REPUBLIC BANCORP INC /KY/ – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations.

The consolidated financial statements include the accounts of Republic Bancorp,
Inc. (the "Parent Company") and its wholly-owned subsidiaries, Republic Bank &
Trust Company and Republic Insurance Services, Inc. As used in this filing, the
terms "Republic," the "Company," "we," "our," and "us" refer to Republic
Bancorp, Inc., and, where the context requires, Republic Bancorp, Inc. and its
subsidiaries. The term the "Bank" refers to the Company's subsidiary bank:
Republic Bank & Trust Company. The term the "Captive" refers to the Company's
insurance subsidiary: Republic Insurance Services, Inc. All significant
intercompany balances and transactions are eliminated in consolidation.



Republic is a financial holding company headquartered in Louisville, Kentucky.
The Bank is a Kentucky-based, state-chartered non-member financial institution
that provides both traditional and non-traditional banking products through five
reportable segments using a multitude of delivery channels. While the Bank
operates primarily in its market footprint, its non-brick-and-mortar delivery
channels allow it to reach clients across the U.S. The Captive is a
Nevada-based, wholly-owned insurance subsidiary of the Company. The Captive
provides property and casualty insurance coverage to the Company and the Bank as
well, as a group of third-party insurance captives for which insurance may not
be available or economically feasible.



In 2005, Republic Bancorp Capital Trust, an unconsolidated trust subsidiary of
Republic, was formed and issued $40 million in TPS. On September 30, 2021, as
permitted under the terms of RBCT's governing documents, Republic redeemed these
securities at the par amount of approximately $40 million, without penalty.
Republic's capital ratios remained well above "well capitalized" levels
following the redemption of the TPS, which were treated as part of Republic's
Tier I Capital while outstanding.

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 discuss matters that are not historical facts. As
forward-looking statements discuss future events or conditions, the statements
often include words such as "anticipate," "believe," "estimate," "expect,"
"intend," "plan," "project," "target," "can," "could," "may," "should," "will,"
"would," "potential," or similar expressions. Do not rely on forward-looking
statements. Forward-looking statements detail management's expectations
regarding the future and are not guarantees. Forward-looking statements are
assumptions based on information known to management only as of the date the
statements are made and management undertakes no obligation to update
forward-looking statements, except as required by applicable law.

Broadly speaking, forward-looking statements include:

? the potential impact of the COVID-19 pandemic on Company operations;

? projections of revenue, income, expenses, losses, earnings per share, capital

expenditures, dividends, capital structure, or other financial items;

? descriptions of plans or objectives for future operations, products, or

services;

? forecasts of future economic performance;

? statements relating to the completion of the Sale Transaction and the potential

timing thereof; and

? descriptions of assumptions underlying or relating to any of the foregoing.

Forward-looking statements involve known and unknown risks, uncertainties, and
other factors that may cause actual results, performance, or achievements to be
materially different from future results, performance, or achievements expressed
or implied by the forward-looking statements. Actual results may differ
materially from those expressed or implied as a result of certain risks and
uncertainties, including, but not limited to the following:

? the impact of the COVID-19 pandemic on the Company's operations and credit

losses;

? the ability of borrowers who received COVID-19 loan accommodations to resume

repaying their loans upon maturity of such accommodations;

? natural disasters impacting the Company's operations;

? changes in political and economic conditions;

? the magnitude and frequency of changes to the FFTR implemented by the FOMC of

the FRB;

? long-term and short-term interest rate fluctuations as well as the overall

steepness of the U.S. Treasury yield curve;

? competitive product and pricing pressures in each of the Company's five

reportable segments;

? equity and fixed income market fluctuations;

? client bankruptcies and loan defaults;

                                       70

  Table of Contents

 ? inflation;


 ? recession;


 ? future acquisitions;

? integrations of acquired businesses;

? changes in technology;

? changes in applicable laws and regulations or the interpretation and

enforcement thereof;

? changes in fiscal, monetary, regulatory and tax policies;

? changes in accounting standards;

? monetary fluctuations;

? changes to the Company's overall internal control environment;

? success in gaining regulatory approvals when required;

? the Company's ability to qualify for future R&D federal tax credits;

? risks related to the completion of the proposed Sale Transaction and the

potential timing thereof?

disruption from the proposed Sale Transaction making it difficult to maintain

? business and operational relationships, including retaining and hiring key

personnel and maintaining relationships with the Bank's customers, vendors and

others with whom the Bank does business?

? the risk of litigation and/or regulatory actions related to the proposed Sale

Transaction?

? information security breaches or cyber security attacks involving either the

Company or one of the Company's third-party service providers; and

other risks and uncertainties reported from time to time in the Company's

? filings with the SEC, including Part 1 Item 1A "Risk Factors" of the Company's

Annual Report on Form 10-K for the year ended December 31, 2020 and Part II

   Item 1A "Risk Factors" of the current filing.




Accounting Standards Update

For disclosure regarding the impact to the Company's financial statements of
ASUs, see Footnote 1 "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 fiscal year ended December 31, 2020.



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 operating
results 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 its
ACLL and Provision.

                                       71

  Table of Contents

ACLL and Provision - As of September 30, 2021, the Bank maintained an ACLL for
expected credit losses inherent in the Bank'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 of Directors quarterly.



Effective January 1, 2020, the Company adopted ASC 326 Financial Instruments -
Credit Losses, which replaced the pre-January 1, 2020 "probable-incurred" method
for calculating the Company's ACL with the CECL method. CECL is applicable to
financial assets measured at amortized cost, including loan and lease
receivables and held-to-maturity debt securities. CECL also applies to certain
off-balance sheet credit exposures.



When measuring an ACL, CECL primarily differs from the probable-incurred method
by: a) incorporating a lower "expected" threshold for loss recognition versus a
higher "probable" threshold; b) requiring life-of-loan considerations; and c)
requiring reasonable and supportable forecasts. 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. For its CRE
loan pool, the Company employed a one-year forecast of CRE vacancy rates through
March 31, 2021 but discontinued use of this forecast during the second quarter
of 2021 in favor of a one-year forecast of general CRE values. This change in
forecast method had no material impact on the Company's ACLL.



Management's evaluation of the appropriateness of the ACLL is often the most
critical accounting estimate for a financial institution, as the ACLL requires
significant reliance on the use of estimates and significant judgment as to the
reliance on historical loss rates, consideration of quantitative and qualitative
economic factors, and the reliance on a reasonable and supportable forecast.



Adjustments to the historical loss rate for current conditions include
differences in underwriting standards, portfolio mix or term, delinquency level,
as well as for changes in environmental conditions, such as changes in property
values or other relevant factors. One-year forecast adjustments to the
historical loss rate are based on the U.S. national unemployment rate and CRE
values. Subsequent to the one-year forecasts, loss rates are assumed to
immediately revert back to long-term historical averages.



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.



See additional detail regarding the Company's adoption of ASC 326 and the CECL
method under Footnote 1"Summary of Significant Accounting Policies" of Part II
Item 8 "Financial Statements and Supplementary Data" of the Company's Annual
Report on Form 10-K for the year ended December 31, 2020.







                                       72

  Table of Contents

BUSINESS SEGMENT COMPOSITION

As of September 30, 2021, the Company was divided into five reportable segments:
Traditional Banking, Warehouse, Mortgage Banking, TRS, and RCS. Management
considers the first three segments to collectively constitute "Core Bank" or
"Core Banking" operations, while the last two segments collectively constitute
RPG operations.

(I) Traditional Banking segment

The Traditional Banking segment provides traditional banking products primarily
to customers in the Company's market footprint. As of September 30, 2021,
Republic had 42 full-service banking centers with locations as follows:

 ? Kentucky - 28

? Metropolitan Louisville - 18

 ? Central Kentucky - 7


 ? Georgetown - 1


 ? Lexington - 5


 ? Shelbyville - 1


 ? Northern Kentucky - 3


 ? Covington - 1


 ? Crestview Hills - 1


 ? Florence - 1


 ? Southern Indiana - 3


 ? Floyds Knobs - 1


 ? Jeffersonville - 1


 ? New Albany - 1

? Metropolitan Tampa, Florida - 7

? Metropolitan Cincinnati, Ohio - 2

? Metropolitan Nashville, Tennessee - 2

Republic's headquarters are in Louisville, which is the largest city in Kentucky
based on population.

The Bank's principal 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, residential real
estate loans. In addition, the Bank originates HEALs and HELOCs through its
retail banking centers. Such loans are generally collateralized by
owner-occupied, residential real estate 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 the
Consumer Direct channel are generally secured by owner occupied-collateral
located outside of the Bank's market footprint.

Commercial Lending - The Bank conducts commercial lending activities primarily
through Corporate Banking, Commercial Banking, Business Banking, and Retail
Banking channels.

In general, commercial lending credit approvals and processing are prepared and
underwritten through the Bank's Commercial Credit Administration Department.
Clients are generally located within the Bank's market footprint or in areas
nearby the market footprint.



Construction and Land Development Lending - The Bank originates business loans
for the construction of both single-family, residential properties and
commercial properties (apartment complexes, shopping centers, office buildings).
While not a focus for the Bank, the Bank may originate loans for the acquisition
and development of residential or commercial land into buildable lots.



Consumer Lending - Traditional Banking consumer loans made by the Bank include
home improvement and home equity loans, other secured and unsecured personal
loans, and credit cards. Except for home equity loans, which are actively
marketed in conjunction with single family, first lien residential real estate
loans, other Traditional Banking consumer loan products (not including products
offered through RPG), while available, are not and have not been actively
promoted in the Bank's markets.



                                       73

  Table of Contents

Aircraft Lending - In October 2017, the Bank created an Aircraft Lending
division. Aircraft loans are typically made to purchase or refinance personal
aircrafts, along with engine overhauls and avionic upgrades. The aircraft loan
program is open to all states, except for Alaska and Hawaii.



The credit characteristics of an aircraft borrower are higher than a typical
consumer in that they must demonstrate and indicate a higher degree of credit
worthiness for approval.

The Bank's 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.



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.

Mobile Banking - The Bank allows clients to easily and 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 detail regarding the Traditional Banking segment under Footnote
16 "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 United States through mortgage warehouse lines of credit.
These credit facilities are primarily secured by single-family, first-lien
residential real estate loans. The credit facility enables the mortgage banking
clients to close single-family, first-lien residential real estate 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 line for an average of 15 to 30 days.
Reverse mortgage loans typically remain on the line longer than conventional
mortgage loans. Interest income and loan fees are accrued for each individual
loan during the time the loan remains on the warehouse line 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 detail regarding the Warehouse Lending segment under Footnote 16
"Segment Information" of Part I Item 1 "Financial Statements."

(III)  Mortgage Banking segment



Mortgage Banking activities primarily include 15-, 20- and 30-year fixed-term
single-family, first-lien residential real estate loans that are originated and
sold into the secondary market, primarily to the FHLMC and the FNMA. The Bank
typically retains servicing on loans sold into the secondary market for loans
generated in states within its footprint and generally sells servicing for loans
generated in states outside of its footprint. Administration of loans with
servicing retained by the Bank includes collecting principal and interest
payments, escrowing funds for property taxes and property insurance, and
remitting payments to secondary market investors. The Bank receives fees for
performing these standard servicing functions.



See additional detail regarding the Mortgage Banking segment under Footnote 11
"Mortgage Banking Activities" and Footnote 16 "Segment Information" of Part I
Item 1 "Financial Statements."

                                       74

Table of Contents

(IV) Tax Refund Solutions segment

Tax Refund Solutions segment - On May 13, 2021, the Bank entered into the
Purchase Agreement with Green Dot providing for the Sale Transaction. As a
result of the Purchase Agreement and the proposed Sale Transaction, the results
for the Company, RPG, and its TRS segment are presented within this filing to
reflect continuing versus discontinued operations. RPG's continuing operations
include its RCS segment, its RPS division, and certain overhead costs previously
allocated to TRS that will remain with RPG. Discontinued operations are those
contracted to be sold. These discontinued operations have historically contained
the majority of TRS's revenue and expense. Interest income and expense for
continuing and discontinued operations also include intercompany interest
charged and earned based on the Company's funds transfer pricing methodology.



On October 4, 2021, Green Dot announced that it had been unable to obtain the
Federal Reserve's approval of or non-objection to the Sale Transaction and that,
as a result, Green Dot would not consummate the Sale Transaction. On October 5,
2021, the Bank filed a lawsuit against Green Dot in the Delaware Court of
Chancery alleging breach of contract. In so doing, the Bank seeks, among other
relief, specific performance to require that Green Dot proceed with the Sale
Transaction as the parties had agreed to in the Purchase Agreement. Due to the
inherent uncertainties of legal proceedings, at this time, the Company cannot
predict the outcome of these proceedings and their impact on the Company's
financial condition and results of operations.

See additional detail regarding the Bank's agreement to sell TRS under Footnote
17 "Discontinued Operations" of Part I Item 1 "Financial Statements."

Republic Payment Solutions division - RPS is currently managed and operated
within the TRS segment's continuing operations. The RPS division offers
general-purpose reloadable prepaid cards as an issuing bank through third-party
service providers. For the projected near-term, as the prepaid card program
matures, the operating results of the RPS division are expected to be immaterial
to the Company's overall results of operations and will be reported as part of
the TRS segment's continuing operations. The RPS division will not be considered
a separate reportable segment until such time, if any, that it meets
quantitative reporting thresholds.

The Company reports fees related to RPS programs 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."

(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. The Bank uses third-party service providers for certain
services such as marketing and loan servicing of RCS loans. Additional
information regarding consumer loan products offered through RCS follows:

RCS line-of-credit products - Using separate third-party service providers, the

Bank originates two line-of-credit products to generally subprime borrowers in

? multiple states. The first of these two products (the "LOC I") has been

originated by the Bank since 2014. The second (the "LOC II") was introduced in

   January 2021.




   RCS's LOC I represents the substantial majority of RCS activity. Elastic

Marketing, LLC and Elevate Decision Sciences, LLC, are third-party service

providers for the product and are subject to the Bank's oversight and

supervision. Together, these companies provide the Bank with certain marketing,

o servicing, technology, and support services, while a separate third party

provides customer support, servicing, and other services on the Bank's

behalf. The Bank is the lender for this product and is marketed as such.

Further, the Bank controls the loan terms and underwriting guidelines, and the

   Bank exercises consumer compliance oversight of the product.

The Bank sells participation interests in this product. These participation
interests are a 90% interest in advances made to borrowers under the borrower's
line-of-credit account, and the participation interests are generally sold three
business days following the Bank's funding of the associated advances. Although
the Bank retains a 10% participation interest in each advance, it maintains 100%
ownership of the underlying LOC I account with each borrower. Loan balances held
for sale through this program are carried at the lower of cost or fair value.

In January 2021, RCS began originating balances through its LOC II. One of

o RCS's existing third-party service providers, subject to the Bank's oversight

   and supervision, provides the Bank with marketing services and loan


                                       75

  Table of Contents

servicing for the LOC II product. The Bank is the lender for this product and is

marketed as such. Furthermore, the Bank controls the loan terms and underwriting

  guidelines, and the Bank exercises consumer compliance oversight of this
  product.

The Bank sells participation interests in this product. These participation
interests are a 95% interest in advances made to borrowers under the borrower's
line-of-credit account, and the participation interests are generally sold three
business days following the Bank's funding of the associated advances. Although
the Bank retains a 5% participation interest in each advance, it maintains 100%
ownership of the underlying LOC II account with each borrower. Loan balances
held for sale through this program are carried at the lower of cost or fair
value.

RCS installment loan product - In December 2019, through RCS, the Bank began

offering 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 loans. 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 RCS installment 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 "held for sale" on the Bank's balance sheet, with

the intention to sell these loans to its third-party service provider generally

within sixteen 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.




   RCS healthcare receivables products - The Bank originates
   healthcare-receivables products across the U.S. through two different

third-party service providers. In one program, the Bank retains 100% of the

? receivables originated. In the other program, the Bank retains 100% of the

receivables originated in some instances, and in other instances, sells 100% of

the receivables within one month of origination. Loan balances held for sale

   through this program are carried at the lower of cost or fair value.

The Company reports interest income and loan origination fees earned on RCS
loans under "Loans, including fees," while any gains or losses on sale and
mark-to-market adjustments of RCS loans are reported as noninterest income under
"Program fees."

OVERVIEW (Three Months Ended September 30, 2021 Compared to Three Months Ended
September 30, 2020)

Total Company net income for the third quarter of 2021 was $20.0 million, a
$380,000, or 2%, decrease from the same period in 2020. Diluted EPS was $0.99
for the three months ended September 30, 2021, an increase of approximately 1%
compared to $0.98 for the same period in 2020. The 3% difference between the 2%
decrease in net income and the 1% increase in Diluted EPS of the Company
represents the benefit of the Company's on-going stock buyback program. As of
September 30, 2021, the stock buyback program has reduced the number of shares
outstanding by approximately 748,000 shares since the buyback was implemented in
early 2021. The decrease in net income reflected a $1.5 million decrease in net
income from discontinued operations, driven by a change in the timing of Easy
Advance recoveries, as the Company received a higher rate and a higher volume of
EA recoveries during the third quarter of 2020 compared to the third quarter of
2021.



Net income from continuing operations was $18.4 million for the third quarter of
2021, a $1.1 million, or 7%, increase from the same period in 2020. Diluted EPS
from continuing operations was $0.91 for the three months ended September 30,
2021, an increase of approximately 10% over the $0.83 for the same period in
2020. The overall increase in net income from continuing operations generally
reflected an increase in RPG program fees, a positive reduction in Provision,
offset by a reduction in Mortgage Banking income.

The following are general highlights by reportable segment. Discontinued
operations for the periods discussed relate entirely to the TRS segment.

See additional detail regarding the Bank's agreement to sell TRS under Footnote
17 "Discontinued Operations" of Part I Item 1 "Financial Statements."

Traditional Banking segment



 ? Net income increased $6.4 million for the third quarter of 2021 compared to the
   same period in 2020.




                                       76

  Table of Contents

Net interest income increased $1.5 million, or 4%, for the third quarter of

? 2021 compared to the same period in 2020. The Traditional Bank's net interest

   margin remained at 3.22% for the third quarter of 2021.

Provision decreased $5.9 million to a net credit of $44,000 for the third

? quarter of 2021 compared to a net charge of $5.9 million for the same period in

   2020.

? Noninterest income increased $970,000, or 14%, for the third quarter of 2021

compared to the same period in 2020.

? Total noninterest expense decreased $488,000, or 1%, for the third quarter of

   2021 compared to same period in 2020.




Warehouse Lending segment

? Net income remained at $4.2 million for the third quarter of 2021 compared to

   the same period in 2020.

? Net interest income decreased $1.1 million, or 14%, for the third quarter of

2021 compared to the same period in 2020.

? The Warehouse Provision was a net credit of $223,000 for the third quarter of

2021 compared to a net credit of $3,000 for the same period in 2020.

? Average committed Warehouse lines increased to $1.4 billion during the third

quarter of 2021 from $1.3 billion during the same period in 2020.

? Average line usage was 51% during the third quarter of 2021 compared to 68%

   during the same period in 2020.




Mortgage Banking segment

Within the Mortgage Banking segment, mortgage banking income decreased $5.5

? million, or 51%, during the third quarter of 2021 compared to the same period

   in 2020.

Overall, Republic's originations of secondary market loans totaled $170 million

? during the third quarter of 2021 compared to $204 million during the same

   period in 2020, with the Company's cash gain-as-a-percent-of-loans-sold
   decreasing from 4.49% to 2.94% from period to period.




Tax Refund Solutions segment



Continuing Operations

? Net loss from continuing operations was $272,000 for the third quarter of 2021

   compared to a net loss of $123,000 for the same period in 2020.




Discontinued Operations

? Net income from discontinued operations decreased $1.5 million for the third

quarter of 2021 compared to the same period in 2020.

Overall, TRS recorded a net credit to the Provision from discontinued

? operations of $2.3 million during the third quarter of 2021 compared to a net

   credit to the Provision of $4.3 million for the same period in 2020.

? Noninterest income from discontinued operations increased $147,000, or 12%, for

the third quarter of 2021 compared to the same period in 2020.

? Net RT revenue from discontinued operations increased to $1.3 million for the

third quarter of 2021 compared to $1.2 million for the same period in 2020.

? Noninterest expense from discontinued operations was $1.7 million for the third

   quarter of 2021, equal to $1.7 million for the same period in 2020.


                                       77

  Table of Contents

Republic Credit Solutions segment

? Net income decreased $422,000, or 12%, for the third quarter of 2021 compared

to the same period in 2020.

? Net interest income increased $321,000, or 6%, for the third quarter of 2021

   compared to the same period in 2020.

Overall, RCS recorded a net charge to the Provision of $3.8 million during the

? third quarter of 2021 compared to a net credit of $12,000 for the same period

   in 2020.

? Noninterest income increased $2.9 million from the third quarter of 2020 to the

   third quarter of 2021.

? Noninterest expense was $1.0 million for the third quarter of 2021 compared to

   $1.2 million for the same period in 2020.

RESULTS OF OPERATIONS (Three Months Ended September 30, 2021 Compared to Three
Months Ended September 30, 2020)

Net Interest Income



Banking operations are significantly dependent upon net interest income. Net
interest income is the difference between interest income on interest-earning
assets, such as loans and investment securities and the interest expense on
interest-bearing liabilities used to fund those assets, such as interest-bearing
deposits, securities sold under agreements to repurchase, and FHLB advances. Net
interest income is impacted by both changes in the amount and composition of
interest-earning assets and interest-bearing liabilities, as well as market
interest rates.

See the section titled "Asset/Liability Management and Market Risk" in this
section of the filing regarding the Bank's interest rate sensitivity.

A large amount of the Company's financial instruments track closely with, or are
primarily indexed to, either the FFTR, Prime, or LIBOR. These market rates
trended lower since the first quarter of 2020 and the onset of COVID-19
pandemic, as the FOMC reduced the FFTR to approximately 25 basis points during
2020. The FOMC has provided on-going guidance that it is unlikely the FFTR will
be increased in the near term.



Additional increases in short-term interest rates and overall market rates are
generally believed by management to be favorable to the Bank's net interest
income and net interest margin in the near term, while additional decreases in
short-term interest rates and overall market rates are generally believed by
management to be unfavorable to the Bank's net interest income and net interest
margin in the near term. Increases in short-term interest rates, however, could
have a negative impact on net interest income and net interest margin if the
Bank is unable to maintain its deposit balances and the cost of those deposits
at the levels assumed in its interest-rate-risk model. In addition, a flattening
or inversion of the yield curve, causing the spread between long-term interest
rates and short-term interest rates to decrease, could negatively impact the
Company's net interest income and net interest margin. Unknown variables, which
may impact the Company's net interest income and net interest margin in the
future, include, but are not limited to, the actual steepness of the yield
curve, future demand for the Bank's financial products and the Bank's overall
future liquidity needs.



Total Company net interest income from continuing operations increased $260,000
during the third quarter of 2021 compared to the same period in 2020. Total
Company net interest margin from continuing operations decreased to 3.55% during
the third quarter of 2021 compared to 3.57% for the same period in 2020. Net
interest income from discontinued operations was $123,000 during the third
quarter of 2021 compared to $203,000 during the third quarter of 2020.

The following were the most significant components affecting the Company's net
interest income by reportable segment:

Traditional Banking segment



The Traditional Banking's net interest income increased $1.5 million, or 4%, for
the third quarter of 2021 compared to the same period in 2020. Traditional
Banking's net interest margin remained at 3.22% for the third quarter of 2021
compared to the same period in 2020.





                                       78

  Table of Contents

Table 1 - Traditional Bank Net Interest Income and Net Interest Margin Excluding
PPP (Non-GAAP)

The Company earns fees and a coupon interest of 1.0% on its PPP portfolio. Due
to the short-term nature of the PPP, management believes Traditional Bank net
interest income excluding PPP fees and interest is a more appropriate measure to
analyze the challenges within the Traditional Bank's net interest income and net
interest margin. The following table reconciles Traditional Bank net interest
income and net interest margin to Traditional Bank net interest income and net
interest margin excluding PPP fees and interest, a non-GAAP measure. Net
interest margin excluding PPP fees and interest presented below also excludes
average PPP loans of $186 million and $513 million for the quarters ended
September 30, 2021 and 2020.





                                                                              Net Interest Income                                      Net Interest Margin
                                                              Three Months Ended Sep. 30,                                    Three Months Ended Sep. 30,
(dollars in thousands)                                           2021              2020         $ Change    % Change          2021              2020           Change

Traditional Banking - GAAP                                  $       40,297    $       38,753   $    1,544          4 %         3.22 %             3.22 %           - %
Less: PPP fees and interest                                          5,668             3,497        2,171         62           0.35             (0.06)          0.41

Traditional Banking ex PPP fees and interest - non-GAAP $ 34,629

  $       35,256   $    (627)        (2) %         2.87               3.28        (0.41)

The increase in the Traditional Bank's net interest income and static net
interest margin during the third quarter of 2021 was primarily attributable to
the following factors:

The Traditional Bank recognized $5.7 million of fees and interest on its PPP

portfolio during the third quarter of 2021 compared to $3.5 million of similar

fees and interest during the same period in 2020. The $2.2 million increase in

PPP fees and interest was driven significantly by the forgiveness, payoff, and

paydown of $130 million of PPP loans during the third quarter of 2021. As of

? September 30, 2021, net PPP loans of $126 million remained on the Traditional

Bank's balance sheet, including $19 million in loan balances originated during

2020, $111 million in loan balances originated during 2021, and $4 million of

unaccreted PPP fees reported as a credit offset to these originated balances.

Unaccreted PPP fees will generally be recognized into income over the estimated

remaining life of the PPP portfolio, with fee recognition accelerated if loans

   are forgiven or repaid earlier than estimated.




   Traditional Bank net interest income, excluding PPP fees and interest,

decreased $627,000, or 2%, from the third quarter 2020, as the Traditional

Bank's net interest margin, excluding PPP loans and related fees and interest,

declined from 3.28% for the third quarter of 2020 to 2.87% for the third

? quarter of 2021. The decline in the net interest margin was substantially

driven by a 66-basis point decline in the Traditional Bank's yield on its

average non-PPP interest-earning assets from the third quarter of 2020 to the

third quarter of 2021, as the majority of the Traditional Bank's growth in

   non-PPP interest-earning assets during the previous 12 months was in
   lower-yielding cash instead of loans.




Warehouse Lending segment



Net interest income from the Warehouse segment decreased $1.1 million, or 14%,
from the third quarter of 2020 to the third quarter of 2021 driven primarily by
a decrease in average outstanding balances, while the net interest margin for
the Warehouse segment increased from 3.41% to 3.51% during the same time
periods.



Overall average outstanding Warehouse balances declined from $860 million during
the third quarter of 2020 to $717 million for the third quarter of 2021, as
home-mortgage refinancing dipped from record highs during 2020. Committed
Warehouse lines-of-credit grew to $1.4 billion as of September 30, 2021 from
$1.3 billion as of September 30, 2020, while average usage rates for Warehouse
lines were 51% and 68%, respectively, during the third quarters of 2021 and
2020.



The net interest margin for the Warehouse segment improved from quarter to
quarter due to a decline in the segment's assigned cost of funds while many of
the segment's lines-of-credit reached contractual floors for their interest
rates, allowing the yield for the Warehouse portfolio to remain higher than it
otherwise would have been by contractual formula. Due to increasing competitive
pressures, however, the Company began lowering the contractual interest-rate
floors on its Warehouse lines during the third quarter of 2021. Management
expects these lower floors to have a negative impact on the Warehouse net
interest margin going forward.





                                       79

  Table of Contents

Republic Credit Solutions segment

RCS's net interest income increased $321,000, or 6%, from the third quarter of
2020 to the third quarter of 2021. The increase was driven primarily by an
increase in fee income from RCS's LOC I product. Loan fees on this product,
recorded as interest income on loans, increased to $4.2 million during the third
quarter of 2021 compared to $4.0 million during the same period in 2020 and
accounted for 77% and 76% of all RCS interest income on loans during the
periods. The increase in loan fees was the direct result of a change in
marketing strategy for the product from period to period.

Future loan fee income from RCS's LOC I product may be negatively impacted by
the on-going COVID-19 pandemic.

                                       80

  Table of Contents

Table 2 - Total Company Average Balance Sheets and Interest Rates from
Continuing Operations





                                              Three Months Ended September 30, 2021                Three Months Ended September 30, 2020
                                               Average                         Average              Average                         Average

(dollars in thousands)                         Balance          Interest        Rate                Balance          Interest        Rate

ASSETS (1)

Interest-earning assets:
Federal funds sold and other
interest-earning deposits                  $       924,859     $       359 

0.16 % $ 313,281 $ 94 0.12 %
Investment securities, including FHLB
stock (2)

                                          555,934           1,928        1.39                  600,943           2,363        1.57
Intercompany funds loaned to
discontinued operations                              5,964               4        0.27                    2,316               1        0.17
RCS LOC I product (3) (7)                           19,231           4,166       86.65                   17,369           3,996       92.03
Other RPG loans (7)                                109,317           1,212        4.43                   97,379           1,137        4.67
Outstanding Warehouse lines of credit
(4) (7)                                            717,036           6,698        3.74                  860,420           7,966        3.70
Paycheck Protection Program loans (5)
(7)                                                185,931           5,668       12.19                  513,201           3,497        2.73
All other Core Bank loans (6) (7)                3,373,085          33,665        3.99                3,419,261          36,851        4.31

Total interest-earning assets                    5,891,357          53,700        3.65                5,824,170          55,905        3.84

Allowance for credit losses                       (61,562)                                             (55,213)

Noninterest-earning assets:
Noninterest-earning cash and cash
equivalents                                        133,743                                               92,731
Premises and equipment, net                         38,242                                               42,167
Bank owned life insurance                           99,386                 

                             67,447
Other assets (2)                                   186,848                                              180,236
Total assets                               $     6,288,014                                      $     6,151,538

LIABILITIES AND STOCKHOLDERS' EQUITY
(1)

Interest-bearing liabilities:
Transaction accounts                       $     1,569,407     $        91        0.02 %        $     1,366,830     $       178        0.05 %
Money market accounts                              822,190              96        0.05                  734,203             235        0.13
Time deposits                                      298,179             835        1.12                  409,088           2,025        1.98
Reciprocal money market and time
deposits                                           188,357             124        0.26                  292,948             378        0.52
Brokered deposits                                   30,001               2        0.03                  135,994              60        0.18

Total interest-bearing deposits                  2,908,134           1,148        0.16                2,939,063           2,876        0.39

SSUARs                                             242,867              21        0.03                  213,010              22        0.04
Intercompany funds borrowed from
discontinued operations                             43,259              50        0.46                   28,732              70        0.97
Federal Reserve PPP Liquidity Facility                   -               -           -                   53,338              48        0.36
Federal Home Loan Bank advances                     25,000               6        0.10                  126,250             658        2.08
Subordinated note                                   40,792             166        1.63                   41,240             182        1.77

Total interest-bearing liabilities               3,260,052           1,391        0.17                3,401,633           3,856        0.45

Noninterest-bearing liabilities and
Stockholders' equity:
Noninterest-bearing deposits                     2,074,941                 

                          1,817,820
Other liabilities                                  104,086                                              120,734
Stockholders' equity                               848,935                                              811,351
Total liabilities and stockholders'
equity                                     $     6,288,014                                      $     6,151,538

Net interest income                                            $    52,309                                          $    52,049

Net interest spread                                                               3.48 %                                               3.39 %

Net interest margin                                                               3.55 %                                               3.57 %




    The table above excludes average assets, average liabilities, interest

income, and interest expense for discontinued operations; however, loans to

and borrowings from discontinued operations are included above based on the
(1) Company's funds transfer pricing methodology. Net interest income would be

$52.4 million and $52.3 million and net interest margin would be 3.56% and

3.59% for the quarters ended September 30, 2021 and 2020 if continuing and

discontinued operations were consolidated above.

(2) For the purpose of this calculation, the fair market value adjustment on debt

securities is included as a component of other assets.

(3) Interest income is entirely composed of loan fees.

(4) Interest income includes loan fees of $779,000 and $942,000 for the quarters

ended September 30, 2021 and 2020.

(5) Interest income includes loan fees of $5.2 million and $2.1 million for the

quarters ended September 30, 2021 and 2020.

(6) Interest income includes loan fees of $1.2 million and $680,000 for the

quarters ended September 30, 2021 and 2020.

Average balances for loans include the principal balance of nonaccrual loans
(7) and loans held for sale, and are inclusive of all loan premiums, discounts,

    fees and costs.




                                       81

  Table of Contents

Table 3 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 from continuing operations
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 from Continuing Operations




                                              Three Months Ended September 30, 2021
                                                           Compared to
                                              Three Months Ended September 30, 2020
                                       Total Net          Increase / (Decrease) Due to
(in thousands)                           Change             Volume               Rate

Interest income:

Federal funds sold and other
interest-earning deposits             $        265     $            230      $          35
Investment securities, including
FHLB stock                                   (435)                (169)              (266)
Intercompany funds loaned to
discontinued operations                          3                    2                  1
RCS LOC I product                              170                  412              (242)
Other RPG loans                                 75                  135               (60)
Outstanding Warehouse lines of
credit                                     (1,268)              (1,339)                 71
Paycheck Protection Program loans            2,171              (3,432)    

         5,603
All other Core Bank loans                  (3,186)                (492)            (2,694)
Net change in interest income              (2,205)              (4,653)              2,448

Interest expense:

Transaction accounts                          (87)                   24              (111)
Money market accounts                        (139)                   26              (165)
Time deposits                              (1,190)                (457)              (733)
Reciprocal money market and time
deposits                                     (254)                (107)              (147)
Brokered deposits                             (58)                 (28)               (30)
SSUARs                                         (1)                    3                (4)
Intercompany funds borrowed from
discontinued operations                       (20)                   27               (47)
Federal Reserve PPP Liquidity
Facility                                      (48)                 (48)                  -

Federal Home Loan Bank advances              (652)                (298)    

(354)

Subordinated note                             (16)                  (5)    

(11)

Net change in interest expense             (2,465)                (863)    

(1,602)

Net change in net interest income $ 260 $ (3,790)

 $       4,050

* The table above does not consider average assets, average liabilities,
interest income, and interest expense for discontinued operations.

                                       82

  Table of Contents

Provision

Total Company Provision from continuing operations was a net charge of $3.6
million for the third quarter of 2021 compared to a net charge of $5.8 million
for the same period in 2020. Provision from discontinued operations was a net
credit of $2.3 million for the third quarter of 2021 compared to a net credit of
$4.3 million for the same period in 2020.

The following were the most significant components comprising the Company's
Provision by reportable segment:

Traditional Banking segment



The Traditional Banking Provision during the third quarter of 2021 was a net
credit of $44,000 compared to a net charge of $5.9 million for the third quarter
of 2020. An analysis of the Provision for the third quarter of 2021 compared to
the same period in 2020 follows:

For the third quarter of 2021, the Traditional Bank's net credit to the

? Provision was primarily driven by net loan loss recoveries of $167,000 for the

quarter. Loan loss recoveries were positively impacted by a $286,000 recovery

   from one borrower.

During the third quarter of 2020, the Traditional Bank recorded $5.6 million of

additional Provision due to the expected economic impact of the COVID-19

? pandemic. Offsetting the increase in Provision due to the impact of the

COVID-19 pandemic during the third quarter of 2020 was a reduction in Provision

of $1.2 million consistent with an $83 million decrease in Traditional Bank

   non-PPP loan spot balances during the same quarter.




As a percentage of total Traditional Bank loans, the Traditional Banking ACLL
was 1.42% as of September 30, 2021 compared to 1.34% as of December 31, 2020 and
1.26% as of September 30, 2020. The Company believes, based on information
presently available, that it has adequately provided for Traditional Banking
loan losses as of September 30, 2021.

See the sections titled "Allowance for Credit Losses" and "Asset Quality" in
this section of the filing under "Comparison of Financial Condition" for
additional discussion regarding the Provision and the Bank's credit quality.

Warehouse Lending segment



Warehouse recorded a net credit to the Provision of $223,000 for the third
quarter of 2021 compared to a net credit of $3,000 for the same period in 2020.
Provision for both periods reflected changes in general reserves consistent with
changes in outstanding period-end balances. Outstanding Warehouse period-end
balances decreased $89 million during the third quarter of 2021 compared to a
decrease of $1 million during the third quarter of 2020.



As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was
0.25% as of September 30, 2021, December 31, 2020, and September 30, 2020. The
Company believes, based on information presently available, that it has
adequately provided for Warehouse loan losses as of September 30, 2021.



Tax Refund Solutions segment



Discontinued Operations

TRS recorded a net credit to the Provision from discontinued operations of $2.3
million during the third quarter of 2021 compared to a net credit of $4.3
million for the same period in 2020. These credits to the Provision primarily
reflected recoveries on EA loans charged off during the first six months of the
year. While TRS experienced a higher rate of EAs charged-off during the first
six months of 2020 than the comparable six months in 2021, it also experienced a
higher rate of EA recoveries during the third quarter of 2020 than the
comparable quarter of 2021. Management believes the higher rate of EAs
charged-off through the first six months of 2020 and recovered during the third
quarter of 2020 was directly related to the impact of the COVID-19 pandemic and
the resulting delay in tax return processing by the IRS for certain types of tax
returns that require further taxpayer communication and verification.



With the third quarter EA paydowns, the percent of unpaid EAs to total EAs
originated was 3.19% as of September 30, 2021. This compares to 3.93% as of
September 30, 2020, a positive difference of 74 basis points. With all unpaid
EAs having been charged off as of June 30, 2021, any EA payments received during
the fourth quarter of 2021 will continue to represent recovery credits directly
to income from discontinued operations.



                                       83

  Table of Contents

See additional detail regarding the EA product under Footnote 4 "Loans and
Allowance for Credit Losses" of Part I Item 1 "Financial Statements."

Republic Credit Solutions segment

As illustrated in Table 4 below, RCS recorded a net charge to the Provision of
$3.8 million during the third quarter of 2021 compared to a net credit to the
Provision of $12,000 for the same period in 2020. The negative swing in the
Provision was driven by a $6.0 million increase in outstanding balances for
RCS's lines of credit during the third quarter of 2021 compared to a $1.3
million decrease in similar balances during the third quarter of 2020. The
Company reduced marketing for its LOC I product during the second and third
quarters of 2020, then began incrementally increasing such marketing during the
fourth quarter of 2020. The Company began offering its LOC II product during the
first quarter of 2021.

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 9.99% as of September 30, 2021, 7.94% as of December 31,
2020, and 7.82% as of September 30, 2020. The Company believes, based on
information presently available, that it has adequately provided for RCS loan
losses as of September 30, 2021.

The following table presents net charges to the RCS Provision from continuing
operations by product:

Table 4 - RCS Provision by Product

                          Three Months Ended Sep. 30,
(in thousands)               2021               2020         $ Change    % Change
Product:
Lines of credit        $          3,830     $        (40)   $    3,870         NM %
Hospital receivables               (10)                28         (38)      (136)
Total                  $          3,820     $        (12)   $    3,832         NM %






                                       84

  Table of Contents

Table 5 - Summary of Loan and Lease Loss Experience

                                                            Three Months Ended
                                                              September 30,
(dollars in thousands)                                      2021           2020

ACLL at beginning of period                              $    60,291    $   55,097

Charge-offs:

Traditional Banking:
Residential real estate                                            -          (13)
Commercial & industrial                                         (35)         (255)
Home equity                                                        -          (14)
Consumer                                                       (279)         (227)
Total Traditional Banking                                      (314)         (509)
Warehouse lines of credit                                          -             -
Total Core Banking                                             (314)         (509)

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                                      -             -
Other TRS loans                                                    -          (22)
Republic Credit Solutions                                    (1,064)         (684)

Total Republic Processing Group                              (1,064)       

 (706)
Total charge-offs                                            (1,378)       (1,215)

Recoveries:

Traditional Banking:
Residential real estate                                          329            28
Commercial real estate                                             3             -
Commercial & industrial                                           16            80
Home equity                                                        5            21
Consumer                                                         128            77
Total Traditional Banking                                        481           206
Warehouse lines of credit                                          -             -
Total Core Banking                                               481           206

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                                  2,242         4,294
Other TRS loans                                                   19             -
Republic Credit Solutions                                         75            83

Total Republic Processing Group                                2,336       

 4,377

Total recoveries                                               2,817         4,583

Net loan recoveries (charge-offs)                              1,439       

3,368

Provision from continuing operations- Core Banking             (265)       

5,780

Provision from continuing operations - RPG                     3,820       

(12)

Provision from discontinued operations - RPG                 (2,261)      

(4,342)
Total Provision                                                1,294         1,426
ACLL at end of period                                    $    63,024    $   59,891

Credit Quality Ratios - Total Company:

ACLL to total loans                                             1.45 %        1.20 %
ACLL to nonperforming loans                                      301       

284

Net loan charge-offs (recoveries) to average loans            (0.13)       

(0.27)

Net loan charge-offs from continuing operations to
average loans                                                   0.07       

0.07

Credit Quality Ratios - Core Banking:

ACLL to total loans                                             1.22 %        1.05 %
ACLL to nonperforming loans                                      254       

245

Net loan charge-offs (recoveries) to average loans            (0.02)       

  0.03






                                       85

  Table of Contents

Noninterest Income

Total Company noninterest income from continuing operations decreased $1.4
million during the third quarter of 2021 compared to the same period in 2020.
Noninterest income from discontinued operations increased $147,000, or 12%
comparing the same periods.

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

Traditional Banking segment



Traditional Banking's noninterest income increased $970,000, or 14%, for the
third quarter of 2021 compared to the same period in 2020. Interchange Fee
Income increased $326,000 from the third quarter of 2020 to the same period in
2021, while Service Charges on Deposit Accounts increased $262,000 comparing the
same periods. Service Charges on Deposit Accounts were below normal levels
during the third quarter of 2020, as a pandemic-driven rise in the consumer
savings rates drove a reduction in the Bank's overdraft-related fees. Both
Interchange Fee Income and Service Charges on Deposits began to trend upward
toward more normal levels during the first quarter of 2021 following the removal
of many pandemic-related restrictions.



The 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 Accounts
for the three months ended September 30, 2021 and 2020 were $1.6 million and
$1.3 million. The total daily overdraft charges, net of refunds, included in
interest income for the three months ended September 30, 2021 and 2020 were
$304,000 and $99,000. The Bank suspended its daily overdraft charges during 2020
to soften the economic hardship of the COVID-19 pandemic on its clients. The
Bank reinstituted the charging of its daily overdraft fee on September 1, 2020.



Mortgage Banking segment

Mortgage Banking income decreased from $10.8 million for the third quarter of
2020 to $5.3 million for the third quarter of 2021. For the third quarter of
2021, the Core Bank originated $170 million in secondary market loans and
achieved an average cash gain-as-a-percent-of-loans-sold during the quarter of
2.94%, with both figures solid by normal historical comparisons. During the
third quarter of 2020, however, secondary market originations were $204 million
with comparable gains-as-a-percent-of-loans-sold of 4.49%. Favorable market
conditions during the third quarter of 2020 brought on by the COVID pandemic
drove gains-as-a-percent-of-loans-sold to all-time record highs for the Core
Bank and, in general, the entire mortgage industry.

Republic Credit Solutions segment

RCS's noninterest income increased $2.9 million during the third quarter of 2021
compared to the same period in 2020, with program fees representing the entirety
of RCS's noninterest income. Pandemic-driven restrictions negatively impacted
RCS program fees during the third quarter of 2020, with those program fees
beginning to normalize during 2021 following the removal of restrictions.





                                       86

  Table of Contents

The following table presents RCS program fees by product:

Table 6 - RCS Program Fees by Product

                          Three Months Ended Sep. 30,
(in thousands)               2021                2020        $ Change    % Change
Product:
Lines of credit        $           2,046     $        752   $    1,294        172 %
Hospital receivables                  62               45           17         38
Installment loans*                 1,659               47        1,612         NM
Total                  $           3,767     $        844   $    2,923        346 %

* The Company has elected the fair value option for this product, with

mark-to-market adjustments recorded as a component of program fees.

Noninterest Expense

Total Company noninterest expense from continuing operations decreased $1.2
million during the third quarter of 2021 compared to the same period in 2020.
Noninterest expense from discontinued operations decreased $87,000 comparing the
same periods.

The following were the most significant components comprising the increase in
noninterest expense by reportable segment:

Traditional Banking segment

Traditional Banking noninterest expense decreased $488,000, or 1%, for the third
quarter of 2021 compared to the same period in 2020. The following primarily
drove the change in noninterest expense:

Bank Franchise Tax expense decreased $661,000. As previously reported, Kentucky

? enacted HB354 in March 2019 and as a result, the Bank transitioned from a

capital-based bank franchise tax to corporate income tax on January 1, 2021 for

   Kentucky state taxes.

Other expenses decreased $717,000. Within this decrease, Provision for credit

losses on off-balance sheet credit exposures decreased $283,000, driven by

lower expected usage rates on the Bank's committed credit lines coupled with a

? generally improving economic outlook. Additionally, within the other expenses

line item, the following expenses experienced decreases: fraud-related

expenses, supplies, freight, core deposit amortization, and ATM promotions,

with most of these decreases generally driven by the impact of the ongoing

   pandemic.

Salaries and Benefits increased from $21.1 million during the third quarter of

2020 to $21.7 million for the third quarter of 2021, driven primarily by annual

merit increases, which averaged approximately 3%, along with higher

? equity-based compensation expenses. These increases to compensation expense

were partially offset by lower salaries resulting from a reduction in full-time

equivalent employees, which decreased from 976 FTEs as of December 31, 2020 to

   949 FTEs as of September 30, 2021.




Warehouse Lending segment



Noninterest expense at the Warehouse segment decreased $819,000 during the third
quarter of 2021 compared to the same period in 2020, primarily due to higher
incentive compensation expense recorded during 2020, generally due to higher
Warehouse client loan volumes during 2020.



Mortgage Banking segment

Noninterest expense at the Mortgage Banking segment increased $425,000, or 15%,
during the third quarter of 2021 compared to the same period in 2020, primarily
due to higher mortgage commissions recorded during 2021, as the Company
broadened the base of associates eligible to receive commissions during 2021.



                                       87

  Table of Contents

OVERVIEW (Nine Months Ended September 30, 2021 Compared to Nine Months Ended
September 30, 2020)

Total Company net income for the first nine months of 2021 was $70.0 million, a
$7.1 million, or 11%, increase from the same period in 2020. Diluted EPS
increased to $3.39 for the nine months of September 30, 2021 compared to $3.02
for the same period in 2020.

Net income from continuing operations was $55.2 million for the first nine
months of 2021, a $5.9 million increase from the same period in 2020. Diluted
EPS from continuing operations increased to $2.68 for the nine months ended
September 30, 2021 compared to $2.37 for the same period in 2020. The increase
in net income and net income from continuing operations primarily reflected a
positive reduction in Provision partially offset by a decrease in Mortgage
Banking income and net interest income.

The following are general highlights by reportable segment. Discontinued
operations for the periods discussed relate entirely to the TRS segment.

See additional detail regarding the Bank's agreement to sell TRS under Footnote
17 "Discontinued Operations" of Part I Item 1 "Financial Statements."

Traditional Banking segment

? Net income increased $12.9 million, or 100%, for the first nine months of 2021

compared to the same period in 2020.

? Net interest income increased $1.3 million, or 1%, for the first nine months of

   2021 compared to the same period in 2020.

Provision had a $14.7 million positive swing to a net credit of $126,000 for

? the first nine months of 2021 compared to a net charge of $14.5 million for the

   same period in 2020.

? Noninterest income increased $2.4 million, or 12%, for the first nine months of

2021 compared to the same period in 2020.

? Total noninterest expense increased $442,000 for the first nine months of 2021

compared to same period in 2020.

? Total Traditional Bank loans decreased $239 million, or 6%, during the first

nine months of 2021, driven primarily by a $266 million decrease in PPP loans.

? Total nonperforming loans to total loans for the Traditional Banking segment

was 0.58% as of September 30, 2021 compared to 0.63% as of December 31, 2020.

? Delinquent loans to total loans for the Traditional Banking segment was 0.22%

as of September 30, 2021 compared to 0.26% as of December 31, 2020.

? Total Traditional Bank deposits increased $188 million, or 4%, during the first

   nine months of 2021.




Warehouse Lending segment

? Net income increased $2.5 million, or 24%, for the first nine months of 2021

compared to the same period in 2020.

? Net interest income increased $1.7 million, or 9%, for the first nine months of

2021 compared to the same period in 2020.

? The Warehouse Provision was a net credit of $530,000 for the first nine months

of 2021 compared to a net charge of $778,000 for the same period in 2020.

? Average committed Warehouse lines increased to $1.4 billion during the first

   nine months of 2021 from $1.2 billion during the same period in 2020.

? Average line usage was 52% during the first nine months of 2021 compared to 65%

   during the same period in 2020.




                                       88

  Table of Contents

Mortgage Banking segment

Within the Mortgage Banking segment, mortgage banking income decreased $7.3

? million, or 31%, during the first nine months of 2021 compared to the same

   period in 2020.

Overall, Republic's originations of secondary market loans totaled $525 million

? during the first nine months of 2021 compared to $548 million during the same

period in 2020, with the Company's gain-as-a-percent-of-loans-sold decreasing

   from 4.57% to 3.11% from period to period.




Tax Refund Solutions segment



Continuing Operations

Net loss from continuing operations was $834,000 for the first nine months of

2021 compared to a net loss of $1.7 million for the same period in 2020. The

higher loss during the first nine months of 2020 primarily reflected general

? operating losses related to TRS's prepaid card division, with such losses

substantially occurring prior to May 1, 2020. On May 1, 2020, the RPS division

added a large depository relationship that significantly improved profitability

   on a subsequent basis.




Discontinued Operations

? Net income from discontinued operations increased $1.2 million, or 9%, for the

first nine months of 2021 compared to the same period in 2020.

? Net interest income from discontinued operations decreased $5.9 million, or

28%, for the first nine months of 2021 compared to the same period in 2020.

? Total EA originations were $250 million during the first nine months of 2021

compared to $388 million for the first nine months of 2020.

Overall, TRS recorded a net charge to the Provision from discontinued

? operations of $7.9 million during the first nine months of 2021 compared to a

net charge to the Provision of $15.2 million for the same period in 2020.

? Noninterest income from discontinued operations increased $76,000 for the first

nine months of 2021 compared to the same period in 2020.

? Net RT revenue increased $54,000 for the first nine months of 2021 compared to

   the same period in 2020.

? Noninterest expense from discontinued operations was $7.7 million for the first

nine months of 2021 compared to $8.2 million for the same period in 2020.

Republic Credit Solutions segment

? Net income decreased $2.9 million, or 21%, for the first nine months of 2021

compared to the same period in 2020.

? Net interest income decreased $2.9 million, or 16%, for the first nine months

   of 2021 compared to the same period in 2020.

Overall, RCS recorded a net charge to the Provision of $5.0 million during the

? first nine months of 2021 compared to a net charge of $251,000 for the same

   period in 2020.

? Noninterest income increased $4.3 million, or 116%, from the first nine months

of 2020 to the first nine months of 2021.

? Noninterest expense was $3.0 million for the first nine months of 2021 and $3.0

million for the same period in 2020.

? Total nonperforming loans to total loans for the RCS segment was 0.59% as of

September 30, 2021 compared to 0.04% as of December 31, 2020.

                                       89

  Table of Contents

? Delinquent loans to total loans for the RCS segment was 8.31% as of September

   30, 2021 compared to 9.23% as of December 31, 2020.

RESULTS OF OPERATIONS (Nine Months Ended September 30, 2021 Compared to Nine
Months Ended September 30, 2020)

Net Interest Income



Banking operations are significantly dependent upon net interest income. Net
interest income is the difference between interest income on interest-earning
assets, such as loans and investment securities and the interest expense on
interest-bearing liabilities used to fund those assets, such as interest-bearing
deposits, securities sold under agreements to repurchase, and FHLB advances. Net
interest income is impacted by both changes in the amount and composition of
interest-earning assets and interest-bearing liabilities, as well as market
interest rates.

See the section titled "Asset/Liability Management and Market Risk" in this
section of the filing regarding the Bank's interest rate sensitivity.

A large amount of the Company's financial instruments track closely with, or are
primarily indexed to, either the FFTR, Prime, or LIBOR. These market rates
trended lower since the first quarter of 2020 and the onset of COVID-19
pandemic, as the FOMC reduced the FFTR to approximately 25 basis points during
2020. The FOMC has provided on-going guidance that it is unlikely the FFTR will
be increased in the near term.



Additional increases in short-term interest rates and overall market rates are
generally believed by management to be favorable to the Bank's net interest
income and net interest margin in the near term, while additional decreases in
short-term interest rates and overall market rates are generally believed by
management to be unfavorable to the Bank's net interest income and net interest
margin in the near term. Increases in short-term interest rates, however, could
have a negative impact on net interest income and net interest margin if the
Bank is unable to maintain its deposit balances and the cost of those deposits
at the levels assumed in its interest-rate-risk model. In addition, a flattening
or inversion of the yield curve, causing the spread between long-term interest
rates and short-term interest rates to decrease, could negatively impact the
Company's net interest income and net interest margin. Unknown variables, which
may impact the Company's net interest income and net interest margin in the
future, include, but are not limited to, the actual steepness of the yield
curve, future demand for the Bank's financial products and the Bank's overall
future liquidity needs.

Total Company net interest income from continuing operations decreased $1.0
million, or 1%, during the first nine months of 2021 compared to the same period
in 2020. Total Company net interest margin from continuing operations decreased
to 3.46% during the first nine months of 2021 compared to 3.69% for the same
period in 2020. Net interest income from discontinued operations was $14.9
million during the first nine months of 2021 compared to $20.9 million during
the same period in 2020.

The following were the most significant components affecting the Company's net
interest income by reportable segment:

Traditional Banking segment



The Traditional Banking's net interest income increased $1.3 million for the
first nine months of 2021 compared to the same period in 2020. Traditional
Banking's net interest margin was 3.21% for the first nine months of 2021, a
decrease of 20 basis points from the same period in 2020.

Table 7 - Traditional Bank Net Interest Income and Net Interest Margin Excluding
PPP (Non-GAAP)

The Company earns fees and a coupon interest rate of 1.0% on its PPP portfolio.
Due to the short-term nature of the PPP, management believes Traditional Bank
net interest income excluding PPP fees and coupon interest is a more appropriate
measure to analyze the challenges within the Traditional Bank's net interest
income and net interest margin. The following table reconciles Traditional Bank
net interest income and net interest margin to Traditional Bank net interest
income and net interest margin excluding PPP fees and interest, a non-GAAP
measure. Net interest margin excluding PPP fees and interest presented below
also excludes average PPP loans of $299 million and $301 million for the nine
months ended September 30, 2021 and 2020.

                                       90

  Table of Contents





                                                                              Net Interest Income                                    Net Interest Margin
                                                               Nine Months Ended Sep. 30,                                   Nine Months Ended Sep. 30,
(dollars in thousands)                                           2021              2020        $ Change    % Change          2021              2020          Change

Traditional Banking - GAAP                                  $      119,677    $      118,409   $   1,268          1 %         3.21 %             3.41 %     (0.20) %
Less: PPP fees and interest                                         16,949             6,149      10,800        176           0.28             (0.05)         0.33

Traditional Banking ex PPP fees and interest - non-GAAP $ 102,728

  $      112,260   $ (9,532)        (8) %         2.93               3.46       (0.53)

The decrease in the Traditional Bank's net interest income and net interest
margin during the first nine months of 2021 was primarily attributable to the
following factors:

Traditional Bank net interest income, excluding PPP fees and interest,

decreased $9.5 million, or 8%, from the first nine months of 2020, as the

Traditional Bank's net interest margin, excluding PPP loans and related fees

and interest, declined from 3.46% for the first nine months of 2020 to 2.93%

? for the first nine months of 2021. The decline in the net interest margin was

substantially driven by an 83-basis point decline in the Traditional Bank's

yield on its average non-PPP interest-earning assets from the first nine months

of 2020 to the first nine months of 2021, as the majority of the Traditional

Bank's growth in interest-earning assets during the previous 12 months was in

   lower-yielding cash or cash equivalents instead of loans.

Partially offsetting the Traditional Bank's margin compression, the Traditional

Bank recognized $16.9 million of fees and interest on its PPP portfolio during

the first nine months of 2021 compared to $6.1 million of similar income during

the same period in 2020. The $10.8 million increase in PPP fees and interest

was driven significantly by the forgiveness, payoff, and paydown of $480

million of PPP loans during the first nine months of 2021. As of September 30,

? 2021, net PPP loans of $126 million remained on the Traditional Bank's balance

sheet, including $19 million in loan balances originated during 2020, $111

million in loan balances originated during 2021, and $4 million of unaccreted

PPP fees reported as a credit offset to these originated balances. Unaccreted

PPP fees will generally be recognized into income over the estimated remaining

   life of the PPP portfolio, with fee recognition accelerated if loans are
   forgiven or repaid earlier than estimated.




Warehouse Lending segment

Net interest income increased $2.5 million, or 24%, for the first nine months of
2021 compared to the same period in 2020.

Average committed Warehouse lines increased to $1.4 billion during the first
nine months of 2021 from $1.2 billion during the same period in 2020, while
overall usage rates on Warehouse lines of credit were 52% and 65%, respectively
for the same periods. In addition, the Warehouse net interest margin increased
to 3.47% for the first nine months of 2021 compared to 3.07% for the first nine
months of 2020, as many of the Bank's Warehouse clients reached contractual
interest rate floors on their lines-of-credit during the first nine months of
2020 preventing further declines in the segment's loan yields, while the
segment's cost of funds continued to decline. Due to increasing competitive
pressures, the Company began lowering the contractual interest-rate floors on
its Warehouse lines during 2021. Management expects these lower floors to have a
negative impact on the Warehouse net interest margin going forward.



Tax Refund Solutions segment



Discontinued Operations



TRS's net interest income from discontinued operations decreased $5.9 million
for the first nine months of 2021 compared to the same period in 2020. TRS's EA
product earned $13.2 million in interest income during the first nine months of
2021, a $6.4 million decrease from the first nine months of 2020 resulting
primarily from a $138 million decrease in EA originations from period to period.
Management believes that economic impact (stimulus) payments, pandemic health
risks, and a two-week delay in the start to the 2021 tax season, all, in varying
degrees, negatively impacted demand for its EA product during the first nine
months of 2021.

See additional detail regarding the EA product under Footnote 4 "Loans and
Allowance for Credit Losses" of Part I Item 1 "Financial Statements."

                                       91

  Table of Contents

Republic Credit Solutions segment

RCS's net interest income decreased $2.9 million, or 16%, from the first nine
months of 2020 to the first nine months of 2021. The decrease was driven
primarily by a decline in fee income from RCS's LOC I product. Loan fees on this
product, recorded as interest income on loans, decreased to $11.5 million during
the first nine months of 2021 compared to $14.7 million during the same period
in 2020 and accounted for 76% and 78% of all RCS interest income on loans during
the periods. The decrease in loan fees was the direct result of a decline in
balances for RCS's LOC I product following a reduction of marketing for this
product during the second and third quarters of 2020. While the marketing for
this product was reinstated during the fourth quarter of 2020, management
believes the ongoing impact of government stimulus payments continued to reduce
demand for this product during the first six months of 2021.

Future loan fee income from RCS's LOC I product will likely continue to be
negatively impacted by the on-going COVID-19 pandemic.

                                       92

  Table of Contents

Table 8 - Total Company Average Balance Sheets and Interest Rates from
Continuing Operations




                                              Nine Months Ended September 30, 2021                 Nine Months Ended September 30, 2020
                                               Average                         Average              Average                         Average

(dollars in thousands)                         Balance           Interest       Rate                Balance           Interest       Rate

ASSETS (1)

Interest-earning assets:
Federal funds sold and other
interest-earning deposits                  $       792,858     $        774

0.13 % $ 273,604 $ 818 0.40 %
Investment securities, including FHLB
stock (2)

                                          560,780            5,860       1.39                  575,575            8,191       1.90
Intercompany funds loaned to
discontinued operations                            108,228              199       0.25                  103,442            1,131       1.46
RCS LOC I product (3) (7)                           16,885           11,505      90.85                   21,300           14,692      91.97
Other RPG loans (7)                                105,292            3,539       4.48                   92,803            3,519       5.06
Outstanding Warehouse lines of credit
(4) (7)                                            744,522           20,892       3.74                  770,454           22,305       3.86
Paycheck Protection Program loans (5)
(7)                                                299,458           16,949       7.55                  300,733            6,149       2.73
All other Core Bank loans (6) (7)                3,349,804          100,548       4.00                3,508,851          117,637       4.47

Total interest-earning assets                    5,977,827          160,266       3.57                5,646,762          174,442       4.12

Allowance for credit loss                         (60,682)                                             (52,652)

Noninterest-earning assets:
Noninterest-earning cash and cash
equivalents                                        117,763                                               94,679
Premises and equipment, net                         38,845                                               43,836
Bank owned life insurance                           88,414                 

                             67,061
Other assets (2)                                   173,927                                              148,773
Total assets                               $     6,336,094                                      $     5,948,459

LIABILITIES AND STOCKHOLDERS' EQUITY
(1)

Interest-bearing liabilities:
Transaction accounts                       $     1,551,690     $        266       0.02 %        $     1,253,811     $      1,019       0.11 %
Money market accounts                              776,448              292       0.05                  741,205            1,725       0.31
Time deposits                                      305,456            2,871       1.25                  417,171            6,370       2.04
Reciprocal money market and time
deposits                                           273,312              585       0.29                  263,681            1,432       0.72
Brokered deposits                                   38,864               23       0.08                  176,127            1,752       1.33

Total interest-bearing deposits                  2,945,770            4,037       0.18                2,851,995           12,298       0.57

Securities sold under agreements to
repurchase and other short-term
borrowings                                         201,992               37       0.02                  199,556              158       0.11
Intercompany funds borrowed from
discontinued operations                            102,190              313       0.41                  132,497            1,543       1.55
Federal Reserve PPP Liquidity Facility                   -                -          -                   58,683              153       0.35
Federal Home Loan Bank advances                     30,989               47       0.20                  253,157            3,128       1.65
Subordinated note                                   41,089              507       1.65                   41,240              829       2.68

Total interest-bearing liabilities               3,322,030            4,941       0.20                3,537,128           18,109       0.68

Noninterest-bearing liabilities and
Stockholders' equity:
Noninterest-bearing deposits                     2,061,144                 

                          1,506,109
Other liabilities                                  108,035                                              109,339
Stockholders' equity                               844,885                                              795,883
Total liabilities and stock-holders'
equity                                     $     6,336,094                                      $     5,948,459

Net interest income                                            $    155,325                                         $    156,333

Net interest spread                                                               3.37 %                                               3.44 %

Net interest margin                                                               3.46 %                                               3.69 %



    The table above excludes average assets, average liabilities, interest

income, and interest expense for discontinued operations; however, loans to

and borrowings from discontinued operations are included above based on the
(1) Company's funds transfer pricing methodology. Net interest income would be

$170.3 million and $177.2 million and net interest margin would be 3.84% and

4.21% for the nine months ended September 30, 2021 and 2020 if continuing and

discontinued operations were consolidated above.

(2) For the purpose of this calculation, the fair market value adjustment on debt

securities is included as a component of other assets.

(3) Interest income is composed entirely of loan fees.

(4) Interest income includes loan fees of $2.4 million and $2.4 million for the

nine months ended September 30, 2021 and 2020.

(5) Interest income includes loan fees of $14.6 million and $3.7 million for the

nine months ended September 30, 2021 and 2020.

(6) Interest income includes loan fees of $3.0 million and $2.4 million for the

nine months ended September 30, 2021 and 2020.

Average balances for loans include the principal balance of nonaccrual loans
(7) and loans held for sale, and are inclusive of all loan premiums, discounts,

    fees and costs.


                                       93

  Table of Contents

Table 9 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 9 - Total Company Volume/Rate Variance Analysis from Continuing Operations




                                               Nine Months Ended September 30, 2021
                                                            Compared to
                                               Nine Months Ended September 30, 2020
                                        Total Net          Increase / (Decrease) Due to
(in thousands)                           Change              Volume               Rate

Interest income:

Federal funds sold and other
interest-earning deposits             $        (44)     $             781     $       (825)
Investment securities, including
FHLB stock                                  (2,331)                 (205)           (2,126)
Intercompany funds loaned to
discontinued operations                       (932)                    50             (982)
RCS LOC I product                           (3,187)               (7,321)             4,134
Other RPG loans                                  20                   444             (424)
Outstanding Warehouse lines of
credit                                      (1,413)                 (739)  

(674)

Paycheck Protection Program loans            10,800                  (26)  

         10,826
All other Core Bank loans                  (17,089)               (5,164)          (11,925)
Net change in interest income              (14,176)              (12,180)           (1,996)

Interest expense:

Transaction accounts                          (753)                   198             (951)
Money market accounts                       (1,433)                    78           (1,511)
Time deposits                               (3,499)               (1,436)           (2,063)
Reciprocal money market and time
deposits                                      (847)                    51  

(898)

Brokered deposits                           (1,729)                 (784)  

(945)

Securities sold under agreements to
repurchase and other short-term
borrowings                                    (121)                     2  

(123)

Intercompany funds borrowed from
discontinued operations                     (1,230)                 (292)             (938)
Federal Reserve PPP Liquidity
Facility                                      (153)                 (153)                 -

Federal Home Loan Bank advances             (3,081)               (1,540)  

(1,541)

Subordinated note                             (322)                   (3)  

(319)

Net change in interest expense             (13,168)               (3,879)  

(9,289)

Net change in net interest income $ (1,008) $ (8,301)

$ 7,293

* The table above does not consider average assets, average liabilities,
interest income, and interest expense for discontinued operations.

                                       94

  Table of Contents

Provision

Total Company Provision from continuing operations was a net charge of $4.4
million for the first nine months of 2021 compared to a net charge of $15.6
million for the same period in 2020. Total Company Provision from discontinued
operations was a net charge of $7.9 million for the first nine months of 2021
compared to a net charge of $15.2 million for the same period in 2020.

The following were the most significant components comprising the Company's
Provision by reportable segment:

Traditional Banking segment

The Traditional Banking Provision during the first nine months of 2021 was a net
credit of $126,000 compared to a net charge of $14.5 million for the first nine
months of 2020. An analysis of the Provision for the first nine months of 2021
compared to the same period in 2020 follows:

For the first nine months of 2021, there was a minimal net credit to the

Traditional Bank Provision, generally based on an improving economic outlook in

conjunction with limited net charge-offs incurred by the Traditional Bank since

making significant life-of-loan reserves during 2020 following the onset of the

? pandemic. The net credit recorded during the first nine months of 2021

primarily included nominal ACLL releases for the residential real estate, CRE,

and HELOC portfolios offset by additional reserves for certain Special Mention

loans with continued signs of pandemic-related hardship through September 30,

   2021.

During the first nine months of 2020, the Traditional Bank recorded $17.7

million of additional Provision due to the expected economic impact of the

COVID-19 pandemic. Offsetting the increase in Provision due to the impact of

? the COVID-19 pandemic during the first nine months of 2020 was a reduction in

Provision of $3.2 million consistent with a $254 million decrease in

Traditional Bank loan spot balances from December 31, 2019 to September 30,

   2020.




As a percentage of total Traditional Bank loans, the Traditional Banking ACLL
was 1.42% as of September 30, 2021 compared to 1.34% as of December 31, 2020 and
1.26% as of September 30, 2020. The Company believes, based on information
presently available, that it has adequately provided for Traditional Banking
loan losses as of September 30, 2021.

See the sections titled "Allowance for Credit Losses" and "Asset Quality" in
this section of the filing under "Comparison of Financial Condition" for
additional discussion regarding the Provision and the Bank's credit quality.

Warehouse Lending segment



Warehouse recorded a net credit to the Provision of $530,000 for the first nine
months of 2021 compared to a net charge of $778,000 for the same period in 2020.
Provision for both periods reflected changes in general reserves consistent with
changes in outstanding period-end balances. Outstanding Warehouse period-end
balances decreased $212 million during the first nine months of 2021 compared to
an increase of $311 million during the first nine months of 2020.



As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was
0.25% as of September 30, 2021, December 31, 2020, and September 30, 2020. The
Company believes, based on information presently available, that it has
adequately provided for Warehouse loan losses as of September 30, 2021.



Tax Refund Solutions segment



Discontinued Operations

TRS recorded a net charge to the Provision from discontinued operations of $7.9
million during the first nine months of 2021 compared to a net charge of $15.2
million for the same period in 2020. Substantially all TRS Provision in both
periods was related to its EA product.



TRS's Provision for EA loan losses was $8.0 million, or 3.19% of its $250
million in EAs originated during the first nine months of 2021, compared to a
Provision of $15.2 million, or 3.93% of its $388 million in EAs originated
during the first nine months of 2020. The lower Provision during the first nine
months of 2021 resulted from repayment rates on EA loans from the U.S. Treasury
that exceeded those during the first nine months of 2020. Management believes
the slower repayment rates from the U.S. Treasury during

                                       95

Table of Contents

the first nine months of 2020 was directly related to the impact of the COVID-19
pandemic and the resulting delay in tax-return processing by the IRS for certain
types of tax returns that required further taxpayer communication and
verification.



EAs are only originated during the first two months of each year, with all
uncollected EAs charged off by June 30th of each year. EAs collected during the
second half of each year are recorded as recoveries of previously charged-off
loans.

See additional detail regarding the EA product under Footnote 4 "Loans and
Allowance for Credit Losses" of Part I Item 1 "Financial Statements."

Republic Credit Solutions segment

As illustrated in Table 10 below, RCS recorded a net charge to the Provision of
$5.0 million during the first nine months of 2021 compared to a net charge to
the Provision of $251,000 for the same period in 2020. The increase in the
Provision was driven by an increase in outstanding balances for RCS's lines of
credit during the first nine months of 2021 compared to a decrease in similar
balances during the same period in 2020. The Company reduced marketing for its
LOC I product during the second and third quarters of 2020, then began
incrementally increasing such marketing during the fourth quarter of 2020. The
Company began offering its LOC II product during the first quarter of 2021.



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 9.99% as of September 30, 2021, 7.94% as of December 31,
2020, and 7.82% as of September 30, 2020. The Company believes, based on
information presently available, that it has adequately provided for RCS loan
losses as of September 30, 2021.

The following table presents net charges to the RCS Provision by product:

Table 10 - RCS Provision by Product

                          Nine Months Ended Sep. 30,
(in thousands)              2021                 2020       $ Change    % Change
Product:
Lines of credit        $         5,036     $         214   $    4,822        NM %
Hospital receivables                 1                37         (36)      (97)
Total                  $         5,037     $         251   $    4,786        NM %






                                       96

  Table of Contents

Table 11 - Summary of Loan and Lease Loss Experience

                                                             Nine Months Ended
                                                               September 30,
(dollars in thousands)                                      2021           2020

ACLL at beginning of period                              $    61,067    $    43,351

Adoption of ASC 326                                                -          6,734

Charge-offs:

Traditional Banking:
Residential real estate                                            -           (40)
Commercial real estate                                         (428)          (270)
Commercial & industrial                                         (35)          (447)
Home equity                                                        -           (14)
Consumer                                                       (649)          (960)
Total Traditional Banking                                    (1,112)        (1,731)
Warehouse lines of credit                                          -              -
Total Core Banking                                           (1,112)        (1,731)

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                               (10,256)       (19,575)
Other TRS loans                                                 (51)           (94)
Republic Credit Solutions                                    (2,427)        (5,401)

Total Republic Processing Group                             (12,734)      

(25,070)
Total charge-offs                                           (13,846)       (26,801)

Recoveries:

Traditional Banking:
Residential real estate                                          376            116
Commercial real estate                                            82            472
Commercial & industrial                                           27            124
Home equity                                                       46            108
Consumer                                                         371            399
Total Traditional Banking                                        902          1,219
Warehouse lines of credit                                          -              -
Total Core Banking                                               902          1,219

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                                  2,272          4,336
Other TRS loans                                                   27              1
Republic Credit Solutions                                        247            553

Total Republic Processing Group                                2,546       

  4,890
Total recoveries                                               3,448          6,109

Net loan charge-offs                                        (10,398)       (20,692)

Provision from continuing operations- Core Banking             (532)       

15,008

Provision from continuing operations - RPG                     5,037       

251

Provision from discontinued operations - RPG                   7,850       

 15,239
Total Provision                                               12,355         30,498
ACLL at end of period                                    $    63,024    $    59,891

Credit Quality Ratios - Total Company:

ACLL to total loans                                             1.45 %         1.20 %
ACLL to nonperforming loans                                      301       

284

Net loan charge-offs to average loans                           0.30       

0.58

Net loan charge-offs from continuing operations to
average loans                                                   0.07       

0.15

Credit Quality Ratios - Core Banking:

ACLL to total loans                                             1.22 %         1.05 %
ACLL to nonperforming loans                                      254       

245

Net loan charge-offs to average loans                           0.01       

   0.01




                                       97

  Table of Contents

Noninterest Income



Total Company noninterest income from continuing operations increased $236,000
during the first nine months of 2021 compared to the same period in 2020. Total
Company noninterest income from discontinued operations increased $76,000 during
the first nine months of 2021 compared to the same period in 2020.

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

Traditional Banking segment



Traditional Banking's noninterest income increased $2.4 million, or 12%, for the
first nine months of 2021 compared to the same period in 2020. Interchange Fee
Income increased $1.4 million from the first nine months of 2020 to the same
period in 2021, while Service Charges on Deposit Accounts increased $612,000
comparing the same periods. Service Charges on Deposit Accounts were below
normal levels during the first nine months of 2020, as a pandemic-driven rise in
the consumer savings rate drove a reduction in the Bank's overdraft-related
fees. Both Interchange Fee Income and Service Charges on Deposits began to trend
upward toward more normal levels during the first quarter of 2021 following the
removal of pandemic-related restrictions.



The 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
nine months ended September 30, 2021 and 2020 were $4.0 million and $4.1
million. The total daily overdraft charges, net of refunds, included in interest
income for the nine months ended September 30, 2021 and 2020 were $810,000 and
$517,000. The Bank suspended its daily overdraft charges during the first nine
months of 2020 to soften the economic hardship of the COVID-19 pandemic on its
clients. The Bank reinstituted the charging of its daily overdraft fee on
September 1, 2020.



Mortgage Banking segment

Within the Mortgage Banking segment, mortgage banking income decreased $7.3
million, or 31%, during the first nine months of 2021 compared to the same
period in 2020. For the first nine months of 2021, the Core Bank originated $525
million in secondary market loans and achieved an average
gain-as-a-percent-of-loans-sold during the period of 3.11%, with comparable
originations of $548 million and comparable gains of 4.57% during the first nine
months of 2020. Favorable market conditions drove a higher gain percentage for
the Core Bank and the mortgage industry, in general, during the last nine months
of 2020 and for a portion of the first nine months of 2021. These favorable
conditions began to normalize during February 2021 causing the Core Bank's
gain-as-a-percentage-of-loans-sold to trend toward more normal historical levels
at or near 2.50%. Management believes this trend will likely continue during the
remainder of 2021.







                                       98

  Table of Contents

Republic Credit Solutions segment

RCS's noninterest income increased $4.3 million, or 116%, during the first nine
months of 2021 compared to the same period in 2020, with program fees
representing the entirety of RCS's noninterest income. Pandemic-driven
restrictions negatively impacted RCS program fees during the first nine months
of 2020, with those program fees beginning to normalize during 2021 following
the removal of restrictions.

The following table presents RCS program fees by product:

Table 12 - RCS Program Fees by Product

                         Nine Months Ended Sep. 30,
(in thousands)             2021             2020         $ Change    % Change
Product:
Lines of credit        $       4,168    $       2,199   $    1,969       90 %
Hospital receivables             173               53          120      226
Installment loans*             3,589            1,424        2,165       NM
Total                  $       7,930    $       3,676   $    4,254      116 %

* The Company has elected the fair value option for this product, with

mark-to-market adjustments recorded as a component of program fees.

Noninterest Expense



Total Company noninterest expense from continuing operations increased $905,000,
or 1%, during the first nine months of 2021 compared to the same period in 2020.
Total Company noninterest expense from discontinued operations decreased
$503,000 during the first nine months of 2021 compared to the same period in
2020.

The following were the most significant components comprising the increase in
noninterest expense by reportable segment:

Traditional Banking segment

Traditional Banking noninterest expense increased $442,000 for the first nine
months of 2021 compared to the same period in 2020. The following primarily
drove the change in noninterest expense:

Salaries and benefits expense increased approximately $2.4 million, or 4%,

? primarily driven by annual merit increases and increases in contract labor,

equity compensation, payroll taxes, and health benefits from period to period.

Technology, Equipment, and Communication expense increased $683,000, as the

? Traditional Bank strategically added 24 Interactive Teller Machines over the

previous 12 months, bringing its ITM fleet to over 70 ITMs as of September 30,

   2021.

Interchange-related expense increased $430,000, or 13%, as transaction volume

? began rising to normal levels during the first quarter of 2021 following the

   removal of pandemic-related restrictions.

Partially offsetting the increases above, Bank Franchise Tax expense decreased

? $1.6 million. As previously reported, Kentucky enacted HB354 in March 2019 and

as a result, the Bank transitioned from a capital-based bank franchise tax to

   the Kentucky corporate income tax on January 1, 2021.

Other expenses decreased $1.9 million. Within this decrease, Provision for

credit losses on off-balance sheet credit exposures decreased $518,000, driven

by lower expected usage rates on the Bank's committed credit lines coupled with

? a generally improving economic outlook. Additionally, within the other expenses

line item, the following expenses experienced decreases: fraud-related

expenses, supplies, freight, and ATM promotions, with most of these decreases

   generally driven by the impact of the ongoing pandemic.




Mortgage Banking segment



Noninterest expense at the Mortgage Banking segment increased $1.9 million, or
25%, during the first nine months of 2021 compared to the same period in 2020,
primarily due to higher mortgage commissions recorded during 2021.

                                       99

Table of Contents

COMPARISON OF FINANCIAL CONDITION AS OF SEPTEMBER 30, 2021 AND DECEMBER 31, 2020

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.
Republic had $1.0 billion in cash and cash equivalents as of September 30, 2021
compared to $486 million as of December 31, 2020. The growth in cash balances
was driven by continued growth in deposit balances along with a continued
general decline in loans. Given the near-term risk of inflation and rising
market interest rates, combined with the requirement that the term of the
investments would have to be extended in order to pick up a meaningful increase
in the overall yield, management chose to not redeploy significant excess cash
into the investment portfolio through September 30, 2021. During the fourth
quarter of 2021, however, management began evaluating potential changes to its
existing strategy for redeploying excess cash as a result of a recent steepening
of the yield curve.



For cash held at the FRB, the Bank earns a yield on amounts more than required
reserves. This yield was a weighted-average 0.13% for the first nine months of
2021. For cash held within the Bank's banking center and ATM networks, the

Bank
does not earn interest.

Table 13 - Loan Portfolio Composition

(in thousands)                            September 30, 2021      December 31, 2020     $ Change     % Change

Traditional Banking:
Residential real estate:
Owner occupied                           $            827,898    $           879,800   $  (51,902)        (6) %
Nonowner occupied                                     294,818                264,780        30,038         11
Commercial real estate                              1,393,241              1,349,085        44,156          3

Construction & land development                       105,968              

  98,674         7,294          7
Commercial & industrial                               333,795                325,596         8,199          3
Paycheck Protection Program                           126,271                392,319     (266,048)       (68)
Lease financing receivables                             9,427                 10,130         (703)        (7)
Aircraft                                              130,398                101,375        29,023         29
Home equity                                           215,282                240,640      (25,358)       (11)
Consumer:
Credit cards                                           14,781                 14,196           585          4
Overdrafts                                                753                    587           166         28
Automobile loans                                       17,533                 30,300      (12,767)       (42)
Other consumer                                          6,223                  8,167       (1,944)       (24)
Total Traditional Banking                           3,476,388              3,715,649     (239,261)        (6)
Warehouse lines of credit*                            750,682                962,796     (212,114)       (22)
Total Core Banking                                  4,227,070              4,678,445     (451,375)       (10)

Republic Processing Group*:
Tax Refund Solutions:
Easy Advances                                               -                      -             -         NA
Other TRS loans                                             1                      -             1         NA
Republic Credit Solutions                             116,711                110,893         5,818          5

Total Republic Processing Group                       116,712              

 110,893         5,819          5

Total loans**                                       4,343,782              4,789,338     (445,556)        (9)
Allowance for credit losses                          (63,024)               (61,067)       (1,957)          3

Total loans, net                         $          4,280,758    $         4,728,271   $ (447,513)        (9) %

*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.

                                      100

  Table of Contents

Gross loans decreased by $446 million, or 9%, during the first nine months of
2021 to $4.3 billion as of September 30, 2021. The most significant components
comprising the change in loans by reportable segment follow:



Traditional Banking segment



Period-end balances for Traditional Banking loans decreased $239 million, or 6%,
from December 31, 2020 to September 30, 2021. The following primarily drove the
change in loan balances during the first nine months of 2021:

During the first nine months of 2021, the Core Bank's PPP portfolio decreased

? $266 million, primarily reflecting the forgiveness and payoff of $382 million

of 2020 PPP originations and the net increase of $111 million of 2021 PPP loans

   during the first nine months of 2021.




The CARES Act was enacted in March 2020 and provided for the SBA's PPP, which
allowed the Bank to lend to its qualifying small business clients to assist them
in their efforts to meet their cash-flow needs during the COVID-19 pandemic. The
Economic Aid Act was enacted in December 2020 and provided for a second round of
PPP loans. PPP loans are fully backed by the SBA and may be entirely forgiven if
the loan client uses loan funds for qualifying reasons. As of September 30,
2021, net PPP loans of $126 million remained on the Traditional Bank's balance
sheet, including $19 million in loan balances originated during 2020, $111
million in loan balances originated during 2021, and $4 million of unaccreted
PPP fees reported as a credit offset to these originated balances. Unaccreted
PPP fees will generally be recognized into income over the estimated remaining
life of the PPP portfolio, with fee recognition accelerated if loans are
forgiven or repaid earlier than estimated. While no guarantee can be made as to
the overall remaining life of these loans, management believes the loans are
likely to remain on the Company's balance sheet less than one year, as it
expects the substantial majority of its clients to request forgiveness for their
loans at the earliest possible time, presuming these clients achieve the
required program metrics.

PPP loans have a stated maturity of two to five years, an annualized fixed
coupon rate of 1.0% to the client, are 100% guaranteed by the SBA, and 100%
forgivable to the client if certain program metrics are met. The Bank earns an
origination fee of 1%, 3%, or 5% based on the size of the loan.

The owner-occupied residential real estate and home equity categories decreased

$52 million and $25 million during the first nine months of 2021. These

? decreases largely reflect the impact of a sharp drop in long-term market

interest rates during the previous 12 months that drove an increase in

refinance volume for residential mortgages, with much of the refinance activity

   going into fixed-rate products sold on the secondary market.

Offsetting the decreases above, the CRE category increased $44 million and the

? Aircraft category increased $29 million, as lending activity began normalizing

following the removal of pandemic-driven restrictions during the first nine

   months of 2021.




Warehouse Lending segment



Outstanding Warehouse period end balances decreased $212 million from December
31, 2020 to September 30, 2021. Due to the volatility and seasonality of the
mortgage market, it is difficult to project future outstanding balances of
Warehouse lines of credit. The growth of the Bank's Warehouse Lending business
greatly depends on the overall mortgage market and typically follows industry
trends. Since its entrance into this business during 2011, the Bank has
experienced volatility in the Warehouse portfolio consistent with overall demand
for mortgage products. Weighted average quarterly usage rates on the Bank's
Warehouse lines have ranged from a low of 31% during the fourth quarter of 2013
to a high of 71% during the fourth quarter of 2019. On an annual basis, weighted
average usage rates on the Bank's Warehouse lines have ranged from a low of 40%
during 2013 to a high of 66% during 2020.

Allowance for Credit Losses

As of September 30, 2021, the Bank maintained an ACLL for expected credit losses
inherent in the Bank's loan portfolio, which includes overdrawn deposit
accounts. The Bank also maintained an ACLS and an ACLC for expected losses in
its securities portfolio and its off-balance sheet credit exposures,
respectively. Management evaluates the adequacy of the ACLL monthly, and the
adequacy of the ACLS and ACLC quarterly. All ACLs are presented and discussed
with the Audit Committee and the Board of Directors quarterly.



                                      101

  Table of Contents

The Company's ACLL increased $2 million from $61 million as of December 31, 2020
to $63 million as of September 30, 2021. As a percent of total loans, the total
Company's ACLL increased to 1.45% as of September 30, 2021 compared to 1.27% as
of December 31, 2020. An analysis of the ACL by reportable segment follows:

Traditional Banking segment

The Traditional Banking ACLL decreased approximately $212,000 to $49 million as

? of September 30, 2021 driven primarily by net charge-offs during the first nine

   months of 2021.

The Traditional Bank decreased its ACLS $124,000 during the first nine months

? of 2021 to $54,000 based on improved PD and LGD expectations on its corporate

   bond portfolios.

? The Traditional Bank decreased its ACLC $52,000 during the first nine months of

   2021 to $937,000 based on an improving economic outlook.




Warehouse Lending segment



The Warehouse ACLL decreased to approximately $1.9 million, and the Warehouse
ACLL to total Warehouse loans remained at 0.25% when comparing September 30,
2021 to December 31, 2020. As of September 30, 2021, the Warehouse ACLL was
entirely qualitative in nature with no adjustments to the qualitative reserve
percentage required for the first nine months of 2021.

Republic Credit Solutions segment

The RCS ACLL increased $3 million from $9 million as of December 31, 2020 to $12
million as of September 30, 2021, with this increase driven by growth in
balances on RCS's line-of-credit products.

RCS maintained an ACLL for two distinct credit products offered as of September
30, 2021, including its line-of-credit products and its healthcare-receivables
products. As of September 30, 2021, the ACLL to total loans estimated for each
RCS product ranged from as low as 0.25% for its healthcare-receivables products
to as high as 49% for its line-of-credit products. The lower reserve percentage
of 0.25% was provided for RCS's healthcare receivables, as such receivables have
recourse back to the third-party providers.



Asset Quality



COVID-19 Loan Accommodations

The CARES Act provided several forms of economic relief designed to defray the
impact of COVID-19. In April 2020, through its own independent relief efforts
and CARES Act provisions, the Company began offering loan accommodations through
deferrals and forbearances. These accommodations were generally under
three-month terms for commercial clients, with residential and consumer
accommodations in line with prevailing regulatory and legal parameters. Loans
that received an accommodation were generally not considered troubled debt
restructurings by the Company if such loans were not greater than 30 days past
due as of December 31, 2019.

As of September 30, 2021, $3 million, or less than 1% of the Company's
Traditional Bank portfolio remained under a COVID-19 hardship accommodation.

The ultimate long-term impact of the above accommodated loan balances on the
Company's Classified, Special Mention, nonperforming, and delinquent loans is
currently uncertain. When evaluating its borrowers for further accommodation,
the Bank considers prudent options based on the borrower's credit risk;
applicable federal and state laws and regulations, including COVID-related
accommodations provided by applicable federal, state, and local laws; and the
Bank's ability to ease cash flow pressures on the affected borrowers while
improving the Bank's likelihood of collection on its loans. If enough borrowers
were unable to meet their loan payment obligations at the end of their
accommodation periods and were also unable to further extend their accommodation
arrangements with the Bank, the Bank's Classified, Special Mention,
nonperforming, and delinquent loans would increase and negatively impact the
Company's overall operating performance.



                                      102

  Table of Contents

Classified and Special Mention Loans

The Bank applies credit quality indicators, or ratings, to individual loans
based on internal Bank policies. Such internal policies are informed by
regulatory standards. Loans rated "Loss," "Doubtful," "Substandard," and
PCD-Substandard are considered "Classified." Loans rated "Special Mention" or
PCD-Special Mention are considered Special Mention. The Bank's Classified and
Special Mention loans increased approximately $12 million during the first nine
months of 2021, driven primarily by commercial-purpose loans within the
hospitality and leisure industry downgraded to Special Mention during the first
nine months of 2021. As previously mentioned, the ultimate long-term impact of
loans accommodated due to COVID-19 on the Company's Classified and Special
Mention loans is currently uncertain.

See Footnote 4 "Loans and Allowance for Credit Losses" of Part I Item 1
"Financial Statements" for additional discussion regarding Classified and
Special Mention loans.

Table 14 - Classified and Special Mention Loans

(in thousands)                        September 30, 2021      December 31, 2020     $ Change    % Change

Loss                                 $                  -    $                 -   $        -          -
Doubtful                                                -                      -            -          -
Substandard                                        24,501                 30,193      (5,692)       (19) %
PCD - Substandard                                   1,739                  1,887        (148)        (8)
Total Classified Loans                             26,240                 32,080      (5,840)       (18)

Special Mention                                   107,227                 89,206       18,021         20
PCD - Special Mention                                 831                    895         (64)        (7)
Total Special Mention Loans                       108,058                 

90,101 17,957 20

Total Classified and Special
Mention Loans                        $            134,298    $           122,181   $   12,117         10






Nonperforming Loans



Nonperforming loans include loans on nonaccrual status and loans past due
90-days-or-more and still accruing. The nonperforming loan category includes
TDRs totaling approximately $6 million and $7 million as of September 30, 2021
and December 31, 2020.

Nonperforming loans to total loans remained at 0.48% from December 31, 2020 to
September 30, 2021. As previously mentioned, the ultimate long-term impact of
loans accommodated due to COVID-19 on the Company's nonperforming loans is

currently uncertain.





                                      103

  Table of Contents

Table 15 - Nonperforming Loans and Nonperforming Assets Summary

(in thousands)                                September 30, 2021        December 31, 2020

Loans on nonaccrual status*                  $             20,252      $            23,548
Loans past due 90-days-or-more and still
on accrual**                                                  691                       47
Total nonperforming loans                                  20,943                   23,595
Other real estate owned                                     1,845                    2,499
Total nonperforming assets                   $             22,788      $            26,094

Credit Quality Ratios - Total Company:
Nonperforming loans to total loans                           0.48 %                   0.49 %
Nonperforming assets to total loans
(including OREO)                                             0.52          

0.54

Nonperforming assets to total assets                         0.37          

0.42

Credit Quality Ratios - Core Bank:
Nonperforming loans to total loans                           0.48 %                   0.50 %
Nonperforming assets to total loans
(including OREO)                                             0.52          

0.56

Nonperforming assets to total assets                         0.39          

0.45

Loans on nonaccrual status include collateral-dependent loans. See Footnote 4
* "Loans and Allowance for Credit Losses" of Part I Item 1 "Financial Statements"

for additional discussion regarding collateral-dependent loans.

** Loans past due 90-days-or-more and still accruing consist of smaller balance

   consumer loans.

Table 16 - Nonperforming Loan Composition

                                       September 30, 2021           December 31, 2020
                                                   Percent of                  Percent of
                                                     Total                       Total
(in thousands)                       Balance       Loan Class    Balance       Loan Class

Traditional Banking:
Residential real estate:
Owner occupied                        $  11,708      1.41 %       $  14,328      1.63 %
Nonowner occupied                            99      0.03                81      0.03
Commercial real estate                    6,607      0.47             6,762      0.50

Construction & land development               -         -                 -

        -
Commercial & industrial                      93      0.03                55      0.02
Paycheck Protection Program                   -         -                 -         -
Lease financing receivables                   -         -                 -         -
Aircraft                                      -         -                 -         -
Home equity                               1,657      0.77             2,141      0.89
Consumer:
Credit cards                                  -         -                 5      0.04
Overdrafts                                    -         -                 -         -
Automobile loans                             84      0.48               170      0.56
Other consumer                                4      0.06                11      0.13
Total Traditional Banking                20,252      0.58            23,553      0.63
Warehouse lines of credit                     -         -                 -         -
Total Core Banking                       20,252      0.48            23,553      0.50

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                 -         -                 -         -
Other TRS loans                               -         -                 -         -
Republic Credit Solutions                   691      0.59                42      0.04

Total Republic Processing Group             691      0.59                42

     0.04

Total nonperforming loans             $  20,943      0.48 %       $  23,595      0.49 %







                                      104

  Table of Contents

Table 17 - Stratification of Nonperforming Loans

                                                  Number of Nonperforming 

Loans and Recorded Investment

                                                                  Balance
September 30, 2021                          Balance              > $100 &               Balance                 Total
(dollars in thousands)              No.     <= $100       No.     <= $500       No.      > $500        No.     Balance

Traditional Banking:
Residential real estate:
Owner occupied                       143    $  5,002       25    $   4,511        2    $    2,195       170    $ 11,708
Nonowner occupied                      3          99        -            -        -             -         3          99
Commercial real estate                 -           -        4          895        3         5,712         7       6,607

Construction & land development        -           -        -            -        -             -         -           -
Commercial & industrial                4          93        -            -        -             -         4          93
Paycheck Protection Program            -           -        -            -        -             -         -           -
Lease financing receivables            -           -        -            - 

      -             -         -           -
Aircraft                               -           -        -            -        -             -         -           -
Home equity                           27         741        4          916        -             -        31       1,657
Consumer:
Credit cards                           -           -        -            -        -             -        NM           -
Overdrafts                             -           -        -            -        -             -         -           -
Automobile loans                      10          84        -            -        -             -        10          84
Other consumer                         4           4        -            -        -             -         4           4

Total Traditional Banking            191       6,023       33        6,322        5         7,907       229      20,252
Warehouse lines of credit              -           -        -            -        -             -         -           -
Total Core Banking                   191       6,023       33        6,322 

5 7,907 229 20,252

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                          -           -        -            -        -             -         -           -
Other TRS loans                        -           -        -            -        -             -         -           -

Republic Credit Solutions             NM         691        -            -        -             -        NM         691
Total Republic Processing Group       NM         691        -            - 

      -             -        NM         691

Total                                191    $  6,714       33    $   6,322        5    $    7,907       229    $ 20,943






                                                  Number of Nonperforming

Loans and Recorded Investment

                                                                  Balance
December 31, 2020                           Balance              > $100 &              Balance                 Total
(dollars in thousands)              No.     <= $100       No.     <= $500       No.     > $500        No.     Balance

Traditional Banking:
Residential real estate:
Owner occupied                       146    $  5,110       27    $   4,966        5    $   4,252       178    $ 14,328
Nonowner occupied                      3          81        -            -        -            -         3          81
Commercial real estate                 2          45        3          925        3        5,792         8       6,762

Construction & land development        -           -        -            -        -            -         -           -
Commercial & industrial                2          55        -            -        -            -         2          55
Paycheck Protection Program            -           -        -            -        -            -         -           -
Lease financing receivables            -           -        -            - 

      -            -         -           -
Aircraft                               -           -        -            -        -            -         -           -
Home equity                           26         867        6        1,274        -            -        32       2,141
Consumer:
Credit cards                          NM           5        -            -        -            -        NM           5
Overdrafts                             -           -        -            -        -            -         -           -
Automobile loans                      14         170        -            -        -            -        14         170
Other consumer                         7          11        -            -        -            -         7          11

Total Traditional Banking            200       6,344       36        7,165        8       10,044       244      23,553
Warehouse lines of credit              -           -        -            -        -            -         -           -
Total Core Banking                   200       6,344       36        7,165 

8 10,044 244 23,553

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                          -           -        -            -        -            -         -           -
Other TRS loans                        -           -        -            -        -            -         -           -

Republic Credit Solutions             NM          42        -            -        -            -        NM          42
Total Republic Processing Group       NM          42        -            - 

      -            -        NM          42

Total                                200    $  6,386       36    $   7,165        8    $  10,044       244    $ 23,595







                                      105

  Table of Contents

Table 18 - Rollforward of Nonperforming Loans

                                             Three Months Ended         Nine Months Ended
                                               September 30,             September 30,
(in thousands)                               2021          2020         2021        2020

Nonperforming loans at the beginning
of the period                             $    22,344    $  20,419    $  23,595   $  23,489
Loans added to nonperforming status
during the period that remained
nonperforming at the end of the period          1,248        3,721        2,641       8,169
Loans removed from nonperforming
status during the period that were
nonperforming at the beginning of the
period (see table below)                      (2,233)      (2,251)      (4,839)     (5,932)
Principal balance paydowns of loans
nonperforming at both period ends               (384)        (360)      (1,098)     (4,660)
Net change in principal balance of
other loans nonperforming at both
period ends*                                     (32)        (444)         

644 19

Nonperforming loans at the end of the
period                                    $    20,943    $  21,085    $  

20,943 $ 21,085

* Includes relatively small consumer portfolios, e.g., RCS loans.

Table 19 - Detail of Loans Removed from Nonperforming Status

                                              Three Months Ended        Nine Months Ended
                                                September 30,             September 30,
(in thousands)                                2021         2020         2021         2020

Loans charged off                           $       -    $       -    $       -    $     (2)
Loans transferred to OREO                           -            -            -      (2,109)
Loans refinanced at other institutions        (2,150)      (1,917)      (4,559)      (2,870)
Loans returned to accrual status                 (83)        (334)        

(280) (951)

Total loans removed from nonperforming
status during the period that were
nonperforming at the beginning of the
period                                      $ (2,233)    $ (2,251)    $ (4,839)    $ (5,932)

Based on the Bank's review as of September 30, 2021, management believes that
its reserves are adequate to absorb expected losses on all nonperforming loans.

Delinquent Loans



Total Company delinquent loans to total loans decreased to 0.40% as of
September 30, 2021 from 0.42% as of December 31, 2020. Core Bank delinquent
loans to total Core Bank loans decreased to 0.18% as of September 30, 2021 from
0.21% as of December 31, 2020. With the exception of small-dollar consumer
loans, all Traditional Bank loans past due 90-days-or-more as of
September 30, 2021 and December 31, 2020 were on nonaccrual status. As
previously mentioned, the ultimate long-term impact of loans accommodated due to
COVID-19 on the Company's delinquent loans is currently uncertain.

                                      106

Table of Contents

Table 20 - Delinquent Loan Composition*

                                       September 30, 2021         December 31, 2020
                                                  Percent of                Percent of
                                                     Total                     Total
(in thousands)                       Balance      Loan Class    Balance     Loan Class

Traditional Banking:
Residential real estate:
Owner occupied                         $  2,128       0.26 %     $  3,260       0.37 %
Nonowner occupied                             -          -              -          -
Commercial real estate                    5,037       0.36          5,457       0.40

Construction & land development               -          -              -  

       -
Commercial & industrial                      66       0.02             12       0.00
Paycheck Protection Program                   -          -              -          -
Lease financing receivables                   -          -              -          -
Aircraft                                      -          -              -          -
Home equity                                 259       0.12            702       0.29
Consumer:
Credit cards                                 45       0.30             73       0.51
Overdrafts                                  145      19.26            147      25.04
Automobile loans                             11       0.06             56       0.18
Other consumer                                1       0.02              6       0.07
Total Traditional Banking                 7,692       0.22          9,713       0.26
Warehouse lines of credit                     -          -              -          -
Total Core Banking                        7,692       0.18          9,713       0.21

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                 -          -              -          -
Other TRS loans                               -          -              -          -
Republic Credit Solutions                 9,701       8.31         10,234       9.23

Total Republic Processing Group           9,701       8.31         10,234  

    9.23

Total delinquent loans                 $ 17,393       0.40 %     $ 19,947       0.42 %

* 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.

                                      107

  Table of Contents

Table 21 - Rollforward of Delinquent Loans

                                              Three Months Ended        Nine Months Ended
                                                September 30,             September 30,
(in thousands)                                2021         2020         2021         2020

Delinquent loans at the beginning of the
period                                      $  18,718    $  14,046    $  19,947    $  20,804
Loans added to delinquency status during
the period and remained in delinquency
status at the end of the period                   945        6,093        1,268        7,817
Loans removed from delinquency status
during the period that were in
delinquency status at the beginning of
the period (see table below)                  (3,109)      (2,205)      (3,179)      (8,488)
Principal balance paydowns of loans
delinquent at both period ends                   (34)        (788)         (81)      (2,977)
Net change in principal balance of other
loans delinquent at both period ends*             873         (93)        

(562) (103)
Delinquent loans at the end of period $ 17,393 $ 17,053 $ 17,393 $ 17,053

* Includes relatively-small consumer portfolios, e.g., RCS loans.

Table 22 - Detail of Loans Removed from Delinquent Status

                                             Three Months Ended        Nine Months Ended
                                               September 30,             September 30,
(in thousands)                               2021         2020         2021         2020

Loans charged off                          $       -    $       -    $     (1)    $     (3)

Easy Advances paid off or charged off              -            -            -            -
Loans transferred to OREO                          -            -            -      (2,109)
Loans refinanced at other institutions       (1,652)      (1,189)      (1,938)      (3,856)
Loans paid current                           (1,457)      (1,016)      

(1,240) (2,520)

Total loans removed from delinquency
status during the period that were in
delinquency status at the beginning of
the period                                 $ (3,109)    $ (2,205)    $ (3,179)    $ (8,488)

Collateral-Dependent Loans and Troubled Debt Restructurings

When management determines that a loan is collateral dependent and foreclosure
is probable, expected credit losses are based on the fair value of the
collateral at the reporting date, adjusted for selling costs if appropriate. The
Bank's policy is to charge-off all or that portion of its recorded investment in
collateral-dependent loans upon a determination that it expects the full amount
of contractual principal and interest will not be collected.



A TDR is a situation where, due to a borrower's financial difficulties, the Bank
grants a concession to the borrower that the Bank would not otherwise have
considered. The majority of the Bank's TDRs involve a restructuring of loan
terms such as a temporary reduction in the payment amount to require only
interest and escrow (if required), reducing the loan's interest rate, and/or
extending the maturity date of the debt. Nonaccrual loans modified as TDRs
remain on nonaccrual status and continue to be reported as nonperforming loans.
Accruing loans modified as TDRs are evaluated for nonaccrual status based on a
current evaluation of the borrower's financial condition and ability and
willingness to service the modified debt.

Table 23 - Collateral-Dependent Loans and Troubled Debt Restructurings

(in thousands)                         September 30, 2021      December 31, 2020      $ Change      % Change

Cashflow-dependent TDRs               $              6,227    $            10,938   $    (4,711)      (43)  %
Collateral-dependent TDRs                           10,224                  9,840            384         4
Total TDRs                                          16,451                 20,778        (4,327)      (21)
Collateral-dependent loans (which
are not TDRs)                                       14,781                 20,806        (6,025)      (29)
Total recorded investment in TDRs
and collateral-dependent loans        $             31,232    $           

41,584   $   (10,352)      (25)  %

See Footnote 4 "Loans and Allowance for Credit Losses" of Part I Item 1
"Financial Statements" for additional discussion regarding collateral-dependent
loans and TDRs.

                                      108

  Table of Contents



Deposits

Table 24 - Deposit Composition

(in thousands)                        September 30, 2021      December 31, 2020     $ Change     % Change

Core Bank:
Demand                               $          1,342,395    $         1,217,263   $   125,132         10 %
Money market accounts                             793,236                712,824        80,412         11
Savings                                           295,663                236,335        59,328         25
Individual retirement accounts
(1)                                                46,196                 47,889       (1,693)        (4)
Time deposits, $250 and over (1)                   84,340                 83,448           892          1
Other certificates of deposit (1)                 163,345                199,214      (35,869)       (18)
Reciprocal money market and time
deposits (1)                                      101,109                314,109     (213,000)       (68)
Brokered deposits (1)                              30,001                 25,010         4,991         20
Total Core Bank interest-bearing
deposits                                        2,856,285              2,836,092        20,193          1
Total Core Bank
noninterest-bearing deposits                    1,691,413              1,503,662       187,751         12
Total Core Bank deposits                        4,547,698              4,339,754       207,944          5

Republic Processing Group:
Money market accounts                               5,114                  6,673       (1,559)       (23)
Total RPG interest-bearing
deposits                                            5,114                 

6,673 (1,559) (23)

Brokered prepaid card deposits                    323,250                257,856        65,394         25
Other noninterest-bearing
deposits                                           38,822                110,021      (71,199)       (65)
Total RPG noninterest-bearing
deposits                                          362,072                367,877       (5,805)        (2)
Total RPG deposits                                367,186                374,550       (7,364)        (2)

Deposits of discontinued
operations (2)                                     33,063                 18,877        14,186         75

Total deposits                       $          4,947,947    $         4,733,181   $   214,766          5 %


(1) Includes time deposit

(2) See additional detail regarding the Bank's agreement to sell TRS under

    Footnote 17 "Discontinued Operations" in this section of the filing.

Total Company deposits increased $215 million, or 5%, from December 31, 2020 to
$4.9 billion as of September 30, 2021.

Total Core Bank deposits increased $208 million, or 5%, with the following
primarily driving growth:

Management believes its deposit balances continue to be the beneficiary of

Federal government stimulus brought about by the COVID-19 pandemic. During the

? first nine months of 2021, the Federal government issued two rounds of economic

   stimulus payments. At this time, management is uncertain how long these
   stimulus funds may remain at the Bank.

The Core Bank originated $210 million of PPP loans during the first nine months

? of 2021, with PPP borrowers generally retaining their loan proceeds within a

   deposit account at the Bank.




   Management believes that much of the growth in noninterest-bearing and

interest-bearing deposits at the Core Bank has been, and continues to be, a

? flight to safety brought about by the COVID-19 pandemic. At this time,

management is unable to predict how long these funds might remain at the Bank

due to the uncertain economic environment for many of the depositors, including

   the depositors' short-term and long-term cash needs.




   Offsetting the positive growth mentioned above, deposit balances were

negatively impacted by a shift of approximately $140 million in balances from

interest-bearing reciprocal money market accounts to SSUARs. This shift

? occurred as the Bank lowered its reciprocal money market account pricing to its

clients due to the high cost of the additional fees associated with

participation in the money market network, which allows clients to fully insure

their deposits through FDIC insurance by spreading their funds across multiple

   banks.

Total RPG deposits from continuing operations decreased $7 million, or 2%, for
the first nine months of 2021, with the following primarily driving growth:

? RPG noninterest-bearing deposits growth was primarily driven by the following:

                                      109

  Table of Contents

RPG prepaid card balances within its RPS division increased $65 million, driven

? by government stimulus funds applied to prepaid card deposit balances. At this

time, management is uncertain how long these stimulus funds may remain at the

   Bank.

RPG other noninterest-bearing deposits decreased $71 million, driven by an

? outflow of commercial settlement deposits associated with the RCS segment's

   line-of-credit products.

Securities Sold Under Agreements to Repurchase and Other Short-Term Borrowings

SSUARs are collateralized by securities and are treated as financings;
accordingly, the securities involved with the agreements are recorded as assets
and are held by a safekeeping agent and the obligations to repurchase the
securities are reflected as liabilities. All securities underlying the
agreements are under the Bank's control.

SSUARs increased $50 million during the first nine months of 2021 to $261
million as of September 30, 2021 compared to $211 million as of December 31,
2020. As mentioned above, Bank clients shifted approximately $140 million in
balances from interest-bearing reciprocal money market accounts to SSUARs after
the Bank lowered its reciprocal money market account pricing due to the high
cost to the Bank of participating in the money market network. The increase
driven by this shift was partially offset by a $94 million decrease in SSUARs
during the first nine months of 2021, driven by the exit of one corporate client
following the acquisition of this client by another company. The substantial
majority of SSUARs are indexed to immediately repricing indices such as the
FFTR.

Federal Home Loan Bank Advances

FHLB advances declined by $210 million from December 31, 2020 to September 30,
2021, as the Bank continued to maintain sufficient deposit balances to meet its
current liquidity needs. The Bank held $25 million in overnight advances at a
rate of 0.14% as of September 30, 2021, compared to $225 million in overnight
advances at a rate of 0.16% as of December 31, 2020. Given the overall amount of
liquidity on the Company's balance sheet as of September 30, 2021, management
does not anticipate that FHLB term or overnight advances will likely be utilized
to any material extent over the near term.



Overall use of FHLB advances during a given year is dependent upon many factors
including asset growth, deposit growth, current earnings, and expectations of
future interest rates, among others.



Interest Rate Swaps

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 in order 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
earnings.

See Footnote 12 "Interest Rate Swaps" of Part I Item 1 "Financial Statements"
for additional discussion regarding the Bank's interest rate swaps.

Liquidity



The Company had a loan to deposit ratio (excluding brokered deposits) of 95% as
of September 30, 2021 and 108% as of December 31, 2020. As of September 30, 2021
and December 31, 2020, the Company had cash and cash equivalents on-hand of $1.0
billion and $486 million. The Bank also had available borrowing capacity of $898
million and $683 million from the FHLB as of September 30, 2021 and December 31,
2020. In addition, the Bank's liquidity resources included unencumbered debt
securities of $187 million and $274 million as of September 30, 2021 and
December 31, 2020 and unsecured lines of credit of $125 million available
through various other financial institutions as of the same period-ends.



The Bank maintains sufficient liquidity to fund routine loan demand and routine
deposit withdrawal activity. Liquidity is managed by maintaining sufficient
liquid assets in the form of investment securities. Funding and cash flows can
also be realized by the sale of AFS debt securities, principal paydowns on loans
and mortgage-backed securities, and proceeds realized from loans held for sale.
The Bank's liquidity is impacted by its ability to sell certain investment
securities, which is limited due to the level of investment securities that are
needed to secure public deposits, securities sold under agreements to
repurchase, FHLB borrowings, and for other purposes, as required by law. As of
September 30, 2021 and December 31, 2020, these pledged investment securities
had a fair value of $354

                                      110

  Table of Contents

million and $304 million. Republic's banking centers and its website,
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 canceled, 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 September 30, 2021, the Bank had approximately $1.6 billion in deposits
from 245 large non-sweep deposit relationships, including reciprocal deposits,
where the individual relationship exceeded $2 million. The 20 largest non-sweep
deposit relationships represented approximately $609 million, or 12%, of the
Company's total deposit balances as of September 30, 2021. 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 past 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.



Capital



Total stockholders' equity increased from $823 million as of December 31, 2020
to $839 million as of September 30, 2021. The increase in stockholders' equity
was primarily attributable to net income earned during 2021 reduced primarily by
cash dividends declared and Class A common stock repurchased.

See Part II, Item 2. "Unregistered Sales of Equity Securities and Use of
Proceeds" for additional detail regarding stock repurchases and stock buyback
programs.

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 September 30, 2021, RB&T could,
without prior approval, declare dividends of approximately $176 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 of Directors.



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 off-balance sheet 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, in order 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

                                      111

  Table of Contents

exceeds the "well-capitalized" requirements as defined by the FRB and the FDIC,
in addition to the Capital Conservation Buffer. Republic's average stockholders'
equity to average assets ratio was 13.33% as of September 30, 2021 compared to
13.35% as of December 31, 2020. Formal measurements of the capital ratios for
Republic and the Bank are performed by the Company at each quarter end.



In 2005, Republic Bancorp Capital Trust, an unconsolidated trust subsidiary of
Republic, was formed and issued $40 million in TPS. On September 30, 2021, as
permitted under the terms of RBCT's governing documents, Republic redeemed these
securities at the par amount of approximately $40 million, without penalty.
Republic's capital ratios remained well above "well capitalized" levels
following the redemption of the TPS, which were treated as part of Republic's
Tier I Capital while outstanding.

Table 25 - Capital Ratios (1)

                                            As of September 30, 2021          As of December 31, 2020
(dollars in thousands)                        Amount            Ratio           Amount           Ratio

Total capital to risk-weighted assets
Republic Bancorp, Inc.                    $       877,936         18.25 %   $      896,053         18.52 %
Republic Bank & Trust Company                     849,951         17.67    

796,114 16.46

Common equity tier 1 capital to
risk-weighted assets
Republic Bancorp, Inc.                    $       824,203         17.13 %   $      803,682         16.61 %
Republic Bank & Trust Company                     796,218         16.56    

743,743 15.38

Tier 1 (core) capital to risk-weighted
assets
Republic Bancorp, Inc.                    $       824,203         17.13 %   $      843,682         17.43 %
Republic Bank & Trust Company                     796,218         16.56    

743,743 15.38

Tier 1 leverage capital to average
assets
Republic Bancorp, Inc.                    $       824,203         13.13 %   $      843,682         13.70 %
Republic Bank & Trust Company                     796,218         12.72    

       743,743         12.11




    The Company and the Bank elected in 2020 to defer the impact of CECL on

regulatory capital. The deferral period is five years, with the total
(1) estimated CECL impact 100% deferred for the first two years, then phased in

over the next three years. If not for this election, the Company's regulatory

capital ratios would have been approximately 14 basis points lower than those

    presented in the table above as of September 30, 2021.


                                      112

  Table of Contents

Asset/Liability Management and Market Risk

Asset/liability management is designed to ensure safety and soundness, maintain
liquidity, meet regulatory capital standards, and achieve acceptable net
interest income based on the Bank's risk tolerance. 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 in order 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 basis point 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 September 30, 2021, a dynamic simulation model was run for interest rate
changes from "Down 100" basis points to "Up 400" basis points. The following
table illustrates the Bank's projected percent change from its Base net interest
income over the period beginning October 1, 2021 and ending September 30, 2022
based on instantaneous movements in interest rates from Down 100 to Up 400 basis
points equally across all points on the yield curve. The Bank's dynamic earnings
simulation model includes secondary market loan fees and excludes Traditional
Bank loan fees.

Table 26 - Bank Interest Rate Sensitivity (Continuing Operations)

                                                                        Change in Rates
                                           -100             +100             +200             +300             +400
                                       Basis Points     Basis Points    

Basis Points Basis Points Basis Points

% Change from base net interest income
as of September 30, 2021                           - %          (1.8) %          (1.7) %            2.8 %            7.3 %
% Change from base net interest income
as of December 31, 2020                          0.4 %          (4.5) %    

     (7.0) %          (5.7) %          (4.2) %




The Bank's dynamic simulation model run for September 2021 projected no change
in the Bank's net interest income plus secondary market loan fees for the
"Down-100" scenario, a decrease in the "Up-100" and "Up-200" scenarios, and an
increase in the "Up-300" and "Up-400" rate scenarios. The projections as of
December 2020 reflected a modest increase in the Down-100 scenario and decreases
in all Up-rate scenarios.



As compared to December 2020, the deterioration in the Down-100 rate scenario
for September 2021 was generally because the Bank had less ability in September
2021 than December 2020 to reprice its liabilities downward.  The improvement in
the Up-rate scenarios was primarily due to the following:

? Growth in interest-earning cash balances from December 2020 to September 2021;

and

? A smaller projected falloff in secondary market fees for the September 2021

   simulation than previously projected for the December 2020 simulation.






                                      113

  Table of Contents

LIBOR Exposure

In July 2017, the Financial Conduct Authority (the "FCA"), the authority
regulating LIBOR, along with various other regulatory bodies, announced that
LIBOR would likely be discontinued at the end of 2021. Subsequent to that
announcement, in November 2020, the FCA announced that many tenors of LIBOR
would continue to be published through June 2023. Bank regulators have
instructed banks to discontinue new originations referencing LIBOR as soon as
possible, but no later than December 2021. To facilitate the transition process,
management has instituted an enterprise-wide program to identify, assess, and
monitor risks associated with the expected discontinuance or unavailability of
LIBOR.

Management focuses on operational readiness, as well as instituting processes
and systems to validate that contract risk is clearly identified and understood.
New originations and any modifications or renewals of LIBOR-based contracts
contain fallback language to assist in an orderly transition to an alternative
reference rate. For Bank contracts that have a duration beyond December 31,
2021, and that reference LIBOR, all fallback provisions and variations are
currently being identified and sorted into classifications based upon those
provisions. Upon classification, the contracts are monitored and possibly
remediated if fallback provisions are not deemed sufficiently robust. The Bank
realizes that remediating certain contracts indexed to LIBOR may require consent
from the counterparties, which could be difficult and costly to obtain in
certain limited circumstances.

As of September 30, 2021, the Company had approximately $1.3 billion of assets
that reference LIBOR, with short-term Warehouse balances representing $751
million of these assets and commercial and mortgage loans primarily making up
the remainder. These amounts exclude derivative assets and liabilities on the
Company's consolidated balance sheet. As of September 30, 2021, the notional
amount of the Company's LIBOR-referenced interest rate derivative contracts was
more than $250 million. Each of the LIBOR-referenced amounts discussed above
will vary in future periods as current contracts expire with potential
replacement contracts using either LIBOR or an alternative reference rate. The
Company, and other industry participants, continue to review alternative
reference rates that could be utilized as a replacement for LIBOR.



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 September 30, 2021 Compared to Three
Months Ended September 30, 2020) and "RESULTS OF OPERATIONS (Nine Months Ended
September 30, 2021 Compared to Nine Months Ended September 30, 2020."