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SEGMENT INFORMATION
6 Months Ended
Jun. 30, 2024
SEGMENT INFORMATION  
SEGMENT INFORMATION

16. 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 June 30, 2024, the Company was divided into five reportable segments: Traditional Banking, Warehouse Lending, TRS, RPS, and RCS. Management considers the first two 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 revenue 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

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 generally the same as those described in the summary of significant accounting policies in the Company’s 2023 Annual Report on Form 10-K. Republic evaluates segment performance using operating income. The Company allocates goodwill to the Traditional Banking segment. Republic generally allocates income taxes based on income before income tax expense unless reasonable and specific segment allocations can be made. The Company makes transactions among reportable segments at carrying value.

Segment information follows:

Three Months Ended June 30, 2024

 

Core Banking

Republic Processing Group

 

Total

Tax

Republic

Republic

Traditional

Warehouse

Core

Refund

Payment

Credit

Total

Total

 

(dollars in thousands)

Banking

Lending

Banking

Solutions

Solutions

Solutions

RPG

Company

 

Net interest income

$

49,915

$

2,914

   

$

52,829

$

823

$

2,930

$

11,954

$

15,707

$

68,536

Provision for expected credit loss expense

 

915

 

214

 

1,129

 

(1,182)

 

 

5,196

 

4,014

 

5,143

Net refund transfer fees

 

 

 

 

3,811

 

 

 

3,811

 

3,811

Mortgage banking income

 

1,612

 

 

1,612

 

 

 

 

 

1,612

Program fees

760

3,638

4,398

4,398

Other noninterest income

 

8,435

 

13

 

8,448

 

75

 

1

 

1

 

77

 

8,525

Total noninterest income

 

10,047

 

13

 

10,060

 

3,886

 

761

 

3,639

 

8,286

 

18,346

Total noninterest expense

 

41,712

 

927

 

42,639

 

2,024

 

1,018

 

3,953

 

6,995

 

49,634

Income (loss) before income tax expense

 

17,335

 

1,786

 

19,121

 

3,867

 

2,673

 

6,444

 

12,984

 

32,105

Income tax expense (benefit)

3,708

403

4,111

796

574

1,418

2,788

6,899

Net income (loss)

$

13,627

$

1,383

$

15,010

$

3,071

$

2,099

$

5,026

$

10,196

$

25,206

Period-end assets

$

5,531,961

$

549,472

$

6,081,433

$

32,106

$

362,410

$

140,625

$

535,141

$

6,616,574

Net interest margin

 

3.53

%  

 

2.57

%  

 

3.46

%  

 

NM

 

5.03

%  

 

NM

 

NM

 

4.36

%  

Net-revenue concentration*

70

%  

3

%  

73

%  

5

%  

4

%  

18

%  

27

%  

100

%  

Three Months Ended June 30, 2023

 

Core Banking

Republic Processing Group

 

    

    

    

    

Total

    

    

Tax

Republic

Republic

    

    

 

Traditional

Warehouse

Core

Refund

Payment

Credit

Total

Total

 

(dollars in thousands)

Banking

Lending

Banking

Solutions

Solutions

Solutions

RPG

Company

 

Net interest income

$

48,743

$

2,642

$

51,385

$

70

$

3,940

$

9,134

$

13,144

$

64,529

Provision for expected credit loss expense

 

1,860

 

202

 

2,062

 

(219)

 

 

4,296

 

4,077

 

6,139

Net refund transfer fees

 

 

 

 

4,479

 

 

 

4,479

 

4,479

Mortgage banking income

 

907

 

 

907

 

 

 

 

 

907

Program fees

728

3,011

3,739

3,739

Death benefits in excess of cash surrender value of life insurance

1,728

1,728

1,728

Other noninterest income

 

8,629

 

11

 

8,640

 

127

 

(9)

 

40

 

158

 

8,798

Total noninterest income

 

11,264

 

11

 

11,275

 

4,606

 

719

 

3,051

 

8,376

 

19,651

Total noninterest expense

 

44,475

 

1,008

 

45,483

 

2,160

 

983

 

2,907

 

6,050

 

51,533

Income before income tax expense

 

13,672

 

1,443

 

15,115

 

2,735

 

3,676

 

4,982

 

11,393

 

26,508

Income tax expense

 

2,649

 

322

 

2,971

 

573

 

818

 

1,094

 

2,485

 

5,456

Net income

$

11,023

$

1,121

$

12,144

$

2,162

$

2,858

$

3,888

$

8,908

$

21,052

Period-end assets

$

5,287,197

$

540,106

$

5,827,303

$

39,234

$

376,194

$

127,048

$

542,476

$

6,369,779

Net interest margin

 

3.77

%  

 

2.28

%  

 

3.65

%  

 

NM

 

4.52

%  

 

NM

 

NM

 

4.46

%  

Net-revenue concentration*

71

%  

3

%  

74

%  

6

%  

6

%  

14

%  

26

%  

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.

Six Months Ended June 30, 2024

 

Core Banking

Republic Processing Group

 

    

    

    

    

Total

    

    

Tax

Republic

Republic

    

    

 

Traditional

Warehouse

Core

Refund

Payment

Credit

Total

Total

 

(dollars in thousands)

Banking

Lending

Banking

Solutions

Solutions

Solutions

RPG

Company

 

Net interest income

$

98,174

$

5,171

$

103,345

$

31,733

$

6,438

$

23,939

$

62,110

$

165,455

Provision for expected credit loss expense

 

1,273

 

523

 

1,796

 

24,592

 

 

9,377

 

33,969

 

35,765

Net refund transfer fees

 

 

 

 

14,631

 

 

 

14,631

 

14,631

Mortgage banking income

 

1,922

 

 

1,922

 

 

 

 

 

1,922

Program fees

1,533

7,044

8,577

8,577

Other noninterest income

 

16,421

 

26

 

16,447

 

138

 

2

 

2

 

142

 

16,589

Total noninterest income

 

18,343

 

26

 

18,369

 

14,769

 

1,535

 

7,046

 

23,350

 

41,719

Total noninterest expense

 

83,106

 

1,805

 

84,911

 

6,536

 

1,972

 

7,186

 

15,694

 

100,605

Income (loss) before income tax expense

 

32,138

 

2,869

 

35,007

 

15,374

 

6,001

 

14,422

 

35,797

 

70,804

Income tax expense (benefit)

6,228

647

6,875

3,510

1,335

3,272

8,117

14,992

Net income (loss)

$

25,910

$

2,222

$

28,132

$

11,864

$

4,666

$

11,150

$

27,680

$

55,812

Period-end assets

$

5,531,961

$

549,472

$

6,081,433

$

32,106

$

362,410

$

140,625

$

535,141

$

6,616,574

Net interest margin

 

3.43

%  

 

2.61

%  

 

3.38

%  

 

NM

 

5.05

%  

 

NM

 

NM

 

5.13

%  

Net-revenue concentration*

56

%  

3

%  

59

%  

22

%

4

%  

15

%  

41

%  

100

%  

Six Months Ended June 30, 2023

 

Core Banking

Republic Processing Group

 

    

    

    

    

Total

    

    

Tax

Republic

Republic

    

    

 

Traditional

Warehouse

Core

Refund

Payment

Credit

Total

Total

 

(dollars in thousands)

Banking

Lending

Banking

Solutions

Solutions

Solutions

RPG

Company

 

Net interest income

$

98,911

$

4,729

$

103,640

$

28,377

$

7,398

$

17,756

$

53,531

$

157,171

Provision for expected credit loss expense

 

4,844

 

337

 

5,181

 

21,589

 

 

6,135

 

27,724

 

32,905

Net refund transfer fees

 

 

 

 

15,286

 

 

 

15,286

 

15,286

Mortgage banking income

 

1,707

 

 

1,707

 

 

 

 

 

1,707

Program fees

1,435

5,545

6,980

6,980

Death benefits in excess of cash surrender value of life insurance

1,728

1,728

1,728

Other noninterest income

 

16,300

 

22

 

16,322

 

242

 

2

 

65

 

309

 

16,631

Total noninterest income

 

19,735

 

22

 

19,757

 

15,528

 

1,437

 

5,610

 

22,575

 

42,332

Total noninterest expense

 

87,881

 

1,976

 

89,857

 

6,942

 

1,849

 

5,328

 

14,119

 

103,976

Income before income tax expense

 

25,921

 

2,438

 

28,359

 

15,374

 

6,986

 

11,903

 

34,263

 

62,622

Income tax expense

 

5,362

 

545

 

5,907

 

3,379

 

1,553

 

2,639

 

7,571

 

13,478

Net income

$

20,559

$

1,893

$

22,452

$

11,995

$

5,433

$

9,264

$

26,692

$

49,144

Period-end assets

$

5,287,197

$

540,106

$

5,827,303

$

39,234

$

376,194

$

127,048

$

542,476

$

6,369,779

Net interest margin

 

3.92

%  

 

2.39

%  

 

3.81

%  

 

NM

 

4.17

%  

 

NM

 

NM

 

5.48

%  

Net-revenue concentration*

60

%  

2

%  

62

%  

22

%

4

%  

12

%  

38

%  

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.