Republic Bancorp, Inc. Reports Solid First Quarter Results for 2026

Strong Core Banking Performance Drives Earnings Amid Contract Loss and Strategic Actions

Republic Bancorp, Inc. (NASDAQ: RBCAA), headquartered in Louisville, Kentucky, has announced its financial results for the first quarter ended March 31, 2026. The company reported net income of \$42.6 million and diluted earnings per Class A Common Share of \$2.18, reflecting a 10% decrease year-over-year. Despite the decline, the underlying Core Banking franchise delivered robust growth in net interest income and margin, offsetting several nonrecurring and price-sensitive events.

Key Financial Highlights

• Net Income (GAAP): \$42.6 million, down from \$47.3 million in Q1 2025
• Diluted EPS: \$2.18, down from \$2.42
• Adjusted Net Income (Non-GAAP): \$39.9 million, up 3% year-over-year
• Core Bank Adjusted Net Income: \$21.1 million, up 21% year-over-year
• Republic Processing Group (RPG) Adjusted Net Income: \$18.8 million, down 12%
• Core Bank Net Interest Income: \$63.2 million, up 12%
• Core Bank Net Interest Margin: 3.96%, up 26 basis points
• Return on Average Assets: 2.40% (down 8% year-over-year)
• Return on Average Equity: 15.28% (down 18%)

Important Nonrecurring and Price-Sensitive Events

Shareholders should note several events impacting comparability and potentially affecting share value:

• \$4.4 million after-tax gain from the sale of Republic Bank Finance (RBF) in Q1 2026
• \$1.8 million after-tax penalty for early payoff of long-term Federal Home Loan Bank (FHLB) advances
• \$8.4 million after-tax loss due to the nonrenewal of a large Tax Refund Solutions (TRS) Tax Provider contract
• Prior period impacts: \$3.3 million after-tax gain from the sale of Visa Class B-1 shares and \$1.3 million after-tax insurance recovery in Q1 2025
• \$4.6 million after-tax gain from the 2025 core system deconversion and related consulting fees

Segment Performance Details

Core Banking

• Core Bank net income (GAAP): \$23.8 million, up 37%
• Core Bank adjusted net income: \$21.1 million, up 21%
• Net interest income increased \$6.9 million, driven by net interest margin expansion and deposit cost reduction
• Average Traditional Bank loans grew to \$4.62 billion (up \$42 million), average yield increased to 5.64%
• Warehouse Lending average loans surged 33% to \$610 million; yield declined but usage rates increased
• Weighted-average cost of interest-bearing deposits fell to 1.98% (from 2.26%), with balances up 8%
• FHLB advances prepaid (\$220 million), reducing borrowing costs but incurring a \$2.3 million penalty (management expects to recoup penalty within ~1.2 years)

Republic Processing Group (RPG)

• RPG net income: \$18.8 million (down 37% GAAP, down 12% adjusted)
• TRS net income dropped from \$19.6 million to \$9.7 million, mainly due to contract nonrenewal
• Republic Payment Solutions (RPS) net income: \$2.1 million (down \$835,000), impacted by lower deposit yields (Federal Funds Rate cuts)
• Republic Credit Solutions (RCS) net income: \$7.0 million (down 5%), due to higher credit provisions

Credit Quality and Loan Loss Provisions

• Core Bank provision for expected credit losses: net charge of \$394,000 (vs. net credit of \$722,000 last year)
• Allowance-to-total-loans ratio increased to 1.26% (from 1.17%)
• Nonperforming loans ratio rose to 0.61% (from 0.44%)
• Net charge-offs remain low at 0.03% annualized

Expense Management and Technology Savings

• Core Bank noninterest expenses fell \$3.5 million (down 7%) to \$47.3 million
• Adjusted noninterest expenses flat at \$45.0 million
• Salaries and benefits up 2%, offset by reduced FTEs and technology savings
• Technology expense declined 8% due to completed core system conversion
• Interchange expense down due to lower card processing costs

Recognition and Outlook

Republic Bank was named one of America’s Best Regional Banks 2025 by Newsweek and Plant A Insights Group for the third consecutive year, based on customer surveys and social media reviews. The company remains focused on sustainable performance, disciplined risk management, and community-based banking.

Forward-Looking Statements

Management highlighted the resilience of the Core Banking franchise and expects to recoup penalties incurred from FHLB advance repayments within 1.2 years, assuming current rate conditions persist. However, future results are subject to uncertainties, interest rate changes, and strategic execution risks.

Shareholder Considerations

• Nonrenewal of a large TRS contract is a material event that significantly impacted RPG and overall earnings and may affect future results.
• Strategic sale of Republic Bank Finance and core system conversion led to one-time gains and expense savings.
• Early termination penalty for FHLB advances will be recouped over time, but represents a short-term drag on earnings.
• Core Banking fundamentals remain strong, with margin expansion and disciplined expense management likely to support future profitability.
• Recognition as a top regional bank may positively impact brand and customer loyalty, supporting long-term growth.

Company Profile

Republic Bancorp, Inc. is the holding company for Republic Bank & Trust Company, with 47 banking centers across Kentucky, Indiana, Ohio, Florida, and Tennessee. As of March 31, 2026, the company had approximately \$7.25 billion in total assets. Its Class A Common Stock is traded under the symbol “RBCAA” on NASDAQ Global Select Market.

Contact

Republic Bancorp, Inc.
Kevin Sipes, EVP & CFO
(502) 560-8628

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The information summarized herein is based on Republic Bancorp, Inc.’s official earnings release and may contain forward-looking statements subject to risks and uncertainties. Investors should review the company’s SEC filings and consult professional advisors before making investment decisions. Actual results may differ from those discussed due to market conditions and other factors.

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