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REPUBLIC BANCORP INC /KY/ (RBCAA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a clean beat on EPS and net revenue, driven by Core Bank NIM expansion and strong performance across all five segments; diluted EPS was $1.61 vs S&P Global consensus $1.435 (+13%), and Total Net Revenue (GAAP) was $93.85M vs S&P Global consensus $93.25M (+0.6%). Values retrieved from S&P Global*
  • Core Bank NIM improved to 3.72% (from 3.46% YoY) as deposit costs moderated and asset yields rose; Traditional Banking and Warehouse Lending net interest income increased YoY by $6.5M and $0.6M, respectively .
  • RPG (TRS, RPS, RCS) net income rose 25% YoY to $12.8M, aided by lower TRS Provision, an RPS revenue-share elimination, and higher RCS profitability on a key LOC product .
  • Operational catalysts: technology investments (call center management system) temporarily lifted Tech expenses (+16% YoY), but management expects net benefit to Tech/communication costs ahead; core system conversion remains targeted for Q3 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • NIM expansion and deposit cost moderation: “Our strategic pricing discipline continued to produce results – driving increased asset yields and cost of funds moderation,” leading to Core Bank NIM rising from 3.46% to 3.72% .
    • Broad-based segment strength: “All five of our reporting segments posting strong results for the quarter,” with RPG net income +25% YoY to $12.8M .
    • Credit quality stable at Core Bank: nonperforming loans/total loans 0.41% and annualized net charge-offs 0.02%, reflecting favorably low charge-offs .

  • What Went Wrong

    • Technology expenses elevated: Tech expense +$1.0M (+16% YoY) due to enhanced security and call center system transition (timing headwind until net benefit realized) .
    • Traditional Bank average loans slightly lower YoY (-$35M) given prior sale of residential real estate loans held for investment, tempering average loan growth .
    • Decline in noninterest-bearing deposits: average noninterest-bearing down $29M YoY amid an inverted curve and deposit competition pushing clients to premium-rate interest-bearing accounts .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Net Revenue (GAAP) ($USD Millions)$86.88 $135.84 $93.85
Diluted EPS (Class A) ($)$1.30 $2.42 $1.61
Net Interest Margin – Total Company (%)4.36 6.28 4.61
Efficiency Ratio – GAAP-derived (%)57.1 42.8 55.0
ROA (%)1.50 2.61 1.79
ROE (%)10.57 18.74 11.96

Results vs consensus (S&P Global):

MetricConsensusActualBeat/Miss
EPS (Primary)$1.435*$1.61 Beat
Revenue$93.25M*$93.85M Beat
Values retrieved from S&P Global*

Segment breakdown (Net income):

SegmentQ2 2024 ($USD Millions)Q2 2025 ($USD Millions)
Traditional Banking$13.63 $16.86
Warehouse Lending$1.38 $1.83
Total Core Bank$15.01 $18.69
Tax Refund Solutions (TRS)$3.07 $3.31
Republic Payment Solutions (RPS)$2.10 $2.44
Republic Credit Solutions (RCS)$5.03 $7.04
Total RPG$10.20 $12.80
Total Company$25.21 $31.48

KPIs and credit quality:

KPIQ2 2024Q1 2025Q2 2025
Core Bank NIM (%)3.46 3.70 3.72
Nonperforming Loans / Total Loans – Total Company (%)0.39 0.43 0.40
Delinquent Loans / Total Loans – Total Company (%)0.37 0.33 0.36
Allowance for Credit Losses / Total Loans – Total Company (%)1.53 2.01 1.52
Annualized NCOs / Average Loans – Total Company (%)2.52 0.24 1.99

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core system conversion timelineQ3 2025Targeting Q3 2025 launch Targeting Q3 2025 launch (no update in Q2 release) Maintained
Technology/communication costs (call center system)Forward periodsTransition underway; expected savings over time Management expects net benefit in Tech and communication costs from new call center management system Clarified positive outlook
Cash dividend per share (Class A)Payable Oct 17, 2025$0.451 in prior quarter $0.451 declared; record Sep 19, 2025 Maintained
Cash dividend per share (Class B)Payable Oct 17, 2025$0.410 in prior quarter $0.410 declared; record Sep 19, 2025 Maintained

No formal revenue, margin, OpEx, OI&E, tax rate ranges provided in the Q2 materials .

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript was available in our catalog.

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
NIM expansionCore Bank NIM rose 3.40%→3.64% in Q4’24; pricing discipline; deposit mix support Core Bank NIM rose 3.46%→3.72% YoY; cost of deposits down; asset yields up Improving
Deposit cost moderation, mixQ1’25 cost of interest-bearing deposits down to 2.26%; money market growth; lower brokered deposits Cost of interest-bearing deposits down to 2.34%; money market balances up; listing deposits down Improving
Warehouse lending demandQ4’24 usage 37%→59% YoY; balances +49% Q2’25 usage 49%→57%; average balances +24% YoY Strong
Technology initiativesQ1’25: core conversion targeted Q3’25; consulting and migration costs; call center system transition Q2’25: Tech expenses +16% YoY; management expects net cost benefit ahead Near-term cost uptick; medium-term savings
Macro/tariffsManagement flagged “global tariff uncertainty” as a concern in Q1’25 No new macro/tariff specifics in Q2’25 release Watchful
Credit qualityCore Bank NCOs low; NPLs stable (Q4’24/Q1’25) NPLs/loans 0.41%; annualized NCOs 0.02% at Core Bank Stable/Strong
RPG economicsQ4’24: TRS ERA loss cap guarantee; fee adjustments; RPS revenue share began Jan’24 Q2’25: TRS Provision credit; RPS no revenue-share; RCS LOC profitability up Favorable mix shift

Management Commentary

  • “We are pleased to report strong second quarter operating results… strategic pricing discipline continued to produce results – driving increased asset yields and cost of funds moderation… Core Bank Net Interest Margin (“NIM”) expansion during the quarter” — Logan Pichel, President & CEO .
  • “We are extremely proud of our first quarter 2025 performance… solid safety and soundness metrics… entering a period of economic uncertainty [global tariff uncertainty]” — Logan Pichel, Q1 2025 .
  • Branding: “Republic Bank. Time to Thrive.™ perfectly encapsulates our mission…” — Q2 press release .

Q&A Highlights

  • Q2 2025 earnings call transcript not available in our dataset; no public Q&A documented [functions List/Read results: 0 transcripts]. Guidance clarifications were provided via press materials (technology cost outlook; dividend declaration) .

Estimates Context

  • EPS: Actual diluted EPS $1.61 vs S&P Global consensus $1.435 — a beat likely supported by NIM expansion and lower Core Bank Provision . Values retrieved from S&P Global*
  • Revenue: Company’s Total Net Revenue (GAAP) $93.85M vs S&P Global Revenue consensus $93.25M — slight beat; note company presents net revenue while third-party may define revenue differently . Values retrieved from S&P Global*
  • FY framework: S&P Global target price consensus $75 (one estimate) and FY 2025 normalized EPS consensus $6.85; FY 2026 EPS $6.105 (limited coverage) Values retrieved from S&P Global*

Where estimates may adjust:

  • Upward bias to near-term EPS from demonstrated NIM resilience and segment outperformance (particularly RCS), tempered by Tech expense timing and TRS seasonality/Provision variability .

Key Takeaways for Investors

  • EPS and net revenue beat vs consensus; quality of beat driven by Core Bank NIM expansion and disciplined deposit pricing, not one-time items alone .
  • Core Bank fundamentals improving: asset yields up, deposit costs down, Warehouse utilization high; supports sustained NIM resilience into 2H if rate environment stable .
  • RPG tailwinds: TRS Provision credit, RPS revenue-share elimination, and RCS LOC profitability gains diversify earnings beyond traditional banking .
  • Credit quality remains strong at Core Bank (NPLs ~0.41%; very low NCOs), reducing earnings volatility from credit costs .
  • Near-term OpEx watch: Tech expenses elevated due to security and system transitions, but management expects net benefit in Tech/communication costs—monitor margin impact as savings materialize .
  • Dividend maintained ($0.451 Class A; $0.410 Class B), signaling capital strength and confidence in cash generation .
  • Medium-term catalysts: Q3’25 core system conversion target and branding refresh (“Time to Thrive™”) may enhance efficiency and client acquisition—evaluate execution milestones and realized savings vs plan .