) Co
Slide 6: 2023 Total Returns for Company Stock
2023 Total Returns for Company Stock 6 (1) Assumes dividends reinvested in company stock. ▪ Strong stock performance in 2023 vs. internal peer group Source: Piper Sandler Company research desk 1-Year Total Return as of 12/31/2023 Ticker Company % Total Return(1) Internal Peer Group Rank RBCAA Republ
Slide 7: Net Income
Net Income (1) Adjusted Net income for 2022 is a non-GAAP measure that excludes the positive impact of the $18.0 million Green Dot settlement received, net of $914,000 in expenses and $3.9 million in taxes. See slides 35 and 36 in appendix for non-GAAP reconciliation. (2) Adjusted Net income for 202
Slide 8: Net Interest Income
Net Interest Income 8 ▪ Net interest income growth of $52 million ▪ Annual expansion of Core Bank net interest income/margin with diminishing benefit each quarter $7mm 1Q 2023 2Q 2023 3Q 2023 4Q 2023 $15mm $21mm $24mm 2023 Total Interest Expense (increasing each quarter): 2022 2023 2022 2023 Total C
Slide 9: 2023 Core Bank Net Interest Income
2023 Core Bank Net Interest Income $17,683 $17,251 $16,331 $11,900 $12,900 $13,900 $14,900 $15,900 $16,900 $17,900 $18,900 in thousands 2022 2023 2023 ex Cbank/RBF 9
Slide 10: Growth in 2023 Net Interest Income/Margin
Growth in 2023 Net Interest Income/Margin: ▪ 2023 Core Bank Net Interest Income/Margin: $204 million/3.61% ▪ 2022 Core Bank Net Interest Income/Margin: $186 million/3.32% Traditional Bank Loan Growth Remained Strong (spot balances) Total Core Bank Deposits Grew in 2023 (spot balances) Core Bank Noni
Slide 11: Strong Liquidity
Strong Liquidity Liquidity ▪ Cash of $317 million as of 12/31/2023 represented 5% of total assets at period end. ▪ Total Federal Home Loan Bank remaining borrowing capacity remained robust at $730 million as of 12/31/2023 ▪ Free security collateral of $491 million as of 12/31/2023 provided $400+ mil
Slide 12: Republic Processing Group net income
▪ 2023 Net Income $ 8.9 million ▪ 2022 Net Income: $23.2 million ▪ 2022 Net Income: $ 9.9 million (adjusted)* Tax Refund Solutions ▪ 2023 Net Income: $11.7 million ▪ 2022 Net Income: $ 3.5 million Republic Payment Solutions Republic Credit Solutions ▪ 2023 Net Income: $18.4 million ▪ 2022 Net Income
Slide 13: 2023 Noninterest Income
2023 Noninterest Income ▪ Noninterest Income Down less than 1% vs 2022 (excluding $18 million ’22 legal settlement) Total Noninterest Income 2023: $72 million 2022: $90 million 2022: $71 million (adjusted)* Mortgage Banking Income $4MM Net Refund Transfer Fees $16MM RPG Program Fees $16MM Service Ch
Slide 14: 2023 Noninterest Expense
2023 Noninterest Expense 14 ▪ 2023 noninterest expense, excluding all CBank-related expenses, increased 3% over 2022. Total Noninterest Expense 2023: $199 million 2023: $193 million, +3% (adjusted)* 2022: $187 million Salaries $116MM Technology, Equipment, Communication $29MM Occupancy $14MM All Oth
Slide 15: Enhanced Total Company Efficiency in 2023
Enhanced Total Company Efficiency in 2023 15 (1) Adjusted Total Company Revenue and Adjusted Total Company Efficiency Ratio are non-GAAP measures that exclude $8.6 million of Paycheck Protection Program ("PPP") fees in 2020, $17.5 million of PPP fees in 2021, $1.2 million of PPP fees in 2022, and $1
Slide 16: Credit Quality
Credit Quality ▪ Net charge-offs remain historically low within Republic’s Core Banking Operations and across the industry (1) UBPR used throughout this presentation represents all commercial banks with total assets between $3 billion and $10 billion as published by the FDIC in its quarterly Uniform
Slide 17: Balance Sheet
REPUBLIC BANCORP Balance Sheet fu
Slide 18: 2023 Loan Balances/Growth
2023 Loan Balances/Growth Total Loans 12/31/2023: $5.2 Billion, up 16% 12/31/2022: $4.5 Billion ▪ Total Core Bank Loan growth of $700 million (16%) in 2023 Residential Real Estate - Owner-Occupied $1,145MM Residential Real Estate - Nonowner-Occupied $346MM Commercial Real Estate - All Other $1,369MM
Slide 19: 2023 Deposit Balances/Growth
2023 Deposit Balances/Growth Core Bank NIB $1,239MM Core Bank IB $3,158MM RPG NIB $438MM RPG IB $219MM 62% 25% 9% 4% Total Deposits Dec. 31, 2023 - $5.1 Billion, up 11% Dec. 31, 2022 - $4.5 Billion IB = interest Bearing, NIB = Noninterest Bearing 19 Balances as of 12/31/2023 ▪ Total growth of $515 m
Slide 20: Industry Leading Capital Levels
Industry Leading Capital Levels – Republic Bank & Trust Company 20 13.11% 14.09% 13.25% 9.55% 9.92% 10.15% 0.00% 5.00% 10.00% 15.00% 12/31/2021 12/31/2022 12/31/2023 Tier 1 Leverage Ratio RB&T UBPR Peer 16.07% 16.01% 13.55% 14.25% 12.91% 13.01% 0.00% 5.00% 10.00% 15.00% 20.00% 12/31/2021 12/31/2022
Slide 21: 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 $1.62 $0.21 $1.10 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 Cash Dividend Regular Dividend Special Dividend Long History of Solid Divid
Slide 22: Logan Pichel, President and CEO, Republic Bank & Trust Company
Logan Pichel President and Chief Executive Officer, Republic Bank & Trust Company 22
Slide 23: Q1 Results and Strategic Initiatives
Q1 Results and Strategic Initiatives Quarter ended March 31, 2024 23
Slide 24: 1Q 2024 Financial Highlights
1Q 2024 Financial Highlights Net income for 1Q 2024 was $30.6 million, a $2.5 million, or 9%, increase from 1Q 2023 (1) Adjusted Net income for 2023 is a non-GAAP measure that excludes the negative of impact related to CBank of Day-1 Provision expense of $2.7 million; Day-1 merger expenses of $2.1 m
Slide 25: 1Q Net Interest Income
1Q 24 Net Interest Income 25 ▪ Total Company Net Interest Income $’s up despite lower net interest margin 1Q 2023 1Q 2024 1Q 2023 1Q 2024 $ 52,255 $ 50,516 3.98% 3.30% 40,387 46,403 NM NM $ 92,642 $ 96,919 6.52% 5.87% NM = Not Meaningful Total Company Net Interest Income ($000s) Net Interest Margin
Slide 26: Noninterest Income Growth and Expense Moderation
Noninterest Income Growth 26 ▪ Disciplined expense control to start 2024 Moderation of Noninterest Expense 1Q 24 Results ($ in thousands) 1Q 1Q $ % Noninterest Income Category 2023 2024 Change Change Service Charges on Deposits $ 3,299 $ 3,313 $ 14 0% Net Refund Transfer Fees 10,807 10,820 13 0% Int
Slide 27: Core Bank Credit Quality
Core Bank Credit Quality ▪ Credit Metrics remain strong at the Core Bank 27 As of and for the Years Ended As of and for the Quarter Ended 12/31/2021 12/31/2022 12/31/2023 03/31/2024 0.47% 0.37% 0.39% 0.38% 0.17% 0.14% 0.16% 0.15% 251% 332% 313% 313% 1.18% 1.21% 1.21% 1.20% 0.01% 0.00% 0.01% 0.01% Al
Slide 28: Company Recognition
Company Recognition ▪ Recognized by Newsweek as one of America’s Best Online Mortgage Lenders ▪ Recognized as one of America’s Best Regional Banks and Credit Unions for 2024 by Newsweek ▪ Recognized, for the 8th consecutive year, as one of Kentucky’s Best Places to Work ▪ Recognized as one of Louisv
Slide 29: Expanding our Presence
Expanding our Presence ▪ Relocated 120 associates to downtown Louisville in June 2023. ▪ Will further relocate 40 associates to downtown Louisville in July 2024. ▪ Acquired CBank in March 2023 ▪ Added $222 million of Loans and $222 million in deposits ▪ Added Republic Bank Finance, a nationwide leas
Slide 30: Focusing on the Client Experience
Focusing on the Client Experience 30
Slide 31: Industry-Leading Net Promoter Score
Industry-Leading Net Promoter Score “How likely are you to recommend Republic Bank to a friend or colleague?” NPS Score = % Promoters - % Detractors Scores range: -100 to +100 Not at all Likely Extremely Likely 78% % of Promoters 11% % of Detractors NPS Score 67% Q3 ’23 58% Q1 ’23 38% Q3 ’22 44% Q1
Slide 32: Investing in our Associates
Investing in our Associates ▪ In the last 4 years, promoted 126 associates to AVP, VP, SVP, EVP ▪ In 2023, 157 associates were moved into new roles within the company ▪ 2023 Associate Turnover Rate declined to 17% vs. 20% in ’22 & ‘23 32
Slide 33: Thank you!
REPUBLIC BANCORP Thank you!
Slide 34: Appendix – Non-GAAP Disclosures
34 Appendix – Non-GAAP Disclosures
Slide 35: Appendix – Non-GAAP Disclosure
Appendix – Non-GAAP Disclosure 35 ➢Total Company Adjusted Annual Net Income (Non-GAAP) ➢Core Bank Adjusted Annual Net Income (Non-GAAP) (dollars in thousands) D ecember 31, 2022 D ecember 31, 2023 $ C hange % C hange Net income - GAAP 91,106 90,374 (732) -1% Add: Expenses related to CBank acquisitio
Slide 36: Appendix – Non-GAAP Disclosure
Appendix – Non-GAAP Disclosure 36 ➢TRS Adjusted Annual Net Income (Non-GAAP) ➢RPG Adjusted Annual Net Income (Non-GAAP) (dollars in thousands) D ecember 31, 2022 D ecember 31, 2023 $ C hange % C hange Net income - GAAP 43,764 38,918 (4,846) -11% Less: Contract termination fee related to TRS Transact
Slide 37: Appendix – Non-GAAP Disclosure
Appendix – Non-GAAP Disclosure 37 ➢Total Company Adjusted Annual Noninterest Income (Non-GAAP) ➢Total Company Adjusted Annual Noninterest Expense (Non-GAAP) ➢Total Company Adjusted Annual Revenue (Non-GAAP) (do llars in tho us ands ) D e c e m be r 3 1, 2 0 2 2 D e c e m be r 3 1, 2 0 2 3 $ C ha ng
Slide 38: Appendix – Non-GAAP Disclosure
Appendix – Non-GAAP Disclosure 38 ➢Total Company Adjusted Annual Noninterest Expenses (Non-GAAP) ➢Total Company Annual Operating Leverage (Non-GAAP) ➢Total Company Adjusted Annual Operating Leverage (Non-GAAP) 2021 2022 2023 % Change % Change % Change Total Company Revenue % Change (a) -3.1% 5.6% 10
Slide 39: Appendix – Non-GAAP Disclosure
Appendix – Non-GAAP Disclosure 39 ➢Total Company Annual Efficiency Ratio (Non-GAAP) (dollars in thousands) D ecember 31, 2020 D ecember 31, 2021 D ecember 31, 2022 D ecember 31, 2023 $ C hange % C hange $ C hange % C hange $ C hange % C hange Net interest income - GAAP 232,315 220,594 236,691 288,77
Slide 40: Appendix – Non-GAAP Disclosure
Appendix – Non-GAAP Disclosure 40 ➢Total Company Adjusted Quarterly Net Income (Non-GAAP) ➢Core Bank Adjusted Quarterly Net Income (Non-GAAP) (dollars in thousands) M arch 31, 2023 M arch 31, 2024 $ C hange % C hange Net income - GAAP 28,092 30,606 2,514 9% Add: Expenses related to CBank acquisition