Republic’s Tax Refund Solutions (“TRS”) on Track for Record Net Income in 2011
As a result of its strong interim results at TRS, management currently estimates that its first quarter total Company net income will be in a range between
- ERC/ERD volume between 350,000 and 450,000 products during
March 2011 . - RAL origination volume between 38,000 and 44,000 products during
March 2011 . - An estimated RAL loan loss rate as of
March 31, 2011 , between 1.50% and 2.00% of total RALs originated. - A Traditional Banking segment provision for loan losses of
$2.2 million to $3.4 million for the quarter.
The Bank’s goal entering the 2011 tax season was to achieve a final RAL loan loss rate of 2.50% or less. Through the date of this filing, RALs outstanding past their expected funding date, which represents potential loan losses, was 2.13% of total RALs originated. Management expects this percentage rate to improve each week as the Bank continues to receive payments from the
In addition to the Company’s solid RAL underwriting results, the number of federal ERCs/ERDs processed through the first two months of 2011 was up 62% compared to the first two months of 2010. As expected, the Company’s RAL origination volume was down significantly compared to the first two months of 2010. Overall, the Company has originated
The Company publishes these results on an interim basis in light of the Federal Deposit Insurance Corporation’s (the “FDIC”) concerns regarding the safety and soundness of its RAL program as expressed in the FDIC’s Notice of Charges for an Order to Cease and Desist and Notice of Hearing (the “Notice”) previously disclosed. A copy of the Notice is set forth as Exhibit 10.1 of the Form 8-K filed with the
As described more fully in the periodic filings of Republic with the
The Bank has operated in the tax refund product industry for 15 years. RB&T is one of the largest providers of these services in the country providing tax refund-based products to over 3 million taxpayers during 2010. During its peak processing time, the Bank employs over 400 people in downtown
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in the preceding paragraphs are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements, which speak only as of the date on which they are made. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include consumer demand for the Bank’s tax refund products, consumer demand for income tax return preparation services and tax services generally, unanticipated losses on RALs and within the Traditional Banking segment, regulatory proceedings to curtail or exit the RAL business, overall tax refund product mix and overhead cost to the Bank, and other factors disclosed from time to time in the Company's filings with the
Republic
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Republic
President and Chief Executive Officer
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