Republic Bancorp, Inc. · NASDAQ:RBCAA
Republic Bancorp — Shareholder Meeting (April 2017)
47 slides from Republic Bancorp's shareholder meeting presentation, Apr 20, 2017
Slide 1: Annual Meeting of Shareholders
THURSDAY, APRIL 20, 2017 ANNUAL MEETING OF SHAREHOLDERS Republic Bancorp Republic bank it’s just easier here rbcaa nasdaq listed
Slide 2: Forward-looking statements safe harbor
It’s just easier here.® HARBOR During the course of this presentation, we will be providing you with a discussion of some of the factors we currently anticipate may influence the future results of Republic Bancorp, Inc. (“Republic” or the “Company”), as well as certain financial projections. We want
Slide 3: Opening Remarks
It’s just easier here.® STEVE TRAGER Chairman and Chief Executive Officer 2 OPENI NG REMARKS Republic bank
Slide 4: Republic Banking Centers
It’s just easier here.® EPUBLIC BANKING CENTERS Louisville, KY ............................. 17 Lexington, KY ............................. 5 Owensboro, KY ........................... 2 Covington, KY ............................. 1 Crestwood, KY ............................ 1 Elizabethtown, KY .....
Slide 5: Stock Overview
It’s just easier here.® STOCK OVERVIEW 4 1998 – IPO completed2.6million shares issued (adjusted) NASDAQ SymbolRBCAA Shares Outstanding – 12/31/1620.9million Market Capitalization – 12/31/16$825 million Average Daily Volume 21,276 shares (trailing 12 months at 12/31/16) Stock Price – 3/31/17$34.39 St
Slide 6: Dividends per Class A Common Share
$1.10 $0.80 $0.74 $0.52 $0.31 $0.21 $0.21 $0.20 $0.12 $0.14 It’s just easier here.® DIVIDENDS PER CLASS A COMMON SHARE $1.20 Ordinary DividendSpecial Dividend $1.00 $0.83 $0.78 $0.65 $0.69 $0.61 $0.60 $0.56 $0.47 $0.42 $0.40 $0.36 $0.25 $0.17 $0.09 $0.09 $0.09 $0.10 $-5 1996-2016 1996 1997 1998 1999
Slide 7: Republic Bancorp Highlights: Year ended December 31, 2016
It’s just easier here.® REPUBLIC BANCORP HIGHLIGHTS Year ended December 31, 2016 6 Republic bank
Slide 8: 2016 Highlights
It’s just easier here.® HIGHLIGHTS Net income of $45.9 million, an increase of 31% over 2015, resulting in Diluted Earnings per Class A Common share of $2.22 Return On Average Assets of 1.02% Return On Average Equity of 7.68% Capital ratios continued to exceed “well capitalized” with a total
Slide 9: Net Income and Earnings Per Share
Republic Processing Group Core Banking $45.9 $2.00 $1.70 $28.8 $1.38 $30.0 $20.0 2014 2015 2016 $5.0 9 It’s just easier here.® HIGHLIGHTS In Millions Earnings Per Share $50.0 $45.0 $40.0 $35.2$2.50 $2.22 $35.0 $34.9 $1.50 $25.0 $29.9 $1.00 $24.3 $15.0 $0.50 $10.0 $-$11.0 $4.5 $5.3 $-201420152016 8 E
Slide 10: 2016 Cornerstone Acquisition
It’s just easier here.® HIGHLIGHTS On May 17, 2016, the Company completed its acquisition of Cornerstone Bancorp, Inc. (“Cornerstone”), and its wholly-owned bank subsidiary Cornerstone Community Bank (“CCB”), for approximately $32 million in cash. As of May 17, 2016, Cornerstone maintained total a
Slide 11: Growth from former Cornerstone Operations
Total Loans Total Deposits $189.6 It’s just easier here.® HIGHLIGHTS Annualized Growth of 9% in both Loans and Deposits for 20A1nn6usailnizceed Garcoqwutihs iotfi o9%n. in both Loans and Deposits for 2016 since acquisition. In Millions $220.0 $216.6 $215.0 $210.0 $205.3 $205.0 $200.1 $200.0 $195.0 $
Slide 12: 2016 Core Bank Highlights
It’s just easier here.® HIGHLIGHTS Exclusive of the Cornerstone acquisition, gross Core Bank loans grew by $252 million, or 8%, during 2016 Mortgage Warehouse loan portfolio grew $199 million, or 21%, to $585M Exclusive of the Cornerstone acquisition and all brokered deposits, organic Core Bank d
Slide 13: Net Interest Income
$140.0 $104.0 It’s just easier here.® HIGHLIGHTS Net Interest Income (Excluding FDIC-assisted transactions(1)) In Millions $136.1 $116.7 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $-201420152016 (1) See Appendix A for a reconciliation to net interest income in accordance with Generally Accepted Accountin
Slide 14: Noninterest Income Components
2014 2015 2016 $15.0 $7.5 $10.0 $6.0 $4.4 $1.7 $2.0 Service Charges on Mortgage Banking Interchange Fee Other 2014 2015 2016 It’s just easier here.® HIGHLIGHTS Noninterest Income In Millions $35.0 $33.4 $30.0 $28.4 In Millions $24.6 $25.0 $13.8 $14.0 $13.0 $13.2 $20.0 $12.0 $10.0 $8.9 $8.0 $6.9 $6.2
Slide 15: Noninterest Expense and Efficiency Ratio
$96.5 71.0% $100.0 68% 68% $20.0 by the sum of net interest income and noninterest income. The It’s just easier here.® HIGHLIGHTS Noninterest Expense and Efficiency Ratio In Millions $120.0 $116.2 $101.2 70% 70.0% $80.0 69.0% 68.0% $60.0 67.0% 66.0% $40.0 201420152016 The efficiency ratio equals tot
Slide 16: Staffing and Infrastructure Investments
It’s just easier here.® HIGHLIGHTS Staffing and Infrastructure Investments Core Bank invested in 143 additional full-time-equivalent employees (“FTEs”) during 2016 to service current year growth and also help implement our strategic goals. The following are the areas where we added the most FTEs du
Slide 17: 2016 RPG Highlights
It’s just easier here.® HIGHLIGHTS Republic Credit Solutions Line-of-credit product – Originated and sold $331 million in loans during 2016 Credit Card product – Originated and sold $6 million in loans during 2016 Installment Loan product – Originated and sold $43 million in loans during 2016
Slide 18: Net Refund Transfer Revenues
It’s just easier here.® HIGHLIGHTS Net Refund Transfer Revenues In Millions$19.2 $20.0 $17.4 $16.1 $15.0 $10.0 $5.0 $0.0 2014 2015 2016 17 2016 RPG Republic bank
Slide 19: Change in Divisional Contribution to RPG Net Income
It’s just easier here.® HIGHLIGHTS Change in Divisional Contribution to RPG Net Income TRS Tax-refund products $ 8,899 $ 6,590 81% 124% $ 2,309 35% RPS Prepaid cards (1,397) (861) -13% -16% (536) -62% 18 Total RPG $ 11,044 $ 5,309 100% 100% $ 5,735 108% RCS Consumer loans 3,542 (420) 32% -8% 3,962 9
Slide 20: RCS Division Net Income by Quarter
Pilot phase for RCS’s line-It’s just easier here.® HIGHLIGHTS RCS Division Net Income by Quarter During 2016 and 2015 In Millions$1.6 $1.4 $1.2 $1.0 $0.8 $0.6 of-credit product $0.4 $0.2 $-$(0.2) $(0.4) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 19 2016
Slide 21: Republic Bancorp Balance Sheet
It’s just easier here.® REPUBLIC BANCORP BALANCESHEET 20 Republic bank Republic bank
Slide 22: Core Bank Strong Capital
(2) Based on prompt corrective action thresholds for FDIC supervised financial institutions - see 12 CFR Part 324, subpart H. It’s just easier here.® BANK (1) Peer data obtained from the December 31, 2016 Uniform Bank Performance Report (“UBPR”). 21 Capital Ratio 12/31/2016 Republic Banc orp Well Ca
Slide 23: Core Bank Portfolio Five Year History
It’s just easier here.® BANK 5 Year History $3,000 $ In Millions $2,500 $2,000 Traditional Network $1,500 Warehouse Lending Correspondent Lending $1,000 Business Acquisitions $500 $-Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 22 CORE Portfolio Republic bank
Slide 24: Core Bank Loan Mix
Estate Lines of Credit Residential Commercial & Consumer 2% 46% 5% 8% It’s just easier here.® BANK 2012 versus 2016 Loan Portfolio Dec. 31, 2012 Loan Portfolio Dec. 31, 2016 Warehouse Residential Real Warehouse Lines of Consumer 35% Industrial Credit1% Real Estate 16% Home Equity 9% Commercial & Ind
Slide 25: Core Bank Warehouse Lending
It’s just easier here.® BANK 2012-2016 In Millions Outstanding BalanceTotal Commitments $1,200 $1,013 $1,000 $800 $670 $585 $600 $528 $387 $400 $331 $358 $319 $217 $150 $200 $-Dec 12Dec 132Dec 14Dec 15Dec 16 25 24 CORE Warehouse Lending Republic bank
Slide 26: Core Bank Core Deposits
It’s just easier here.® BANK Quarterly Averages (Excludes Institutional Brokered Deposits & CDs) Quarter EndedQuarter Ended (in thousands)Dec 31, 2016Dec 31, 2015Change Now & Passbook Sav ings1,026,015882,195143,820 Liquid CDs25,89830,647(4,749) Money Market Sav ings41,10341,905(802) 25 Total Core D
Slide 27: Core Bank Deposits
$900 It’s just easier here.® BANK 5 Year History Non-Interest Bearing Interest-Bearing DDA MMDA/SAV Time Deposits Brokered Deposits $1,000 In Millions $800 $700 $600 $500 $400 $300 $200 $100 $-Dec 12Dec 13Dec 14Dec 15Dec 16 26 CORE Deposits Republic bank
Slide 28: Strong Credit Quality
CREDIT QUALITY It’s just easier here.® REPUBLIC BANCORP INDUSTRY STRONG 27 Republic bank
Slide 29: Core Bank Credit Quality Trends
It’s just easier here.® BANK Includes Acquired Banks 28 Ratio As of and for the Years Ended 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 Nonperforming Loans / Total Loans 0.82% 0.81% 0.78% 0.66% 0.42% Nonperforming Assets / Total Assets 1.41% 1.13% 0.93% 0.55% 0.36% Delinquent Loans / Tota
Slide 30: Management of Interest Rate Strategy
MANAGEMENT It’s just easier here.® REPUBLIC BANCORP INTEREST RATE STRATEGY 29 Republic bank
Slide 31: Interest Rate Sensitivity
It’s just easier here.® REPUBLIC BANCORP Asset Repricing 89% of our total loan portfolio reprices within 5yrs as of December 31, 2016 91% of the Commercial Real Estate portfolio reprices within 5 years 96% of the Commercial & Industrial portfolio reprices within 5 years Mortgage Warehouse ba
Slide 32: Republic Bancorp Highlights: First Quarter 2017
It’s just easier here.® REPUBLIC BANCORP HIGHLIGHTS First Quarter 2017 31 Republic bank
Slide 33: 1Q 2017 Highlights
It’s just easier here.® 2017 HIGHLIGHTS Net income of $20.0 million, an increase of 13% over the first quarter of 2016 Return On Average Assets of 1.65% Return On Average Equity of 13.12% Capital ratios continued to exceed “well capitalized” 32 1Q Republic bank
Slide 34: Net Income and Earnings Per Share
$0.96 $20.0 $5.0 It’s just easier here.® 2017 HIGHLIGHTS Net Income and Earnings Per Share In Millions Republic Processing Group Core Banking $25.0 $20.0 $17.7 $1.00 $0.85 $0.90 $13.8 $8.5 $0.80 $0.66 $15.0 $8.1 $0.70 $6.6 $0.60 $0.50 $10.0 $0.40 $0.30 $9.7 $11.5 $0.20 $7.2 $0.10 $-$- 1Q2015 1Q2016
Slide 35: 1Q 2017 Core Bank Highlights
It’s just easier here.® 2017 HIGHLIGHTS Net income of $8.5 million, an increase of 5% over the first quarter of 2016 Net interest income of $36.6 million, a 17% increase over the first quarter of 2016 Credit metrics continue to outperform peer Noninterest income of $7.7 million, a 3% increase ov
Slide 36: MemoryBank Accounts by State
It’s just easier here.® MEMORYBANK® MemoryBank® Accounts by State: California ................................... 75 Texas .......................................... 37 New York ................................... 28 Florida........................................ 27 New Jersey .....................
Slide 37: 1Q 2017 Core Bank Highlights
It’s just easier here.® 2017 HIGHLIGHTS Opened new Vine Street location in downtown Lexington, Kentucky Opened new loan production office in Brentwood (Nashville), Tennessee Expanded contact center hours from 7 a.m. to midnight, seven days a week Introduced four additional interactive teller mac
Slide 38: Net Interest Income
It’s just easier here.® 2017 HIGHLIGHTS Net Interest Income (Excluding FDIC-assisted transactions(1)) In Millions $40.0 $36.2 $35.0 $30.2 $30.0 $27.8 $25.0 $20.0 $15.0 1Q151Q161Q17 (1) See Appendix A for a reconciliation to net interest income in accordance with GAAP. 37 1Q Core Republic bank
Slide 39: Noninterest Income Components
$7.0 $6.0 $3.0 $1.6 $1.2 $1.0 $0.8 $1.0 1Q2015 1Q2016 1Q2017 Service Charges on Mortgage Banking Interchange Fee Other It’s just easier here.® 2017 HIGHLIGHTS Noninterest Income In Millions $8.0 $7.5 $7.7 $6.8 1Q2015 1Q2016 1Q2017 In Millions $5.0 $3.5 $3.1 $3.3 $4.0 $3.0 $3.0 $2.5 $2.1 $2.2 $2.0 $2
Slide 40: Noninterest Expense and Efficiency Ratio
$32.1 $30.0 72% 71% $26.8 $5.0 by the sum of net interest income and noninterest income. The It’s just easier here.® 2017 HIGHLIGHTS Noninterest Expense and Efficiency Ratio In Millions $35.0 72% 72% $25.3 $25.0 70% 69% $20.0 69% 68% $15.0 67% $10.0 1Q2015 1Q2016 1Q2017 The efficiency ratio equals t
Slide 41: Core Bank Loan Growth by Origination Channel
It’s just easier here.® 2017 HIGHLIGHTS Loan Growth 40 (dollars in thousands) Origination Channel Ending Ending BalanceBalance$ 3/31/2017 3/31/2016 Change Average Average Quarterly Quarterly BalanceBalance$ 3/31/2017 3/31/2016 Change Warehouse Lending $495,165 $393,986 $101,179 $436,459 $292,574 $14
Slide 42: 1Q 2017 RPG Highlights
It’s just easier here.® 2017 HIGHLIGHTS Increased Easy Advance (“EA”) credit program volume by $205 million driving a $4.0 million increase in EA fee income net of estimated provision for EA losses Additional EA revenues helped to offset a 10% reduction in net Refund Transfer revenues Sales of RC
Slide 43: Refund Transfers and Easy Advances
It’s just easier here.® 2017 HIGHLIGHTS Refund Transfers (RT) and Easy Advances (EA) 42 YTDYTD (dol l a rs i n thousa nds)Mar. 2017Mar. 2016$ Change% Change RT Product Volume$8,004,650$8,768,036$(763,386)-9% Ne t RT Re ve nue$15,382$17,078$(1,696)-10% EAs Originate d$328,582$123,231$205,351167% EA F
Slide 44: RPG Loan Growth
It’s just easier here.® 2017 HIGHLIGHTS Loan Growth 43 (dollars in thousands) Origination Channel Ending Ending BalanceBalance$ 3/31/2017 3/31/2016 Change Average Average QuarterlyQuarterly BalanceBalance$ 3/31/2017 3/31/2016 Change Tax Refund Solutions $10,686 $6,310 $4,376 $87,714 $41,871 $45,843
Slide 45: Initiatives
It’s just easier here.® INITIATIVES Continue to grow the MemoryBank® brand Additional investment in mortgage-related personnel, processes and systems in order to expand market share Grow Dealer Floor Plan Lending, which had $8 million of loans outstanding at March 31, 2017 Implementation of a ne
Slide 46: Thank You
It’s just easier here.® REPUBLIC BANCORP THANK YOU 45 Republic bank
Slide 47: Appendix A: Non-GAAP Disclosures
meaningful measure of the Bank’s performance. It’s just easier here.® REPUBLIC BANCORP Appendix A Non-GAAP Disclosures Net Interest Income and Non-Interest Income (in thousands)Years Ended Dec. 31,Three Months Ended Mar. 31, 201420152016201520162017 Net interest income on loans acquired in the Compa