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What changed in REPUBLIC BANCORP INC /KY/'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of REPUBLIC BANCORP INC /KY/'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+492 added−484 removedSource: 10-K (2024-03-14) vs 10-K (2023-03-03)

Top changes in REPUBLIC BANCORP INC /KY/'s 2023 10-K

492 paragraphs added · 484 removed · 341 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

121 edited+27 added−7 removed107 unchanged
Biggest changeEffective April 2022, with full compliance no later than May 2022, banking organizations are required to satisfy specified consumer notice requirements if an incident occurs, which may include a major computer-system failure; a cyber-related interruption, such as a distributed denial of service or ransomware attack; or another type of significant operational interruption. ​ In addition, various U.S. regulators, including the Federal Reserve and the SEC, have increased their focus on cyber-security through guidance, examinations, and regulations.
Biggest changeEffective April 2022, with full compliance no later than May 2022, banking organizations are required to satisfy specified consumer notice requirements if certain computer-security incidents occur, including incidents that have materially disrupted or degraded, or are reasonably likely to materially disrupt or degrade, the organization’s (i) ability to carry out banking operations, activities, or processes, or deliver banking products and services to a material portion of its customer base, in the ordinary course of business, (ii) business lines, including associated operations, services, functions, and support, that upon failure would result in a material loss of revenue, profit, or franchise value, or (iii) operations the failure or discontinuance of which would pose a threat to the financial stability of the United States. ​ In addition, various U.S. regulators, including the FRB and the SEC, have increased their focus on cyber-security through guidance, examinations, and regulations.
The failure to meet such requirements could result in material restrictions on the activities of the Company and may also adversely affect the Company’s ability to enter into certain transactions (including mergers and acquisitions) or obtain necessary approvals in connection therewith, as well as loss of FHC status.
The failure to meet such requirements could result in material restrictions on the activities of the Company and may also adversely affect the Company’s ability to enter into certain transactions (including mergers and acquisitions) or obtain necessary approvals in connection therewith, as well as the loss of FHC status.
Management cannot predict what insurance assessment rates will be in the future. ​ The FDIC may terminate the deposit insurance of any insured depository institution, including the Bank, if it determines that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order or any condition imposed by an agreement with the FDIC.
Management cannot predict what insurance assessment rates will be in the future. ​ The FDIC may terminate the deposit insurance of any insured depository institution, including the Bank, if it determines that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order or condition imposed by an agreement with the FDIC.
Control is refutably presumed to exist if, immediately after a transaction, the acquiring person or company owns, controls, or holds voting securities of the institution with the power to vote 10% or more of any class, and (i) the institution has registered securities under Section 12 of the Securities Exchange Act of 1934; or (ii) no other person will own, control, or hold the power to vote a greater percentage of that class of voting securities immediately after the transaction. ​ Financial Activities — The Company is an FHC.
Additionally, control is refutably presumed to exist if, immediately after a transaction, the acquiring person owns, controls, or holds with the power to vote 10% or more of any class of voting securities of an institution and (i) the institution has registered securities under Section 12 of the Securities Exchange Act of 1934 or (ii) no other person will own, control, or hold the power to vote a greater percentage of that class of voting securities immediately after the transaction. ​ Financial Activities — The Company is an FHC.
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. ​ See additional discussion regarding the Mortgage Banking segment under Footnote 25 “Segment Information” of Part II Item 8 “Financial Statements and Supplementary Data.” ​ ​ 10 Table of Contents (IV) Tax Refund Solutions segment ​ Through the TRS segment, the Bank is one of a limited number of financial institutions that facilitates the receipt and payment of federal and state tax refund products and offers a credit product through third-party tax preparers located throughout the U.S., as well as tax-preparation software providers (collectively, the “Tax Providers”).
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. ​ See additional discussion regarding the Mortgage Banking segment under Footnote 24 “Segment Information” of Part II Item 8 “Financial Statements and Supplementary Data.” ​ ​ 10 Table of Contents (IV) Tax Refund Solutions segment ​ Through the TRS segment, the Bank is one of a limited number of financial institutions that facilitates the receipt and payment of federal and state tax refund products and offers a credit product through third-party tax preparers located throughout the U.S., as well as tax-preparation software providers (collectively, the “Tax Providers”).
Until such deficiencies are corrected, the FRB may impose any limitations or conditions on the conduct or activities of the FHC and its affiliates that the FRB determines are appropriate, and the FHC may not commence any additional activity or acquire control of any company under Section 4(k) of the BHCA without prior FRB approval.
Until such deficiencies are corrected, the FRB generally may impose any limitations or conditions on the conduct or activities of the FHC and its affiliates that the FRB determines are appropriate, and the FHC may not commence any additional activity or acquire control of any company under Section 4(k) of the BHCA without prior FRB approval.
FDIC regulations also require all insured depository institutions to remain in a safe and sound condition, as defined in regulations, as a condition of having FDIC deposit insurance. ​ FDIC Deposit Insurance Assessments — All Bank deposits are insured to the maximum extent permitted by the DIF.
FDIC regulations also require all insured depository institutions to remain in a safe and sound condition, as defined in applicable regulations, as a condition of having FDIC deposit insurance. ​ FDIC Deposit Insurance Assessments — All Bank deposits are insured to the maximum extent permitted by the DIF.
If the Bank fails to properly safeguard customer information or is the subject of a successful cyber-attack, it could result in material fines and/or liabilities that would materially affect the Company’s results of operations.
If the Bank fails to properly safeguard customer information or is the subject of a successful cyber-attack, it could result in material fines and/or liabilities that could materially affect the Company’s results of operations.
Under the Dodd-Frank Act and in line with prior FRB policy, a BHC is expected to act as a source of financial strength to its banking subsidiaries and to commit resources for their support.
Under the Dodd-Frank Act and in line with prior FRB policy, a BHC is expected to act as a source of financial and managerial strength to its banking subsidiaries and to commit resources for their support.
The remaining proceeds are credited to the mortgage-banking client. ​ See additional discussion regarding the Warehouse Lending segment under Footnote 25 “Segment Information” of Part II Item 8 “Financial Statements and Supplementary Data.” ​ (III) Mortgage Banking segment ​ 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 remaining proceeds are credited to the mortgage-banking client. ​ See additional discussion regarding the Warehouse Lending segment under Footnote 24 “Segment Information” of Part II Item 8 “Financial Statements and Supplementary Data.” ​ (III) Mortgage Banking segment ​ 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.
Competitors for the Company’s small-dollar loan programs include, but are not limited to, billers who accept late payments for a fee, overdraft privilege programs of other banks and credit unions, as well as payday lenders and fintech companies. ​ New entrants to the small-dollar consumer loan market must successfully implement underwriting and fraud prevention processes, overcome consumer brand loyalty, and have sufficient capital to withstand early losses associated with unseasoned loan portfolios.
Competitors for the Company’s small-dollar loan programs include, but are not limited to, billers who accept late payments for a fee, overdraft privilege programs of other banks and credit unions, payday lenders, and fintech companies. ​ New entrants to the small-dollar consumer loan market must successfully implement underwriting and fraud prevention processes, overcome consumer brand loyalty, and have sufficient capital to withstand early losses associated with unseasoned loan portfolios.
An adverse ruling or finding against the Company or the Bank under these laws could have a material adverse effect on the results of operations. ​ The Company and the Bank are also subject to the regulations of the CFPB.
An adverse ruling or finding against the Company or the Bank under these laws could have a material adverse effect on our results of operations. ​ The Company and the Bank are also subject to the regulations of the CFPB.
While there is no requirement for clients to refinance their loans at the end of the fixed-rate period, clients have historically done so the majority of the time, as most clients are interest-rate-risk averse on their first mortgage loans. ​ Depending on the term and amount of the ARM, loans collateralized by single family, owner-occupied first lien residential real estate may be originated with an LTV up to 90%.
While there is no requirement for clients to refinance their loans at the end of the fixed-rate period, clients have historically done so the majority of the time, as most clients are interest-rate-risk averse on their first mortgage loans. ​ Depending on the term and amount of the ARM, loans collateralized by single-family, owner-occupied first-lien residential real estate may be originated with a LTV up to 90%.
These bank deposits are backed by the full faith and credit of the U.S. Government. As insurer, the FDIC is authorized to conduct examinations of, and to require reporting by, insured institutions.
Insured Bank deposits are backed by the full faith and credit of the U.S. Government. As insurer, the FDIC is authorized to conduct examinations of, and to require reporting by, insured institutions.
Underwriting for C&I loans is based on the borrower’s capacity to repay these loans from operating cash flows, typically measured by EBITDA, with capital strength, collateral, and management experience also important underwriting considerations. ​ Corporate Banking focuses on larger C&I opportunities. Borrowers are generally single-asset entities and loan sizes typically range from $5 million to $30 million.
Underwriting for C&I loans is based on the borrower’s capacity to repay these loans from operating cash flows, typically measured by EBITDA, with capital strength, collateral, and management experience also important underwriting considerations. ​ Corporate Banking focuses on larger C&I opportunities. Borrowers are generally single-asset entities and loan sizes typically range from $5 million to $35 million.
If the FDIC determines that the Bank fails to meet any standard prescribed by the guidelines, the FDIC may require the Bank to submit to it an acceptable plan to achieve compliance with the standard.
If the FDIC determines that the Bank fails to meet any standard prescribed by these guidelines, the FDIC may require the Bank to submit to it an acceptable plan to achieve compliance with the standard.
It may also suspend deposit insurance temporarily if the institution has no tangible capital. If insurance is terminated, the accounts at the institution at the time of the termination, less subsequent withdrawals, shall continue to be insured for a period of six months to two years, as determined by the FDIC.
It may also suspend deposit insurance temporarily if an institution has no tangible capital. If insurance is terminated, the accounts at the institution at the time of termination, less subsequent withdrawals, continue to be insured for a period of six months to two years, as determined by the FDIC.
In addition, an institution’s failure to comply with the Equal Credit Opportunity Act and the Fair Housing Act could result in the FDIC, other federal regulatory agencies, or the Department of Justice, taking enforcement actions against the institution. Failure by the Bank to fully comply with these laws could result in material penalties being assessed against the Bank.
In addition, an institution’s failure to comply with the Equal Credit Opportunity Act and the Fair Housing Act could result in federal regulatory agencies or the Department of Justice taking enforcement actions against the institution. Failure by the Bank to fully comply with these laws could result in material penalties being assessed against the Bank.
The Company’s website address is www.republicbank.com. ​ Website Access to Reports ​ The Company makes its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, available free of charge through its website, www.republicbank.com, as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.
The Company’s website address is www.republicbank.com. 5 Table of Contents Website Access to Reports ​ The Company makes its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, available free of charge through its website, www.republicbank.com, as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.
An institution that fails to meet these standards must develop a plan acceptable to the agency, specifying the steps that the institution will take to meet the standards.
An institution that fails to meet these standards must develop a plan acceptable to the applicable agency specifying the steps that the institution will take to meet the standards.
The Bank believes that an emphasis on highly personalized service tailored to individual client needs, together with the local character of the Bank’s business and its 14 Table of Contents “community bank” management philosophy will continue to enhance the Bank’s ability to compete successfully in its market footprint. ​ Warehouse Lending ​ The Bank faces strong competition from financial institutions across the United States for mortgage banking clients in need of warehouse lines of credit.
The Bank believes that an emphasis on highly personalized service tailored to individual client needs, together with the local character of the Bank’s business and its “community bank” management philosophy will continue to enhance the Bank’s ability to compete successfully in its market footprint. ​ Warehouse Lending ​ The Bank faces strong competition from financial institutions across the United States for mortgage banking clients in need of warehouse lines of credit.
Item 1. Business . ​ 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.
Item 1. Business . ​ 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 six reportable segments using a multitude of delivery channels.
Kentucky’s statutes contain a super parity provision that permits a well-rated Kentucky bank to engage in any banking activity in which a national bank in Kentucky, a state bank, state thrift, or state savings association operating in any other state, a federal savings bank, or a federal thrift meeting the qualified thrift lender test engages, provided it first obtains a legal opinion from counsel specifying the statutory or regulatory provisions that permit the activity. 17 Table of Contents Safety and Soundness — The federal banking regulatory agencies have prescribed, by regulation, guidelines for all insured depository institutions relating to: (i) internal controls, information systems, and internal audit systems; (ii) loan documentation; (iii) credit underwriting; (iv) interest rate risk exposure; (v) asset growth; (vi) asset quality; (vii) earnings; and (viii) compensation, fees, and benefits.
Kentucky’s statutes contain a super parity provision that permits a well-rated Kentucky bank to engage in any banking activity in which a national bank in Kentucky, a state bank, state thrift, or state savings association operating in any other state, a federal savings bank, or a federal thrift meeting the qualified thrift lender test engages, provided it first obtains a legal opinion from counsel specifying the statutory or regulatory provisions that permit the activity. ​ Safety and Soundness — The federal banking regulatory agencies have prescribed, by regulation, guidelines for all insured depository institutions relating to: (i) internal controls, information systems, and internal audit systems; (ii) loan documentation; (iii) credit underwriting; (iv) interest rate risk exposure; (v) asset growth; (vi) asset quality; (vii) earnings; and (viii) compensation and benefits.
Management considers the first three segments (Traditional Banking, Warehouse, Mortgage Banking) to collectively constitute “Core Bank” or “Core Banking” operations, while the last two segments (TRS and RCS) collectively constitute RPG operations. ​ (I) Traditional Banking segment ​ As of December 31, 2022 and through the date of this filing, generally all Traditional Banking products and services were offered through the Company’s traditional RB&T brand. ​ Lending Activities ​ The Bank’s principal lending activities consist of the following: ​ Retail Mortgage Lending — Through the Bank’s mortgage division, which consists of a retail channel and consumer direct channel, as well as the Bank’s private banking division and banking center network, the Bank originates single-family, residential real estate loans and HELOCs.
Management considers the first three segments (Traditional Banking, Warehouse, Mortgage Banking) to collectively constitute “Core Bank” or “Core Banking” operations, while the last three segments (TRS, RPS, and RCS) collectively constitute RPG operations. ​ (I) Traditional Banking segment ​ As of December 31, 2023 and through the date of this filing, generally all Traditional Banking products and services were offered through the Company’s traditional RB&T brand. ​ Lending Activities ​ The Bank’s principal lending activities consist of the following: ​ Retail Mortgage Lending — Through the Bank’s mortgage division, which consists of a Retail Channel and Consumer Direct Channel, as well as the Bank’s Private Banking division and banking center network, the Bank originates single-family, residential real estate loans, and HELOCs.
In general, these transactions must be on terms and conditions that are consistent with safe and sound banking practices and substantially the same, or at least as favorable to the bank or its subsidiary, as those for comparable transactions with non-affiliated parties.
In general, these transactions must be on terms and conditions that are consistent with safe and sound banking practices and substantially the same, or at least as favorable to the bank or its subsidiaries, as those for comparable transactions with non-affiliated parties.
Such unlimited branching authority has the potential to increase competition within the markets in which the Company and the Bank operate. ​ Restrictions on Affiliate Transactions and Loans to Insiders — Transactions between the Bank and its affiliates, and in some cases the Bank’s correspondent banks, are subject to FDIC regulations, the FRB’s Regulations O and W, and Sections 23A, 23B, 22(g), and 22(h) of the Federal Reserve Act (“FRA”).
Such unlimited branching authority has the potential to increase competition within the markets in which the Company and the Bank operate. ​ Restrictions on Affiliate Transactions and Loans to Insiders — Transactions between the Bank or its subsidiaries and affiliates (including the Company), and in some cases the Bank’s correspondent banks, are subject to FDIC regulations, the FRB’s Regulations O and W, and Sections 23A, 23B, 22(g), and 22(h) of the Federal Reserve Act (“FRA”).
Based on total assets as of December 31, 2022, Republic ranked as the second largest Kentucky-based financial holding company. The executive offices of Republic are located at 601 West Market Street, Louisville, Kentucky 40202, telephone number (502) 584-3600.
Based on total assets as of December 31, 2023, Republic ranked as the second largest Kentucky-based financial holding company. The executive offices of Republic are located at 601 West Market Street, Louisville, Kentucky 40202, telephone number (502) 584-3600.
A bank is undercapitalized if it fails to meet any one of the ratios required to be adequately capitalized. ​ Undercapitalized, significantly undercapitalized, and critically undercapitalized institutions are required to submit a capital restoration plan, which must be guaranteed by the holding company of the institution.
A bank is undercapitalized if it fails to meet any one of the ratios required to be adequately capitalized. ​ Undercapitalized, significantly undercapitalized, and critically undercapitalized institutions are required to submit a capital restoration plan, which must be guaranteed by the institution’s holding company.
The Bank maintains an errors and omissions insurance policy to protect the Bank against loss in the event a borrower fails to maintain proper fire and other hazard insurance policies. ​ Single-family, first-lien residential real estate loans with fixed-rate periods of 15, 20, and 30 years are primarily originated and sold into the secondary market.
The Bank maintains an errors and omissions insurance policy to protect the Bank against loss in the event a borrower fails to maintain proper fire and other hazard insurance policies. ​ 6 Table of Contents Single-family, first-lien residential real estate loans with fixed-rate periods of 15, 20, and 30 years are primarily originated and sold into the secondary market.
In addition, there are substantial regulatory and compliance costs, including the need for expertise to customize products associated with licenses to lend in various states across the United States. ​ Supervision and Regulation ​ The Company and the Bank are separate and distinct entities and are subject to extensive federal and state banking laws and regulations, which establish a comprehensive framework of activities in which the Company and the Bank may engage.
In addition, there are substantial regulatory and compliance costs, including the need for expertise to customize products associated with licenses to lend in various states across the United States. 16 Table of Contents Supervision and Regulation ​ The Company and the Bank are separate and distinct entities and are subject to extensive federal and state banking laws and regulations, which establish a comprehensive framework of activities in which the Company and the Bank may engage.
The Company’s Board has approved and adopted a customer information security program. ​ The GLBA requires financial institutions to implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to non-affiliated third parties.
The Company’s Board has approved and adopted a written information security program. ​ The GLBA requires financial institutions to implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to non-affiliated third parties.
Moreover, in November 2021, the FRB, FDIC, and Office of the Comptroller of the Currency issued a joint final rule establishing computer-security incident notification requirements for banking organizations and their bank service providers.
Additionally, in November 2021, the FRB, FDIC, and Office of the Comptroller of the Currency issued a joint final rule establishing computer-security incident notification requirements for banking organizations and their bank service providers.
Given the size of these credits, the Bank generally seeks established, well-known borrowers and projects with low credit risk. ​ Commercial Banking focuses on medium sized C&I and CRE opportunities. Borrowers are generally single-asset entities and loan sizes typically range from $1 million to $5 million.
Given the size of these credits, the Bank generally seeks established, well-known borrowers and projects with low credit risk. ​ Commercial Banking focuses on small and medium sized C&I and owner-occupied CRE opportunities. Borrowers are generally single-asset entities and loan sizes typically range from $1 million to $5 million.
The continued effect of the CFPB on the development and promulgation of consumer protection rules and guidelines and the enforcement of federal “consumer financial laws” on the Bank, if any, cannot be determined with certainty at this time. ​ ​ 19 Table of Contents Community Reinvestment Act and Fair Lending Laws — Banks have a responsibility under the CRA and related regulations of the FDIC to help meet the credit needs of their entire communities, including low- and moderate-income neighborhoods.
The continued effect of the CFPB on the development and promulgation of consumer protection rules and guidelines and the enforcement of federal “consumer financial laws” on the Bank, if any, cannot be determined with certainty at this time. ​ Community Reinvestment Act and Fair Lending Laws — Banks have a responsibility under the CRA and related regulations to help meet the credit needs of their entire communities, including low- and moderate-income neighborhoods.
In the event of a BHC’s bankruptcy, any commitment by the BHC to a federal bank regulatory agency to maintain the capital of subsidiary bank will be assumed by the bankruptcy trustee and entitled to a priority of payment. ​ Acquisitions and Strategic Planning — The Company is required to obtain the prior approval of the FRB under the BHCA before it may, among other things, acquire all or substantially all of the assets of any bank, or ownership or control of any voting shares of any bank, if after such acquisition it would own or control, directly or indirectly, more than 5% of any class of the voting shares of such bank.
In the event of a BHC’s bankruptcy, any commitment by the BHC to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a priority of payment. ​ Acquisitions and Strategic Planning — The Company generally is required to obtain the prior approval of the FRB under the BHCA before it may, among other things, merge or consolidate with another BHC, acquire all or substantially all of the assets of any bank, or acquire ownership or control of any voting shares of any bank, if after such acquisition it would own or control, directly or indirectly, more than 5% of any class of the voting shares of such bank.
In addition, certain types of these transactions referred to as “covered transactions” are subject to quantitative limits based on a percentage of the Bank’s capital, thereby restricting the total dollar amount of transactions the Bank may engage in with each individual affiliate and with all affiliates in the aggregate.
In addition, certain types of these transactions referred to as “covered transactions” are subject to quantitative limits based on a percentage of the Bank’s capital, thereby restricting the total dollar amount of transactions the Bank or its subsidiaries may engage in with each individual affiliate and with all affiliates in the aggregate.
Premiums on loans held for investment acquired though the Correspondent Lending channel will be amortized into interest income on the level-yield method over the expected life of the loan.
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.
The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (the “EGRRCPA”) and its implementing regulations pulled back some of the more stringent requirements of the Dodd-Frank Act for community banks with total consolidated assets of less than $10 billion, such as the Bank.
The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (the “EGRRCPA”) and its implementing regulations 17 Table of Contents pulled back some of the more stringent requirements of the Dodd-Frank Act for community banks with total consolidated assets of less than $10 billion, such as the Bank.
As with Corporate Banking, the primary underwriting considerations are project cash flow (current and historical), quality of leases, financial capacity of sponsors, and collateral value of property financed.
As with Corporate Banking, the primary underwriting considerations are cash flow projections (current and historical), quality of leases, financial capacity of sponsors, and collateral value of property financed.
If restrictions are imposed on the activities of an FHC, such information may not necessarily be available to the public. ​ II. The Bank ​ The Kentucky and federal banking statutes prescribe the permissible activities in which a Kentucky chartered bank may engage and where those activities may be conducted.
If restrictions are imposed on the activities of an FHC, such information may not necessarily be available to the public. ​ 18 Table of Contents II. The Bank ​ The Kentucky and federal banking statutes prescribe the permissible activities in which a Kentucky-chartered bank may engage and where those activities may be conducted.
Federal regulators evaluate the effectiveness of an applicant in combating money laundering when determining whether to approve a proposed bank merger, acquisition, restructuring, or other expansionary activity. ​ Consumer Laws and Regulations — The Bank is subject to a number of federal and state consumer protection laws, including, but not limited to, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Military Lending Act, the Real Estate Settlement Procedures Act, the Servicemembers Civil Relief Act, the Telephone Consumer Protection Act, and these laws’ respective state-law counterparts, among many others.
Additionally, federal banking regulatory agencies evaluate the effectiveness of an applicant in combating money laundering when, determining whether to approve, among other things, a proposed bank merger, acquisition, restructuring, or other expansionary activity. ​ Consumer Laws and Regulations — The Bank is subject to a number of federal and state consumer protection laws, including, but not limited to, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Military Lending Act, the Real Estate Settlement Procedures Act, the Servicemembers Civil Relief Act, the Telephone Consumer Protection Act, and these laws’ respective state-law counterparts, among many others.
In addition, agency regulations contain broad restrictions on certain activities of undercapitalized institutions including asset growth, acquisitions, branch establishment, and expansion into new lines of business.
In addition, applicable regulations contain broad restrictions on certain activities of undercapitalized institutions, including asset growth, acquisitions, branch establishment, and expansion into new lines of business.
RAs do not have a contractual due date but the Company considered an RA, related to the first quarter 2022 tax season, delinquent if it remained unpaid 35 days after the taxpayer’s tax return was submitted to the applicable taxing authority.
RAs do not have a contractual due date, but the Company considered an RA, related to the first quarter 2023 tax filing season, delinquent if it remained unpaid 35 days after the taxpayer’s tax return was submitted to the applicable taxing authority.
These standards cover internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, such other operational and managerial standards as the agency determines to be appropriate, and standards for asset quality, earnings, and stock valuation.
These standards cover internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation and benefits, standards for asset quality, earnings, and stock valuation, and other operational and managerial standards the agency determines to be appropriate.
The Bank also competes with insurance companies, consumer finance companies, investment banking firms, and mutual fund managers. Some of the Company’s competitors are not subject to the same degree of regulatory review and restrictions that apply to the Company and the Bank.
The Bank also competes with insurance companies, consumer finance companies, investment banking firms, and mutual fund managers. 15 Table of Contents Some of the Company’s competitors are not subject to the same degree of regulatory review and restrictions that apply to the Company and the Bank.
Under banking regulations, a bank may not lawfully accept, roll over, or renew brokered deposits unless it is either well capitalized or it is adequately capitalized and receives a waiver from its applicable regulator. ​ If a banking institution’s capital decreases below acceptable levels, bank regulatory enforcement powers become more enhanced.
Under applicable 23 Table of Contents regulations, a bank may not lawfully accept, roll over, or renew brokered deposits unless it is either well capitalized or it is adequately capitalized and receives a waiver from its applicable regulator. ​ If a banking institution’s capital decreases below acceptable levels, bank regulatory enforcement powers become more enhanced.
The CFPB is an independent “watchdog” within the Federal Reserve System that regulates any person or service provider who offers or provides personal, family or household financial products or services by overseeing the application and implementation of “Federal consumer financial laws”. ​ The CFPB is authorized to prescribe rules applicable to any covered person or service provider identifying and prohibiting acts or practices that are unfair, deceptive, or abusive in connection with any consumer financial product or service transaction.
The CFPB is an independent “watchdog” within the Federal Reserve System that regulates any person or service provider who offers or provides personal, family, or household financial products or services by overseeing the application and implementation of federal “consumer financial laws.” ​ The CFPB is authorized to prescribe rules applicable to any covered person or service provider identifying and prohibiting acts or practices that are unfair, deceptive, or abusive in connection with any consumer financial product or service transaction.
The guidance does not set forth any formulas or pay caps but contains certain principles that companies are required to follow with respect to employees and groups of employees that may expose the company to material amounts of risk.
The guidance does not set forth any formulas or pay caps but contains certain principles that organizations are required to follow with respect to employees and groups of employees that may expose the organizations to material amounts of risk.
The Bank has never sold loans to the Mortgage Purchase Program. 20 Table of Contents In the event of a default on an advance, the Federal Home Loan Bank Act establishes priority of the FHLB’s claim over various other claims.
The Bank has never sold loans to the Mortgage Purchase Program. ​ In the event of a default on an advance, the Federal Home Loan Bank Act establishes priority of the FHLB’s claim over various other claims.
Banks with risk-based capital and leverage ratios below the required minimums may also be subject to certain administrative actions, including the termination of deposit insurance upon notice and hearing, or a temporary suspension of insurance without a hearing if the institution has no tangible capital. ​ In addition, a BHC may face significant consequences if its bank subsidiary fails to maintain the required capital and management ratings, including entering into an agreement with the FRB that imposes limitations on its operations and may even require divestitures.
Banks with risk-based capital and leverage ratios below the required minimums may also be subject to certain administrative actions, including the termination of deposit insurance upon notice and hearing, or a temporary suspension of insurance without a hearing if the institution has no tangible capital. ​ In addition, an FHC may face significant consequences if its bank subsidiary fails to maintain the required capital and management ratings, including the imposition of an agreement with the FRB that imposes limitations on its operations and may require divestitures.
Agency regulations define, for each capital category, the levels at which institutions are well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.
Applicable regulations define, for each capital category, the levels at which institutions are well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.
Congress and state legislative bodies also continually consider proposals for altering the structure, regulation, and competitive relationships of financial institutions.
The U.S. Congress and state legislative bodies also continually consider proposals for altering the structure, regulation, and competitive relationships of financial institutions.
The CFPB has engaged in rulemaking and taken enforcement actions that directly impact the business operations of financial institutions offering consumer financial products or services including the Bank and its divisions.
The CFPB has engaged in rulemaking and taken enforcement actions that directly impact the business operations of financial institutions offering 20 Table of Contents consumer financial products or services, including the Bank and its divisions.
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.
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.
In addition, the Bank must obtain regulatory approval before entering into certain transactions, such as adding new banking offices and mergers with, or acquisitions of, other financial institutions.
In addition, the Bank must obtain regulatory approval before completing certain transactions, such as adding new banking offices and mergers with, or acquisitions of, other financial institutions.
Management is aware of no existing circumstances that would result in termination of the Bank’s FDIC deposit insurance. ​ Anti-Money Laundering, Patriot Act; OFAC Sanctions — The Company and the Bank are subject to federal laws that are designed to counter money laundering and terrorist financing, and transactions with persons, companies, or foreign governments sanctioned by the United States.
Management is aware of no existing circumstances that would result in termination of the Bank’s FDIC deposit insurance. ​ Anti-Money Laundering and Related Laws — The Company and the Bank are subject to federal laws that are designed to counter money laundering and terrorist financing and transactions with persons, companies, or foreign governments sanctioned by the United States.
The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. ​ General Business Overview ​ As of December 31, 2022, the Company was divided into five reportable segments: Traditional Banking, Warehouse, Mortgage Banking, TRS, and RCS.
The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy, information statements, and other information regarding issuers that file electronically with the SEC. ​ General Business Overview ​ As of December 31, 2023, the Company was divided into six reportable segments: Traditional Banking, Warehouse, Mortgage Banking, TRS, RPS, and RCS.
Commercial clients are typically located within the Bank’s market footprint or in an adjoining market. ​ Credit opportunities are generally driven by the following: companies expanding their businesses; companies acquiring new businesses; and/or companies refinancing existing debt from other institutions. The Bank has a focus on C&I lending, and owner-occupied and non-owner-occupied CRE lending.
Commercial clients are typically primarily located within the Bank’s market footprint or in an adjoining market. ​ Credit opportunities are generally driven by the following: companies expanding their businesses; companies acquiring new businesses; and/or companies refinancing existing debt from other institutions. The Bank has a primary focus on C&I lending and CRE lending.
The guidelines set forth safety and soundness standards that the federal banking regulatory agencies use to identify and address problems at FDIC member institutions before capital becomes impaired.
These guidelines set forth safety and soundness standards that the federal banking regulatory agencies use to identify and address problems at FDIC insured institutions before capital becomes impaired.
The Bank promotes these products to Tax Providers using various revenue-share and pricing incentives, as well as product features and overall service levels. ​ Republic Payment Solutions (a division of TRS) ​ The prepaid card industry is subject to intense and increasing competition.
The Bank promotes these products to Tax Providers using various revenue-share and pricing incentives, as well as product features and overall service levels. ​ Republic Payment Solutions ​ The prepaid card industry is subject to intense and increasing competition.
The number 11 Table of Contents of days for delinquency eligibility is based on management’s annual analysis of tax return processing times. Provisions on RAs are estimated when advances are made.
The number of days for delinquency eligibility is based on management’s annual analysis of tax return processing times. ​ Provisions on RAs are estimated when advances are made.
As discussed in more detail below, the Bank also complies with fair lending and privacy laws. Banks as well as nonbank consumer financial providers are subject to any rule, regulation or guideline created by the CFPB.
As discussed in more detail below, the Bank must also comply with fair lending and privacy laws. Banks as well as nonbank consumer financial services providers are subject to any rule, regulation, or guideline created by the CFPB.
In connection with loan purchases, the Bank receives various representations and warranties from the sellers regarding the quality and characteristics of the loans. ​ Commercial Lending — The Bank conducts commercial lending activities primarily through Corporate Banking, Commercial Banking, CRE Banking, Business Banking, and Retail Banking channels. ​ Commercial lending credit approvals and processing are prepared and underwritten through the Bank’s centralized CCAD.
In connection with loan purchases, the Bank receives various representations and warranties from the sellers regarding the quality and characteristics of the loans. ​ Commercial Lending — The Bank conducts commercial lending activities primarily through Corporate Banking, Commercial Banking, CRE Banking, Business Banking, Private Banking, and Retail Banking Channels. ​ Commercial lending credit approvals and processing are prepared and underwritten through the Bank’s centralized Commercial Credit Administration Department (“CCAD”).
Altogether, Republic had 984 full-time and 28 part-time employees. None of the Company’s employees are subject to a collective bargaining agreement, and Republic has never experienced a work stoppage. The Company believes that it has had and continues to have good employee relations. ​ Employee retention helps the Company operate efficiently and effectively.
Altogether, Republic had 1,010 full-time and 18 part-time employees. None of the Company’s employees are subject to a collective bargaining agreement, and Republic has never experienced a work stoppage. The Company believes that it has had and continues to have good employee relations. ​ Employee retention helps the Company operate efficiently and effectively.
Generally, commercial-construction loans are made for the duration of the construction period and slightly beyond and will either convert to permanent financing with the Bank or with another lender at or before maturity. ​ Construction-to-permanent loans are another type of construction-related financing offered by the Bank.
Generally, commercial-construction loans are made for the duration of the construction period and slightly beyond and will either convert to permanent financing with the Bank or with another lender at or before maturity. ​ Construction-to-permanent loans are another type of construction-related financing that the Bank offers.
For small banks (such as the Bank) post-Dodd-Frank, individual assessment rates are individually assigned based on the FDIC’s financial ratios method that estimates the probability of the bank’s failure over three years using financial data and a weighted average of the bank’s CAMELS component ratings, subject to adjustment. CAMELS composite ratings are used to set minimum and maximum assessment rates.
For small banks (such as the Bank) post-Dodd-Frank Act, individual assessment rates are individually assigned based on the FDIC’s financial ratios method that estimates the probability of a bank’s failure over three years using financial data and a weighted average of the bank’s CAMELS component ratings, subject to adjustment.
It also may prohibit any insured institution from engaging in any activity determined by regulation or order to pose a serious threat to the DIF. ​ 18 Table of Contents The FDIC assesses all banks quarterly. A bank’s assessment base and assessment rates are determined quarterly and are risk-based.
The FDIC also may prohibit any insured institution from engaging in any activity determined by regulation or order to pose a serious threat to the DIF. ​ The FDIC assesses all banks quarterly. A bank’s assessment base and assessment rates are determined quarterly and are risk-based.
In general, the statute requires explanations to consumers on policies and procedures regarding the disclosure of such nonpublic personal information, and, except as otherwise required by law, prohibits disclosing such information except as provided in the banking subsidiary’s policies and procedures.
In general, the statute requires explanations to consumers on policies and procedures regarding the disclosure of such nonpublic personal information, and, except as otherwise required by law, prohibits disclosing such information except as provided in the financial institution’s policies and procedures.
Unless the period for compliance is extended by the FRB, if an FHC fails to correct deficiencies in maintaining its qualification for FHC status within 180 days of notice to the FRB, 22 Table of Contents the FRB may order divestiture of any depository institution controlled by the company.
Unless the period for compliance is extended by the FRB, if an FHC fails to correct deficiencies in maintaining its qualification for FHC status within 180 days of notice of such deficiencies from the FRB, the FRB may order divestiture of any depository institution controlled by the company.
Additionally, the Company’s portion of interchange revenue generated by prepaid card transactions is reported as noninterest income under “Interchange fee income.” ​ See additional discussion regarding the TRS segment under the sections titled: ​ ● Part I Item 1A “Risk Factors” ● Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” ● Part II Item 8 “Financial Statements and Supplementary Data,” Footnote 25 “Segment Information” ​ (V) Republic Credit Solutions segment ​ Through the RCS segment, the Bank offers consumer credit products.
Additionally, the Company’s portion of interchange revenue generated by prepaid card transactions is reported as noninterest income under “Interchange fee income.” ​ See additional discussion regarding the RPS segment under the sections titled: ​ ● Part I Item 1A “Risk Factors” ● Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” ● Part II Item 8 “Financial Statements and Supplementary Data,” Footnote 24 “Segment Information” 13 Table of Contents (VI) Republic Credit Solutions segment ​ Through the RCS segment, the Bank offers consumer credit products.
These laws include the Bank Secrecy Act, the Money Laundering Control Act, the Anti-Money Laundering Act of 2020, the Corporate Transparency Act, and the USA Patriot Act, as administered by the United States Treasury Department’s Financial Crimes Enforcement Network.
These laws include the BSA, the Money Laundering Control Act, the Anti-Money Laundering Act of 2020, the Corporate Transparency Act, and the Patriot Act, as administered by the United States Treasury Department’s Financial Crimes Enforcement Network.
A depository institution is prohibited, subject to certain exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the client obtain some additional product or service from the institution or its affiliates or not obtain services of a competitor of the institution. ​ Depositor Preference — The FDIA provides that, in the event of the “liquidation or other resolution” of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other general unsecured claims against the institution.
A depository institution generally is prohibited, subject to certain exceptions, from extending credit or offering any other service, or fixing or varying the consideration for an extension of credit or service, on the condition that the client obtain some additional product or service from the institution or its affiliates or not obtain products or services of a competitor of the institution. ​ Depositor Preference — The FDIA provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as receiver, will have priority over other general unsecured claims against the 21 Table of Contents institution.
Interest rates offered are based on both fixed and variable interest-rate formulas. 7 Table of Contents The Bank’s CRE and multi-family loans are typically secured by improved property such as office buildings, medical facilities, retail centers, warehouses, apartment buildings, condominiums, schools, religious institutions, and other types of commercial use property. ​ The Business Banking and Business Development groups, reporting under Retail Banking, focus on locally based small-to-medium sized businesses in the Bank’s market footprint with primary annual revenues up to $10 million, and borrowings between $200,000 and $1 million.
Interest rates offered are based on both fixed and variable interest-rate formulas. ​ The Bank’s CRE and multi-family loans are typically secured by improved property such as office buildings, medical facilities, retail centers, warehouses, apartment buildings, condominiums, schools, religious institutions, and other types of commercial use property. 7 Table of Contents The Business Banking group, reporting under Retail Banking in most markets, focuses on locally based small businesses in the Bank’s market footprint with primary annual revenues up to $10 million and borrowings between $350,000 and $1 million.
The Bank’s lenders utilize all appropriate programs of the SBA to reduce credit risk exposure. ​ 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).
The Bank’s lenders utilize programs of the SBA to reduce credit risk exposure. ​ Construction and Land Development Lending — T he Bank originates business loans for the construction of both single-family, residential properties, and commercial properties (e.g., apartment complexes, shopping centers, office buildings).
While the Bank operates primarily in its market footprint, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S. The Captive is a Nevada-based, wholly owned insurance subsidiary of the Company.
While the Bank operates primarily in its market footprint, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S. During the fourth quarter of 2023, the Company dissolved its Captive, a Nevada-based, wholly owned insurance subsidiary of the Company.
The ERA product related to the first quarter 2023 tax filing season had the following features: ​ ● Offered only during December 2022 and January 2023; ● The taxpayer had the option to choose from multiple loan-amount tiers, subject to underwriting, up to a maximum advance amount of $1,000; ● No requirement that the taxpayer pays for another bank product, such as an RT; ● Multiple disbursement methods were available with most Tax Providers, including direct deposit or prepaid card, based on the taxpayer-customer’s election; ● Repayment of the ERA to the Bank is deducted from the taxpayer’s tax refund proceeds; and ● If an insufficient refund to repay the ERA occurs, including the failure to file a final federal tax return through a Republic Tax Provider: o there is 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 ERA product had the following features during the 2023 and 2024 tax filing seasons: ​ ● Only offered during December and the following 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; ● No requirement that the taxpayer pays for another bank product, such as an RT; ● Multiple disbursement methods available with 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. ​ 11 Table of Contents The Company reports fees paid for the RAs, including ERAs, as interest income on loans.
Correspondent Lending generally involves the Bank acquiring, primarily from its Warehouse Lending clients, closed loans that meet the Bank’s specifications. Substantially all loans purchased through the Correspondent Lending channel will be purchased at a premium.
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.
RAs that were originated related to the first quarter 2022 tax season were repaid, on average, within 32 days after the taxpayer’s tax return was submitted to the applicable taxing authority.
RAs, including ERAs that were originated related to the first quarter 2023 tax filing season were repaid, on average, within 32 days after the taxpayer’s tax return was submitted to the applicable taxing authority.
This support may restrict the Company’s ability to pay dividends, and may be required at times when, absent this FRB policy, a holding company may not be inclined to provide it. A BHC may also be required to guarantee the capital restoration plan of an undercapitalized banking subsidiary and any applicable cross-guarantee provisions that may apply to the Company.
Providing financial support of this nature could restrict the Company’s ability to pay dividends, and may be required at times when the Company may not be inclined to provide it. A BHC may also be required to guarantee the capital restoration plan of an undercapitalized banking subsidiary and any applicable cross-guarantee provisions that may apply to the BHC.
Except for its HEAL product under $250,000, the Bank requires mortgagee’s title insurance on single family, first lien residential real estate 6 Table of Contents loans to protect the Bank against defects in its liens on the properties that collateralize the loans.
Except for its HEAL product with loan amounts under $250,000, the Bank requires mortgagee’s title insurance on single-family, first-lien residential real estate loans to protect the Bank against defects in its liens on the properties that collateralize the loans.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf the Company can no longer offer or must substantially alter its RPG products, it will have a material adverse effect on its profits. ​ ​ 23 Table of Contents The Bank’s RPG products represent a significant third-party management risk, and if the Bank’s third-party service providers fail to comply with all the statutory and regulatory requirements for these products or if the Bank fails to properly monitor its third-party service providers offering these products, it could have a material negative impact on earnings.
Biggest changeIf the Company can no longer offer or must substantially alter its RPG products, it will have a material negative impact on earnings. ​ Use of third parties creates a third-party management risk.
A material increase in the ACLL or loan charge-offs would have a material adverse effect on the Bank’s financial condition and results of operations. ​ Deterioration in the quality of the Traditional Banking loan portfolio may result in additional charge-offs, which would adversely impact the Bank’s operating results.
A material increase in the ACLL or loan charge-offs would have a material adverse effect on the Bank’s financial condition and results of operations. ​ Deterioration in the quality of the Traditional Banking loan portfolio may result in additional charge-offs, which would adversely impact the Bank’s operating results and financial condition.
These changes in the RA’s underwriting criteria do not ensure positive results and could have an overall material negative impact on the performance of the RA and therefore on the Company’s financial condition and results of operations. ​ Because there is no recourse to the taxpayer customer if the RA is not paid off by the taxpayer customer’s tax refund, the Bank must collect all its payments related to RAs through the refund process.
These changes in the RAs underwriting criteria do not ensure positive results and could have an overall material negative impact on the performance of the RA and therefore on the Company’s financial condition and results of operations. ​ Because there is no recourse to the taxpayer customer if the RA is not paid off by the taxpayer customer’s tax refund, the Bank must collect all its payments related to RAs through the refund process.
A rise in the Bank’s cost of interest-bearing liabilities without a corresponding increase in the yield on its interest-earning assets, would have an adverse effect on the Bank’s net interest margin and overall results of operations. ​ The Bank may be compelled to offer market-leading interest rates to maintain sufficient funding and liquidity levels.
An additional rise in the Bank’s cost of interest-bearing liabilities without a corresponding increase in the yield on its interest-earning assets, would have an adverse effect on the Bank’s net interest margin and overall results of operations. ​ The Bank may be compelled to offer market-leading interest rates to maintain sufficient funding and liquidity levels.
Such an increase could have a material adverse impact on the program, and if such losses persisted for an extended period of time, it could lead to the discontinuation of the underlying product. ​ Management’s changes to RPG product parameters could have a material negative impact on the performance of the RPG products.
Such an increase could have a material adverse impact on the program, and if such losses persisted for an extended period, it could lead to the discontinuation of the underlying product. ​ Management’s changes to RPG product parameters could have a material negative impact on the performance of the RPG products.
The Company is dependent upon the ability and experience of a number of its key management personnel who have substantial experience with Company operations, the financial services industry, and the markets in which the Company offers services.
The Company is materially dependent upon the ability and experience of a number of its key management personnel who have substantial experience with Company operations, the financial services industry, and the markets in which the Company offers services.
Cyber-attacks may be carried out directly against the Company, or against the Company’s clients or vendors by third parties or insiders using techniques that range from highly sophisticated efforts to electronically circumvent network security or overwhelm websites to more traditional intelligence gathering and social engineering aimed at obtaining information necessary to gain access.
Cyber-attacks may be carried out directly against the Company, or against the Company’s clients or service providers/vendors by third parties or insiders using techniques that range from highly sophisticated efforts to electronically circumvent network security or overwhelm websites to more traditional intelligence gathering and social engineering aimed at obtaining information necessary to gain access.
There can be no assurance about the level of the market price of the Company’s common stock in the future or that investors will be able to resell their shares at times or at prices they find attractive. ​ The Company’s insiders hold voting rights that give them significant control over matters requiring stockholder approval.
There can be no assurance about the level of the market price of the Company’s common stock in the future or that investors will be able to resell their shares at times or at prices they find attractive. ​ The Company’s insiders hold voting rights that give them significant control over matters requiring shareholder approval.
While the Company has not incurred any material losses related to cyber-attacks, the Bank may incur substantial costs and suffer other negative consequences if the Bank, the Bank’s clients, or one of the Bank’s third-party service providers fall victim to successful cyber-attacks.
While the Company, to its knowledge, has not incurred any material losses related to cyber-attacks, the Bank may incur substantial costs and suffer other negative consequences if the Bank, the Bank’s clients, or one of the Bank’s third-party service providers fall victim to successful cyber-attacks.
The Company’s Executive Chair/CEO and Vice Chair hold substantial voting authority over the Company’s Class A Common Stock and Class B Common Stock. Each share of Class A Common Stock is entitled to one vote and each share of Class B Common Stock is entitled to ten votes. This group generally votes together on matters presented to stockholders for approval.
The Company’s Executive Chair/CEO and Vice Chair hold substantial voting authority over the Company’s Class A Common Stock and Class B Common Stock. Each share of Class A Common Stock is entitled to one vote and each share of Class B Common Stock is entitled to ten votes. This group generally votes together on matters presented to shareholders for approval.
These funding delays effectively restrict the Bank’s ability to make in-season modifications to its RA underwriting model based on then-current year tax refund funding patterns, because the substantial majority of all RAs are issued prior to February 15.
These funding delays effectively restrict the Bank’s ability to make in-season modifications to its RA underwriting model based on then-current year tax refund funding patterns, because the substantial majority of all RAs are issued prior to February 15th.
The Bank has traditionally relied on client deposits (with approximately 7% of deposits concentrated with the Bank’s top 20 depositors), brokered deposits, and advances from the FHLB to fund operations. Such traditional sources may be unavailable, limited, or insufficient in the future.
The Bank has traditionally relied on client deposits (with approximately 6% of deposits concentrated with the Bank’s top 20 depositors), brokered deposits, and advances from the FHLB to fund operations. Such traditional sources may be unavailable, limited, or insufficient in the future.
Such negative consequences could include: remediation costs for stolen assets or information; system repairs; consumer protection costs; increased cyber security protection costs that may include organizational changes; deploying additional personnel and protection technologies, training employees, and engaging third-party experts and consultants; lost revenues resulting from unauthorized use of proprietary information or the failure to retain or attract clients following an attack; litigation and payment of damages; and reputational damage adversely affecting client or investor confidence. ​ The Company’s information systems may experience an interruption that could adversely impact the Company’s business, financial condition, and results of operations .
Such negative consequences could include: remediation costs for stolen assets or information; system repairs; consumer protection costs; increased cybersecurity protection costs that may include organizational changes; deploying additional personnel and protection technologies, training employees, and engaging third-party experts and consultants; lost revenues resulting from unauthorized use of proprietary information or the failure to retain or attract clients following an attack; litigation and payment of damages; and reputational damage adversely affecting client or investor confidence. ​ The Company’s information systems may experience an interruption that could adversely impact the Company’s financial condition and results of operations .
Loans serviced outside the Bank’s traditional footprint also subject the Bank to various state-level servicing laws and regulations that are different than those within the Bank’s traditional footprint and may impact the Bank’s ability to collect a deficiency and timely foreclose on a loan that becomes delinquent.
Loans serviced outside the Bank’s traditional footprint also subject the Bank to various state-level servicing laws and regulations that are different than those within the Bank’s traditional footprint and may impact the Bank’s ability to collect a deficiency and timely foreclose on a loan.
There is credit risk associated with an RA because the funds are disbursed to the taxpayer customer prior to the Bank receiving the taxpayer customer’s refund as claimed on the return. Management annually reviews and revises the RA’s underwriting criteria.
There is credit risk associated with an RA because the funds are disbursed to the taxpayer customer prior to the Bank receiving the taxpayer customer’s refund as claimed on the return. Management annually reviews and revises the RAs underwriting criteria.
These costs and claims could adversely affect the Bank. ​ The Bank holds a significant amount of BOLI, which creates credit risk relative to the insurers and liquidity risk relative to the product. As of December 31, 2022, the Bank held BOLI on certain employees.
These costs and claims could adversely affect the Bank. ​ The Bank holds a significant amount of BOLI, which creates credit risk relative to the insurers and liquidity risk relative to the product. As of December 31, 2023, the Bank held BOLI on certain employees.
A decline in demand for Mortgage Banking products resulting from rising interest rates could also adversely impact other products which are typically cross-sold with mortgages. ​ 31 Table of Contents Fluctuations in interest rates could reduce profitability.
A decline in demand for Mortgage Banking products resulting from rising interest rates could also adversely impact other products which are typically cross-sold with mortgages. 25 Table of Contents Fluctuations in interest rates could reduce profitability.
While the Bank’s underwriting during the RA approval process takes these factors into consideration based on prior years’ payment patterns, if the IRS significantly alters its revenue protection strategies, if refund payment patterns for a given tax season meaningfully change, if the federal government fails to timely deliver refunds, or if the Bank is incorrect in its underwriting assumptions, the Bank could experience higher loan loss provisions above those projected.
While the Bank’s underwriting during the RA approval process takes these factors into consideration based on prior years’ payment patterns, if the IRS significantly alters its revenue protection strategies, if refund payment patterns for a given tax season meaningfully change, if the federal government fails to 27 Table of Contents timely deliver refunds, or if the Bank is incorrect in its underwriting assumptions, the Bank could experience higher loan loss provisions above those projected.
The Company is exposed to the risk of cyber-attacks in the normal course of business and incurs substantial cyber security protection costs. In general, cyber incidents can result from deliberate attacks or unintentional events.
The Company is exposed to the risk of cyber-attacks in the normal course of business and incurs substantial cybersecurity protection costs. In general, cyber incidents can result from deliberate attacks or unintentional events.
Failure to comply with disclosure requirements or with laws, including those relating to the permissibility of interest rates and fees charged, could have a material negative impact on earnings. In addition, failure to comply with applicable laws and regulations could also expose RB&T to civil money penalties and litigation risk, including shareholder actions.
Failure to comply with disclosure requirements or with laws, including those relating to the permissibility of interest rates and fees charged, could have a material negative impact on earnings. In addition, failure to comply with applicable laws and regulations could also expose the Bank to civil money penalties and litigation risk, including shareholder actions.
As a result of any of these factors, the value of collateral securing a loan may be less than supposed, and if a default occurs, the Bank may not recover the outstanding balance of the loan. Approximately 27% of the Bank’s portfolio is secured by residential real estate and 35% is secured by commercial real estate properties.
As a result of any of these factors, the value of collateral securing a loan may be less than supposed, and if a default occurs, the Bank may not recover the outstanding balance of the loan. Approximately 34% of the Bank’s portfolio is secured by residential real estate and 34% is secured by commercial real estate properties.
In addition, failure to comply with applicable laws and regulations could also expose RB&T to civil money penalties and litigation risk, including shareholder actions. Various states and consumer groups have, from time to time, questioned the fairness of the products offered by RPG.
In addition, failure to comply with applicable laws and regulations could also expose the Bank to civil money penalties and litigation risk, including shareholder actions. Various states and consumer groups have, from time to time, questioned the fairness of the products offered by RPG.
While the Company has policies and procedures designed to prevent or limit the impact of the failure or interruption of information systems, there can be no assurance that any such failures or interruptions will not occur or, if they do occur, that they will be adequately addressed.
While the Company has policies and procedures designed to prevent or limit the impact of the failure or interruption of information systems, there can be no assurance that any such failures or interruptions will not occur or, if they do 31 Table of Contents occur, that they will be adequately addressed.
The Company expects that the market price of its common stock will continue to fluctuate due to many factors, including prevailing interest rates, other economic conditions, operating performance, and investor perceptions of the outlook for the Company specifically and the banking industry in general.
The Company expects that the market price of its common stock will continue to fluctuate due to many factors, including prevailing interest rates, other economic conditions, operating performance, and investor perceptions of the outlook for the Company specifically and the banking industry in 36 Table of Contents general.
In determining the amount of the ACLL, among other things, the Bank reviews its loss and delinquency experience, economic conditions, etc. If its assumptions are incorrect, the ACLL may not be sufficient to cover losses inherent in its loan portfolio, resulting in additions to its ACLL.
In determining the amount of the ACLL, among other things, the Bank reviews its loss and delinquency experience, economic conditions, etc. If its assumptions are incorrect, the ACLL may not be 28 Table of Contents sufficient to cover losses inherent in its loan portfolio, resulting in additions to its ACLL.
Such penalties could also include the discontinuance of any or all third-party program manager products and services. ​ The Bank’s “Overdraft Honor” program represents a significant business risk, and if the Bank terminated the program, it would materially impact the earnings of the Bank.
Such penalties could also include the discontinuance of any or all third-party program manager products and services. 32 Table of Contents The Bank’s “Overdraft Honor” program represents a significant business risk, and if the Bank terminated the program, it would materially impact the earnings of the Bank.
Any failure, sustained interruption, or breach in security, including the cyber security, of these systems could result in failures or disruptions in client relationship management and other systems.
Any failure, sustained interruption, or breach in security, including the cybersecurity, of these systems could result in failures or disruptions in client relationship management and other systems.
As a result, the underwriting criteria that TRS 25 Table of Contents establishes for the RA product at the beginning of the tax season could have a material negative impact on the performance of the RA before mitigating revisions can be made. ​ ERAs represent a significant credit risk, and if RB&T is unable to collect a significant portion of its ERAs, it would materially, negatively impact earnings.
As a result, the underwriting criteria that TRS establishes for the RA product at the beginning of the tax season could have a material negative impact on the performance of the RA before mitigating revisions can be made. ​ ERAs represent a significant credit risk, and if RB&T is unable to collect a significant portion of its ERAs, it would materially, negatively impact earnings and results of operations .
Ineffective internal control over financial reporting could diminish investor confidence, negatively affect the 35 Table of Contents price of the Company’s Class A common stock, and could result in the Company’s delisting on the Nasdaq. See Item 9A.
Ineffective internal control over financial reporting could diminish investor confidence, negatively affect the price of the Company’s Class A common stock, and could result in the Company’s delisting on the Nasdaq. See Item 9A.
These, and other restrictions, can limit in varying degrees, the way Republic conducts its business. ​ 24 Table of Contents Federal and state laws and regulations govern numerous matters relating to the offering of banking products.
These, and other restrictions, can limit in varying degrees, the way Republic conducts its business. ​ Federal and state laws and regulations govern numerous matters relating to the offering of banking products.
Because the Bank’s interest-bearing liabilities tend to be shorter in duration than its interest-earning assets, when the yield curve flattens or even inverts, the Bank’s net interest margin could decrease as its cost of funds rises higher and at a faster pace than the yield on its interest-earning assets.
Because the Bank’s interest-bearing liabilities tend to be shorter in duration than its interest-earning assets, when the yield curve flattens or even inverts, the Bank’s net interest margin generally decreases as its cost of funds rises higher and at a faster pace than the yield on its interest-earning assets.
Consequently, other stockholders’ ability to influence Company actions through their vote may be limited and the non-insider stockholders may not have sufficient voting power to approve a change in control even if a significant premium is being offered for their shares.
Consequently, other shareholders’ ability to influence Company actions through their vote may be limited and the non-insider shareholders may not have sufficient voting power to approve a change in control even if a significant premium is being offered for their shares.
Additional charge-offs will adversely affect the Bank’s operating results and financial condition. ​ 26 Table of Contents Loans originated through the Bank’s Consumer Direct and Correspondent Lending channels subject the Bank to credit risks that the Bank does not have through its historical origination and servicing channels.
Additional charge-offs will adversely affect the Bank’s operating results and financial condition. ​ Loans originated through the Bank’s Consumer Direct and Correspondent Lending channels subject the Bank to credit risks that the Bank does not have through its historical origination and servicing channels.
In either event, if market interest rates should move contrary to the Bank’s position, earnings may be negatively affected. ​ A flattening or inversion of the interest rate yield curve may reduce profitability. Changes in the slope of the “yield curve,” or the spread between short-term and long-term interest rates, could reduce the Bank’s net interest margin.
In either event, if market interest rates should move contrary to the Bank’s balance sheet position, earnings may be negatively affected. ​ A continued or further inversion of the interest rate yield curve may reduce profitability. Changes in the slope of the “yield curve,” or the spread between short-term and long-term interest rates, could reduce the Bank’s net interest margin.
RPG and its third-party service providers operate in a highly regulated environment and deliver products and services that are subject to strict legal and regulatory requirements.
The Bank, including RPG, and its third-party service providers operate in a highly regulated environment and deliver products and services that are subject to strict legal and regulatory requirements.
The risks presented by the acquisition of other financial institutions could adversely affect the Bank’s financial condition and results of operations. ​ Successful Company acquisitions present many risks that could adversely affect the Company’s financial condition and results of operations.
The risks presented by the acquisition of other financial institutions could adversely affect the Bank’s financial condition and results of operations. ​ 35 Table of Contents Successful Company acquisitions present many risks that could adversely affect the Company’s financial condition and results of operations.
To conduct its RPG businesses, the Bank must implement and test new systems, train associates for new products and changes to existing products, and process information and data received from third party marketer and servicer providers.
To conduct its RPG businesses, the Bank must implement and test new systems, train associates for new products and changes to existing products, and process information and data received from third-party marketers and service providers.
If the Bank were unable to properly service this business as a result of inaccurate or untimely data from its third party marketer and servicer providers, it could materially impact earnings. ​ 27 Table of Contents RCS revenues and earnings are highly concentrated in its line-of-credit products.
If the Bank were unable to properly service this business as a result of inaccurate or untimely data from its third-party marketers and service providers, it could materially impact earnings. ​ RCS revenues and earnings are highly concentrated in its line-of-credit products.
Further changes in product parameters do not ensure positive results and could have an overall material negative impact on the performance of the product and therefore on the Company’s financial condition and results of operations. ​ The Warehouse Lending business is subject to numerous risks that may result in losses.
Further changes in product parameters do not ensure positive results and could have an overall material negative impact on the performance of the product and therefore on the Company’s financial condition and results of operations. ​ The Warehouse Lending business is subject to numerous risks that may have a material adverse impact on the Bank’s financial statements and results of operations.
If these third-party service providers experience difficulty or terminate their services and the Company is unable to replace them with other providers, its operations could be interrupted, which would adversely impact its business. ​ 29 Table of Contents The Company’s operations, including third-party and client interactions, are increasingly done via electronic means, and this has increased the risks related to cyber security.
If these third-party service providers experience difficulty or terminate their services and the Company is unable to replace them with other providers, its operations could be interrupted, which would adversely impact its business. ​ The Company’s operations, including third-party and client interactions, are increasingly done via electronic means, and this has increased the risks related to cybersecurity threats.
If the Bank needs to liquidate these policies for liquidity purposes, it would be subject to taxation on the increase in cash surrender value and penalties for early termination, both of which would adversely impact earnings. ​ OPERATIONAL AND STRATEGIC RISKS ​ RPG products represent a significant operational risk and rely heavily on the accuracy and timeliness of data received from the Bank’s third party marketer and servicer providers.
If the Bank needs to liquidate these policies for liquidity purposes, it would be subject to taxation on the increase in cash surrender value and penalties for early termination, both of which would adversely impact earnings. ​ 29 Table of Contents OPERATIONAL AND STRATEGIC RISKS ​ RPG products represent a significant operational risk, and RPG relies heavily on the accuracy and timeliness of data received from the Bank’s third-party marketers and service providers.
The Company’s Captive is a Nevada-based, wholly owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company and the Bank as well as a group of other third-party insurance captives for which insurance may not be available or economically feasible.
The Captive was a Nevada-based, wholly owned insurance subsidiary of the Company that provided property and casualty insurance coverage to the Company and the Bank as well as a group of other third-party insurance captives for which insurance may not have been available or economically feasible.
Such penalties could also include the discontinuance of the Consumer Direct Channel or Corresponding Lending operations. ​ Failure to appropriately manage these additional risks could lead to additional regulatory and compliance risks, as well as create burdens that reduce profitability or cause operating losses from these origination channels. ​ The Company is significantly impacted by the regulatory, fiscal, and monetary policies of federal and state governments that could negatively impact the Company’s liquidity position and earnings.
Failure to appropriately manage these additional risks could lead to regulatory and compliance risks, as well as create burdens that reduce profitability or cause operating losses from these origination channels. ​ The Company is significantly impacted by the regulatory, fiscal, and monetary policies of federal and state governments that could negatively impact the Company’s liquidity position and earnings.
Included in its actions are raising the FFTR, ending its quantitative easing program of buying certain types of bonds in the open market, and implementing a quantitative tightening program to reduce the size of its balance sheet by selling certain types of bonds in the market. ​ The FOMC’s signaling of these actions caused market interest rates for U.S.
Included in its actions since early 2022 have been raising the FFTR multiple times, ending its quantitative easing program of buying certain types of bonds in the open market, and implementing a quantitative tightening program to reduce the size of its balance sheet by selling certain types of bonds in the market. ​ The FOMC’s continuance of these actions caused market interest rates for U.S.
Included in its actions are raising the FFTR multiple times, ending its quantitative easing program of buying certain types of bonds in the open market, and implementing a quantitative tightening program by reducing the size of its balance sheet and selling certain types of bonds in the market. ​ The FOMC’s implementation of these actions caused market interest rates for treasury bonds and mortgages to rise rapidly during 2022.
Included in its actions since early 2022 have been raising the FFTR multiple times, ending its quantitative easing program of buying certain types of bonds in the open market, and implementing a quantitative tightening program by reducing the size of its balance sheet and selling certain types of bonds in the market. ​ The FOMC’s continuance of these actions caused market interest rates for treasury bonds and mortgages to remain elevated during 2023.
The loss of a significant number of clients may materially impact the Company’s results of operations. ​ Mortgage Banking revenue will likely decline due to declining mortgage demand resulting from a rising interest rate environment, which will also lead to more intense industry competition for a shrinking mortgage market. Mortgage Banking is a significant operating segment of the Company.
The loss of a significant number of clients, or large significant clients, may materially impact the Company’s results of operations. ​ Mortgage Banking revenue will likely continue to decline due to low mortgage demand resulting from an elevated interest rate environment, which will also lead to more intense industry competition for a shrinking mortgage market.
With the rise of inflation during 2022, the FOMC implemented a more aggressive and hawkish approach to its monetary policies during 2022 and has signaled these policies could continue into the future until inflation decreases to acceptable levels.
With the continued elevated inflation levels during 2023, the FOMC continued a more aggressive and hawkish approach to its monetary policies during the year and has signaled these policies could continue into the future until inflation decreases to, and remains at, acceptable levels.
Generally, if demand increases, Mortgage Banking income will be positively impacted by more gains on sale; however, the valuation of existing mortgage servicing rights will decrease and may result in a significant impairment.
A decline in market interest rates generally results in higher demand for mortgage products, while an increase in rates generally results in reduced demand. Generally, if demand increases, Mortgage Banking income will be positively impacted by more gains on sale; however, the valuation of existing mortgage servicing rights will decrease and may result in a significant impairment.
If clients move money out of bank deposits in favor of alternative investments, the Bank could lose a relatively inexpensive source of funds, increasing its funding costs and negatively impacting its overall results of operations. ​ The loss of large deposit relationships could increase the Bank’s funding costs.
If clients move money out of bank deposits in favor of alternative investments, the Bank could lose a relatively inexpensive source of funds, increasing its funding costs and negatively impacting its overall results of operations. ​ 30 Table of Contents Prepayment of loans may negatively impact the Bank’s results of operations and financial condition.
Initiatives of the current President and the current Congress, along with actions of the states, governmental agencies, and consumer groups, could result in regulatory, governmental, or legislative action or litigation, which could have a material adverse effect on the Company’s operations. ​ Use of third parties creates a third-party management risk.
Initiatives of the current President and the current Congress, along with actions of the states, governmental agencies, and consumer groups, could result in regulatory, governmental, or legislative action or litigation, which could have a material adverse effect on the Company’s operations. ​ Republic may experience additional increases in FDIC insurance assessments.
Failure by the Bank to properly comply with these various state level laws and regulations could subject the Bank to fines and penalties that materially and adversely affect the Bank’s earnings.
Failure by the Bank to properly comply with these various state-level laws and regulations could subject the Bank to fines and penalties that materially and adversely affect the Bank’s earnings. Such penalties could also include the discontinuance of the Consumer Direct Channel or Corresponding Lending operations.
The Bank’s status as an approved seller/servicer for both is subject to compliance with their selling and servicing guides. ​ Any discontinuation of, or significant reduction or material change in, the operation of Freddie Mac or Fannie Mae or any significant adverse change in the level of activity in the secondary mortgage market or the underwriting criteria of Freddie Mac or Fannie Mae would likely prevent the Bank from originating and selling most, if not all, of its mortgage loan originations. ​ Prepayment of loans may negatively impact the Bank’s business.
The Bank’s status as an approved seller/servicer for both is subject to compliance with their selling and servicing guides. ​ Any discontinuation of, or significant reduction or material change in, the operation of Freddie Mac or Fannie Mae or any significant adverse change in the level of activity in the secondary mortgage market or the underwriting criteria of Freddie Mac or Fannie Mae would likely prevent the Bank from originating and selling most, if not all, of its mortgage loan originations, which would materially and adversely affect its business, financial position, results of operations, and cash flows. ​ Clients could pursue alternatives to bank deposits, causing the Bank to lose a relatively inexpensive source of funding.
A low average daily stock trading volume can lead to significant price swings even when a relatively small number of shares are being traded. ​ ​ 32 Table of Contents The market price for the Company’s common stock may be volatile.
Republic’s stock price can fluctuate widely in response to a variety of factors, as detailed in the next risk factor. A low average daily stock trading volume can lead to significant price swings even when a relatively small number of shares are being traded. ​ The market price for the Company’s common stock may be volatile.
Financial services institutions are interrelated because of trading, clearing, counterparty, or other relationships. The Company has exposure to many different industries and counterparties, and routinely executes transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks, and other institutional clients.
The Company has exposure to many different industries and counterparties, and routinely executes transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks, and other institutional clients. Many of these transactions expose the Company to credit risk in the event of a default by a counterparty or client.
With the rise in mortgage rates, mortgage refinance activity slowed dramatically during 2022, and as a result, mortgage origination volume declined significantly. Further monetary tightening by the FOMC in 2023 will likely further decrease mortgage demand.
With the higher mortgage rates, mortgage refinance activity remained low during 2023, and as a result, mortgage origination volume remained low. Continued or additional monetary tightening by the FOMC in 2024 will likely further decrease mortgage demand.
Changes in interest rates can impact the gain on sale of loans, loan origination fees, and loan servicing fees, which account for a significant portion of Mortgage Banking income. A decline in market interest rates generally results in higher demand for mortgage products, while an increase in rates generally results in reduced demand.
The Company is unable to predict changes in market interest rates. Changes in interest rates can impact the gain on sale of loans, loan origination fees, and loan servicing fees, which account for a significant portion of Mortgage Banking income.
Treasury bonds and mortgages to rise rapidly during the 2022. With the rise in mortgage rates, mortgage refinance activity slowed dramatically during 2022, and Warehouse usage began to decline significantly. Further monetary tightening by the FOMC in 2023 will likely further decrease mortgage demand and Warehouse line usage.
Treasury bonds and mortgages to remain elevated during 2023. With the elevated mortgage rates during 2023, mortgage refinance activity remained low, and Warehouse usage continued to decline throughout the year. Further monetary tightening by the FOMC in 2024 will likely further decrease mortgage demand and Warehouse line usage.
Such decreased earnings could materially impact the Company’s results of operations. ​ The Company may lose Warehouse clients due to mergers and acquisitions in the industry. The Bank’s Warehouse clients are primarily mortgage companies across the United States. Mergers and acquisitions affecting such clients may lead to an end to the client relationship with the Bank.
The Bank’s Warehouse clients are primarily mortgage companies across the United States. Mergers and acquisitions affecting such clients may lead to an end to the client relationship with the Bank.
In addition, a decrease in mortgage demand across the mortgage industry could also cause competitive pricing pressure on the Bank to lower its mortgage pricing to maintain its volumes for a shrinking market, further causing its cash gains-as-a-percentage-of-loans-sold to decline. ​ The Bank will likely experience decreased Mortgage Banking revenue during 2023 due to expected rising market interest rates and strong industry competition, housing supply shortages, and pricing pressures.
In addition, a decrease in mortgage demand across the mortgage industry could also cause competitive pricing pressure on the Bank to lower its mortgage pricing to maintain its volumes for a shrinking market, further causing its cash gains-as-a-percentage-of-loans-sold to decline.
Majority stockholders may not vote their shares in accordance with minority stockholder interests. ​ An investment in the Company’s Common Stock is not an insured deposit . The Company’s common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity.
The Company’s common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity.
The overall cost of gathering brokered deposits and/or FHLB advances, however, could be substantially higher than the Traditional Bank deposits they replace, increasing the Bank’s funding costs and reducing the Bank’s overall results of operations. ​ Government responses to economic conditions may adversely affect the Company’s operations, financial condition, and earnings .
The overall cost of gathering brokered deposits and/or FHLB advances, however, could be substantially higher than the Traditional Bank deposits they replace, increasing the Bank’s funding costs and reducing the Bank’s overall results of operations. ​ Recent negative developments in the banking industry could adversely affect Republic’s current and future business operations and its financial condition and results of operations.
Any such losses could have a material adverse effect on the Company’s financial condition and results of operations. ​ The Company is dependent upon the services of key qualified personnel.
Any such losses could have a material adverse effect on the Company’s financial condition and results of operations. ​ The Company is dependent upon retaining and recruiting key qualified personnel and the loss of one or more of these key individuals could curtail its growth and adversely affect its prospects.
Obtaining funds at market-leading interest rates would have an adverse impact on the Company’s net interest income and overall results of operations. ​ Clients could pursue alternatives to bank deposits, causing the Bank to lose a relatively inexpensive source of funding.
Obtaining funds at market-leading interest rates would have an adverse impact on the Company’s net interest income and overall results of operations. ​ The loss of large deposit relationships could increase the Bank’s funding costs.
In addition, a decrease in usage across the Warehouse industry could also cause competitive pricing pressure on the Bank to lower its pricing to its Warehouse clients in order to maintain higher volumes. ​ The Bank could likely experience decreased earnings on its Warehouse lines of credit during 2023 due to the expected interest rate environment combined with strong industry competition and pricing pressures.
In addition, a decrease in usage across the Warehouse industry could also cause competitive pricing pressure on the Bank to lower its pricing to its Warehouse clients in order to maintain higher volumes.
It is possible that the loss of the services of one or more of its key personnel would have an adverse effect on operations. ​ The Company’s operations could be impacted if its third-party service providers experience difficulty . The Company depends on several relationships with third-party service providers, including core systems processing and web hosting.
Competition for such personnel is intense, and management cannot be sure that the Bank will be successful in attracting or retaining such personnel. ​ The Company’s operations could be impacted if its third-party service providers experience difficulty . The Company depends on several relationships with third-party service providers, including core systems processing and web hosting.
All service offerings, including current offerings and those that may be provided in the future, may become riskier due to changes in economic, competitive, and market conditions beyond the Company’s control. ​ ​ 30 Table of Contents The proposed acquisition and integration of CBank pursuant to the CBank Agreement includes certain acquisition-related risks to the Company and the Bank.
All service offerings, including current offerings and those that may be provided in the future, may become riskier due to changes in economic, competitive, and market conditions beyond the Company’s control. ​ The Bank may experience goodwill impairment, which could reduce its earnings.
Its policies determine, in large part, the Company’s cost of funds for lending and investing and the return the Company earns on these loans and investments, all of which impact net interest margin. ​ The Company and the Bank are heavily regulated at both the federal and state levels and are subject to various routine and non-routine examinations by federal and state regulators.
The Board of Governors of the Federal Reserve System regulates the supply of money and credit in the U.S. Its policies determine, in large part, the Company’s cost of funds for lending and investing and the return the Company earns on these loans and investments, all of which impact net interest margin.
With the rise of inflation during 2022, the FOMC has implemented a more aggressive and hawkish approach to its monetary policies.
Mortgage Banking is a significant operating segment of the Company. With the elevated level of inflation during 2023, the FOMC continued its more aggressive and hawkish approach to its monetary policies.
If management’s judgment was incorrect and goodwill impairment was later deemed to exist, the Bank would be required to write down its goodwill resulting in a charge to earnings, which could materially, adversely affect its results of operations. ​ ​ Item 1B. Unresolved Staff Comments . ​ None ​ 36 Table of Contents
If management’s judgment was incorrect and goodwill impairment was later deemed to exist, the Bank would be required to write down its goodwill resulting in a charge to earnings, which could materially, adversely affect its results of operations. ​ ​ REGULATORY AND LEGAL RISKS ​ The Bank’s RPG products represent a significant legal, compliance, and regulatory risk, and if the Bank fails to comply with all statutory and regulatory requirements, it could have a material negative impact on earnings.
In addition, these risks could affect the performance and value of the Company’s loan and investment securities portfolios, which also would negatively affect financial performance. ​ The Company’s common stock generally has a low average daily trading volume, which limits a stockholder’s ability to quickly accumulate or quickly sell large numbers of shares of Republic’s stock without causing wide price fluctuations.
The Company may finance acquisitions with borrowed funds, thereby increasing the Company’s leverage and reducing liquidity, or with potentially dilutive issuances of equity securities. ​ Risks Related to the Company’s Common Stock ​ The Company’s common stock generally has a low average daily trading volume, which limits a shareholder’s ability to quickly accumulate or quickly sell large numbers of shares of Republic’s stock without causing wide price fluctuations.
If the IRS ultimately concludes such transactions do create tax avoidance or evasion issues, the Company could be subject to the payment of penalties and interest. ​ CREDIT RISKS ​ RAs represent a significant credit risk, and if the Bank is unable to collect a significant portion of its RAs, it would materially, negatively impact earnings.
These factors could further materially and negatively impact the Company’s results of operations. ​ CREDIT RISKS ​ RAs represent a significant credit risk, and if the Bank is unable to collect a significant portion of its RAs, it would materially, negatively impact the Company’s financial condition and results of operations.
As a result, if you acquire the Company’s common stock, you could lose some or all of your investment. ​ ​ 33 Table of Contents COMPETITIVE RISKS ​ Outstanding Warehouse lines of credit and their corresponding earnings could decline due to several factors, such as intense industry competition, declining mortgage demand, and a rising interest rate environment.
Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits. This spread may be exacerbated by higher prevailing interest rates. ​ Outstanding Warehouse lines of credit and their corresponding earnings could decline due to several factors, such as intense industry competition, declining mortgage demand, and a continuing rising interest rate environment.
This regulatory oversight is primarily intended to protect depositors, the Deposit Insurance Fund, and the banking system, not the stockholders of the Company.
The Company and the Bank are heavily regulated at both the federal and state levels and are subject to various routine and non-routine examinations by federal and state regulators. This regulatory oversight is primarily intended to protect depositors, the DIF, and the banking system, not the shareholders of the Company.
Materially different amounts could be reported under different conditions or using different assumptions or estimates. ​ The Bank may experience goodwill impairment, which could reduce its earnings. The Bank performed its annual goodwill impairment test during the fourth quarter of 2022 as of September 30, 2022. The evaluation of the fair value of goodwill requires management judgment.
Such a charge would have no impact on tangible capital. ​ The Bank performed its annual goodwill impairment test during the fourth quarter of 2023 as of September 30, 2023. The evaluation of the fair value of goodwill requires management judgment.
A significant reduction in interest income would have a negative impact on the Bank’s results of operations and financial condition. ​ The planned discontinuance of LIBOR presents risks to the Company because the Bank uses LIBOR as a reference rate for a material portion of its financial instruments.
A significant reduction in interest income would have a negative impact on the Bank’s results of operations and financial condition. ​ The Company may be adversely affected by the soundness of other financial institutions. Financial services institutions are interrelated because of trading, clearing, counterparty, or other relationships.
Some of these factors are described below, however, many are described in the other sections of this Annual Report on Form 10-K. ​ REGULATORY AND LEGAL RISKS ​ The Bank’s RPG products represent a significant legal, compliance and regulatory risk, and if RB&T fails to comply with all statutory and regulatory requirements, it could have a material negative impact on earnings.
Some of these factors are described below, however, many are described in the other sections of this Annual Report on Form 10-K. ​ Risks Related to Republic’s Business and Industry ​ ECONOMIC, INTEREST RATE, AND LIQUIDITY RISKS ​ Mortgage Banking activities have been adversely impacted by increasing long-term interest rates.
Removed
The Board of Governors of the Federal Reserve System regulates the supply of money and credit in the U.S.
Added
Recent bank failures and their related negative media attention have generated significant market trading volatility among publicly traded bank holding companies and, in particular, bank holding companies for regional and community banks. These developments have negatively impacted customer confidence in regional and community banks, which could prompt customers to maintain their deposits with larger financial institutions.
Removed
RB&T and its third-party service providers operate in a highly regulated environment and deliver products and services that are subject to strict legal and regulatory requirements.
Added
Further, competition for deposits has increased in recent periods, and the cost of funding has similarly increased, putting pressure on net interest margin.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSuite 150, Tampa ​ 4,000 ​ L ​ ​ ​ ​ ​ Southern Indiana Banking Centers: ​ ​ ​ ​ 4571 Duffy Road, Floyds Knobs ​ 4,000 ​ O/L(2) 3141 Highway 62, Jeffersonville ​ 4,000 ​ O 3001 Charlestown Crossing Way, New Albany ​ 2,000 ​ L ​ ​ ​ ​ ​ Tennessee Banking Centers: ​ ​ ​ ​ 113 Seaboard Lane, Franklin ​ 2,000 ​ L 2034 Richard Jones Road, Nashville ​ 3,000 ​ L ​ ​ ​ ​ ​ Ohio Banking Center: ​ ​ ​ ​ 4030 Smith Road, Norwood ​ 5,000 ​ L 9110 West Chester Towne Center Dr., West Chester ​ 1,000 ​ L ​ ​ ​ ​ ​ Support and Operations: ​ ​ ​ ​ 200 South Seventh Street, Louisville, KY ​ 80,000 ​ L(1) ​ ​ ​ ​ ​ (1) Locations are leased from partnerships in which the Company’s Executive Chair and Chief Executive Officer, Steven E.
Biggest changeSuite 150, Tampa ​ 4,000 ​ L ​ ​ ​ ​ ​ Southern Indiana Banking Centers: ​ ​ ​ ​ 4571 Duffy Road, Floyds Knobs ​ 4,000 ​ O/L(2) 3141 Highway 62, Jeffersonville ​ 4,000 ​ O 3001 Charlestown Crossing Way, New Albany ​ 2,000 ​ L ​ ​ ​ ​ ​ Tennessee Banking Centers: ​ ​ ​ ​ 113 Seaboard Lane, Franklin ​ 2,000 ​ L 3404 West End Ave, Nashville ​ 2,000 ​ L 128 Kedron Pkwy, Spring Hill ​ 1,000 ​ L 1141 Fortress Blvd, Murfreesboro ​ 3,000 ​ L ​ ​ ​ ​ ​ Ohio Banking Center: ​ ​ ​ ​ 4030 Smith Road, Norwood ​ 5,000 ​ L 9110 West Chester Towne Center Dr., West Chester ​ 1,000 ​ L 8050 Hosbrook Road, Cincinnati ​ 5,000 ​ L 8100 Montgomery Road, Cincinnati ​ 2,000 ​ O ​ ​ ​ ​ ​ Missouri Loan Production Office: ​ ​ ​ ​ 10024 Office Center Avenue Suite 150, Saint Louis ​ 4,000 ​ L ​ ​ ​ ​ ​ Support and Operations: ​ ​ ​ ​ 200 South Seventh Street, Louisville, KY ​ 80,000 ​ L(1) ​ ​ ​ ​ ​ (1) Locations are leased from partnerships in which the Company’s Executive Chair and Chief Executive Officer, Steven E.
See additional discussion included under Part III Item 13 “Certain Relationships and Related Transactions, and Director Independence.” For additional discussion regarding Republic’s lease obligations, see Part II Item 8 “Financial Statements and Supplementary Data” Footnote 6 “Right-of-Use Assets and Operating Leases Liabilities.” ​ (2) The banking centers at these locations are owned by Republic; however, the banking center is located on land that is leased through long-term agreements with third parties . ​ ​
See additional discussion included under Part III Item 13 “Certain Relationships and Related Transactions, and Director Independence.” For additional discussion regarding Republic’s lease obligations, see Part II Item 8 “Financial Statements and Supplementary Data” Footnote 6 “Right-of-Use Assets and Operating Leases Liabilities.” ​ (2) The banking centers at these locations are owned by Republic; however, the banking center is located on land that is leased through long-term agreements with third parties . ​ ​ ​ ​ ​ ​ 41 Table of Contents
As of December 31, 2022, Republic had 28 banking centers located in Kentucky, seven banking centers in Florida, three banking centers in Indiana, two banking centers in Tennessee, and two banking centers in Ohio. ​ The location of Republic’s facilities, their respective approximate square footage, and their form of occupancy are as follows: ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ Square Owned (O)/ Bank Offices Footage Leased (L) ​ ​ ​ ​ ​ Kentucky Banking Centers: ​ ​ ​ ​ ​ ​ ​ Louisville Metropolitan Area ​ ​ ​ ​ 2801 Bardstown Road, Louisville 5,000 L (1) 601 West Market Street, Louisville ​ 57,000 ​ L (1) 661 South Hurstbourne Parkway, Louisville ​ 42,000 ​ L (1) 9600 Brownsboro Road, Louisville ​ 42,000 ​ L (1) 5250 Dixie Highway, Louisville ​ 5,000 ​ O/L (2) 10100 Brookridge Village Boulevard, Louisville ​ 5,000 ​ O/L (2) 9101 U.S.
As of December 31, 2023, Republic had 29 banking centers located in Kentucky, seven banking centers in Florida, three banking centers in Indiana, four banking centers in Tennessee, and four banking centers in Ohio. ​ The location of Republic’s facilities, their respective approximate square footage, and their form of occupancy are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ ​ Square Owned (O)/ Bank Offices ​ Footage ​ Leased (L) ​ ​ ​ ​ ​ Kentucky Banking Centers: ​ ​ ​ ​ ​ ​ ​ Louisville Metropolitan Area ​ ​ ​ ​ 2801 Bardstown Road, Louisville 5,000 L (1) 601 West Market Street, Louisville ​ 57,000 ​ L (1) 661 South Hurstbourne Parkway, Louisville ​ 21,000 ​ L (1) 9600 Brownsboro Road, Louisville ​ 41,000 ​ L (1) 5250 Dixie Highway, Louisville ​ 5,000 ​ O/L (2) 10100 Brookridge Village Boulevard, Louisville ​ 5,000 ​ O/L (2) 9101 U.S.
Highway 42, Florence ​ 4,000 ​ L ​ ​ ​ ​ ​ (continued) ​ ​ ​ ​ ​ ​ 37 Table of Contents ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ Square Owned (O)/ Bank Offices Footage Leased (L) (continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ Georgetown , 430 Connector Road ​ 5,000 ​ O/L (2) ​ ​ ​ ​ ​ Shelbyville , 1614 Midland Trail ​ 4,000 ​ L (2) ​ ​ ​ ​ ​ Florida Banking Centers: ​ ​ ​ ​ 12933 Walsingham Road, Largo ​ 4,000 ​ O 10577 State Road 54, New Port Richey ​ 3,000 ​ L 6300 4th Street N, St.
Highway 42, Florence ​ 4,000 ​ L 119 Fairfield Ave Suite 110, Bellevue ​ 3,000 ​ L ​ ​ ​ ​ ​ (continued) ​ ​ ​ ​ ​ ​ 40 Table of Contents ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ Square Owned (O)/ Bank Offices Footage Leased (L) (continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ Georgetown , 430 Connector Road ​ 5,000 ​ O/L (2) ​ ​ ​ ​ ​ Shelbyville , 1614 Midland Trail ​ 4,000 ​ L (2) ​ ​ ​ ​ ​ Florida Banking Centers: ​ ​ ​ ​ 12933 Walsingham Road, Largo ​ 4,000 ​ O 10577 State Road 54, New Port Richey ​ 3,000 ​ L 6300 4th Street N, St.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings . ​ See Footnote 1 “Summary of Significant Accounting Policies” of Part II Item 8 “Financial Statements and Supplementary Data” for discussion regarding the cancelled sale of the TRS business and associated litigation. ​ In the ordinary course of operations, Republic and the Bank are defendants in various legal proceedings.
Biggest changeItem 3. Legal Proceedings . ​ In the ordinary course of operations, Republic and the Bank are defendants in various legal proceedings.
Mine Safety Disclosures . ​ Not applicable. ​ ​ 38 Table of Contents PART I I ​
Mine Safety Disclosures . ​ Not applicable. ​ PART I I ​

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. ​ Mine Safety Disclosures. ​ 38 ​ ​ ​ ​ ​ ​ ​ PART II ​ ​ ​ ​ ​ Item 5. ​ Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. ​ 39 ​
Biggest changeItem 4. ​ Mine Safety Disclosures. ​ 42 ​ ​ ​ ​ ​ ​ ​ PART II ​ ​ ​ ​ ​ Item 5. ​ Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. ​ 42 ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2022, the trustee held 253,228 shares of Class A Common Stock and 1,214 shares of Class B Common Stock on behalf of the plan. ​ Details of Republic’s Class A Common Stock purchases during the fourth quarter of 2022 are included in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Additional Maximum Number ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ Shares ​ of Shares that May ​ ​ ​ ​ ​ ​ ​ as Part of Publicly ​ Authorized ​ Yet Be Purchased ​ ​ Total Number of ​ Average Price ​ Announced Plans ​ Under Plans ​ Under the Plans Period ​ Shares Purchased ​ Paid Per Share ​ or Programs ​ or Programs ​ or Programs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1 - October 31 — ​ $ — — ​ 292,806 ​ 500,000 ​ November 1 - November 30 — ​ — — ​ — ​ 500,000 ​ December 1 - December 31 10,000 ​ 41.34 10,000 ​ — ​ 490,000 ​ Total 10,000 ​ $ 41.34 10,000 292,806 490,000 ​ ​ During 2022, the Company repurchased 273,134 shares.
Biggest changeAs of December 31, 2023, the trustee held 238,112 shares of Class A Common Stock and 1,215 shares of Class B Common Stock on behalf of the plan. ​ Details of Republic’s Class A Common Stock purchases during the fourth quarter of 2023 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 Plans Period ​ Shares Purchased ​ Paid Per Share ​ or Programs ​ or Programs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1 - October 31 74,245 ​ $ 44.25 74,245 ​ 53,110 November 1 - November 30 18,700 ​ 45.09 18,700 ​ 34,410 December 1 - December 31 — ​ — — ​ 34,410 Total 92,945 ​ $ 44.42 92,945 34,410 ​ During 2023, the Company repurchased 455,590 shares.
The payment of dividends in the future is dependent upon future income, financial position, capital requirements, the discretion and judgment of the Board of Directors, and numerous other considerations. ​ For additional discussion regarding regulatory restrictions on dividends, see Part II Item 8 “Financial Statements and Supplementary Data” Footnote 14 “Stockholders’ Equity and Regulatory Capital Matters.” ​ Republic has made available to its employees participating in its 401(k) Plan the opportunity, at the employee’s sole discretion, to invest funds held in their accounts under the plan in shares of Class A Common Stock of Republic.
The payment of dividends in the future is dependent upon future income, financial position, capital requirements, the discretion and judgment of the Board of Directors, and numerous other considerations. ​ For additional discussion regarding regulatory restrictions on dividends, see Part II Item 8 “Financial Statements and Supplementary Data” Footnote 13 “Stockholders’ Equity and Regulatory Capital Matters.” ​ Republic has made available to its employees participating in its 401(k) Plan the opportunity, at the employee’s sole discretion, to invest funds held in their accounts under the plan in shares of Class A Common Stock of Republic.
There were no equity securities of the registrant sold without registration during the quarter covered by this report. 39 Table of Contents STOCK PERFORMANCE GRAPH ​ The following stock performance graph does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates the performance graph by reference therein. ​ The following stock performance graph sets forth the cumulative total shareholder return (assuming reinvestment of dividends) on Republic’s Class A Common Stock as compared to the KBW NASDAQ Bank Index and the S&P 500 Index.
There were no equity securities of the registrant sold without registration during the quarter covered by this report. ​ ​ STOCK PERFORMANCE GRAPH ​ The following stock performance graph does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates the performance graph by reference therein. ​ The following stock performance graph sets forth the cumulative total shareholder return (assuming reinvestment of dividends) on Republic’s Class A Common Stock as compared to the KBW NASDAQ Bank Index and the S&P 500 Index.
The graph covers the period beginning December 31, 2017 and ending December 31, 2022. The calculation of cumulative total return assumes an initial investment of $100 in Republic’s Class A Common Stock, the KBW NASDAQ Bank Index and the S&P 500 Index on December 31, 2017.
The graph covers the period beginning December 31, 2018 and ending December 31, 2023. The calculation of cumulative total return assumes an initial investment of $100 in Republic’s Class A Common Stock, the KBW NASDAQ Bank Index and the S&P 500 Index on December 31, 2018.
The exemption from registration of the newly issued Class A Common Stock relied upon was Section (3)(a)(9) of the Securities Act of 1933.
The 42 Table of Contents exemption from registration of the newly issued Class A Common Stock relied upon was Section (3)(a)(9) of the Securities Act of 1933.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. ​ Market and Dividend Information ​ Republic’s Class A Common Stock is traded on the NASDAQ under the symbol “RBCAA.” There is no established public trading market for the Company’s Class B Common Stock, however, the Company’s Class B Common Stock is fully convertible into the Company’s publicly-traded Class A Common Stock on a one-for-one basis. ​ On February 10, 2023, the Company’s Class A Common Stock was held by 1,021 shareholders of record and the Class B Common Stock was held by 92 shareholders of record.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. ​ Market and Dividend Information ​ Republic’s Class A Common Stock is traded on the NASDAQ under the symbol “RBCAA.” There is no established public trading market for the Company’s Class B Common Stock, however, the Company’s Class B Common Stock is fully convertible into the Company’s publicly-traded Class A Common Stock on a one-for-one basis. ​ On February 29, 2024, the Company’s Class A Common Stock was held by 17,252,179 shareholders of record and the Class B Common Stock was held by 2,150,669 shareholders of record.
As of December 31, 2022, the Company had 490,000 shares which could be repurchased under its current share repurchase programs. ​ During 2022, there were approximately 5,408 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 provision option of the Class B Common Stock.
As of December 31, 2023, the Company had 34,410 shares which could be repurchased under its current share repurchase programs. ​ During 2023, there were 4,933 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 provision option of the Class B Common Stock.
In addition, in connection with employee stock awards, there were 3,288 shares withheld upon exercise of stock options and vesting of restricted stock awards to satisfy the withholding taxes and, for stock options, the exercise price.
In addition, in connection with employee stock awards, there were 18,463 shares withheld upon exercise of stock options and vesting of restricted stock awards to satisfy the withholding taxes and, for stock options, the exercise price. ​ On October 25, 2022, the Board of Directors of Republic Bancorp, Inc. increased the Company’s existing authorization to purchase shares of its Class A Common Stock to 500,000 shares.
The stock price performance shown on the graph below is not necessarily indicative of future stock price performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, December 31, December 31, December 31, December 31, ​ ​ ​ 2017 ​ ​ 2018 ​ ​ 2019 ​ ​ 2020 ​ ​ 2021 ​ ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Class A ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock (RBCAA) ​ ​ $ 100.00 ​ ​ $ 104.17 ​ ​ $ 128.87 ​ ​ $ 102.87 ​ ​ $ 148.68 ​ ​ $ 123.50 ​ S&P 500 Index ​ ​ 100.00 ​ ​ 95.62 ​ ​ 125.72 ​ ​ 148.85 ​ ​ 191.58 ​ ​ 156.88 ​ KBW NASDAQ Bank Index ​ ​ 100.00 ​ ​ 82.29 ​ ​ 112.01 ​ ​ 100.46 ​ ​ 138.97 ​ ​ 109.23 ​ ​ ​ ​ 40 Table of Contents It em 6. [Reserved] ​
The stock price performance shown on the graph below is not necessarily indicative of future stock price performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, December 31, December 31, December 31, December 31, ​ ​ ​ 2018 ​ ​ 2019 ​ ​ 2020 ​ ​ 2021 ​ ​ 2022 ​ ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Class A Common Stock (RBCAA) ​ ​ $ 100.00 ​ ​ $ 123.71 ​ ​ $ 98.75 ​ ​ $ 142.73 ​ ​ $ 118.56 ​ ​ $ 165.22 ​ S&P 500 Index ​ ​ 100.00 ​ ​ 131.49 ​ ​ 155.68 ​ ​ 200.37 ​ ​ 164.08 ​ ​ 207.21 ​ KBW NASDAQ Bank Index ​ ​ 100.00 ​ ​ 136.13 ​ ​ 122.09 ​ ​ 168.88 ​ ​ 132.75 ​ ​ 131.57 ​ ​ ​ ​ ​ 43 Table of Contents It em 6. [Reserved] ​
Removed
The Board took the following actions as it relates to the Company’s existing stock repurchase program: ​ ● On January 27, 2021, the Board increased the Company’s existing authorization to purchase shares of its Class A Common Stock to 1,000,000 shares, ● On November 17, 2021, the Board increased the Company’s existing authorization to purchase shares of its Class A Common Stock by an additional 250,000 shares, ● On July 20, 2022, the Board increased the Company’s existing authorization to purchase shares of its Class A Common Stock by an additional 200,000 shares, and ● On October 25, 2022, the Board increased the Company’s existing authorization to purchase shares of its Class A Common Stock to 500,000 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.
Added
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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

128 edited+80 added−103 removed46 unchanged
Biggest changeTable 1 below presents Republic’s financial performance for the years ended December 31, 2022, 2021, and 2020: ​ Table 1 — Summary ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percent Increase/(Decrease) ​ Years Ended December 31, (dollars in thousands, except per share data) 2022 2021 2020 2022/2021 2021/2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income tax expense ​ $ 116,845 ​ $ 111,442 ​ $ 102,633 ​ 5 % 9 % Net income ​ ​ 91,106 ​ ​ 87,611 ​ ​ 83,246 ​ 4 ​ 5 ​ Diluted EPS of Class A Common Stock ​ ​ 4.59 ​ ​ 4.28 ​ ​ 3.99 ​ 7 ​ 7 ​ ROA ​ ​ 1.48 % 1.39 % 1.38 % 6 ​ 1 ​ ROE ​ 10.68 ​ 10.37 ​ 10.37 ​ 3 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The increase in net income for the Total Company primarily reflected the following: ​ ● The benefit of an $13 million pre-tax legal settlement; ​ ● The benefit of a $5 million pre-tax contract termination fee; ​ ● A $32.9 million increase in non-PPP related interest income; ​ ● A $18.6 million decrease in PPP income within interest income; and ​ ● An $13.8 million decrease in Mortgage Banking income. ​ Additional discussion follows in this section of the filing under “Results of Operations.” ​ ​ General highlights by reportable segment for the year ended December 31, 2022 consisted of the following: ​ Traditional Banking segment ​ ● Net income increased $5.3 million, or 15%, from 2021. ​ ● Net interest income increased $14.3 million, or 9%, compared to 2021. ​ ● Provision was a net charge of $1.4 million for 2022 compared to a net credit of $38,000 for 2021. ​ ● Noninterest income increased $156,000, or less than 1%, over 2021. ​ ● Noninterest expense increased $4.3 million, or 3%, over 2021. ​ ● Total Traditional Bank non-PPP related loans increased $404 million, or 12%, during 2022, driven primarily by strong CRE loan growth. ​ ● Total nonperforming loans to total loans for the Traditional Banking segment was 0.40% as of December 31, 2022 compared to 0.59% as of December 31, 2021. ​ ● Delinquent loans to total loans for the Traditional Banking segment was 0.16% as of December 31, 2022 compared to 0.21% as of December 31, 2021. 47 Table of Contents Warehouse Lending segment ​ ● Net income decreased $7.6 million, or 47%, from 2021. ​ ● Net interest income decreased $11.5 million, or 46%, from 2021. ​ ● The Warehouse Provision was a net credit of $1.1 million for 2022 compared to a net credit of $281,000 for 2021. ​ ● Average committed Warehouse lines decreased to $1.3 billion during 2022 from $1.4 billion during 2021. ​ ● Average Warehouse line usage was 44% during 2022 compared to 53% during 2021. ​ Mortgage Banking segment ​ ● Within the Mortgage Banking segment, mortgage banking income decreased $13.8 million, or 69%, from 2021 to 2022. ​ ● Overall, Republic’s proceeds from sale of secondary market loans totaled $238 million during 2022 compared to $718 million during 2021, with the Company’s cash-gain-as-a-percent-of-loans-sold decreasing to 3.01% from 3.22% from period to period. ​ Tax Refund Solutions segment ​ ● Net income increased $14.1 million, or 111%, from 2021 to 2022. ​ ● Net interest income increased $5.9 million, or 37%, from 2021 to 2022. ​ ● Total RA originations were $311 million during the first quarter of 2022 compared to $250 million for the first quarter of 2021. ​ ● TRS originated $98 million of ERAs during the fourth quarter of 2022 related to the anticipated filing of tax returns for the upcoming first quarter 2023 tax season. ​ ● The TRS Provision was $10.0 million for 2022, compared to $6.7 million for 2021. ​ ● Noninterest income was $38.5 million for 2022 compared to $23.8 million for 2021.
Biggest changeTable 1 below presents Republic’s financial performance for the years ended December 31, 2023, 2022, and 2021: ​ Table 1 — Summary ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percent Increase/(Decrease) ​ Years Ended December 31, (dollars in thousands, except per share data) 2023 2022 2021 2023/2022 2022/2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income tax expense ​ $ 113,213 ​ $ 116,845 ​ $ 111,442 ​ (3) % 5 % Net income ​ ​ 90,374 ​ ​ 91,106 ​ ​ 87,611 ​ (1) ​ 4 ​ Diluted EPS of Class A Common Stock ​ ​ 4.62 ​ ​ 4.59 ​ ​ 4.28 ​ 1 ​ 7 ​ ROA ​ ​ 1.44 % 1.48 % 1.39 % (3) ​ 6 ​ ROE ​ 10.10 ​ 10.68 ​ 10.37 ​ (5) ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The decrease in net income during 2023 for the Total Company primarily resulted from the nonrecurrence of the following income items recorded during 2022: ​ ● The benefit of a $ 13 million pre-tax legal settlement. ​ ● The benefit of a $5 million pre-tax contract termination fee. ​ ​ General highlights by reportable segment for the year ended December 31, 2023 consisted of the following: ​ Traditional Banking segment ​ ● Net income increased $9.0 million , or 22%, from 2022. ​ ● Net interest income increased $23.0 million , or 13%, compared to 2022. ​ ● Provision was a net charge of $8.7 million for 2023 compared to a net charge of $1.4 million for 2022. ​ ● Noninterest income increased $4.2 million , or 13%, over 2022. ​ ● Noninterest expense increased $10.4 million , or 7%, over 2022. ​ ● Total Traditional Bank loans increased $763 million, or 20 %, during 2023. ​ ● Total nonperforming loans to total loans for the Traditional Banking segment was 0.41% as of December 31, 2023 compared to 0.40 % as of December 31, 2022. ​ ● Delinquent loans to total loans for the Traditional Banking segment was 0.18 % as of December 31, 2023 compared to 0.16% as of December 31, 2022. ​ ● On March 15, 2023, the Company completed its acquisition of CBank, and its wholly owned bank subsidiary Commercial Industrial Finance, for approximately $51 million in cash.
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; ● 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.
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; ● p rojections 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; ● 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.
Loans from Republic Processing Group are generally small dollar homogenous consumer loans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Nonperforming Loans and Recorded Investment ​ ​ ​ ​ ​ ​ Balance ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 ​ ​ ​ Balance ​ ​ ​ ​ > $100 & ​ ​ ​ ​ Balance ​ ​ ​ ​ Total (dollars in thousands) ​ No. ​ ​ ​ No. ​ ​ ​ No. ​ > $500 ​ ​ No. ​ Balance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied 146 ​ $ 5,042 ​ 27 ​ $ 4,857 ​ 2 ​ $ 2,140 ​ 175 ​ $ 12,039 ​ Nonowner occupied 3 ​ 95 ​ — ​ — ​ — ​ — ​ 3 ​ 95 ​ Commercial real estate — ​ — ​ 4 ​ 872 ​ 3 ​ 5,685 ​ 7 ​ 6,557 ​ Construction & land development — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Commercial & industrial 1 ​ 13 ​ — ​ — ​ — ​ — ​ 1 ​ 13 ​ Paycheck Protection Program ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Lease financing receivables — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Aircraft ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ ​ — ​ Home equity 25 ​ 695 ​ 5 ​ 1,005 ​ — ​ — ​ 30 ​ 1,700 ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Overdrafts ​ NM ​ 1 ​ — ​ — ​ — ​ — ​ NM ​ 1 ​ Automobile loans ​ 13 ​ 97 ​ — ​ — ​ — ​ — ​ 13 ​ 97 ​ Other consumer ​ 4 ​ ​ 3 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4 ​ 3 ​ Total Traditional Banking ​ 192 ​ ​ 5,946 ​ ​ 36 ​ ​ 6,734 ​ ​ 5 ​ ​ 7,825 ​ ​ 233 ​ ​ 20,505 ​ Warehouse lines of credit — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Total Core Banking ​ 192 ​ ​ 5,946 ​ ​ 36 ​ ​ 6,734 ​ ​ 5 ​ ​ 7,825 ​ ​ 233 ​ ​ 20,505 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Other TRS commercial & industrial loans ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Republic Credit Solutions ​ NM ​ ​ 47 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ NM ​ 47 ​ Total Republic Processing Group ​ NM ​ ​ 47 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ NM ​ ​ 47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total 192 ​ $ 5,993 ​ 36 ​ $ 6,734 ​ 5 ​ $ 7,825 ​ 233 ​ $ 20,552 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NM – Not meaningful.
Loans from Republic Processing Group are generally small dollar homogenous consumer loans. ​ ​ ​ ​ 75 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Nonperforming Loans and Recorded Investment ​ ​ ​ ​ ​ ​ Balance ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 ​ ​ ​ Balance ​ ​ ​ ​ > $100 & ​ ​ ​ ​ Balance ​ ​ ​ ​ Total (dollars in thousands) ​ No. ​ ​ ​ No. ​ ​ ​ No. ​ > $500 ​ ​ No. ​ Balance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied 146 ​ $ 5,042 ​ 27 ​ $ 4,857 ​ 2 ​ $ 2,140 ​ 175 ​ $ 12,039 ​ Nonowner occupied 3 ​ 95 ​ — ​ — ​ — ​ — ​ 3 ​ 95 ​ Commercial real estate — ​ — ​ 4 ​ 872 ​ 3 ​ 5,685 ​ 7 ​ 6,557 ​ Construction & land development — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Commercial & industrial 1 ​ 13 ​ — ​ — ​ — ​ — ​ 1 ​ 13 ​ Paycheck Protection Program ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Lease financing receivables — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Aircraft ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Home equity 25 ​ 695 ​ 5 ​ 1,005 ​ — ​ — ​ 30 ​ 1,700 ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Overdrafts ​ NM ​ 1 ​ — ​ — ​ — ​ — ​ NM ​ 1 ​ Automobile loans ​ 13 ​ 97 ​ — ​ — ​ — ​ — ​ 13 ​ 97 ​ Other consumer ​ 4 ​ ​ 3 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4 ​ 3 ​ Total Traditional Banking ​ 192 ​ ​ 5,946 ​ ​ 36 ​ ​ 6,734 ​ ​ 5 ​ ​ 7,825 ​ ​ 233 ​ ​ 20,505 ​ Warehouse lines of credit — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Total Core Banking ​ 192 ​ ​ 5,946 ​ ​ 36 ​ ​ 6,734 ​ ​ 5 ​ ​ 7,825 ​ ​ 233 ​ ​ 20,505 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Other TRS commercial & industrial loans ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Republic Credit Solutions ​ NM ​ ​ 47 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ NM ​ 47 ​ Total Republic Processing Group ​ NM ​ ​ 47 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ NM ​ ​ 47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total 192 ​ $ 5,993 ​ 36 ​ $ 6,734 ​ 5 ​ $ 7,825 ​ 233 ​ $ 20,552 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NM – Not meaningful.
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.
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 business greatly depends on the overall mortgage market and typically follows industry trends.
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. ​ 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 tracks closely with, or are primarily indexed to, either the FFTR, Prime, or LIBOR.
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. ​ 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 tracks closely with, or are primarily indexed to, either the FFTR, Prime, or SOFR.
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 the following: ​ ACLL and Provision — As of December 31, 2022, the Bank maintained an ACLL for expected credit losses inherent in the Bank’s loan portfolio, which includes overdrawn deposit accounts.
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 the following: ​ ACLL and Provision — As of December 31, 2023, the Bank maintained an ACLL for expected credit losses inherent in the Bank’s loan portfolio, which includes overdrawn deposit accounts.
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.
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.
Further changes in RA and ERA product parameters do not ensure positive results and could have an overall material negative impact on the performance of the RA an ERA and therefore on the Company’s financial condition and results of operations. ​ See additional discussion regarding the RA product under the sections titled: ​ ● Part I Item 1A “Risk Factors” ● Part II Item 8 “Financial Statements and Supplementary Data,” Footnote 4 “Loans and Allowance for Credit Losses” ​ RPG recorded a net charge of $22.0 million, $15.1 million, and $14.4 million to the Provision during 2022, 2021, and 2020, with the Provision for each year primarily due to net losses on RAs and growth in short-term, consumer loans originated through the RCS segment.
Further changes in RA and ERA product parameters do not ensure positive results and could have an overall material negative impact on the performance of the RA and ERA and therefore on the Company’s financial condition and results of operations. ​ See additional discussion regarding the RA product under the sections titled: ​ ● Part I Item 1A “Risk Factors” ● Part II Item 8 “Financial Statements and Supplementary Data,” Footnote 4 “Loans and Allowance for Credit Losses” ​ RPG recorded a net charge of $39.1 million, $22.0 million, and $15.1 million to the Provision during 2023, 2022, and 2021, with the Provision for each year primarily due to net losses on RAs and growth in short-term, consumer loans originated through the RCS segment.
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.
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 six reportable segments using a multitude of delivery channels.
Because much of the loan volume occurs each year before that year’s tax refund funding 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 funding patterns change materially between years. ​ In response to changes in the legal, regulatory, and competitive environment, management annually reviews and revises the RA and ERA product parameters.
Because much of the loan volume occurs each year before that year’s tax refund funding 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 funding patterns change materially between years. ​ 47 Table of Contents In response to changes in the legal, regulatory, and competitive environment, management annually reviews and revises the RA and ERA product parameters.
Values of less than 50 basis points are rounded down to zero. ​ Management believes, based on information presently available, that it has adequately provided for loan and lease credit losses as of December 31, 2022. ​ For additional discussion regarding Republic’s methodology for determining the adequacy of the ACLL, see the section titled “Critical Accounting Policies and Estimates” in this section of the filing. ​ 70 Table of Contents Asset Quality ​ Classified and Special Mention Loans ​ The Bank applies credit quality indicators, or ratings, to individual loans based on internal Bank policies.
Values of less than 50 basis points are rounded down to zero. ​ Management believes, based on information presently available, that it has adequately provided for loan and lease credit losses as of December 31, 2023. ​ For additional discussion regarding Republic’s methodology for determining the adequacy of the ACLL, see the section titled “Critical Accounting Policies and Estimates” in this section of the filing. ​ 71 Table of Contents Asset Quality ​ Classified and Special Mention Loans ​ The Bank applies credit quality indicators, or ratings, to individual loans based on internal Bank policies.
These rates 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.
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.
An ACLL for losses on RAs and ERAs is estimated during the limited, short-term period the product is offered. RAs originated during the first two months of 2022, were repaid, on average, within 32 days of origination.
An ACLL for losses on RAs and ERAs is estimated during the limited, short-term period the product is offered. RAs originated during the first two months of 2023, were repaid, on average, within 32 days of origination.
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 fourth quarter of 2013 to a high of 71% during the fourth quarter of 2019.
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.
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 operations; ● changes in political and economic conditions; ● the discontinuation of LIBOR; 41 Table of Contents ● 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.
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 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.
This trend began to change in 2022, however, as a significant rise in long-term, fixed-rate mortgages caused portfolio level ARM loans to become generally more attractive than secondary market loans.
This trend began to change in mid to late 2022, however, as a significant rise in long-term, fixed-rate mortgages caused portfolio level ARM loans to become generally more attractive than secondary market loans.
If the number of future charge-offs on RAs and RCS loans differ significantly from assumptions used by management in making its determination, an adjustment to the RPG ACLL and the resulting effect on the income statement could be material. ​ Cancelled TRS Sale Transaction ​ On June 3, 2022, the Bank and Green Dot entered into the Settlement Agreement to fully resolve the Lawsuit that the Bank filed against Green Dot in the Delaware Court of Chancery on October 5, 2021. ​ As previously disclosed in the Company’s prior SEC filings, the Lawsuit arose from Green Dot’s inability to consummate the Sale Transaction contemplated in the TRS Purchase Agreement through which Green Dot would purchase all of the assets and operations of the Bank’s Tax Refund Solutions business. ​ In accordance with the Settlement Agreement, on June 6, 2022, Green Dot paid $13 million to the Bank, which was in addition to a $5 million termination fee that Green Dot paid to the Bank during the first quarter of 2022 under the terms of the TRS Purchase Agreement.
If the number of future charge-offs on RAs and RCS loans differ significantly from assumptions used by management in making its determination, an adjustment to the RPG ACLL and the resulting effect on the income statement could be material. ​ ​ Cancelled TRS Sale Transaction ​ On June 3, 2022, the Bank and Green Dot entered into a settlement agreement (“Settlement Agreement”) to fully resolve the lawsuit that the Bank filed against Green Dot in the Delaware Court of Chancery on October 5, 2021 (the “Lawsuit”). ​ As previously disclosed in the Company’s prior SEC filings, the Lawsuit arose from Green Dot’s inability to consummate a sale transaction contemplated in a purchase agreement through which Green Dot would purchase all of the assets and operations of the Bank’s TRS business (“TRS Purchase Agreement”). ​ In accordance with the Settlement Agreement, on June 6, 2022, Green Dot paid $13 million to the Bank, which was in addition to a $5 million termination fee that Green Dot paid to the Bank during the first quarter of 2022 under the terms of the TRS Purchase Agreement.
Formal measurements of the capital ratios for Republic and the Bank are performed by the Company at each quarter end. ​ Contractual Obligations and Commitments ​ The Company or the Bank has required future payments under various contractual obligations and other commitments. ​ See the following footnotes within Part II Item 8 “Financial Statements and Supplementary Data” for additional detail regarding contractual obligations and other commitments of the Company or Bank: ​ ● Footnote 6 “Right-of-Use Assets and Operating Lease Liabilities” ​ ● Footnote 9 “Deposits” ​ ● Footnote 10 “Securities Sold Under Agreements to Repurchase” ​ ● Footnote 13 “Off Balance Sheet Risks, Commitments, and Contingent Liabilities” ​ ● Footnote 18 “Benefit Plans” ​ In addition, the Bank maintains contractual obligations for its technological needs, including its enterprise risk management application, customer relationship management application, internet banking platform, and its core accounting application.
Formal measurements of the capital ratios for Republic and the Bank are performed by the Company at each quarter end. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 85 Table of Contents ​ Contractual Obligations and Commitments ​ The Company or the Bank has required future payments under various contractual obligations and other commitments. ​ See the following footnotes within Part II Item 8 “Financial Statements and Supplementary Data” for additional detail regarding contractual obligations and other commitments of the Company or Bank : ​ ● Footnote 6 “Right-of-Use Assets and Operating Lease Liabilities” ​ ● Footnote 9 “Deposits” ​ ● Footnote 10 “Securities Sold Under Agreements to Repurchase” ​ ● Footnote 12 “Off Balance Sheet Risks, Commitments, and Contingent Liabilities” ​ ● Footnote 17 “Benefit Plans” ​ In addition, the Bank maintains contractual obligations for its technological needs, including its enterprise risk management application, customer relationship management application, internet banking platform, and its core accounting application.
The total contractual commitment for these applications is approximately $13 million through May 2025. ​ 84 Table of Contents 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.
The total contractual commitment for these applications is approximately $13 million through May 2025. ​ 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.
Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years. As of January 1, 2023, the Bank could, without prior approval, declare dividends of approximately $92 million.
Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years. As of January 1, 2024, the Bank could, without prior approval, declare dividends of approximately $133 million.
Provision for both periods reflected changes in general reserves consistent with changes in outstanding period-end balances. Outstanding Warehouse period-end balances decreased $447 million during 2022 compared to a decrease of $112 million during 2021. ​ As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was 0.25% as of December 31, 2022, and December 31, 2021.
Provision for both periods reflected changes in general reserves consistent with changes in outstanding period-end balances. Outstanding Warehouse period-end balances decreased $64 million during 2023 compared to a decrease of $447 million during 2022. ​ As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was 0.25% as of December 31, 2023, and December 31, 2022.
This compares to an ACLL of $52 million and $50 million as of December 31, 2021 and December 31, 2020 with Provisions of a net credit of $319,000 for 2021 and net charge of $16.9 million for 2020. ​ If the mix and amount of future charge-off percentages differ significantly from those assumptions used by management in making its determination, an adjustment to the Core Bank ACLL and the resulting effect on the income statement could be material. ​ The RPG ACLL as of December 31, 2022 primarily related to loans originated and held for investment through the RCS segment.
This compares to an ACLL of $52 million as of both December 31, 2022 and December 31, 2021 with Provisions of a net charge of $312,000 for 2022 and net credit of $319,000 for 2021. ​ If the mix and amount of future charge-off percentages differ significantly from those assumptions used by management in making its determination, an adjustment to the Core Bank ACLL and the resulting effect on the income statement could be material. ​ The RPG ACLL as of December 31, 2023 primarily related to loans originated and held for investment through the RCS segment.
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 also impacted by its ability to sell certain investment securities, which could be limited due to the level of investment securities that are needed to secure public deposits, SSUARs, FHLB borrowings, and for other purposes, as required by law.
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.
Class A Common shares have one vote per share and Class B Common shares have ten votes per share. 83 Table of Contents Class B Common shares may be converted, at the option of the holder, to Class A Common shares on a share for share basis.
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.
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. ​ 82 Table of Contents As noted in the sections above titled “Deposits” and “Securities Sold Under Agreements to Repurchase and Other Short-term Borrowings”, the Bank implemented a general strategy during 2022 to maintain a low beta for its client-related interest-bearing liabilities as part of its overall strategy to increase its net interest margin and net interest income.
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. ​ 83 Table of Contents As noted in the sections above titled “Deposits” and “Securities Sold Under Agreements to Repurchase and Other Short-term Borrowings,” the Bank implemented a general strategy during 2022 and most of the first quarter of 2023 to maintain a low beta for its client-related interest-bearing liabilities as part of its overall strategy to increase its net interest margin and net interest income.
(7) 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. ​ ​ 54 Table of Contents Table 5 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.
(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. 55 Table of Contents Table 4 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.
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.
Many assumptions based on growth expectations and on the historical behavior of the Bank’s loans and deposits and their related balances in relation to changes in interest rates are incorporated into this dynamic model.
The decline in the Warehouse net interest margin occurred as its funding costs, as charged through the Company’s internal FTP methodology, generally rose in tandem with the increase in short-term interest rates during the year, while its yield increases were delayed until the adjustable rates on its clients’ lines of credit surpassed their contractual interest rate floors.
The decline in the Warehouse net interest margin occurred as its funding costs, as charged through the Company’s internal FTP methodology, generally rose in tandem with the increase in short-term interest rates since rates began rising in March 2022, while its yield increases were delayed until the adjustable rates on its clients’ lines of credit surpassed their contractual interest rate floors.
The Bank’s policy is to charge-off all or that portion of its recorded investment in collateral-dependent loans upon a determination that it expects the full amount of contractual principal and interest will not be collected. ​ A TDR is a situation where, due to a borrower’s financial difficulties, the Bank grants a concession to the borrower that the Bank would not otherwise have considered.
The Bank’s policy is to charge-off all or that portion of its recorded investment in collateral-dependent loans upon a determination that it expects the full amount of contractual principal and interest will not be collected. ​ A loan modification (formerly a TDR prior to the adoption of ASU 2022-02) is a situation where, due to a borrower’s financial difficulties, the Bank grants a concession to the borrower that the Bank would not otherwise have considered.
These nonrecurring payments included the following: ​ ● A contract termination fee of $5.0 million in January 2022 after RB&T provided Green Dot a notice of termination of the May 2021 TRS Purchase Agreement for the sale of substantially all of RB&T’s TRS assets and operations to Green Dot. ​ ● A legal settlement of $13.0 million in June 2022 regarding RB&T’s lawsuit against Green Dot. ​ Regarding TRS’s RT product, net RT revenue decreased 16% from $20.2 million during 2021 to $17.1 million during 2022.
These nonrecurring payments included the following: ​ ● A contract termination fee of $5.0 million in January 2022 after RB&T provided Green Dot a notice of termination of the May 2021 TRS Purchase Agreement for the sale of substantially all of RB&T’s TRS assets and operations to Green Dot. ​ ● A legal settlement of $13.0 million in June 2022 regarding RB&T’s lawsuit against Green Dot. ​ Regarding the noninterest income from TRS’s RT product, net RT revenue decreased $1.3 million from $17.0 million during 2022 to $15.7 million during 2023.
The Company believes, based on information presently available, that it has adequately provided for Warehouse loan losses as of December 31, 2022. ​ 56 Table of Contents Tax Refund Solutions segment ​ TRS recorded a net charge to the Provision of $10.0 million during 2022 compared to a net charge of $6.7 million for in 2021.
The Company believes, based on information presently available, that it has adequately provided for Warehouse loan losses as of December 31, 2023. ​ Tax Refund Solutions segment ​ TRS recorded a net charge to the Provision of $22.6 million during 2023 compared to a net charge of $10.0 million for in 2022.
Provisions for RA and ERA losses are estimated when advances are made and adjusted to actual net charge-offs as of June 30 th of each year. The ACLL for ERAs as of December 31, 2022 was $3.8 million for $98 million of ERAs originated during December 2022.
Provisions for RA and ERA losses are estimated when advances are made and adjusted to actual net charge-offs as of June 30 th of each year. The ACLL for ERAs as of December 31, 2023 was $3.9 million for $103 million of ERAs originated during December 2023.
While the Bank operates primarily in its market footprint, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S. The Captive is a Nevada-based, wholly owned insurance subsidiary of the Company.
While the Bank operates primarily in its market footprint, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S. During the last quarter of 2023, the Company dissolved its Captive, a Nevada-based, wholly owned insurance subsidiary of the Company.
Delinquent status may be determined by either the number of days past due or number of payments past due. ​ ​ 76 Table of Contents Table 26 — Rollforward of Delinquent Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Delinquent loans at the beginning of the period ​ $ 13,465 ​ $ 19,947 ​ $ 20,804 Loans added to delinquency status during the period and remained in delinquency status at the end of the period ​ 5,507 ​ 1,459 ​ 6,681 Loans removed from delinquency status during the period that were in delinquency status at the beginning of the period (see table below) ​ (6,847) ​ (3,559) ​ (8,617) Principal balance paydowns of loans delinquent at both period ends ​ ​ (50) ​ ​ (158) ​ ​ (146) Net change in principal balance of other loans delinquent at both period ends* ​ 3,185 ​ (4,224) ​ 1,225 Delinquent loans at the end of period ​ $ 15,260 ​ $ 13,465 ​ $ 19,947 *Includes small consumer portfolios, e.g., RCS loans. ​ Table 27 — Detail of Loans Removed from Delinquent Status ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) ​ 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans charged off ​ ​ $ (1) ​ $ (58) ​ $ (115) Refund Advances paid off or charged off ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans transferred to OREO ​ ​ — ​ — ​ (2,254) Loan payoffs and paydowns ​ ​ (6,243) ​ (2,016) ​ (4,052) Loans paid current ​ ​ (603) ​ (1,485) ​ (2,196) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans removed from delinquency status during the period that were in delinquency status at the beginning of the period ​ ​ $ (6,847) ​ $ (3,559) ​ $ (8,617) ​ Collateral-Dependent Loans and Troubled Debt Restructurings ​ When management determines that a loan is collateral dependent and foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date and adjusted for selling costs if appropriate.
Delinquent status may be determined by either the number of days past due or number of payments past due. ​ ​ 77 Table of Contents Table 25 — Rollforward of Delinquent Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Delinquent loans at the beginning of the period ​ $ 15,260 ​ $ 13,465 ​ $ 19,947 Loans added to delinquency status during the period and remained in delinquency status at the end of the period ​ 6,625 ​ 5,507 ​ 1,459 Loans removed from delinquency status during the period that were in delinquency status at the beginning of the period (see table below) ​ (4,371) ​ (6,847) ​ (3,559) Principal balance paydowns of loans delinquent at both period ends ​ ​ (106) ​ ​ (50) ​ ​ (158) Net change in principal balance of other delinquent loans* ​ 4,684 ​ 3,185 ​ (4,224) Delinquent loans at the end of period ​ $ 22,092 ​ $ 15,260 ​ $ 13,465 *Includes small consumer portfolios, e.g., RCS loans. ​ Table 26 — Detail of Loans Removed from Delinquent Status ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans charged off ​ ​ $ (1) ​ $ (1) ​ $ (58) Refund Advances paid off or charged off ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans transferred to OREO ​ ​ — ​ — ​ — Loan payoffs and paydowns ​ ​ (1,915) ​ (6,243) ​ (2,016) Loans paid current ​ ​ (2,455) ​ (603) ​ (1,485) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans removed from delinquency status during the period that were in delinquency status at the beginning of the period ​ ​ $ (4,371) ​ $ (6,847) ​ $ (3,559) ​ Collateral-Dependent Loans and Troubled Debt Restructurings ​ When management determines that a loan is collateral dependent and foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs, if appropriate.
All securities underlying the agreements are under the Bank’s control. ​ SSUARs decreased $74 million, or 25%, during 2022 to $217 million as of December 31, 2022. SSUARs generally represent large customer relationships deposited into the Bank that require security collateral above the $250,000 FDIC insurance limit of the Bank.
All securities underlying the agreements are under the Bank’s control. ​ SSUARs decreased $119 million, or 55%, during 2023 to $98 million as of December 31, 2023. SSUARs generally represent large customer relationships deposited into the Bank that require security collateral above the $250,000 FDIC insurance limit of the Bank.
Additional variables which may also impact the Traditional Bank’s net interest income and net interest margin in the future include, but are not limited to, the actual steepness and shape of the yield curve, future demand for the Traditional Bank’s financial products, and the Traditional Bank’s overall future liquidity needs. ​ Warehouse Lending segment ​ Net interest income within the Warehouse segment decreased $11.5 million, or 46%, from 2021, driven by decreases in both average outstanding balances and net interest margin.
Additional variables which may also impact the Traditional Bank’s net interest income and net interest margin in the future include, but are not limited to, the actual steepness and shape of the yield curve, future demand for the Traditional Bank’s financial products, and the Traditional Bank’s overall future liquidity needs. ​ Warehouse ​ Net interest income within Warehouse decreased $4.3 million, or 31%, from 2022 to 2023, driven by decreases in both average outstanding balances and net interest margin.
The most significant components comprising the change in loans by reportable segment follow: ​ Traditional Banking segment ​ Period-end balances for Traditional Banking loans increased $353 million, or 10%, from December 31, 2021 to December 31, 2022.
The most significant components comprising the change in loans by reportable segment follow: ​ Traditional Banking segment ​ Period-end balances for Traditional Banking loans increased $763 million, or 20%, from December 31, 2022 to December 31, 2023.
Overall average outstanding Warehouse balances declined from $748 million during the 2021 to $510 million for 2022, driven largely by the sharp rise in long-term interest rates during 2022, which depressed mortgage-refinancing demand and resulted in a significant drop in Warehouse line usage. ​ In addition, the Warehouse net interest margin decreased 68 basis points from 3.37% during 2021 to 2.69 % during 2022.
Overall average outstanding Warehouse balances declined from $510 million during 2022 to $397 million for 2023, driven largely by the sharp rise in long-term interest rates during 2022, which depressed mortgage-refinancing demand and resulted in a sharp drop in Warehouse line usage. ​ In addition, the Warehouse net interest margin decreased 31 basis points from 2.69% during 2022 to 2.38% during 2023.
These interest rate floors benefited Warehouse’s net interest margin substantially during 2020 and 2021 when market rates declined to historical lows but have produced margin compression since the onset of the FFTR increases during 2022.
These interest rate floors benefited the Warehouse net interest margin substantially during 2020 and 2021 when market rates declined to historical lows 53 Table of Contents but have produced margin compression since the onset of the FFTR increases during the first quarter of 2022.
As a percent of total loans, the total Company’s ACLL increased to 1.56% as of December 31, 2022 compared to 1.44% as of December 31, 2021.
As a percent of total loans, the total Company’s ACLL increased to 1.57% as of December 31, 2023 compared to 1.56% as of December 31, 2022.
The FOMC’s increases to the FFTR during 2022 included the following: ​ ​ 50 Table of Contents Table 2 — Increases to the Federal Funds Target Rate during 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase to ​ FFTR Date ​ ​ the FFTR ​ after Increase ​ ​ ​ ​ ​ ​ ​ ​ March 17, 2022 ​ ​ 0.25 % ​ 0.50 % May 5, 2022 ​ ​ 0.50 ​ ​ 1.00 ​ June 16, 2022 ​ ​ 0.75 ​ ​ 1.75 ​ July 27, 2022 ​ ​ 0.75 ​ ​ 2.50 ​ September 21, 2022 ​ ​ 0.75 ​ ​ 3.25 ​ November 2, 2022 ​ ​ 0.75 ​ ​ 4.00 ​ December 15, 2022 ​ ​ 0.50 ​ ​ 4.50 ​ ​ The FOMC’s actions and signals continued to place upward pressure on short-term market interest rates for bonds and loans throughout the second half of 2022.
The FOMC’s increases to the FFTR since January 1, 2022 included the following: 51 Table of Contents Table 2 — Increases to the Federal Funds Target Rate since January 1, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase to ​ FFTR Date ​ the FFTR ​ after Increase ​ ​ ​ ​ ​ ​ ​ March 17, 2022 ​ 0.25 % ​ 0.50 % May 5, 2022 ​ 0.50 ​ ​ 1.00 ​ June 16, 2022 ​ 0.75 ​ ​ 1.75 ​ July 27, 2022 ​ 0.75 ​ ​ 2.50 ​ September 21, 2022 ​ 0.75 ​ ​ 3.25 ​ November 2, 2022 ​ 0.75 ​ ​ 4.00 ​ December 15, 2022 ​ 0.50 ​ ​ 4.50 ​ February 2, 2023 ​ 0.25 ​ ​ 4.75 ​ March 23, 2023 ​ 0.25 ​ ​ 5.00 ​ May 4, 2023 ​ 0.25 ​ ​ 5.25 ​ July 26, 2023 ​ 0.25 ​ ​ 5.50 ​ ​ The FOMC’s actions and signals continued to place upward pressure on short-term market interest rates throughout 2022 and 2023.
Substantially all TRS Provision in both periods was related to its RA product, including the ERA product. ​ TRS recorded a charge to the Provision for RA loans of $10.5 million, or 2.56 % of its $409 million in total RAs and ERAs originated during 2022 compared to a charge to the Provision of $6.7 million, or 2.69% of its $250 million of RAs originated during 2021.
Substantially all TRS Provision in both periods was related to its RA product, including the ERA product. ​ TRS recorded a charge to the Provision for RA loans of $22.5 million, or 2.68% of its $840 million in total RAs and ERAs originated during 2023 compared to a charge to the Provision of $10.5 million, or 2.56 % of its $409 million of RAs originated during 2022.
Refer to Results of Operations on pages 53-63 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”) for a discussion of the 2021 versus 2020 results. ​ Net Interest Income ​ Banking operations are significantly dependent upon net interest income.
Refer to Results of Operations on pages 50-61 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) for a discussion of the 2022 versus 2021 results. ​ Net Interest Income ​ Banking operations are significantly dependent upon net interest income.
A rising interest rate environment, however, likely will impact the Company’s internal FTP cost allocated to this segment.
A rising interest rate environment, however, would negatively impact the Company’s internal FTP cost allocated to this segment.
As a percentage of total RCS loans, the RCS ACLL was 13.73% as of December 31, 2022 and 13.91% as of December 31, 2021.
As a percentage of total RCS loans, the RCS ACLL was 13.82% as of December 31, 2023 and 13.73% as of December 31, 2022.
The increase in stockholders’ equity was primarily attributable to net income earned during 2022 reduced by cash dividends declared and common stock repurchases. ​ See Part II, Item 5.
The increase in stockholders’ equity was primarily attributable to net income earned during 2023 reduced primarily by cash dividends declared. ​ See Part II, Item 5.
These swaps are derivatives, but are not designated as hedging instruments, and therefore changes in fair value are reported in current year earnings. ​ A summary of the Bank’s interest rate swaps related to clients as of December 31, 2022 and 2021 is included in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ ​ ​ ​ Notional ​ ​ ​ ​ Notional ​ ​ ​ December 31, (in thousands) Bank Position ​ Amount Fair Value Amount Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps with Bank clients - Assets Pay variable/receive fixed ​ $ 40,032 $ 1,386 $ 107,502 $ 5,786 Interest rate swaps with Bank clients - Liabilities Pay variable/receive fixed ​ ​ 91,636 ​ ​ (6,742) ​ ​ 16,423 ​ ​ (298) Interest rate swaps with Bank clients - Total Pay variable/receive fixed ​ $ 131,668 $ (5,356) ​ $ 123,925 $ 5,488 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Offsetting interest rate swaps with institutional swap dealer - Assets ​ Pay fixed/receive variable ​ ​ ​ 91,636 ​ ​ 6,742 ​ ​ 16,423 ​ ​ 298 Offsetting interest rate swaps with institutional swap dealer - Liabilities ​ Pay fixed/receive variable ​ ​ ​ 40,032 ​ ​ (1,386) ​ ​ 107,502 ​ ​ (5,786) Offsetting interest rate swaps with institutional swap dealer - Total ​ Pay fixed/receive variable ​ ​ $ 131,668 $ 5,356 ​ $ 123,925 $ (5,488) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ $ 263,336 $ — $ 247,850 $ — ​ ​ See Footnote 8 “Interest Rate Swaps” of Part II Item 8 “Financial Statements and Supplementary Data” for further information regarding the Bank’s interest rate swaps. ​ Liquidity ​ The Bank maintains sufficient liquidity to fund routine loan demand and routine deposit withdrawal activity.
These swaps are derivatives, but are not designated as hedging instruments, and therefore changes in fair value are reported in current year earnings. ​ A summary of the Bank’s interest rate swaps related to clients as of December 31, 2023 and 2022 is included in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ ​ ​ ​ Notional ​ ​ ​ ​ Notional ​ ​ ​ December 31, (in thousands) Bank Position ​ Amount Fair Value Amount Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps with Bank clients - Assets Pay variable/receive fixed ​ $ 120,442 $ 4,066 $ 40,032 $ 1,386 Interest rate swaps with Bank clients - Liabilities Pay variable/receive fixed ​ ​ 95,820 ​ ​ (4,867) ​ ​ 91,636 ​ ​ (6,742) Interest rate swaps with Bank clients - Total Pay variable/receive fixed ​ $ 216,262 $ (801) ​ $ 131,668 $ (5,356) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Offsetting interest rate swaps with institutional swap dealer - Assets ​ Pay fixed/receive variable ​ ​ ​ 95,820 ​ ​ 4,867 ​ ​ 91,636 ​ ​ 6,742 Offsetting interest rate swaps with institutional swap dealer - Liabilities ​ Pay fixed/receive variable ​ ​ ​ 120,442 ​ ​ (4,066) ​ ​ 40,032 ​ ​ (1,386) Offsetting interest rate swaps with institutional swap dealer - Total ​ Pay fixed/receive variable ​ ​ $ 216,262 $ 801 ​ $ 131,668 $ 5,356 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ $ 432,524 $ — $ 263,336 $ — ​ ​ See Footnote 8 “Interest Rate Swaps” of Part II Item 8 “Financial Statements and Supplementary Data” for further information regarding the Bank’s interest rate swaps. ​ Liquidity ​ The Bank maintains sufficient liquidity to fund routine loan demand and routine deposit withdrawal activity.
Based on management’s 44 Table of Contents calculation, an ACLL of $18.7 million, or 7.3 %, of total RPG loans was an adequate estimate of expected losses within the RPG portfolio as of December 31, 2022. ​ RPG’s TRS segment offered its RA credit product during the first two months of 2022, 2021, and 2020, and its ERA credit product during December 2022 related to the first quarter 2023 tax season.
Based on management’s calculation, an ACLL of $22 million, or 7.91%, of total RPG loans was an adequate estimate of expected losses within the RPG portfolio as of December 31, 2023. ​ RPG’s TRS segment offered its RA credit product during the first two months of 2023, 2022, and 2021, and its ERA credit product during December 2023 and 2022 related to the subsequent first quarter tax filing seasons.
The increase was driven primarily by an increase in fee income from RCS’s LOC products. ​ RCS’s LOC loan fees, which are recorded as interest income on loans, increased to $27.3 million during 2022 compared to $19.3 million during 2021.
The increase was driven primarily by an increase in fee income from RCS’s LOC II product. ​ RCS’s LOC II loan fees, which are recorded as interest income on loans, increased to $19.3 million during 2023 compared to $8.5 million during 2022.
This change in forecast method had no material impact on the Company’s ACLL. ​ 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.
For its CRE loan pool, the Company employs a one-year forecast of general CRE values. ​ 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.
With the exception of small-dollar consumer loans, all Traditional Bank loans past due 90-days-or-more as of December 31, 2022 and December 31, 2021 were on nonaccrual status. ​ 75 Table of Contents Table 25 — Delinquent Loan Composition * ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ Percent of ​ ​ ​ ​ Percent of ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ Total ​ ​ ​ ​ Total December 31, (dollars in thousands) ​ Balance ​ Loan Class Balance ​ Loan Class Balance ​ Loan Class ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ ​ $ 4,834 ​ 0.53 % $ 1,599 ​ 0.19 % $ 3,260 ​ 0.37 % Nonowner occupied ​ ​ — ​ — ​ — ​ — ​ — ​ — ​ Commercial real estate ​ ​ 604 ​ 0.04 ​ 5,292 ​ 0.36 ​ 5,457 ​ 0.40 ​ Construction & land development ​ ​ — ​ — ​ — ​ — ​ — ​ — ​ Commercial & industrial ​ ​ 177 ​ 0.04 ​ 21 ​ 0.01 ​ 12 ​ 0.00 ​ Paycheck Protection Program ​ ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ Lease financing receivables ​ ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ Aircraft ​ ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ Home equity ​ ​ ​ ​ 175 ​ 0.07 ​ ​ ​ 314 ​ 0.15 ​ ​ ​ 702 ​ 0.29 ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards ​ ​ ​ ​ 55 ​ 0.36 ​ ​ ​ 30 ​ 0.21 ​ ​ ​ 73 ​ 0.51 ​ Overdrafts ​ ​ ​ ​ 160 ​ 22.04 ​ ​ ​ 164 ​ 24.01 ​ ​ ​ 147 ​ 25.04 ​ Automobile loans ​ ​ ​ ​ 11 ​ 0.16 ​ ​ ​ 9 ​ 0.06 ​ ​ ​ 56 ​ 0.18 ​ Other consumer ​ ​ ​ ​ 44 ​ 7.03 ​ ​ ​ 1 ​ 0.07 ​ ​ ​ 6 ​ 0.07 ​ Total Traditional Banking ​ ​ ​ ​ 6,060 ​ 0.16 ​ ​ ​ 7,430 ​ 0.21 ​ ​ ​ 9,713 ​ 0.26 ​ Warehouse lines of credit ​ ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ Total Core Banking ​ ​ ​ ​ 6,060 ​ 0.14 ​ ​ ​ 7,430 ​ 0.17 ​ ​ ​ 9,713 ​ 0.21 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ ​ — ​ — ​ — ​ — ​ — ​ — ​ Other TRS commercial & industrial loans ​ ​ — ​ — ​ — ​ — ​ — ​ — ​ Republic Credit Solutions ​ ​ 9,200 ​ 8.53 ​ 6,035 ​ 6.48 ​ 10,234 ​ 9.23 ​ Total Republic Processing Group ​ ​ 9,200 ​ 3.58 ​ 6,035 ​ 4.19 ​ 10,234 ​ 7.60 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total delinquent loans ​ ​ $ 15,260 ​ 0.34 ​ $ 13,465 ​ 0.30 ​ $ 19,947 ​ 0.41 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ *Represents total loans 30-days-or-more past due.
With the exception of small-dollar consumer loans, all Traditional Bank loans past due 90-days-or-more as of December 31, 2023 and December 31, 2022 were on nonaccrual status. ​ Table 24 — Delinquent Loan Composition * ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ Percent of ​ ​ ​ ​ Percent of ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ Total ​ ​ ​ ​ Total December 31, (dollars in thousands) Balance ​ Loan Class Balance ​ Loan Class Balance ​ Loan Class ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner-occupied ​ $ 5,803 ​ 0.51 % $ 4,834 ​ 0.53 % $ 1,599 ​ 0.19 % Nonowner-occupied ​ — ​ — ​ — ​ — ​ — ​ — ​ Commercial real estate ​ — ​ — ​ 604 ​ 0.04 ​ 5,292 ​ 0.36 ​ Construction & land development ​ — ​ — ​ — ​ — ​ — ​ — ​ Commercial & industrial ​ 1,360 ​ 0.29 ​ 177 ​ 0.04 ​ 21 ​ 0.01 ​ Lease financing receivables ​ ​ ​ 18 ​ 0.02 ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ Aircraft ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ Home equity ​ ​ ​ 767 ​ 0.26 ​ ​ ​ 175 ​ 0.07 ​ ​ ​ 314 ​ 0.15 ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards ​ ​ ​ 35 ​ 0.21 ​ ​ ​ 55 ​ 0.36 ​ ​ ​ 30 ​ 0.21 ​ Overdrafts ​ ​ ​ 131 ​ 18.88 ​ ​ ​ 160 ​ 22.04 ​ ​ ​ 164 ​ 24.01 ​ Automobile loans ​ ​ ​ 2 ​ 0.08 ​ ​ ​ 11 ​ 0.16 ​ ​ ​ 9 ​ 0.06 ​ Other consumer ​ ​ ​ 60 ​ 0.81 ​ ​ ​ 44 ​ 7.03 ​ ​ ​ 1 ​ 0.07 ​ Total Traditional Banking ​ ​ ​ 8,176 ​ 0.18 ​ ​ ​ 6,060 ​ 0.16 ​ ​ ​ 7,430 ​ 0.21 ​ Warehouse lines of credit ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ Total Core Banking ​ ​ ​ 8,176 ​ 0.16 ​ ​ ​ 6,060 ​ 0.14 ​ ​ ​ 7,430 ​ 0.17 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ — ​ — ​ — ​ — ​ — ​ — ​ Other TRS commercial & industrial loans ​ — ​ — ​ — ​ — ​ — ​ — ​ Republic Credit Solutions ​ 13,916 ​ 10.51 ​ 9,200 ​ 8.53 ​ 6,035 ​ 6.48 ​ Total Republic Processing Group ​ 13,916 ​ 4.94 ​ 9,200 ​ 3.58 ​ 6,035 ​ 4.19 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total delinquent loans ​ $ 22,092 ​ 0.42 ​ $ 15,260 ​ 0.34 ​ $ 13,465 ​ 0.30 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ *Represents total loans 30-days-or-more past due.
Loans from Republic Processing Group are generally small dollar homogenous consumer loans. ​ 74 Table of Contents Interest income that would have been recorded if nonaccrual loans were on a current basis in accordance with their original terms was $1.0 million, $1.3 million and 1.3 million in 2022, 2021, and 2020. ​ Based on the Bank’s review as of December 31, 2022, management believes that its reserves are adequate to absorb expected losses on all nonperforming credits ​ Table 23 — Rollforward of Nonperforming Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonperforming loans at the beginning of the period ​ $ 20,552 ​ $ 23,595 ​ $ 23,489 ​ Loans added to nonperforming status during the period that remained nonperforming at the end of the period ​ 7,076 ​ 3,627 ​ 8,993 ​ Loans removed from nonperforming status during the period that were nonperforming at the beginning of the period (see table below) ​ (10,934) ​ (5,221) ​ (7,959) ​ Principal balance paydowns of loans nonperforming at both period ends ​ ​ (1,084) ​ ​ (1,450) ​ ​ (817) ​ Net change in principal balance of other loans nonperforming at both period ends* ​ 708 ​ 1 ​ (111) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonperforming loans at the end of the period ​ $ 16,318 ​ $ 20,552 ​ $ 23,595 ​ ​ Table 24 — Detail of Loans Removed from Nonperforming Status ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans charged off ​ $ — ​ $ (57) ​ $ (1,142) ​ Loans transferred to OREO ​ — ​ — ​ (2,254) ​ Loan payoffs and paydowns ​ (8,385) ​ (4,884) ​ (4,420) ​ Loans returned to accrual status ​ (2,549) ​ (280) ​ (143) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans removed from nonperforming status during the period that were nonperforming at the beginning of the period ​ $ (10,934) ​ $ (5,221) ​ $ (7,959) ​ ​ Delinquent Loans ​ Delinquent loans to total loans increased to 0.34% as of December 31, 2022, from 0.30% as of December 31, 2021, primarily due to a $3 million increase in delinquent RPG loans, partially offset by a $1 million decrease in Core Bank loans. ​ Core Bank delinquent loans to total Core Bank loans decreased to 0.14% as of December 31, 2022 from 0.17% as of December 31, 2021.
Loans from Republic Processing Group are generally small dollar homogenous consumer loans. ​ Interest income that would have been recorded if nonaccrual loans were on a current basis in accordance with their original terms was $912,000, $1.0 million, and 1.3 million in 2023, 2022, and 2021. ​ Based on the Bank’s review as of December 31, 2023, management believes that its reserves are adequate to absorb expected losses on all nonperforming credits. ​ Table 22 — Rollforward of Nonperforming Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonperforming loans at the beginning of the period ​ $ 16,318 ​ $ 20,552 ​ $ 23,595 Loans added to nonperforming status during the period that remained nonperforming at the end of the period ​ 9,503 ​ 7,076 ​ 3,627 Loans removed from nonperforming status during the period that were nonperforming at the beginning of the period (see table below) ​ (4,801) ​ (10,934) ​ (5,221) Principal balance paydowns of loans nonperforming at both period ends ​ ​ (1,116) ​ ​ (1,084) ​ ​ (1,450) Net change in principal balance of other nonperforming loans* ​ 714 ​ 708 ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonperforming loans at the end of the period ​ $ 20,618 ​ $ 16,318 ​ $ 20,552 *Includes relatively small consumer portfolios, e.g., RCS loans. ​ Table 23 — Detail of Loans Removed from Nonperforming Status ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans charged off ​ $ — ​ $ — ​ $ (57) Loans transferred to OREO ​ — ​ — ​ — Loan payoffs and paydowns ​ (2,495) ​ (8,385) ​ (4,884) Loans returned to accrual status ​ (2,306) ​ (2,549) ​ (280) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans removed from nonperforming status during the period that were nonperforming at the beginning of the period ​ $ (4,801) ​ $ (10,934) ​ $ (5,221) ​ 76 Table of Contents Delinquent Loans ​ Delinquent loans to total loans increased to 0.42% as of December 31, 2023, from 0.34% as of December 31, 2022, primarily due to a $5 million increase in delinquent RPG loans and a $2 million increase in Core Bank loans. ​ Core Bank delinquent loans to total Core Bank loans increased to 0.16% as of December 31, 2023 from 0.14% as of December 31, 2022.
The Bank’s Classified and Special Mention loans decreased approximately $50 million during 2022, driven primarily by commercial-purpose loans within the hospitality and leisure industry upgraded during 2022. ​ See Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data” for additional discussion regarding Classified and Special Mention loans. ​ Table 19 — Classified and Special Mention Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) ​ 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss ​ $ — ​ $ — ​ $ — Doubtful ​ — ​ — ​ — Substandard ​ 17,010 ​ 21,714 ​ 30,193 PCD - Substandard ​ 1,498 ​ 1,692 ​ 1,887 Total Classified Loans ​ 18,508 ​ 23,406 ​ 32,080 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Special Mention ​ 69,246 ​ 114,496 ​ 89,206 PCD - Special Mention ​ 718 ​ 795 ​ 895 Total Special Mention Loans ​ 69,964 ​ 115,291 ​ 90,101 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Classified and Special Mention Loans ​ $ 88,472 ​ $ 138,697 ​ $ 122,181 ​ Nonperforming Loans ​ Nonperforming loans include loans on nonaccrual status and loans past due 90-days-or-more and still accruing.
The Bank’s Classified and Special Mention loans decreased approximately $14 million during 2023, driven primarily by upgrades during 2023 to commercial-purpose loans within the hospitality and leisure industry. ​ See Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data” for additional discussion regarding Classified and Special Mention loans. ​ Table 18 — Classified and Special Mention Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss ​ $ — ​ $ — ​ $ — Doubtful ​ — ​ — ​ — Substandard ​ 20,253 ​ 17,010 ​ 21,714 PCD - Substandard ​ 1,699 ​ 1,498 ​ 1,692 Total Classified Loans ​ 21,952 ​ 18,508 ​ 23,406 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Special Mention ​ 51,447 ​ 69,246 ​ 114,496 PCD - Special Mention ​ 447 ​ 718 ​ 795 Total Special Mention Loans ​ 51,894 ​ 69,964 ​ 115,291 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Classified and Special Mention Loans ​ $ 73,846 ​ $ 88,472 ​ $ 138,697 ​ Nonperforming Loans ​ Nonperforming loans include loans on nonaccrual status and loans past due 90-days-or-more and still accruing.
Since these factors and management’s assumptions are subject to change, the allocation is not necessarily indicative of future loan portfolio performance or future ACLL allocation. ​ Table 18 — Management’s Allocation of the Allowance for Credit Losses on Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 ​ ​ ​ ​ Percent of Percent of ​ ​ ​ Percent of Percent of ​ ​ ​ Percent of Percent of ​ ​ ​ ​ ​ Loans to ​ ACLL to ​ ​ ​ ​ Loans to ​ ACLL to ​ ​ ​ ​ Loans to ​ ACLL to ​ ​ ​ ​ ​ Total ​ Total ​ ​ ​ ​ Total ​ Total ​ ​ ​ ​ Total ​ Total December 31, (in thousands) ACLL ​ Loans* ​ Loan Class ACLL ​ Loans* ​ Loan Class* ACLL ​ Loans* ​ Loan Class* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied $ 8,909 21 % 0.98 % ​ $ 8,647 19 % 1.05 % ​ $ 9,715 19 % 1.10 % Nonowner occupied 2,831 7 ​ 0.88 ​ ​ 2,700 7 ​ 0.88 ​ ​ 2,466 6 ​ 0.93 ​ Commercial real estate 23,739 36 ​ 1.48 ​ ​ 23,769 32 ​ 1.63 ​ ​ 23,606 28 ​ 1.75 ​ Construction & land development 4,123 3 ​ 2.68 ​ ​ 4,128 3 ​ 3.19 ​ ​ 3,274 2 ​ 3.32 ​ Commercial & industrial ​ ​ 3,976 ​ 9 ​ ​ 0.97 ​ ​ ​ 3,487 ​ 8 ​ ​ 1.02 ​ ​ ​ 2,797 ​ 7 ​ ​ 0.86 ​ Paycheck Protection Program ​ ​ — ​ — ​ ​ — ​ ​ ​ — ​ 1 ​ ​ — ​ ​ ​ — ​ 8 ​ ​ — ​ Lease financing receivables ​ ​ 110 ​ — ​ ​ 1.05 ​ ​ ​ 91 ​ — ​ ​ 1.05 ​ ​ ​ 106 ​ — ​ ​ 1.05 ​ Aircraft ​ ​ 449 ​ 4 ​ ​ 0.25 ​ ​ ​ 357 ​ 3 ​ ​ 0.25 ​ ​ ​ 253 ​ 2 ​ ​ 0.25 ​ Home equity ​ ​ 4,628 ​ 5 ​ ​ 1.91 ​ ​ ​ 4,111 ​ 5 ​ ​ 1.95 ​ ​ ​ 4,990 ​ 5 ​ ​ 2.07 ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards ​ ​ 996 ​ — ​ ​ 6.44 ​ ​ ​ 934 ​ — ​ ​ 6.44 ​ ​ ​ 929 ​ — ​ ​ 6.54 ​ Overdrafts ​ ​ 726 ​ — ​ ​ 100.00 ​ ​ ​ 683 ​ — ​ ​ 100.00 ​ ​ ​ 587 ​ — ​ ​ 100.00 ​ Automobile loans ​ ​ 87 ​ — ​ ​ 1.29 ​ ​ ​ 186 ​ — ​ ​ 1.29 ​ ​ ​ 399 ​ 1 ​ ​ 1.32 ​ Other consumer ​ ​ 135 ​ — ​ ​ 21.57 ​ ​ ​ 314 ​ — ​ ​ 21.93 ​ ​ ​ 577 ​ — ​ ​ 7.07 ​ Total Traditional Banking ​ ​ 50,709 ​ 85 ​ ​ 1.32 ​ ​ ​ 49,407 ​ 78 ​ ​ 1.41 ​ ​ ​ 49,699 ​ 78 ​ ​ 1.34 ​ Warehouse lines of credit ​ ​ 1,009 ​ 9 ​ ​ 0.25 ​ ​ ​ 2,126 ​ 19 ​ ​ 0.25 ​ ​ ​ 2,407 ​ 20 ​ ​ 0.25 ​ Total Core Banking ​ ​ 51,718 ​ 94 ​ ​ 1.21 ​ ​ ​ 51,533 ​ 97 ​ ​ 1.18 ​ ​ ​ 52,106 ​ 98 ​ ​ 1.11 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances 3,797 2 ​ 4 ​ ​ — — ​ — ​ ​ — — ​ — ​ Other TRS commercial & industrial loans 91 1 ​ 0.18 ​ ​ 96 1 ​ 0.19 ​ ​ 158 — ​ 0.66 ​ Republic Credit Solutions ​ 14,807 ​ 3 ​ ​ 13.73 ​ ​ ​ 12,948 ​ 2 ​ ​ 13.91 ​ ​ ​ 8,803 ​ 2 ​ ​ 7.94 ​ Total Republic Processing Group ​ ​ 18,695 ​ 6 ​ ​ 7.27 ​ ​ ​ 13,044 ​ 3 ​ ​ 9.06 ​ ​ ​ 8,961 ​ 2 ​ ​ 6.65 ​ Total $ 70,413 100 ​ 1.56 ​ ​ $ 64,577 100 ​ 1.44 ​ ​ $ 61,067 100 ​ 1.27 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ *See Table 14 in this section of the filing for loan portfolio balances.
Since these factors and management’s assumptions are subject to change, the allocation is not necessarily indicative of future loan portfolio performance or future ACLL allocation. ​ Table 17 — Management’s Allocation of the Allowance for Credit Losses on Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 2021 ​ ​ ​ ​ Percent of Percent of ​ ​ ​ Percent of Percent of ​ ​ ​ Percent of Percent of ​ ​ ​ ​ ​ Loans to ​ ACLL to ​ ​ ​ ​ Loans to ​ ACLL to ​ ​ ​ ​ Loans to ​ ACLL to ​ ​ ​ ​ ​ Total ​ Total ​ ​ ​ ​ Total ​ Total ​ ​ ​ ​ Total ​ Total (in thousands) ACLL ​ Loans* ​ Loan Class ACLL ​ Loans* ​ Loan Class* ACLL ​ Loans* ​ Loan Class* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner-occupied $ 10,337 22 % 0.90 % ​ $ 8,909 21 % 0.98 % ​ $ 8,647 19 % 1.05 % Nonowner-occupied 3,047 7 ​ 0.88 ​ ​ 2,831 7 ​ 0.88 ​ ​ 2,700 7 ​ 0.88 ​ Commercial real estate 25,830 33 ​ 1.45 ​ ​ 23,739 36 ​ 1.48 ​ ​ 23,769 32 ​ 1.63 ​ Construction & land development 6,060 4 ​ 2.79 ​ ​ 4,123 3 ​ 2.68 ​ ​ 4,128 3 ​ 3.19 ​ Commercial & industrial ​ ​ 4,236 ​ 9 ​ ​ 0.91 ​ ​ ​ 3,976 ​ 9 ​ ​ 0.97 ​ ​ ​ 3,487 ​ 9 ​ ​ 1.02 ​ Lease financing receivables ​ ​ 1,061 ​ 2 ​ ​ 1.20 ​ ​ ​ 110 ​ — ​ ​ 1.05 ​ ​ ​ 91 ​ — ​ ​ 1.05 ​ Aircraft ​ ​ 625 ​ 5 ​ ​ 0.25 ​ ​ ​ 449 ​ 4 ​ ​ 0.25 ​ ​ ​ 357 ​ 3 ​ ​ 0.25 ​ Home equity ​ ​ 5,501 ​ 6 ​ ​ 1.86 ​ ​ ​ 4,628 ​ 5 ​ ​ 1.91 ​ ​ ​ 4,111 ​ 5 ​ ​ 1.95 ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards ​ ​ 1,074 ​ — ​ ​ 6.45 ​ ​ ​ 996 ​ — ​ ​ 6.44 ​ ​ ​ 934 ​ — ​ ​ 6.44 ​ Overdrafts ​ ​ 694 ​ — ​ ​ 100.00 ​ ​ ​ 726 ​ — ​ ​ 100.00 ​ ​ ​ 683 ​ — ​ ​ 100.00 ​ Automobile loans ​ ​ 32 ​ — ​ ​ 1.20 ​ ​ ​ 87 ​ — ​ ​ 1.29 ​ ​ ​ 186 ​ — ​ ​ 1.29 ​ Other consumer ​ ​ 501 ​ — ​ ​ 6.74 ​ ​ ​ 135 ​ — ​ ​ 21.57 ​ ​ ​ 314 ​ — ​ ​ 21.93 ​ Total Traditional Banking ​ ​ 58,998 ​ 88 ​ ​ 1.28 ​ ​ ​ 50,709 ​ 85 ​ ​ 1.32 ​ ​ ​ 49,407 ​ 78 ​ ​ 1.41 ​ Warehouse lines of credit ​ ​ 847 ​ 6 ​ ​ 0.25 ​ ​ ​ 1,009 ​ 9 ​ ​ 0.25 ​ ​ ​ 2,126 ​ 19 ​ ​ 0.25 ​ Total Core Banking ​ ​ 59,845 ​ 94 ​ ​ 1.21 ​ ​ ​ 51,718 ​ 94 ​ ​ 1.21 ​ ​ ​ 51,533 ​ 97 ​ ​ 1.18 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances 3,929 2 ​ 3.81 ​ ​ 3,797 2 ​ 4.00 ​ ​ — — ​ — ​ Other TRS commercial & industrial loans 61 1 ​ 0.13 ​ ​ 91 1 ​ 0.18 ​ ​ 96 1 ​ 0.19 ​ Republic Credit Solutions ​ 18,295 ​ 3 ​ ​ 13.82 ​ ​ ​ 14,807 ​ 3 ​ ​ 13.73 ​ ​ ​ 12,948 ​ 2 ​ ​ 13.91 ​ Total Republic Processing Group ​ ​ 22,285 ​ 6 ​ ​ 7.91 ​ ​ ​ 18,695 ​ 6 ​ ​ 7.27 ​ ​ ​ 13,044 ​ 3 ​ ​ 9.06 ​ Total $ 82,130 100 % 1.57 % ​ $ 70,413 100 % 1.56 % ​ $ 64,577 100 % 1.44 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ *See Table 13 in this section of the filing for loan portfolio balances.
Government agencies ​ 75,000 ​ — ​ — ​ Mortgage backed securities - residential ​ 27 ​ 46 ​ 99 ​ Collateralized mortgage obligations ​ 7,270 ​ 9,080 ​ 13,061 ​ Corporate bonds ​ ​ 4,964 ​ ​ 34,928 ​ ​ 39,808 ​ Obligations of state and political subdivisions ​ 125 ​ 245 ​ 356 ​ Total held-to-maturity debt securities ​ 87,386 ​ 44,299 ​ 53,324 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities with a readily determinable fair value (fair value): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Freddie Mac preferred stock ​ 111 ​ 170 ​ 560 ​ Community Reinvestment Act mutual fund ​ — ​ 2,450 ​ 2,523 ​ Total equity securities with a readily determinable fair value ​ ​ 111 ​ ​ 2,620 ​ ​ 3,083 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total investment securities ​ $ 707,862 ​ $ 542,045 ​ $ 580,270 ​ ​ AFS debt securities primarily consists of U.S.
Government agencies ​ 65,000 ​ 75,000 ​ — Mortgage backed securities - residential ​ 25 ​ 27 ​ 46 Collateralized mortgage obligations ​ 6,386 ​ 7,270 ​ 9,080 Corporate bonds ​ ​ 4,976 ​ ​ 4,964 ​ ​ 34,928 Obligations of state and political subdivisions ​ — ​ 125 ​ 245 Total held-to-maturity debt securities ​ 76,387 ​ 87,386 ​ 44,299 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities with a readily determinable fair value (fair value): ​ ​ ​ ​ ​ ​ ​ ​ ​ Freddie Mac preferred stock ​ 174 ​ 111 ​ 170 Community Reinvestment Act mutual fund ​ — ​ — ​ 2,450 Total equity securities with a readily determinable fair value ​ ​ 174 ​ ​ 111 ​ ​ 2,620 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total investment securities ​ $ 667,874 ​ $ 707,862 ​ $ 542,045 ​ AFS debt securities primarily consists of U.S.
As of December 31, 2022, the ACLL to total loans estimated for each RCS product ranged from as low as 0.25% for its healthcare-receivables portfolios to as high as 54.85% for its line-of-credit portfolios.
As of December 31, 2023, 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 50.89% for its line-of-credit products.
All ACLs are presented and discussed with the Audit Committee and the Board of Directors quarterly. ​ The Company’s ACLL increased $5.8 million from $64.6 million as of December 31, 2021 to $70.4 million as of December 31, 2022.
All ACLs are presented and discussed with the Audit Committee and the Board of Directors quarterly. ​ The Company’s ACLL increased from $70 million as of December 31, 2022 to $82 million as of December 31, 2023.
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. ​ For additional discussion regarding Republic’s methodology for determining the adequacy of the ACLL, see the section titled “Critical Accounting Policies and Estimates” in this section of the filing. ​ See additional detail regarding Republic Credit Solution’s loan products under Item 1 “Business.” ​ 67 Table of Contents Table 16 — Summary of Loan and Lease Loss Experience ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (dollars in thousands) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ACLL at beginning of period ​ $ 64,577 ​ $ 61,067 ​ $ 43,351 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adoption of ASC 326 ​ ​ — ​ ​ — ​ ​ 6,734 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate ​ (21) ​ — ​ (169) ​ Commercial real estate ​ (9) ​ (428) ​ (795) ​ Commercial & industrial ​ — ​ (86) ​ (310) ​ Home equity ​ — ​ (51) ​ (14) ​ Consumer ​ ​ (1,290) ​ ​ (895) ​ ​ (1,481) ​ Total Traditional Banking ​ ​ (1,320) ​ ​ (1,460) ​ ​ (2,769) ​ Warehouse lines of credit ​ — ​ — ​ — ​ Total Core Banking ​ ​ (1,320) ​ ​ (1,460) ​ ​ (2,769) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ ​ (11,505) ​ ​ (10,256) ​ ​ (19,575) ​ Other TRS loans ​ ​ (154) ​ ​ (51) ​ ​ (234) ​ Republic Credit Solutions ​ ​ (11,390) ​ ​ (4,707) ​ ​ (6,163) ​ Total Republic Processing Group ​ ​ (23,049) ​ ​ (15,014) ​ ​ (25,972) ​ Total charge-offs ​ (24,369) ​ (16,474) ​ (28,741) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recoveries: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate ​ ​ 104 ​ ​ 396 ​ ​ 182 ​ Commercial real estate ​ 287 ​ 82 ​ 472 ​ Commercial & industrial ​ 271 ​ 76 ​ 122 ​ Home equity ​ 121 ​ 46 ​ 115 ​ Consumer ​ ​ 373 ​ ​ 475 ​ ​ 508 ​ Total Traditional Banking ​ ​ 1,156 ​ ​ 1,075 ​ ​ 1,399 ​ Warehouse lines of credit ​ — ​ — ​ — ​ Total Core Banking ​ ​ 1,156 ​ ​ 1,075 ​ ​ 1,399 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ ​ 4,831 ​ ​ 3,533 ​ ​ 6,542 ​ Other TRS commercial & industrial loans ​ ​ 665 ​ ​ 29 ​ ​ 2 ​ Republic Credit Solutions ​ ​ 1,168 ​ ​ 408 ​ ​ 629 ​ Total Republic Processing Group ​ ​ 6,664 ​ ​ 3,970 ​ ​ 7,173 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total recoveries ​ 7,820 ​ 5,045 ​ 8,572 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loan recoveries (charge-offs) ​ (16,549) ​ (11,429) ​ (20,169) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision - Core Banking ​ 349 ​ (188) ​ 16,743 ​ Provision - RPG ​ 22,036 ​ 15,127 ​ 14,408 ​ Total Provision ​ 22,385 ​ 14,939 ​ 31,151 ​ ACLL at end of period ​ $ 70,413 ​ $ 64,577 ​ $ 61,067 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit Quality Ratios - Total Company: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ACLL to total loans ​ 1.56 % 1.44 % 1.27 % ACLL to nonperforming loans ​ 432 ​ 314 ​ 259 ​ Net loan charge-offs (recoveries) to average loans ​ ​ 0.38 ​ ​ 0.25 ​ ​ 0.42 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit Quality Ratios - Core Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ACLL to total loans ​ 1.21 % 1.18 % 1.11 % ACLL to nonperforming loans ​ 332 ​ 251 ​ 221 ​ Net loan charge-offs (recoveries) to average loans ​ ​ 0.00 ​ ​ 0.01 ​ ​ 0.03 ​ ​ ​ 68 Table of Contents Table 17 — Net Loan Charge-offs (Recoveries) to Average Loans by Loan Category ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loan Charge-Offs (Recoveries) to Average Loans Years Ended December 31, (dollars in thousands) ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ ​ (0.01) % ​ (0.04) % ​ — % Nonowner occupied ​ ​ — ​ ​ — ​ ​ — ​ Commercial real estate ​ ​ (0.02) ​ ​ 0.03 ​ ​ 0.02 ​ Construction & land development ​ ​ — ​ ​ — ​ ​ — ​ Commercial & industrial ​ ​ (0.07) ​ ​ — ​ ​ 0.05 ​ Paycheck Protection Program ​ ​ — ​ ​ — ​ ​ — ​ Lease financing receivables ​ ​ — ​ ​ — ​ ​ — ​ Aircraft ​ ​ — ​ ​ — ​ ​ — ​ Home equity ​ ​ (0.06) ​ ​ — ​ ​ (0.04) ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards ​ ​ 0.48 ​ ​ 0.65 ​ ​ 1.46 ​ Overdrafts ​ ​ 104.04 ​ ​ 51.69 ​ ​ 93.94 ​ Automobile loans ​ ​ (0.14) ​ ​ (0.10) ​ ​ 0.08 ​ Other consumer ​ ​ 1.02 ​ ​ 0.27 ​ ​ 0.58 ​ Total Traditional Banking ​ ​ — ​ ​ 0.01 ​ ​ 0.04 ​ Warehouse lines of credit ​ ​ — ​ ​ — ​ ​ — ​ Total Core Banking ​ ​ — ​ ​ 0.01 ​ ​ 0.03 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances* ​ ​ 26.78 ​ ​ 26.58 ​ ​ 33.55 ​ Other TRS commercial & industrial loans ​ ​ (3.18) ​ ​ 0.19 ​ ​ 2.32 ​ Republic Credit Solutions ​ ​ 10.73 ​ ​ 3.93 ​ ​ 5.35 ​ Total Republic Processing Group ​ ​ 12.02 ​ ​ 7.42 ​ ​ 12.20 ​ Total ​ ​ 0.38 ​ ​ 0.25 ​ ​ 0.42 ​ * Refund advances are originated during the first two months of each year, and beginning in December 2022, ERAs for the upcoming first quarter tax season are originated during the fourth quarter of the year.
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. ​ For additional discussion regarding Republic’s methodology for determining the adequacy of the ACLL, see the section titled “Critical Accounting Policies and Estimates” in this section of the filing. ​ See additional detail regarding Republic Credit Solution’s loan products under Item 1 “Business.” ​ 68 Table of Contents Table 15 — Summary of Loan and Lease Loss Experience ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (dollars in thousands) ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ACLL at beginning of period ​ $ 70,413 ​ $ 64,577 ​ $ 61,067 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CBank Fair Value Adjustment ​ ​ 216 ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate ​ (26) ​ (21) ​ — Commercial real estate ​ — ​ (9) ​ (428) Commercial & industrial ​ — ​ — ​ (86) Lease financing receivables ​ (141) ​ — ​ — Home equity ​ (2) ​ — ​ (51) Consumer ​ ​ (1,182) ​ ​ (1,290) ​ ​ (895) Total Traditional Banking ​ ​ (1,351) ​ ​ (1,320) ​ ​ (1,460) Warehouse lines of credit ​ — ​ — ​ — Total Core Banking ​ ​ (1,351) ​ ​ (1,320) ​ ​ (1,460) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ ​ (25,823) ​ ​ (11,505) ​ ​ (10,256) Other TRS loans ​ ​ (128) ​ ​ (154) ​ ​ (51) Republic Credit Solutions ​ ​ (13,912) ​ ​ (11,390) ​ ​ (4,707) Total Republic Processing Group ​ ​ (39,863) ​ ​ (23,049) ​ ​ (15,014) Total charge-offs ​ (41,214) ​ (24,369) ​ (16,474) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recoveries: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate ​ ​ 154 ​ ​ 104 ​ ​ 396 Commercial real estate ​ 94 ​ 287 ​ 82 Commercial & industrial ​ 123 ​ 271 ​ 76 Lease financing receivables ​ 10 ​ — ​ — Home equity ​ 3 ​ 121 ​ 46 Consumer ​ ​ 342 ​ ​ 373 ​ ​ 475 Total Traditional Banking ​ ​ 726 ​ ​ 1,156 ​ ​ 1,075 Warehouse lines of credit ​ — ​ — ​ — Total Core Banking ​ ​ 726 ​ ​ 1,156 ​ ​ 1,075 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ ​ 3,463 ​ ​ 4,831 ​ ​ 3,533 Other TRS commercial & industrial loans ​ ​ 31 ​ ​ 665 ​ ​ 29 Republic Credit Solutions ​ ​ 871 ​ ​ 1,168 ​ ​ 408 Total Republic Processing Group ​ ​ 4,365 ​ ​ 6,664 ​ ​ 3,970 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total recoveries ​ 5,091 ​ 7,820 ​ 5,045 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loan recoveries (charge-offs) ​ (36,123) ​ (16,549) ​ (11,429) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision - Core Bank Loans ​ 8,536 ​ 349 ​ (188) Provision - RPG Loans ​ 39,088 ​ 22,036 ​ 15,127 Total Provision for All Loans ​ 47,624 ​ 22,385 ​ 14,939 ACLL at end of period ​ $ 82,130 ​ $ 70,413 ​ $ 64,577 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit Quality Ratios - Total Company: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ACLL to total loans ​ 1.57 % 1.56 % 1.44 ACLL to nonperforming loans ​ 398 ​ 432 ​ 314 Net loan charge-offs (recoveries) to average loans ​ ​ 0.73 ​ ​ 0.38 ​ ​ 0.25 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit Quality Ratios - Core Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ACLL to total loans ​ 1.21 % 1.21 % 1.18 ACLL to nonperforming loans ​ 313 ​ 332 ​ 251 Net loan charge-offs (recoveries) to average loans ​ ​ 0.01 ​ ​ 0.00 ​ ​ 0.01 ​ ​ 69 Table of Contents Table 16 — Net Loan Charge-offs (Recoveries) to Average Loans by Loan Category ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loan Charge-Offs (Recoveries) to Average Loans Years Ended December 31, (dollars in thousands) ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner-occupied ​ (0.01) % ​ (0.01) % ​ (0.04) % Nonowner-occupied ​ — ​ ​ — ​ ​ — ​ Commercial real estate ​ (0.01) ​ ​ (0.02) ​ ​ 0.03 ​ Construction & land development ​ — ​ ​ — ​ ​ — ​ Commercial & industrial ​ (0.03) ​ ​ (0.07) ​ ​ — ​ Lease financing receivables ​ 0.28 ​ ​ — ​ ​ — ​ Aircraft ​ — ​ ​ — ​ ​ — ​ Home equity ​ — ​ ​ (0.06) ​ ​ — ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards ​ 0.55 ​ ​ 0.48 ​ ​ 0.65 ​ Overdrafts ​ 84.39 ​ ​ 104.04 ​ ​ 51.69 ​ Automobile loans ​ 0.66 ​ ​ (0.14) ​ ​ (0.10) ​ Other consumer ​ 0.33 ​ ​ 1.02 ​ ​ 0.27 ​ Total Traditional Banking ​ 0.01 ​ ​ — ​ ​ 0.01 ​ Warehouse lines of credit ​ — ​ ​ — ​ ​ — ​ Total Core Banking ​ 0.01 ​ ​ — ​ ​ 0.01 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances* ​ 29.56 ​ ​ 26.78 ​ ​ 26.58 ​ Other TRS commercial & industrial loans ​ 0.53 ​ ​ (3.18) ​ ​ 0.19 ​ Republic Credit Solutions ​ 10.52 ​ ​ 10.73 ​ ​ 3.93 ​ Total Republic Processing Group ​ 16.27 ​ ​ 12.02 ​ ​ 7.42 ​ Total ​ 0.73 % ​ 0.38 % ​ 0.25 % * Refund advances are originated during the first two months of each year, and beginning in December 2022, ERAs for the upcoming first quarter tax filing season are originated during the fourth quarter of the year.
As of December 31, 2022, the Company’s $95 million of FHLB advances had a weighted-average maturity of 1.06 years and a weighted-average cost of 3.84%. ​ 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. ​ Table 35 — Federal Home Loan Bank Advances ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the Years Ended December 31, (dollars in thousands) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding balance at end of period ​ $ 95,000 ​ $ 25,000 ​ $ 235,000 ​ Weighted average interest rate at period end ​ 3.84 % 0.14 % 0.23 % Average outstanding balance during the period ​ $ 21,233 ​ $ 29,479 ​ $ 211,776 ​ Average interest rate during the period ​ 1.60 % 0.19 % 1.66 % Maximum outstanding at any month end ​ $ 95,000 ​ $ 25,000 ​ $ 590,000 ​ ​ ​ 81 Table of Contents Interest Rate Swaps ​ Non-hedge Interest Rate Swaps ​ The Bank enters into interest rate swaps to facilitate client transactions and meet their financing needs.
In addition, the Bank had remaining $110 million of overnight borrowings with a cost of 5.38% as of December 31, 2023. ​ 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. ​ Table 34 — Federal Home Loan Bank Advances ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the Years Ended December 31, (dollars in thousands) 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding balance at end of period ​ $ 380,000 ​ $ 95,000 ​ $ 25,000 ​ Weighted average interest rate at period end ​ 4.63 % 3.84 % 0.14 % Average outstanding balance during the period ​ $ 325,678 ​ $ 21,233 ​ $ 29,479 ​ Average interest rate during the period ​ 4.68 % 1.60 % 0.19 % Maximum outstanding at any month end ​ $ 525,000 ​ $ 95,000 ​ $ 25,000 ​ ​ ​ 82 Table of Contents Interest Rate Swaps ​ Non-hedge Interest Rate Swaps ​ The Bank enters into interest rate swaps to facilitate client transactions and meet their financing needs.
Additionally, actual results could differ materially from the model if interest rates do not move equally across all points on the yield curve. ​ The following table illustrates the Bank’s projected percent change from its Base net interest income over the period beginning January 1, 2023 and ending December 31, 2023 based on instantaneous movements in interest rates from Down 200 to Up 300 basis points equally across all points on the yield curve.
The following table illustrates the Bank’s projected percent change from its Base net interest income over the period beginning January 1, 2024 and ending December 31, 2024 based on instantaneous movements in interest rates from Down 300 to Up 300 basis points equally across all points on the yield curve.
Total Company net interest margin expanded to 4.12% during 2022 compared to 3.79% for 2021. ​ The following were the most significant components affecting the Company’s net interest income by reportable segment: ​ Traditional Banking segment ​ The Traditional Banking’s net interest income increased $14.3 million, or 9%, over 2021.
Total Company net interest margin expanded to 4.91% during 2023 compared to 4.12% for 2022. ​ The following were the most significant components affecting the Company’s net interest income by reportable segment: ​ Traditional Banking segment ​ The Traditional Banking’s net interest income increased $23.0 million, or 13%, for 2023 compared to 2022.
As of December 31, 2022 and December 31, 2021, these pledged investment securities had a fair value of $218 million and $320 million. ​ Capital ​ Table 38 — Capital ​ Information pertaining to the Company’s capital balances and ratios follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the Years Ended December 31, (dollars in thousands, except per share data) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ $ 856,613 ​ $ 835,054 ​ $ 823,323 ​ Book value per share at December 31, ​ 43.38 ​ 41.79 ​ 39.40 ​ Tangible book value per share at December 31, * ​ 42.11 ​ 40.52 ​ 38.27 ​ Dividends declared per share - Class A Common Stock ​ 1.364 ​ 1.232 ​ 1.144 ​ Dividends declared per share - Class B Common Stock ​ 1.240 ​ 1.120 ​ 1.040 ​ Average stockholders’ equity to average total assets ​ 13.82 % 13.41 % 13.35 % Total risk-based capital ​ 17.92 ​ 17.48 ​ 18.52 ​ Common equity tier 1 capital ​ ​ 16.70 ​ ​ 16.39 ​ ​ 16.61 ​ Tier 1 risk-based capital ​ 16.70 ​ 16.39 ​ 17.43 ​ Tier 1 leverage capital ​ 14.81 ​ 13.36 ​ 13.70 ​ Dividend payout ratio ​ 30 ​ 29 ​ 29 ​ Dividend yield ​ 3.33 ​ 2.42 ​ 3.17 ​ *For additional detail, see Footnote 2 of “Selected Financial Data” in this section of the filing. ​ Total stockholders’ equity increased from $835 million as of December 31, 2021 to $857 million as of December 31, 2022.
As of December 31, 2023 and December 31, 2022, these pledged investment securities had a fair value of $100 million and $218 million. ​ Capital ​ Table 36 — Capital ​ Information pertaining to the Company’s capital balances and ratios follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the Years Ended December 31, (dollars in thousands, except per share data) 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ $ 912,756 ​ $ 856,613 ​ $ 843,063 ​ Book value per share at December 31, ​ 47.15 ​ 43.38 ​ 42.69 ​ Tangible book value per share at December 31, * ​ 44.55 ​ 42.11 ​ 41.40 ​ Dividends declared per share - Class A Common Stock ​ 1.496 ​ 1.364 ​ 1.232 ​ Dividends declared per share - Class B Common Stock ​ 1.360 ​ 1.240 ​ 1.120 ​ Average stockholders’ equity to average total assets ​ 14.21 % 13.82 % 13.41 % Total risk-based capital ​ 16.10 ​ 17.92 ​ 17.48 ​ Common equity tier 1 capital ​ ​ 14.85 ​ ​ 16.70 ​ ​ 16.39 ​ Tier 1 risk-based capital ​ 14.85 ​ 16.70 ​ 16.39 ​ Tier 1 leverage capital ​ 13.89 ​ 14.81 ​ 13.36 ​ Dividend payout ratio ​ 32 ​ 30 ​ 29 ​ Dividend yield ​ 3.66 ​ 3.33 ​ 2.42 ​ *For additional detail, see Footnote 2 of “Selected Financial Data” in this section of the filing. ​ 84 Table of Contents Total stockholders’ equity increased from $857 million as of December 31, 2022 to $913 million as of December 31, 2023.
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. ​ Table 37 — Liquid Assets and Borrowing Capacity ​ The Company’s liquid assets and borrowing capacity included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) ​ 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ $ 313,689 ​ $ 756,971 ​ $ 485,587 Unincumbered debt securities ​ ​ 438,052 ​ 219,775 ​ 273,652 Total liquid assets ​ ​ ​ 751,741 ​ ​ 976,746 ​ ​ 759,239 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available borrowing capacity with the FHLB ​ ​ 899,362 ​ 900,424 ​ 682,992 Available borrowing capacity through unsecured credit lines ​ ​ 125,000 ​ 125,000 ​ 125,000 Total available borrowing capacity ​ ​ ​ 1,024,362 ​ ​ 1,025,424 ​ ​ 807,992 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liquid assets and available borrowing capacity ​ ​ $ 1,776,103 ​ $ 2,002,170 ​ $ 1,567,231 ​ The Bank had a loan to deposit ratio (excluding brokered deposits) of 107% as of December 31, 2022 and 99% as of December 31, 2021.
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. ​ Table 35 — Liquid Assets and Borrowing Capacity ​ The Company’s liquid assets and borrowing capacity included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ $ 316,567 ​ $ 313,689 ​ $ 756,971 Unencumbered debt securities ​ ​ 491,783 ​ 438,052 ​ 219,775 Total liquid assets ​ ​ ​ 808,350 ​ ​ 751,741 ​ ​ 976,746 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available borrowing capacity with the FHLB ​ ​ 730,265 ​ 899,362 ​ 900,424 Available borrowing capacity through unsecured credit lines ​ ​ 100,000 ​ 125,000 ​ 125,000 Total available borrowing capacity ​ ​ ​ 830,265 ​ ​ 1,024,362 ​ ​ 1,025,424 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liquid assets and available borrowing capacity ​ ​ $ 1,638,615 ​ $ 1,776,103 ​ $ 2,002,170 ​ The Company had a loan to deposit ratio (excluding wholesale brokered deposits) of 106% as of December 31, 2023 and 107% as of December 31, 2022.
All RAs, including ERAs, are charged-off by June 30 th of each year. ​ The Company’s net charge-offs to average total Company loans increased from 0.25% during 2021 to 0.38% during 2022, with net charge-offs increasing $5.1 million and average total Company loans decreasing $180 million, or 4%.
All RAs, including ERAs, are charged-off by June 30 th of each year. ​ The Company’s net charge-offs to average total Company loans increased from 0.38% during 2022 to 0.73% during 2023, with net charge-offs increasing $19.6 million and average total Company loans increasing $585 million, or 13%.
(2) Interest income for RAs and RCS line-of-credit products is composed entirely of loan fees. (3) Interest income includes loan fees of $882,000, $1.7 million, and $1.4 million for 2022, 2021, and 2020. (4) Interest income includes loan fees of $1.7 million, $3.1 million, and $3.4 million for 2022, 2021, and 2020.
(b) Interest income for RAs and RCS line-of-credit products is composed entirely of loan fees. (c) Interest income includes loan fees of $957,000, $882,000, and $1.7 million for 2023, 2022, and 2021. (d) Interest income includes loan fees of $1.0 million, $1.7 million, and $3.1 million for 2023, 2022, and 2021.
The majority of the Bank’s TDRs involve a restructuring of loan terms such as a temporary reduction in the payment amount to require only interest and escrow (if required), reducing the loan’s interest rate and/or extending the maturity date of the debt. Nonaccrual loans modified as TDRs remain on nonaccrual status and continue to be reported as nonperforming loans.
The majority of the Bank’s loan modifications involve a restructuring of loan terms such as a temporary reduction in the payment amount to require only interest and escrow (if required), reducing the loan’s interest rate, and/or extending the maturity date of the debt.
As was noted with deposits, the Bank currently expects to continue its low beta strategy for SSUARS in 2023, but this strategy is subject to change depending upon several factors including, but not limited to, the Bank’s overall current and projected liquidity positions, its clients’ demand for its loans and deposit products, the Bank’s overall interest rate risk position, the interest rate environment at the time, as well as the projected interest rate environment for the near term and the long term. ​ Table 34 — Securities Sold Under Agreements to Repurchase ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the Years Ended December 31, (dollars in thousands) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding balance at end of period ​ $ 216,956 ​ $ 290,967 ​ $ 211,026 ​ Weighted average interest rate at period end ​ 0.41 % 0.04 % 0.04 % Average outstanding balance during the period ​ $ 265,188 ​ $ 231,430 ​ $ 204,797 ​ Average interest rate during the period ​ 0.15 % 0.03 % 0.09 % Maximum outstanding at any month end ​ $ 303,315 ​ $ 432,047 ​ $ 295,698 ​ ​ Federal Home Loan Bank Advances ​ The Bank’s total FHLB advances were $95 million as of December 31, 2022 compared to $25 million as of December 31, 2021.
The Bank’s SSUAR pricing strategy, however, is subject to change depending upon several factors including, but not limited to, the Bank’s current and projected overall liquidity positions, its clients’ demand for its loans and deposit products, the Bank’s overall interest rate risk position, the interest rate environment at the time, as well as the projected interest rate environment for the near term and the long term. ​ 81 Table of Contents Table 33 — Securities Sold Under Agreements to Repurchase ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the Years Ended December 31, (dollars in thousands) 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding balance at end of period ​ $ 97,618 ​ $ 216,956 ​ $ 290,967 ​ Weighted average interest rate at period end ​ 0.50 % 0.41 % 0.04 % Average outstanding balance during the period ​ $ 134,632 ​ $ 265,188 ​ $ 231,430 ​ Average interest rate during the period ​ 0.43 % 0.15 % 0.03 % Maximum outstanding at any month end ​ $ 311,035 ​ $ 303,315 ​ $ 432,047 ​ ​ Federal Home Loan Bank Advances ​ The Bank’s total FHLB advances were $380 million as of December 31, 2023 compared to $95 million as of December 31, 2022.
The Bank currently expects to continue its low beta strategy for deposits and SSUARS in 2023, but this strategy is subject to change depending upon several factors including, but not limited to, the Bank’s overall current and projected liquidity positions, its clients’ demand for its loans and deposit products, the Bank’s overall interest rate risk position, the interest rate environment at the time, as well as the projected interest rate environment for the near term and the long term. ​ As of December 31, 2022, the Bank had approximately $879 million in deposits from 185 large non-sweep deposit relationships, including reciprocal deposits, where the individual relationship exceeded $2 million.
The Bank’s overall deposit and SSUAR pricing strategies are subject to change depending upon several factors including, but not limited to, the Bank’s current and projected overall liquidity positions, its clients’ demand for its loans and deposit products, the Bank’s overall interest rate risk position, the interest rate environment at the time, as well as the projected interest rate environment for the near term and the long term. ​ As of December 31, 2023, the Bank had approximately $912 million in deposits from 187 large non-sweep deposit relationships, including reciprocal deposits, where the deposit amount exceeded $2 million for a depositor’s taxpayer identification number.
See Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data” for the components within the nonaccrual loans to total loans and ACLL to nonaccrual loans ratios, as well as additional discussion regarding nonaccrual loans and collateral-dependent loans. ** Loans past due 90-days-or-more and still accruing consist of smaller-balance consumer loans. ​ 72 Table of Contents Table 21 — Nonperforming Loan Composition ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ Total ​ December 31, (in thousands) Balance Loan Class ​ Balance ​ Loan Class ​ Balance ​ Loan Class ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ $ 13,388 ​ 1.47 % ​ $ 12,039 ​ 1.47 % ​ $ 14,328 ​ 1.63 % ​ Nonowner occupied ​ 117 ​ 0.04 ​ ​ ​ 95 ​ 0.03 ​ ​ ​ 81 ​ 0.03 ​ ​ Commercial real estate ​ 1,001 ​ 0.06 ​ ​ ​ 6,557 ​ 0.45 ​ ​ ​ 6,762 ​ 0.50 ​ ​ Construction & land development ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ Commercial & industrial ​ — ​ — ​ ​ ​ 13 ​ 0.00 ​ ​ ​ 55 ​ 0.02 ​ ​ Paycheck Protection Program ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ Lease financing receivables ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ Aircraft ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ Home equity ​ 815 ​ 0.34 ​ ​ 1,700 ​ 0.81 ​ ​ 2,141 ​ 0.89 ​ ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ ​ ​ 5 ​ 0.04 ​ ​ Overdrafts ​ ​ ​ — ​ — ​ ​ ​ ​ 1 ​ 0.15 ​ ​ ​ ​ — ​ — ​ ​ Automobile loans ​ ​ ​ 31 ​ 0.46 ​ ​ ​ ​ 97 ​ 0.67 ​ ​ ​ ​ 170 ​ 0.56 ​ ​ Other consumer ​ ​ ​ 210 ​ 33.55 ​ ​ ​ ​ 3 ​ 0.21 ​ ​ ​ ​ 11 ​ 0.13 ​ ​ Total Traditional Banking ​ ​ ​ 15,562 ​ 0.40 ​ ​ ​ ​ 20,505 ​ 0.59 ​ ​ ​ ​ 23,553 ​ 0.63 ​ ​ Warehouse lines of credit ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ Total Core Banking ​ ​ ​ 15,562 ​ 0.37 ​ ​ ​ ​ 20,505 ​ 0.47 ​ ​ ​ ​ 23,553 ​ 0.50 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ Other TRS commercial & industrial loans ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ Republic Credit Solutions ​ 756 ​ 0.70 ​ ​ ​ 47 ​ 0.05 ​ ​ ​ 42 ​ 0.04 ​ ​ Total Republic Processing Group ​ 756 ​ 0.29 ​ ​ ​ 47 ​ 0.03 ​ ​ ​ 42 ​ 0.03 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total nonperforming loans ​ $ 16,318 ​ 0.36 ​ ​ ​ $ 20,552 ​ 0.46 ​ ​ ​ $ 23,595 ​ 0.49 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 73 Table of Contents Table 22 — Stratification of Nonperforming Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Nonperforming Loans and Recorded Investment ​ ​ ​ ​ ​ ​ Balance ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ Balance ​ ​ ​ ​ > $100 & ​ ​ ​ ​ Balance ​ ​ ​ ​ Total (dollars in thousands) ​ No. ​ ​ ​ No. ​ ​ ​ No. ​ > $500 ​ ​ No. ​ Balance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied 134 ​ $ 4,650 ​ 45 ​ $ 7,353 ​ 1 ​ $ 1,385 ​ 180 ​ $ 13,388 ​ Nonowner occupied 4 ​ 117 ​ — ​ — ​ — ​ — ​ 4 ​ 117 ​ Commercial real estate — ​ — ​ 1 ​ 232 ​ 1 ​ 769 ​ 2 ​ 1,001 ​ Construction & land development — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Commercial & industrial — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Paycheck Protection Program ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Lease financing receivables — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Aircraft ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Home equity 28 ​ 711 ​ 1 ​ 104 ​ — ​ — ​ 29 ​ 815 ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Overdrafts ​ NM ​ — ​ — ​ — ​ — ​ — ​ NM ​ — ​ Automobile loans ​ 6 ​ 31 ​ — ​ — ​ — ​ — ​ 6 ​ 31 ​ Other consumer ​ — ​ ​ — ​ ​ 1 ​ ​ 210 ​ ​ — ​ ​ — ​ ​ 1 ​ 210 ​ Total Traditional Banking ​ 172 ​ ​ 5,509 ​ ​ 48 ​ ​ 7,899 ​ ​ 2 ​ ​ 2,154 ​ ​ 222 ​ ​ 15,562 ​ Warehouse lines of credit — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Total Core Banking ​ 172 ​ ​ 5,509 ​ ​ 48 ​ ​ 7,899 ​ ​ 2 ​ ​ 2,154 ​ ​ 222 ​ ​ 15,562 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Other TRS commercial & industrial loans ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Republic Credit Solutions ​ NM ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 756 ​ ​ NM ​ 756 ​ Total Republic Processing Group ​ NM ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 756 ​ ​ NM ​ ​ 756 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total 172 ​ $ 5,509 ​ 48 ​ $ 7,899 ​ 2 ​ $ 2,910 ​ 222 ​ $ 16,318 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NM – Not meaningful.
See Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data” for the components within the nonaccrual loans to total loans and ACLL to nonaccrual loans ratios, as well as additional discussion regarding nonaccrual loans and collateral-dependent loans. ** Loans past due 90-days-or-more and still accruing consist of smaller-balance consumer loans. ​ 73 Table of Contents Table 20 — Nonperforming Loan Composition ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ Total ​ December 31, (in thousands) Balance Loan Class ​ Balance ​ Loan Class ​ Balance ​ Loan Class ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner-occupied $ 15,056 ​ 1.32 % ​ $ 13,388 ​ 1.47 % ​ $ 12,039 ​ 1.47 % ​ Nonowner-occupied 64 ​ 0.02 ​ ​ ​ 117 ​ 0.04 ​ ​ ​ 95 ​ 0.03 ​ ​ Commercial real estate 850 ​ 0.05 ​ ​ ​ 1,001 ​ 0.06 ​ ​ ​ 6,557 ​ 0.45 ​ ​ Construction & land development — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ Commercial & industrial 1,221 ​ 0.26 ​ ​ ​ — ​ — ​ ​ ​ 13 ​ 0.00 ​ ​ Lease financing receivables — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ Aircraft ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ Home equity 1,948 ​ 0.66 ​ ​ 815 ​ 0.34 ​ ​ 1,700 ​ 0.81 ​ ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ Overdrafts ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ ​ ​ 1 ​ 0.15 ​ ​ Automobile loans ​ ​ 10 ​ 0.38 ​ ​ ​ ​ 31 ​ 0.46 ​ ​ ​ ​ 97 ​ 0.67 ​ ​ Other consumer ​ ​ 1 ​ 0.01 ​ ​ ​ ​ 210 ​ 33.55 ​ ​ ​ ​ 3 ​ 0.21 ​ ​ Total Traditional Banking ​ ​ 19,150 ​ 0.41 ​ ​ ​ ​ 15,562 ​ 0.40 ​ ​ ​ ​ 20,505 ​ 0.59 ​ ​ Warehouse lines of credit — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ Total Core Banking ​ ​ 19,150 ​ 0.39 ​ ​ ​ ​ 15,562 ​ 0.37 ​ ​ ​ ​ 20,505 ​ 0.47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances — ​ — ​ ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ Other TRS commercial & industrial loans ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ ​ ​ — ​ — ​ ​ Republic Credit Solutions 1,468 ​ 1.11 ​ ​ ​ 756 ​ 0.70 ​ ​ ​ 47 ​ 0.05 ​ ​ Total Republic Processing Group 1,468 ​ 0.52 ​ ​ ​ 756 ​ 0.29 ​ ​ ​ 47 ​ 0.03 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total nonperforming loans $ 20,618 ​ 0.39 ​ ​ ​ $ 16,318 ​ 0.36 ​ ​ ​ $ 20,552 ​ 0.46 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 74 Table of Contents Table 21 — Stratification of Nonperforming Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Nonperforming Loans and Recorded Investment ​ ​ ​ ​ ​ ​ Balance ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ Balance ​ ​ ​ ​ > $100 & ​ ​ ​ ​ Balance ​ ​ ​ ​ Total (dollars in thousands) ​ No. ​ ​ ​ No. ​ ​ ​ No. ​ > $500 ​ ​ No. ​ Balance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Traditional Banking: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner-occupied 125 ​ $ 4,569 ​ 45 ​ $ 7,200 ​ 3 ​ $ 3,287 ​ 173 ​ $ 15,056 ​ Nonowner-occupied 3 ​ 64 ​ — ​ — ​ — ​ — ​ 3 ​ 64 ​ Commercial real estate — ​ — ​ 1 ​ 191 ​ 1 ​ 659 ​ 2 ​ 850 ​ Construction & land development — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Commercial & industrial 2 ​ 61 ​ 1 ​ 339 ​ 1 ​ 821 ​ 4 ​ 1,221 ​ Lease financing receivables — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Aircraft ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Home equity 36 ​ 1,236 ​ 3 ​ 712 ​ — ​ — ​ 39 ​ 1,948 ​ Consumer: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit cards — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Overdrafts ​ NM ​ — ​ — ​ — ​ — ​ — ​ NM ​ — ​ Automobile loans ​ 3 ​ 10 ​ — ​ — ​ — ​ — ​ 3 ​ 10 ​ Other consumer ​ 1 ​ ​ 1 ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 1 ​ 1 ​ Total Traditional Banking ​ 170 ​ ​ 5,941 ​ ​ 50 ​ ​ 8,442 ​ ​ 5 ​ ​ 4,767 ​ ​ 225 ​ ​ 19,150 ​ Warehouse lines of credit — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ Total Core Banking ​ 170 ​ ​ 5,941 ​ ​ 50 ​ ​ 8,442 ​ ​ 5 ​ ​ 4,767 ​ ​ 225 ​ ​ 19,150 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Refund Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Refund Advances ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Other TRS commercial & industrial loans ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Republic Credit Solutions ​ NM ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,468 ​ ​ NM ​ 1,468 ​ Total Republic Processing Group ​ NM ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,468 ​ ​ NM ​ ​ 1,468 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total 170 ​ $ 5,941 ​ 50 ​ $ 8,442 ​ 5 ​ $ 6,235 ​ 225 ​ $ 20,618 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NM – Not meaningful.
The Bank’s dynamic earnings simulation model includes secondary market loan fees and excludes Traditional Bank loan fees. ​ Table 39 — Bank Interest Rate Sensitivity as of December 31, 2022 and 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Rates ​ ​ -200 -100 +100 +200 +300 ​ Basis Points ​ Basis Points ​ Basis Points ​ Basis Points ​ Basis Points ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % Change from base net interest income as of December 31, 2022 (2.8) % ​ (0.6) % ​ 1.8 % ​ 3.7 % ​ 5.7 % ​ % Change from base net interest income as of December 31, 2021 (2.9) % ​ 1.3 % ​ (0.6) % ​ 0.7 % ​ 4.7 % ​ ​ For the Down-100 scenario, the December 2022 simulation reflected a more negative outcome than the December 2021 simulation.
The Bank’s dynamic earnings simulation model includes secondary market loan fees and excludes Traditional Bank loan fees. ​ Table 37 — Bank Interest Rate Sensitivity as of December 31, 2023 and 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Rates ​ ​ -300 -200 -100 +100 +200 +300 ​ Basis Points ​ Basis Points ​ Basis Points ​ Basis Points ​ Basis Points ​ Basis Points ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % Change from base net interest income as of December 31, 2023 5.0 % ​ 0.1 % ​ 0.2 % ​ (1.0) % ​ (2.1) % ​ (3.1) % ​ % Change from base net interest income as of December 31, 2022 (5.7) % ​ (2.8) % ​ (0.6) % ​ 1.8 % ​ 3.7 % ​ 5.7 % ​ ​ Notable changes for the Bank’s interest rate sensitivity projections from December 31, 2022 to December 31, 2023 occurred in all the scenarios.
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. ​ See additional detail regarding the Company’s adoption of ASC 326 and the CECL method under Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data.” ​ 43 Table of Contents Management’s Evaluation of the ACLL ​ Management evaluates the ACLL for its Core Banking operations separately from its non-traditional RPG operations.
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. ​ See additional detail regarding the Company’s adoption of ASC 326 and the CECL method under Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data.” ​ ​ ​ ​ 46 Table of Contents Management evaluated the reasonableness of its Core Bank ACLL by evaluating absorption and exhaustion rates that account for CECL life-of-loan considerations.
This cash earned a weighted-average yield of 1.54% during 2022 with a spot balance yield of 4.40% on December 31, 2022.
This cash earned a weighted-average yield of 5.13% during 2023 with a spot balance yield of approximately 5.40% on December 31, 2023.
Since early 2020, the Bank has utilized a general investing strategy of purchasing securities with shorter-term durations or maintaining a large amount cash at the Federal Reserve.
Since early 2020, the Bank has utilized a general investing strategy of purchasing securities with shorter-term durations or maintaining a large amount cash at the Federal Reserve. The Bank utilized this general strategy due to liquidity reasons and as an interest rate risk management tool.
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 ability of the Company to remediate its material weaknesses in its internal control over financial reporting; ● success in gaining regulatory approvals when required; ● 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 cyber security attacks involving either the Company or one of the Company’s third-party service providers; 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.” ​ On October 26, 2022, Republic, the Bank and CBank entered into the CBank Agreement.
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 six reportable segments; ● equity and fixed income market fluctuations; ● client bankruptcies and loan defaults; 44 Table of Contents ● 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; 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.” ​ Accounting Standards Updates ​ For disclosure regarding the impact to the Company’s financial statements of ASUs, see Footnote 1 “Summary of Significant Accounting Policies” of Part II Item 8 “Financial Statements and Supplementary Data.” ​ 45 Table of Contents Critical Accounting Estimates ​ Republic’s consolidated financial statements and accompanying footnotes have been prepared in accordance with GAAP.
RCS generally originates small-dollar, consumer credit products. In some instances, the Bank originates these products, sells 90% or 95% of the balances within three business days of loan origination, and retains a 5% or 10% interest.
For its LOC products, the Bank originates these products, sells 90% or 95% of the balances within three business days of loan origination, and retains a 5% or 10% interest.
The total per item fees, net of refunds, included in service charges on deposits for 2022 and 2021 were $6.8 million and $5.6 million. The total daily overdraft charges, net of refunds, included in interest income for 2022 and 2021 were $1.3 million and $1.1 million.
The total per item fees, net of refunds, included in service charges on deposits for 2023 and 2022 were $7.2 million and $6.8 million.
The Company carried $102 million and $99 million of BOLI on its consolidated balance sheet as of December 31, 2022 and 2021. ​ Table 30 — Rollforward of Bank Owned Life Insurance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in thousands) 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BOLI at beginning of period ​ $ 99,161 ​ $ 68,018 ​ $ 66,433 ​ BOLI acquired ​ — ​ 30,000 ​ — ​ Death benefits paid ​ ​ — ​ ​ (1,099) ​ ​ — ​ Increase in cash surrender value ​ 2,526 ​ 2,242 ​ 1,585 ​ BOLI at end of period ​ $ 101,687 ​ $ 99,161 ​ $ 68,018 ​ ​ 78 Table of Contents Deposits ​ Table 31 — Deposit Composition ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) ​ 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Core Bank: ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand ​ $ 1,336,082 ​ $ 1,381,522 ​ $ 1,217,263 Money market accounts ​ 707,272 ​ 789,876 ​ 712,824 Savings ​ 323,015 ​ 311,624 ​ 236,335 Reciprocal money market ​ 28,635 ​ 60,685 ​ 246,257 Individual retirement accounts (1) ​ 38,640 ​ 43,724 ​ 47,889 Time deposits, $250 and over (1) ​ 54,855 ​ 81,050 ​ 83,448 Other certificates of deposit (1) ​ 129,324 ​ 154,174 ​ 199,214 Reciprocal time deposits (1) ​ ​ 7,405 ​ ​ 17,265 ​ ​ 67,852 Brokered deposits (1) ​ — ​ — ​ 25,010 Total Core Bank interest-bearing deposits ​ ​ 2,625,228 ​ ​ 2,839,920 ​ ​ 2,836,092 Total Core Bank noninterest-bearing deposits ​ 1,464,493 ​ 1,579,171 ​ 1,503,662 Total Core Bank deposits ​ 4,089,721 ​ 4,419,091 ​ 4,339,754 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market accounts ​ ​ 3,849 ​ ​ 9,717 ​ ​ 6,673 Total RPG interest-bearing deposits ​ ​ 3,849 ​ ​ 9,717 ​ ​ 6,673 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Brokered prepaid card deposits ​ ​ 328,655 ​ ​ 320,907 ​ ​ 257,856 Other noninterest-bearing deposits ​ ​ 115,620 ​ ​ 89,601 ​ ​ 128,898 Total RPG noninterest-bearing deposits ​ ​ 444,275 ​ ​ 410,508 ​ ​ 386,754 Total RPG deposits ​ ​ 448,124 ​ ​ 420,225 ​ ​ 393,427 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deposits ​ $ 4,537,845 ​ $ 4,839,316 ​ $ 4,733,181 (1) Represents time deposits. ​ Total Bank deposits decreased $301 million from December 31, 2021 to $4.5 billion as of December 31, 2022.
The Company carried $104 million and $102 million of BOLI on its consolidated balance sheet as of December 31, 2023 and 2022. ​ Table 29 — Rollforward of Bank Owned Life Insurance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in thousands) 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BOLI at beginning of period ​ $ 101,687 ​ $ 99,161 ​ $ 68,018 BOLI acquired ​ — ​ — ​ 30,000 Death benefits paid from cash surrender value ​ ​ (490) ​ ​ — ​ ​ (1,099) Increase in cash surrender value ​ 2,719 ​ 2,526 ​ 2,242 BOLI at end of period ​ $ 103,916 ​ $ 101,687 ​ $ 99,161 ​ 79 Table of Contents Deposits ​ Table 30 — Deposit Composition ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Core Bank: ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand ​ $ 1,158,051 ​ $ 1,336,082 ​ $ 1,381,522 Money market accounts ​ 1,007,356 ​ 707,272 ​ 789,876 Savings ​ 263,238 ​ 323,015 ​ 311,624 Reciprocal money market ​ 188,078 ​ 28,635 ​ 60,685 Individual retirement accounts (1) ​ 33,793 ​ 38,640 ​ 43,724 Time deposits, $250 and over (1) ​ 101,787 ​ 54,855 ​ 81,050 Other certificates of deposit (1) ​ 225,614 ​ 129,324 ​ 154,174 Reciprocal time deposits (1) ​ ​ 90,857 ​ ​ 7,405 ​ ​ 17,265 Wholesale brokered deposits (1) ​ 88,767 ​ — ​ — Total Core Bank interest-bearing deposits ​ ​ 3,157,541 ​ ​ 2,625,228 ​ ​ 2,839,920 Total Core Bank noninterest-bearing deposits ​ 1,239,466 ​ 1,464,493 ​ 1,579,171 Total Core Bank deposits ​ 4,397,007 ​ 4,089,721 ​ 4,419,091 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Republic Processing Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ Wholesale brokered deposits (1) ​ ​ 199,960 ​ ​ — ​ ​ — Money market accounts ​ ​ 18,664 ​ ​ 3,849 ​ ​ 9,717 Total RPG interest-bearing deposits ​ ​ 218,624 ​ ​ 3,849 ​ ​ 9,717 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing prepaid card deposits ​ ​ 318,769 ​ ​ 328,655 ​ ​ 320,907 Other noninterest-bearing deposits ​ ​ 118,763 ​ ​ 115,620 ​ ​ 89,601 Total RPG noninterest-bearing deposits ​ ​ 437,532 ​ ​ 444,275 ​ ​ 410,508 Total RPG deposits ​ ​ 656,156 ​ ​ 448,124 ​ ​ 420,225 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deposits ​ $ 5,053,163 ​ $ 4,537,845 ​ $ 4,839,316 (1) Represents time deposits. ​ Total deposits increased $515 million from December 31, 2022 to $5.1 billion as of December 31, 2023.
(5) Interest income includes loan fees of $1.2 million, $17.5 million, and $8.6 million for 2022, 2021, and 2020. (6) Interest income includes loan fees of $4.8 million, $4.1 million, and $3.4 million for 2022, 2021, and 2020.
(e) Interest income includes loan fees of $ 5.7 million, $4.8 million, and $4.1 million for 2023, 2022, and 2021.
Accruing loans modified as TDRs are evaluated for nonaccrual status based on a current evaluation of the borrower’s financial condition and ability and willingness to service the modified debt. ​ Table 28 — Collateral Dependent Loan Composition ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) ​ ​ 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cashflow-dependent TDRs ​ ​ $ 5,761 ​ $ 5,960 ​ $ 10,938 ​ Collateral-dependent TDRs ​ ​ ​ 6,265 ​ ​ 9,426 ​ ​ 9,840 ​ Total TDRs ​ ​ ​ 12,026 ​ ​ 15,386 ​ ​ 20,778 ​ Collateral-dependent loans (which are not TDRs) ​ ​ 14,186 ​ 14,645 ​ 20,806 ​ Total recorded investment in TDRs and collateral-dependent loans ​ ​ $ 26,212 ​ $ 30,031 ​ $ 41,584 ​ See Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data” for additional discussion regarding collateral-dependent loans and TDRs. ​ 77 Table of Contents Other Real Estate Owned ​ Table 29 — Rollforward of Other Real Estate Owned Activity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) ​ 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OREO at beginning of period ​ $ 1,792 ​ $ 2,499 ​ $ 113 ​ Transfer from loans to OREO ​ — ​ 64 ​ 2,750 ​ Proceeds from sale* ​ — ​ (611) ​ (324) ​ Net gain on sale ​ — ​ 51 ​ 65 ​ Writedowns ​ (211) ​ (211) ​ (105) ​ OREO at end of period ​ $ 1,581 ​ $ 1,792 ​ $ 2,499 ​ *Inclusive of non-cash proceeds where the Bank financed the sale of the property. ​ The fair value of OREO represents the estimated value that management expects to receive when the property is sold, net of related costs to sell.
With the adoption of ASU 2022-02 in 2023, all loan modifications will now be recognized as collateral-dependent. ​ There were $1.9 million of collateral-dependent loan modifications made during 2023, and as of December 31, 2023 there were $21.0 million of collateral-dependent loans outstanding on the Company’s balance sheet. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 78 Table of Contents The table below presents the composition of the Company’s TDRs and collateral-dependent loans on its consolidated balance sheet as of December 31, 2022 and 2021. ​ Table 27 — Collateral Dependent Loan Composition ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) ​ 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ Cashflow-dependent TDRs ​ ​ $ 5,761 ​ $ 5,960 Collateral-dependent TDRs ​ ​ ​ 6,265 ​ ​ 9,426 Total TDRs ​ ​ ​ 12,026 ​ ​ 15,386 Collateral-dependent loans (which are not TDRs or Loan Modifications) ​ ​ 14,186 ​ 14,645 Total recorded investment in TDRs and collateral-dependent loans ​ ​ $ 26,212 ​ $ 30,031 See Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data” for additional discussion regarding collateral-dependent loans and TDRs. ​ Other Real Estate Owned ​ Table 28 — Rollforward of Other Real Estate Owned Activity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) ​ 2023 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OREO at beginning of period ​ $ 1,581 ​ $ 1,792 ​ $ 2,499 Transfer from loans to OREO ​ — ​ — ​ 64 Proceeds from sale* ​ — ​ — ​ (611) Net gain on sale ​ — ​ — ​ 51 Writedowns ​ (211) ​ (211) ​ (211) OREO at end of period ​ $ 1,370 ​ $ 1,581 ​ $ 1,792 *Inclusive of non-cash proceeds where the Bank financed the sale of the property. ​ The fair value of OREO represents the estimated value that management expects to receive when the property is sold, net of related costs to sell.
Government agencies ​ $ 411,141 ​ $ 237,459 ​ $ 246,909 ​ Private label mortgage-backed security ​ 2,127 ​ 2,731 ​ 2,957 ​ Mortgage-backed securities - residential ​ 171,873 ​ 210,749 ​ 211,202 ​ Collateralized mortgage obligations ​ 21,368 ​ 30,294 ​ 48,952 ​ Corporate bonds ​ 10,001 ​ 10,046 ​ 10,043 ​ Trust preferred security ​ 3,855 ​ 3,847 ​ 3,800 ​ Total available-for-sale debt securities ​ 620,365 ​ 495,126 ​ 523,863 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held-to-maturity debt securities (carrying value): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
Government agencies ​ $ 407,033 ​ $ 411,141 ​ $ 237,459 Private label mortgage-backed security ​ 1,773 ​ 2,127 ​ 2,731 Mortgage-backed securities - residential ​ 154,710 ​ 171,873 ​ 210,749 Collateralized mortgage obligations ​ 21,659 ​ 21,368 ​ 30,294 Corporate bonds ​ 2,020 ​ 10,001 ​ 10,046 Trust preferred security ​ 4,118 ​ 3,855 ​ 3,847 Total available-for-sale debt securities ​ 591,313 ​ 620,365 ​ 495,126 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held-to-maturity debt securities (amortized cost): ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.

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