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SEGMENT INFORMATION
12 Months Ended
Dec. 31, 2023
SEGMENT INFORMATION  
SEGMENT INFORMATION

24.

SEGMENT INFORMATION

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

As of December 31, 2023, the Company was divided into six reportable segments: Traditional Banking, Warehouse, Mortgage Banking, TRS, RPS, and RCS. Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last three segments collectively constitute RPG operations.

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

Reportable Segment:

Nature of Operations:

Primary Drivers of Net Revenue:

Core Banking:

Traditional Banking

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

Loans, investments, and deposits

Warehouse Lending

Provides short-term, revolving credit facilities to mortgage bankers across the United States.

Mortgage warehouse lines of credit

Mortgage Banking

Primarily originates, sells, and services long-term, single-family, first-lien residential real estate loans primarily to clients in the Bank's market footprint.

Loan sales and servicing

Republic Processing Group:

Tax Refund Solutions

TRS offers tax-related credit products and facilitates the receipt and payment of federal and state tax refunds through Refund Transfer products. TRS products are primarily provided to clients outside of the Bank’s market footprint.

Loans and refund transfers

Republic Payment Solutions

RPS offers general-purpose reloadable cards. RPS products are primarily provided to clients outside of the Bank’s market footprint.

Prepaid cards

Republic Credit Solutions

Offers consumer credit products. RCS products are primarily provided to clients outside of the Bank’s market footprint, with a substantial portion of RCS clients considered subprime or near-prime borrowers.

Unsecured, consumer loans

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

Segment information for the years ended December 31, 2023, 2022, and 2021 is as follows:

Year Ended December 31, 2023

 

Core Banking

Republic Processing Group

 

    

    

    

    

    

Total

    

    

Tax

Republic

Republic

    

    

 

Traditional

Warehouse

Mortgage

Core

Refund

Payment

Credit

Total

Total

 

(dollars in thousands)

Banking

Lending

Banking

Banking

Solutions

Solutions

Solutions

RPG

Company

 

Net interest income

$

194,516

$

9,447

$

282

$

204,245

$

29,557

$

15,729

$

39,247

$

84,533

$

288,778

Provision for expected credit loss expense

 

8,698

 

(162)

 

 

8,536

 

22,559

 

 

16,529

 

39,088

 

47,624

Net refund transfer fees

 

 

 

 

 

15,748

 

 

 

15,748

 

15,748

Mortgage banking income

 

 

 

3,542

 

3,542

 

 

 

 

 

3,542

Program fees

2,827

12,755

15,582

15,582

Contract termination fee

Legal settlement

Other noninterest income

 

35,885

 

44

 

74

 

36,003

 

341

 

158

 

83

 

582

 

36,585

Total noninterest income

 

35,885

 

44

 

3,616

 

39,545

 

16,089

 

2,985

 

12,838

 

31,912

 

71,457

Total noninterest expense

 

160,101

 

3,547

 

8,019

 

171,667

 

12,035

 

3,710

 

11,986

 

27,731

 

199,398

Income (loss) before income tax expense

 

61,602

 

6,106

 

(4,121)

 

63,587

 

11,052

 

15,004

 

23,570

 

49,626

 

113,213

Income tax expense (benefit)

11,673

1,365

(907)

12,131

2,196

3,307

5,205

10,708

22,839

Net income (loss)

$

49,929

$

4,741

$

(3,214)

$

51,456

$

8,856

$

11,697

$

18,365

$

38,918

$

90,374

Period-end assets

$

5,504,886

$

340,224

$

14,746

$

5,859,856

$

228,738

$

366,117

$

140,180

$

735,035

$

6,594,891

Net interest margin

 

3.69

%  

 

2.38

%  

 

4.19

%  

 

3.61

%  

 

NM

 

4.59

%  

 

NM

 

NM

 

4.91

%  

Net-revenue concentration*

64

%  

3

%  

1

%  

68

%  

13

5

%  

14

%  

32

%  

100

%  

Year Ended December 31, 2022

 

Core Banking

Republic Processing Group

 

    

    

    

    

    

Total

    

    

Tax

Republic

Republic

    

    

 

Traditional

Warehouse

Mortgage

Core

Refund

Payment

Credit

Total

Total

 

(dollars in thousands)

Banking

Lending

Banking

Banking

Solutions

Solutions

Solutions

RPG

Company

 

Net interest income

$

171,543

$

13,729

$

519

$

185,791

$

16,896

$

4,819

$

29,185

$

50,900

$

236,691

Provision for expected credit loss expense

 

1,429

 

(1,117)

 

 

312

 

9,955

 

 

12,081

 

22,036

 

22,348

Net refund transfer fees

 

 

 

 

 

17,080

 

 

 

17,080

 

17,080

Mortgage banking income

 

 

 

6,196

 

6,196

 

 

 

 

 

6,196

Program fees

2,872

13,300

16,172

16,172

Contract termination fee

5,000

5,000

5,000

Legal settlement

13,000

13,000

13,000

Other noninterest income

 

31,648

 

50

 

136

 

31,834

 

424

 

104

 

 

528

 

32,362

Total noninterest income

 

31,648

 

50

 

6,332

 

38,030

 

35,504

 

2,976

 

13,300

 

51,780

 

89,810

Total noninterest expense

 

149,681

 

3,604

 

9,912

 

163,197

 

12,377

 

3,340

 

8,394

 

24,111

 

187,308

Income before income tax expense

 

52,081

 

11,292

 

(3,061)

 

60,312

 

30,068

 

4,455

 

22,010

 

56,533

 

116,845

Income tax expense

 

11,104

 

2,539

 

(673)

 

12,970

 

6,905

 

942

 

4,922

 

12,769

 

25,739

Net income

$

40,977

$

8,753

$

(2,388)

$

47,342

$

23,163

$

3,513

$

17,088

$

43,764

$

91,106

Period-end assets

$

4,894,773

$

405,052

$

13,938

$

5,313,763

$

46,192

$

363,067

$

112,521

$

521,780

$

5,835,543

Net interest margin

 

3.38

%  

 

2.69

%  

 

4.01

%  

 

3.32

%  

 

NM

 

1.37

%  

 

NM

 

NM

 

4.12

%  

Net-revenue concentration*

63

%  

4

%  

2

%  

69

%  

16

2

%  

13

%  

31

%  

100

%  

Year Ended December 31, 2021

 

Core Banking

Republic Processing Group

 

    

    

    

    

    

Total

    

    

Tax

Republic

    

Republic

    

    

 

Traditional

Warehouse

Mortgage

Core

Refund

Payment

Credit

Total

Total

 

(dollars in thousands)

Banking

Lending

Banking

Banking

Solutions

Solutions

Solutions

RPG

Company

 

Net interest income

$

157,249

$

25,218

$

1,081

$

183,548

$

14,999

$

838

$

23,355

$

39,192

$

222,740

Provision for expected credit loss expense

 

(38)

 

(281)

 

 

(319)

 

6,683

 

 

8,444

 

15,127

 

14,808

Net refund transfer fees

 

 

 

 

 

20,248

 

 

 

20,248

 

20,248

Mortgage banking income

 

 

 

19,994

 

19,994

 

 

 

 

 

19,994

Program fees

3,171

11,066

14,237

14,237

Gain on branch divestiture

Other noninterest income

 

31,492

 

57

 

191

 

31,740

 

348

 

8

 

 

356

 

32,096

Total noninterest income

 

31,492

 

57

 

20,185

 

51,734

 

20,596

 

3,179

 

11,066

 

34,841

 

86,575

Total noninterest expense

 

145,376

 

4,210

 

12,356

 

161,942

 

13,611

 

2,733

 

4,779

 

21,123

 

183,065

Income before income tax expense

 

21,467

 

20,981

 

22,552

 

73,659

 

15,301

 

1,284

 

22,591

 

39,176

 

111,442

Income tax expense

 

7,685

 

4,962

 

1,960

 

14,607

 

3,685

 

279

 

5,260

 

9,224

 

23,831

Net income

$

13,782

$

16,019

$

20,592

$

59,052

$

11,616

$

1,005

$

17,331

$

29,952

$

87,611

Period-end assets

$

4,717,836

$

850,703

$

43,929

$

5,775,552

$

371,647

$

371,647

$

109,517

$

392,773

$

6,168,325

Net interest margin

 

3.18

%  

 

3.37

%  

 

NM

 

3.39

%  

 

NM

 

NM

 

NM

 

NM

 

4.10

%  

Net-revenue concentration*

61

%  

8

%  

7

%  

76

%  

12

1

%  

11

%  

24

%  

100

%  

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

NM - Not Meaningful