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REPUBLIC BANCORP INC /KY/ (RBCAA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 net income rose 12% year over year to $29.7M, with diluted EPS of $1.52; ROA/ROE were 1.69%/10.91% .
  • Net interest margin expanded materially: Total Company NIM reached 4.65% vs 4.61% in Q2 2025 and 4.49% in Q3 2024; Core Bank NIM was 3.78% vs 3.72% and 3.53% respectively, driven by deposit cost moderation and balance sheet pricing discipline .
  • Against S&P Global consensus, EPS beat ($1.52 vs $1.405) while revenue was broadly in line/slightly below ($~$93.5M reported net revenue vs $92.35M consensus revenue; S&P’s “Revenue” series recorded $91.5M actual); the beat was primarily from NIM expansion and lower Provision at the Core Bank . Values retrieved from S&P Global.
  • Operating expenses rose on technology and branding investments; management now targets the core system conversion in Q4 (from prior Q3 target) and expects marketing expenses near current levels to continue, with technology costs to benefit longer term from the new call center and core conversion .
  • Dividend maintained at $0.451 (Class A) and $0.41 (Class B), payable Jan 16, 2026; near-term catalysts include continued margin momentum and execution on cost initiatives .

What Went Well and What Went Wrong

What Went Well

  • Significant NIM expansion and Core Bank net interest income growth: Core Bank NIM rose to 3.78% (vs 3.53% YoY), with Core Bank net interest income up $6.6M YoY to $61.2M, driven by lower deposit costs and disciplined pricing .
  • Core Bank net income +15% YoY to $19.8M, aided by a net credit to Provision of $479K vs a $1.6M charge YoY, reflecting minimal net charge-offs and reserve formula changes tied to balance declines in select portfolios .
  • Credit quality solid: Core Bank net charge-offs to average loans at 0.02% annualized; Core Bank NPLs/total loans 0.42% and delinquent loans 0.21% .
  • Management recognition and brand momentum: Ranked among Bank Director’s Top 25, and awarded the 2024 Raymond James Community Bankers Cup; CEO: “We delivered another strong quarter, fueled by a 15% increase in Core Bank net income…” .

What Went Wrong

  • Noninterest expenses increased: Technology (+18%, month-to-month premium with legacy provider during conversion), marketing (+$972K for branding), and higher health insurance claims (+$737K) lifted OpEx; efficiency ratio GAAP at 57.5% .
  • Noninterest income at the Core Bank decreased by $571K YoY due to timing of MasterCard annual volume incentives ($610K recognized in Q3 2024; 2025 expected in Q4), partially offsetting NIM gains .
  • Period-end total Company loans declined $92M sequentially (Traditional Bank -$24M; Warehouse -$62M), consistent with pricing discipline and loan-to-deposit ratio moderation, which may temper near-term asset growth .

Financial Results

Headline results vs prior periods

MetricQ3 2024Q2 2025Q3 2025
Net Interest Income ($USD ‘000s)$71,305 $76,202 $76,970
Noninterest Income ($USD ‘000s)$16,813 $17,644 $16,568
Total Net Revenue - GAAP ($USD ‘000s)$88,118 $93,846 $93,538
Net Income ($USD ‘000s)$26,543 $31,484 $29,744
Diluted EPS (Class A) ($)$1.37 $1.61 $1.52
ROA (%)1.58 1.79 1.69
ROE (%)10.88 11.96 10.91

Margins and efficiency

MetricQ3 2024Q2 2025Q3 2025
NIM - Total Company (%)4.49 4.61 4.65
NIM - Core Bank (%)3.53 3.72 3.78
Net Interest Spread (%)3.59 3.89 3.94
Efficiency Ratio - GAAP-derived (%)55.2 55.0 57.5

Segment net income

Segment Net Income ($USD ‘000s)Q3 2024Q2 2025Q3 2025
Traditional Banking$15,157 $16,856 $17,466
Warehouse Lending$2,007 $1,833 $2,351
Core Bank Total$17,164 $18,689 $19,817
Tax Refund Solutions (TRS)$919 $3,312 $459
Republic Payment Solutions (RPS)$2,174 $2,441 $2,246
Republic Credit Solutions (RCS)$6,286 $7,042 $7,222
RPG Total$9,379 $12,795 $9,927
Total Company$26,543 $31,484 $29,744

KPIs

KPISep 30, 2024Jun 30, 2025Sep 30, 2025
Total Assets ($USD ‘000s)$6,692,470 $6,970,917 $7,014,919
Total Deposits ($USD ‘000s)$5,101,696 $5,317,239 $5,338,345
Loans, net ($USD ‘000s)$5,214,759 $5,291,260 $5,201,509
Interest-bearing deposits ($USD ‘000s)$3,841,610 $4,094,223 $4,099,322
Noninterest-bearing deposits ($USD ‘000s)$1,260,086 $1,223,016 $1,239,023
Core Bank NPLs / Total Loans (%)0.38 0.41 0.42
Core Bank Delinquencies / Loans (%)0.19 0.19 0.21
Core Bank Net Charge-offs (annualized) (%)0.14 0.02 0.02

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core system conversion timeline2025Target launch in Q3 2025 Working toward conversion in Q4 2025 Lowered/delayed
Technology/communication costs outlookForwardExpect net benefit from call center management system Expect net benefit post core conversion + call center deployment Maintained/clarified
Marketing expense run-rateForwardN/ABranding campaign costs expected to continue near current levels New disclosure
DividendQ4 2025 (payable 1/16/26)$0.451 (Class A); $0.41 (Class B) in prior quarter $0.451 (Class A); $0.41 (Class B), payable Jan 16, 2026 Maintained

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was located; themes are synthesized from quarterly releases.

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
NIM expansion & deposit cost moderationCore Bank NIM +40bps YoY; weighted-average cost of interest-bearing deposits down to 2.26% Core Bank NIM +26bps YoY; deposit cost down to 2.34% Total Company NIM 4.65%; Core Bank NIM 3.78%; deposit cost and pricing discipline continue Improving
Core system conversion & call centerTarget launch Q3; $5.7M deconversion/consulting costs; expected savings >$16M over 5 years Net benefit expected from call center system Conversion now targeted Q4; continued tech investments and premium under legacy month-to-month terms Timeline extended; benefits intact
Warehouse Lending dynamicsAvg balances +35% YoY; usage up to 47% Avg balances +24% YoY; usage up to 57% Avg balances +9% YoY; yield down 102bps to 7.02%; usage 54% Mixed (volume stable; yield lower)
Branding/marketingN/ANew branding initiative launched in June Branding campaign costs up $972K; expected to continue Continued spend
Macro/tariffsManagement flagged global tariff uncertainty N/AN/A (no new macro change disclosed) Watchful
Credit qualityStrong (NCOs 0.01%; NPLs 0.44%) Core Bank NCOs 0.02%; NPLs 0.41% Core Bank NCOs 0.02%; NPLs 0.42%; delinquencies 0.21% Stable/Solid

Management Commentary

  • “We delivered another strong quarter, fueled by a 15% increase in Core Bank net income, underscoring the continued momentum of our strategy and the dedication of our entire team... Our disciplined approach to pricing across the Core Bank balance sheet continued to generate significant Net Interest Margin (“NIM”) expansion…” — Logan Pichel, President & CEO .
  • Liquidity and balance sheet discipline: deposits +$21M QoQ; total company loans -$92M QoQ; moderating loan-to-deposit ratio to enhance strategic flexibility .
  • Technology and operations: month-to-month premium on legacy core provider during Q3; conversion targeted for Q4; expanded data storage, security, and call center system investments, with expected net benefits ahead .
  • Recognition: Bank Director Top 25; 2024 Raymond James Community Bankers Cup — validating profitability, capital adequacy, and credit quality .

Q&A Highlights

  • No public Q3 2025 earnings call transcript was available; therefore, no Q&A highlights or call-based guidance clarifications could be extracted.

Estimates Context

MetricS&P Global Consensus (Q3 2025)Reported (Q3 2025)
EPS ($)1.4051.52
Revenue ($USD ‘000s)92,35093,538 (Total net revenue - GAAP)

Values retrieved from S&P Global.

  • EPS beat consensus (+$0.115), supported by NIM expansion and a net credit to Provision at the Core Bank, while total net revenue was slightly above consensus depending on revenue definition (S&P’s “Revenue” series recorded $91,515K actual) . Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin momentum is intact: continued NIM expansion (Total Company 4.65%) with deposit cost moderation and pricing discipline remains the core earnings driver .
  • Credit quality remains a strength: minimal Core Bank charge-offs and low NPL/delinquency ratios reduce earnings volatility and support capital deployment confidence .
  • Operating investments are near-term headwinds but set up medium-term efficiency gains: branding spend is expected to continue; technology costs should benefit post core conversion/call center implementation .
  • Segment diversification helps resilience: RPG contributions fluctuated (TRS seasonality/recoveries timing), while RCS delivered solid profitability; Core Bank growth is the anchor .
  • Tactical balance sheet positioning: loans moderated and investments increased (deployment of excess cash into longer-term securities with attractive yields), supporting NIM in a dynamic rate backdrop .
  • Near-term trading: the EPS beat vs consensus and clear NIM expansion are positive catalysts; monitor expense trajectory and core conversion execution in Q4 as potential stock movers .
  • Medium-term thesis: compounding NII via disciplined pricing, stable credit metrics, and pending tech-driven efficiency gains can sustain ROA >1.6% and ROE ~11% barring macro shocks; watch Warehouse yields/usage and deposit mix evolution .