REPUBLIC BANCORP, INC._March 31, 2025

(in thousands)

March 31, 2025

December 31, 2024

Recorded investment in consumer residential real estate mortgage loans in the process of foreclosure

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2025

◻ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 0-24649

REPUBLIC BANCORP, INC.

(Exact name of registrant as specified in its charter)


Kentucky		61-0862051
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

601 West Market Street, Louisville, Kentucky		40202
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (502) 584-3600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common	RBCAA	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ⌧ Yes ◻ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ⌧ Yes ◻ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ◻	Accelerated filer ⌧	Non-accelerated filer ◻	Smaller reporting company ◻
Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ◻ Yes ☒ No

The number of shares outstanding of the registrant’s Class A Common Stock and Class B Common Stock, as of April 30, 2025 was 17,374,735 and 2,150,090.

Table of Contents

TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements.	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	57

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	92

Item 4.	Controls and Procedures.	92

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings.	92

Item 1A.	Risk Factors.	92

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	93

Item 5.	Other Information.	93

Item 6.	Exhibits.	94

	SIGNATURES	95

Table of Contents

GLOSSARY OF TERMS

The terms identified in alphabetical order below are used throughout this Form 10-Q. You may find it helpful to refer to this page as you read this report.


Term		Definition

2024 Tax Season		December 2023 through February 2024
2025 Tax Season		December 2024 through February 2025
ACH		Automated Clearing House
ACL		Allowance for Credit Losses
ACLC		Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
ACLL		Allowance for Credit Losses on Loans
ACLS		Allowance for Credit Losses on Securities
AFS		Available for Sale
AOCI		Accumulated Other Comprehensive Income
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
Basic EPS		Basic earnings per Class A Common Share
BOLI		Bank Owned Life Insurance
BPO		Brokered Price Opinion
C&D		Construction and Development
C&I		Commercial and Industrial
CARES Act		Coronavirus Aid, Relief, and Economic Security Act
CECL		Current Expected Credit Losses
CMO		Collateralized Mortgage Obligation
CODM		Chief Operating Decision Maker
Core Bank		The Traditional Banking and Warehouse Lending reportable segments of the Company
COVID		Coronavirus Disease of 2019
CRE		Commercial Real Estate
DDA		Demand Deposit Account
Diluted EPS		Diluted earnings per Class A Common Share
Economic Aid Act		Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
ERA		Early Season Refund Advance
ESPP		Employee Stock Purchase Plan
EVP		Executive Vice President
FASB		Financial Accounting Standards Board
FDIC		Federal Deposit Insurance Corporation
FFTR		Federal Funds Target Rate
FHLB		Federal Home Loan Bank
FHLMC		Federal Home Loan Mortgage Corporation
FICO		Fair Isaac Corporation
FNMA		Federal National Mortgage Association
FOMC		Federal Open Market Committee
FRB		Federal Reserve Bank
FTE		Full Time Equivalent
FTP		Funds Transfer Pricing
GAAP		Generally Accepted Accounting Principles in the United States
HEAL		Home Equity Amortizing Loan
HELOC		Home Equity Line of Credit
HTM		Held to Maturity
IRS		Internal Revenue Service
ITM		Interactive Teller Machine
LGD		Loss Given Default
LIBOR		London Interbank Offered Rate
LOC		Line of Credit
LOC I		RCS product introduced in 2014 for which the Bank participates out a 90% interest and holds a 10% interest
LOC II		RCS product introduced in 2021 for which the Bank participates out a 95% interest and holds a 5% interest
LRA		Lender Risk Account
LTV		Loan to Value
MBS		Mortgage Backed Securities
MSRs		Mortgage Servicing Rights
NA		Not Applicable
NIM		Net Interest Margin
NM		Not Meaningful
OBS		Off-Balance Sheet
OCI		Other Comprehensive Income
OREO		Other Real Estate Owned
OTTI		Other than Temporary Impairment
PCD		Purchased Credit Deteriorated
PD		Probability of Default
PPP		SBA's Paycheck Protection Program
Prime		The Wall Street Journal Prime Interest Rate
Provision		Provision for Expected Credit Loss Expense
PSU		Performance Stock Unit
RA		Refund Advance
RB&T / the Bank		Republic Bank & Trust Company
RCS		Republic Credit Solutions segment
Republic / the Company		Republic Bancorp, Inc.
RPG		Republic Processing Group
RPS		Republic Payment Solutions
RT		Refund Transfer
SBA		U.S. Small Business Administration
SEC		Securities and Exchange Commission
SSUAR		Securities Sold Under Agreements to Repurchase
Tax Provider		Third-party tax preparers located throughout the U.S., as well as tax-preparation software providers that offer Republic Bank ERAs, RAs, and RTs
TDR		Troubled Debt Restructuring
The Captive		Republic Insurance Services, Inc.
TRS		Tax Refund Solutions segment
TRUP		Trust Preferred Security Investment
Warehouse		Warehouse Lending segment

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share data)


	March 31,		December 31,
	2025		2024
ASSETS

Cash and cash equivalents	$	793,020	$	432,151
Available-for-sale debt securities, at fair value (amortized cost of $622,748 in 2025 and $602,493 in 2024, allowance for credit losses of $0 in 2025 and 2024)		609,327		584,155
Held-to-maturity debt securities (fair value of $5,565 in 2025 and $10,735 in 2024, allowance for credit losses of $0 in 2025 and $0 in 2024)		5,612		10,778
Equity securities with readily determinable fair value		724		693
Mortgage loans held for sale, at fair value		9,140		8,312
Consumer loans held for sale, at fair value		8,602		5,443
Consumer loans held for sale, at the lower of cost or fair value		23,523		18,632
Loans (loans carried at fair value of $0 in 2025 and $0 in 2024)		5,289,793		5,439,466
Allowance for credit losses		(106,303)		(91,978)
Loans, net		5,183,490		5,347,488
Federal Home Loan Bank stock, at cost		26,748		24,478
Premises and equipment, net		31,996		32,309
Right-of-use assets		35,857		36,182
Goodwill		40,516		40,516
Other real estate owned		1,107		1,160
Bank owned life insurance		107,918		107,125
Other assets and accrued interest receivable		197,975		197,245

TOTAL ASSETS	$	7,075,555	$	6,846,667

LIABILITIES

Deposits:
Noninterest-bearing	$	1,375,234	$	1,207,764
Interest-bearing		4,030,658		4,002,782
Total deposits		5,405,892		5,210,546

Securities sold under agreements to repurchase and other short-term borrowings		89,718		103,318
Operating lease liabilities		36,831		37,121
Federal Home Loan Bank advances		370,000		395,000
Other liabilities and accrued interest payable		139,025		108,653

Total liabilities		6,041,466		5,854,638

Commitments and contingent liabilities (Footnote 8)		—		—

STOCKHOLDERS’ EQUITY

Preferred stock, no par value		—		—
Class A Common Stock, no par value, 30,000,000 shares authorized, 17,367,736 shares (2025) and 17,297,878 shares (2024) issued and outstanding; Class B Common Stock, no par value, 5,000,000 shares authorized, 2,150,090 shares (2025) and 2,150,090 shares (2024) issued and outstanding		4,594		4,587
Additional paid in capital		151,473		148,053
Retained earnings		889,687		853,627
Accumulated other comprehensive (loss) income		(11,665)		(14,238)

Total stockholders’ equity		1,034,089		992,029

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,075,555	$	6,846,667

See accompanying footnotes to consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)


	Three Months Ended
	March 31,
	2025		2024
INTEREST INCOME:

Loans, including fees	$	118,857	$	118,907
Taxable investment securities		4,557		4,452
Federal Home Loan Bank stock and other		6,424		7,273
Total interest income		129,838		130,632

INTEREST EXPENSE:

Deposits		21,378		26,996
Securities sold under agreements to repurchase and other short-term borrowings		137		130
Federal Home Loan Bank advances		5,635		6,587
Total interest expense		27,150		33,713

NET INTEREST INCOME		102,688		96,919

Provision for expected credit loss expense for on-balance sheet exposures (loans and investment securities)		17,672		30,622

NET INTEREST INCOME AFTER PROVISION		85,016		66,297

NONINTEREST INCOME:

Service charges on deposit accounts		3,460		3,313
Net refund transfer fees		13,893		10,820
Mortgage banking income		1,821		310
Interchange fee income		3,077		3,157
Program fees		3,822		4,179
Increase in cash surrender value of bank owned life insurance		793		754
Net losses on other real estate owned		(53)		(53)
Gain on sale of Visa Class B-1 Shares		4,090		—
Other		2,251		893
Total noninterest income		33,154		23,373

NONINTEREST EXPENSE:

Salaries and employee benefits		31,069		29,716
Technology, equipment, and communication		8,643		7,490
Occupancy		3,564		3,822
Marketing and development		1,387		1,924
FDIC insurance expense		819		772
Interchange related expense		1,636		1,298
Legal and professional fees		1,118		1,055
Core conversion & contract consulting fees		5,714		—
Merger expense		—		41
Other		4,258		4,853
Total noninterest expense		58,208		50,971

INCOME BEFORE INCOME TAX EXPENSE		59,962		38,699
INCOME TAX EXPENSE		12,694		8,093
NET INCOME	$	47,268	$	30,606

BASIC EARNINGS PER SHARE:
Class A Common Stock	$	2.43	$	1.59
Class B Common Stock		2.21		1.44

DILUTED EARNINGS PER SHARE:
Class A Common Stock	$	2.42	$	1.58
Class B Common Stock		2.20		1.43

See accompanying footnotes to consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in thousands)


	Three Months Ended
	March 31,
	2025		2024

Net income	$	47,268	$	30,606

OTHER COMPREHENSIVE INCOME (LOSS)

Change in fair value of derivatives		(1,440)		—
Reclassification amount for net derivative losses realized in income		(46)		—
Unrealized gain on AFS debt securities		4,917		649
Total other comprehensive income before income tax		3,431		649
Income tax expense related to items of other comprehensive income		(858)		(163)
Total other comprehensive income, net of tax		2,573		486

COMPREHENSIVE INCOME	$	49,841	$	31,092

See accompanying footnotes to consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)


	Three Months Ended March 31, 2025

	Common Stock								Accumulated
	Class A	Class B			Additional				Other		Total
	Shares	Shares			Paid In		Retained		Comprehensive		Stockholders’
(in thousands, except per share data)	Outstanding	Outstanding	Amount		Capital		Earnings		Income (Loss)		Equity

Balance, January 1, 2025	17,298	2,150	$	4,587	$	148,053	$	853,627	$	(14,238)	$	992,029

Net income	—	—		—		—		47,268		—		47,268
Net change in AOCI	—	—		—		—		—		2,573		2,573
Dividends declared on Common Stock:
Class A Shares ($0.451 per share)	—	—		—		—		(7,799)		—		(7,799)
Class B Shares ($0.410 per share)	—	—		—		—		(882)		—		(882)
Stock options exercised, net of shares withheld	36	—		8		2,671		(2,304)		—		375
Net change in notes receivable on Class A Common Stock	—	—		—		(48)		—		—		(48)
Deferred compensation - Class A Common Stock:
Directors	—	—		—		143		—		—		143
Designated key employees	18	—		(1)		269		(179)		—		89
Employee stock purchase plan - Class A Common Stock	3	—		1		176		—		—		177
Stock-based awards - Class A Common Stock:	—			—
Performance stock units	—	—		—		36		—		—		36
Restricted stock, net of shares withheld	13	—		(1)		17		(44)		—		(28)
Stock options	—	—		—		156		—		—		156

Balance, March 31, 2025	17,368	2,150	$	4,594	$	151,473	$	889,687	$	(11,665)	$	1,034,089


	Three Months Ended March 31, 2024

	Common Stock								Accumulated
	Class A	Class B			Additional				Other		Total
	Shares	Shares			Paid In		Retained		Comprehensive		Stockholders’
(in thousands, except per share data)	Outstanding	Outstanding	Amount		Capital		Earnings		Income (Loss)		Equity

Balance, January 1, 2024	17,203	2,155	$	4,553	$	142,124	$	786,487	$	(20,408)	$	912,756

Net income	—	—		—		—		30,606		—		30,606
Net change in AOCI	—	—		—		—		—		486		486
Dividends declared on Common Stock:
Class A Shares ($0.407 per share)	—	—		—		—		(6,986)		—		(6,986)
Class B Shares ($0.370 per share)	—	—		—		—		(796)		—		(796)
Stock options exercised, net of shares withheld	37	—		26		(689)		(437)		—		(1,100)
Conversion of Class B to Class A Common Shares	4	(4)		—		—		—		—		—
Repurchase of Class A Common Stock	—	—		—		—		—		—		—
Net change in notes receivable on Class A Common Stock	—	—		—		—		—		—		—
Deferred compensation - Class A Common Stock:
Directors	—	—		(1)		135		—		—		134
Designated key employees	11	—		—		167		—		—		167
Employee stock purchase plan - Class A Common Stock	4	—		1		183		—		—		184
Stock-based awards - Class A Common Stock:
Performance stock units	—	—		—		36		—		—		36
Restricted stock, net of shares withheld	1	—		(1)		(34)		(38)		—		(73)
Stock options	—	—		—		169		—		—		169

Balance, March 31, 2024	17,260	2,151	$	4,578	$	142,091	$	808,836	$	(19,922)	$	935,583

See accompanying footnotes to consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


	Three Months Ended
	March 31,
	2025		2024
OPERATING ACTIVITIES:

Net income	$	47,268	$	30,606
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization on investment securities and low-income housing investments		2,222		1,555
Net accretion and amortization on loans and deposits		(679)		(639)
Unrealized and realized losses on equity securities with readily determinable fair value		(31)		(61)
Depreciation of premises and equipment		1,942		1,944
Amortization of mortgage servicing rights		415		426
Provision for on-balance sheet exposures		17,672		30,622
Provision for off-balance sheet exposures		20		(110)
Net loss (gain) on sale of mortgage loans held for sale		(1,411)		80
Origination of mortgage loans held for sale		(41,233)		(27,046)
Proceeds from sale of mortgage loans held for sale		41,816		18,773
Net gain on sale of consumer loans held for sale		(3,055)		(3,405)
Origination of consumer loans held for sale		(266,651)		(188,347)
Proceeds from sale of consumer loans held for sale		266,633		196,584
Writedowns of other real estate owned		53		53
Deferred compensation expense - Class A Common Stock		232		301
Stock-based awards and ESPP expense - Class A Common Stock		190		160
Amortization of right-of-use assets		1,519		1,481
Repayment of operating lease liabilities		(1,489)		(1,463)
Increase in cash surrender value of bank owned life insurance		(793)		(754)
Net change in other assets and liabilities:
Accrued interest receivable		(1,124)		(1,878)
Accrued interest payable		(527)		2,832
Other assets		(4,867)		(5,489)
Other liabilities		35,067		14,999
Net cash provided by operating activities		93,189		71,224

INVESTING ACTIVITIES:
Purchases of available-for-sale debt securities		(134,584)		(50,000)
Proceeds from calls, maturities and paydowns of equity and available-for-sale debt securities		114,411		54,220
Proceeds from calls, maturities and paydowns of held-to-maturity debt securities		5,166		133
Net change in outstanding warehouse lines of credit		(18,742)		(123,526)
Net change in other loans		160,838		66,188
Purchases of Federal Home Loan Bank stock		(2,270)		(19,959)
Investments in low-income housing tax partnerships		(4,977)		(2,710)
Net purchases of premises and equipment		(1,629)		(2,090)
Net cash (used in) provided by investing activities		118,213		(77,744)

FINANCING ACTIVITIES:
Net change in deposits		195,346		367,486
Net change in securities sold under agreements to repurchase and other short-term borrowings		(13,600)		(13,096)
Payments of Federal Home Loan Bank advances		(428,000)		(110,000)
Proceeds from Federal Home Loan Bank advances		403,000		—
Net proceeds from Class A Common Stock purchased through employee stock purchase plan		151		156
Net proceeds from option exercises and equity awards vested - Class A Common Stock		375		(1,100)
Cash dividends paid		(7,805)		(7,130)
Net cash provided by financing activities		149,467		236,316
NET CHANGE IN CASH AND CASH EQUIVALENTS		360,869		229,796
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		432,151		316,567
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	793,020	$	546,363
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION:
Cash paid during the period for:
Interest	$	27,677	$	30,882
Income taxes		392		570
SUPPLEMENTAL NONCASH DISCLOSURES:
Mortgage servicing rights capitalized	$	316	$	118
Transfers from loans to real estate acquired in settlement of loans		—		169
Net transfers from loans held for investment to loans held for sale		4,977		69,464
Operating right-of-use assets recorded		1,194		—
Operating Lease Liabilities Recorded		1,199		—

See accompanying footnotes to consolidated financial statements.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS –MARCH 31, 2025 and 2024 AND DECEMBER 31, 2024 (UNAUDITED)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation — The consolidated financial statements include the accounts of Republic Bancorp, Inc. (the “Parent Company”) and its wholly owned subsidiaries, Republic Bank & Trust Company and Republic Insurance Services, Inc. As used in this filing, the terms “Republic,” the “Company,” “we,” “our,” and “us” refer to Republic Bancorp, Inc., and, where the context requires, Republic Bancorp, Inc. and its subsidiaries. The term “Bank” refers to the Company’s subsidiary bank: Republic Bank & Trust Company. All significant intercompany balances and transactions are eliminated in consolidation.

Republic is a financial holding company headquartered in Louisville, Kentucky. The Bank is a Kentucky-based, state-chartered non-member financial institution that provides both traditional and non-traditional banking products through five reportable segments using a multitude of delivery channels. While the Bank operates primarily in its geographic market footprint where it has physical locations, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025. For further information, refer to the consolidated financial statements and footnotes thereto included in Republic’s Form 10-K for the year ended December 31, 2024. Certain amounts presented in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported prior periods’ net income or shareholders’ equity.

BUSINESS SEGMENT COMPOSITION

As of March 31, 2025, the Company was divided into five reportable segments: Traditional Banking, Warehouse Lending, TRS, RPS, and RCS. Management considers the first two segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last three segments collectively constitute RPG operations.

The Company’s Executive Chair and Chief Executive Officer serves as the Company’s CODM. Income (loss) before income tax expense is the reportable measure of segment profit or loss that the CODM regularly reviews and uses to allocate resources and assess performance. See additional discussion regarding segment information under Footnote 15 “Segment Information” in this section of the filing.

Core Bank

Traditional Banking segment — The Traditional Banking segment provides traditional banking products primarily to customers in the Company’s market footprint. As of March 31, 2025, Republic had 47 banking centers with locations as follows:

●

Kentucky — 29

●

Metropolitan Louisville — 19

●

Central Kentucky — 6

●

Georgetown — 1

●

Lexington — 5

●

Northern Kentucky (Metropolitan Cincinnati) — 4

●Bellevue— 1

●

Covington — 1

●

Crestview Hills — 1

●

Florence — 1

●

Indiana — 3

●

Southern Indiana (Metropolitan Louisville) — 3

●

Floyds Knobs — 1

●

Jeffersonville — 1

Table of Contents

●

New Albany — 1

●

Florida — 7

●

Metropolitan Tampa — 7

●

Ohio — 4

●

Metropolitan Cincinnati — 4

●

Tennessee — 4

●

Metropolitan Nashville — 4

Republic’s headquarters are in Louisville, which is the largest city in Kentucky based on population.

Traditional Banking results of operations are primarily dependent upon net interest income, which represents the difference between the interest income and fees on interest-earning assets and the interest expense on interest-bearing liabilities. Principal interest-earning Traditional Banking assets represent investment securities and commercial and consumer loans primarily secured by real estate and/or personal property. Interest-bearing liabilities primarily consist of interest-bearing deposit accounts, securities sold under agreements to repurchase, as well as short-term and long-term borrowing sources. FHLB advances have traditionally been a significant borrowing source for the Bank.

Other sources of Traditional Banking income include service charges on deposit accounts, debit and credit card interchange fee income, title insurance commissions, and increases in the cash surrender value of BOLI.

Traditional Banking operating expenses consist primarily of salaries and employee benefits; technology, equipment, and communication; occupancy; interchange related expense; marketing and development; FDIC insurance expense, and various other general and administrative costs. Traditional Banking results of operations are significantly impacted by general economic and competitive conditions, particularly changes in market interest rates, government laws and policies, and actions of regulatory agencies.

Warehouse Lending segment — The Core Bank provides short-term, revolving credit facilities to mortgage bankers across the United States through mortgage warehouse lines of credit. These credit facilities are primarily secured by single-family, first-lien residential real estate loans. The credit facility enables the mortgage banking clients to close single-family, first-lien residential real estate loans in their own name and temporarily fund their inventory of these closed loans until the loans are sold to investors approved by the Bank. Individual loans are expected to remain on the warehouse line for an average of 15 to 30 days. Advances for reverse mortgage loans and construction loans typically remain on the line longer than conventional mortgage loans. Interest income and loan fees are accrued for each individual advance during the time the advance remains on the warehouse line and collected when the loan is sold. The Core Bank receives the sale proceeds of each loan directly from the investor and applies the funds to pay off the warehouse advance and related accrued interest and fees. The remaining proceeds are credited to the mortgage-banking client.

Republic Processing Group

Tax Refund Solutions segment — Through the TRS segment, the Bank facilitates the receipt and payment of federal and state tax refund products and offers a credit product through Tax Providers. The majority of the business generated by the TRS business occurs during the first half of each year. During the second half of each year, TRS generates limited revenue and incurs costs preparing for the next year’s tax season. During December 2024, TRS originated $139 million of ERAs related to tax returns that were anticipated to be filed during the first quarter 2025 tax filing season.

RTs are fee-based products whereby a tax refund is issued to the taxpayer after the Bank has received the refund from the federal or state government. There is no credit risk or borrowing cost associated with these products because they are only delivered to the taxpayer upon receipt of the tax refund directly from the governmental paying authority. Fees earned by the Company on RTs, net of revenue share, are reported as noninterest income under the line item “Net refund transfer fees.”

The RA product is a loan made in conjunction with the filing of a taxpayer’s federal tax return, which allows the taxpayer to borrow funds as an advance of a portion of their tax refund. The RA product had the following features during the first quarters of 2025 and 2024:

●

Offered only during the first two months of each year;

●

The taxpayer was given the option to choose from multiple loan-amount tiers, subject to underwriting, up to a maximum advance amount of $6,500 for the 2024 Tax Season and $6,250 for the 2025 Tax Season;

●

No requirement that the taxpayer pays for another bank product, such as an RT;

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●

Multiple disbursement methods were available through most Tax Providers, including direct deposit, prepaid card, or check, based on the taxpayer-customer’s election;

●

Repayment of the RA to the Bank is deducted from the taxpayer’s tax refund proceeds; and

●

If an insufficient refund to repay the RA occurs:

o

there is no recourse to the taxpayer,

o

no negative credit reporting on the taxpayer, and

o

no collection efforts against the taxpayer.

Since its introduction in December of 2022, the ERA loan product has been structured similarly to the RA with the primary differences being the timing of when the ERAs are originated and the documentation available to underwrite the ERAs. The ERA is originated prior to the taxpayer receiving their fiscal year taxable income documentation, e.g., W-2, and the filing of the taxpayer’s final federal tax return. As such, the Company generally uses paystub information to underwrite the ERA. The repayment of the ERA is incumbent upon the taxpayer client returning to the Bank’s Tax Provider for the filing of their final federal tax return in order for the tax refund to potentially be received by the Bank from the federal government to pay off the advance. The ERA product had the following features during the 2024 and 2025 tax filing seasons:

●

Only offered during December and the up-coming January in connection with the upcoming first quarter tax business for each period;

●

The taxpayer had the option to choose from multiple loan tiers, subject to underwriting, up to a maximum advance amount of $1,000 for the 2024 Tax Season and $2,000 for the 2025 Tax Season;

●

No requirement that the taxpayer pays for another bank product, such as an RT;

●

Multiple disbursement methods available through most Tax Providers, including direct deposit or prepaid card, based on the taxpayer-customer’s election;

●

Repayment of the ERA to the Bank deducted from the taxpayer’s tax refund proceeds; and

●

If an insufficient refund to repay the ERA, including the failure to file a final federal tax return through a Republic Tax Provider:

o

no recourse to the taxpayer,

o

no negative credit reporting on the taxpayer, and

o

no collection efforts against the taxpayer.

The Company reports fees paid for the RAs, including ERAs, as interest income on loans. The number of days for delinquency eligibility is based on management’s annual analysis of tax return processing times. RAs, including ERAs that were originated related to the first quarter 2024 tax filing season were repaid, on average, within 32 days after the taxpayer’s tax return was submitted to the applicable taxing authority. RAs do not have a contractual due date, but as it did during 2024, the Company considered an RA delinquent during the first three months of 2025 if it remained unpaid 35 days after the taxpayer’s tax return was submitted to the applicable taxing authority.

Provisions on RAs are estimated when advances are made. Unpaid RAs, including ERAs, related to the first quarter tax filing season of a given year are charged-off by June 30th of that year, unless they are deemed to be uncollectible earlier than June 30th, at which time they are charged off. RAs collected during the second half of that year, not subject to loan loss guarantee arrangements, are recorded as recoveries of previously charged-off loans.

Republic Payment Solutions segment - The RPS segment offers a range of payment-related products and services to consumers through third party service providers. The Bank offers both issuing solutions and money movement capabilities.

Issuing Solutions:

The RPS segment offers prepaid and debit solutions primarily marketed to consumers through third-party marketer-servicers.

Prepaid solutions include the issuing of payroll and general purpose reloadable (“GPR”) cards. Characteristics of these cards include the following:

●

Similar to a traditional debit card with features including traditional point of sale purchasing, ATM withdrawals and direct deposit;

●

Funds associated with these products are typically held in pooled accounts at the Bank with the Bank maintaining records of individual balances within these pooled accounts; and

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●

Payroll cards facilitate the loading of an employer’s payroll onto a card via direct deposit with GPR cards generally distributed through retail locations and reloadable through participating retail load networks.

Debit solutions include the issuing of demand deposit accounts, savings accounts and/or debit cards. In addition to offering traditional point of sale purchasing, ATM withdrawals, and direct deposit options, these accounts may include overdraft protection.

Money Movement:

The Bank participates in traditional money movement solutions including ACH transactions, wire transfer, check processing, and the Mastercard Remote Payment and Presentment Service (“RPPS”). These capabilities are complementary to issuing within RPS, as well as, generally facilitating the movement of money for the TRS and RCS Divisions.

The Company reports its share of client-related charges and fees for RPS programs under Program fees. Additionally, the Company’s portion of interchange revenue generated by prepaid card transactions is reported as noninterest income under “Interchange fee income.”

Republic Credit Solutions segment — Through the RCS segment, the Bank offers consumer credit products. In general, the credit products are unsecured, small dollar consumer loans that are dependent on various factors. RCS loans typically earn a higher yield but also have higher credit risk compared to loans originated through the Traditional Banking segment, with a significant portion of RCS clients considered subprime or near-prime borrowers. The Bank uses third-party service providers for certain services such as marketing and loan servicing of RCS loans. Additional information regarding consumer loan products offered through RCS follows:

●

RCS line-of-credit products – Using separate third-party service providers, the Bank originates two line-of-credit products to generally subprime borrowers in multiple states.

Elastic Marketing, LLC and Elevate Decision Sciences, LLC are third-party service providers for the LOC I product and are subject to the Bank’s oversight and supervision. Together, these companies provide the Bank with certain marketing, servicing, technology, and support services, while a separate third party provides customer support, servicing, and other services on the Bank’s behalf. The Bank is the lender for this product and is marketed as such. Furthermore, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of the product.

The Bank sells participation interests in this product. These participation interests are a 90% interest in advances made to borrowers under the borrower’s line-of-credit account, and the participation interests are generally sold three business days following the Bank’s funding of the associated advances. Although the Bank retains a 10% participation interest in each advance, it maintains 100% ownership of the underlying LOC I account with each borrower. Loan balances held for sale through this program are carried at the lower of cost or fair value.

Similar to its LOC I product, the Bank provides oversight and supervision to a third party for its LOC II product. In return, this third party provides the Bank with marketing services and loan servicing for the LOC II product. The Bank is the lender for this product and is marketed as such. Furthermore, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of this product.

The Bank sells 95% participation interests in the LOC II product. These participation interests are generally sold three business days following the Bank’s funding of the associated advances. Although the Bank retains a 5% participation interest in each advance, it maintains 100% ownership of the underlying LOC II account with each borrower. Loan balances held for sale through this program are carried at the lower of cost or fair value.

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●

RCS installment loan product – Through RCS, the Bank offers installment loans with terms ranging from 12 to 60 months to borrowers in multiple states. The same third-party service provider for RCS’s LOC II is the third-party provider for the installment loans. This third-party provider is subject to the Bank’s oversight and supervision and provides the Bank with marketing services and loan servicing for these RCS installment loans. The Bank is the lender for these RCS installment loans and is marketed as such. Furthermore, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of this RCS installment loan product. Currently, all loan balances originated under this RCS installment loan program are carried as “held for sale” on the Bank’s balance sheet, with the intention to sell these loans to a third-party, who is an affiliate of the Bank’s third-party service provider, generally within sixteen days following the Bank’s origination of the loans. Loans originated under this RCS installment loan program are carried at fair value under a fair-value option, with the portfolio marked to market monthly.

●

RCS healthcare receivables products – The Bank originates healthcare-receivables products across the U.S. through three different third-party service providers.

o

For two of the programs, the Bank retains 100% of the receivables, with recourse in the event of default.

o

For the remaining program, in some instances the Bank retains 100% of the receivables originated, with recourse in the event of default, and in other instances, the Bank sells 100% of the receivables generally within one month of origination. Loan balances held for sale through this program are carried at the lower of cost or fair value.

For the RCS line of credit and healthcare receivable products, the Company reports interest income and loan origination fees earned on RCS loans under “Loans, including fees,” while any net gains or losses on sale and mark-to-market adjustments of RCS loans are reported as noninterest income under “RCS Program fees.” The Company has elected fair value accounting for its RCS installment loan product that it sells after an initial holding period. As a result, interest income on loans, loan origination fees, net gains or losses on sale, and mark-to-market adjustments for the RCS installment product are reported as noninterest income under “RCS Program fees.”

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Recently Adopted Accounting Standards

The following ASUs were adopted by the Company during the three months ended March 31, 2025:


				Method of	Financial
ASU. No.	Topic	Nature of Update	Date Adopted	Adoption	Statement Impact
2024-02	Codification Improvements—Amendments to Remove References to the Concepts Statements	This ASU contains amendments to the Codification that remove references to various Concepts Statements. In most instances the references are extraneous and not required to understand or apply the guidance. In other instances the references were used in prior Statements to provide guidance in certain topical areas.	January 1, 2025	Prospectively	Immaterial

Accounting Standards Update

The following not-yet-effective ASUs are considered relevant to the Company’s financial statements.


			Date Adoption	Adoption	Expected
ASU. No.	Topic	Nature of Update	Required	Method	Financial Impact
2023-09	Income Taxes (Topic 740): Improvements to Income Tax Disclosures	Among other things, these amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and income tax paid information and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate).	Annual reporting periods beginning after Dec. 15, 2024.	Prospectively	The Company will update its income tax disclosures upon adoption within its 2025 Form 10-K.

2024-03	Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses	This ASU requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period.	Annual reporting periods beginning after Dec. 15, 2026, and interim periods within annual reporting periods beginning after Dec. 15, 2027.	Retrospectively	The Company is currently analyzing the impact of this ASU on its financial statements.

2025-01	Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date	This ASU amends the effective date of ASU No. 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.	Annual reporting periods beginning after Dec. 15, 2026, and interim periods within annual reporting periods beginning after Dec. 15, 2027.	Retrospectively	The Company is currently analyzing the impact of this ASU on its financial statements.

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2. INVESTMENT SECURITIES

Available-for-Sale Debt Securities

The following tables summarize the amortized cost, fair value, and ACLS of AFS debt securities and the corresponding amounts of related gross unrealized gains and losses recognized in AOCI:


			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for		Fair
March 31, 2025 (in thousands)	Cost		Gains		Losses		Credit Losses		Value

U.S. Treasury securities and U.S. Government agencies	$	350,261	$	91	$	(4,656)	$	—	$	345,696
Private label mortgage-backed security		74		1,441		—		—		1,515
Mortgage-backed securities - residential		247,077		436		(10,183)		—		237,330
Collateralized mortgage obligations		19,451		28		(769)		—		18,710
Corporate bonds		2,006		—		(3)		—		2,003
Trust preferred security		3,879		194		—		—		4,073
Total available-for-sale debt securities	$	622,748	$	2,190	$	(15,611)	$	—	$	609,327


			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for		Fair
December 31, 2024 (in thousands)	Cost		Gains		Losses		Credit Losses		Value

U.S. Treasury securities and U.S. Government agencies	$	395,609	$	4	$	(6,527)	$	—	$	389,086
Private label mortgage-backed security		121		1,429		—		—		1,550
Mortgage-backed securities - residential		180,765		193		(12,725)		—		168,233
Collateralized mortgage obligations		20,127		27		(911)		—		19,243
Corporate bonds		2,008		1		—		—		2,009
Trust preferred security		3,863		171		—		—		4,034
Total available-for-sale debt securities	$	602,493	$	1,825	$	(20,163)	$	—	$	584,155

Held-to-Maturity Debt Securities

The following tables summarize the amortized cost, fair value, and ACLS of HTM debt securities and the corresponding amounts of related gross unrecognized gains and losses:


			Gross		Gross				Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for
March 31, 2025 (in thousands)	Cost		Gains		Losses		Value		Credit Losses

U.S. Treasury securities and U.S. Government agencies	$	—	$	—	$	—	$	—	$	—
Mortgage-backed securities - residential		14		—		—		14		—
Collateralized mortgage obligations		5,598		33		(80)		5,551		—
Corporate bonds		—		—		—		—		—
Obligations of state and political subdivisions		—		—		—		—		—
Total held-to-maturity debt securities	$	5,612	$	33	$	(80)	$	5,565	$	—


			Gross		Gross				Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for
December 31, 2024 (in thousands)	Cost		Gains		Losses		Value		Credit Losses

U.S. Treasury securities and U.S. Government agencies	$	—	$	—	$	—	$	—	$	—
Mortgage-backed securities - residential		23		1		—		24		—
Collateralized mortgage obligations		5,756		36		(86)		5,706		—
Corporate bonds		4,999		6		—		5,005		—
Obligations of state and political subdivisions		—		—		—		—		—
Total held-to-maturity debt securities	$	10,778	$	43	$	(86)	$	10,735	$	—

Sales of Available-for-Sale Debt Securities

During the three months ended March 31, 2025 and 2024, there were no material gains or losses on sales or calls of AFS debt securities.

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Debt Securities by Contractual Maturity

The amortized cost and fair value of debt securities by contractual maturity as of March 31, 2025 follow. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are detailed separately.


	Available-for-Sale				Held-to-Maturity
	Debt Securities				Debt Securities
	Amortized		Fair		Amortized		Fair
March 31, 2025 (in thousands)	Cost		Value		Cost		Value

Due in one year or less	$	125,311	$	124,280	$	—	$	—
Due from one year to five years		216,956		213,421		—		—
Due from five years to ten years		10,000		9,998		—		—
Due beyond ten years		3,879		4,073		—		—
Private label mortgage-backed security		74		1,515		—		—
Mortgage-backed securities - residential		247,077		237,330		14		14
Collateralized mortgage obligations		19,451		18,710		5,598		5,551
Total debt securities	$	622,748	$	609,327	$	5,612	$	5,565

Unrealized-Loss Analysis on Debt Securities

The following tables summarize AFS debt securities in an unrealized loss position for which an ACLS had not been recorded as of March 31, 2025 and December 31, 2024, aggregated by investment category and length of time in a continuous unrealized loss position:


	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
March 31, 2025 (in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

Available-for-sale debt securities:
U.S. Treasury securities and U.S. Government agencies	$	79,927	$	(40)	$	185,360	$	(4,616)	$	265,287	$	(4,656)
Mortgage-backed securities - residential		48,192		(295)		109,966		(9,888)		158,158		(10,183)
Collateralized mortgage obligations		3,070		(158)		13,784		(611)		16,854		(769)
Corporate bonds		2,003		(3)		—		—		2,003		(3)
Trust preferred security		—		—		—		—		—		—
Total available-for-sale debt securities	$	133,192	$	(496)	$	309,110	$	(15,115)	$	442,302	$	(15,611)


	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
December 31, 2024 (in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

Available-for-sale debt securities:
U.S. Treasury securities and U.S. Government agencies	$	145,048	$	(212)	$	209,033	$	(6,315)	$	354,081	$	(6,527)
Mortgage-backed securities - residential		52,347		(874)		104,453		(11,851)		156,800		(12,725)
Collateralized mortgage obligations		700		(8)		15,951		(903)		16,651		(911)
Trust preferred security		—		—		—		—		—		—
Total available-for-sale debt securities	$	198,095	$	(1,094)	$	329,437	$	(19,069)	$	527,532	$	(20,163)

As of March 31, 2025, the Bank’s security portfolio consisted of 182 securities of which 103 securities were in an unrealized loss position.

As of December 31, 2024, the Bank’s security portfolio consisted of 182 securities of which 114 securities were in an unrealized loss position.

As of March 31, 2025 and December 31, 2024, there were no holdings of debt securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.

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Mortgage-Backed Securities and Collateralized Mortgage Obligations

As of March 31, 2025, with the exception of one private label mortgage-backed security with an amortized cost of $74,000, all other mortgage-backed securities and CMOs held by the Bank were issued by U.S. government-sponsored entities and agencies, primarily the FHLMC and FNMA. As of March 31, 2025 and December 31, 2024, there were gross unrealized losses of $11.0 million and $13.6 million related to AFS mortgage-backed securities and CMOs. Because these unrealized losses are attributable to changes in interest rates and illiquidity, and not credit quality, and because the Bank does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, management does not consider these securities to have credit-related impairment that would require a provision adjustment to the ACLS.

Roll-forward of the Allowance for Credit Losses on Debt Securities

The tables below present a roll-forward for the three months ended March 31, 2025 and 2024 of the ACLS on AFS and HTM debt securities:


	ACLS Roll-forward
	Three Months Ended March 31,
	2025										2024
	Beginning				Charge-				Ending			Beginning				Charge-				Ending
(in thousands)	Balance		Provision		offs		Recoveries		Balance			Balance		Provision		offs		Recoveries		Balance

Available-for-Sale Securities:
Corporate Bonds	$	—	$	—	$	—	$	—	$	—		$	—	$	—	$	—	$	—	$	—
Held-to-Maturity Securities:
Corporate Bonds		—		—		—		—		—			10		—		—		—		10

Total	$	—	$	—	$	—	$	—	$	—		$	10	$	—	$	—	$	—	$	10

There were no HTM debt securities on nonaccrual or past due 90 days or more as of March 31, 2025 and December 31, 2024. All of the Company’s HTM corporate bonds were rated investment grade as of March 31, 2025 and December 31, 2024.

There were no HTM debt securities considered collateral dependent as of March 31, 2025 and December 31, 2024.

Accrued interest on AFS debt securities is presented as a component of other assets on the Company’s balance sheet and is excluded from the ACLS. Accrued interest on AFS debt securities totaled $4 million and $3 million as of March 31, 2025 and December 31, 2024. Accrued interest receivable on HTM debt securities totaled $14,000 and $60,000 as of March 31, 2025 and December 31, 2024.

Pledged Debt Securities

Debt securities pledged to secure public deposits, securities sold under agreements to repurchase, and debt securities held for other purposes, as required or permitted by law, were as follows:


	As of
(in thousands)	March 31, 2025		December 31, 2024

Amortized cost	$	204,867	$	205,160
Fair value		200,550		199,607
Carrying amount		200,550		199,607

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Equity Securities

The carrying value, gross unrealized gains and losses, and fair value of equity securities with readily determinable fair values were as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2025 (in thousands)	Cost		Gains		Losses		Value

Freddie Mac preferred stock	$	—	$	724	$	—	$	724
Total equity securities with readily determinable fair values	$	—	$	724	$	—	$	724


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2024 (in thousands)	Cost		Gains		Losses		Value

Freddie Mac preferred stock	$	—	$	693	$	—	$	693
Total equity securities with readily determinable fair values	$	—	$	693	$	—	$	693

For equity securities with readily determinable fair values, the gross realized and unrealized gains and losses recognized in the Company’s consolidated statements of income were as follows:


	Gains (Losses) Recognized on Equity Securities
	Three Months Ended March 31, 2025						Three Months Ended March 31, 2024
(in thousands)	Realized		Unrealized		Total		Realized		Unrealized		Total

Freddie Mac preferred stock	$	—	$	31	$	31	$	—	$	61	$	61
Total equity securities with readily determinable fair value	$	—	$	31	$	31	$	—	$	61	$	61

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3. LOANS HELD FOR SALE

In the ordinary course of business, the Bank originates for sale mortgage loans and consumer loans. Mortgage loans originated for sale are primarily originated and sold into the secondary market through the Bank’s Traditional Banking segment, while consumer loans originated for sale are originated and sold through the RCS segment.

Mortgage Loans Held for Sale, at Fair Value

See additional detail regarding mortgage loans originated for sale, at fair value under Footnote 10 “Mortgage Banking Activities” of this section of the filing.

Consumer Loans Held for Sale, at Fair Value

The Bank offers RCS installment loans with terms ranging from 12 to 60 months to borrowers in multiple states. Balances originated under this RCS installment loan program are carried as “held for sale” on the Bank’s balance sheet, with the intent to sell generally within sixteen days following the Bank’s origination of the loans. Loans originated under this RCS installment loan program are carried at fair value under a fair-value option, with the portfolio marked to market monthly.

Activity for consumer loans held for sale and carried at fair value was as follows:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Balance, beginning of period	$	5,443	$	7,914
Origination of consumer loans held for sale		34,347		35,159
Proceeds from the sale of consumer loans held for sale		(32,020)		(38,011)
Net gain on sale of consumer loans held for sale		832		1,031
Balance, end of period	$	8,602	$	6,093

Consumer Loans Held for Sale, at the Lower of Cost or Fair Value

RCS originates for sale 90% or 95% of the balances from its line-of-credit products and 100% for some of its healthcare receivables products. Ordinary gains or losses on the sale of these RCS products are reported as a component of “Program fees.” During March 2025, Management reached an agreement to sell $5 million of consumer credit cards that were previously classified as held for investment. The sale of these credit cards is expected to be completed during the second quarter of 2025. As a result, the $5 million of consumer loans were transferred from held for investment to held for sale as of March 31, 2025.

Activity for consumer loans held for sale and carried at the lower of cost or market value was as follows:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Balance, beginning of period	$	18,632	$	16,094
Origination of consumer loans held for sale		232,304		153,188
Transferred from held for investment to held for sale		4,977		—
Proceeds from the sale of consumer loans held for sale		(234,613)		(158,573)
Net gain on sale of consumer loans held for sale		2,223		2,374
Balance, end of period	$	23,523	$	13,083

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4. LOANS AND ALLOWANCE FOR CREDIT LOSSES

The composition of the loan portfolio follows:


(in thousands)	March 31, 2025		December 31, 2024

Traditional Banking:
Residential real estate:
Owner-occupied	$	1,025,461	$	1,032,459
Nonowner-occupied		311,955		318,096
Commercial real estate:
Owner-occupied		651,531		659,216
Nonowner-occupied		832,504		840,517
Multi-family		322,725		313,444
Construction & land development		238,562		244,121
Commercial & industrial		482,955		460,245
Lease financing receivables		93,159		93,304
Aircraft		219,292		226,179
Home equity		365,631		353,441
Consumer:
Credit cards		11,136		16,464
Overdrafts		779		982
Automobile loans		1,031		1,156
Other consumer		9,638		9,555
Total Traditional Banking		4,566,359		4,569,179
Warehouse lines of credit*		569,502		550,760
Total Core Banking		5,135,861		5,119,939

*Republic Processing Group:**
Tax Refund Solutions:
Refund Advances		30,344		138,614
Other TRS commercial & industrial loans		5,841		52,180
Republic Credit Solutions		117,747		128,733
Total Republic Processing Group		153,932		319,527

Total loans**		5,289,793		5,439,466
Allowance for credit losses		(106,303)		(91,978)

Total loans, net	$	5,183,490	$	5,347,488

*Identifies loans to borrowers located primarily outside of the Bank’s market footprint.

**Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs. See table directly below for expanded detail.

The following table reconciles the contractually receivable and carrying amounts of loans:


(in thousands)	March 31, 2025		December 31, 2024

Contractually receivable	$	5,295,493	$	5,445,531
Unearned income		(2,824)		(2,932)
Unamortized premiums		163		184
Unaccreted discounts		(1,467)		(1,619)
Other net unamortized deferred origination (fees) and costs		(1,572)		(1,698)
Carrying value of loans	$	5,289,793	$	5,439,466

Table of Contents

Credit Quality Indicators

The following tables include loans by segment, risk category, and, for non-revolving loans, origination year. Loan segments and risk categories as of March 31, 2025 remain unchanged from those defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Regarding origination year, loan extensions and renewals are generally considered originated in the year extended or renewed unless the loan is classified as a loan modification. Loan extensions and renewals classified as loan modifications generally receive no change in origination date upon extension or renewal.


													Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
As of March 31, 2025	2025		2024		2023		2022		2021		Prior		Cost Basis		to Term		Total

Residential real estate owner-occupied:
Risk Rating
Pass or not rated	$	28,400	$	70,625	$	228,586	$	175,995	$	151,716	$	331,082	$	—	$	8,119	$	994,523
Special Mention		—		—		—		1,750		—		4,204		—		—		5,954
Substandard		—		1,225		2,414		4,063		2,859		14,423		—		—		24,984
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	28,400	$	71,850	$	231,000	$	181,808	$	154,575	$	349,709	$	—	$	8,119	$	1,025,461
YTD Gross Charge-offs	$	—	$	—	$	—	$	18	$	—	$	—	$	—	$	—	$	18

Residential real estate nonowner-occupied:
Risk Rating
Pass or not rated	$	4,300	$	13,785	$	52,779	$	57,990	$	68,267	$	112,110	$	—	$	2,439	$	311,670
Special Mention		—		—		—		—		—		18		—		—		18
Substandard		—		—		140		—		—		127		—		—		267
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	4,300	$	13,785	$	52,919	$	57,990	$	68,267	$	112,255	$	—	$	2,439	$	311,955
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial real estate owner-occupied:
Risk Rating
Pass or not rated	$	10,452	$	41,646	$	69,340	$	111,533	$	99,952	$	224,681	$	14,135	$	65,625	$	637,364
Special Mention		380		1,171		—		5,221		356		5,954		317		—		13,399
Substandard		—		—		—		—		—		768		—		—		768
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	10,832	$	42,817	$	69,340	$	116,754	$	100,308	$	231,403	$	14,452	$	65,625	$	651,531
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial real estate nonowner-occupied:
Risk Rating
Pass or not rated	$	11,494	$	49,956	$	106,986	$	137,481	$	107,418	$	277,784	$	17,066	$	98,655	$	806,840
Special Mention		—		—		—		—		4,000		21,525		—		—		25,525
Substandard		—		—		—		—		—		139		—		—		139
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	11,494	$	49,956	$	106,986	$	137,481	$	111,418	$	299,448	$	17,066	$	98,655	$	832,504
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-Family:
Risk Rating
Pass or not rated	$	489	$	14,290	$	40,643	$	76,475	$	54,072	$	77,743	$	5,710	$	53,303	$	322,725
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	489	$	14,290	$	40,643	$	76,475	$	54,072	$	77,743	$	5,710	$	53,303	$	322,725
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Construction and land development:
Risk Rating
Pass or not rated	$	11,441	$	54,519	$	92,251	$	58,652	$	14,144	$	5,774	$	1,371	$	—	$	238,152
Special Mention		—		—		410		—		—		—		—		—		410
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	11,441	$	54,519	$	92,661	$	58,652	$	14,144	$	5,774	$	1,371	$	—	$	238,562
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		—

Commercial and industrial:
Risk Rating
Pass or not rated	$	28,750	$	82,434	$	74,524	$	58,888	$	44,821	$	47,599	$	130,313	$	8,184	$	475,513
Special Mention		—		1,184		31		330		2,285		2,668		135		—		6,633
Substandard		—		—		70		71		1		297		26		344		809
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	28,750	$	83,618	$	74,625	$	59,289	$	47,107	$	50,564	$	130,474	$	8,528	$	482,955
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Lease financing receivables:
Risk Rating
Pass or not rated	$	8,110	$	31,622	$	32,764	$	13,485	$	4,468	$	1,543	$	—	$	—	$	91,992
Special Mention		—		42		215		88		113		49		—		—		507
Substandard		—		—		317		337		6		—		—		—		660
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	8,110	$	31,664	$	33,296	$	13,910	$	4,587	$	1,592	$	—	$	—	$	93,159
YTD Gross Charge-offs	$	—	$	—	$	11	$	—	$	—	$	—	$	—	$	—	$	11

Table of Contents



													Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year (Continued)												Amortized		Converted
As of March 31, 2025	2025		2024		2023		2022		2021		Prior		Cost Basis		to Term		Total

Aircraft:
Risk Rating
Pass or not rated	$	1,450	$	33,764	$	70,042	$	39,766	$	34,220	$	38,971	$	—	$	—	$	218,213
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		1,079		—		—		—		1,079
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	1,450	$	33,764	$	70,042	$	39,766	$	35,299	$	38,971	$	—	$	—	$	219,292
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Home equity:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	—	$	362,485	$	—	$	362,485
Special Mention		—		—		—		—		—		—		310		—		310
Substandard		—		—		—		—		—		—		2,836		—		2,836
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	365,631	$	—	$	365,631
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer:
Risk Rating
Pass or not rated	$	826	$	6,145	$	2,066	$	197	$	62	$	999	$	12,284	$	—	$	22,579
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		5		—		—		5
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	826	$	6,145	$	2,066	$	197	$	62	$	1,004	$	12,284	$	—	$	22,584
YTD Gross Charge-offs	$	14	$	—	$	1	$	—	$	1	$	—	$	226	$	—	$	242

Warehouse:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	—	$	569,502	$	—	$	569,502
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	569,502	$	—	$	569,502
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

TRS:
Risk Rating
Pass or not rated	$	26,032	$	10,153	$	—	$	—	$	—	$	—	$	—	$	—	$	36,185
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	26,032	$	10,153	$	—	$	—	$	—	$	—	$	—	$	—	$	36,185
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

RCS:
Risk Rating
Pass or not rated	$	493	$	6,498	$	7,932	$	1,093	$	88	$	47,156	$	54,304	$	—	$	117,564
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		183		—		183
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	493	$	6,498	$	7,932	$	1,093	$	88	$	47,156	$	54,487	$	—	$	117,747
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	4,254	$	—	$	4,254

Grand Total:
Risk Rating
Pass or not rated	$	132,237	$	415,437	$	777,913	$	731,555	$	579,228	$	1,165,442	$	1,167,170	$	236,325	$	5,205,307
Special Mention		380		2,397		656		7,389		6,754		34,418		762		—		52,756
Substandard		—		1,225		2,941		4,471		3,945		15,759		3,045		344		31,730
Doubtful		—		—		—		—		—		—		—		—		—
Grand Total	$	132,617	$	419,059	$	781,510	$	743,415	$	589,927	$	1,215,619	$	1,170,977	$	236,669	$	5,289,793
YTD Gross Charge-offs	$	14	$	—	$	12	$	18	$	1	$	—	$	4,480	$	—	$	4,525


													Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total

Residential real estate owner-occupied:
Risk Rating
Pass or not rated	$	79,874	$	236,681	$	181,703	$	157,834	$	150,449	$	191,013	$	—	$	8,840	$	1,006,394
Special Mention		—		—		—		—		83		4,343		—		—		4,426
Substandard		875		1,052		2,566		2,806		4,099		10,241		—		—		21,639
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	80,749	$	237,733	$	184,269	$	160,640	$	154,631	$	205,597	$	—	$	8,840	$	1,032,459
YTD Gross Charge-offs	$	—	$	10	$	39	$	13	$	—	$	—	$	—	$	—	$	62

Residential real estate nonowner-occupied:
Risk Rating
Pass or not rated	$	15,147	$	53,718	$	58,776	$	69,355	$	57,310	$	59,130	$	—	$	2,431	$	315,867
Special Mention		—		—		1,795		—		—		20		—		—		1,815
Substandard		—		—		—		—		—		414		—		—		414
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	15,147	$	53,718	$	60,571	$	69,355	$	57,310	$	59,564	$	—	$	2,431	$	318,096
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Table of Contents


													Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total

Commercial real estate owner-occupied:
Risk Rating
Pass or not rated	$	44,982	$	68,442	$	113,338	$	101,216	$	114,208	$	120,576	$	16,503	$	64,832	$	644,097
Special Mention		1,177		—		5,324		832		545		5,897		317		—		14,092
Substandard		—		—		—		—		785		242		—		—		1,027
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	46,159	$	68,442	$	118,662	$	102,048	$	115,538	$	126,715	$	16,820	$	64,832	$	659,216
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial real estate nonowner-occupied:
Risk Rating
Pass or not rated	$	50,179	$	106,785	$	139,026	$	112,082	$	144,363	$	148,481	$	16,337	$	97,321	$	814,574
Special Mention		—		—		—		4,000		4,171		17,592		—		—		25,763
Substandard		—		—		—		—		—		180		—		—		180
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	50,179	$	106,785	$	139,026	$	116,082	$	148,534	$	166,253	$	16,337	$	97,321	$	840,517
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-Family:
Risk Rating
Pass or not rated	$	13,766	$	41,171	$	79,181	$	56,993	$	38,908	$	41,422	$	5,054	$	36,949	$	313,444
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	13,766	$	41,171	$	79,181	$	56,993	$	38,908	$	41,422	$	5,054	$	36,949	$	313,444
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Construction and land development:
Risk Rating
Pass or not rated	$	52,732	$	105,616	$	63,117	$	15,741	$	1,689	$	3,740	$	1,161	$	—	$	243,796
Special Mention		—		325		—		—		—		—		—		—		325
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	52,732	$	105,941	$	63,117	$	15,741	$	1,689	$	3,740	$	1,161	$	—	$	244,121
YTD Gross Charge-offs		—		—		—		—		—		—		—		—		—

Commercial and industrial:
Risk Rating
Pass or not rated	$	82,096	$	77,333	$	63,187	$	48,621	$	25,608	$	25,286	$	125,002	$	4,722	$	451,855
Special Mention		1,225		34		359		2,126		922		2,022		843		—		7,531
Substandard		—		81		73		2		—		333		26		344		859
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	83,321	$	77,448	$	63,619	$	50,749	$	26,530	$	27,641	$	125,871	$	5,066	$	460,245
YTD Gross Charge-offs		—	$	—	$	27	$	—	$	—	$	—	$	—	$	—		27

Lease financing receivables:
Risk Rating
Pass or not rated	$	34,335	$	34,370	$	15,427	$	5,759	$	2,226	$	451	$	—	$	—	$	92,568
Special Mention		—		23		46		41		73		48		—		—		231
Substandard		—		115		360		30		—		—		—		—		505
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	34,335	$	34,508	$	15,833	$	5,830	$	2,299	$	499	$	—	$	—	$	93,304
YTD Gross Charge-offs		—	$	45	$	124	$	—	$	4	$	32	$	—	$	—		205

Aircraft:
Risk Rating
Pass or not rated	$	36,972	$	71,706	$	40,778	$	35,652	$	23,933	$	16,380	$	—	$	—	$	225,421
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		312		—		446		—		—		758
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	36,972	$	71,706	$	40,778	$	35,964	$	23,933	$	16,826	$	—	$	—	$	226,179
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Home equity:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	—	$	350,828	$	—	$	350,828
Special Mention		—		—		—		—		—		—		100		—		100
Substandard		—		—		—		—		—		—		2,513		—		2,513
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	353,441	$	—	$	353,441
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	64	$	—	$	64

Consumer:
Risk Rating
Pass or not rated	$	5,156	$	2,403	$	240	$	94	$	19	$	1,256	$	18,426	$	—	$	27,594
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		556		—		—		—		—		7		—		—		563
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	5,712	$	2,403	$	240	$	94	$	19	$	1,263	$	18,426	$	—	$	28,157
YTD Gross Charge-offs	$	828	$	1,170	$	2	$	1	$	—	$	1	$	1,103	$	—	$	3,105

Table of Contents


													Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total

Warehouse:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	—	$	550,760	$	—	$	550,760
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	550,760	$	—	$	550,760
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

TRS:
Risk Rating
Pass or not rated (1)	$	190,794	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	190,794
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total (1)	$	190,794	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	190,794
YTD Gross Charge-offs (1)	$	23,534	$	9,158	$	—	$	—	$	—	$	—	$	—	$	—	$	32,692

RCS:
Risk Rating
Pass or not rated	$	8,625	$	9,954	$	3,000	$	295	$	247	$	47,383	$	58,959	$	—	$	128,463
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		270		—		270
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	8,625	$	9,954	$	3,000	$	295	$	247	$	47,383	$	59,229	$	—	$	128,733
YTD Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	19,239	$	—	$	19,239

Grand Total:
Risk Rating
Pass or not rated	$	614,658	$	808,179	$	757,773	$	603,642	$	558,960	$	655,118	$	1,143,030	$	215,095	$	5,356,455
Special Mention		2,402		382		7,524		6,999		5,794		29,922		1,260		—		54,283
Substandard		1,431		1,248		2,999		3,150		4,884		11,863		2,809		344		28,728
Doubtful		—		—		—		—		—		—		—		—		—
Grand Total	$	618,491	$	809,809	$	768,296	$	613,791	$	569,638	$	696,903	$	1,147,099	$	215,439	$	5,439,466
YTD Gross Charge-offs	$	24,362	$	10,383	$	192	$	14	$	4	$	33	$	20,406	$	—	$	55,394

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Allowance for Credit Losses on Loans

The following table presents the activity in the ACLL by portfolio class:


	ACLL Roll-forward
	Three Months Ended March 31,
	2025										2024
	Beginning				Charge-				Ending			Beginning			Charge-				Ending
(in thousands)	Balance		Provision		offs		Recoveries		Balance			Balance	Provision		offs		Recoveries		Balance

Traditional Banking:
Residential real estate:
Owner-occupied	$	10,849	$	(115)	$	(18)	$	40	$	10,756	$	10,337	$	(800)	$	(13)	$	58	$	9,582
Nonowner-occupied		4,140		(115)		—		—		4,025		3,047		3		—		1		3,051
Commercial real estate*:
Owner-occupied*		7,319		15		—		—		7,334
Nonowner-occupied*		12,523		(344)		—		—		12,179
Multi-Family*		2,714		93		—		—		2,807
Total commercial real estate*		22,556		(236)		—		—		22,320		25,830		145		—		20		25,995
Construction & land development		8,227		(200)		—		—		8,027		6,060		640		—		—		6,700
Commercial & industrial		2,527		89		—		—		2,616		4,236		(79)		—		1		4,158
Lease financing receivables		1,117		(57)		(11)		5		1,054		1,061		22		(24)		13		1,072
Aircraft		565		(11)		—		—		554		625		(10)		—		—		615
Home equity		7,378		247		—		1		7,626		5,501		247		—		1		5,749
Consumer:
Credit cards		1,379		(425)		(36)		19		937		1,074		83		(81)		11		1,087
Overdrafts		724		99		(190)		54		687		694		27		(238)		80		563
Automobile loans		11		(4)		—		1		8		32		(10)		—		2		24
Other consumer		283		(41)		(16)		15		241		501		90		(26)		15		580
Total Traditional Banking		59,756		(769)		(271)		135		58,851		58,998		358		(382)		202		59,176
Warehouse lines of credit		1,374		47		—		—		1,421		847		309		—		—		1,156
Total Core Banking		61,130		(722)		(271)		135		60,272		59,845		667		(382)		202		60,332

Republic Processing Group:
Tax Refund Solutions:
Refund Advances		9,793		15,335		—		691		25,819		3,929		25,718		—		275		29,922
Other TRS commercial & industrial loans		68		92		—		2		162		61		56		—		30		147
Republic Credit Solutions		20,987		2,967		(4,254)		350		20,050		18,295		4,181		(4,545)		370		18,301
Total Republic Processing Group		30,848		18,394		(4,254)		1,043		46,031		22,285		29,955		(4,545)		675		48,370

Total	$	91,978	$	17,672	$	(4,525)	$	1,178	$	106,303	$	82,130	$	30,622	$	(4,927)	$	877	$	108,702

* The CRE loan pool was further segmented into Owner-occupied CRE, Nonowner-occupied CRE, and Multi-family beginning in 2025. For the three months ended March 31, 2024 presented above, the Total CRE line represents the ACLL Roll-forward information for the total CRE loan pool, as previously presented.

During the first quarter of 2025, the Company further segmented its Commercial Real Estate portfolio into Owner Occupied Commercial Real Estate, Nonowner Occupied Commercial Real Estate, and Multi-family. The Company believes this additional portfolio segmentation will provide better granularity to the ACLL in the future. Given the loss history for each of these portfolio segments over the past several years, this additional segmentation did not have a material impact to the Company’s ACLL as of March 31, 2025. This additional segmentation could have material impacts to the ACLL in the future, however, depending upon the overall credit performance of each of these individual portfolios on a go-forward basis.

The cumulative loss rate used as the basis for the estimate of the Company’s ACLL as of March 31, 2025 was primarily based on a static pool analysis of each of the Company’s loan pools using the Company’s loss experience from 2013 through 2024, supplemented by qualitative factor adjustments for current and forecasted conditions. The Company employs one-year forecasts of unemployment and CRE values within its ACLL model, with reversion to long-term averages following the forecasted period. The cumulative loss rate within the Company’s ACLL also includes estimated losses based on an individual evaluation of loans which are either collateral dependent or which do not share risk characteristics with pooled loans, e.g., loan modifications.

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Nonperforming Loans and Nonperforming Assets

Detail of nonperforming loans, nonperforming assets, and select credit quality ratios follows:


(dollars in thousands)	March 31, 2025			December 31, 2024

Loans on nonaccrual status*	$	22,730		$	22,619
Loans past due 90-days-or-more and still on accrual**		120			141
Total nonperforming loans		22,850			22,760
Other real estate owned		1,107			1,160
Total nonperforming assets	$	23,957		$	23,920

Credit Quality Ratios - Total Company:

Nonperforming loans to total loans		0.43	%		0.42	%
Nonperforming assets to total loans (including OREO)		0.45			0.44
Nonperforming assets to total assets		0.34			0.35

Credit Quality Ratios - Core Bank:

Nonperforming loans to total loans		0.44	%		0.44	%
Nonperforming assets to total loans (including OREO)		0.46			0.46
Nonperforming assets to total assets		0.37			0.39

*	Loans on nonaccrual status include collateral-dependent loans.

**	Loans past due 90-days-or-more and still accruing consist of smaller balance consumer loans.

The following tables present nonaccrual loans and loans past due 90-days-or-more and still on accrual by class of loans:


					Past Due 90-Days-or-More
	Nonaccrual				and Still Accruing Interest*
(in thousands)	March 31, 2025		December 31, 2024		March 31, 2025		December 31, 2024

Traditional Banking:
Residential real estate:
Owner-occupied	$	17,445	$	17,331	$	—	$	—
Nonowner-occupied		57		81		—		—
Commercial real estate:
Owner-occupied		170		424		—		—
Nonowner-occupied		765		799		—		—
Multi-family		—		—		—		—
Construction & land development		—		—		—		—
Commercial & industrial		739		860		—		—
Lease financing receivables		92		147		—		—
Aircraft		771		56		—		—
Home equity		2,686		2,359		—		—
Consumer:
Credit cards		—		—		—		—
Overdrafts		—		—		—		—
Automobile loans		4		5		—		—
Other consumer		1		557		—		—
Total Traditional Banking		22,730		22,619		—		—
Warehouse lines of credit		—		—		—		—
Total Core Banking		22,730		22,619		—		—

Republic Processing Group:
Tax Refund Solutions:
Refund Advances		—		—		—		—
Other TRS commercial & industrial loans		—		—		—		—
Republic Credit Solutions		—		—		120		141
Total Republic Processing Group		—		—		120		141

Total	$	22,730	$	22,619	$	120	$	141

* Loans past due 90-days-or-more and still accruing consist of smaller balance consumer loans.

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							Three Months Ended
	As of March 31, 2025						March 31, 2025
	Nonaccrual		Nonaccrual			Total	Interest Income
	Loans with		Loans without			Nonaccrual	Recognized
(in thousands)	ACLL		ACLL			Loans	on Nonaccrual Loans*

Residential real estate:
Owner-occupied	$	472	$	16,973	$	17,445	$	368
Nonowner-occupied		24		33		57		17
Commercial real estate:
Owner-occupied		170		—		170		48
Nonowner-occupied		489		276		765		4
Multi-family		—		—		—		—
Construction & land development		—		—		—		—
Commercial & industrial		644		95		739		5
Lease financing receivables		—		92		92		—
Aircraft		80		691		771		—
Home equity		—		2,686		2,686		—
Consumer		5		—		5		21
Total	$	1,884	$	20,846	$	22,730	$	463

* Includes interest income for loans on nonaccrual as of the beginning of the period that were paid off during the period.


							Three Months Ended
	As of December 31, 2024						March 31, 2024
	Nonaccrual		Nonaccrual			Total	Interest Income
	Loans with		Loans without			Nonaccrual	Recognized
(in thousands)	ACLL		ACLL			Loans	on Nonaccrual Loans*

Residential real estate:
Owner-occupied	$	688	$	16,643	$	17,331	$	246
Nonowner-occupied		25		56		81		15
Commercial real estate:
Owner-occupied		180		244		424		38
Nonowner-occupied		524		275		799		4
Multi-family		—		—		—		—
Construction & land development		—		—		—		—
Commercial & industrial		726		134		860		—
Lease financing receivables		—		147		147		—
Aircraft		—		56		56		—
Home equity		—		2,359		2,359		49
Consumer		562		—		562		—
Total	$	2,705	$	19,914	$	22,619	$	352

* Includes interest income for loans on nonaccrual as of the beginning of the period that were paid off during the period.

Nonaccrual loans and loans past due 90-days-or-more and still on accrual both include smaller balance, primarily retail, homogeneous loans. Nonaccrual loans are typically returned to accrual status when all the principal and interest amounts contractually due are brought current and held current for six consecutive months and future contractual payments are reasonably assured. Loan modifications on nonaccrual status are reviewed for return to accrual status on an individual basis, with additional consideration given to performance under the modified terms.

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Delinquent Loans

The following tables present the aging of the recorded investment in loans by class of loans:


	30 - 59			60 - 89			90 or More
	Days			Days			Days			Total			Total
March 31, 2025 (dollars in thousands)	Delinquent			Delinquent			Delinquent*			Delinquent**			Current		Total

Traditional Banking:
Residential real estate:
Owner-occupied	$	2,882		$	1,776		$	1,910		$	6,568		$	1,018,893	$	1,025,461
Nonowner-occupied		—			—			—			—			311,955		311,955
Commercial real estate:
Owner-occupied		—			—			276			276			651,255		651,531
Nonowner-occupied		—			—			—			—			832,504		832,504
Multi-family		—			—			—			—			322,725		322,725
Construction & land development		—			—			—			—			238,562		238,562
Commercial & industrial		60			23			668			751			482,204		482,955
Lease financing receivables		22			4			134			160			92,999		93,159
Aircraft		—			—			—			—			219,292		219,292
Home equity		428			162			485			1,075			364,556		365,631
Consumer:
Credit cards		13			17			—			30			11,106		11,136
Overdrafts		95			22			1			118			661		779
Automobile loans		—			—			—			—			1,031		1,031
Other consumer		46			6			1			53			9,585		9,638
Total Traditional Banking		3,546			2,010			3,475			9,031			4,557,328		4,566,359
Warehouse lines of credit		—			—			—			—			569,502		569,502
Total Core Banking		3,546			2,010			3,475			9,031			5,126,830		5,135,861

Republic Processing Group:
Tax Refund Solutions:
Refund Advances		—			—			—			—			30,344		30,344
Other TRS commercial & industrial loans		21			—			—			21			5,820		5,841
Republic Credit Solutions		6,631			1,510			120			8,261			109,486		117,747
Total Republic Processing Group		6,652			1,510			120			8,282			145,650		153,932

Total	$	10,198		$	3,520		$	3,595		$	17,313		$	5,272,480	$	5,289,793
Delinquency ratio***		0.19	%		0.07	%		0.07	%		0.33	%

* All loans past due 90-days-or-more, excluding small balance consumer loans, were on nonaccrual status.

** Delinquent status may be determined by either the number of days past due or number of payments past due. RAs do not have a contractual due date but the Company considers a RA delinquent if it remains unpaid 35 days after the taxpayer’s tax return is submitted to the applicable taxing authority.

*** Represents total loans 30-days-or-more past due by aging category divided by total loans.

Table of Contents


	30 - 59			60 - 89			90 or More
	Days			Days			Days			Total			Total
December 31, 2024 (dollars in thousands)	Delinquent			Delinquent			Delinquent*			Delinquent**			Current		Total

Traditional Banking:
Residential real estate:
Owner-occupied	$	2,320		$	2,292		$	2,403		$	7,015		$	1,025,444	$	1,032,459
Nonowner-occupied		—			—			21			21			318,075		318,096
Commercial real estate:
Owner-occupied		—			—			244			244			658,972		659,216
Nonowner-occupied		—			275			—			275			840,242		840,517
Multi-family		—			—			—			—			313,444		313,444
Construction & land development		—			—			—			—			244,121		244,121
Commercial & industrial		104			15			785			904			459,341		460,245
Lease financing receivables		8			14			53			75			93,229		93,304
Aircraft		—			—			—			—			226,179		226,179
Home equity		714			204			478			1,396			352,045		353,441
Consumer:
Credit cards		25			3			—			28			16,436		16,464
Overdrafts		163			10			—			173			809		982
Automobile loans		11			—			—			11			1,145		1,156
Other consumer		41			1			1			43			9,512		9,555
Total Traditional Banking		3,386			2,814			3,985			10,185			4,558,994		4,569,179
Warehouse lines of credit		—			—			—			—			550,760		550,760
Total Core Banking		3,386			2,814			3,985			10,185			5,109,754		5,119,939

Republic Processing Group:
Tax Refund Solutions:
Refund Advances		—			—			—			—			138,614		138,614
Other TRS commercial & industrial loans		—			—			—			—			52,180		52,180
Republic Credit Solutions		7,915			2,248			141			10,304			118,429		128,733
Total Republic Processing Group		7,915			2,248			141			10,304			309,223		319,527

Total	$	11,301		$	5,062		$	4,126		$	20,489		$	5,418,977	$	5,439,466
Delinquency ratio***		0.21	%		0.09	%		0.08	%		0.38	%

* All loans past due 90-days-or-more, excluding smaller balance consumer loans, were on nonaccrual status.

*** Represents total loans 30-days-or-more past due by aging category divided by total loans.

Table of Contents

Collateral-Dependent Loans

The following table presents the amortized cost basis of collateral-dependent loans by class of loans:


	March 31, 2025				December 31, 2024
	Secured		Secured		Secured		Secured
	by Real		by Personal		by Real		by Personal
(in thousands)	Estate		Property		Estate		Property

Traditional Banking:
Residential real estate:
Owner-occupied	$	25,124	$	—	$	23,116	$	—
Nonowner-occupied		127		—		414		—
Commercial real estate:
Owner-occupied		768		—		149		—
Nonowner-occupied		139		—		1,061		—
Multi-family		—		—		—		—
Construction & land development		—		—		—		—
Commercial & industrial		809		—		859		—
Lease financing receivables		—		660		—		504
Aircraft		—		1,079		—		758
Home equity		2,835		—		2,513		—
Consumer		—		6		—		563
Total Traditional Banking	$	29,802	$	1,745	$	28,112	$	1,825

Collateral-dependent loans are generally secured by real estate or personal property. If there is insufficient collateral value to secure the Company’s recorded investment in these loans, they are charged down to collateral value less estimated selling costs, when selling costs are applicable. Selling costs range from 10% to 13%, with those percentages based on annual studies performed by the Company.

Loan and Lease Modification Disclosures Pursuant to ASU 2022-02

The following tables show the amortized cost of loans and leases as of March 31, 2025 and March 31, 2024 that were both experiencing financial difficulty and modified during the three months ended March 31, 2025 and March 31, 2024, segregated by portfolio segment and type of modification. The following tables show the amortized cost of loans and leases modified by type. The average deferral period was three months as of March 31, 2025.


	Amortized Cost Basis of Modified Financing Receivables
	Three Months Ended March 31, 2025


(dollars in thousands)	Loans (#)	Rate Reduction ($)		Loans (#)	Term Extension ($)		Loans (#)	Principal Deferral ($)

Republic Processing Group	—	$	—	—	$	—	265	$	63
Total Loan Modifications	—	$	—	—	$	—	265	$	63


	Amortized Cost Basis of Modified Financing Receivables
	Three Months Ended March 31, 2024


(dollars in thousands)	Loans (#)	Rate Reduction ($)		Loans (#)	Term Extension ($)		Loans (#)	Principal Deferral ($)

Republic Processing Group	—	$	—	—	$	—	349	$	75
Total Loan Modifications	—	$	—	—	$	—	349	$	75

Table of Contents

The following tables show the amortized cost of loans and leases as of March 31, 2025 and March 31, 2024 that were both experiencing financial difficulty and modified during the three months ended March 31, 2025 and March 31, 2024, segregated by type of modification. The following tables show the amortized cost of loans and leases modified by type.


	Total Loan Modification by Type
	Three Months Ended March 31, 2025
	Accruing			Nonaccruing
(dollars in thousands)	Loans (#)	Recorded investment ($)		Loans (#)	Recorded investment ($)

Principal deferral	265	$	63	—	$	—
Total Loan Modifications	265	$	63	—	$	—


	Total Loan Modification by Type
	Three Months Ended March 31, 2024
	Accruing			Nonaccruing
(dollars in thousands)	Loans (#)	Recorded investment ($)		Loans (#)	Recorded investment ($)

Principal deferral	349	$	75	—	$	—
Total Loan Modifications	349	$	75	—	$	—

The following tables show the percentage of the amortized cost of loans and leases that were modified to borrowers in financial distress as compared to the amortized cost of each segment of financing receivable.


	Accruing Loan Modifications
	Three Months Ended March 31, 2025
				% of Total
		Amortized		of Financing
(dollars in thousands)	Loans	Cost Basis		Receivable

Republic Processing Group	265	$	63	0.04	%
Total Accruing Loan Modifications	265	$	63	NM	%


	Nonaccruing Loan Modifications
	Three Months Ended March 31, 2025
				% of Total
		Amortized		of Financing
(dollars in thousands)	Loans	Cost Basis		Receivable

Republic Processing Group	—	$	—	—	%
Total Nonaccruing Loan Modifications	—	$	—	—	%



	Three Months Ended March 31, 2024
				% of Total
		Amortized		of Financing
(dollars in thousands)	Loans	Cost Basis		Receivable

Republic Processing Group	349	$	75	0.04	%
Total Accruing Loan Modifications	349	$	75	NM	%



	Three Months Ended March 31, 2024
				% of Total
		Amortized		of Financing
(dollars in thousands)	Loans	Cost Basis		Receivable

Republic Processing Group	—	$	—	—	%
Total Nonaccruing Loan Modifications	—	$	—	—	%

There were no commitments to lend additional amounts to the borrowers included in the previous loan modification tables.

Table of Contents

The Company closely monitors the performance of loans and leases that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following tables show the performance of such loans and leases that have been modified during the past twelve months as of March 31, 2025 and as of March 31, 2024.


	Accruing Loan Modifications
	As of March 31, 2025
			30-89 Days		90+ Days
(in thousands)	Current		Past Due		Past Due

Residential real estate:
Owner-occupied	$	8	$	—	$	—
Commercial & industrial		71		—		—
Republic Processing Group		150		—		—
Total accruing loan modifications to borrowers experiencing financial difficulty in which modifications were made in the twelve months ended March 31, 2025	$	229	$	—	$	—


	Nonaccruing Loan Modifications
	As of March 31, 2025
			30-89 Days		90+ Days
(in thousands)	Current		Past Due		Past Due

Residential real estate:
Owner-occupied	$	—	$	148	$	—
Home equity		—		—		—
Total nonaccruing loan modifications to borrowers experiencing financial difficulty in which modifications were made in the twelve months ended March 31, 2025	$	—	$	148	$	—



	Accruing Loan Modifications
	As of March 31, 2024
			30-89 Days		90+ Days
(in thousands)	Current		Past Due		Past Due

Residential real estate:
Owner occupied	$	—	$	—	$	—
Commercial & industrial		—		—		—
Republic Processing Group		105		—		—
Total accruing loan modifications to borrowers experiencing financial difficulty in which modifications were made in the twelve months ended March 31, 2024	$	105	$	—	$	—


	Nonaccruing Loan Modifications
	As of March 31, 2024
			30-89 Days		90+ Days
(in thousands)	Current		Past Due		Past Due

Residential real estate:
Owner-occupied	$	609	$	—	$	—
Home equity		72		—		—
Total nonaccruing loan modifications to borrowers experiencing financial difficulty in which modifications were made in the twelve months ended March 31, 2024	$	681	$	—	$	—

There was one modified loan that had a payment default during the three months ended March 31, 2025 that was modified in the twelve months prior to that default to borrowers experiencing financial difficulty. There were no modified loans or leases that had a payment default during the three months ended March 31, 2024 that was modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

Upon the Company’s determination that a modified loan or lease has subsequently been deemed uncollectible, the loan or lease is written off. Therefore, the amortized cost of the loan is reduced by the uncollectible amount and the allowance for loan and lease losses is adjusted by the same amount.

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Foreclosures

The following table presents the carrying amount of foreclosed properties held as a result of the Bank obtaining physical possession of such properties:


(in thousands)	March 31, 2025		December 31, 2024

Commercial real estate:
Owner-occupied	$	—	$	—
Nonowner-occupied		1,107		1,160
Multi-family		—		—
Total other real estate owned	$	1,107	$	1,160

The following table presents the recorded investment in consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to requirements of the applicable jurisdiction:

Refund Advances

The Company’s TRS segment offered (i) its RA product during the first two months of 2025, along with its ERA product during December 2024 and the first two weeks of 2025 for the 2025 Tax Season and (ii) its RA product during the first two months of 2024, along with its ERA product during December 2023 and the first two weeks of 2024 for the 2024 Tax Season. The ERA originations during December 2024 and the first two weeks of 2025 were made in relation to estimated tax returns that were anticipated to be filed during the first quarter 2025 tax season, while the ERA originations during December 2023 and the first two weeks of 2024 were made in relation to estimated tax returns that were anticipated to be filed during the first quarter 2024 tax season. Each year, all unpaid RAs, including ERAs, are charged off by June 30^th, and each quarter thereafter, any credits to the Provision for RAs, including ERAs, are recorded as recoveries of previously charged-off accounts.

Information regarding calendar year activities for RAs follows:


	Three Months Ended
	March 31,
(dollars in thousands)	2025			2024

Refund Advances originated	$	662,556		$	771,091
Net charge to the Provision for RAs, including ERAs		15,335			25,718
Provision as a percentage of Ras originated, including ERAs		2.31	%		3.34	%
Refund Advances net charge-offs (recoveries)	$	(691)		$	(275)
Refund Advances net charge-offs (recoveries) to total Refund Advances originated		(0.10)	%		(0.04)	%

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5. DEPOSITS

The composition of the deposit portfolio follows:


(in thousands)	March 31, 2025		December 31, 2024

Core Bank:
Demand	$	1,217,881	$	1,166,517
Money market accounts		1,362,185		1,295,024
Savings		236,290		238,596
Reciprocal money market		228,804		212,033
Individual retirement accounts (1)		34,766		34,543
Time deposits, $250 and over (1)		133,080		129,593
Other certificates of deposit (1)		257,843		239,643
Reciprocal time deposits (1)		74,354		80,016
Wholesale brokered deposits (1)		87,317		87,285
Total Core Bank interest-bearing deposits		3,632,520		3,483,250
Total Core Bank noninterest-bearing deposits		1,149,353		1,123,208
Total Core Bank deposits		4,781,873		4,606,458

Republic Processing Group:
Wholesale brokered deposits (1)		17,252		199,964
Interest-bearing prepaid card deposits		358,594		296,921
Money market accounts		22,292		22,647
Total RPG interest-bearing deposits		398,138		519,532

Noninterest-bearing prepaid card deposits		4,281		2,842
Other noninterest-bearing deposits		221,600		81,714
Total RPG noninterest-bearing deposits		225,881		84,556
Total RPG deposits		624,019		604,088

Total deposits	$	5,405,892	$	5,210,546

(1)	Includes time deposits.

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6. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER SHORT-TERM BORROWINGS

Securities sold under agreements to repurchase consist of short-term excess funds from correspondent banks, repurchase agreements, and overnight liabilities to deposit clients arising from the Bank’s treasury management program. While comparable to deposits in their transactional nature, these overnight liabilities to clients are in the form of repurchase agreements. Repurchase agreements collateralized by securities are treated as financings. Accordingly, the securities involved with the agreements are recorded as assets and are held by a safekeeping agent and the obligations to repurchase the securities are reflected as liabilities. Should the fair value of currently pledged securities fall below the associated repurchase agreements, the Bank would be required to pledge additional securities. To mitigate the risk of under collateralization, the Bank typically pledges at least two percent more in securities than the associated repurchase agreements. All such securities are under the Bank’s control.

As of March 31, 2025 and December 31, 2024, all securities sold under agreements to repurchase had overnight maturities. Additional information regarding securities sold under agreements to repurchase and other short-term borrowings follows:


(dollars in thousands)	March 31, 2025			December 31, 2024

Outstanding balance at end of period	$	89,718		$	103,318
Weighted average interest rate at end of period		0.58	%		0.53	%

Fair value of securities pledged:
U.S. Treasury securities and U.S. Government agencies	$	125,761		$	151,972
Total securities pledged	$	125,761		$	151,972


	Three Months Ended
	March 31,
(dollars in thousands)	2025			2024

Average outstanding balance during the period	$	108,760		$	102,592
Weighted average interest rate during the period		0.51	%		0.51	%
Maximum outstanding at any month end during the period	$	112,826		$	113,281

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7. FEDERAL HOME LOAN BANK ADVANCES

FHLB advances were as follows:


(in thousands)	March 31, 2025		December 31, 2024

Overnight advances	$	—	$	25,000
Fixed interest rate advances		370,000		370,000
Total FHLB advances	$	370,000	$	395,000

Each FHLB advance is payable at its maturity date, with a prepayment penalty for fixed rate advances that are paid off earlier than maturity. FHLB advances are collateralized by a blanket pledge of eligible real estate loans. As of March 31, 2025 and December 31, 2024, Republic had available borrowing capacity of $722 million and $755 million, respectively, from the FHLB. In addition to its borrowing capacity with the FHLB, Republic also had unsecured lines of credit totaling $100 million available through various other financial institutions as of March 31, 2025 and December 31, 2024.

Aggregate future principal payments on FHLB advances based on contractual maturity and the weighted average cost of such advances are detailed below:


			Weighted
			Average
Year (dollars in thousands)	Principal		Rate

2025	$	100,000	4.55	%
2026		30,000	4.82
2027		80,000	4.01
2028		160,000	4.39
Total	$	370,000	4.39	%

As more fully disclosed in Footnote 11 “Interest Rate Swaps” in this section of the filing, the Bank elected to extend $100 million of FHLB borrowings during May and June of 2024 through a third-party, fixed rate swap to take advantage of the inverted yield curve and lower its overall borrowing costs. As a result of this swap, the Bank was able to lock in an annualized cost of 4.42% for this $100 million over a five-year term. The total weighted average cost of all advances, including the impact of any corresponding swaps, is 4.35%.

Due to their nature, the Bank considers average balance information more meaningful than period-end balances for its overnight borrowings from the FHLB. Information regarding overnight FHLB advances follows:


	Three Months Ended
	March 31,
(dollars in thousands)	2025			2024

Average outstanding balance during the period	$	150,778		$	266,209
Weighted average interest rate during the period		4.42	%		5.44	%
Maximum outstanding at any month end during the period	$	428,000		$	760,000

The following table illustrates real estate loans pledged to collateralize advances and letters of credit with the FHLB:


(in thousands)	March 31, 2025		December 31, 2024

First-lien, single family residential real estate	$	1,165,788	$	1,177,113
Home equity lines of credit		322,962		312,168
Multi-family commercial real estate		91,324		94,334
Commercial real estate		308,075		330,911

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8. OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES

Commitments to Extend Credit

The Company, in the normal course of business, is party to financial instruments with off balance sheet risk. These financial instruments primarily include commitments to extend credit and standby letters of credit. The contract or notional amounts of these instruments reflect the potential future obligations of the Company pursuant to those financial instruments. Creditworthiness for all instruments is evaluated on a case-by-case basis in accordance with the Company’s credit policies. Collateral from the client may be required based on the Company’s credit evaluation of the client and may include business assets of commercial clients, as well as personal property and real estate of individual clients or guarantors.

The Company also extends binding commitments to clients and prospective clients. Such commitments assure a borrower of financing for a specified period of time at a specified rate. The risk to the Company under such loan commitments is limited by the terms of the contracts. For example, the Company may not be obligated to advance funds if the client’s financial condition deteriorates or if the client fails to meet specific covenants.

An approved but unfunded loan commitment represents a potential credit risk and a liquidity risk, since the Company’s client(s) may demand immediate cash that would require funding. In addition, unfunded loan commitments represent interest rate risk as market interest rates may rise above the rate committed to the Company’s client. Since a portion of these loan commitments normally expire unused, the total amount of outstanding commitments at any point in time may not require future funding.

The following table presents the Company’s commitments, exclusive of mortgage banking loan commitments, for each period ended:


(in thousands)	March 31, 2025		December 31, 2024

Unused warehouse lines of credit	$	405,998	$	404,240
Unused home equity lines of credit		481,676		478,040
Unused loan commitments - other		1,128,625		1,093,990
Standby letters of credit		11,070		11,282
Total commitments	$	2,027,369	$	1,987,552

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third-party. The terms and risk of loss involved in issuing standby letters of credit are similar to those involved in issuing loan commitments and extending credit. In addition to credit risk, the Company also has liquidity risk associated with standby letters of credit because funding for these obligations could be required immediately. The Company does not deem this risk to be material.

The following tables present a roll-forward of the ACLC for the three months ended March 31, 2025 and 2024:


	ACLC Roll-forward
	Three Months Ended
	2025										2024
	Beginning				Charge-				Ending		Beginning				Charge-				Ending
(in thousands)	Balance		Provision		offs		Recoveries		Balance		Balance		Provision		offs		Recoveries		Balance

Loan Commitments
Unused warehouse lines of credit	$	79	$	26	$	—	$	—	$	105	$	116	$	(8)	$	—	$	—	$	108
Unused home equity lines of credit		183		16		—		—		199		55		31		—		—		86
Unused construction lines of credit		677		60		—		—		737		820		(179)		—		—		641
Unused RCS lines of credit		300		(110)		—		—		190		—		—		—		—		—
Unused loan commitments - other		251		28		—		—		279		349		46		—		—		395

Total	$	1,490	$	20	$	—	$	—	$	1,510	$	1,340	$	(110)	$	—	$	—	$	1,230

The Company increased its ACLC $20,000 during the three months ended March 31, 2025 as unused commitments increased $40 million from December 31, 2024.

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9. FAIR VALUE

Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Bank used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Available-for-sale debt securities: Except for the Bank’s U.S. Treasury securities, its private label mortgage-backed security, and its TRUP investment, the fair value of AFS debt securities is typically determined by matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

The Bank’s U.S. Treasury securities are based on quoted market prices (Level 1 inputs) and considered highly liquid.

The Bank’s private label mortgage-backed security remains illiquid, and as such, the Bank classifies this security as a Level 3 security in accordance with ASC Topic 820, Fair Value Measurement. Based on this determination, the Bank utilized an income valuation model (present value model) approach in determining the fair value of this security.

See in this section of the filing under Footnote 2 “Investment Securities” for additional discussion regarding the Bank’s private label mortgage-backed security.

The Company acquired its TRUP investment in 2015 and considered the most recent bid price for the same instrument to approximate market value as of March 31, 2025. The Company’s TRUP investment is considered highly illiquid and also valued using Level 3 inputs, as the most recent bid price for this instrument is not always considered generally observable.

Equity securities with readily determinable fair value: Quoted market prices in an active market are available for the Bank’s CRA mutual fund investment and fall within Level 1 of the fair value hierarchy.

The fair value of the Company’s Freddie Mac preferred stock is determined by matrix pricing, as described above (Level 2 inputs).

Mortgage loans held for sale, at fair value: The fair value of mortgage loans held for sale is determined using quoted secondary market prices. Mortgage loans held for sale are classified as Level 2 in the fair value hierarchy.

Consumer loans held for sale, at fair value: The fair value for these loans is based on contractual sales terms, Level 3 inputs.

Consumer loans held for investment, at fair value: The Bank held an immaterial amount of consumer loans at fair value through a consumer loan program the Company is currently unwinding. The fair value of these loans was based on the discounted cash flows of the underlying loans, Level 3 inputs. Further disclosure of these loans is considered immaterial and thus omitted.

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Mortgage banking derivatives: Mortgage banking derivatives used in the ordinary course of business primarily consist of mandatory forward sales contracts (“forward contracts”) and interest rate lock loan commitments. The fair value of the Bank’s derivative instruments is primarily measured by obtaining pricing from broker-dealers recognized to be market participants. The pricing is derived from market observable inputs that can generally be verified and do not typically involve significant judgment by the Bank. Forward contracts and rate lock loan commitments are classified as Level 2 in the fair value hierarchy.

Interest rate swap agreements: Interest rate swaps are recorded at fair value on a recurring basis. The Company values its interest rate swaps using a third-party valuation service and classifies such valuations as Level 2. Valuations of these interest rate swaps are also received from the relevant dealer counterparty and validated against the Company’s calculations. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities.

Collateral-dependent loans: Collateral-dependent loans generally reflect partial charge-downs to their respective fair value, which is commonly based on recent real estate appraisals or BPOs. These appraisals or BPOs may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the process by the independent experts to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Collateral-dependent loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Other real estate owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals or BPOs. These appraisals or BPOs may utilize a single approach or a combination of approaches, including comparable sales and the income approach. Adjustments are routinely made in the process by the independent experts to adjust for differences between the comparable sales and income data available. Such adjustments may be significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for collateral-dependent loans, impaired premises and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Bank. Once the appraisal is received, a member of the Bank’s CCAD reviews the assumptions and approaches utilized in the appraisal, as well as the overall resulting fair value in comparison with independent data sources, such as recent market data or industry-wide statistics. On at least an annual basis, the Bank performs a back test of collateral appraisals by comparing actual selling prices on recent collateral sales to the most recent appraisal of such collateral. Back tests are performed for each collateral class, e.g., residential real estate or commercial real estate, and may lead to additional adjustments to the value of unliquidated collateral of similar class.

Mortgage servicing rights: At least quarterly, MSRs are evaluated for impairment based upon the fair value of the MSRs as compared to carrying amount. If the carrying amount of an individual tranche exceeds fair value, impairment is recorded, and the respective individual tranche is carried at fair value. If the carrying amount of an individual tranche does not exceed fair value, impairment is reversed if previously recognized and the carrying value of the individual tranche is based on the amortization method. The valuation model utilizes assumptions that market participants would use in estimating future net servicing income and can generally be validated against available market data (Level 2).

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Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Bank has elected the fair value option, are summarized below. Information as of March 31, 2025 is presented net of any applicable ACL.


	Fair Value Measurements at
	March 31, 2025 Using:
	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable		Total
	Assets		Inputs		Inputs		Fair
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Available-for-sale debt securities:
U.S. Treasury securities and U.S. Government agencies	$	54,761	$	290,935	$	—	$	345,696
Private label mortgage-backed security		—		—		1,515		1,515
Mortgage-backed securities - residential		—		237,330		—		237,330
Collateralized mortgage obligations		—		18,710		—		18,710
Corporate bonds		—		2,003		—		2,003
Trust preferred security		—		—		4,073		4,073
Total available-for-sale debt securities	$	54,761	$	548,978	$	5,588	$	609,327

Equity securities with readily determinable fair value:
Freddie Mac preferred stock	$	—	$	724	$	—	$	724
Total equity securities with readily determinable fair value	$	—	$	724	$	—	$	724

Mortgage loans held for sale	$	—	$	9,140	$	—	$	9,140
Consumer loans held for sale		—		—		8,602		8,602
Rate lock commitments		—		535		—		535
Interest rate swap agreements - Bank clients and institutional swap dealer		—		6,723		—		6,723

Financial liabilities:
Mandatory forward contracts	$	—	$	69	$	—	$	69
Interest rate swap agreements - Bank clients and institutional swap dealer		—		6,723		—		6,723
Interest rate swap agreements on FHLB advances		—		2,133		—		2,133


	Fair Value Measurements at
	December 31, 2024 Using:
	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable		Total
	Assets		Inputs		Inputs		Fair
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Available-for-sale debt securities:
U.S. Treasury securities and U.S. Government agencies	$	84,775	$	304,311	$	—	$	389,086
Private label mortgage-backed security		—		—		1,550		1,550
Mortgage-backed securities - residential		—		168,233		—		168,233
Collateralized mortgage obligations		—		19,243		—		19,243
Corporate bonds		—		2,009		—		2,009
Trust preferred security		—		—		4,034		4,034
Total available-for-sale debt securities	$	84,775	$	493,796	$	5,584	$	584,155

Equity securities with readily determinable fair value:
Freddie Mac preferred stock	$	—	$	693	$	—	$	693
Total equity securities with readily determinable fair value	$	—	$	693	$	—	$	693

Mortgage loans held for sale	$	—	$	8,312	$	—	$	8,312
Consumer loans held for sale		—		—		5,443		5,443
Rate lock commitments		—		223		—		223
Mandatory forward contracts		—		70		—		70
Interest rate swap agreements - Bank clients and institutional swap dealer		—		6,588		—		6,588

Financial liabilities:
Interest rate swap agreements - Bank clients and institutional swap dealer	$	—	$	6,588	$	—	$	6,588
Interest rate swap agreements on FHLB advances		—		647		—		647

All transfers between levels are generally recognized at the end of each quarter. There were no transfers into or out of Level 1, 2, or 3 assets during the three months ended March 31, 2025 and 2024.

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Private Label Mortgage-Backed Security

The following table presents a reconciliation of the Bank’s private label mortgage-backed security measured at fair value on a recurring basis using significant unobservable inputs (Level 3):


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Balance, beginning of period	$	1,550	$	1,773
Total gains or losses included in earnings:
Net change in unrealized gain (loss)		12		57
Principal paydowns		(47)		(58)
Balance, end of period	$	1,515	$	1,772

The fair value of the Bank’s single private label mortgage-backed security is supported by analysis prepared by an independent third party. The third party’s approach to determining fair value involved several steps: 1) detailed collateral analysis of the underlying mortgages, including consideration of geographic location, original loan-to-value, and the weighted average FICO score of the borrowers; 2) collateral performance projections for each pool of mortgages underlying the security (probability of default, severity of default, and prepayment probabilities) and 3) discounted cash flow modeling.

The significant unobservable inputs in the fair value measurement of the Bank’s single private label mortgage-backed security are prepayment rates, probability of default, and loss severity in the event of default. Significant fluctuations in any of those inputs in isolation would result in a significantly different fair value measurement.

Quantitative information about recurring Level 3 fair value measurement inputs for the Bank’s single private label mortgage-backed security follows:



March 31, 2025 (dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range (1)

Private label mortgage-backed security	$	1,515	Discounted cash flow	(1) Constant prepayment rate	2.9% - 4.5%

				(2) Probability of default	0.5% - 9.2%

				(3) Loss severity	25%

(1) The bank owns one private label mortgage-backed security; therefore, the range presented is equivalent to the weighted average range.


	Fair		Valuation
December 31, 2024 (dollars in thousands)	Value		Technique	Unobservable Inputs	Range (1)

Private label mortgage-backed security	$	1,550	Discounted cash flow	(1) Constant prepayment rate	1.5% - 2.6%

				(2) Probability of default	0.5% - 9.1%

				(3) Loss severity	25%

(1) The bank owns one private label mortgage-backed security; therefore, the range presented is equivalent to the weighted average range.

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Trust Preferred Security

The following table presents a reconciliation of the Company’s TRUP measured at fair value on a recurring basis using significant unobservable inputs (Level 3):


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Balance, beginning of period	$	4,034	$	4,118
Total gains or losses included in earnings:
Discount accretion		16		15
Net change in unrealized gain (loss)		23		(106)
Balance, end of period	$	4,073	$	4,027

The fair value of the Company’s TRUP investment is based on the most recent bid price for this instrument, as provided by a third-party broker.

Mortgage Loans Held for Sale

The Bank has elected the fair value option for mortgage loans held for sale. These loans are intended for sale and the Bank believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loans and in accordance with Bank policy for such instruments. None of these loans were past due 90-days-or-more or on nonaccrual as of March 31, 2025 and December 31, 2024.

The aggregate fair value, contractual balance, and unrealized gain were as follows:


(in thousands)	March 31, 2025		December 31, 2024

Aggregate fair value	$	9,140	$	8,312
Contractual balance		8,990		8,117
Unrealized gain		150		195

The total amount of gains and losses from changes in fair value included in earnings for the three months ended March 31, 2025 and 2024 for mortgage loans held for sale are presented in the following table:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Interest income	$	166	$	86
Change in fair value		(45)		145
Total included in earnings	$	121	$	231

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Consumer Loans Held for Sale

RCS carries loans originated through its installment loan program at fair value. Interest income is recorded based on the contractual terms of the loan and in accordance with Bank policy for such instruments. None of these loans were past due 90-days-or-more or on nonaccrual as of March 31, 2025 and December 31, 2024.

The significant unobservable inputs in the fair value measurement of the Bank’s short-term installment loans are the net contractual premiums and level of loans sold at a discount price. Significant fluctuations in any of those inputs in isolation would result in a significantly lower/higher fair value measurement.

The following table presents quantitative information about recurring Level 3 fair value measurement inputs for installment loans:


	Fair		Valuation
March 31, 2025 (dollars in thousands)	Value		Technique	Unobservable Inputs	Rate

Consumer loans held for sale	$	8,602	Contract Terms	(1) Net Premium	0.15%

				(2) Discounted Sales	10.00%


	Fair		Valuation
December 31, 2024 (dollars in thousands)	Value		Technique	Unobservable Inputs	Rate

Consumer loans held for sale	$	5,443	Contract Terms	(1) Net Premium	0.15%

				(2) Discounted Sales	10.00%

The aggregate fair value, contractual balance, and unrealized gain on consumer loans held for sale, at fair value, were as follows:


(in thousands)	March 31, 2025		December 31, 2024

Aggregate fair value	$	8,602	$	5,443
Contractual balance		8,657		5,476
Unrealized loss		(55)		(33)

The total amount of net gains from changes in fair value included in earnings for consumer loans held for sale, at fair value, are presented in the following table:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Interest income	$	1,078	$	1,173
Change in fair value		(21)		14
Total included in earnings	$	1,057	$	1,187

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Assets measured at fair value on a non-recurring basis are summarized below:


	Fair Value Measurements at
	March 31, 2025 Using:
	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable		Total
	Assets		Inputs		Inputs		Fair
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Value

Collateral-dependent loans:
Residential real estate:
Owner-occupied	$	—	$	—	$	266	$	266
Lease financing receivables		—		—		170		170
Aircraft		—		—		75		75
Total collateral-dependent loans	$	—	$	—	$	511	$	511

Other real estate owned:
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	—
Nonowner-occupied		—		—		1,107	$	1,107
Multi-Family		—		—		—		—
Total other real estate owned	$	—	$	—	$	1,107	$	1,107


	Fair Value Measurements at
	December 31, 2024 Using:
	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable		Total
	Assets		Inputs		Inputs		Fair
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Value

Collateral-dependent loans:
Residential real estate:
Owner-occupied	$	—	$	—	$	201	$	201
Total collateral-dependent loans	$	—	$	—	$	201	$	201

Other real estate owned:
Commercial real estate
Owner-occupied	$	—	$	—	$	—	$	—
Nonowner-occupied		—		—		1,160		1,160
Multi-Family		—		—		—		—
Total other real estate owned	$	—	$	—	$	1,160	$	1,160

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The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis:


					Range
	Fair		Valuation	Unobservable	(Weighted
March 31, 2025 (dollars in thousands)	Value		Technique	Inputs	Average)

Collateral-dependent loans - residential real estate owner-occupied	$	266	Appraisal	Appraisal discounts	12%-15% (14%)

Collateral-dependent loans - lease financing receivables	$	170	Appraisal	Appraisal discounts	13% (13%)

Collateral-dependent loans - aircraft	$	75	Appraisal	Appraisal discounts	34% (34%)

Other real estate owned - commercial real estate nonowner-occupied	$	1,107	Appraisal	Appraisal discounts	59% (59%)


					Range
	Fair		Valuation	Unobservable	(Weighted
December 31, 2024 (dollars in thousands)	Value		Technique	Inputs	Average)

Collateral-dependent loans - residential real estate owner-occupied	$	201	Appraisal	Appraisal discounts	3% (3%)

Other real estate owned - commercial real estate	$	1,160	Appraisal	Appraisal discounts	57% (57%)

Collateral-Dependent Loans

Collateral-dependent loans are generally measured for loss using the fair value for reasonable disposition of the underlying collateral. The Bank’s practice is to obtain new or updated appraisals or BPOs on the loans subject to the initial review and then to evaluate the need for an update to this value on an as necessary or possibly annual basis thereafter (depending on the market conditions impacting the value of the collateral). The Bank may discount the valuation amount as necessary for selling costs and past due real estate taxes. If a new or updated appraisal or BPO is not available at the time of a loan’s loss review, the Bank may apply a discount to the existing value of an old valuation to reflect the property’s current estimated value if it is believed to have deteriorated in either: (i) the physical or economic aspects of the subject property or (ii) material changes in market conditions. The review generally results in a partial charge-off of the loan if fair value, less selling costs, are below the loan’s carrying value. Collateral-dependent loans are valued within Level 3 of the fair value hierarchy.

The Provision on collateral-dependent loans follows:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Provision on collateral-dependent loans	$	35	$	(7)

Other Real Estate Owned

Details of other real estate owned carrying value and write downs follows:



(in thousands)	March 31, 2025		December 31, 2024

Other real estate owned carried at fair value	$	1,107	$	1,160
Total carrying value of other real estate owned	$	1,107	$	1,160


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Other real estate owned write-downs during the period	$	53	$	53

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The carrying amounts and estimated exit price fair values of all financial instruments follow:


			Fair Value Measurements at
			March 31, 2025:
									Total
	Carrying								Fair
(in thousands)	Value		Level 1		Level 2		Level 3		Value

Assets:
Cash and cash equivalents	$	793,020	$	793,020	$	—	$	—	$	793,020
Available-for-sale debt securities		609,327		54,761		548,978		5,588		609,327
Held-to-maturity debt securities		5,612		—		5,565		—		5,565
Equity securities with readily determinable fair values		724		—		724		—		724
Mortgage loans held for sale, at fair value		9,140		—		9,140		—		9,140
Consumer loans held for sale, at fair value		8,602		—		—		8,602		8,602
Consumer loans held for sale, at the lower of cost or fair value		23,523		—		—		23,654		23,654
Loans, net		5,183,490		—		—		5,054,167		5,054,167
Federal Home Loan Bank stock		26,748		—		—		—		NA
Accrued interest receivable		21,252		—		21,252		—		21,252
Mortgage servicing rights		6,876		—		16,975		—		16,975
Rate lock commitments		535		—		535		—		535
Interest rate swap agreements - Bank clients and institutional swap dealer		6,723		—		6,723		—		6,723

Liabilities:
Noninterest-bearing deposits	$	1,375,234	$	—	$	1,375,234	$	—	$	1,375,234
Transaction deposits		3,426,046		—		3,426,046		—		3,426,046
Time deposits		604,612		—		590,380		—		590,380
Securities sold under agreements to repurchase and other short-term borrowings		89,718		—		89,718		—		89,718
Federal Home Loan Bank advances		370,000		—		373,336		—		373,336
Accrued interest payable		4,626		—		4,626		—		4,626
Mandatory forward contracts		69		—		69		—		69
Interest rate swap agreements - Bank clients and institutional swap dealer		6,723		—		6,723		—		6,723
Interest rate swap agreements on FHLB advances		2,133		—		2,133		—		2,133


			Fair Value Measurements at
			December 31, 2024:
									Total
	Carrying								Fair
(in thousands)	Value		Level 1		Level 2		Level 3		Value

Assets:
Cash and cash equivalents	$	432,151	$	432,151	$	—	$	—	$	432,151
Available-for-sale debt securities		584,155		84,775		493,796		5,584		584,155
Held-to-maturity debt securities		10,778		—		10,735		—		10,735
Equity securities with readily determinable fair values		693		—		693		—		693
Mortgage loans held for sale, at fair value		8,312		—		8,312		—		8,312
Consumer loans held for sale, at fair value		5,443		—		—		5,443		5,443
Consumer loans held for sale, at the lower of cost or fair value		18,632		—		—		18,714		18,714
Loans, net		5,347,488		—		—		5,209,571		5,209,571
Federal Home Loan Bank stock		24,478		—		—		—		NA
Accrued interest receivable		20,128		—		20,128		—		20,128
Mortgage servicing rights		6,975		—		17,159		—		17,159
Rate lock commitments		223		—		223		—		223
Mandatory forward contracts		70		—		70		—		70
Interest rate swap agreements - Bank clients and institutional swap dealer		6,588		—		6,588		—		6,588

Liabilities:
Noninterest-bearing deposits	$	1,207,764	$	—	$	1,207,764	$	—	$	1,207,764
Transaction deposits		3,231,738		—		3,231,738		—		3,231,738
Time deposits		771,044		—		773,415		—		773,415
Deposits of discontinued operations		—		—		—		—		—
Securities sold under agreements to repurchase and other short-term borrowings		103,318		—		103,318		—		103,318
Federal Home Loan Bank advances		395,000		—		395,814		—		395,814
Accrued interest payable		5,153		—		5,153		—		5,153
Interest rate swap agreements - Bank clients and institutional swap dealer		6,588		—		6,588		—		6,588
Interest rate swap agreements on FHLB advances		647		—		647		—		647

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10. MORTGAGE BANKING ACTIVITIES

Mortgage banking activities primarily include residential mortgage originations and servicing.

Activity for mortgage loans held for sale, at fair value, was as follows:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Balance, beginning of period	$	8,312	$	3,227
Origination of mortgage loans held for sale		41,233		27,046
Transferred from held for investment to held for sale		—		69,464
Proceeds from the sale of mortgage loans held for sale		(41,816)		(18,773)
Net gain (loss) on mortgage loans held for sale		1,411		(80)
Balance, end of period	$	9,140	$	80,884

Mortgage loans sold to the FHLB provide for the establishment of an LRA, which represents a recourse obligation of the FHLB for absorbing potential losses on loans sold to the FHLB and an asset to the Company. The funds withheld by the FHLB to settle these recourse obligations totaled $2 million and $1 million as of March 31, 2025 and December 31, 2024. In the event that the estimated losses are not realized within the portfolio, the LRA agreements provide for repayment of these funds to the Company. These receivables are recorded on the Company’s balance sheet at the present value of their expected future cash flows upon the establishment of the LRA, and adjusted on a quarterly basis based on changes in interest rates and the projected future cash flows. As of March 31, 2025 and December 31, 2024, the LRA had a carrying value on the Company’s balance sheet of $1 million and $572,000.

The following table presents the components of mortgage banking income:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Net gain realized on sale of mortgage loans held for sale	$	1,283	$	565
Fair value adjustment for correspondent loans reclassified to held for sale		—		(997)
Net change in fair value recognized on loans held for sale		(45)		145
Net change in fair value recognized on rate lock loan commitments		312		223
Net change in fair value recognized on forward contracts		(139)		(16)
Net gain (loss) recognized		1,411		(80)

Loan servicing income		825		816
Amortization of mortgage servicing rights		(415)		(426)
Net servicing income recognized		410		390
Total mortgage banking income	$	1,821	$	310

Activity for capitalized mortgage servicing rights was as follows:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Balance, beginning of period	$	6,975	$	7,411
Additions		316		118
Amortized to expense		(415)		(426)
Balance, end of period	$	6,876	$	7,103

There was no valuation allowance for capitalized mortgage servicing rights for the three months ended March 31, 2025 and 2024.

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Other information relating to mortgage servicing rights follows:


(dollars in thousands)	March 31, 2025			December 31, 2024

Fair value of mortgage servicing rights portfolio	$	16,975		$	17,159
Monthly weighted average prepayment rate of unpaid principal balance*		130	%		125	%
Discount rate		10.70	%		10.25	%
Weighted average foreclosure rate		0.08	%		0.06	%
Weighted average life in years		4.54			4.41

*	Rates are applied to individual tranches with similar characteristics.

Mortgage banking derivatives used in the ordinary course of business primarily consist of mandatory forward sales contracts and interest rate lock loan commitments. Mandatory forward contracts represent future commitments to deliver loans at a specified price and date and are used to manage interest rate risk on loan commitments and mortgage loans held for sale. Interest rate lock loan commitments represent commitments to fund loans at a specific rate. These derivatives involve underlying items, such as interest rates, and are designed to transfer risk. Substantially all of these instruments expire within 90 days from the date of issuance. Notional amounts are amounts on which calculations and payments are based, but which do not represent credit exposure, as credit exposure is limited to the amounts required to be received or paid.

Mandatory forward contracts also contain an element of risk in that the counterparties may be unable to meet the terms of such agreements. In the event the counterparties fail to deliver commitments or are unable to fulfill their obligations, the Bank could potentially incur significant additional costs by replacing the positions at then current market rates. The Bank manages its risk of exposure by limiting counterparties to those banks and institutions deemed appropriate by management and the Board of Directors. The Bank does not expect any counterparty to default on their obligations and therefore, the Bank does not expect to incur any cost related to counterparty default.

The Bank is exposed to interest rate risk on loans held for sale and rate lock loan commitments. As market interest rates fluctuate, the fair value of mortgage loans held for sale and rate lock commitments will decline or increase. To offset this interest rate risk the Bank enters into derivatives, such as mandatory forward contracts to sell loans or purchase TBA securities. The fair value of these mandatory forward contracts will fluctuate as market interest rates fluctuate, and the change in the value of these instruments is expected to largely, though not entirely, offset the change in fair value of loans held for sale and rate lock commitments. The objective of this activity is to minimize the exposure to losses on rate loan lock commitments and loans held for sale due to market interest rate fluctuations. The net effect of derivatives on earnings will depend on risk management activities and a variety of other factors, including: market interest rate volatility; the amount of rate lock commitments that close; the ability to fill the forward contracts before expiration; and the time period required to close and sell loans.

The following table includes the notional amounts and fair values of mortgage loans held for sale and mortgage banking derivatives as of the period ends presented:


	March 31, 2025				December 31, 2024
	Notional				Notional
(in thousands)	Amount		Fair Value		Amount		Fair Value

Included in Mortgage loans held for sale:
Mortgage loans held for sale, at fair value	$	8,990	$	9,140	$	8,117	$	8,312

Included in other assets:
Rate lock loan commitments	$	21,901	$	535	$	12,592	$	223
Mandatory forward contracts		—		—		18,776		70

Included in other liabilities:
Mandatory forward contracts	$	28,100	$	69	$	—	$	—

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11. INTEREST RATE SWAPS

Interest rate swap derivatives are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies for hedge accounting as part of a cash flow hedging relationship. For a derivative designated as a cash flow hedge, the effective portion of the derivative’s unrealized gain or loss is recorded as a component of other comprehensive income (“OCI”). The amount included in AOCI would be reclassified to current earnings should the hedge no longer be considered effective. Derivatives not designated as hedges are economic derivatives with the gain or loss recognized in current period earnings.

Interest Rate Swaps Used as Cash Flow Hedges

The Bank entered into three interest rate swap agreements (“swaps”) during the second quarter of 2024 related to FHLB advances tied to the 1-month SOFR. The counterparty for all three swaps met the Bank’s credit standards and the Bank believes that the credit risk inherent in the swap contracts is not significant. As of August 8, 2024 the Bank designated the swaps to be effective for hedge accounting purposes. The Bank expects the hedges to remain fully effective during the remaining term of the swaps.

The following tables reflect information about swaps designated as cash flow hedges as of March 31, 2025 and December 31, 2024:


		March 31, 2025				December 31, 2024
		Notional				Notional
(in thousands)	Bank Position	Amount		Fair Value		Amount		Fair Value

Interest rate swaps on FHLB advances - Other liabilities and accrued interest payable	Pay fixed/receive variable	$	100,000	$	(2,133)	$	100,000	$	(647)
Total		$	100,000	$	(2,133)	$	100,000	$	(647)


									March 31, 2025				December 31, 2024
											Unrealized				Unrealized
	Notional		Pay		Receive				Assets /		Gain (Loss)		Assets /		Gain (Loss)
(dollars in thousands)	Amount		Rate		Rate		Term	Bank Position	(Liabilities)		in AOCI		(Liabilities)		in AOCI

Interest rate swaps on FHLB advances - Other liabilities and accrued interest payable	$	100,000	4.14	%		1M SOFR	5/2024 - 6/2029	Pay fixed/receive variable	$	100,000	$	(2,133)	$	100,000	$	(647)
Total	$	100,000							$	100,000	$	(2,133)	$	100,000	$	(647)

The following table reflects the total interest expense recorded on these swap transactions in the consolidated statements of income for the three months ended March 31, 2025 and 2024:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Interest rate swaps on FHLB advances	$	(46)	$	—
Total interest (benefit) expense on swap transactions	$	(46)	$	—

The following table presents the net gains (losses) recorded in OCI and the consolidated statements of income relating to the swaps designated as cash flow hedges for the three months ended March 31, 2025 and 2024:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Gains (losses) recognized in OCI on derivative (effective portion)	$	(1,440)	$	—

Gains (losses) reclassified from OCI on derivative (effective portion)		(46)		—

Gains (losses) recognized in income on derivative (ineffective portion)		—		—

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Non-hedge Interest Rate Swaps

The Bank also enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments, the Bank enters into offsetting positions in order to minimize the Bank’s interest rate risk. These swaps are derivatives, but are not designated as hedging instruments, and therefore changes in fair value are reported in current year earnings.

Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty or client owes the Bank and results in credit risk to the Bank. When the fair value of a derivative instrument contract is negative, the Bank owes the client or counterparty, and therefore, has no credit risk.

A summary of the Bank’s interest rate swaps related to clients is included in the following table:


		March 31, 2025				December 31, 2024
		Notional				Notional
(in thousands)	Bank Position	Amount		Fair Value		Amount		Fair Value

Interest rate swaps with Bank clients - Other assets and accrued interest receivable	Pay variable/receive fixed	$	144,127	$	2,843	$	103,707	$	1,070
Interest rate swaps with Bank clients - Other liabilities and accrued interest payable	Pay variable/receive fixed		88,533		(3,880)		128,621		(5,518)
Interest rate swaps with Bank clients - Total	Pay variable/receive fixed	$	232,660	$	(1,037)	$	232,328	$	(4,448)

Offsetting interest rate swaps with institutional swap dealer - Other assets and accrued interest receivable	Pay fixed/receive variable		88,533		3,880		128,621		5,518
Offsetting interest rate swaps with institutional swap dealer - Other liabilities and accrued interest payable	Pay fixed/receive variable		144,127		(2,843)		103,707		(1,070)
Offsetting interest rate swaps with institutional swap dealer - Total	Pay fixed/receive variable	$	232,660	$	1,037	$	232,328	$	4,448

Total		$	465,320	$	—	$	464,656	$	—

The Bank and its counterparties are required to pledge securities or cash as collateral when either party is in a net loss position exceeding $250,000 with the other party. As of March 31, 2025 and December 31, 2024, the Bank’s counterparties had cash of $360,000 and $4.2 million pledged to the Bank, which were included in Interest-bearing deposits on the Company’s Balance Sheet. Conversely, the Bank had $850,000 and $0 pledged to its counterparties as of March 31, 2025 and December 31, 2024, which were included in Cash and cash equivalents on the Company’s Balance Sheet.

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12. EARNINGS PER SHARE

The Company calculates earnings per share under the two-class method. Under the two-class method, earnings available to common shareholders for the period are allocated between Class A Common Stock and Class B Common Stock according to dividends declared (or accumulated) and participation rights in undistributed earnings. The difference in earnings per share between the two classes of common stock results from the 10% per share cash dividend premium paid on Class A Common Stock over that paid on Class B Common Stock.

A reconciliation of the combined Class A and Class B Common Stock numerators and denominators of the earnings per share and diluted earnings per share computations is presented below:


	Three Months Ended
	March 31,
(in thousands, except per share data)	2025		2024

Net income	$	47,268	$	30,606
Dividends declared on Common Stock:
Class A Shares		(7,799)		(6,986)
Class B Shares		(882)		(796)
Undistributed net income for basic earnings per share		38,587		22,824
Weighted average potential dividends on Class A shares upon exercise of dilutive options		(39)		(36)
Undistributed net income for diluted earnings per share	$	38,548	$	22,788

Weighted average shares outstanding:
Class A Shares		17,561		17,456
Class B Shares		2,150		2,151
Effect of dilutive securities on Class A Shares outstanding		86		87
Weighted average shares outstanding including dilutive securities		19,797		19,694

Basic earnings per share:
Class A Common Stock:
Per share dividends distributed	$	0.45	$	0.41
Undistributed earnings per share*		1.98		1.18
Total basic earnings per share - Class A Common Stock	$	2.43	$	1.59

Class B Common Stock:
Per share dividends distributed	$	0.41	$	0.37
Undistributed earnings per share*		1.80		1.07
Total basic earnings per share - Class B Common Stock	$	2.21	$	1.44

Diluted earnings per share:
Class A Common Stock:
Per share dividends distributed	$	0.45	$	0.41
Undistributed earnings per share*		1.97		1.17
Total diluted earnings per share - Class A Common Stock	$	2.42	$	1.58

Class B Common Stock:
Per share dividends distributed	$	0.41	$	0.37
Undistributed earnings per share*		1.79		1.06
Total diluted earnings per share - Class B Common Stock	$	2.20	$	1.43

To arrive at undistributed earnings per share, undistributed net income is first prorated between Class A and Class B Common Shares, with Class A Common Shares receiving a 10% premium. The resulting pro-rated, undistributed net income for each class is then divided by the weighted average shares for each class.

Stock options excluded from the detailed earnings per share calculation because their impact was antidilutive are as follows:


	Three Months Ended
	March 31,
	2025	2024

Antidilutive stock options	43,612	52,781
Average antidilutive stock options	35,218	52,781

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13. OTHER COMPREHENSIVE INCOME

OCI components and related tax effects were as follows:


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Available-for-Sale Debt Securities:
Unrealized gain on AFS debt securities	$	4,917	$	649
Net gains		4,917		649
Income tax expense related to items of other comprehensive income		(1,230)		(163)
Net of tax	$	3,687	$	486

Derivatives:
Change in fair value of derivatives		(1,440)		—
Reclassification amount for net derivative losses realized in income		(46)		—
Net losses		(1,486)		—
Tax effect		372		—
Net of tax		(1,114)		—

Total other comprehensive income components, net of tax	$	2,573	$	486

The following is a summary of the AOCI balances, net of tax:


			Change
(in thousands)	December 31, 2024		Three Months Ended March 31, 2025		March 31, 2025

Unrealized gain (loss) on AFS debt securities	$	(13,753)	$	3,687	$	(10,066)
Unrealized loss on derivatives		(485)		(1,114)		(1,599)
Total unrealized gain (loss)	$	(14,238)	$	2,573	$	(11,665)


			Change
(in thousands)	December 31, 2023		Three Months Ended March 31, 2024		March 31, 2024

Unrealized gain (loss) on AFS debt securities	$	(20,408)	$	486	$	(19,922)
Total unrealized gain (loss)	$	(20,408)	$	486	$	(19,922)

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14. REVENUE FROM CONTRACTS WITH CUSTOMERS

The following tables present the Company’s net revenue and net revenue concentration by reportable segment:


	Three Months Ended March 31, 2025
	Core Banking									Republic Processing Group
							Total			Tax			Republic			Republic
	Traditional			Warehouse			Core			Refund			Payment			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Solutions			Solutions			Solutions			RPG			Company

Net interest income (1)	$	53,321		$	3,028		$	56,349		$	29,812		$	3,994		$	12,533		$	46,339		$	102,688

Noninterest income:
Service charges on deposit accounts		3,439			20			3,459			—			—			1			1			3,460
Net refund transfer fees		—			—			—			13,893			—			—			13,893			13,893
Mortgage banking income (1)		1,821			—			1,821			—			—			—			—			1,821
Interchange fee income		3,044			—			3,044			33			—			—			33			3,077
Program fees (1)		—			—			—			—			767			3,055			3,822			3,822
Increase in cash surrender value of BOLI (1)		793			—			793			—			—			—			—			793
Net losses on OREO		(53)			—			(53)			—			—			—			—			(53)
Gain on sale of Visa Class B-1 Shares (1)		4,090			—			4,090			—			—			—			—			4,090
Other		2,230			—			2,230			21			—			—			21			2,251
Total noninterest income		15,364			20			15,384			13,947			767			3,056			17,770			33,154

Total net revenue	$	68,685		$	3,048		$	71,733		$	43,759		$	4,761		$	15,589		$	64,109		$	135,842

Net-revenue concentration (2)		51	%		2	%		53	%		32	%		4	%		11	%		47	%		100	%


	Three Months Ended March 31, 2024
	Core Banking									Republic Processing Group
							Total			Tax			Republic			Republic
	Traditional			Warehouse			Core			Refund			Payment			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Solutions			Solutions			Solutions			RPG			Company

Net interest income (1)	$	48,259		$	2,257		$	50,516		$	30,910		$	3,508		$	11,985		$	46,403		$	96,919

Noninterest income:
Service charges on deposit accounts		3,299			13			3,312			—			—			1			1			3,313
Net refund transfer fees		—			—			—			10,820			—			—			10,820			10,820
Mortgage banking income (1)		310			—			310			—			—			—			—			310
Interchange fee income		3,117			—			3,117			39			1			—			40			3,157
Program fees (1)		—			—			—			—			773			3,406			4,179			4,179
Increase in cash surrender value of BOLI (1)		754			—			754			—			—			—			—			754
Net losses on OREO		(53)			—			(53)			—			—			—			—			(53)
Other		869			—			869			24			—			—			24			893
Total noninterest income		8,296			13			8,309			10,883			774			3,407			15,064			23,373

Total net revenue	$	56,555		$	2,270		$	58,825		$	41,793		$	4,282		$	15,392		$	61,467		$	120,292

Net-revenue concentration (2)		46	%		2	%		48	%		35	%		4	%		13	%		52	%		100	%

(1)	This revenue is not subject to ASC 606.

(2)	Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue.

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The following represents information for significant revenue streams subject to ASC 606:

Service charges on deposit accounts – The Company earns revenue for account-based and event-driven services on its retail and commercial deposit accounts. Contracts for these services are generally in the form of deposit agreements, which disclose fees for deposit services. Revenue for event-driven services is recognized in close proximity or simultaneously with service performance. Revenue for certain account-based services may be recognized at a point in time or over the period the service is rendered, typically no longer than a month. Examples of account-based and event-driven service charges on deposits include per item fees, paper-statement fees, check-cashing fees, and analysis fees.

Net refund transfer fees – An RT is a fee-based product offered by the Bank through Tax Providers with the Bank acting as an independent contractor of the Tax Providers. An RT allows a taxpayer to pay any applicable tax preparation and filing related fees directly from his federal or state government tax refund, with the remainder of the tax refund disbursed directly to the taxpayer. RT fees and all applicable tax preparation, transmitter, audit, and any other taxpayer authorized amounts are deducted from the tax refund by either the Bank or the Bank’s service provider and automatically forwarded to the appropriate party as authorized by the taxpayer. RT fees generally receive first priority when applying fees against the taxpayer’s refund, with the Bank’s share of RT fees generally superior to the claims of other third-party service providers, including the Tax Providers. The remainder of the refund is disbursed to the taxpayer by a Bank check, direct deposit to the taxpayer’s personal bank account, or loaded to a prepaid card.

The Company executes contracts with individual Tax Providers to offer RTs to their taxpayer customers. RT revenue is recognized by the Bank immediately after the taxpayer’s refund is disbursed in accordance with the RT contract with the taxpayer customer. The fee paid by the taxpayer for the RT is shared between the Bank and the Tax Providers based on contracts executed between the parties.

The Company presents RT revenue net of any amounts shared with the Tax Providers. The Bank’s share of RT revenue is generally based on the obligations undertaken by the Tax Provider for each individual RT program, with more obligations generally corresponding to higher RT revenue share. The significant majority of net RT revenue is recognized and obligations under RT contracts fulfilled by the Bank during the first half of each year. Incremental expenses associated with the fulfilment of RT contracts are generally expensed during the first half of the year.

Interchange fee income – As an “issuing bank” for card transactions, the Company earns interchange fee income on transactions executed by its cardholders with various third-party merchants. Through third-party intermediaries, merchants compensate the Company for each transaction for the ability to efficiently settle the transaction, and for the Company’s willingness to accept certain risks inherent in the transaction. There is no written contract between the merchant and the Company, but a contract is implied between the two parties by customary business practices. Interchange fee income is recognized almost simultaneously by the Company upon the completion of a related card transaction.

The Company compensates its cardholders by way of cash or other “rewards” for generating card transactions. These rewards are disclosed in cardholder agreements between the Company and its cardholders. Reward costs are accrued over time based on card transactions generated by the cardholder. Interchange fee income is presented net of reward costs within noninterest income.

Net gains/(losses) on other real estate – The Company routinely sells OREO it has acquired through loan foreclosure. Net gains/(losses) on OREO reflect both 1) the gain or loss recognized upon an executed deed and 2) mark-to-market write-downs the Company takes on its OREO inventory.

The Company generally recognizes gains or losses on OREO at the time of an executed deed, although gains may be recognized over a financing period if the Company finances the sale. For financed OREO sales, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on sale, the Company adjusts the transaction price and related gain/(loss) on sale if a significant financing component is present.

Mark-to-market write-downs taken by the Company during the property’s holding period are generally at least 10% per year but may be higher based on updated real estate appraisals or BPOs. Incremental expenditures to bring OREO to salable condition are generally expensed as-incurred.

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15. SEGMENT INFORMATION

Reportable segments are determined by the type of products and services offered and the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business (such as banking centers and business units), which are then aggregated if operating performance, products/services, and clients are similar.

The nature of segment operations and the primary drivers of net revenue by reportable segment are provided below:


Reportable Segment:	Nature of Operations:	Primary Drivers of Net Revenue:

Core Banking:

Traditional Banking	Provides traditional banking products to clients in its market footprint primarily via its network of banking centers and to clients outside of its market footprint primarily via its digital delivery channels.	Net interest income

Warehouse Lending	Provides short-term, revolving credit facilities to mortgage bankers across the United States.	Net interest income

Republic Processing Group:

Tax Refund Solutions	TRS offers tax-related credit products and facilitates the receipt and payment of federal and state tax refunds through Refund Transfer products. TRS products are primarily provided to clients outside of the Bank’s market footprint.	Net interest income and Net refund transfer fees

Republic Payment Solutions	RPS offers general-purpose reloadable cards. RPS products are primarily provided to clients outside of the Bank’s market footprint.	Net interest income and Program fees

Republic Credit Solutions	Offers consumer credit products. RCS products are primarily provided to clients outside of the Bank’s market footprint, with a substantial portion of RCS clients considered subprime or near-prime borrowers.	Net interest income and Program fees

The accounting policies used for Republic’s reportable segments are the same as those described in the summary of significant accounting policies. Segment performance is evaluated using operating income before income taxes. Goodwill is allocated to the Traditional Banking segment. Income taxes are generally allocated based on income before income tax expense unless specific segment allocations can be reasonably made.

Transactions among reportable segments are made at carrying value. Net Interest income is reflected within each applicable business segment based on the underlying financial instruments assigned to each segment as well as the impact of the Company’s internal FTP applied to each instrument. FTP is allocated from the Traditional Bank to each segment based on the assumed terms of the underlying financial instruments within that segment in combination with applicable market interest rates matching the assumed terms of each instrument.

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Segment information follows:


	Three Months Ended March 31, 2025
	Core Banking									Republic Processing Group
							Total			Tax			Republic			Republic
	Traditional			Warehouse			Core			Refund			Payment			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Solutions			Solutions			Solutions			RPG			Company

Net interest income	$	53,321		$	3,028		$	56,349		$	29,812		$	3,994		$	12,533		$	46,339		$	102,688

Provision for expected credit loss expense		(769)			47			(722)			15,427			—			2,967			18,394			17,672

Net refund transfer fees		—			—			—			13,893			—			—			13,893			13,893
Mortgage banking income		1,821			—			1,821			—			—			—			—			1,821
Program fees		—			—			—			—			767			3,055			3,822			3,822
Gain on sale of Visa Class B-1 Shares		4,090			—			4,090			—			—			—			—			4,090
Other noninterest income		9,453			20			9,473			54			—			1			55			9,528
Total noninterest income		15,364			20			15,384			13,947			767			3,056			17,770			33,154

Salaries and employee benefits		26,258			693			26,951			2,198			867			1,053			4,118			31,069
Technology, Equipment, and Communication		7,447			35			7,482			185			17			959			1,161			8,643
Occupancy		3,463			30			3,493			61			5			5			71			3,564
Marketing and development		288			—			288			75			—			1,024			1,099			1,387
Core conversion & contract consulting fees		5,714			—			5,714			—			—			—			—			5,714
Other noninterest expense (2)		6,736			114			6,850			704			171			106			981			7,831
Total noninterest expense		49,906			872			50,778			3,223			1,060			3,147			7,430			58,208

Income (loss) before income tax expense		19,548			2,129			21,677			25,109			3,701			9,475			38,285			59,962
Income tax expense (benefit)		3,836			480			4,316			5,498			806			2,074			8,378			12,694

Net income (loss)	$	15,712		$	1,649		$	17,361		$	19,611		$	2,895		$	7,401		$	29,907		$	47,268

Period-end assets	$	5,797,416		$	569,862		$	6,367,278		$	192,037		$	386,362		$	129,878		$	708,277		$	7,075,555

Period-end loans	$	4,566,359		$	569,502			5,135,861		$	36,185		$	—		$	117,747		$	153,932		$	5,289,793

Period-end deposits	$	4,741,912		$	39,961			4,781,873		$	178,510		$	386,361		$	59,148		$	624,019		$	5,405,892

Net interest margin		3.79	%		2.68	%		3.70	%		NM			4.55	%		NM			NM			6.28	%

Net-revenue concentration*		51	%		2	%		53	%		32	%		4	%		11	%		47	%		100	%


	Three Months Ended March 31, 2024
	Core Banking									Republic Processing Group
							Total			Tax			Republic			Republic
	Traditional			Warehouse			Core			Refund			Payment			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Solutions			Solutions			Solutions			RPG			Company

Net interest income	$	48,259		$	2,257		$	50,516		$	30,910		$	3,508		$	11,985		$	46,403		$	96,919

Provision for expected credit loss expense		358			309			667			25,774			—			4,181			29,955			30,622

Net refund transfer fees		—			—			—			10,820			—			—			10,820			10,820
Mortgage banking income		310			—			310			—			—			—			—			310
Program fees		—			—			—			—			773			3,406			4,179			4,179
Other noninterest income		7,986			13			7,999			63			1			1			65			8,064
Total noninterest income		8,296			13			8,309			10,883			774			3,407			15,064			23,373

Salaries and employee benefits		24,629			705			25,334			2,550			768			1,064			4,382			29,716
Technology, Equipment, and Communication		6,485			22			6,507			168			4			811			983			7,490
Occupancy		3,700			18			3,718			90			7			7			104			3,822
Marketing and development		484			—			484			155			—			1,285			1,440			1,924
Other noninterest expense (2)		6,096			133			6,229			1,549			175			66			1,790			8,019
Total noninterest expense		41,394			878			42,272			4,512			954			3,233			8,699			50,971

Income before income tax expense		14,803			1,083			15,886			11,507			3,328			7,978			22,813			38,699
Income tax expense		2,520			244			2,764			2,714			761			1,854			5,329			8,093

Net income	$	12,283		$	839		$	13,122		$	8,793		$	2,567		$	6,124		$	17,484		$	30,606

Period-end assets	$	5,766,166		$	463,664		$	6,229,830		$	106,401		$	406,847		$	132,514		$	645,762		$	6,875,592

Period-end loans	$	4,573,650		$	463,249		$	5,036,899		$	57,497		$	—		$	129,896		$	187,393		$	5,224,292

Period-end deposits	$	4,807,143		$	35,170		$	4,842,313		$	171,869		$	334,991		$	71,476		$	578,336		$	5,420,649

Net interest margin		3.33	%		2.67	%		3.30	%		NM			5.07	%		NM			NM			5.87	%

Net-revenue concentration*		46	%		2	%		48	%		35	%		4	%		13	%		52	%		100	%

* Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue.

(1) Other noninterest income includes Service charges on deposit accounts, Interchange fee income, Increase in cash surrender value of bank owned life insurance, Net losses on other real estate owned, and Other noninterest income.

(2) Other noninterest expense includes FDIC insurance expense, Interchange related expense, Legal and professional fees, and Other noninterest expense.

NM - Not Meaningful

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16. LOW-INCOME HOUSING TAX CREDIT INVESTMENTS

The Company is a limited partner in several low-income housing partnerships whose purpose is to invest in qualified affordable housing. The Company expects to recover its remaining investments in these partnerships through the use of tax credits that are generated by the investments. These investments are included in other assets and accrued interest receivable on the Consolidated Balance Sheets, with any unfunded obligations included in other liabilities and accrued interest payable. The investments are amortized as a component of income tax expense.

The following table summarizes information related to the Company’s qualified low-income housing investments and obligations:


(in thousands)		March 31, 2025				December 31, 2024
					Unfunded				Unfunded
Investment	Accounting Method		Investments		Obligations (2)		Investments		Obligations (1)
Low-income housing tax credit - Gross	Proportional amortization	$	77,392	$	49,820	$	72,415	$	54,797
Life-to-date amortization			(24,204)		NA		(21,899)		NA
Low-income housing tax credit - Net		$	53,188	$	49,820	$	50,516	$	54,797

(1)	All obligations will be paid by the Company by December 31, 2038.

(2)	All obligations will be paid by the Company by December 31, 2039.

The following table summarizes the amortization expense and tax credits recognized in income tax expense for the Company’s qualified low-income housing investments for the three months ended March 31, 2025 and 2024, respectively:


	Three Months Ended March 31,

(in thousands)		2025		2024

Amortization expense	$	2,305	$	1,783
Tax credits recognized		(3,175)		(2,691)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The consolidated financial statements include the accounts of Republic Bancorp, Inc. (the “Parent Company”) and its wholly owned subsidiaries, Republic Bank & Trust Company and Republic Insurance Services, Inc. As used in this filing, the terms “Republic,” the “Company,” “we,” “our,” and “us” refer to Republic Bancorp, Inc., and, where the context requires, Republic Bancorp, Inc. and its subsidiaries. The term the “Bank” refers to the Company’s subsidiary bank: Republic Bank & Trust Company. All significant intercompany balances and transactions are eliminated in consolidation.

Republic is a financial holding company headquartered in Louisville, Kentucky. The Bank is a Kentucky-based, state-chartered non-member financial institution that provides both traditional and non-traditional banking products through five reportable segments using a multitude of delivery channels. While the Bank operates primarily in its geographical market footprint where it has physical locations, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Republic should be read in conjunction with Part I Item 1 “Financial Statements.”

Forward-looking statements discuss matters that are not historical facts. As forward-looking statements discuss future events or conditions, the statements often include words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would,” “potential,” or similar expressions. Do not rely on forward-looking statements. Forward-looking statements detail management’s expectations regarding the future and are not guarantees. Forward-looking statements are assumptions based on information known to management only as of the date the statements are made and management undertakes no obligation to update forward-looking statements, except as required by applicable law.

Broadly speaking, forward-looking statements include:

●

the potential impact of inflation on Company operations;

●

projections of revenue, income, expenses, losses, earnings per share, capital expenditures, dividends, capital structure, loan volume, loan growth, deposit growth, or other financial items;

●

descriptions of plans or objectives for future operations, products, or services;

●

descriptions and projections related to management strategies for loans, deposits, investments, and borrowings;

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●

forecasts of future economic performance; and

●

descriptions of assumptions underlying or relating to any of the foregoing.

Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by the forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties, including, but not limited to the following:

●

the impact of inflation on the Company’s operations and credit losses;

●

litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future;

●

natural disasters impacting the Company’s results of operations;

●

changes in political and economic conditions;

●

the magnitude and frequency of changes to the FFTR implemented by the FOMC of the FRB;

●

long-term and short-term interest rate fluctuations and the overall steepness of the U.S. Treasury yield curve, as well as their impact on the Company’s net interest income and mortgage banking operations;

●

competitive product and pricing pressures in each of the Company’s five reportable segments;

●

equity and fixed income market fluctuations;

●

client bankruptcies and loan defaults;

●

recession;

●

future acquisitions;

●

integrations of acquired businesses;

●

changes in technology;

●

changes in applicable laws and regulations or the interpretation and enforcement thereof;

●

changes in fiscal, monetary, regulatory, and tax policies;

●

changes in accounting standards;

●

monetary fluctuations;

●

changes to the Company’s overall internal control environment;

●

the Company’s ability to qualify for future R&D federal tax credits;

●

the ability for Tax Providers to successfully market and realize the expected RA and RT volume anticipated by TRS;

●

information security breaches or cybersecurity attacks involving either the Company or one of the Company’s third-party service providers;

●

the impacts of actual or proposed tariffs to the US economy, market interest rates, and the Company’s results of operations;

●

the ability for the Company to achieve its projected savings from a new core system contract;

●

the ability to launch the new core system by the Company’s third quarter 2025 target date;

●

the ability of the Company to achieve savings from its new call center management system;

●

the ability of the Company to complete the sale of its consumer credit card portfolio; and

●

other risks and uncertainties reported from time to time in the Company’s filings with the SEC, including Part 1 Item 1A “Risk Factors.” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and Part II Item 1A “Risk Factors” of the current filing.

Accounting Standards Update

For disclosure regarding the impact to the Company’s financial statements of ASUs, see Footnote 1 “Basis of Presentation and Summary of Significant Accounting Policies” of Part I Item 1 “Financial Statements.”

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Republic’s consolidated financial statements and accompanying footnotes have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods.

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A summary of the Company's significant accounting policies is set forth in Part II “Item 8. Financial Statements and Supplementary Data” of its Annual Report on Form 10-K for the year ended December 31, 2024.

Management continually evaluates the Company’s accounting policies and estimates that it uses to prepare the consolidated financial statements. In general, management’s estimates and assumptions are based on historical experience, accounting and regulatory guidance, and information obtained from independent third-party professionals. Actual results may differ from those estimates made by management.

Critical accounting policies are those that management believes are the most important to the portrayal of the Company’s financial condition and operating results and require management to make estimates that are difficult, subjective and complex. Most accounting policies are not considered by management to be critical accounting policies. Several factors are considered in determining whether or not a policy is critical in the preparation of the financial statements. These factors include, among other things, whether the estimates have a significant impact on the financial statements, the nature of the estimates, the ability to readily validate the estimates with other information including independent third parties or available pricing, sensitivity of the estimates to changes in economic conditions and whether alternative methods of accounting may be utilized under GAAP. Management has discussed each critical accounting policy and the methodology for the identification and determination of critical accounting policies with the Company’s Audit Committee.

Republic believes its critical accounting policies and estimates relate to its ACLL and Provision.

ACLL and Provision — As of March 31, 2025, the Bank maintained an ACLL for expected credit losses inherent in the Bank’s loan portfolio, which includes overdrawn deposit accounts. Management evaluates the adequacy of the ACLL monthly and presents and discusses the ACLL with the Audit Committee and the Board of Directors quarterly.

Management’s evaluation of the appropriateness of the ACLL is often the most critical accounting estimate for a financial institution, as the ACLL requires significant reliance on the use of estimates and significant judgment as to the reliance on historical loss rates, consideration of quantitative and qualitative economic factors, and the reliance on a reasonable and supportable forecast.

Adjustments to the historical loss rate for current conditions include differences in underwriting standards, portfolio mix or term, delinquency level, as well as for changes in environmental conditions, such as changes in property values or other relevant factors. One-year forecast adjustments to the historical loss rate are based on the U.S. national unemployment rate and CRE values. Subsequent to the one-year forecasts, loss rates are assumed to immediately revert back to long-term historical averages.

The ACLL is significantly influenced by the composition, characteristics and quality of the Company’s loan portfolio, as well as the prevailing economic conditions and forecasts utilized. Material changes to these and other relevant factors may result in greater volatility to the ACLL, and therefore, greater volatility to the Company’s reported earnings.

BUSINESS SEGMENT COMPOSITION

(I)	Traditional Banking segment

The Traditional Banking segment provides traditional banking products primarily to customers in the Company’s market footprint. As of March 31, 2025, Republic had 47 banking centers with locations as follows:

●

Kentucky — 29

●

Metropolitan Louisville — 19

●

Central Kentucky — 6

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●

Georgetown — 1

●

Lexington — 5

●

Northern Kentucky (Metropolitan Cincinnati) — 4

●Bellevue— 1

●

Covington — 1

●

Crestview Hills — 1

●

Florence — 1

●

Indiana — 3

●

Southern Indiana (Metropolitan Louisville) — 3

●

Floyds Knobs — 1

●

Jeffersonville — 1

●

New Albany — 1

●

Florida — 7

●

Metropolitan Tampa — 7

●

Ohio — 4

●

Metropolitan Cincinnati — 4

●

Tennessee — 4

●

Metropolitan Nashville — 4

Republic’s headquarters are in Louisville, which is the largest city in Kentucky based on population.

The Bank’s principal lending activities consist of the following:

Retail Mortgage Lending — Through its retail banking centers and its online Consumer Direct channel, the Bank originates single-family, residential real estate loans and HELOCs. In addition, the Bank originates HEALs through its retail banking centers. Such loans are generally collateralized by owner-occupied, residential real estate properties. For those loans originated through the Bank’s retail banking centers, the collateral is predominately located in the Bank’s market footprint, while loans originated through its Consumer Direct channel are generally secured by owner-occupied collateral located outside of the Bank’s market footprint.

Mortgage banking — Mortgage banking activities primarily include 15-, 20- and 30-year fixed-term single-family, first-lien residential real estate loans that are originated and sold into the secondary market, primarily to the FHLMC and the FNMA. The Bank typically retains servicing on loans sold into the secondary market. Administration of loans with servicing retained by the Bank includes collecting principal and interest payments, escrowing funds for property taxes and property insurance, and remitting payments to secondary market investors. The Bank receives fees for performing these standard servicing functions.

As part of the sale of loans with servicing retained, the Bank records MSRs. MSRs represent an estimate of the present value of future cash servicing income, net of estimated costs, which the Bank expects to receive on loans sold with servicing retained by the Bank. MSRs are capitalized as separate assets. This transaction is posted to net gain on sale of loans, a component of “mortgage banking income” in the income statement. Management considers all relevant factors, in addition to pricing considerations from other servicers, to estimate the fair value of the MSRs to be recorded when the loans are initially sold with servicing retained by the Bank. The carrying value of MSRs is initially amortized in proportion to and over the estimated period of net servicing income and subsequently adjusted quarterly based on the weighted average remaining life of the underlying loans. The MSR amortization is recorded as a reduction to net servicing income, a component of mortgage banking income.

With the assistance of an independent third party, the MSRs asset is reviewed at least quarterly for impairment based on the fair value of the MSRs using groupings of the underlying loans based on predominant risk characteristics. Any impairment of a grouping is reported as a valuation allowance. A primary factor influencing the fair value is the estimated life of the underlying loans serviced. The estimated life of the loans serviced is significantly influenced by market interest rates. During a period of declining interest rates, the fair value of the MSRs is expected to decline due to increased anticipated prepayment speeds within the portfolio. Alternatively, during a period of rising interest rates, the fair value of MSRs would be expected to increase as prepayment speeds on the underlying loans would be expected to decline.

Commercial Lending — The Bank conducts commercial lending activities primarily through Corporate Banking, Commercial Banking, Business Banking, and Retail Banking channels.

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In general, commercial lending credit approvals and processing are prepared and underwritten through the Bank’s Commercial Credit Administration Department. Clients are generally located within the Bank’s market footprint or in areas nearby the market footprint.

Construction and Land Development Lending — The Bank originates business loans for the construction of both single-family, residential properties and commercial properties (apartment complexes, shopping centers, office buildings). While not a focus for the Bank, the Bank may originate loans for the acquisition and development of residential or commercial land into buildable lots.

Consumer Lending — Traditional Banking consumer loans made by the Bank include home improvement and home equity loans, other secured and unsecured personal loans, and credit cards. Except for home equity loans, which are actively marketed in conjunction with single family, first lien residential real estate loans, other Traditional Banking consumer loan products (not including products offered through RPG), while available, are not and have not been actively promoted in the Bank’s markets.

Aircraft Lending — Aircraft loans are typically made to purchase or refinance personal aircrafts, along with engine overhauls and avionic upgrades. Loans range between $200,000 and $2,000,000 in size and have terms up to 20 years. The aircraft loan program is open to all fifty states. The credit characteristics of an aircraft borrower are higher than a typical consumer in that they must demonstrate and indicate a higher degree of credit worthiness for approval.

The Bank’s other Traditional Banking activities generally consist of the following:

Private Banking — The Bank provides financial products and services to high-net-worth individuals through its Private Banking department. The Bank’s Private Banking officers have extensive banking experience and are trained to meet the unique financial needs of this clientele.

Treasury Management Services — The Bank provides various deposit products designed for commercial business clients located throughout its market footprint. Lockbox processing, remote deposit capture, business on-line banking, account reconciliation, and ACH processing are additional services offered to commercial businesses through the Bank’s Treasury Management department. Treasury Management officers work closely with commercial and retail officers to support the cash management needs of Bank clients.

Correspondent Lending — During 2023, the Bank purchased a block of single family, first-lien mortgage loans for investment through its Correspondent Lending channel. The Bank had previously purchased correspondent loans during 2014 and 2015. Correspondent Lending generally involves the Bank purchasing, primarily from its Warehouse Lending clients, closed loans that meet the Bank’s specifications. Substantially all loans purchased through the Correspondent Lending channel are purchased at a premium. Premiums on loans held for investment acquired though the Correspondent Lending channel will be amortized into interest income over the expected life of the loan utilizing the level-yield. Loans acquired through the Correspondent Lending channel are generally made to borrowers outside of the Bank’s historical market footprint. During the last half of March 2024, Management made the decision to sell $69 million of correspondent loans that were previously classified as held for investment. The sale of these loans was completed during the second quarter of 2024 with the final dollar amount of loans sold being $67 million.

Internet Banking — The Bank expands its market penetration and service delivery of its RB&T brand by offering clients Internet Banking services and products through its website, www.republicbank.com.

RBMAX — RBMAX is a separately branded, national branchless banking platform offered by the Bank. RBMAX focuses on technologically savvy clients that prefer to bank virtually as well as those that prefer to carry larger balances in high yield savings accounts.

Mobile Banking — The Bank allows clients to easily and securely access and manage their accounts through its mobile banking application.

Other Banking Services — The Bank also provides title insurance and other financial institution related products and services.

Bank Acquisitions — The Bank maintains an acquisition strategy to selectively grow its franchise as a complement to its organic growth strategies.

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See additional detail regarding the Traditional Banking segment under Footnote 15 “Segment Information” of Part I Item 1 “Financial Statements.”

(II) Warehouse Lending segment

The Core Bank provides short-term, revolving credit facilities to mortgage bankers across the United States through mortgage warehouse lines of credit. These credit facilities are primarily secured by single-family, first-lien residential real estate loans. The credit facility enables the mortgage banking clients to close single-family, first-lien residential real estate loans in their own name and temporarily fund their inventory of these closed loans until the loans are sold to investors approved by the Bank. Individual loans are expected to remain on the warehouse line for an average of 15 to 30 days. Advances for Reverse mortgage loans and construction loans typically remain on the line longer than conventional mortgage loans. Interest income and loan fees are accrued for each individual advance during the time the advance remains on the warehouse line and collected when the loan is sold. The Core Bank receives the sale proceeds of each loan directly from the investor and applies the funds to pay off the warehouse advance and related accrued interest and fees. The remaining proceeds are credited to the mortgage-banking client.

See additional detail regarding the Warehouse Lending segment under Footnote 15 “Segment Information” of Part I Item 1 “Financial Statements.”

(III) Tax Refund Solutions segment

Through the TRS segment, the Bank facilitates the receipt and payment of federal and state tax refund products and offers a credit product through Tax Providers. The majority of all the business generated by the TRS business occurs during the first half of each year. During the second half of each year, TRS generates limited revenue and incurs costs preparing for the next year’s tax season. During December 2024, TRS originated $139 million of ERAs related to tax returns that were anticipated to be filed during the first quarter 2025 tax filing season.

●

Offered only during the first two months of each year;

●

No requirement that the taxpayer pays for another bank product, such as an RT;

●

Multiple disbursement methods were available through most Tax Providers, including direct deposit, prepaid card, or check, based on the taxpayer-customer’s election;

●

Repayment of the RA to the Bank is deducted from the taxpayer’s tax refund proceeds; and

●

If an insufficient refund to repay the RA occurs:

o

there is no recourse to the taxpayer,

o

no negative credit reporting on the taxpayer, and

o

no collection efforts against the taxpayer.

●

Only offered during December and the up-coming January in connection with the upcoming first quarter tax business for each period;

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●

The taxpayer had the option to choose from multiple loan tiers, subject to underwriting, up to a maximum advance amount of $1,000 for the 2024 Tax Season and $2,000 for the 2025 Tax Season;

●

No requirement that the taxpayer pays for another bank product, such as an RT;

●

Multiple disbursement methods available through most Tax Providers, including direct deposit or prepaid card, based on the taxpayer-customer’s election;

●

Repayment of the ERA to the Bank deducted from the taxpayer’s tax refund proceeds; and

●

If an insufficient refund to repay the ERA, including the failure to file a final federal tax return through a Republic Tax Provider:

o

no recourse to the taxpayer,

o

no negative credit reporting on the taxpayer, and

o

no collection efforts against the taxpayer.

Provisions on RAs are estimated when advances are made. Unpaid RAs, including ERAs related to the 2025 Tax Season, of a given year are considered delinquent at June 30^th of that year and charged-off.

Related to the overall credit losses on RAs, including ERAs, the Bank’s ability to control losses is highly dependent upon its ability to predict the taxpayer’s likelihood to receive the tax refund as claimed on the taxpayer’s tax return. In addition, the Bank’s ability to control losses for the ERA product is highly dependent upon the taxpayer returning to a Tax Provider for the filing of their final tax return. Each year, the Bank’s RA approval model is based primarily on the prior-year’s tax refund payment patterns. Because the substantial majority of the RA volume occurs each year before that year’s tax refund payment patterns can be analyzed and subsequent underwriting changes made, credit losses during a current year could be higher than management’s predictions if tax refund payment patterns change materially between years.

In response to changes in the legal, regulatory, and competitive environment, management annually reviews and revises the RA, including the ERA, product parameters. Further changes in the RA product parameters do not ensure positive results and could have an overall material negative impact on the performance of all RA product offerings and therefore on the Company’s financial condition and results of operations.

See additional detail regarding the RA product under Footnote 4 “Loans and Allowance for Credit Losses” of Part I Item 1 “Financial Statements.”

(IV) Republic Payment Solutions segment

Through the RPS segment, the Bank offers a range of payment-related products and services to consumers through third-party service providers. The Bank offers both issuing solutions and money movement capabilities.

Issuing Solutions:

The RPS segment offers prepaid and debit solutions primarily marketed to consumers through third-party marketer-servicers.

Prepaid solutions include the issuing of payroll and general purpose reloadable (“GPR”) cards. Characteristics of these cards include the following:

●

Similar to a traditional debit card with features including traditional point of sale purchasing, ATM withdrawals and direct deposit;

●

Funds associated with these products are typically held in pooled accounts at the Bank with the Bank maintaining records of individual balances within these pooled accounts; and

●

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Money Movement:

The Company reports its share of client-related charges and fees for RPS programs under RPS program fees. Additionally, the Company’s portion of interchange revenue generated by prepaid card transactions is reported as noninterest income under “Interchange fee income.”

(V) Republic Credit Solutions segment

●

RCS line-of-credit products – Using separate third-party service providers, the Bank originates two line-of-credit products to generally subprime borrowers in multiple states. Elastic Marketing, LLC and Elevate Decision Sciences, LLC are third-party service providers for the LOC I product and are subject to the Bank’s oversight and supervision. Together, these companies provide the Bank with certain marketing, servicing, technology, and support services, while a separate third party provides customer support, servicing, and other services on the Bank’s behalf. The Bank is the lender for this product and is marketed as such. Furthermore, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of the product.

●

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●

RCS healthcare receivables products – The Bank originates healthcare-receivables products across the U.S. through three different third-party service providers.

o

For two of the programs, the Bank retains 100% of the receivables, with recourse in the event of default.

o

Recent Developments

The Company’s largest Tax Provider contract within TRS in terms of product volume expires in October 2025. The Company does not expect to enter into a new contract with this Tax Provider to replace its existing contract.

The ERAs and RAs originated through this Tax Provider represented approximately 67% of the total dollars of ERAs and RAs originated through TRS from December 2024 through March 2025. In addition, the net RT revenue generated through this Tax Provider during the first quarter of 2025 represented approximately 22% of the total net RT revenue generated through TRS for the first quarter of 2025.

In total, Management estimates that the TRS segment earned approximately 26% of its pre-tax net income from this existing contract for the 12-month period ended March 31, 2025.

OVERVIEW (Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024)

Total Company net income for the first quarter of 2025 was $47.3 million, an increase of $16.7 million over the same period in 2024. Diluted EPS also increased to $2.42 for the first quarter of 2025 compared to $1.58 for the same period in 2024. The increase in net income primarily reflected the following by reportable segment:

Traditional Banking segment

●

Net income increased $3.4 million, 28%, from the first quarter of 2024 to the first quarter of 2025.

●

Net interest income increased $5.1 million, or 10%, from the first quarter of 2024 to the first quarter of 2025.

●

Provision was a net credit of $769,000 for the first quarter of 2025 compared to a net charge of $358,000 for the same period in 2024.

●

Noninterest income increased $7.1 million, or 85%, from the first quarter of 2024 to the first quarter of 2025.

●

Noninterest expense increased $8.5 million, or 21%, from the first quarter of 2024 to the first quarter of 2025.

Warehouse Lending segment

●

Net income increased $810,000, or 97%, from the first quarter of 2024 to the first quarter of 2025.

●

Net interest income increased $771,000, or 34%, from the first quarter of 2024 to the first quarter of 2025.

●

The Warehouse Provision was a net charge of $47,000 for the first quarter of 2025 compared to a net charge of $309,000 for the same period in 2024.

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●

Average committed Warehouse lines increased to $968 million for the first quarter of 2025 from $929 million for the first quarter of 2024.

●

Average line usage was 47% during the first quarter of 2025 compared to 37% during the same period in 2024.

Tax Refund Solutions segment

●

Net income increased $10.8 million, or 123%, from the first quarter of 2024 to the first quarter of 2025.

●

Net interest income decreased $1.1 million, or 4%, from the first quarter of 2024 to the first quarter of 2025.

●

Overall, TRS recorded a net charge to the Provision of $15.4 million during the first quarter of 2025 compared to a net charge to the Provision of $25.8 million for the same period in 2024.

●

Noninterest income increased $3.1 million, or 28%, from the first quarter of 2024 to the first quarter of 2025.

●

Within noninterest income, net RT revenue increased $3.1 million from the first quarter of 2024 to the first quarter of 2025.

●

Noninterest expense was $3.2 million for the first quarter of 2025 compared to $4.5 million for the same period in 2024.

Republic Payment Solutions segment

●

Net income increased $328,000, or 13%, from the first quarter of 2024 to the first quarter of 2025.

●

Net interest income increased $486,000, or 14%, from the first quarter of 2024 to the first quarter of 2025.

●

Noninterest income was $767,000 for the first quarter of 2025 compared to $774,000 for the first quarter of 2024.

●

Noninterest expense was $1.1 million for the first quarter of 2025 and compared to $954,000 for the first quarter of 2024.

Republic Credit Solutions segment

●

Net income increased $1.3 million, or 21%, from the first quarter of 2024 to the first quarter of 2025.

●

Net interest income increased $548,000, or 5%, from the first quarter of 2024 to the first quarter of 2025.

●

Overall, RCS recorded a net charge to the Provision of $3.0 million during the first quarter of 2025 compared to a net charge of $4.2 million for the same period in 2024.

●

Noninterest income decreased $351,000, or 10%, from the first quarter of 2024 to the first quarter of 2025.

●

Noninterest expense was $3.1 million for the first quarter of 2025 and $3.2 million for the same period in 2024.

RESULTS OF OPERATIONS (Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024)

Net Interest Income

Banking operations are significantly dependent upon net interest income. Net interest income is the difference between interest income on interest-earning assets, such as loans and investment securities, and the interest expense on interest-bearing liabilities used to fund those assets, such as interest-bearing deposits, securities sold under agreements to repurchase, and FHLB advances. Net interest income is impacted by both changes in the amount and composition of interest-earning assets and interest-bearing liabilities, as well as market interest rates.

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See the section titled “Asset/Liability Management and Market Risk” in this section of the filing regarding the Bank’s interest rate sensitivity.

A large amount of the Company’s financial instruments track closely with, or are primarily indexed to, either the FFTR, Prime, or SOFR. These indices trended lower beginning in the first quarter of 2020 with the onset of the COVID pandemic, as the FOMC reduced the FFTR to approximately 25 basis points. During 2022 inflation rose to levels not seen in approximately 40 years. In response, the FOMC began executing a quantitative tightening program by reducing its balance sheet, selling certain types of bonds in the market, and beginning in March 2022 repeatedly increasing the FFTR until it reached its peak of 5.50% in July 2023.

While long-term interest rates initially rose in tandem with the increases to the FFTR through the middle part of 2022, they trended lower than short-term rates during the second half of 2022. Long-term rates generally maintained this lower level relative to short-term rates throughout 2023 and the first two quarters of 2024, which was generally negative for banks’ net interest income and net interest margins during that time period.

The FOMC lowered the FFTR by 50 basis points on September 19, 2024, 25 basis points on November 8, 2024, and 25 more basis points on December 19, 2024 bringing the FFTR to 4.50% as of December 31, 2024. Management believes the 50-basis-point decrease to the FFTR in September 2024 was beneficial to the Company’s net interest income and net interest margin during the fourth quarter of 2024. Management also believes that the two 25-basis-point decreases to the FFTR during the fourth quarter of 2024 were not beneficial to the Company’s net interest income and net interest margin as the Company began to reach pricing floors on certain deposit products.

Subsequent to the end of the first quarter of 2025, the President announced the implementation of tariffs against many of the US’s global trading partners. In response, the value of equity markets fell, bond markets rallied and market interest rates declined out of recession fears resulting from these tariffs and the retaliatory actions from the US’s global trading partners. In addition, many market pundits began projecting a high probability of multiple reductions to the FFTR by the FOMC throughout the remainder of 2025, as a result of the potential negative impact of the tariffs to the US economy. At this time Management is unable to project the future interest rate environment including the future shape of the yield curve, which became more inverted subsequent to quarter-end as a result of these tariffs. Management believes that, based on the Company’s current balance sheet structure, any future reductions to the FFTR will likely have a negative impact to the Company’s net interest income and net interest margin. The amount of such impact to the Company’s net interest income and net interest margin resulting from any future changes to the FFTR will be dependent upon many factors including, but not limited to, the magnitude of the continuing shift from noninterest-bearing deposits into interest-bearing deposits, the actual steepness and shape of the yield curve, future demand for the Company’s financial products, the Company’s ability to lower its deposit costs in conjunction with, and in line with the magnitude to, the decreases to the FFTR, as well as the Company’s overall future liquidity needs.

Total Company net interest income was $102.7 million during the first quarter of 2025 compared to $96.9 million during the first quarter of 2024, representing a $5.8 million or 6% increase. The Total Company net interest margin increased 41 basis points to 6.28% during the first quarter of 2025 compared to 5.87% during the first quarter of 2024.

The following were the most significant components affecting the Company’s net interest income by reportable segment:

Traditional Banking segment

The Traditional Bank’s net interest income was $53.3 million for the first quarter of 2025, a $5.1 million, or 10%, increase from $48.3 million during the first quarter of 2024 and was driven generally by a higher period-over-period net interest margin, and to a lesser degree, growth in average interest-earning assets. The Traditional Bank’s NIM increased from 3.33% during the first quarter of 2024 to 3.79% during the first quarter of 2025.

Items of note impacting the Traditional Bank’s change in net interest income and NIM between the first quarter of 2024 and the first quarter of 2025 were as follows:

●

Traditional Bank average loans declined from $4.63 billion with a weighted-average yield of 5.45% during the first quarter of 2024 to $4.58 billion with a weighted average yield of 5.61% during the first quarter of 2025. The comparison of average loans for the Traditional Bank was negatively impacted by the sale of $67 million in residential real estate loans during the second quarter of 2024 that were previously held for investment. For additional discussion of the stricter pricing strategy for new loan originations, see section titled “Loan Portfolio” in the “COMPARISON OF FINANCIAL CONDITION” of this document.

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●

Average interest-earning cash was $517 million with a weighted-average yield of 4.45% during the first quarter of 2025 compared to $454 million with a weighted-average yield of 5.57% for the first quarter of 2024. In addition, average investments were $620 million with a weighted-average yield of 3.48% during the first quarter of 2025 compared to $733 million with a weighted-average yield of 2.98% for the first quarter of 2024. In general, the Company strategically deployed a higher percentage of its proceeds from maturing investments over the past year into interest-earning cash for a better overall yield due to the inverted yield curve.

●

Further segmenting the Traditional Bank’s increased cost of interest-bearing liabilities:

o

The weighted-average cost of total interest-bearing deposits decreased from 2.68% during the first quarter of 2024 to 2.25% for the first quarter of 2025, while average interest-bearing deposit balances grew $101 million for the same periods. Included within this growth in interest-bearing deposits was a $278 million net increase in the average balances for business and consumer money market accounts, which generally pay more premium rates.

o

The average balance of FHLB borrowings decreased from $536 million for the first quarter of 2024 to $521 million for the first quarter of 2025, while the weighted-average cost of these borrowings decreased from 4.94% to 4.39% for the same time periods. The decrease in the overall weighted-average cost of FHLB borrowings resulted primarily from previous term-extension strategies implemented earlier in 2024 to take advantage of the then-inverted yield curve, as well as an approximate 100-basis point improvement in the cost of overnight borrowings as a result of Federal Reserve decreases to the Federal Funds Target Rate.

●

Average noninterest-bearing deposits decreased $87 million from the first quarter of 2024 to the first quarter of 2025. The decline in noninterest-bearing deposits is an on-going trend for banks, in general, dating back to the fourth quarter of 2022, as the overall interest rate environment highlighted by an inverted yield curve, combined with the competition for deposits, continued to make premium-rate, interest-bearing checking and savings deposits a more attractive alternative for consumer and business clients.

Management believes that any future reductions to the FFTR will likely not benefit the Traditional Bank’s net interest income and net interest margin. The amount of such impact to the Traditional Bank’s net interest income and net interest margin resulting from the most recent change and any future changes to the FFTR will be dependent upon many factors including, but not limited to, the magnitude of the continuing shift from noninterest-bearing deposits into interest-bearing deposits, the actual steepness and shape of the yield curve, future demand for the Company’s financial products, the Company’s ability to lower its deposit costs in conjunction with, and in line with the magnitude to, the decreases to the FFTR, as well as the Company’s overall future liquidity needs.

For additional discussion of the factors impacting interest-earning cash and deposit balances as well as deposit betas, see sections titled “Cash and Cash Equivalents” and “Deposits” in the “COMPARISON OF FINANCIAL CONDITION” of this document.

Warehouse Lending

Net interest income within Warehouse increased $771,000, or 34%, from the first quarter of 2024 to the first quarter of 2025. The rise in Warehouse net interest income was primarily driven by a $118 million increase in average outstanding Warehouse balances, while the Warehouse NIM remained relatively stable increasing 1 basis point from the first quarter of 2024 to the first quarter of 2025. Overall, Average outstanding Warehouse balances increased 35% from $340 million during the first quarter of 2024 to $458 million for the first quarter of 2025. Period-end committed Warehouse lines increased from $932 million to $975 million from March 31, 2024 to March 31 2025, while higher demand caused average usage rates for Warehouse lines to increase from 37% during the first quarter of 2024 to 47% for the first quarter of 2025.

Because consumer mortgage demand drives the usage of Warehouse lines of credit, overall line usage for the Warehouse segment has been sensitive, historically, to changes in interest rates on the long end of the yield curve. As a result, a decreasing interest rate environment for the long end of the yield curve could positively impact Warehouse demand if the long term interest rate declines are substantial. Alternatively, if interest rates only decline on the short-end of the yield curve, Warehouse demand would not likely be materially impacted.

Republic Payment Solutions

Net interest income from the Company’s prepaid card division increased $486,000 from the first quarter of 2024 to the first quarter of 2025. Driving this increase at RPS was a reduction in the segment’s revenue share component for the first quarter of 2025, as the

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Company’s largest marketer-servicer did not achieve the minimal contractual thresholds in order to earn a revenue share for the quarter. By contrast, this revenue share was $969,000 during the first quarter of 2024 and was recorded as interest expense in the segment’s income statement. At this time, Management is uncertain how much the revenue share component may be in the future as deposit balances originated through the segment’s largest marketer-servicer are at levels near the thresholds necessary to achieve a revenue share, making a future revenue share probable, but not certain.

Partially offsetting the positive benefit of the decreased revenue share, RPS earned a lower yield of 4.55% for its $373 million average of prepaid program balances for the first quarter of 2025 compared to a yield of 5.07% for the $375 million in average prepaid card balances for the first quarter of 2024. The lower earnings rate was driven by a decrease in the Federal Funds target rate of 100 basis points from the first quarter of 2024 to the first quarter of 2025.

Overall customer demand for the RPS segment has historically not been interest rate sensitive and therefore management does not believe a changing interest rate environment would impact origination volume for its prepaid card products. A decreasing interest rate environment, however, would likely negatively impact the Company’s internal FTP credit more than it would impact the revenue share the Company pays for the product, decreasing the segment's net interest margin. The exact amount of impact for either scenario would depend on the final internal FTP credit assigned, as well as the overall volume of balances, as the revenue share payouts are also based on overall balances tiers.

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The following table presents the average balance sheets for the three-month periods ended March 31, 2025 and 2024, along with the related calculations of tax-equivalent net interest income, net interest margin and net interest spread for the related periods.

Table 1 — Total Company Average Balance Sheets and Interest Rates



	Three Months Ended March 31, 2025						Three Months Ended March 31, 2024
	Average				Average		Average				Average
(dollars in thousands)	Balance		Interest		Rate		Balance		Interest		Rate

ASSETS

Interest-earning assets:
Federal funds sold and other interest-earning deposits	$	516,785	$	5,670	4.45	%	$	454,426	$	6,289	5.57	%
Investment securities, including FHLB stock (a)		619,525		5,311	3.48			732,678		5,436	2.98
TRS Refund Advance loans (b)		276,877		33,290	48.76			287,806		34,652	48.42
RCS LOC products (b)		45,514		12,237	109.04			41,339		11,372	110.64
Other RPG loans (c) (f)		141,130		2,004	5.76			149,818		3,295	8.85
Outstanding Warehouse lines of credit (d) (f)		458,657		7,991	7.07			340,433		6,753	7.98
All other Core Bank loans (e) (f)		4,575,790		63,335	5.61			4,634,948		62,835	5.45

Total interest-earning assets		6,634,278		129,838	7.94			6,641,448		130,632	7.91

Allowance for credit losses		(102,271)						(96,446)

Noninterest-earning assets:
Noninterest-earning cash and cash equivalents		389,994						280,618
Premises and equipment, net		32,513						33,889
Bank owned life insurance		107,599						104,305
Other assets (a)		273,643						255,758
Total assets	$	7,335,756					$	7,219,572

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest-bearing liabilities:
Transaction accounts	$	1,736,500	$	2,667	0.62	%	$	1,833,566	$	5,729	1.26	%
Money market accounts		1,348,717		9,475	2.85			1,066,046		8,807	3.32
Time deposits		413,082		3,972	3.90			373,240		3,581	3.86
Reciprocal money market and time deposits		296,373		2,478	3.39			310,898		3,232	4.18
Brokered deposits		247,319		2,786	4.57			421,096		5,647	5.39

Total interest-bearing deposits		4,041,991		21,378	2.14			4,004,846		26,996	2.71

SSUARs and other short-term borrowings		108,760		137	0.51			102,592		130	0.51
Federal Home Loan Bank advances and other long-term borrowings		520,778		5,635	4.39			536,209		6,587	4.94

Total interest-bearing liabilities		4,671,529		27,150	2.36			4,643,647		33,713	2.92

Noninterest-bearing liabilities and Stockholders’ equity:
Noninterest-bearing deposits		1,491,084						1,490,048
Other liabilities		150,299						152,835
Stockholders’ equity		1,022,844						933,042
Total liabilities and stockholders’ equity	$	7,335,756					$	7,219,572

Net interest income			$	102,688					$	96,919

Net interest spread					5.58	%					4.99	%

Net interest margin					6.28	%					5.87	%

a)	For the purpose of this calculation, the fair market value adjustment on debt securities is included as a component of other assets.

b)	Interest income for Refund Advances and RCS line-of-credit products is composed entirely of loan fees.

c)	Interest income includes loan fees of $384,000 and $1.2 million for the three months ended March 31, 2025 and 2024.

d)	Interest income includes loan fees of $310,000 and $263,000 for the three months ended March 31, 2025 and 2024.

e)	Interest income includes loan fees of $1.3 million and $1.4 million for the three months ended March 31, 2025 and 2024.

f)	Average balances for loans include the principal balance of nonaccrual loans and loans held for sale, and are inclusive of all loan premiums, discounts, fees, and costs.

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Table 2 illustrates the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities impacted Republic’s interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

Table 2 — Total Company Volume/Rate Variance Analysis


		Three Months Ended March 31, 2025
		Compared to
		Three Months Ended March 31, 2024
	Total Net		Increase / (Decrease) Due to
(in thousands)	Change		Volume		Rate

Interest income:

Federal funds sold and other interest-earning deposits	$	(619)	$	792	$	(1,411)
Investment securities, including FHLB stock		(125)		(905)		780
TRS Refund Advance loans		(1,362)		(1,314)		(48)
RCS LOC products		865		1,127		(262)
Other RPG loans		(1,291)		(182)		(1,109)
Outstanding Warehouse lines of credit		1,238		2,134		(896)
All other Core Bank loans		500		(808)		1,308
Net change in interest income		(794)		844		(1,638)

Interest expense:

Transaction accounts		(3,062)		(289)		(2,773)
Money market accounts		668		2,112		(1,444)
Time deposits		391		383		8
Reciprocal money market and time deposits		(754)		(145)		(609)
Brokered deposits		(2,861)		(2,062)		(799)
SSUARs and other short-term borrowings		7		8		(1)
Federal Home Loan Bank advances		(952)		(185)		(767)
Net change in interest expense		(6,563)		(178)		(6,385)

Net change in net interest income	$	5,769	$	1,022	$	4,747

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Provision

Total Company Provision was a net charge of $17.7 million for the first quarter of 2025 compared to a net charge of $30.6 million for the same period in 2024.

The following were the most significant components comprising the Company’s Provision by reportable segment:

Traditional Banking segment

The Traditional Banking Provision during the first quarter of 2025 was a net credit of $769,000 compared to a net charge of $358,000 for the first quarter of 2024.

The net credit of $769,000 for the first quarter of 2025 was driven, primarily, by the following:

●

The Traditional Bank recorded a credit to the Provision of $414,000 as a result of a reclassification of $5 million of consumer credit cards from loans held for investment into loans held for sale. The consumer credit card sale is expected to be completed during the second quarter of 2025.

●

The Traditional Bank recorded a net credit to the Provision of $491,000 during the first quarter of 2025 primarily related to a general improvement in the life-of-loan historical loss rates within certain categories of the Traditional Bank loan portfolio combined with a minimal net change in the Traditional Bank period-end loan balances for the quarter.

The net charge of $358,000 during the first quarter of 2024 was primarily driven by the following:

●

The Core Bank recorded a net charge to the Provision of $820,000 during the first quarter of 2024 related to general formula reserves applied to Traditional Bank loans. While loan balances at the Traditional Bank decreased in total during the first quarter, the segment experienced a change in loan mix generally growing in loan categories with higher loan loss reserve requirements. 

●

The Core Bank recorded a net charge to the Provision of $309,000 resulting from general formula reserves applied to a $124 million increase in the outstanding Warehouse spot balances during the quarter.  

●

Offsetting the above charges to Provision, the Core Bank recorded a credit to the Provision of $631,000 as a result of a reclass of $69 million of correspondent mortgage loans from loans held for investment into loans held for sale.

As a percentage of total Traditional Bank loans, the Traditional Banking ACLL was 1.29% as of March 31, 2025 compared to 1.31% as of December 31, 2024 and 1.29% as of March 31, 2024. The Company believes, based on information presently available, that it has adequately provided for Traditional Banking loan losses as of March 31, 2025.

See the sections titled “Allowance for Credit Losses” and “Asset Quality” in this section of the filing under “Comparison of Financial Condition” for additional discussion regarding the Provision and the Bank’s credit quality.

Warehouse Lending segment

Warehouse recorded a net charge to the Provision of $47,000 for the first quarter of 2025 compared to a net charge of $309,000 for the same period in 2024. Provision for both periods reflected changes in general reserves consistent with changes in outstanding period-end balances. Outstanding Warehouse period-end balances increased $19 million during the first quarter of 2025 compared to an increase of $124 million during the first quarter of 2024.

As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was 0.25% as of March 31, 2025, December 31, 2024, and March 31, 2024. The Company believes, based on information presently available, that it has adequately provided for Warehouse loan losses as of March 31, 2025.

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Tax Refund Solutions segment

TRS recorded a net charge to the Provision of $15.4 million during the 2025 Tax Season compared to a net charge of $25.8 million for the 2024 Tax Season. Substantially all TRS Provisions in both periods were related to its RA, including ERAs, product. In addition to a decrease in total RA volume driving lower estimated loan losses during the quarter, the decrease in Provision from the first quarter of 2024 to the first quarter of 2025 primarily occurred because of the following two factors:

●

Payments received from the U.S. Treasury to fund federal tax refunds through March 31, 2025 were notably better than payments received through March 31, 2024; and

●

TRS recorded a larger percentage of its total ERA Provision during the fourth quarter of 2024 than it did for ERAs during the fourth quarter of 2023, effectively leading to a lower Provision during the first quarter of 2025 than the first quarter of 2024. TRS recorded a larger percentage of its total ERA Provision during the fourth quarter of 2024 versus the fourth quarter of 2023 due to the final loss rate realized from the ERAs originated December 2023, with that final loss rate applied to the ERAs originated during December 2024 in the Company’s fourth quarter 2024 Allowance calculation.

RAs related to the 2025 Tax Season were only originated during December of 2024 and the first two months of 2025, while RAs related to the 2024 Tax Season were only originated during December of 2023 and the first two months of 2024. As of March 31, 2025 and March 31, 2024, the Company estimated Allowance for RAs was 3.22% and 3.37% of total RAs/ERAs originated for the respective tax seasons. In June 2024, the Company charged off all unpaid RAs/ERAs for the 2024 Tax Season, which equated to 3.22% of those originated. The final loss rate of RAs/ERAs for the 2024 Tax Season was 3.11% of originations.

As is the case each year as of March 31^st, the Allowance related to RAs is an estimate with that estimate finalized during the second quarter when all uncollected RAs are ultimately charged off as of June 30th. The final charge-off figures posted during the second quarter of a calendar year can be meaningfully different (higher or lower) than its March 31st estimate based on actual paydowns received from the U.S. Treasury during the second quarter. RAs collected during the second half of that year, not subject to loan loss guarantee arrangements, are recorded as recoveries of previously charged-off loans.

For factors affecting the comparison of the TRS results of operations for the first quarter of 2025 and the first quarter of 2024, see section titled “OVERVIEW (Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024) - Tax Refund Solutions.”

See additional detail regarding the RA product under Footnote 4 “Loans and Allowance for Credit Losses” of Part I Item 1 “Financial Statements.”

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Republic Credit Solutions segment

As illustrated in Table 3 below, RCS recorded a net charge to the Provision of $3.0 million during the first quarter of 2025 compared to a net charge to the Provision of $4.2 million for the same period in 2024. The decrease in the Provision was driven primarily by a $1.1 million decrease in Provision for the LOC II product. The reduction in the Provision for the LOC II product was primarily the result of a $218,000 decrease in its Allowance for the first quarter of 2025 driven by a decline in period-end loan balances during the quarter. Conversely, the LOC II Allowance increased $856,000 during the first quarter of 2024 and was driven by an increase in period-end loan balances during the quarter combined with an increase in reserve requirements based an increase in historical charge-offs at that time.

While RCS loans generally return higher yields, they also present a greater credit risk than Traditional Banking loan products. As a percentage of total RCS loans, the RCS ACLL was 17.03% as of March 31, 2025, 16.30% as of December 31, 2024, and 14.09% as of March 31, 2024. The segment continued to experience a change in loan mix, growing in categories with higher loan loss reserve requirements thus driving its higher ACLL for the quarter. The Company believes, based on information presently available, that it has adequately provided for RCS loan losses as of March 31, 2025.

The following table presents net charges to the RCS Provision by product:

Table 3 — RCS Provision by Product


	Three Months Ended Mar. 31,
(dollars in thousands)	2025		2024		$ Change		% Change

Product:
Lines of credit	$	2,989	$	4,185	$	(1,196)	(29)	%
Healthcare receivables		(22)		(4)		(18)	450
Total	$	2,967	$	4,181	$	(1,214)	(29)	%

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Table 4 — Summary of Loan and Lease Loss Experience


	Three Months Ended
	March 31,
(dollars in thousands)	2025			2024

ACLL at beginning of period	$	91,978		$	82,130

Charge-offs:

Traditional Banking:
Residential real estate		(18)			(13)
Lease financing receivables		(11)			(24)
Consumer		(242)			(345)
Total Traditional Banking		(271)			(382)
Warehouse lines of credit		—			—
Total Core Banking		(271)			(382)

Republic Processing Group:
Tax Refund Solutions:
Refund Advances		—			—
Other TRS loans		—			—
Republic Credit Solutions		(4,254)			(4,545)
Total Republic Processing Group		(4,254)			(4,545)
Total charge-offs		(4,525)			(4,927)

Recoveries:

Traditional Banking:
Residential real estate		40			59
Commercial real estate		—			20
Commercial & industrial		—			1
Lease financing receivables		5			13
Home equity		1			1
Consumer		89			108
Total Traditional Banking		135			202
Warehouse lines of credit		—			—
Total Core Banking		135			202

Republic Processing Group:
Tax Refund Solutions:
Refund Advances		691			275
Other TRS commercial & industrial loans		2			30
Republic Credit Solutions		350			370
Total Republic Processing Group		1,043			675

Total recoveries		1,178			877

Net loan recoveries (charge-offs)		(3,347)			(4,050)

Provision - Core Bank Loans		(722)			667
Provision - RPG Loans		18,394			29,955
Total Provision for All Loans		17,672			30,622
ACLL at end of period	$	106,303		$	108,702


Credit Quality Ratios - Total Company:

ACLL to total loans		2.01	%		2.08	%
ACLL to nonperforming loans		465			509
Net loan charge-offs (recoveries) to average loans		0.24			0.30

Credit Quality Ratios - Core Banking:

ACLL to total loans		1.17	%		1.20	%
ACLL to nonperforming loans		265			313
Net loan charge-offs (recoveries) to average loans		0.01			0.01

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Table 5 — Annualized Net Loan Charge-offs (Recoveries) to Average Loans by Loan Category


	Net Loan Charge-Offs (Recoveries) to Average Loans
	2025		2024

Traditional Banking:
Residential real estate:
Owner-occupied	(0.01)	%	(0.02)	%
Nonowner-occupied	—		—
Commercial real estate:
Owner-occupied	—		—
Nonowner-occupied	—		—
Multi-Family	—		—
Construction & land development	—		—
Commercial & industrial	—		—
Lease financing receivables	0.03		0.05
Aircraft	—		—
Home equity	—		—
Consumer:
Credit cards	0.39		1.54
Overdrafts	66.89		79.01
Automobile loans	(1.12)		(0.49)
Other consumer	0.09		0.48
Total Traditional Banking	0.01		0.02
Warehouse lines of credit	—		—
Total Core Banking	0.01		0.01

Republic Processing Group:
Tax Refund Solutions:
Refund Advances*	NM		NM
Other TRS commercial & industrial loans	NM		NM
Republic Credit Solutions	12.26		12.21
Total Republic Processing Group	2.80		3.25
Total	0.24	%	0.30	%

* All loss rates above are based on net charge-offs as a function of average outstanding portfolio balances. Refund Advances are originated during the first two months of each year, with all RAs charged-off by June 30^th of each year. Due to their relatively short life, RA net charge-offs are typically analyzed by the Company as a percentage of total RA originations, not as a percentage of average outstanding balances.

The Company’s net charge-offs to average total Company loans decreased from 0.30% during the first quarter of 2024 to 0.24% during the first quarter of 2025, with net charge-offs decreasing $703,000, or 17%, and average total Company loans increasing $44 million, or 1%. The $703,000 decrease in net charge-offs was driven by a $659,000 decrease in RPG net charge-offs.

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Noninterest Income

Total Company noninterest income increased $9.8 million during the first quarter of 2025 compared to the same period in 2024.

The following were the most significant components comprising the total Company’s noninterest income by reportable segment:

Traditional Banking segment

Traditional Banking’s noninterest income increased $7.1 million, or 85%, from the first quarter of 2024 compared to the first quarter of 2025. The increase in noninterest income was primarily driven by the following:

●

Mortgage Banking income increased $1.5 million from the first quarter of 2024 to the first quarter of 2025. Approximately $1.0 million of the increase was the result of a negative fair value adjustment recorded during the first quarter of 2024 related to the $69 million of correspondent loans that were redesignated from held for investment to held for sale during the quarter. The remaining $500,000 of the increase was primarily related to a $23 million increase in the volume of fixed rate loans that were sold into the secondary market during the first quarter of 2025 compared to the first quarter of 2024.

●

The Traditional Bank recorded a $4.1 million gain on sale of Visa Class B-1 shares during the quarter. The Visa Class B-1 common stock was issued to Visa’s U.S. member banks during 2008 in connection with a reorganization and Initial Public Offering.

●

The Traditional Bank recorded a $1.6 million insurance recovery related to a $1.9 million charge-off recorded during the third quarter of 2024.

In addition to the previously noted items, the Traditional Bank earns a substantial majority of its fee income related to its overdraft service program from the per item fee it assesses its customers for each insufficient-funds check or electronic debit presented for payment. The total per item fees, net of refunds, included in service charges on deposits for the three months ended March 31, 2025 and 2024 were $1.8 million and $1.7 million. The total daily overdraft charges, net of refunds, included in interest income for the three months ended March 31, 2025 and 2024 were $295,000 and $301,000.

Tax Refund Solutions segment

TRS’s noninterest income increased from $10.9 million for the first quarter of 2024 to $13.9 million for the first quarter of 2025. RT fees constituted the substantial majority of all TRS noninterest income for each of these quarters. Total RT fees increased $3.1 million during these time periods due to a 30% increase in the net revenue earned for each RT product. The better per-unit profitability was generally brought about by a select increase in prices for the product combined with a minimal change in the revenue being shared.

Noninterest Expense

Total Company noninterest expense increased to $58.2 million for the first quarter of 2025 compared to $51.0 million for first quarter of 2024.

The following were the most significant components comprising the increase in noninterest expense by reportable segment:

Traditional Banking segment

Traditional Banking noninterest expense increased $8.5 million, or 21%, for the first quarter of 2025 compared to the same period in 2024. Notable line-item variances within the noninterest expense category included:

●

Salaries and employee benefits increased by a combined $1.6 million, or 7%, driven by a $1.5 million increase in estimated bonus-related expenses. The larger estimated bonus-related expenses for the first quarter of 2025 were due to an increased probability of a larger bonus payout for the year based on the Company’s strong first quarter operating results.

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●

Equipment expenses increased $296,000, or 24%, over the first quarter of 2024. The higher expenses were primarily caused by an increase in depreciation expense due to the write-down of obsolete fixed assets related to the Company’s existing core operating system.

●

Technology expenses increased $625,000, or 13%, over the first quarter of 2024. The increase in Technology expense was generally driven by enhanced security and new ancillary systems, including approximately $229,000 in additional costs resulting from the transition to a new call center management system. Management expects to incur a net benefit in technology and communication costs in the future as a result of the new call center management system.

●

The Traditional Bank recorded $5.7 million during the first quarter of 2025 for Core Contract deconversion and consulting fees. Included within these costs were the following:

o

The Company is targeting the third quarter of 2025 to launch a new core system. Approximately $4.1 million of the $5.7 million expense was for contract negotiation assistance from a third-party consultant and was determined based on a percentage of anticipated savings over the five-year term of the new contract. Republic projects a savings in excess of $16 million over the contract’s five-year term. If the Company is unable to convert to the new Core System by the third quarter of 2025, it will likely not be able to convert until mid-2026. Such a delay would result in a postponement of the expected benefit from the new Core System’s contract savings until the new conversion date.

o

Approximately $1.6 million of this expense was related to data conversion and secondary system migration costs in preparation for the conversion to the new Core.

COMPARISON OF FINANCIAL CONDITION AS OF MARCH 31, 2025 AND DECEMBER 31, 2024

Cash and Cash Equivalents

Cash and cash equivalents include cash, deposits with other financial institutions with original maturities less than 90 days, and federal funds sold. Republic had $793 million in cash and cash equivalents as of March 31, 2025 compared to $432 million as of December 31, 2024. Comparing average balances for the first three months of 2025 and 2024, the Company had average interest-earning cash and cash equivalent balances of $517 million for the first three months of 2025 compared to $454 million for the first three months of 2024.

The increase in average interest-earning cash was a strategic decision primarily resulting from the inverted yield curve as the yield for overnight cash remained a more appealing option throughout the first quarter of 2025 than longer-term investment alternatives.

For cash held at the FRB, the Bank earns a yield on amounts more than required reserves. This cash earned a weighted-average yield of 4.45% during the first three months of 2025. For cash held within the Bank’s banking center and ATM networks, the Bank does not earn interest.

Investment Securities

Table 7 — Purchases of Investment Securities


	Three Months Ended March 31, 2025
	Purchase		Yield to	Estimated Weighted
(dollars in thousands)	Cost		Maturity	Average Life

Purchases by Class for the Three Months Ended March 31, 2024
U.S. Government Agencies	$	55,000	5.01	4.86	yrs
Mortgage-backed securities		79,584	5.20	5.53
Total	$	134,584	5.12	5.26	yrs

Republic’s total investment portfolio increased $22 million from December 31, 2024 to March 31, 2025. The increase was driven by the purchases of $135 million in securities and $2 million of FHLB stock, which were partially offset by $105 million in calls and maturities of debt securities and $10 million in paydowns on mortgage-backed securities. The Company elected to generally maintain the excess cash it received from the decline in its investment portfolio in interest-earning cash due to its more attractive yield as compared to longer-term investment options.

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Loan Portfolio

The composition of the loan portfolio follows:

Table 8 — Loan Portfolio Composition


(dollars in thousands)	March 31, 2025		December 31, 2024		$ Change		% Change

Traditional Banking:
Residential real estate:
Owner-occupied	$	1,025,461	$	1,032,459	$	(6,998)	(0.7)	%
Nonowner-occupied		311,955		318,096		(6,141)	(1.9)
Commercial real estate:
Owner-occupied		651,531		659,216		(7,685)	(1.2)
Nonowner-occupied		832,504		840,517		(8,013)	(1.0)
Multi-Family		322,725		313,444		9,281	3.0
Construction & land development		238,562		244,121		(5,559)	(2.3)
Commercial & industrial		482,955		460,245		22,710	4.9
Lease financing receivables		93,159		93,304		(145)	(0.2)
Aircraft		219,292		226,179		(6,887)	(3.0)
Home equity		365,631		353,441		12,190	3.4
Consumer:
Credit cards		11,136		16,464		(5,328)	(32.4)
Overdrafts		779		982		(203)	(20.7)
Automobile loans		1,031		1,156		(125)	(10.8)
Other consumer		9,638		9,555		83	0.9
Total Traditional Banking		4,566,359		4,569,179		(2,820)	(0.1)
Warehouse lines of credit*		569,502		550,760		18,742	3.4
Total Core Banking		5,135,861		5,119,939		15,922	0.3

*Republic Processing Group:**
Tax Refund Solutions:
Refund Advances		30,344		138,614		(108,270)	(78.1)
Other TRS commercial & industrial loans		5,841		52,180		(46,339)	(88.8)
Republic Credit Solutions		117,747		128,733		(10,986)	(8.5)
Total Republic Processing Group		153,932		319,527		(165,595)	(51.8)

Total loans**		5,289,793		5,439,466		(149,673)	(2.8)
Allowance for credit losses		(106,303)		(91,978)		(14,325)	15.6

Total loans, net	$	5,183,490	$	5,347,488	$	(163,998)	(3.1)

*Identifies loans to borrowers located primarily outside of the Bank’s market footprint.

**Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs.

Gross loans decreased by $150 million, or 3%, during the first three months of 2025 to $5.3 billion as of March 31, 2025. The most significant components comprising the change in loans by reportable segment follow:

Traditional Banking segment

Period-end balances for Traditional Banking loans decreased $3 million, or less than 1%, from December 31, 2024 to March 31, 2025. During March 2025, Management reached an agreement to sell $5 million of consumer credit cards that were previously classified as held for investment. The sale of these credit cards is expected to be completed during the second quarter of 2025.

In addition, Management has continued to generally maintain a stricter pricing strategy across all loan types due to the inverted yield curve and elevated funding costs in the market. This stricter pricing strategy has continued to lead to slower overall origination volume across most product types. Management believes it will maintain this stricter pricing strategy as long as the yield curve

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remains inverted, or flat, and incremental funding costs remain elevated. It is possible this stricter pricing policy could cause loan payoffs and paydowns to outpace new originations, leading to a decline in the Traditional Bank’s loan balances during 2025.

Warehouse Lending segment

Outstanding Warehouse period-end balances increased $19 million from December 31, 2024 to March 31, 2025. Due to the volatility and seasonality of the mortgage market, it is difficult to project future outstanding balances of Warehouse lines of credit. The growth of the Bank’s Warehouse Lending business greatly depends on the overall mortgage market and typically follows industry trends. Since its entrance into this business during 2011, the Bank has experienced volatility in the Warehouse portfolio consistent with overall demand for mortgage products. Weighted average quarterly usage rates on the Bank’s Warehouse lines have ranged from a low of 31% during the first quarter of 2023 to a high of 71% during the fourth quarter of 2019. On an annual basis, weighted-average usage rates on the Bank’s Warehouse lines have ranged from a low of 39% during 2022 to a high of 66% during 2020.

Tax Refund Solutions segment

Outstanding TRS loans decreased $155 million from December 31, 2024 to March 31, 2025 primarily reflecting the substantial paydown of ERAs originated during December 2024. In addition, TRS also received substantial paydowns of commercial loans made during the fourth quarter of 2024 to third-party tax-related businesses for their cash flow needs for the first quarter tax season. RAs, including ERAs, are only made during December of the previous year and the first two months of each year, with all unpaid RAs charged off by June 30th of each year.

Allowance for Credit Losses

As of March 31, 2025, the Bank maintained an ACLL for expected credit losses inherent in the Bank’s loan portfolio, which includes overdrawn deposit accounts. The Bank also maintained an ACLS and an ACLC for expected losses in its securities portfolio and its off-balance sheet credit exposures, respectively. Management evaluates the adequacy of the ACLL monthly, and the adequacy of the ACLS and ACLC quarterly. All ACLs are presented and discussed with the Audit Committee and the Board of Directors quarterly.

The Company’s ACLL increased to $106 million at March 31, 2025 compared to $92 million at December 31, 2024. As a percent of total loans, the total Company’s ACLL increased to 2.01% as of March 31, 2025 compared to 1.69% as of December 31, 2024. An analysis of the ACL by reportable segment follows:

Traditional Banking segment

The Traditional Banking ACLL decreased approximately $905,000 to $59 million as of March 31, 2025 driven primarily by general formula reserves applied to Traditional Bank loans. While loan balances at the Traditional Bank slightly decreased in total during the first three months of 2025, the segment experienced a decrease in its Allowance as a percentage of total loans primarily due to a reduction in reserve requirements brought about by a decrease in life-of-loan historical loss rates within the portfolio.

Warehouse Lending segment

The Warehouse ACLL remained at approximately $1 million, and the Warehouse ACLL to total Warehouse loans remained at 0.25% when comparing March 31, 2025 to December 31, 2024. As of March 31, 2025, the Warehouse ACLL was entirely qualitative in nature with no adjustments to the qualitative reserve percentage required for the first three months of 2025.

Tax Refund Solutions

TRS recorded an increase to its ACLL primarily for estimated RAs originated during the first quarter of 2025. Including ERAs originated during the fourth quarter of 2024, TRS had a total Allowance for RAs of $26.0 million as of March 31, 2025 representing 3.22% of all RAs originated related to the first quarter 2025 tax season.

RAs are only originated during December of the previous year and the first two months of the current year related to the first quarter tax season of a year. As is the case each year as of March 31st, the Allowance related to RAs is an estimate with that estimate finalized during the second quarter when all uncollected RAs are ultimately charged off as of June 30th. The final charge-off figures posted during the second quarter of a calendar year can be meaningfully different (higher or lower) than its March 31st estimate based on actual paydowns received during the second quarter. RAs collected during the second half of that year, not subject to loan loss guarantee arrangements, are recorded as recoveries of previously charged-off loans.

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Republic Credit Solutions segment

The RCS ACLL decreased $1 million to $20 million as of March 31, 2025, with this decrease driven by a decrease in the RCS LOC I and RCS LOC II spot loan balances.

RCS maintained an ACLL for two distinct credit products offered as of March 31, 2025, including its line-of-credit products and its healthcare-receivables products. As of March 31, 2025, the ACLL to total loans estimated for each RCS product ranged from as low as 0.25% for its healthcare-receivables products to as high as 70.63% for its line-of-credit products. The lower reserve percentage of 0.25% was provided for RCS’s healthcare receivables, as such receivables have recourse back to the third-party providers.

Table 9 — Management’s Allocation of the Allowance for Credit Losses on Loans


	March 31, 2025							December 31, 2024
				Percent of		Percent of					Percent of		Percent of
				Loans to		ACLL to					Loans to		ACLL to
				Total		Total					Total		Total
(dollars in thousands)		ACLL		Loans*		Loan Class			ACLL		Loans*		Loan Class*

Traditional Banking:
Residential real estate:
Owner-occupied		$	10,756	19	%	1.05	%		$	10,849	20	%	1.05
Nonowner-occupied			4,025	6		1.29				4,140	6		1.30
Commercial real estate
Owner-occupied			7,334	12		1.13				7,425	12		1.13
Nonowner-occupied			12,179	16		1.46				12,474	15		1.48
Multi-Family			2,807	6		0.87				2,657	6		0.85
Total commercial real estate			22,320	34		1.24				22,556	34		1.24
Construction & land development			8,027	5		3.36				8,227	4		3.37
Commercial & industrial			2,616	9		0.54				2,527	8		0.55
Lease financing receivables			1,054	2		1.13				1,117	2		1.20
Aircraft			554	4		0.25				565	4		0.25
Home equity			7,626	7		2.09				7,378	6		2.09
Consumer:
Credit cards			937	—		8.41				1,379	—		8.38
Overdrafts			687	—		88.19				724	—		73.73
Automobile loans			8	—		0.78				11	—		0.95
Other consumer			241	—		2.50				283	—		2.96
Total Traditional Banking			58,851	86		1.29				59,756	84		1.31
Warehouse lines of credit			1,421	11		0.25				1,374	10		0.25
Total Core Banking			60,272	97		1.17				61,130	94		1.19

Republic Processing Group:
Tax Refund Solutions:
Refund Advances			25,819	1		85.09				9,793	3		7.06
Other TRS commercial & industrial loans			162	—		2.77				68	1		0.13
Republic Credit Solutions			20,050	2		17.03				20,987	2		16.30
Total Republic Processing Group			46,031	3		29.90				30,848	6		9.65
Total		$	106,303	100		2.01			$	91,978	100		1.69

* Values of less than 50 basis points are rounded down to zero.

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Asset Quality

Classified and Special Mention Loans

The Bank applies credit quality indicators, or ratings, to individual loans based on internal Bank policies. Such internal policies are informed by regulatory standards. Loans rated “Loss,” “Doubtful,” “Substandard,” and PCD-Substandard are considered “Classified.” Loans rated “Special Mention” or PCD-Special Mention are considered Special Mention. The Bank’s Classified and Special Mention loans increased approximately $1.5 million during the first three months of 2025, driven primarily by a $3.2 million increase in residential real estate substandard loans.

See Footnote 4 “Loans and Allowance for Credit Losses” of Part I Item 1 “Financial Statements” for additional discussion regarding Classified and Special Mention loans.

Table 10 — Classified and Special Mention Loans


(dollars in thousands)	March 31, 2025		December 31, 2024		$ Change		% Change

Loss	$	—	$	—	$	—	—	%
Doubtful		—		—		—	—
Substandard		30,418		27,350		3,068	11
PCD - Substandard		1,312		1,378		(66)	(5)
Total Classified Loans		31,730		28,728		3,002	10

Special Mention		52,429		53,924		(1,495)	(3)
PCD - Special Mention		327		359		(32)	(9)
Total Special Mention Loans		52,756		54,283		(1,527)	(3)

Total Classified and Special Mention Loans	$	84,486	$	83,011	$	1,475	2	%

Nonperforming Loans

Nonperforming loans include loans on nonaccrual status and loans past due 90-days-or-more and still accruing. Nonperforming loans to total loans increased to 0.43% as of March 31, 2025 from 0.42% as of December 31, 2024, as the total balance of nonperforming loans increased by $90,000, or less than 1%, while total loans decreased $150 million during the first three months of 2025.

The ACLL to total nonperforming loans increased to 465% as of March 31, 2025 from 404% as of December 31, 2024, as the total ACLL increased $14 million and the balance of nonperforming loans increased by $90,000.

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Table 11 — Nonperforming Loans and Nonperforming Assets Summary


(dollars in thousands)	March 31, 2025			December 31, 2024

Loans on nonaccrual status*	$	22,730		$	22,619
Loans past due 90-days-or-more and still on accrual**		120			141
Total nonperforming loans		22,850			22,760
Other real estate owned		1,107			1,160
Total nonperforming assets	$	23,957		$	23,920

Credit Quality Ratios - Total Company:
ACLL to total loans		2.01	%		1.69	%
Nonaccrual loans to total loans		0.43			0.42
ACLL to nonperforming loans		465			404
Nonperforming loans to total loans		0.43			0.42
Nonperforming assets to total loans (including OREO)		0.45			0.44
Nonperforming assets to total assets		0.34			0.35

Credit Quality Ratios - Core Bank:
ACLL to total loans		1.17	%		1.19	%
Nonaccrual loans to total loans		0.44			0.44
ACLL to nonperforming loans		265			270
Nonperforming loans to total loans		0.44			0.44
Nonperforming assets to total loans (including OREO)		0.46			0.46
Nonperforming assets to total assets		0.37			0.39

*	Loans on nonaccrual status include collateral-dependent loans. See Footnote 4 “Loans and Allowance for Credit Losses” of Part I Item 1 “Financial Statements” for additional discussion regarding collateral-dependent loans.

**	Loans past due 90-days-or-more and still accruing consist of smaller balance consumer loans.

Table 12 — Nonperforming Loan Composition


	March 31, 2025					December 31, 2024
				Percent of					Percent of
				Total					Total
(dollars in thousands)	Balance			Loan Class		Balance			Loan Class

Traditional Banking:
Residential real estate:
Owner-occupied		$	17,445	1.70	%		$	17,331	1.68	%
Nonowner-occupied			57	0.02				81	0.03
Commercial real estate:
Owner-occupied			170	0.03				424	0.06
Nonowner-occupied			765	0.09				799	0.10
Multi-Family			—	—				—	—
Construction & land development			—	—				—	—
Commercial & industrial			739	0.15				860	0.19
Lease financing receivables			92	0.10				147	0.16
Aircraft			771	0.35				56	0.02
Home equity			2,686	0.73				2,359	0.67
Consumer:
Credit cards			—	—				—	—
Overdrafts			—	—				—	—
Automobile loans			4	0.39				5	0.43
Other consumer			1	0.01				557	5.83
Total Traditional Banking			22,730	0.50				22,619	0.50
Warehouse lines of credit			—	—				—	—
Total Core Banking			22,730	0.44				22,619	0.44

Republic Processing Group:
Tax Refund Solutions:
Refund Advances			—	—				—	—
Other TRS commercial & industrial loans			—	—				—	—
Republic Credit Solutions			120	0.10				141	0.11
Total Republic Processing Group			120	0.08				141	0.04

Total nonperforming loans		$	22,850	0.43	%		$	22,760	0.42	%

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Table 13 — Stratification of Nonperforming Loans


	Number of Nonperforming Loans and Recorded Investment
					Balance
		Balance			> $100 &			Balance			Total
March 31, 2025 (dollars in thousands)	No.	<= $100		No.	<= $500		No.	> $500		No.	Balance

Traditional Banking:
Residential real estate:
Owner-occupied	142	$	5,227	69	$	10,305	2	$	1,913	213	$	17,445
Nonowner-occupied	2		57	—		—	—		—	2		57
Commercial real estate:
Owner-occupied	—		—	1		170	—		—	1		170
Nonowner-occupied	—		—	2		765	—		—	2		765
Multi-Family	—		—	—		—	—		—	—		—
Construction & land development	—		—	—		—	—		—	—		—
Commercial & industrial	3		97	2		642	—		—	5		739
Lease financing receivables	3		92	—		—	—		—	3		92
Aircraft	1		81	—		—	1		690	2		771
Home equity	43		1,482	8		1,204	—		—	51		2,686
Consumer:
Credit cards	—		—	—		—	—		—	—		—
Overdrafts	—		—	—		—	—		—	—		—
Automobile loans	1		4	—		—	—		—	1		4
Other consumer	1		1	—		—	—		—	1		1
Total Traditional Banking	196		7,041	82		13,086	3		2,603	281		22,730
Warehouse lines of credit	—		—	—		—	—		—	—		—
Total Core Banking	196		7,041	82		13,086	3		2,603	281		22,730

Republic Processing Group:
Tax Refund Solutions:
Refund Advances	—		—	—		—	—		—	—		—
Other TRS commercial & industrial loans	—		—	—		—	—		—	—		—
Republic Credit Solutions	NM		120	—		—	—		—	NM		120
Total Republic Processing Group	NM		120	—		—	—		—	NM		120

Total	196	$	7,161	82	$	13,086	3	$	2,603	281	$	22,850


	Number of Nonperforming Loans and Recorded Investment
					Balance
		Balance			> $100 &			Balance			Total
December 31, 2024 (dollars in thousands)	No.	<= $100		No.	<= $500		No.	> $500		No.	Balance

Traditional Banking:
Residential real estate:
Owner-occupied	140	$	5,119	65	$	10,247	2	$	1,965	207	$	17,331
Nonowner-occupied	3		81	—		—	—		—	3		81
Commercial real estate:
Owner-occupied	—		—	2		424	—		—	2		424
Nonowner-occupied	—		—	1		275	1		524	2		799
Multi-Family	—		—	—		—	—		—	—		—
Construction & land development	—		—	—		—	—		—	—		—
Commercial & industrial	4		182	2		678	—		—	6		860
Lease financing receivables	—		—	1		147	—		—	1		147
Aircraft	1		56	—		—	—		—	1		56
Home equity	37		1,288	7		1,071	—		—	44		2,359
Consumer:
Credit cards	—		—	—		—	—		—	—		—
Overdrafts	—		—	—		—	—		—	—		—
Automobile loans	1		5	—		—	—		—	1		5
Other consumer	2		57	—		—	1		556	3		613
Total Traditional Banking	188		6,788	78		12,842	4		3,045	270		22,675
Warehouse lines of credit	—		—	—		—	—		—	—		—
Total Core Banking	188		6,788	78		12,842	4		3,045	270		22,675

Republic Processing Group:
Tax Refund Solutions:
Refund Advances	—		—	—		—	—		—	—		—
Other TRS commercial & industrial loans	—		—	—		—	—		—	—		—
Republic Credit Solutions	—		—	1		141	—		—	1		141
Total Republic Processing Group	—		—	1		141	—		—	1		141

Total	188	$	6,788	79	$	12,983	4	$	3,045	271	$	22,816

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Table 14 — Roll-forward of Nonperforming Loans


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Nonperforming loans at the beginning of the period	$	22,760	$	20,618
Loans added to nonperforming status during the period that remained nonperforming at the end of the period		3,434		1,791
Loans removed from nonperforming status during the period that were nonperforming at the beginning of the period (see table below)		(2,727)		(686)
Principal balance paydowns of loans nonperforming at both period ends		(541)		(1,012)
Net change in principal balance of other nonperforming loans*		(76)		663

Nonperforming loans at the end of the period	$	22,850	$	21,374

*	Includes relatively small consumer portfolios, e.g., RCS loans.

Table 15 — Detail of Loans Removed from Nonperforming Status


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Loans charged off	$	—	$	(13)
Loans transferred to OREO		—		(169)
Loan payoffs and paydowns		(556)		(154)
Loans returned to accrual status		(2,171)		(350)

Total loans removed from nonperforming status during the period that were nonperforming at the beginning of the period	$	(2,727)	$	(686)

Based on the Bank’s review as of March 31, 2025, management believes that its reserves are adequate to absorb expected losses on all nonperforming loans.

Delinquent Loans

Total Company delinquent loans to total loans decreased to 0.33% as of March 31, 2025 from 0.38% as of December 31, 2024. Core Bank delinquent loans to total Core Bank loans decreased to 0.18% as of March 31, 2025 from 0.20% as of December 31, 2024. With the exception of small-dollar consumer loans, all Traditional Bank loans past due 90-days-or-more as of March 31, 2025 and December 31, 2024 were on nonaccrual status.

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Table 16 — Delinquent Loan Composition*


	March 31, 2025					December 31, 2024
				Percent of					Percent of
				Total					Total
(dollars in thousands)	Balance			Loan Class		Balance			Loan Class

Traditional Banking:
Residential real estate:
Owner-occupied		$	6,568	0.64	%		$	7,015	0.68	%
Nonowner-occupied			—	—				21	0.01
Commercial real estate:
Owner-occupied			276	0.04				244	0.04
Nonowner-occupied			—	—				275	0.03
Multi-Family			—	—				—	—
Construction & land development			—	—				—	—
Commercial & industrial			751	0.16				904	0.20
Lease financing receivables			160	0.17				75	0.08
Aircraft			—	—				—	—
Home equity			1,075	0.29				1,396	0.39
Consumer:
Credit cards			30	0.27				28	0.17
Overdrafts			118	15.15				173	17.62
Automobile loans			—	—				11	0.95
Other consumer			53	0.55				43	0.45
Total Traditional Banking			9,031	0.20				10,185	0.22
Warehouse lines of credit			—	—				—	—
Total Core Banking			9,031	0.18				10,185	0.20

Republic Processing Group:
Tax Refund Solutions:
Refund Advances			—	—				—	—
Other TRS commercial & industrial loans			21	0.36				—	—
Republic Credit Solutions			8,261	7.02				10,304	8.00
Total Republic Processing Group			8,282	5.38				10,304	3.22

Total delinquent loans		$	17,313	0.33	%		$	20,489	0.38	%

* Represents total loans 30-days-or-more past due. Delinquent status may be determined by either the number of days past due or number of payments past due.

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Table 17 — Roll-forward of Delinquent Loans


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Delinquent loans at the beginning of the period	$	20,489	$	22,092
Loans that became delinquent during the period - Refund Advances*		—		—
Loans added to delinquency status during the period and remained in delinquency status at the end of the period		3,412		2,499
Loans removed from delinquency status during the period that were in delinquency status at the beginning of the period (see table below)		(4,496)		(2,250)
Principal balance paydowns of loans delinquent at both period ends		(103)		(598)
Net change in principal balance of other delinquent loans**		(1,989)		(331)
Delinquent loans at the end of period	$	17,313	$	21,412

*	RAs do not have a contractual due date but the Company considers a RA delinquent if it remains unpaid 35 days after the taxpayer’s tax return is submitted to the applicable taxing authority.

**	Includes relatively small consumer portfolios, e.g., RCS loans.

Table 18 — Detail of Loans Removed from Delinquent Status


	Three Months Ended
	March 31,
(in thousands)	2025		2024

Loans charged off	$	—	$	(15)
Loans transferred to OREO		—		(169)
Loan payoffs and paydowns		(1,456)		(89)
Loans paid current		(3,040)		(1,977)

Total loans removed from delinquency status during the period that were in delinquency status at the beginning of the period	$	(4,496)	$	(2,250)

Deposits

Table 19 — Deposit Composition


(dollars in thousands)	March 31, 2025		December 31, 2024		$ Change		% Change

Core Bank:
Demand	$	1,217,881	$	1,166,517	$	51,364	4	%
Money market accounts		1,362,185		1,295,024		67,161	5
Savings		236,290		238,596		(2,306)	(1)
Reciprocal money market		228,804		212,033		16,771	8
Individual retirement accounts (1)		34,766		34,543		223	1
Time deposits, $250 and over (1)		133,080		129,593		3,487	3
Other certificates of deposit (1)		257,843		239,643		18,200	8
Reciprocal time deposits (1)		74,354		80,016		(5,662)	(7)
Wholesale brokered deposits (1)		87,317		87,285		32	0
Total Core Bank interest-bearing deposits		3,632,520		3,483,250		149,270	4
Total Core Bank noninterest-bearing deposits		1,149,353		1,123,208		26,145	2
Total Core Bank deposits		4,781,873		4,606,458		175,415	4

Republic Processing Group:
Wholesale brokered deposits (1)		17,252		199,964		(182,712)	(91)
Interest-bearing prepaid card deposits		358,594		296,921		61,673	21
Money market accounts		22,292		22,647		(355)	(2)
Total RPG interest-bearing deposits		398,138		519,532		(121,394)	(23)

Noninterest-bearing prepaid card deposits		4,281		2,842		1,439	51
Other noninterest-bearing deposits		221,600		81,714		139,886	171
Total RPG noninterest-bearing deposits		225,881		84,556		141,325	167
Total RPG deposits		624,019		604,088		19,931	3

Total deposits	$	5,405,892	$	5,210,546	$	195,346	4	%

(1)	Includes time deposits

Total period-end deposits increased $195 million from December 31, 2024 to $5.4 billion as of March 31, 2025, with Core Bank period-end deposits increasing $175 million and RPG period-end deposits increasing $20 million.

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Within the Core Bank noninterest-bearing deposits increased by $26 million for the quarter with interest-bearing deposits increasing by $149 million during the same period. The increase in Core Bank interest-bearing deposits was driven by $124 million of growth in interest-bearing IOLTA, business and consumer money market accounts, which generally pay premium rates above sheet pricing.

While the Core Bank period-end noninterest-bearing deposits increased $26 million for the quarter, the average balances of Core Bank noninterest-bearing deposits decreased $81 million from the fourth quarter of 2024 to the first quarter of 2025. Overall, the Core Bank’s noninterest-bearing deposits have experienced a general quarterly decline in balances dating back to the fourth quarter of 2022. At this time, Management is unsure whether the increase in Core Bank period-end noninterest-bearing deposits represents a temporary reversal of this long-term decline in balances or a possible change in momentum going forward.

Within RPG, the $20 million increase in period-end deposit balances was the net result of the following notable fluctuations:

●

Noninterest-bearing deposits at TRS increased $161 million driven by short-term tax refund deposits from RTs;

●

Interest-bearing deposits at TRS declined $200 million due to the maturity of short-term brokered deposits used to partially fund RA and ERA loan volume for the 2025 Tax Season;

●

Total deposits at RCS increased $7 million due to an increase in excess deposits held at the Bank by the segment’s marketer-servicers; and

●

Prepaid card balances increased by approximately $51 million due primarily to growth in balances from the segment’s largest marketer-servicer.

Federal Home Loan Bank Advances

The Bank’s total FHLB advances were $370 million as of March 31, 2025 compared to $395 million as of December 31, 2024. There were no overnight borrowings as of March 31, 2025 compared to $25 million as of December 31, 2024. The Company has utilized FHLB advances over the past year to partially fund its noninterest-bearing deposit outflow and overall loan growth.

As of March 31, 2025, the Company’s $370 million of FHLB advances had a weighted-average maturity of 3.11 years and a weighted-average cost of 4.35%, both including the impact of the related swaps. Overall use of FHLB advances during a given year is dependent upon many factors including asset growth, deposit growth, current earnings, and expectations of future interest rates, among others.

Interest Rate Swaps

The Bank enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments, the Bank enters into offsetting positions in order to minimize the Bank’s interest rate risk. These swaps are derivatives, but are not designated as hedging instruments, and therefore changes in fair value are reported in current year earnings.

In addition, as noted in the section above, the Company entered into $100 million of notional amount balance sheet related interest rate swaps during the second quarter of 2024 in order to take advantage of the more attractive long-term pricing resulting from the inverted yield.

See Footnote 11 “Interest Rate Swaps” of Part I Item 1 “Financial Statements” for additional discussion regarding the Bank’s interest rate swaps.

Liquidity

The Bank maintains sufficient liquidity to fund routine loan demand and routine deposit withdrawal activity. Liquidity is managed by maintaining sufficient liquid assets, primarily in the form of cash, cash equivalents, and unencumbered investment securities. Funding and cash flows can also be realized through deposit product promotions, the sale of AFS debt securities, principal paydowns on loans and mortgage-backed securities, and proceeds realized from loans held for sale.

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Table 20 — Liquid Assets and Borrowing Capacity

The Bank’s liquid assets and borrowing capacity included the following:


(in thousands)	March 31, 2025		December 31, 2024

Cash and cash equivalents	$	793,020	$	432,151
Unencumbered debt securities		408,777		432,183
Total liquid assets		1,201,797		864,334

Available borrowing capacity with the FHLB		749,652		755,288
Available borrowing capacity with the Federal Reserve		47,106		45,880
Available borrowing capacity through unsecured credit lines		100,000		100,000
Total available borrowing capacity		896,758		901,168

Total liquid assets and available borrowing capacity	$	2,098,555	$	1,765,502

The Company generally carried higher average interest-earning cash balances during the first three months of 2025 as the result of a strategic decision to maintain additional on-balance sheet liquidity above required minimums in response to the uncertainty of the economic environment.

The Bank had a period-end loan-to-deposit ratio (excluding brokered deposits) of 100% as of March 31, 2025 and 111% as of December 31, 2024. Republic’s banking centers and its website, www.republicbank.com, provide access to retail deposit markets. These retail deposit products, if offered at attractive rates, have historically been a source of additional funding when needed. If the Bank were to lose a significant funding source, such as a few major depositors, or if any of its lines of credit were cancelled, or if the Bank cannot obtain brokered deposits, the Bank would be compelled to offer market leading deposit interest rates to meet its funding and liquidity needs.

As of March 31, 2025, the Bank had approximately $1.2 billion in deposits from 224 large non-sweep deposit relationships, including reciprocal deposits, where the individual relationship exceeded $2 million for a depositor’s taxpayer identification number. Total uninsured deposits for the Bank were $1.9 billion, or 36%, of total deposits as of March 31, 2025. The 20 largest non-sweep deposit relationships represented approximately $378 million, or 7%, of the Company’s total deposit balances as of as of March 31, 2025. These accounts do not require collateral; therefore, cash from these accounts can generally be utilized to fund the loan portfolio. If any of these balances were moved from the Bank, the Bank would likely utilize overnight borrowing lines in the short-term to replace the balances. On a longer-term basis, the Bank would likely utilize wholesale-brokered deposits to replace withdrawn balances, or alternatively, higher-cost internet-sourced deposits. Based on past experience utilizing brokered deposits and internet-sourced deposits, the Bank believes it can quickly obtain these types of deposits if needed. The overall cost of gathering these types of deposits, however, could be substantially higher than the Traditional Bank deposits they replace, potentially decreasing the Bank’s earnings.

The Bank’s liquidity is impacted by its ability to sell certain investment securities, which is limited due to the level of investment securities that are needed to secure public deposits, securities sold under agreements to repurchase, FHLB borrowings, and for other purposes, as required by law. As of March 31, 2025 and December 31, 2024, these pledged investment securities had a fair value of $201 million and $152 million.

Capital

Total stockholders’ equity increased from $992 million as of December 31, 2024 to $1.0 billion as of March 31, 2025. The increase in stockholders’ equity was primarily attributable to net income earned during the first three months of 2025 reduced primarily by cash dividends declared.

Common Stock — The Class A Common shares are entitled to cash dividends equal to 110% of the cash dividend paid per share on Class B Common Stock. Class A Common shares have one vote per share and Class B Common shares have ten votes per share. Class B Common shares may be converted, at the option of the holder, to Class A Common shares on a share for share basis. The Class A Common shares are not convertible into any other class of Republic’s capital stock.

Dividend Restrictions — The Parent Company’s principal source of funds for dividend payments are dividends received from RB&T. Banking regulations limit the amount of dividends that may be paid to the Parent Company by the Bank without prior approval of the respective states’ banking regulators. Under these regulations, the amount of dividends that may be paid in any calendar year is limited

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to the current year’s net profits, combined with the retained net profits of the preceding two years. As of April 1, 2025, RB&T could, without prior approval, declare dividends of approximately $131 million. Any payment of dividends in the future will depend, in large part, on the Company’s earnings, capital requirements, financial condition, and other factors considered relevant by the Company’s Board of Directors.

Regulatory Capital Requirements — The Company and the Bank are subject to capital regulations in accordance with Basel III, as administered by banking regulators. Regulatory agencies measure capital adequacy within a framework that makes capital requirements, in part, dependent on the individual risk profiles of financial institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on Republic’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Parent Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items, as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators regarding components, risk weightings, and other factors.

Banking regulators have categorized the Bank as well capitalized. For prompt corrective action, the regulations in accordance with Basel III define “well capitalized” as a 10.0% Total Risk-Based Capital ratio, a 6.5% Common Equity Tier 1 Risk-Based Capital ratio, an 8.0% Tier 1 Risk-Based Capital ratio, and a 5.0% Tier 1 Leverage ratio. Additionally, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, the Company and Bank must hold a capital conservation buffer of 2.5% composed of Common Equity Tier 1 Risk-Based Capital above their minimum risk-based capital requirements.

Republic continues to exceed the regulatory requirements for Total Risk-Based Capital, Common Equity Tier I Risk-Based Capital, Tier I Risk Based-Capital, and Tier I Leverage Capital. Republic and the Bank intend to maintain a capital position that meets or exceeds the “well-capitalized” requirements as defined by the FRB and the FDIC, in addition to the Capital Conservation Buffer. Republic’s average stockholders’ equity to average assets ratio was 13.94% as of March 31, 2025 and 14.21% as of December 31, 2024. Formal measurements of the capital ratios for Republic and the Bank are performed by the Company at each quarter end.

Table 21 — Capital Ratios (1)


	As of March 31, 2025				As of December 31, 2024
(dollars in thousands)	Amount		Ratio		Amount		Ratio

Total capital to risk-weighted assets
Republic Bancorp, Inc.	$	1,078,747	17.84	%	$	1,042,149	16.98	%
Republic Bank & Trust Company		1,023,378	16.94			989,800	16.14

Common equity tier 1 capital to risk-weighted assets
Republic Bancorp, Inc.	$	1,002,818	16.58	%	$	965,243	15.73	%
Republic Bank & Trust Company		947,449	15.68			912,968	14.89

Tier 1 (core) capital to risk-weighted assets
Republic Bancorp, Inc.	$	1,002,818	16.58	%	$	965,243	15.73	%
Republic Bank & Trust Company		947,449	15.68			912,968	14.89

Tier 1 leverage capital to average assets
Republic Bancorp, Inc.	$	1,002,818	13.75	%	$	965,243	14.07	%
Republic Bank & Trust Company		947,449	12.97			912,968	13.29

(1)

The Company and the Bank elected in 2020 to defer the impact of CECL on regulatory capital. The deferral period is five years, with the total estimated CECL impact 100% deferred for the first two years, then phased in over the next three years. If not for this election, the Company’s regulatory capital ratios would have been approximately 0 basis points lower than those presented in the table above as of March 31, 2025 and approximately 3 basis points lower than those presented in the table above as of December 31, 2024.

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Asset/Liability Management and Market Risk

Asset/liability management is designed to ensure safety and soundness, maintain liquidity, meet regulatory capital standards, and achieve acceptable net interest income based on the Bank’s risk tolerance. Interest rate risk is the exposure to adverse changes in net interest income as a result of market fluctuations in interest rates. The Bank, on an ongoing basis, monitors interest rate and liquidity risk in order to implement appropriate funding and balance sheet strategies. Management considers interest rate risk to be a significant risk to the Bank’s overall earnings and balance sheet.

The interest sensitivity profile of the Bank at any point in time will be impacted by a number of factors. These factors include the mix of interest sensitive assets and liabilities, as well as their relative pricing schedules. It is also influenced by changes in market interest rates, deposit and loan balances, and other factors.

The Bank utilizes earnings simulation models as tools to measure interest rate sensitivity, including both a static and dynamic earnings simulation model. A static simulation model is based on current exposures and assumes a constant balance sheet. In contrast, a dynamic simulation model relies on detailed assumptions regarding changes in existing business lines, new business, and changes in management and customer behavior. While the Bank runs the static simulation model as one measure of interest rate risk, historically, the Bank has utilized its dynamic earnings simulation model as its primary interest rate risk tool to measure the potential changes in market interest rates and their subsequent effects on net interest income for a one-year time period. This dynamic model projects a “Base” case net interest income over the next 12 months and the effect on net interest income of instantaneous movements in interest rates between various basis point increments equally across all points on the yield curve. Many assumptions based on growth expectations and on the historical behavior of the Bank’s deposit and loan rates and their related balances in relation to changes in interest rates are incorporated into this dynamic model. These assumptions are inherently uncertain and, as a result, the dynamic model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to the actual timing, magnitude and frequency of interest rate changes, the actual timing and magnitude of changes in loan and deposit balances, as well as the actual changes in market conditions and the application and timing of various management strategies as compared to those projected in the various simulated models. Additionally, actual results could differ materially from the model if interest rates do not move equally across all points on the yield curve.

As of March 31, 2025, a dynamic simulation model was run for interest rate changes from “Down 400” basis points to “Up 400” basis points. The following table illustrates the Bank’s projected percent change from its Base net interest income over the period beginning April 1, 2025 and ending March 31, 2026 based on instantaneous movements in interest rates from Down 400 to Up 400 basis points equally across all points on the yield curve. The Bank’s dynamic earnings simulation model includes secondary market loan fees, which are a component of mortgage banking income within noninterest income and excludes Traditional Bank loan fees.

Table 22 — Bank Interest Rate Sensitivity


	Change in Rates
	-400		-300		-200		-100		+100		+200		+300		+400
	Basis Points		Basis Points		Basis Points		Basis Points		Basis Points		Basis Points		Basis Points		Basis Points

% Change from base net interest income as of March 31, 2025	(2.3)	%	(2.3)	%	(5.5)	%	(2.8)	%	3.0	%	6.1	%	8.9	%	12.0	%
% Change from base net interest income as of December 31, 2024	3.4	%	4.4	%	(0.2)	%	0.2	%	1.5	%	3.1	%	4.4	%	6.0	%

Notable changes for the Bank’s interest rate sensitivity projections from December 31, 2024 to March 31, 2025 occurred in all scenarios. In general, the period-to-period improvements in the up-rate scenarios were generally tied to the Company’s average interest-earning cash balances, which increased from December 2024 to March 2025. As a result, the Bank’s earnings are more sensitive to fluctuations in short-term interest rates. Additionally, a reduction in short-term variable rate borrowings also contributed to the improvement. The benefit from the higher interest-earning cash balances was partially offset by lower projected interest income on loans as loan growth assumptions were lowered based on recent trends.

In the down-rate scenarios, the Company’s interest rate risk position notably deteriorated as the higher interest-earning cash balances that benefited net interest income in the up-rate scenarios are projected to cause similar corresponding declines to net interest income in the down-rate rate scenarios. In addition, the Company’s projected net interest income in down-rate scenarios for March 31, 2025 was also negatively impacted by revisions to the Bank’s deposit beta assumptions, as the Bank assumed a lower beta for deposit costs associated with its premium rate products. The Bank assumed this lower beta for its premium rate deposit products in anticipation of greater competition for deposits and liquidity in a declining interest rate environment. The lower net interest income in the down-rate

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scenarios is partially offset by assumed increases in mortgage banking income as rates fall and more borrowers gain incentive to refinance.

For additional discussion regarding the Bank’s net interest income, see the sections titled “Net Interest Income” in this section of the filing under “RESULTS OF OPERATIONS (Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024).”

Item 3.Quantitative and Qualitative Disclosures about Market Risk.

Information required by this item is included under Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Item 4.Controls and Procedures.

As of the end of the period covered by this report, an evaluation was carried out by Republic Bancorp, Inc.’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report. In addition, no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.Legal Proceedings.

In the ordinary course of operations, Republic and the Bank are defendants in various legal proceedings. There is no proceeding, pending, or threatened litigation in which Republic and the Bank are a defendant, to the knowledge of management, in which an adverse decision could result in a material adverse change in the business or consolidated financial position of Republic or the Bank.

Item 1A.Risk Factors.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Except for the additional risk factor information described below, there have been no material changes in the Company’s risk factors as previously disclosed in Part 1, “Item 1A. Risk Factors” of its Annual Report on Form 10-K for the year ended December 31, 2024. You should carefully consider the risk factors discussed below and in Republic’s 2024 Form 10-K, which could materially affect the Company’s business, financial condition and results of operations in the future.

The Company plans to convert its core customer operating system during the 3^rd quarter of 2025 and could encounter significant adverse developments. The Company plans to replace its core customer operating system (the “Core System”). The Core System, among many other functions, is used to track customer relationships, deposit accounts, and loan accounts. The Core System is integrated with many other customer-facing applications and ancillary back-office systems that are used to service customers. Changing the Core System will subject the Company to operational risks during and after the conversion, which may adversely impact the Company’s customers, including, but not limited to, possible disruptions to technology systems, loss of data, improperly posted transactions and the inability to correct transaction errors. While the Company has plans and procedures designed to prevent or limit the risks of a failure during and after the conversion of our Core System, there can be no assurance that any such adverse development(s) will not occur or, if they do occur, that they will be timely and adequately remediated. The ultimate impact of any adverse development could result in the write-off of unidentified outages, damage the Company's reputation, result in a loss of customer business, subject the Company to regulatory scrutiny, and expose it to civil litigation and possible financial liability, any of which could have a material adverse effect on the Company’s business, financial condition, and results of operations.

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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

Details of Republic’s Class A Common Stock purchases during the first quarter of 2025 are included in the following table:


				Total Number of	Maximum Number
				Shares Purchased	of Shares that May
				as Part of Publicly	Yet Be Purchased
	Total Number of	Average Price		Announced Plans	Under the Plan
Three Months Ended March 31, 2025	Shares Purchased	Paid Per Share		or Programs	or Programs

January 1 - January 31	—	$	—	—	434,410
February 1 - February 28	—		—	—	434,410
March 1 - March 31	—		—	—	434,410
Total	—	$	—	—	434,410

The Company did not repurchase any of its shares during the first quarter of 2025. In addition, in connection with employee stock awards, there were 2,775 shares withheld upon exercise of stock options to satisfy the withholding taxes. On January 24, 2024, the Board of Directors of Republic Bancorp, Inc. increased the Company’s existing authorization to purchase shares of its Class A Common Stock by 400,000 shares. The repurchase program will remain effective until the total number of shares authorized is repurchased or until Republic’s Board of Directors terminates the program. As of March 31, 2025 the Company had 434,410 shares which could be repurchased under its current share repurchase programs.

During the first quarter of 2025, there were no shares of Class A Common Stock issued upon conversion of shares of Class B Common Stock by stockholders of Republic in accordance with the share-for-share conversion option of the Class B Common Stock. The exemption from registration of newly issued Class A Common Stock relies upon Section (3)(a)(9) of the Securities Act of 1933.

There were no equity securities of the registrant sold without registration during the quarter covered by this report.

Item 5.Other Information.

Rule 10b5-1 Trading Plans

During the three months ended March 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

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Item 6.Exhibits.

The following exhibits are filed or furnished as a part of this report:


Exhibit Number		Description of Exhibit

31.1		Certification of Principal Executive Officer pursuant to the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002

32*		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following financial statements from the Company’s quarterly report on Form 10-Q were formatted in iXBRL(Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, (ii) Consolidated Statements of Income and Comprehensive Income for the Three months ended March 31, 2025 and 2024, (iii) Consolidated Statements of Stockholders’ Equity for the Three months ended March 31, 2025 and 2024, (iv) Consolidated Statements of Cash Flows for the Three months ended March 31, 2025 and 2024 and (v) Notes to Consolidated Financial Statements

104		Cover Page Interactive Data File formatted in iXBRL and contained in Exhibit 101.

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			REPUBLIC BANCORP, INC.
			(Registrant)

			Principal Executive Officer:


Date: May 8, 2025			/s/ Steven E. Trager
			By: Steven E. Trager
			Executive Chair and Chief Executive Officer


			Principal Financial Officer:


Date: May 8, 2025			/s/ Kevin Sipes
			By: Kevin Sipes
			Executive Vice President, Chief Financial
			Officer and Chief Accounting Officer