Republic Bancorp Inc: Form 10-Q for the period ended Mar 31, 2026

The consolidated financial statements included in this report include the accounts of Republic Bancorp, Inc. and its wholly owned subsidiary, Republic Bank & Trust Company. As used in this report, the terms “Republic,” the “Company,” “we,” “our,” and “us” refer to Republic Bancorp, Inc. and, where the context requires, Republic Bancorp, Inc. and its subsidiary. The term the “Bank” refers to the Company’s subsidiary bank, Republic Bank & Trust Company, as well as its wholly owned subsidiary, RBT Insurance Agency LLC. All significant intercompany balances and transactions are eliminated in consolidation.

Republic is an FHC headquartered in Louisville, Kentucky, which is the most populous city in Kentucky. The Bank is a Kentucky-based, state-chartered non-member financial institution that provides both traditional and non-traditional banking products and services through five reportable segments using a multitude of delivery channels. While the Bank operates primarily in its geographical market footprint where it has physical locations, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Republic should be read in conjunction with Part I Item 1 “Financial Statements.”

FORWARD-LOOKING STATEMENTS

This Form 10-Q (this “report”) contains statements relating to future results of Republic Bancorp, Inc. that are considered “forward-looking” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements are principally, but not exclusively, contained in this section of the report and Part I Item 1 “Financial Statements.”

Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to differ materially from those expressed or implied in such statements. These statements are often, but not always, identified by words or phrases such as “anticipate,” “believe,” “can,” “conclude,” “continue,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,” “possible,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “will likely,” “would,” or similar expressions. Forward-looking statements are not historical facts; rather, they are based on current expectations, estimates, and projections about the Company’s industry, management’s beliefs, and certain assumptions made by management—many of which are inherently uncertain and beyond management’s control.

Forward-looking statements detail management’s expectations regarding the future and are 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 to reflect events or circumstances that occur after the date forward-looking statements are made, except as required by applicable law.

There is no assurance that the following list of risks and uncertainties is complete. However, risks and uncertainties that could cause actual results to differ materially from those expressed in forward-looking statements include:

Financial, Economic, and Market Risks

• Litigation and regulatory outcomes, including liabilities, costs, expenses, settlements, judgments, or adverse decisions in litigation or regulatory proceedings.
• Interest rate fluctuations and U.S. Treasury yield curve shifts, which may affect the Company’s net interest income, NIM, mortgage banking operations, warehouse lending operations and overall interest rate risk profile.
• Magnitude and frequency of changes to the FFTR implemented by the FOMC.
• Changes in fiscal, monetary, tax, or regulatory policies, including federal and/or statutory tax rates, regulatory rules or standards, which may impact the Company’s operations and compliance requirements.
• Changes in ASUs, including the introduction of new accounting standards that may affect financial reporting and disclosures.
• Economic and political conditions, including inflation, recession, geopolitical developments, risk of further government shutdowns, and U.S government efforts to control related trends, which could disrupt financial markets, consumer confidence, or spending behaviors.
• Market volatility and capital market disruptions, including liquidity pressures and pricing shifts that may affect investment securities, funding sources, and investor sentiment.
• Disruption of the U.S. and global financial system, including volatility in the capital and bond markets, inflationary pressures, tariffs, threats to the FRB’s independence and potential global economic downturns.
• Changes in investor sentiment or behavior, which may affect the Company’s stock price, funding costs, and strategic flexibility.
• Changes in consumer/business spending or savings behavior, which may impact loan demand, deposit levels, and overall economic activity.

Credit and Liquidity Risks

• Ability to effectively manage capital and liquidity, particularly during periods of economic stress or market disruption.
• Credit quality deterioration, including changes in customer and counterparty creditworthiness, the ACLL, the ACLC, charge-offs, or impairments in investment securities, goodwill, MSR’s, or DTA’s.
• Accuracy of assumptions and estimates, including those used in establishing the ACLL, ACLC, and other financial models.
• Model risk, including reliance on complex financial models for CECL, fair value, and stress testing, and the potential for material error or miscalibration.

Operational and Strategic Execution Risks

• Competitive product and pricing pressures across the Company’s five reportable segments, which may impact volume, market share, margins, and profitability.
• Projections of financial performance, including incorrect assumptions by management of future financial performance regarding revenue, expenses, cost saving opportunities, capital expenditures, EPS, dividends, and capital structure, which may differ materially from actual results.
• Operational changes and integration risk, including:
• Financial and operational impact thresholds that trigger enhanced governance reviews;
• Integration challenges from acquired institutions, new systems and related savings realization;
• AI, particularly generative AI, adoption risks including performance failures, bias, or reliance on third-party AI vendors, and more effective adoption by industry competitors;
• Third-party/vendor dependencies, including contractual, data security, and operational integrity risks; and
• Cross-departmental impact, which introduces complexity and coordination risk, potentially requiring multiple governance body reviews.
• Dependence on key contracts and partners, including:
• Nonrenewal of major contracts (e.g., with marketer-servicers in TRS);
• Ability to qualify for or realize tax-credit incentives;
• Achievement of cost savings from system implementations; and
• Replacement of lost revenue from expiring or terminated arrangements.
• ERA/RA and RT volume realization risk, including the ability of Tax Providers to successfully market and deliver expected volumes.
• RPS’ largest segment marketer-servicer’s ability to meet minimum contractual average deposit thresholds to earn revenue share payments.
• Qualification for future R&D federal tax credits.

Technology, Cybersecurity, and Compliance Risks

• Technology and cybersecurity risk, including internal control deficiencies, system failures, cyberattacks, data breaches, business continuity issues, and third-party service disruptions.
• Ability to maintain the security of financial, accounting, technology, data processing, and operational systems, including resilience against unauthorized access or system failures.
• Ability to withstand disruptions caused by failures of third-party systems or vendors.
• Effectiveness of the Company’s risk management and governance framework, including internal control environment, disclosure controls, Anti-Money Laundering/Office of Foreign Assets Control compliance, third-party risk management and Board and audit committee of the Board oversight.
• Data privacy and regulatory compliance risk, including evolving federal and state privacy laws (such as Gramm-Leach-Bliley Act, California Consumer Privacy Act, California Privacy Rights and Enforcement Act) and potential for regulatory penalties or reputational harm.

Environmental, Social, and Geopolitical Risks

• Operational disruptions from natural disasters, pandemics, climate-related physical risks, and sustainability-related reputation or regulatory concerns.
• Exposure to climate-related transition risks, including regulatory shifts, carbon pricing, and potential stranded asset exposures.
• Geopolitical and supply chain risk, including trade tensions, regional conflicts, and disruptions to vendor or operational continuity.

Other Risks

• Other risks and uncertainties reported from time to time in the Company’s reports with the SEC, including Part 1 Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

ACCOUNTING STANDARDS UPDATES

For disclosure regarding the impact to the Company’s financial statements of ASUs, see the Footnote titled, “Basis of Presentation and Summary of Significant Accounting Policies” of Part I Item 1 “Financial Statements.”

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Republic’s consolidated financial statements and accompanying footnotes have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods.

A summary of the Company's significant accounting policies is set forth in Part II “Item 8. Financial Statements and Supplementary Data” of its Annual Report on Form 10-K for the year ended December 31, 2025.

Management continually evaluates the Company’s accounting policies and estimates that it uses to prepare the consolidated financial statements. In general, management’s estimates and assumptions are based on historical experience, accounting and regulatory guidance, and information obtained from independent third-party professionals. Actual results may differ from those estimates made by management.

Critical accounting policies are those that management believes are the most important to the portrayal of the Company’s financial condition and results of operations and require management to make estimates that are difficult, subjective, and complex. Most accounting policies are not considered by management to be critical accounting policies. Several factors are considered in determining whether or not a policy is critical in the preparation of the financial statements. These factors include, among other things, whether the estimates have a significant impact on the financial statements, the nature of the estimates, the ability to readily validate the estimates with other information including independent third parties or available pricing, sensitivity of the estimates to changes in economic conditions and whether alternative methods of accounting may be utilized under GAAP. 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 ACLL and Provision. 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.

As of March 31, 2026, the Bank maintained an ACLL for expected credit losses inherent in Company’s loan portfolio, which includes overdrawn deposit accounts. Management evaluates the adequacy of the ACLL monthly and presents and discusses the ACLL with the Audit Committee and the Board quarterly.

The Company’s CECL method is a “static-pool” method that analyzes historical closed pools of loans over their expected lives to attain a loss rate, which is then adjusted for current conditions and reasonable, supportable forecasts prior to being applied to the current balance of the analyzed pools. Due to its reasonably strong correlation to the Company's historical net loan losses, the Company has chosen to use the U.S. national unemployment rate as its primary forecasting tool. Additionally, the Company reviews and utilizes CRE and C&I vacancy rates as a secondary forecasting tool. Subsequent to the one-year forecasts, loss rates are assumed to immediately revert back to long-term historical averages. 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.

The impact of utilizing the CECL approach to calculate the ACLL is significantly influenced by the composition, characteristics, and quality of the Company’s loan portfolio, as well as the prevailing economic conditions and forecasts utilized. 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.

BUSINESS SEGMENTS

The Company’s Executive Chair/CEO serves as the Company’s CODM. Income before income tax expense is the reportable measure of segment profit or loss that the CODM regularly reviews and utilizes to allocate resources and evaluate performance.

As of March 31, 2026, the Company was divided into five reportable segments: (I) Traditional Banking, (II) Warehouse Lending, (III) TRS, (IV) RPS, and (V) 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.

Core Banking Operations:

The Core Bank consists of the Traditional Banking and Warehouse Lending segments.

(I) Traditional Banking segment

The Traditional Bank segment provides traditional banking products and services primarily to customers in the Company’s market footprint, with all products and services generally offered under the Company’s traditional RB&T brand. As of March 31, 2026, Republic had 47 full-service banking centers with locations as follows:

• Kentucky — 29
• Metropolitan Louisville — 19
• Central Kentucky — 6
• Georgetown — 1
• Lexington — 5
• Northern Kentucky (Metropolitan Cincinnati) — 4
• Bellevue— 1
• Covington — 1
• Crestview Hills — 1
• Florence — 1
• Indiana — 3
• Southern Indiana (Metropolitan Louisville) — 3
• Floyds Knobs — 1
• Jeffersonville — 1
• New Albany — 1
• Florida — 7
• Metropolitan Tampa — 7
• Ohio — 4
• Metropolitan Cincinnati — 4
• Tennessee — 4
• Metropolitan Nashville — 4

Traditional Bank results of operations are primarily dependent upon net interest income, which represents the difference between the interest income and fees on interest-earning assets and the interest expense on interest-bearing liabilities used to fund those assets. Principal interest-earning Traditional Bank assets represent investment securities and commercial and consumer loans primarily secured by real estate and/or personal property. Interest-bearing liabilities primarily consist of interest-bearing deposit accounts, SSUAR, and short-term and long-term borrowing sources. FHLB advances have traditionally served as a significant borrowing and liquidity source for the Bank. 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.

Other sources of Traditional Bank income include service charges on consumer and commercial deposit accounts, mortgage banking income, debit and credit card interchange fee income, title insurance commissions, swap fee income and increases in the cash surrender value of BOLI.

Traditional Bank operating expenses consist primarily of salaries and employee benefits; technology, equipment, and communication; occupancy; interchange related expense; marketing and development; FDIC insurance expense; and various other general and administrative costs. Traditional Bank results of operations are significantly impacted by general economic and competitive conditions, particularly changes in market interest rates, government laws and policies, and actions of regulatory agencies.

Traditional Bank lending activities consist of the following:

Retail Mortgage Lending — Through its retail banking centers and its online Consumer Direct channel, the Bank originates single-family RRE loans and HELOCs which are typically indexed to Prime. In addition, the Bank originates HEALs through its retail banking centers. Such loans are generally collateralized by owner-occupied, RRE properties. For those loans originated through the Bank’s retail banking centers, the collateral is predominately located in the Bank’s market footprint, while loans originated through its Consumer Direct channel are generally secured by owner-occupied collateral located within and outside of the Bank’s market footprint.

The Bank offers single-family, first-lien RRE ARMs with interest rate adjustments tied to the SOFR index with specified minimum and maximum adjustments. The Bank generally charges a premium interest rate for its ARMs if the property is nonowner-occupied. The interest rates on the majority of ARMs are adjusted after their fixed rate periods on an annual or semi-annual basis, with most having annual and lifetime limitations on upward rate adjustments to the loan. These loans typically feature amortization periods of up to 30 years and have fixed interest-rate periods generally ranging from five to seven years, with demand dependent upon market conditions. 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 first-lien mortgage loans.

Single-family, first-lien RRE loans with fixed-rate periods of 15, 20, and 30 years are primarily originated and sold into the secondary market. MSR’s attached to the sold portfolio are either sold along with the loan or retained. Loans sold into the secondary market, along with their corresponding MSR’s, are included as a component of the Company’s Traditional Bank segment, as discussed elsewhere in this report. The Bank, as it has in the past, may retain such longer-term, fixed-rate loans from time to time in the future to help combat NIM compression.

As part of the sale of loans with servicing retained, the Bank records MSR’s. MSR’s represent an estimate of the present value of future cash servicing income, net of estimated costs, which the Bank expects to receive on loans sold with servicing retained by the Bank. MSR’s are capitalized as separate assets. This transaction is posted to net gain on sale of loans, a component of noninterest income under “mortgage banking income” in the income statement. Management considers all relevant factors, in addition to pricing considerations from other servicers, to estimate the fair value of the MSR’s to be recorded when the loans are initially sold with servicing retained by the Bank. The carrying value of MSR’s is initially amortized in proportion to and over the estimated period of net servicing income. MSR amortization is recorded as a reduction to net servicing income.

With the assistance of an independent third-party, the MSR’s asset is reviewed at least quarterly for impairment based on the fair value of the MSR’s using groupings of the underlying loans based on predominant risk characteristics. Any impairment of a grouping is reported as a valuation allowance. A primary factor influencing the fair value is the estimated remaining life of the underlying loans serviced which is significantly influenced by market interest rates. During a period of declining interest rates, the fair value of the MSR’s is expected to decline due to increased anticipated prepayment speeds within the portfolio. Alternatively, during a period of rising interest rates, the fair value of MSR’s would be expected to increase as prepayment speeds on the underlying loans would be expected to decline.

The Bank does, on occasion, purchase single-family, first-lien RRE loans made to low-to-moderate income borrowers and/or secured by property located in low-to-moderate income areas, which assists the Bank in meeting its obligations under the CRA. In connection with loan purchases, the Bank receives various representations and warranties from the sellers regarding the quality and characteristics of the loans.

Correspondent Lending — The Bank, on occasion, has purchased select blocks of single family, first-lien mortgage loans for investment from Warehouse Lending clients through its Correspondent Lending channel. These loans were purchased at a premium that is amortized into interest income over the expected life of the loan utilizing the level-yield. Loans acquired through the Correspondent Lending channel are generally made to borrowers outside of the Bank’s historical market footprint.

Commercial Lending — As described in detail below, the Bank conducts commercial lending activities primarily through the following groups/divisions: Corporate Banking, CRE Banking, Commercial Banking, Business Banking, Private Banking, and Retail Banking channels and clients are primarily located within the Bank’s market footprint or in an adjoining market. In general, all commercial lending credit approvals and processing are prepared and underwritten through the Bank’s centralized CCAD.

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, CRE, and multi-family lending.

C&I loans typically include those secured by general business assets, which consist of equipment, accounts receivable, inventory, and other business assets owned by the borrower/guarantor. Credit facilities include annually renewable LOCs and term loans with maturities typically ranging from three to five years and may also involve financial covenant requirements. These requirements are monitored by the Bank’s CCAD. Underwriting for C&I loans is based upon the borrower’s capacity to repay these loans from operating cash flows, typically measured by reviewing earnings before interest, taxes, depreciation and amortization, with capital strength, collateral, and management experience also important underwriting considerations. The targeted C&I credit size for client relationships is typically between $1 million and $10 million, with higher targets between $10 million and $35 million targeted by the Corporate Banking group.

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 CRE Banking group, which launched in 2022, focuses on large CRE projects, typically in amounts from $5 million to $25 million. Borrowers are generally single-asset entities and the underlying collateral is nonowner-occupied. Primary underwriting considerations are cash flow projections (current and historical), financial capacity of sponsors, and collateral value financed.

Fixed rate financing and reciprocal interest rate swaps are used as well. Given the size of these credits, the Bank generally seeks established, well-known borrowers and projects with low credit risk.

The Commercial Banking group focuses on small and medium-sized C&I and CRE owner-occupied opportunities. Borrowers are generally single-asset entities and loan sizes typically range from $1 million to $5 million. 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. Interest rates offered are based on both fixed and variable interest-rate formulas.

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 needs of these clients range from expansion or acquisition financing, equipment financing, owner-occupied real estate financing, and smaller operating lines of credit.

The Bank is an SBA Preferred Lending Partner, which allows the Bank to underwrite and approve its own SBA loans in an expedited manner. The Bank makes loans to borrowers generally up to $3 million under both the SBA “7A Program” and the “504 Program” for CRE owner-occupied opportunities. The Bank utilizes these programs to reduce credit risk exposure.

Lease financing receivables, which are generally direct financing leases, are reported at their principal balance outstanding, including any lease residual amount, net of any unearned income, deferred loan fees and costs, and applicable ACLL. Leasing income is recognized on the basis that achieves a constant periodic rate of return on the outstanding lease financing balances over the lease terms. During the fourth quarter of 2025, approximately $82 million of loans and leases were reclassified from held for investment to HFS, as the Bank entered into an Asset Purchase Agreement to sell its St. Louis-based RBF operations during December 2025. The transaction closed in February 2026 and the Traditional Bank recorded a gain, net of broker commissions, of $5.8 million during the first quarter of 2026.

Construction & Land Development Lending — The Bank originates business loans for the construction of both single-family, residential properties and commercial properties (apartment complexes, shopping centers and office buildings) to borrowers primarily located within the Bank’s market footprint or in an adjoining market. While not a major focus for the Bank, the Bank may originate loans for the acquisition and development of residential or commercial land into buildable lots.

Single-family, residential-construction loans are made in the Bank’s market area to established homebuilders with solid financial records. The majority of these loans are made for “contract” homes that the builder has already pre-sold to a homebuyer.

Commercial-construction loans are made in the Bank’s market to established commercial builders/developers with solid financial records. Typically, these loans are made for investment properties and have tenants pre-committed for some or all of the space. 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. These loans are made to borrowers who are going to build a property and retain it for ownership after construction completion. These loans are offered on both owner-occupied and nonowner-occupied CRE.

Consumer Lending — Traditional Bank consumer loans include home improvement and home equity loans, other secured and unsecured personal loans, and credit cards originated to borrowers primarily located within the Bank’s market footprint or in an adjoining market. In 2024, the Traditional Bank ceased originating new consumer credit cards and sold its $5 million portfolio in the second quarter of 2025, recognizing a $328,000 pre-tax gain in other noninterest income. With the exception of home equity loans, which are actively marketed in conjunction with single-family, first-lien RRE loans, other Traditional Banking consumer loan products, while available, are not and have not been actively promoted within the Bank’s markets.

Aircraft Lending — Aircraft loans are typically made to purchase or refinance personal aircrafts, along with engine overhauls and avionic upgrades with borrowers across the U.S. Loans typically range between $200,000 and $4 million in size and have terms up to 20 years. The credit characteristics of an aircraft borrower are higher than a typical consumer in that they must demonstrate and indicate a higher degree of creditworthiness for approval.

Other Traditional Banking activities generally consist of the following:

Private Banking — The Bank provides financial products and services to high-net-worth individuals through its Private Banking department. The Bank’s Private Banking officers have extensive banking experience and are trained to meet the unique financial needs of this clientele.

Treasury Management Services — The Bank provides various deposit products designed for commercial business clients located throughout its market footprint. Lockbox processing, remote deposit capture, business on-line banking, account reconciliation, and ACH processing are additional services offered to commercial businesses through the Bank’s Treasury Management department. Treasury Management officers work closely with commercial and retail officers to support the cash management needs of Bank clients.

Internet Banking — The Bank expands its market penetration and service delivery of its RB&T brand by offering clients Internet Banking services and products through its website, www.republicbank.com (http://www.republicbank.com).

Mobile Banking — The Bank allows clients to securely access and manage their accounts through its mobile banking application.

Other Banking Services — The Bank also provides title insurance and other financial institution related products and services.

Bank Acquisitions — The Bank maintains an acquisition strategy to selectively grow its franchise as a complement to its organic growth strategies.

See additional discussion regarding the Traditional Banking segment under the Footnote titled “Segment Information” of Part I Item 1 “Financial Statements.”

(II) Warehouse Lending segment

The Core Bank provides short-term, revolving credit facilities to mortgage bankers across the U.S. through mortgage warehouse lines of credit. These credit facilities are primarily secured by single-family, first-lien RRE loans. The credit facility enables the mortgage banking clients to close single-family, first-lien RRE loans in their own name and temporarily fund their inventory of these closed loans until the loans are sold to investors approved by the Bank. Individual loans are expected to remain on the warehouse LOC for an average of 15 to 30 days. Advances for reverse mortgage loans and construction loans typically remain on the LOC longer than conventional mortgage loans. Interest income and loan fees are accrued for each individual advance during the time the advance remains on the warehouse LOC and collected when the loan is sold. The Core Bank receives the sale proceeds of each loan directly from the investor and applies the funds to pay off the warehouse advance and related accrued interest and fees. The remaining proceeds are credited to the mortgage banking client.

See additional discussion regarding the Warehouse Lending segment under the Footnote titled “Segment Information” of Part I Item 1 “Financial Statements.”

Republic Processing Group Operations:

Republic Processing Group consists of the Tax Refund Solutions, Republic Payment Solutions and Republic Credit Solutions segments.

(III) Tax Refund Solutions segment

Through the TRS segment, the Bank facilitates the receipt and payment of federal and state tax refund products and offers a credit product through third-party tax preparers across the U.S., as well as through tax-preparation software providers that offer Republic Bank ERAs, RAs and RTs (collectively, the “Tax Providers”). The substantial majority of TRS’s business activity occurs during the first half of each year, while the second half of the year is characterized by limited revenue and costs associated with preparing for the upcoming tax season.

Refund Advances:

The RA loan product is a loan made in conjunction with the filing of a taxpayer’s federal tax return, which allows the taxpayer to borrow funds as an advance of a portion of their tax refund. The RA product had the following features during the 2025 and 2026 Tax Seasons:

• Offered only during the first two months of each year;
• The taxpayer was given the option to choose from multiple loan-amount tiers, subject to underwriting, up to a maximum advance amount of $6,250 for both the 2025 and 2026 Tax Seasons;
• No requirement that the taxpayer pays for another bank product, such as an RT;
• Multiple disbursement methods were available through most Tax Providers, including direct deposit, prepaid card, or check, based on the taxpayer-customer’s election;
• Repayment of the RA to the Bank via deduction from the taxpayer’s tax refund proceeds; and
• If a tax refund is insufficient to repay the RA:
• there is no recourse to the taxpayer,
• no negative credit reporting on the taxpayer, and
• no collection efforts against the taxpayer.

Early Season Refund Advances:

Since its introduction in December of 2022, the ERA loan product has been structured similarly to the RA, with the primary differences being the timing of when the ERAs are originated and the documentation available to underwrite the ERAs. The ERA is originated prior to the taxpayer receiving their fiscal year taxable income documentation, such as Form W-2, and the filing of the taxpayer’s final federal tax return. As such, the Company generally uses paystub information to underwrite the ERA. The repayment of the ERA is incumbent upon the taxpayer client returning to the Bank’s Tax Provider for the filing of their final federal tax return in order for the tax refund to potentially be received by the Bank from the federal government to pay off the advance. The ERA product had the following features during the 2025 and 2026 Tax Seasons:

• Only offered during December and the following January in connection with the upcoming first quarter tax business for each period;
• The taxpayer was given the option to choose from multiple loan-amount tiers, subject to underwriting, up to a maximum advance amount of $2,000 for both the 2025 and 2026 Tax Seasons;
• No requirement that the taxpayer pays for another bank product, such as an RT;
• Multiple disbursement methods available through most Tax Providers, including direct deposit or prepaid card, based on the taxpayer-customer’s election;
• Repayment of the ERA to the Bank via deduction from the taxpayer’s tax refund proceeds; and
• If a tax refund is insufficient to repay the ERA, including but not limited to the failure to file a final federal tax return through a Republic Tax Provider:
• there is no recourse to the taxpayer,
• no negative credit reporting on the taxpayer, and
• no collection efforts against the taxpayer.

The Company reports fees earned for ERAs/RAs as “Interest income on loans.” The number of days for delinquency eligibility is based on management’s annual analysis of tax return processing times. RAs, including ERAs that were originated related to the first quarter 2025 Tax Season were repaid, on average, within 32 days after the taxpayer’s tax return was submitted to the applicable taxing authority. Since ERAs/RAs do not have a contractual due date, the Company considered the advance delinquent during 2026 if it remained unpaid 35 days after the taxpayer’s tax return was submitted to the applicable taxing authority.

Provisions on ERAs/RAs are estimated when advances are made. Unpaid ERAs/RAs, related to the first quarter tax filing season of a given year are considered delinquent at June 30th of that year and charged-off. In addition, RAs that are subject to Tax Provider loan loss guarantees will be charged-off as of June 30th and immediately recorded as recoveries of previously charged-off loans with corresponding receivables recorded in other assets for the Tax Provider guarantees. Corresponding receivables are settled during the third quarter of each year. RAs collected during the second half of each year, not subject to loan loss guarantee arrangements, are recorded as recoveries of previously charged-off loans.

Related to the overall credit losses on ERAs/RAs, the Bank’s ability to control losses is highly dependent upon its ability to predict the taxpayer’s likelihood to receive the tax refund as claimed on the taxpayer’s tax return. In addition, the Bank’s ability to control losses for the ERA product is highly dependent upon the taxpayer returning to a Tax Provider for the filing of their final tax return. Each year, the Bank’s ERA/RA approval model is based primarily on the prior-year’s tax refund payment patterns. Because the substantial majority of the ERA/RA volume occurs each year before that year’s tax refund payment patterns can be analyzed and subsequent underwriting changes implemented, credit losses during a given year could be higher than management’s predictions if tax refund payment patterns change materially between years.

In response to changes in the legal, regulatory, and competitive environment, management annually reviews and revises the ERA/RA product parameters. Changes in product parameters do not ensure positive results and could have an overall material negative impact on the performance of all ERA/RA product offerings and therefore on the Company’s financial condition and results of operations.

See additional discussion regarding the ERA/RA products under the sections titled: “Loans and Allowance for Credit Losses on Loans” and “Segment Information” of Part I Item 1 “Financial Statements.”

Refund Transfers:

RTs are fee-based products whereby a tax refund is issued to the taxpayer after the Bank has received the refund from the federal or state government. There is no credit risk or borrowing cost associated with these products because they are only delivered to the taxpayer upon receipt of the tax refund directly from the governmental paying authority. An RT allows a taxpayer to pay any applicable tax preparation and filing related fees directly from his federal or state government tax refund, with the remainder of the tax refund disbursed directly to the taxpayer. RT fees and all applicable tax preparation, transmitter, audit, and any other taxpayer authorized amounts are deducted from the tax refund by either the Bank or the Bank’s service provider and automatically forwarded to the appropriate party as authorized by the taxpayer. The remainder of the refund is disbursed to the taxpayer by a Bank check, direct deposit to the taxpayer’s personal bank account, or loaded to a prepaid card.

The Company executes contracts with individual Tax Providers to offer RTs to their taxpayer customers. RT revenue is recognized by the Bank immediately after the taxpayer’s refund is disbursed in accordance with the RT contract with the taxpayer customer. The fee paid by the taxpayer for the RT is shared between the Bank and the Tax Providers based on contracts executed between the parties.

The Company presents RT revenue net of any amounts shared with the Tax Providers. The Bank’s share of RT revenue is generally based on the obligations undertaken by the Tax Provider for each individual RT program, with more obligations generally corresponding to higher RT revenue share. The significant majority of net RT revenue is recognized and obligations under RT contracts fulfilled by the Bank during the first half of each year. Incremental expenses associated with the fulfilment of RT contracts are generally expensed during the first half of each year. Fees earned by the Company on RTs, net of revenue share, are reported as noninterest income under the line item “Net refund transfer fees.”

(IV) Republic Payment Solutions segment

The RPS segment offers a range of payment-related products and services to consumers through third-party service providers. Through the Bank, the RPS segment offers both issuing solutions and money movement capabilities.

Issuing Solutions:

The RPS segment offers prepaid and debit solutions primarily marketed to the consumer industry. Prepaid solutions include the issuing of payroll and general purpose reloadable cards. Characteristics of these cards include the following:

• Similar to a traditional debit card with features including traditional POS purchasing, ATM/ITM withdrawals and direct deposit;
• Funds associated with these products are typically held in pooled accounts at the Bank, with the Bank maintaining records of individual balances within these pooled accounts; and
• Payroll cards facilitate the loading of an employer’s payroll onto a card via direct deposit, with payroll and general purpose reloadable cards generally distributed through retail locations and reloadable through participating retail load networks.

Debit solutions include the issuing of DDAs, savings accounts and/or debit cards. In addition to offering traditional POS purchasing, ATM/ITM withdrawals, and direct deposit options, these accounts may include overdraft protection.

Money Movement Capabilities:

Through RPS, the Bank participates in traditional money movement solutions including ACH transactions, wire transfers, check processing, and the Mastercard Remote Payment and Presentment Service. These capabilities are also complementary products facilitating the movement of money for other RPG divisions.

The Company reports its share of client-related charges and fees for RPS programs as noninterest income under “Program fees.” Additionally, the Company’s portion of interchange revenue generated by prepaid card transactions is reported as noninterest income under “Interchange fee income.” The Company began sharing interest income revenue with its largest prepaid marketer-servicer during 2024, with the interest shared reported as “Interest expense on deposits.” The Company did not share interest income revenue with its largest prepaid marketer-servicer during 2025 and the first three months of 2026, as minimum deposit balance thresholds were not met.

See additional discussion regarding the RPS segment under the Footnote titled “Segment Information” of Part I Item 1 “Financial Statements.”

(V) Republic Credit Solutions segment

Through the RCS segment, the Bank offers consumer credit products. In general, the credit products are unsecured, small dollar consumer loans that are dependent on various factors. RCS loans typically earn a higher yield but also have higher credit risk compared to loans originated through the Traditional Banking segment, with a significant portion of RCS clients considered subprime or near-prime borrowers. Ordinary gains or losses on the sale of RCS products are reported as a component of “Program fees.” Through the Bank, RCS uses third-party service providers for certain services such as marketing and loan servicing for RCS’s LOC products, installment loan product and healthcare receivables products.

LOC Products:

Through the RCS segment, the Bank uses third-party service providers to originate two line-of-credit products (“LOC I” and “LOC II”) offered generally to subprime or near-prime borrowers across multiple states. These service providers, operating under the Bank’s oversight and supervision, perform certain marketing, servicing, technology, and support functions. In addition, a separate third-party provides customer support, servicing, and other operational services on the Bank’s behalf. The Bank is the lender for both products and is marketed as such. The Bank establishes and controls the loan terms and underwriting guidelines and exercises consumer-compliance oversight over each product. The Bank sells participation interests in these products as follows:

• LOC I – The Bank sells a 90% participation interest in advances made to borrowers, generally three business days after funding the associated advances. Although the Bank retains a 10% participation interest in each advance, it retains 100% ownership of the underlying LOC I account with each borrower. Loan balances HFS through this program are carried at the lower of cost or fair value.
• LOC II – The Bank sells a 95% participation interest in advances made to borrowers, generally three business days after funding the associated advances. Although the Bank retains a 5% participation interest in each advance, it retains 100% ownership of the underlying LOC II account with each borrower. Loan balances HFS through this program are carried at the lower of cost or fair value.

Installment Loan Product:

Through the RCS segment, the Bank offers installment loans with terms ranging from 12 to 60 months to borrowers in multiple states. The same third-party service provider for RCS’s LOC II is the third-party provider for the installment loan product. This third-party provider is subject to the Bank’s oversight and supervision and provides the Bank with marketing services and loan servicing for these RCS installment loans. The Bank is the lender for these loans and is marketed as such. Furthermore, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of this RCS installment loan product. Currently, all loan balances originated under this RCS installment loan program are carried as HFS on the Bank’s balance sheet, with the intent to sell to a third-party, who is an affiliate of the Bank’s third-party service provider, generally within 16 days following the Bank’s origination of the loans. Loans originated under this RCS installment loan program are carried at fair value under a fair-value option, with the portfolio marked to market monthly.

Healthcare Receivables Products:

Through the RCS segment, the Bank originates healthcare receivables products across the U.S. through three different third-party service providers. For two of the programs, the Bank retains 100% of the receivables, with recourse in the event of default. For the remaining program, in some instances the Bank retains 100% of the receivables originated, with recourse in the event of default, and in other instances, the Bank sells 100% of the receivables generally within one month of origination. Loan balances HFS through this program are carried at the lower of cost or fair value.

For the RCS LOC and healthcare receivable products, the Company reports interest income and loan origination fees under “Loans, including fees,” while any net gains or losses on sale and mark-to-market adjustments of RCS loans are reported as noninterest income under “Program fees.” The Company has elected fair value accounting for its RCS installment loan product that it sells after an initial holding period. As a result, interest income on loans, loan origination fees, net gains or losses on sale, and mark-to-market adjustments for the RCS installment loan product are reported as noninterest income under “Program fees.”

See additional discussion regarding the RCS segment under the sections titled: “Loans and Allowance for Credit Losses on Loans” and “Segment Information” of Part I Item 1 “Financial Statements.”

OVERVIEW (Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025)

Total Company net income for the first quarter of 2026 was $42.6 million, a decrease of $4.7 million, or 10%, from the same period in 2025. Diluted EPS declined 10% to $2.18 for the first quarter of 2026 compared to $2.42 for the same period in 2025.

Comparability between the two first-quarter periods was significantly impacted by several nonrecurring or infrequent items, both favorable and unfavorable. These items, net of income taxes, were as follows:

(i) a $4.4 million after-tax favorable impact from the 2026 gain on sale of RBF;

(ii) a $1.8 million after-tax unfavorable impact from a 2026 penalty incurred in connection with the strategic early payoff of long-term FHLB advances;

(iii) a $8.4 million after-tax unfavorable impact in 2026 associated with the nonrenewal of TRS’ largest Tax Provider contract;

(iv) a $3.3 million after-tax unfavorable impact for a 2025 gain on sale of Visa Class B-1 common shares;

(v) a $1.3 million after-tax unfavorable impact related to a 2025 insurance recovery; and

(vi) a $4.6 million after-tax favorable impact related to the 2025 core system deconversion and related consulting fees.

Total Company net income, adjusted for the above nonrecurring or infrequent items (non-GAAP) was $39.9 million for the first quarter of 2026, an increase of $1.0 million, or 3% , compared to the first quarter of 2025.

The following were the most significant components comprising the total Company’s net income fluctuation by reportable segment:

(I) Traditional Banking segment

• Net income increased $5.5 million, or 35%, from the first quarter of 2025 to the first quarter of 2026.
• Net interest income increased $6.0 million, or 11%, from the first quarter of 2025 to the first quarter of 2026.
• Provision was a net charge of $705,000 for the first quarter of 2026 compared to a net credit of $769,000 for the same period in 2025.
• As a percentage of total Traditional Bank loans, the Traditional Banking ACLL was 1.39% as of March 31, 2026, compared to 1.40% as of December 31, 2025 and 1.29% as of March 31, 2025.
• Noninterest income increased $411,000, or 3%, from the first quarter of 2025 to the first quarter of 2026. Results in both periods included several notable nonrecurring or infrequent items.
• On December 31, 2025, the Traditional Bank transferred approximately $82 million of loans and lease financing receivables from held for investment to HFS pursuant to a signed agreement to sell substantially all of the assets of the St. Louis-based RBF Division acquired in the 2023 CBank acquisition. The transaction closed in the first quarter of 2026 and the Traditional Bank generated a pre-tax gain, net of broker commissions, of approximately $5.8 million.
• During the first quarter of 2025, the Traditional Bank recorded a $4.1 million pre-tax gain on sale of Visa Class B-1 shares that had been carried at a zero book values since received in the 2008 Visa initial public offering.
• During the first quarter of 2025, the Traditional Bank recorded a $1.6 million pre-tax insurance recovery related to a Marine Lending charge-off originally recognized in the third quarter of 2024.
• Noninterest expense decreased $3.5 million, or 7%, from the first quarter of 2025 to the first quarter of 2026. Results in both periods included several notable nonrecurring or infrequent items.
• During the first quarter of 2026, the Traditional Bank prepaid $220 million of long-term fixed-rate FHLB advances, incurring a $2.3 million pre-tax early termination penalty.
• During the first quarter of 2025, the Traditional Bank recorded $5.7 million of pre-tax core system deconversion and related consulting fees.
• Total Traditional Bank loans outstanding increased $50 million, or 1%, from December 31, 2025 to $4.60 billion as of March 31, 2026.
• Nonperforming loans to total loans for the Traditional Banking segment was 0.69% as of March 31, 2026 compared to 0.52% as of December 31, 2025 and 0.50% as of March 31, 2025.
• Delinquent loans to total loans for the Traditional Bank segment was 0.72% as of March 31, 2026 compared to 0.31% as of December 31, 2025 and 0.20% as of March 31, 2025.
• Total Traditional Bank deposits increased $232 million, or 5%, from December 31, 2025 to $5.00 billion as of March 31, 2026.

(II) Warehouse Lending segment

• Net income increased $858,000, or 52%, from the first quarter of 2025 to the first quarter of 2026.
• Net interest income increased $872,000, or 29%, from the first quarter of 2025 to the first quarter of 2026.
• Provision was a net credit of $311,000 for the first quarter of 2026 compared to a net charge of $47,000 for the same period in 2025.
• As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was 0.25% as of March 31, 2026, December 31, 2025, and March 31, 2025.
• Total Warehouse loans outstanding decreased $124 million, or 16%, from December 31, 2025 to $630 million as of March 31, 2026.
• Average committed Warehouse lines of credit increased to $1.22 billion during the first quarter of 2026 from $968 million during the first quarter of 2025, while average line utilization increased to 50% from 47% over the same periods.

(III) Tax Refund Solutions segment

• Net income decreased $9.9 million, or 50%, from the first quarter of 2025 to the first quarter of 2026.

As previously disclosed, TRS’ largest Tax Provider contract based on product volume and revenue was not renewed for the 2026 Tax Season (which began in December 2025). In total, this relationship contributed $8.4 million of net income to first quarter 2025 operating results, consisting of: $17.7 million in net interest income, $9.0 million in provision expense, $3.1 million in RT fees and $967,000 in noninterest expense.

TRS net income, adjusted for the above contract nonrenewal (non-GAAP) decreased $1.5 million, or 13%, from the first quarter of 2025 to the first quarter of 2026, generally due to declines in both RA and RT fundings.

• Net interest income decreased $18.4 million from the first quarter of 2025 to the first quarter of 2026.
• Provision was net charge of $5.3 million during the first quarter of 2026 compared to a net charge of $15.4 million for the same period in 2025.
• Noninterest income decreased $4.3 million from the first quarter of 2025 to the first quarter of 2026.
• Noninterest expense increased $42,000 from the first quarter of 2025 to the first quarter of 2026.

(IV) Republic Payment Solutions segment

• Net income decreased $835,000, or 29%, from the first quarter of 2025 to the first quarter of 2026.
• Net interest income decreased $957,000 from the first quarter of 2025 to the first quarter of 2026.
• Noninterest income was $778,000 for the first quarter of 2026 compared to $767,000 for the first quarter of 2025.
• Noninterest expense totaled $1.2 million for the first quarter of 2026 compared to $1.1 million for the first quarter of 2025.
• Total RPS deposits increased $35 million, or 11%, from December 31, 2025 to $350 million as of March 31, 2026.

(V) Republic Credit Solutions segment

• Net income decreased $362,000, or 5%, from the first quarter of 2025 to the first quarter of 2026.
• Net interest income increased $225,000 from the first quarter of 2025 to the first quarter of 2026.
• Provision was a net charge of $4.0 million during the first quarter of 2026 compared to a net charge of $3.0 million for the same period in 2025.
• As a percentage of total RCS loans, the RCS ACLL was 15.10% as of March 31, 2026, compared to 17.15% as of December 31, 2025 and 17.03% as of March 31, 2025.
• Noninterest income increased $718,000, or 23%, from the first quarter of 2025 to the first quarter of 2026.
• Noninterest expense totaled $3.5 million for the first quarter of 2026 compared to $3.1 million for the same period in 2025.
• Total RCS loans outstanding increased $18 million, or 16%, from December 31, 2025 to $132 million as of March 31, 2026.
• Nonperforming loans to total loans for the RCS segment was 0.05% as of March 31, 2026 compared to 0.14% as of December 31, 2025 and 0.10% as of March 31, 2025.
• Delinquent loans to total loans for the RCS segment was 7.36% as of March 31, 2026 compared to 7.87% as of December 31, 2025 and 7.03% as of March 31, 2025.

RESULTS OF OPERATIONS (Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025)

Net Interest Income

See the section titled “Asset/Liability Management and Market Risk” in this section of the document regarding the Bank’s interest rate sensitivity.

Traditional Bank results of operations are primarily dependent upon net interest income, which represents the spread between interest income and fees on interest-earning assets and interest expense on interest-bearing liabilities used to fund those assets. Interest-earning assets primarily consist of investment securities and commercial and consumer loans secured by real estate and/or personal property, while funding sources include interest-bearing deposit accounts, SSUAR, and short- and long-term borrowings. FHLB advances have historically served as a significant source of wholesale funding and liquidity. Accordingly, net interest income is influenced by changes in the volume and mix of interest-earning assets and liabilities, as well as movements in market interest rates.

On December 10, 2025, the FRB lowered the FFTR by 25 basis points to 3.75%, where it remained as of March 31, 2026. This reduction follows cumulative rate cuts totaling 175 basis points enacted across several FOMC meetings since September 2024. While the FFTR is currently maintained within a target range of 3.50% to 3.75%, recent FOMC commentary suggests additional rate cuts are possible in 2026.

Total Company net interest income was $90.5 million during the first quarter of 2026 compared to $102.7 million during the first quarter of 2025, representing a $12.2 million or 12% decrease. Total Company NIM decreased 82 basis points to 5.46% for the first quarter of 2026 compared to 6.28% for the first quarter of 2025, primarily driven by a reduction in RPG net interest income.

The following were the most significant components comprising the total Company’s net interest income and NIM fluctuations by reportable segment:

(I) Traditional Banking segment

Traditional Bank net interest income was $59.3 million for the first quarter of 2026, a $6.0 million, or 11%, increase from $53.3 million achieved during the first quarter of 2025. The increase in net interest income was primarily driven by period-over-period growth in average interest-earning assets and NIM expansion. Overall, the Traditional Bank’s NIM increased from 3.79% during the first quarter of 2025 to 4.10% during the first quarter of 2026, consistent with increased average interest-earning assets, improved asset yields and significant decrease in cost of funds.

Items of note impacting the Traditional Bank’s change in net interest income and NIM between the first quarter of 2025 and the first quarter of 2026 were as follows:

• From 2024 through the first nine months of 2025, management maintained a more conservative lending-pricing strategy, which, as expected, resulted in slower origination volumes across most product categories during that period. Management shifted this approach in the fourth quarter of 2025, contributing to a $32 million increase in average Traditional Bank loans during the fourth quarter of 2025. Given the positively sloped yield curve, management expects to continue this pricing strategy, provided market conditions remain favorable and funding costs remain stable.
• Traditional Bank average loans increased $42 million, or 1%, from $4.58 billion with a weighted-average yield of 5.61% during the first quarter of 2025 to $4.62 billion with a weighted-average yield of 5.64% during the first quarter of 2026. The increase in yield was driven primarily by the runoff of lower-yielding loans through amortization and payoffs, combined with the origination of new loans at higher market rates. Growth in average loans was partially offset by the sale of approximately $82 million of RBF loans and leases during the first quarter of 2026 which were reclassified from held for investment to HFS as of December 31, 2025.
• Average interest-earning cash—managed as a separate but complementary component of the Company’s investment portfolio—declined $172 million, or 33%, to $344 million during the first quarter of 2026, compared to $517 million during the first quarter of 2025. Average interest-earning cash balances declined from the prior period, as excess liquidity was deployed into the investment portfolio, which offered more attractive yields as a result of a steeper yield curve. The weighted-average

yield on interest-earning cash declined from 4.45% during the first quarter of 2025 to 3.66% during the first quarter of 2026, reflecting the 75-basis point decline in the FFTR between the periods.

• Average investments increased $287 million, or 46%, to $907 million with a weighted-average yield of 4.24% during the first quarter of 2026, compared to $620 million with a weighted-average yield of 3.48% during the first quarter of 2025. The increase in yield was driven primarily by a more favorable yield curve and the strategic redeployment of cash from maturing investments into longer-term securities that offered yields superior to overnight interest-earning cash alternatives.

The Traditional Bank’s average cost of interest-bearing liabilities decreased from 2.06% during the first quarter of 2025 to 1.65% during the first quarter of 2026 driven primarily by the following:

• The weighted-average cost of total interest-bearing deposits declined to 1.99% during the first quarter of 2026 from 2.25% during the first quarter of 2025, while average interest-bearing deposit balances increased $277 million, or 8%, over the same period. Growth in interest-bearing deposits included a combined $326 million increase in average balances across business and consumer money market accounts, time deposits, brokered deposits, and reciprocal deposits, each of which generally carries premium pricing. This growth was partially offset by a $49 million decline in average transaction account balances, including an $11 million decrease in third-party listing service deposits.
• Average FHLB advances decreased $94 million, from $521 million during the first quarter of 2025 to $427 million during the first quarter of 2026, while the weighted-average cost declined to 4.19% from 4.39% over the same period. The lower cost primarily reflected reduced reliance on overnight borrowings, combined with lower overnight funding rates resulting from the decline in the FFTR.

In addition, the Traditional Bank prepaid $220 million of long-term fixed rate FHLB advances in late March 2026 carrying a weighted-average cost of 4.57%, incurring a $2.3 million pre-tax early termination penalty. Based on the current interest-rate environment, management expects to recoup the penalty within approximately 1.2 years through a combination of reducing overnight cash balances, currently earning approximately 3.65%, and/or borrowing overnight, which currently costs approximately 3.75%.

• Average noninterest-bearing deposits declined $13 million, or 1%, from the first quarter of 2025 to the first quarter of 2026. This decline reflects an industry-wide trend that began in late 2022, as the interest-rate environment—particularly during periods of an inverted yield curve—combined with heightened deposit competition, has continued to make premium-rate interest-bearing checking and savings products more attractive to both consumer and business clients.

Management believes that additional reductions in the FFTR are unlikely to positively impact the Traditional Bank’s net interest income or net interest margin. The ultimate impact of recent or future FFTR decreases will depend on several factors, including the continued shift from noninterest-bearing to interest-bearing deposits, the shape and steepness of the yield curve, customer demand for the Company’s lending and deposit products, the Company’s ability to lower deposit costs in line with benchmark rate declines, and overall liquidity requirements.

For additional discussion of the factors impacting interest-earning cash and deposit balances as well as deposit betas, see sections titled “Cash and Cash Equivalents” and “Deposits” in the “COMPARISON OF FINANCIAL CONDITION” section of the filing.

(II) Warehouse Lending segment

Warehouse Lending net interest income increased $872,000, or 29%, from the first quarter of 2025 to the first quarter of 2026, as total interest income increased $1.5 million, or 18%, partially offset by a $643,000, or 12%, increase in interest expense. Although Warehouse NIM and loan yields declined 92 basis points and 72 basis points, from the first quarter of 2025 to the first quarter of 2026, results benefited from higher average outstanding balances, which increased $152 million, or 33%, period-over-period.

Average committed Warehouse lines of credit increased to $1.22 billion during the first quarter of 2026 from $968 million during the first quarter of 2025, while average line utilization increased to 50% from 47% over the same periods.

Because consumer mortgage activity drives Warehouse line utilization, demand for Warehouse lending has historically been sensitive to movements in long-term interest rates. A meaningful decline in long-end rates could increase Warehouse demand by stimulating mortgage origination activity. Conversely, rate declines concentrated at the short end of the yield curve are not expected to materially impact Warehouse lending demand.

(III) Tax Refund Solutions segment

TRS’ net interest income decreased $18.4 million, or 62%, from the first quarter of 2025 to the first quarter of 2026. Loan-related interest and fees decreased $24.4 million, or 63%, from the first quarter of 2025 to the first quarter of 2026 consistent with the $416 million, or 63% decline in total RA volume for the 2026 Tax Season.

As previously disclosed, TRS’ largest Tax Provider contract based on product volume and revenue was not renewed for the 2026 Tax Season (which began in December 2025). In total, this relationship contributed $17.7 million in net interest income to first quarter 2025 operating results. Excluding the impact of the contract nonrenewal, TRS net interest income declined $770,000, or 6%, from the first quarter of 2025 to the first quarter of 2026, consistent with the decline in both RA funding activity.

See additional detail regarding the ERA/RA product under the Footnote titled “Loans and Allowance for Credit Losses on Loans” of Part II Item 8 “Financial Statements and Supplemental Data.”

(IV) Republic Payment Solutions segment

Net interest income from the Company’s prepaid card division decreased $957,000, or 24%, from the first quarter of 2025 to the first quarter of 2026. Driving this decrease, RPS earned a reduced yield of 3.69% for its $347 million average of prepaid program balances for the first quarter of 2026 compared to a yield of 4.55% for the $373 million in average prepaid card balances for the first quarter of 2025. The lower earnings rate reflected the 75 basis point decline in the FFTR between the first quarter of 2025 and the first quarter of 2026.

Additionally, the RPS segment’s largest marketer-servicer did not achieve the minimal contractual thresholds for average deposit balances in order to earn a revenue share for the first quarter of 2025 and 2026. At this time, Management is uncertain how much the revenue share component may be in the future, as deposit balances originated through this marketer-servicer are at levels near the thresholds necessary to achieve a revenue share, making a future revenue share possible, but not certain.

Historically, customer demand for prepaid card products has not been sensitive to interest rate movements, and management therefore does not expect changes in the rate environment to materially affect origination volumes. However, a declining interest rate environment would likely reduce the internal FTP credit allocated to this segment more than it would reduce any revenue-share expense, resulting in lower NIM for the segment. The magnitude of this impact will depend on the final FTP rate applied, as well as the overall volume of balances generated.

(V) Republic Credit Solutions segment

RCS’s net interest income increased $225,000, or 2% from the first quarter of 2025 to the first quarter of 2026. The increase in net interest income was driven primarily by an overall increase in the average yield for the segments total portfolio due to a change in loan mix, as the higher-yielding LOC portfolios grew as a percentage of the total RCS portfolio.

Historically, customer demand for RCS consumer loan products has not been sensitive to changes in interest rates, and management therefore does not expect rate movements to materially affect origination volumes. However, a declining interest rate environment would likely reduce the internal FTP cost allocated to this segment, which in turn would be favorable to the segment’s NIM. The magnitude of this benefit would depend on the final FTP rate applied, as well as the overall volume and mix of loans the segment originates.

The following table presents average balances along with the related calculations of tax-equivalent net interest income, NIM and net interest spread for the related periods.

Table 1 — Total Company Average Balance Sheets and Interest Rates

a) For the purpose of this calculation, the debt securities fair market value adjustment is included as a component of other assets.

b) Interest income is composed either entirely or predominantly of loan fees. See the following table titled “Loan Fee Income.”

c) The average balance includes the principal balance of nonaccrual loans and loans HFS (not carried at fair value), and are inclusive of all loan premiums, discounts, fees and costs.

d) See the following table for detail of loan fees by reporting segment.

The amount of loan fee income can meaningfully impact total interest income, loan yields, NIM, and net interest spread. The following table illustrates loan fees recorded as interest income on loans by segment:

Table 2 — Loan Fee Income

(in thousands)

The following table 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. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

Table 3 — Total Company Volume/Rate Variance Analysis

(in thousands)

Provision

For additional discussion regarding Provision, see the sections titled “Allowance for Credit Losses on Loans” and “Asset Quality” in this section of the filing.

Total Company Provision was a net charge of $9.8 million for the first quarter of 2026 compared to a net charge of $17.7 million for the same period in 2025, primarily driven by the TRS segment.

The following were the most significant components comprising the total Company’s Provision fluctuation by reportable segment:

(I) Traditional Banking segment

The Traditional Bank Provision during the first quarter of 2026 was a net charge of $705,000 compared to a net credit of $769,000 for the first quarter of 2025.

The net charge for the first quarter of 2026 was primarily driven by the following:

• The Traditional Bank recorded a net charge to the Provision of $326,000 related to net charge-offs on loans – concentrated in small dollar overdrawn DDAs.
• The Traditional Bank recorded a net charge to the Provision of $379,000 related to the $50 million net increase in Traditional Bank loan balances for the quarter – concentrated in the CRE, C&I and HELOC portfolios.

The net credit for the first quarter of 2025 was primarily driven by the following:

• The Traditional Bank recorded a credit to the Provision of $414,000 as a result of a reclassification of $5 million of consumer credit cards from loans held for investment to HFS.
• The Traditional Bank recorded a net credit to the Provision of $491,000 during the first quarter of 2025 primarily related to a general improvement in the life-of-loan historical loss rates within certain categories of the Traditional Bank loan portfolio combined with a minimal net change in the Traditional Bank period-end loan balances for the quarter.

As a percentage of total Traditional Bank loans, the Traditional Banking ACLL was 1.39% as of March 31, 2026, compared to 1.40% as of December 31, 2025, and 1.29% as of March 31, 2025.

The Company believes, based on information presently available, that it has adequately provided for Traditional Bank loan losses as of March 31, 2026.

(II) Warehouse Lending segment

Warehouse recorded a net credit to the Provision of $311,000 for the first quarter of 2026 compared to a net charge of $47,000 for the same period in 2025. Provision for both periods reflected changes in general reserves consistent with changes in outstanding period-end balances. Outstanding Warehouse period-end balances decreased $124 million during the first quarter of 2026 compared to an increase of $19 million during the first quarter of 2025.

As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was 0.25% as of March 31, 2026, December 31, 2025, and March 31, 2025.

The Company believes, based on information presently available, that it has adequately provided for Warehouse loan losses as of March 31, 2026.

(III) Tax Refund Solutions segment

Substantially all TRS Provision in both periods was related to its ERA/RA products.

As previously disclosed, TRS’ largest Tax Provider contract based on product volume was not renewed for the 2026 Tax Season (which began in December 2025). In total, this relationship contributed $9.0 million of Provision to first quarter 2025 operating results. In addition to the impact of the contract nonrenewal, TRS provision declined $1.1 million, or 16%, from the first quarter of 2025 to the first quarter of 2026, consistent with the decline in both ERA/RA funding activity.

Total ERA/RA volume for the 2026 Tax Season declined $543 million, or 68%, from $802 million originated for the 2025 Tax Season to $259 million for the 2026 Tax Season. Total RA origination volume was $246 million during 2026 compared to $663 million during 2025, with originations for both periods occurring during the first quarter. Total ERA origination volume was $13 million during the 2026 Tax Season compared to $139 million during the 2025 Tax Season, with originations occurring in December 2025 and December 2024.

The Bank’s ability to control ERA/RA losses is highly dependent upon its ability to predict the taxpayer’s likelihood to receive the tax refund as claimed on the taxpayer’s tax return. In addition, the Bank’s ability to control losses for the ERA product is highly dependent upon the taxpayer returning to a Tax Provider for the filing of their final tax return. Each year, the Bank’s ERA/RA approval model is based primarily on the prior-year’s tax refund payment patterns. Because the substantial majority of the ERA/RA volume occurs each year before that year’s tax refund payment patterns can be analyzed and subsequent underwriting changes implemented, credit losses during a given year could be higher than management’s predictions if tax refund payment patterns change materially between years

ERAs/RAs related to the 2026 Tax Season were only originated during December of 2025 and the first two months of 2026, while ERAs/RAs related to the 2025 Tax Season were only originated during December of 2024 and the first two months of 2025. As is the case each year, as of March 31st the ACLL related to ERAs/RAs represented an estimate to be finalized on June 30th when all uncollected ERAs/RAs are ultimately charged-off. ERAs/RAs collected during the second half of each year are recorded as recoveries of previously charged-off loans unless they are covered under a loss guaranty arrangement. ERAs/RAs subject to a loss guaranty arrangement that are recovered during the second half of each year are distributed to the guarantor.

The Company believes, based on information presently available, that it has adequately provided for TRS loan losses as of March 31, 2026.

See additional detail regarding ERAs/RAs under the Footnote titled “Loans and Allowance for Credit Losses on Loans” of Part I Item 1 “Financial Statements” and “Business Segment Composition” in this section of the filing.

(IV) Republic Payment Solutions segment

There is no ACLL or Provision for RPS, as the segment offers prepaid and debit solutions to consumers.

(V) Republic Credit Solutions segment

As illustrated in the following table, RCS recorded a net charge to the Provision of $4.0 million during the first quarter of 2026 compared to a net charge of $3.0 million for the same period in 2025. RCS recorded net charge-offs of $3.6 million and $3.2 million during the first quarters of 2026 of 2025. The remainder of the Provision fluctuation was tied to general reserves applied to changes in the outstanding balances for each RCS portfolio type. While net charge-offs improved by $269,000 from the first quarter of 2025 to the first quarter of 2026, general formula reserve allocations increased $1.3 million. The increase in general reserve allocations was due to a change in loan mix toward the LOC II product, which has a significantly higher general formula reserve percentage compared to the other RCS products

While RCS loans generally return higher yields, they also present a greater credit risk than Traditional Banking loan products. As a percentage of total RCS loans, the RCS ACLL was 15.10% as of March 31, 2026 compared to 17.15% as of December 31, 2025, and 17.03% as of March 31, 2025.

The Company believes, based on information presently available, that it has adequately provided for RCS loan losses as of March 31, 2026.

Table 4 — Republic Credit Solutions Provision by Product Type

(dollars in thousands)

Table 5 — Summary of Loan and Lease Loss Experience

(dollars in thousands)

Table 6 — Annualized Net Loan Charge-offs (Recoveries) to Average Loans by Loan Category

* All loss rates above are based on net charge-offs as a function of average outstanding portfolio balances. RAs are originated during the first two months of each year, with all RAs charged-off by June 30th of each year. Due to their relatively short life, RA net charge-offs are typically analyzed by the Company as a percentage of total RA originations, not as a percentage of average outstanding balances.

Total Company’s net charge-offs to average total Company loans was unchanged at 0.24% during the first quarters of 2026 and 2025, with net charge-offs decreasing $55,000 and average total Company loans decreasing $33 million, or 1%.

Noninterest Income

Total Company noninterest income decreased $3.2 million, or 10%, during the first quarter of 2026 compared to the same period in 2025.

The following were the most significant components comprising the total Company’s noninterest income fluctuation by reportable segment:

Traditional Banking segment

Traditional Bank noninterest income increased $411,000, or 3%, from the first quarter of 2025 compared to the first quarter of 2026, primarily driven by the following:

• On December 31, 2025, the Traditional Bank transferred approximately $82 million of loans and lease financing receivables from held for investment to HFS pursuant to a signed agreement to sell substantially all of the assets of the St. Louis-based RBF Division acquired in the 2023 CBank acquisition. The transaction closed in the first quarter of 2026 and the Traditional Bank generated a pre-tax gain, net of broker commissions, of approximately $5.8 million.
• During the first quarter of 2025, the Traditional Bank recorded a $4.1 million pre-tax gain on sale of Visa Class B-1 shares that had been carried at a zero book values since received in the 2008 Visa initial public offering.
• During the first quarter of 2025, the Traditional Bank recorded a $1.6 million pre-tax insurance recovery related to a Marine Lending charge-off originally recognized in the third quarter of 2024.

Traditional Bank noninterest income, adjusted for the above nonrecurring or infrequent items (non-GAAP) was $9.9 million for the first quarter of 2026, an increase of $227,000, or 2%, compared to the first quarter of 2025.

In addition to the previously noted items, the Traditional Bank earns a substantial majority of its fee income related to its overdraft service program from the per item fee it assesses its customers for each insufficient-funds check or electronic debit presented for payment. The total per item fees, net of refunds, included in service charges on deposits for the Three Months Ended March 31, 2026, and 2025 were $2.2 million and $1.8 million. The total daily overdraft charges, net of refunds, included in interest income for the Three Months Ended March 31, 2026, and 2025 were $383,000 and $295,000.

Tax Refund Solutions segment

As previously disclosed, TRS’ largest Tax Provider contract based on product volume was not renewed for the 2026 Tax Season (which began in December 2025). In total, this relationship contributed $3.1 million RT fees to first quarter 2025 operating results. In addition to the impact of the contract nonrenewal, TRS noninterest income declined $1.2 million, or 11%, from the first quarter of 2025 to the first quarter of 2026, consistent with the 6% decline in RT funding activity.

Noninterest Expense

Total Company noninterest expense decreased $3.0 million, or 5%, during the first quarter of 2026 compared to the same period in 2025.

The following were the most significant components comprising the total Company’s noninterest expense fluctuation by reportable segment:

Traditional Banking segment

Traditional Bank noninterest expense decreased $3.5 million, or 7%, for the first quarter of 2026 compared to the same period in 2025, primarily driven by the following:

• During the first quarter of 2025, the Traditional Bank recorded $5.7 million of pre-tax core system deconversion and consulting fees. Approximately $4.1 million of this expense related to contract negotiation assistance from a third-party consultant and was determined based on a percentage of anticipated savings over the five-year term of the new contract, which was projected to generate savings in excess of $16 million over the contract term. The remaining $1.6 million of expense related to the data conversion from the legacy core system and the integration of multiple secondary systems into the new core platform, which went live in mid-October.
• During March 2026, the Traditional Bank prepaid $220 million of long-term fixed-rate FHLB advances and incurred a $2.3 million pre-tax early termination penalty, recorded to noninterest expense. The advances carried a weighted-average cost of 4.57% and were prepaid as part of management’s proactive balance sheet and interest rate risk management strategy. Assuming short-term interest rates remain at or near current levels, management believes the associated penalty will be earned back in just over 1.2 years through lower ongoing funding costs.

Traditional Bank noninterest expense, adjusted for the above nonrecurring or infrequent items (non-GAAP) was $44.1 million for the first quarter of 2026, a decrease of $120,000 compared to the first quarter of 2025.

• Salaries and employee benefits increased by a combined $381,000, or 1%, driven primarily by increased estimated bonus accruals.
• Technology, equipment and communication expenses decreased $645,000, or 9%, over the first quarter of 2025 driven by cost savings realized following the core system conversion completed in mid-October 2025.
• Marketing and development expenses increased $302,000 over the first quarter of 2025, driven primarily by the Bank’s new branding initiative. Overall, Traditional Bank marketing expenses are expected to remain near current levels into the foreseeable future.

Republic Credit Solutions segment

Noninterest expense at the RCS segment increased $331,000, or 11%, during the first quarter of 2026 compared to the same period in 2025, driven primarily by a $107,000 increase in marketing and development expenses, which generally fluctuate in-line with overall origination volume. Under the terms of the Company’s contract with its LOC II marketer-servicer, RCS reimburses the marketer-servicer a certain dollar amount for marketing costs based on each new product originated during the period.

COMPARISON OF FINANCIAL CONDITION AS OF MARCH 31 2026, AND DECEMBER 31, 2025

Overview

Total assets increased $211 million, or 3%, to $7.25 billion at March 31, 2026 from $7.04 billion at December 31, 2025, driven primarily by an increase in cash and cash equivalents.

Total liabilities increased $180 million, or 3%, to $6.12 billion at March 31, 2026 from $5.94 billion at December 31, 2025, as $306 million of deposit growth was partially offset by the paydown of FHLB advances.

Stockholders’ equity increased $31 million, or 3%, to $1.13 billion at March 31, 2026, compared to $1.10 billion at December 31, 2025. This increase reflected net income of $42.6 million, partially offset by a decline in AOCI and cash dividends declared during the first quarter of 2026. The decline in AOCI was attributable to changes in the interest-rate environment and the corresponding impact on the valuation of the AFS debt-securities portfolio and cash-flow-hedging derivatives.

Cash and Cash Equivalents

Cash and cash equivalents include cash, deposits with other financial institutions with original maturities less than 90 days, and federal funds sold. The Company held $599 million in cash and cash equivalents as of March 31, 2026, compared to $220 million as of December 31, 2025, with the increase primarily attributable to seasonal short-term deposits received for RT products within TRS.

Average interest-earning cash and cash equivalents totaled $344 million during the first three months of 2026, compared to $517 million during the first three months of 2025, reflecting the Company’s continued deployment of excess liquidity into investment securities over the past several quarters. Beginning in the fourth quarter of 2024 and continuing through March 31, 2026, the Company strategically purchased longer-duration investment securities in response to a more favorable yield curve and higher relative yields than those available on overnight cash. The yield curve, which began to steepen during the fourth quarter of 2024, became positively sloped in March 2025 and remained so through the first quarter of 2026.

Cash held at the FRB earns interest on balances in excess of required reserves and generated a weighted-average yield of 3.67% during the first three months of 2026, compared to 4.46% during the first three months of 2025, reflecting the decline in the FFTR Cash held within the Bank’s banking centers and ATM/ITM networks does not earn interest.

Investment Securities

Table 7 — Purchases of Investment Securities

(dollars in thousands)

Republic’s investment portfolio decreased approximately $4 million from December 31, 2025 to March 31, 2026. The decline primarily reflected $148 million of investment securities purchases, offset by calls, maturities, and paydowns on debt securities, including expected paydowns on mortgage-backed securities, as well as changes in market value adjustments on the AFS portfolio.

Beginning in the fourth quarter of 2024 and continuing through the first three months of 2026, the Company strategically shifted the mix between interest-earning cash and investments toward longer-duration investment securities, reflecting a more favorable yield curve and materially higher yields relative to overnight interest-earning cash.

Management currently expects to maintain this general investment strategy for the foreseeable future. The Company’s investment securities strategy is influenced by economic and market conditions, loan demand, deposit mix, and liquidity needs. Investment positioning for the remainder of 2026 and beyond will depend on a variety of factors, including the Company’s current and projected liquidity position, customer demand for loan and deposit products, the Company’s overall interest-rate risk profile, the shape of the yield curve and prevailing interest-rate environment, and expectations for short-term and long-term interest-rate trends.

Loans

Table 8 — Loan Portfolio Composition

(dollars in thousands)

*Identifies loans to borrowers located primarily outside of the Bank’s market footprint.

** Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs.

Total Company gross loans decreased by $79 million, or 1%, during the first three months of 2026 to $5.37 billion as of March 31, 2026. The most significant components comprising the change in loans by reportable segment follow:

(I) Traditional Banking segment

Traditional Bank period-end loan balances increased $50 million, or 1%, from December 31, 2025 to March 31, 2026, as strong origination volume of CRE loans, C&I loans and HELOCs more than offset contraction within the RRE portfolio. Growth in the CRE and C&I portfolios were generally driven by a reduced internal pricing restrictions across these loan types due to competitive pressures.

On December 31, 2025, the Traditional Bank transferred approximately $82 million of loans and lease financing receivables from held for investment to HFS pursuant to a signed agreement to sell substantially all of the assets of the St. Louis-based RBF Division acquired in the 2023 CBank acquisition. The transaction closed in the first quarter of 2026 and the Traditional Bank generated a pre-tax gain, net of broker commissions, of approximately $5.8 million.

(II) Warehouse Lending segment

Outstanding Warehouse period-end balances decreased $124 million, or 16%, from December 31, 2025, to March 31, 2026. Average committed Warehouse lines of credit increased to $1.22 billion during the first quarter of 2026 from $968 million during the first quarter of 2025, while average line utilization increased to 50% from 47% over the same periods.

Due to mortgage-market volatility and seasonality, projecting future outstanding balances for Warehouse lines of credit remains challenging; however, portfolio expansion has historically aligned with broader industry trends. Since entering the business in 2011, the Bank has experienced fluctuations in Warehouse balances consistent with overall mortgage-origination activity. Weighted-average quarterly usage rates have ranged from a low of 31% during the first quarter of 2023 to a high of 71% during the fourth quarter of 2019. On an annual basis, weighted-average usage rates have ranged from a low of 39% during 2022 to a high of 66% during 2020.

(III) Tax Refund Solutions segment

TRS loan balances as of December 31, 2025 included $13 million of ERAs originated during December 2025 and $19 million of short-term, commercial-related loans to Tax Providers to support seasonal cash-flow needs. Consistent with normal Tax Season paydown activity, these balances paid down to $921,000 and $700,000, respectively, as of March 31, 2026.

In addition, TRS generated RA originations of $246 million during the 2026 Tax Season (January and February), with approximately $7 million of RAs remaining outstanding at March 31, 2026.

(IV) Republic Credit Solutions segment

Outstanding period-end RCS balances increased $18 million, or 16%, to $132 million as of March 31, 2026, consistent with increased origination volume primarily associated with the healthcare receivable products.

(V) Republic Payment Solutions segment

There are no outstanding loans at RPS, as the segment offers prepaid and debit solutions to consumers.

Allowance for Credit Losses

The Bank maintains an ACLL on the balance for expected credit losses inherent in the Bank’s loan portfolio, which includes overdrawn deposit accounts. The Bank also maintains an ACLC for expected OBS credit exposure losses. Management evaluates the adequacy of the ACLL monthly and the adequacy of the ACLC for OBS quarterly. The ACLL calculation is presented to and discussed with the Audit Committee and the Board on a quarterly basis.

The Company’s ACLL increased to $92 million at March 31, 2026, compared to $85 million at December 31, 2025, with the total Company ACLL as a percentage of total loans increasing to 1.71% as of March 31, 2026, compared to 1.57% as of December 31, 2025.

The most significant components comprising the change in ACLL by reportable segment follow:

(I) Traditional Banking segment

Traditional Bank loan balances increased $50 million during the first three months of 2026, while the related ACLL increased $379,000 to $64 million at March 31, 2026. As a percentage of total Traditional Bank loans, the ACLL declined slightly to 1.39% at March 31, 2026 from 1.40% at December 31, 2025.

(II) Warehouse Lending segment

The Warehouse ACLL decreased $310,000, or 16%, to $1.6 million, while the Warehouse ACLL as a percentage to total Warehouse loans remained at 0.25% when comparing March 31, 2026 to December 31, 2025. Outstanding Warehouse period-end balances decreased $124 million, or 16%, from December 31, 2025 to March 31, 2026. As of March 31, 2026, the Warehouse ACLL remained entirely qualitative in nature, with no adjustments required to the qualitative reserve percentage required for the first three months of 2026.

(III) Tax Refund Solutions segment

The TRS ACLL increased $6.0 million from $333,000 as of December 31, 2025 to $6.3 million as of March 31, 2026, reflecting the establishment of expected credit loss reserves on RAs originated during the first quarter of 2026.

(IV) Republic Credit Solutions segment

The RCS ACLL increased $409,000 to $20 million as of March 31, 2026, driven primarily by the increase in the LOC product spot loan balances.

As of March 31, 2026, RCS maintained ACLL coverage for two distinct credit products: LOC products and healthcare receivables. At period-end, the ACLL-to-total-loans ratio ranged from 0.39% for healthcare receivables to 70.62% for LOC products, with the lower reserve requirement for healthcare receivables reflecting the recourse maintained to third-party service providers.

While RCS loans generally generate higher yields than Traditional Banking products, they also carry higher credit risk. As a result, the RCS ACLL as a percentage of total RCS loans was 15.10% at March 31, 2026, compared to 17.15% at December 31, 2025 and 17.03% at March 31, 2025. Changes in the segment’s loan mix, including growth in products with higher loss expectations, continued to influence reserve levels.

(V) Republic Payment Solutions segment

There is no ACLL or Provision for RPS, as the segment offers prepaid and debit solutions to consumers.

The following table sets forth management’s allocation of the ACLL by loan class. The allocation reflects management’s assessment of prevailing economic conditions, historical loss experience, forecasts for unemployment and vacancy rates, and various other life-of-loan and forward-looking considerations, as well as qualitative factors.

Table 9 — Management’s Allocation of the Allowance for Credit Losses on Loans

(dollars in thousands)

*See the Table titled “Loan Portfolio Composition” in this section of the report for loan portfolio balances. Values of less than 50 bps in the table above 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 March 31, 2026.

Asset Quality

Classified and Special Mention Loans

The Bank applies credit quality indicators, or ratings, to individual loans based on internal Bank policies, which are informed by regulatory standards. Loans rated “Loss,” “Doubtful,” “Substandard,” and PCD-Substandard are considered “Classified.”

See the Footnote titled “Loans and Allowance for Credit Losses on Loans” of Part I Item 1 “Financial Statements” for additional discussion regarding Classified and Special Mention loans.

Table 10 — Classified and Special Mention Loans

(dollars in thousands)

Nonperforming Loans

Nonperforming loans include loans on nonaccrual status and loans that are 90 days or more past due and still accruing. Nonperforming loans to total loans increased to 0.59% as of March 31, 2026, from 0.44% as of December 31, 2025, as the total balance of nonperforming loans increased by $8 million and total loans decreased by $79 million. Approximately $6 million of the increase was concentrated in three individual CRE relationships. Two of these relationships, representing approximately $5 million, exited the Bank in April 2026, with no loss incurred by the Bank.

The ACLL to total nonperforming loans decreased to 288% as of March 31, 2026, from 356% as of December 31, 2025, as the total ACLL decreased $6 million and the balance of nonperforming loans increased by $8 million.

Table 11 — Nonperforming Loans and Nonperforming Assets Summary

(dollars in thousands)

* Loans on nonaccrual status include collateral-dependent loans. See the Footnote titled “Loans and Allowance for Credit Losses on Loans” of Part I Item 1 “Financial Statements” 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.

Table 12 — Nonperforming Loan Composition

(dollars in thousands)

Table 13 — Stratification of Nonperforming Loans

NM – RCS loans are generally small dollar homogenous consumer loans.

NM – RCS loans are small dollar homogenous consumer loans.

Table 14 — Rollforward of Nonperforming Loans

(in thousands)

* Includes RCS loans which are small dollar homogeneous consumer loans.

Table 15 — Detail of Loans Removed from Nonperforming Status

(in thousands)

Based on the Bank’s review as of March 31, 2026, management believes that its reserves are adequate to absorb expected losses on all nonperforming loans.

Delinquent Loans

Total Company delinquent loans to total loans increased to 0.80% as of March 31, 2026, from 0.42% as of December 31, 2025. Core Bank delinquent loans to total Core Bank loans increased to 0.63% as of March 31, 2026, from 0.26% as of December 31, 2025. Except for small-dollar consumer loans, all Traditional Bank loans past due 90-days-or-more as of March 31, 2026, and December 31, 2025, were on nonaccrual status. During the fourth quarter of 2025, the Company downgraded a $16 million C&I participation relationship from Special Mention to Substandard. This loan became 30-days delinquent during the first quarter of 2026.

Table 16 — Delinquent Loan Composition*

(dollars in thousands)

* Represents total loans 30-days-or-more past due. Delinquent status may be determined by either the number of days past due or number of payments past due.

Table 17 — Rollforward of Delinquent Loans

(in thousands)

* Includes RCS loans which are small dollar homogeneous consumer loans.

Table 18 — Detail of Loans Removed from Delinquent Status

(in thousands)

Premises and Equipment

Premises and equipment are presented on the consolidated balance sheets net of related accumulated depreciation on the respective assets, as well as fair value adjustments associated with purchase accounting. Premises and equipment increased $4.9 million, or 13%, between December 31, 2025, and March 31, 2026. The Company’s branch network currently consists of 47 locations throughout Kentucky, Indiana, Florida, Ohio, and Tennessee.

Right-of-Use Assets and Operating Lease Liabilities

The Company records right-of-use assets for the underlying leased property. Operating lease liabilities represent the present value of its required minimum lease payments plus any amounts probable of being owed under a residual value guarantee.

Goodwill

At March 31, 2026, and December 31, 2025, the Company had $41 million in goodwill recorded on its balance sheet. Goodwill of $24 million is attributed to the 2023 CBank acquisition. Additionally, goodwill totaling $6 million and $10 million is attributed to the acquisitions of Cornerstone Community Bank and GulfStream Community Bank in 2016 and 2006.. The acquisitions of Tennessee Commerce Bank and First Commercial Bank in 2012 resulted in bargain purchase gains.

Events that may trigger goodwill impairment include deterioration in economic conditions, a decline in market-dependent multiples or metrics (i.e., stock price declining below tangible book value), negative trends in overall financial performance and regulatory actions. At September 30, 2025, the Company performed its annual qualitative assessment to determine if it was more-likely-than-not that the fair value of the reporting units exceeded their carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting units exceeded their fair value.

Bank Owned Life Insurance

BOLI assets increased $552,000 to $111 million at March 31, 2026, with the increase attributed to general appreciation of the cash surrender values within the policy plans experienced during the first three months of 2026.

Core Deposit Intangibles

CDIs arising from business acquisitions are initially measured at fair value and are then amortized on an accelerated method based on their useful lives. As of March 31, 2026, and December 31, 2025, the Company’s CDI assets totaled $1.4 million and $1.5 million.

Deposits

Table 19 — Deposit Composition

(dollars in thousands)

(1) Represents time deposits

Total Company deposits increased $306 million, or 6%, from December 31, 2025, to $5.51 billion as of March 31, 2026.

Core Bank

Total Core Bank deposits increased by $228 million, or 5%, from December 31, 2025 to March 31, 2026. Within the Core Bank’s deposits, interest-bearing deposits increased $165 million and noninterest-bearing deposits increased $63 million over the respective period.

The growth in Core Bank interest bearing was led by a combined $114 million increase in business and consumer money market accounts, time deposits, and reciprocal deposits, all of which generally carry higher rates. Core Bank time deposits increased $30 million during the first three months of 2026 ending a $472 million. In addition, consumer and money market accounts increased $58 million, or 4% during the first three months of 2026. The Core Bank continues to experience general migration from low and noninterest-bearing accounts to higher costing accounts.

While Core Bank period-end noninterest-bearing deposits increased $63 million for the first three months of 2026, the average balances of Core Bank noninterest-bearing deposits for the first three months of 2026 decreased $11 million, or 1%, compared to the first quarter of 2025. Overall, the Core Bank’s noninterest-bearing deposits have experienced a general quarterly decline in balances dating back to the fourth quarter of 2022.

Republic Processing Group

Within RPG, period-end total deposit balances increased $78 million, or 20%, during the first three months of 2026. Approximately $43 million of this increase was attributable to short-term tax refund deposits from TRS refund transfers, reflecting the timing of tax refund payments received from federal and state taxing authorities.

Deposits related to the RPS prepaid card program increased $35 million, or 11%, during the first three months of 2026, driven primarily by higher balances associated with the segment’s largest marketer-servicer. As previously disclosed, RPS began sharing a portion of the interest income earned on prepaid card balances with its prepaid card marketer-servicer beginning in the first quarter of 2024. However, throughout 2025 and the first three months of 2026, program balances did not reach the minimum contractual thresholds required to trigger revenue sharing. Partially offsetting the favorable reduction in revenue-share expense, RPS earned a lower yield on average prepaid program balances over recent quarters due to reductions in the overnight FFTR.

Securities Sold Under Agreements to Repurchase

SSUARs are collateralized by securities and are accounted for as financings. Accordingly, the securities underlying these agreements are recorded as assets and held by a safekeeping agent, while the related obligations to repurchase the securities are recorded as liabilities. All underlying securities remain under the Bank’s control throughout the term of the agreements. SSUARs generally represent large customer deposit relationships that require collateralization in excess of the $250,000 FDIC insurance limit, and the Bank pledges securities to satisfy these collateral requirements.

SSUARs decreased $7 million, or 8%, during 2026 to $81 million as of March 31, 2026. Due to the size of the underlying relationships, large fluctuations in the underlying account balances from period to period are common.

Federal Home Loan Bank Advances

FHLB advances totaled $367 million as of March 31, 2026, compared to $506 million as of December 31, 2025. Overnight borrowings increased to $210 million at March 31, 2026, from $130 million at December 31, 2025. Over the past year, the Company has utilized FHLB advances to partially fund noninterest-bearing deposit outflows and support overall loan growth.

During March 2026, the Traditional Bank prepaid $220 million of long-term fixed-rate FHLB advances and incurred a $2.3 million pre-tax early termination penalty, which was recorded in noninterest expense. The prepaid advances carried a weighted-average cost of 4.57% and were retired as part of management’s proactive balance sheet and interest rate risk management strategy. Assuming short-term interest rates remain at or near current levels, management believes the associated penalty will be earned back in just over 1.2 years through lower ongoing funding costs.

As of March 31, 2026, outstanding long-term fixed-rate FHLB advances totaled $157 million, with a weighted-average maturity of 4.12 years and a weighted-average cost of 3.71%, both inclusive of the impact of related interest rate swaps.

The Company’s use of FHLB advances during any given period is dependent on multiple factors, including asset growth, deposit trends, earnings performance, and expectations regarding future interest rate movements.

Interest Rate Swaps

Interest rate swap derivatives are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies for hedge accounting as part of a cash flow hedging relationship. For a derivative designated as a cash flow hedge, the effective portion of the derivative’s unrealized gain or loss is recorded as a component of OCI. The amount included in AOCI would be reclassified to current earnings should the hedge no longer be considered effective. Derivatives not designated as hedges are economic derivatives with the gain or loss recognized in current period earnings.

The Bank enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments, the Bank enters into offsetting positions to minimize the Bank’s interest rate risk. These swaps are derivatives, but are not designated as hedging instruments, and therefore changes in fair value are reported in current year’s earnings.

In addition, as noted in the section above, the Company entered into $100 million of notional amount balance sheet related interest rate swaps during the second quarter of 2024 in order to take advantage of the more attractive long-term pricing resulting from the then-inverted yield.

See the Footnote titled “Interest Rate Swaps” of Part I Item 1 “Financial Statements” for additional discussion regarding the Bank’s interest rate swaps.

Liquidity

The Bank maintains sufficient liquidity to fund routine loan demand and routine deposit withdrawal activity. Liquidity is managed by maintaining sufficient liquid assets, primarily in the form of cash, cash equivalents, and unencumbered investment securities. Funding and cash flows can also be realized through deposit product promotions, the sale of AFS debt securities, principal paydowns on loans and MBSs, and proceeds realized from loans HFS.

Table 20 — Liquid Assets and Borrowing Capacity

The Company’s liquid assets and borrowing capacity included the following:

(in thousands)

Republic had a period-end loan-to-deposit ratio (excluding brokered deposits) of 99% as of March 31, 2026 and 107% as of December 31, 2025. Republic’s banking centers and its website, www.republicbank.com (http://www.republicbank.com), provide access to retail deposit markets. These retail deposit products, if offered at attractive rates, have historically been a source of additional funding when needed. 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.

As of March 31, 2026, the Bank had approximately $1.3 billion in deposits from 216 large non-sweep deposit relationships, including reciprocal deposits, where the individual relationship exceeded $2 million for a depositor’s taxpayer identification number. Total uninsured deposits for the Bank were $2.3 billion, or 41%, of total deposits as of March 31, 2026. The 20 largest non-sweep deposit relationships represented approximately $489 million, or 9%, of the Company’s total deposit balances as of March 31, 2026. These accounts do not require collateral; therefore, cash from these accounts can generally be utilized to fund the loan portfolio. If any of these balances were moved from the Bank, the Bank would likely utilize overnight borrowing lines in the short-term to replace the balances. On a longer-term basis, the Bank would likely utilize wholesale-brokered deposits to replace withdrawn balances, or alternatively, higher-cost internet-sourced deposits. Based on experience utilizing brokered deposits and internet-sourced deposits, the Bank believes it can quickly obtain these types of deposits if needed. 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, SSUAR, FHLB advances, and for other purposes, as required by law. As of March 31, 2026, and December 31, 2025, these pledged investment securities had a fair value of $116 million and $131 million.

Capital

Total stockholders’ equity increased from $1.10 billion as of December 31, 2025, to $1.13 billion as of March 31, 2026. The increase in stockholders’ equity was attributable to net income earned during the first three months of 2026 reduced primarily by cash dividends declared.

Common Stock — The Class A Common shares are entitled to cash dividends equal to 110% of the cash dividend paid per share on Class B Common Stock. 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. The Class A Common shares are not convertible into any other class of Republic’s capital stock.

Dividend Restrictions — The Parent Company’s principal source of funds for dividend payments are dividends received from RB&T. Banking regulations limit the amount of dividends that may be paid to the Parent Company by the Bank without prior approval of the respective states’ banking regulators. 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 April 1, 2026, RB&T could, without prior approval, declare dividends of approximately $168 million. Any payment of dividends in the future will depend, in large part, on the Company’s earnings, capital requirements, financial condition, and other factors considered relevant by the Company’s Board.

Regulatory Capital Requirements — The Company and the Bank are subject to capital regulations in accordance with Basel III, as administered by banking regulators. Regulatory agencies measure capital adequacy within a framework that makes capital requirements, in part, dependent on the individual risk profiles of financial institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on Republic’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Parent Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain OBS items, as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators regarding components, risk weightings, and other factors.

Banking regulators have categorized the Bank as well capitalized. For prompt corrective action, the regulations in accordance with Basel III define “well capitalized” as a 10.0% Total Risk-Based Capital ratio, a 6.5% Common Equity Tier 1 Risk-Based Capital ratio, an 8.0% Tier 1 Risk-Based Capital ratio, and a 5.0% Tier 1 Leverage ratio. Additionally, to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, the Company and Bank must hold a capital conservation buffer of 2.5% composed of Common Equity Tier 1 Risk-Based Capital above their minimum risk-based capital requirements.

Republic continues to exceed the regulatory requirements for Total Risk Based Capital, Common Equity Tier I Risk Based Capital, Tier I Risk Based Capital and Tier I Leverage Capital. Republic and the Bank intend to maintain a capital position that meets or exceeds the “well-capitalized” requirements as defined by the FRB and the FDIC, in addition to the Capital Conservation Buffer. Formal measurements of the capital ratios for Republic and the Bank are performed by the Company at each quarter end.

Table 21 — Capital Ratios

(dollars in thousands)

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. Interest rate risk is the exposure to adverse changes in net interest income as a result of market fluctuations in interest rates. The Bank, on an ongoing basis, monitors interest rate and liquidity risk to implement appropriate funding and balance sheet strategies. Management considers interest rate risk to be a significant risk to the Bank’s overall earnings and balance sheet.

The interest sensitivity profile of the Bank at any point in time will be impacted by a number of factors. These factors include the mix of interest sensitive assets and liabilities, as well as their relative pricing schedules. It is also influenced by changes in market interest rates, deposit and loan balances, and other factors.

The Bank utilizes earnings simulation models as tools to measure interest rate sensitivity, including both a static and dynamic earnings simulation model. A static simulation model is based on current exposures and assumes a constant balance sheet. In contrast, a dynamic simulation model relies on detailed assumptions regarding changes in existing business lines, new business, and changes in management and customer behavior. While the Bank runs the static simulation model as one measure of interest rate risk, historically, the Bank has utilized its dynamic earnings simulation model as its primary interest rate risk tool to measure the potential changes in market interest rates and their subsequent effects on net interest income for a one-year time period. This dynamic model projects a “Base” case net interest income over the next 12 months and the effect on net interest income of instantaneous movements in interest rates between various bp increments equally across all points on the yield curve. 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. These assumptions are inherently uncertain and, as a result, the dynamic model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to the actual timing, magnitude and frequency of interest rate changes, the actual timing and magnitude of changes in loan and deposit balances, as well as the actual changes in market conditions and the application and timing of various management strategies as compared to those projected in the various simulated models. Additionally, actual results could differ materially from the model if interest rates do not move equally across all points on the yield curve.

As of March 31, 2026, a dynamic simulation model was run for interest rate changes from “Down 300” bps to “Up 300” bps. The following table illustrates the Bank’s projected percent change from its Base net interest income over the period beginning April 1, 2026, and ending March 31, 2027, based on instantaneous movements in interest rates from Down 300 to Up 300 bps equally across all points on the yield curve. The Bank’s dynamic earnings simulation model includes secondary market loan fees, which are a component of mortgage banking income within noninterest income and excludes Traditional Bank loan fees.

Table 22 — Bank Interest Rate Sensitivity

The results of the interest rate sensitivity analysis performed as of March 31, 2026 and December 31, 2025 were derived from subjective assumptions the Company uses in its earnings simulation model, particularly in relation to deposit betas, which measure how responsive management’s deposit repricing may be to changes in market rates based on historical data. Management uses different betas in the rising and falling rate scenarios to better simulate expected earnings trends.

In both interest rate sensitivity scenarios presented, the Company projects a decrease in net interest income in a declining rate environment as the rates the Company pays for its non-maturity, interest-bearing deposits cannot be lowered sufficiently to offset the decrease in interest income associated with its declining asset yields. Conversely, in both scenarios presented the Company projects an improvement in net interest income as interest rates rise as the yield the Company expects to earn for its interest-earning assets will increase more than the rise in its projected funding costs. These results depict an asset-sensitive interest rate risk profile.

In comparing the Company’s interest rate sensitivity projections from December 31, 2025, to March 31, 2026, there were notable changes in all illustrated scenarios. In general, the Company projects its interest rate risk position has deteriorated in a declining rate environment and has improved in a rising rate environment.

More specifically driving the period-to-period improvement in net interest income in the illustrated up-rate scenarios, the Company had elevated cash balances as of March 31, 2026, with yields that increase immediately in an up-rate scenario. In addition, in the March 31, 2026, interest rate sensitivity analysis, the Company projects the on-boarding of a notable prepaid card relationship during the second half of 2026 with interest-bearing balances tied to a formula that would generally improve net interest income in a rising rate environment and decrease net interest income in a declining rate environment.

These same factors that drove the improvement in the Company’s interest rate sensitivity analysis from December 31, 2025 to March 31, 2026, also drove the deterioration in its interest rate sensitivity analysis for the same periods.

For additional discussion regarding the Bank’s net interest income, see the sections titled “Net Interest Income” in this section of the filing under “Results of Operations (Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025).

Non-GAAP Financial Measures

The following tables illustrates the Total Company, Core Bank, and Republic Processing Group actual and adjusted net income (non-GAAP) results for the first quarters of 2026 and 2025. Adjusted net income reflects management’s internal view of the Company’s operating performance.

(dollars in thousands, except per share data)

(dollars in thousands, except per share data)

Information required by this item is included under Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

.Item 4.Controls and Procedures. As of the end of the period covered by this report, an evaluation was carried out by Republic Bancorp, Inc.’s management, with the participation of its Executive Chair/CEO and CFO, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act. Based upon that evaluation, the Company’s Executive Chair/CEO and CFO concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report. In addition, no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

There have been no material changes in the Company’s risk factors as previously disclosed in Part 1, “Item 1A. Risk Factors” of its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. You should carefully consider the risk factors discussed in Republic’s 2025 Form 10-K, which could materially affect its business, financial condition, or future results.