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.

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 pandemic on Company operations;

? the potential impact of inflation 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;

? descriptions and projections related to management strategies for loans,

deposits, investments, and borrowings;

? forecasts of future economic performance; 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 pandemic on the Company's operations and credit losses;

 ? the impact of inflation on the Company's operations and credit losses;

litigation liabilities, including related costs, expenses, settlements and

? judgments, or the outcome of matters before regulatory agencies, whether

pending or commencing in the future;

? natural disasters impacting the Company's operations;

? changes in political and economic conditions;

? the discontinuation of LIBOR;

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

the FRB;

long-term and short-term interest rate fluctuations and the overall steepness

? of the U.S. Treasury yield curve, as well as their impact on the Company's net

interest income and Mortgage Banking operations;

? 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;

 ? recession;


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 ? 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;

? 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 I Item 1A "Risk Factors" of the Company's

Annual Report on Form 10-K for the year ended December 31, 2021 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, 2021.

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.

ACLL and Provision - As of June 30, 2022, 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.

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.

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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 ACLL is significantly influenced by the composition, characteristics and
quality of the Company's loan portfolio, as well as the prevailing economic
conditions and forecasts utilized. Material changes to these and other relevant
factors may result in greater volatility to the ACLL, and therefore, greater
volatility to the Company's reported earnings.

BUSINESS SEGMENT COMPOSITION

As of June 30, 2022, 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 June 30, 2022, 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 and HELOCs. In addition, the Bank originates HEALs 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 its
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.

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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.

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. Loans range between
$55,000 and $3,000,000 in size and have terms up to 20 years. 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.
Treasury Management officers work closely with commercial and retail officers to
support the cash management needs of Bank clients.

Digital Experience - 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. 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."

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(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."

(IV) Tax Refund Solutions segment

Through the TRS segment, the Bank is one of a limited number of financial
institutions that facilitates the receipt and payment of federal and state tax
refund products and offers a credit product through third-party tax preparers
located throughout the U.S., as well as tax-preparation software providers
(collectively, the "Tax Providers"). Substantially all of the business generated
by the TRS business occurs during the first half of each year. During the second
half of each year, TRS generates limited revenue and incurs costs preparing for
the next year's tax season.

RTs are fee-based products whereby a tax refund is issued to the taxpayer after
the Bank has received the refund from the federal or state government. There is
no credit risk or borrowing cost associated with these products because they are
only delivered to the taxpayer upon receipt of the tax refund directly from the
governmental paying authority. Fees earned by the Company on RTs, net of revenue
share, are reported as noninterest income under the line item "Net refund
transfer fees."

The EA tax credit product is a loan that allows a taxpayer to borrow funds as an
advance of a portion of their tax refund. The EA product had the following
features during 2022 and 2021:

? Offered only during the first two months of each year;

? The taxpayer was given the option to choose from multiple loan-amount tiers,

subject to underwriting, up to a maximum advance amount of $6,250;

? No requirement that the taxpayer pays for another bank product, such as an RT;

? Multiple funds disbursement methods, including a DDA Card, direct deposit,

prepaid card, or check, based on the taxpayer-customer's election;

? Repayment of the EA to the Bank is deducted from the taxpayer's tax refund

proceeds; and

? If an insufficient refund to repay the EA occurs:

o there is no recourse to the taxpayer,

o no negative credit reporting on the taxpayer, and

o no collection efforts against the taxpayer.

The Company reports fees paid for the EA product as interest income on loans.
During 2021, EAs were repaid, on average, within 32 days after the taxpayer's
tax return was submitted to the applicable taxing authority. EAs do not have a
contractual due date but the Company considered an EA delinquent in 2022 and
2021 if it remained unpaid 35 days after the taxpayer's tax return was submitted
to the applicable taxing authority. The number of days for delinquency
eligibility is based on management's annual analysis of tax return processing
times. Provisions on EAs are estimated when advances are made. Unpaid EAs are
charged-off by June 30th of each year, with EAs collected during the second half
of each year are recorded as recoveries of previously charged-off loans unless
such recovery is subject to guarantor reimbursement under a loan-loss guaranty.

Related to the overall credit losses on EAs, the Bank's ability to control
losses is highly dependent upon its ability to predict the taxpayer's likelihood
to receive the tax refund as claimed on the taxpayer's tax return. Each year,
the Bank's EA approval model is based primarily on the prior-year's tax refund
payment patterns. Because the substantial majority of the EA volume occurs each
year before that year's tax refund payment patterns can be analyzed and
subsequent underwriting changes made, credit losses during a current year could
be higher than management's predictions if tax refund payment patterns change
materially between years.

In response to changes in the legal, regulatory, and competitive environment,
management annually reviews and revises the EAs product parameters. Further
changes in EA product parameters do not ensure positive results and could have
an overall material

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negative impact on the performance of the EA product offering and therefore on
the Company's financial condition and results of operations.

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

Settlement of Lawsuit Against Green Dot - On June 3, 2022, the Bank and Green
Dot entered into the Settlement Agreement to fully resolve the Lawsuit that the
Bank filed against Green Dot in the Delaware Court of Chancery on October 5,
2021.

As previously disclosed in the Company's prior SEC filings, the Lawsuit arose
from Green Dot's inability to consummate the Sale

Transaction contemplated in the TRS Purchase Agreement through which Green Dot
would purchase all of the assets and operations of the Bank's Tax Refund
Solutions business.

In accordance with the Settlement Agreement, on June 6, 2022, Green Dot paid $13
million to the Bank, which was in addition to a $5 million termination fee that
Green Dot paid to the Bank during the first quarter of 2022 under the terms of
the TRS Purchase Agreement. On June 6, 2022, the Bank and Green Dot submitted to
the Delaware Court of Chancery a stipulation of dismissal of the Lawsuit, which
was effective to dismiss the Lawsuit when filed.

Republic Payment Solutions division

RPS is currently managed and operated within the TRS segment. The RPS division
offers general-purpose reloadable prepaid cards, payroll debit cards, and
limited-purpose demand deposit accounts with linked debit 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. 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

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 represented the substantial majority of RCS activity during 2022

and 2021. 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

o certain marketing, 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


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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 a third-party, who is an affiliate of the

Bank's 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 June 30, 2022 Compared to Three Months Ended June
30, 2021)

Total Company net income for the second quarter of 2022 was $23.9 million,
equaling net income for the same period in 2021. Diluted EPS increased to $1.20
for the second quarter of 2022 compared to $1.16 for the same period in 2021.
The consistent net income primarily reflected the following:

? The benefit of a $13.0 million pre-tax legal settlement;

? An $8.0 million negative swing in Provision;

? A $4.4 million decrease in PPP income within interest income; and

? A $2.4 million decrease in Mortgage Banking income.

Compared to the second quarter of 2022, the second quarter of 2021 was
significantly and positively impacted by significantly lower than expected
losses on EA loans, strong fee income from the PPP, and higher demand for
mortgage refinancing, driving strong mortgage banking income.

The following are general highlights by reportable segment:

Traditional Banking segment

? Net income decreased $1.1 million, 13%, for the second quarter of 2022 compared

to the same period in 2021.

? Net interest income increased $880,000, or 2%, for the second quarter of 2022

compared to the same period in 2021.

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? Provision was a net charge of $146,000 for the second quarter of 2022 compared

to a net credit of $77,000 for the same period in 2021.

? Noninterest income decreased $241,000 million, or 3%, for the second quarter of

2022 compared to the same period in 2021.

? Noninterest expense increased $1.4 million, or 4%, for the second quarter of

2022 compared to the same period in 2021.

Warehouse Lending segment

? Net income decreased $1.7 million or 41%, for the second quarter of 2022

compared to the same period in 2021.

? Net interest income decreased $2.4 million, or 39%, for the second quarter of

2022 compared to the same period in 2021.

? The Warehouse Provision was a net credit of $234,000 for the second quarter of

2022 compared to a net credit of $65,000 for the same period in 2021.

? Average committed Warehouse lines remained at $1.4 billion in the second

quarter of 2022 compared to the second quarter of 2021.

? Average line usage was 41% during the second quarter of 2022 compared to 51%

during the same period in 2021.

Mortgage Banking segment

Within the Mortgage Banking segment, mortgage banking income decreased $2.4

? million, or 58%, during the second quarter of 2022 compared to the same period

in 2021.

Overall, Republic's proceeds from sale of secondary market loans totaled $68

? million during the second quarter of 2022 compared to $176 million during the

   same period in 2021, with the Company's cash-gain-as-a-percent-of-loans-sold

remaining at 2.85% from period to period.

Tax Refund Solutions segment

? Net income increased $5.0 million, or 69%, for the second quarter of 2022

compared to the same period in 2021.

? Net interest income increased $1.0 million, or 163%, for the second quarter of

2022 compared to the same period in 2021.

Overall, TRS recorded a net charge to the Provision of $360,000 during the

? second quarter of 2022 compared to a net credit to the Provision of $5.8

million for the same period in 2021.

Noninterest income increased $11.1 million for the second quarter of 2022

? compared to the same period in 2021. Noninterest income for the second quarter

of 2022 included the receipt of a $13.0 million non-recurring legal settlement

payment.

? Net RT revenue decreased $2.0 million for the second quarter of 2022 compared

to the same period in 2021.

? Noninterest expense was $3.5 million for the second quarter of 2022 compared to

$3.7 million for the same period in 2021.

TRS had multiple factors during 2021 and 2022 that impacted and will continue to
impact its 2022 performance and the comparability of that performance to the
same periods in 2021. By year, these factors discussed below include, but may
not be limited to, the following:

2021

1) The start of the IRS processing season was delayed approximately two weeks

later than a typical tax season; and

The Company believes stimulus programs from the Federal Government and

 2) pandemic-related restrictions during early 2021 negatively impacted demand for
    TRS's RT and EA products.


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2022

TRS amended one of its existing third-party contracts to provide for a small

1) revenue share from Republic to the third party, along with a cap on loan

losses from the third party to Republic for all EA products originated through

this provider;

2) TRS experienced a loss of RT and EA product volume to Green Dot directly

following the execution of the TRS Purchase Agreement;

Although to a lesser degree than in the 2021 tax season, Company management

3) believes stimulus programs from the Federal Government during the latter half

of 2021 negatively impacted the 2022 tax season;

4) The Bank received a $5.0 million non-recurring termination fee in January 2022

following the cancellation of the Sales Transaction; and

5) The Bank received a $13.0 million non-recurring legal settlement payment in

June 2022 upon settling its lawsuit against Green Dot.

As it relates to factors impacting 2021, the processing season with the IRS
started approximately two weeks later than normal. As a result, RT funding
volume and loan repayments from the IRS lagged normal funding patterns in
non-COVID-impacted years and effectively pushed RT revenue and loan recovery
activity later into the 2021 calendar year. In addition, government stimulus
programs during 2021 negatively impacted demand for TRS EA and RT products.

Conversely, the timing of the IRS tax season during the second quarter of 2022
was more in-line with non-COVID seasons than the second quarter of 2021. As a
result, the Company believes that it likely received an unusually high
percentage of its funded RT volume in the second quarter of 2021 as compared to
2022, and that it likely received an unusually high percentage of its EA loan
repayments in the second quarter of 2021 as compared to 2022. This estimated
timing, if correct, generally provided less favorable second quarter 2022
results for TRS as compared to the second quarter of 2021, and will likely
provide for less favorable quarterly comparisons throughout the remainder of
2022 as compared to 2021.

In addition to the more normal timing of the tax season in 2022 as compared to
2021, the 2022 tax season was also favorably impacted by a contractual change
with one of the Company's large Tax Providers. As a result of the amended
contract, TRS provides this tax provider a revenue share, while this tax
provider covers certain overhead costs of the program and furnishes to RB&T a
loan loss guaranty for EAs originated through this provider. Through this
specific provider, TRS originated $172 million of EAs during the first quarter
of 2022 as compared to $135 million originated during the first quarter of 2021.
The net cost of the revenue share to the provider from RB&T was approximately
$275,000 for the $172 million of EA volume.

Negatively impacting the second quarter 2022 tax season as compared to the
second quarter of 2021 was a loss of RT and EA volume by RB&T to Green Dot from
certain third-party Tax Providers following the execution of the TRS Purchase
Agreement. While TRS was able to partially offset this lost volume through
higher volume from other existing relationships, the loss of volume to Green Dot
had a negative impact to the overall results of TRS for 2022 and may continue to
have a negative impact to the overall results of TRS well into the future if TRS
is unable to win this business back through its normal solicitation process.

As a net result of all the factors in the preceding paragraphs and excluding the
receipt of a nonrecurring $13 million legal settlement payment, TRS experienced
a significant net decrease to its second quarter 2022 tax results as compared to
the first quarter of 2021. Management believes TRS's results of operations, and
more specifically RT revenue and net recoveries for previously charged-off EAs
for the remainder of 2022, will likely be negative as compared to the same
periods in 2021.

Republic Credit Solutions segment

? Net income decreased $490,000, or 13%, for the second quarter of 2022 compared

to the same period in 2021.

? Net interest income increased $1.5 million, or 30%, for the second quarter of

2022 compared to the same period in 2021.

Overall, RCS recorded a net charge to the Provision of $3.4 million during the

 ? second quarter of 2022 compared to a net charge of $1.6 million for the same
   period in 2021.


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? Noninterest income increased $522,000, or 20%, from the second quarter of 2021

to the second quarter of 2022.

? Noninterest expense was $1.9 million for the second quarter of 2022 and $1.0

million for the same period in 2021.

RESULTS OF OPERATIONS (Three Months Ended June 30, 2022 Compared to Three Months
Ended June 30, 2021)

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 rates trended
lower with the onset of the COVID pandemic, as the FOMC reduced the FFTR to
approximately 25 basis points during 2020. With the rise of inflation during the
latter half of 2021 and a steep inflationary rise during the first half of 2022,
representing inflationary levels not seen in approximately 40 years, the FOMC
began executing a quantitative tightening program by reducing its balance sheet,
selling certain types of bonds in the market, and repeatedly increasing the
FFTR. The increases to the FFTR included a 25-basis-point increase in March
2022, another 50-basis-point increase in May 2022, and another 75-basis-point
increase in June 2022 (the highest one-time increase in 28 years). The FOMC also
increased the FFTR by another 75 basis points in July 2022. Along with these
increases, the FOMC continued to signal that additional 2022 FFTR increases are
likely.

The FOMC's actions and signals continued to place upward pressure on long-term
market interest rates for bonds and loans during the second quarter of 2022.
Further monetary tightening by the Federal Reserve in the future will likely
cause both short-term and long-term market interest rates to increase during the
remainder of 2022. Increases in market interest rates are expected to impact the
various business segments of the Company differently and will be discussed in
further detail in the sections below.

Total Company net interest income was $51.2 million during the second quarter of
2022 and represented an increase of $928,000, or 2%, from the second quarter of
2021. Total Company net interest margin increased to 3.51% during the second
quarter of 2022 compared to 3.33% for the same period in 2021.

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 $880,000, or 2%, for the
second quarter of 2022 compared to the same period in 2021. Traditional
Banking's net interest margin was 3.06% for the second quarter of 2022, an
increase of nine basis points from the same period in 2021.

The increase in the Traditional Bank's net interest income and net interest
margin during the second quarter of 2022 was primarily attributable to the
following factors:

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

increased $5.3 million, or 16%, from the second quarter of 2021, as average

non-PPP loans at the Traditional Bank grew from $3.3 billion for the second

quarter of 2021 to $3.6 billion for the second quarter of 2022. Additionally,

? increases in the FFTR during 2022 have benefitted the Traditional Bank's high

level of interest-earning cash on its balance sheet, as well as its loan and

investment portfolio yields, although to a lesser degree. As a result, the

Traditional Bank's yield on interest earning assets, excluding PPP, increased

20 basis points from the second quarter of 2021 to the second quarter of 2022.

Offsetting the above increase, the Traditional Bank recognized $167,000 of fees

and interest on its PPP portfolio during the second quarter of 2022 compared to

$4.6 million of similar fees and interest during the second quarter of 2021.

? The $4.4 million decrease in PPP fees and interest primarily highlighted the

short-term nature of the PPP, as approximately 97% of all fees and interest

   eligible to be recognized under the program by the Traditional Bank were
   recognized during 2020 and 2021.


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Table 1 - 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 performance of 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 Income                                          Interest-Earning Assets                                   Net Interest Margin
                                                               Three Months Ended Jun. 30,                                    Three Months Ended Jun. 30,                                    Three Months Ended Jun. 30,
(dollars in thousands)                                           2022                2021         $ Change     % Change          2022              2021         $ Change      % Change         2022                2021        % Change

Traditional Banking - GAAP                                  $       39,158      $       38,278    $     880           2 %   $     5,121,492     $ 5,149,602    $  (28,110)         (1) %        3.06 %              2.97 %         0.09 %

Less: Impact of PPP fees and interest                                  167               4,582      (4,415)        (96)              16,668         349,643      (332,975)        (95)             -                0.16       

(0.16)

Traditional Banking ex PPP fees and interest - non-GAAP $ 38,991

    $       33,696    $   5,295          16     $     5,104,824     $ 4,799,959    $   304,865           6          3.06                2.81           0.25


As previously disclosed, both short-term and long-term market interest rates are
expected to continue increasing during the remainder of 2022 as a result of
expected monetary tightening by the FOMC. Additional increases in short-term
interest rates and overall market rates are generally believed by management to
be favorable to the Traditional Bank's net interest income and net interest
margin in the near term, while decreases in short-term interest rates and
overall market rates are generally believed by management to be unfavorable to
the Traditional Bank's net interest income and net interest margin in the near
term.

Increases in market interest rates, however, could have a negative impact on net
interest income and net interest margin if the Traditional 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 Traditional
Bank's net interest income and net interest margin. Variables which may impact
the Traditional Bank'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 Traditional Bank's financial products and the Traditional Bank's
overall future liquidity needs.

Warehouse Lending segment

Net interest income within the Warehouse segment decreased $2.4 million, or 39%,
from the second quarter of 2021 to the second quarter of 2022, driven by
decreases in both average outstanding balances and net interest margin. Overall
average outstanding Warehouse balances declined from $727 million during the
second quarter of 2021 to $579 million for the second quarter of 2022, as
home-mortgage refinancing dipped from historically high volume in early 2021.
The Warehouse net interest margin compressed 79 basis points from 3.48% during
the second quarter of 2021 to 2.69% during the second quarter of 2022, as
competitive forces began driving down the contractual interest rates on the
Company's Warehouse lines during the third quarter of 2021.

In general, the decline in net interest income within Warehouse Lending was
driven largely by a sharp rise in long-term interest rates during the first half
of 2022, which led to a decrease in mortgage refinancing demand, a sharp drop in
Warehouse line usage, and an overall decrease in outstanding Warehouse balances.
In addition, Warehouse's net interest margin was negatively impacted during the
second quarter of 2022, as many adjustable rate Warehouse lines remained below
their interest rate floors. These interest rate floors, which benefitted
Warehouse's net interest margin significantly during 2020 and 2021 when market
rates declined to historical lows, negatively impacted its net interest margin
during the first half of 2022, as its cost of funding rose while its loan yield
remained relatively stable. The negative impact of these floors is expected to
diminish in the near term as interest rates on many Warehouse lines are expected
to begin exceeding their floors during the third quarter of 2022, assuming
projected FFTR increases, currently projected by the financial markets, come to
fruition.

Committed Warehouse lines-of-credit remained at $1.4 billion from June 30, 2021
to June 30, 2022, while average usage rates for Warehouse lines were 41% and
51%, respectively, during the second quarters of 2022 and 2021.

Additional increases in short-term interest rates and overall market rates are
generally believed by management to be favorable to Warehouse's net interest
income and net interest margin in the near term, however, the benefit of an
increase in rates could be partially or entirely offset by a reduction in
average outstanding balances driven by a decline in demand from Warehouse
clients, as higher long-term interest rates generally drive lower demand for
Warehouse borrowings. In addition, a lower demand for Warehouse

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borrowings could cause additional competitive pricing pressures for the
industry, driving down the yield Warehouse earns on its lines of credits.

Tax Refund Solutions segment

TRS's net interest income increased $1.0 million for the second quarter of 2022
compared to the same period in 2021, driven by an increase in outstanding
commercial loan balances and an increase in interest income on TRS's prepaid
card balances as a function of the Company's FTP methodology and a rise in
interest rates. For factors affecting the comparison of the TRS results of
operations for the second quarter of 2022 and the second quarter of 2021, see
section titled "OVERVIEW (Three Months Ended June 30, 2022 Compared to Three
Months Ended June 30, 2021) - Tax Refund Solutions."

Republic Credit Solutions segment

RCS's net interest income increased $1.5 million, or 30%, from the second
quarter of 2021 to the second quarter of 2022. The increase was driven primarily
by an increase in fee income from RCS's LOC products partially offset by a
decrease in interest income from RCS's hospital receivables.

RCS's LOC loan fees, which are recorded as interest income on loans, increased
to $5.8 million during the second quarter of 2022 compared to $3.8 million
during the same period in 2021. Interest income on RCS's LOC I product increased
$1.1 million, driven by a $6 million increase in average outstanding balances
for this product from the second quarter of 2021 to the second quarter of 2022.
Interest income on RCS's LOC II product increased $855,000, as the Company first
piloted this product during the first quarter of 2021 with limited outstanding
balances during the pilot phase.

Interest income from RCS's hospital receivables decreased $385,000 from the
second quarter of 2021 to the second quarter of 2022 resulting from a $38
million decrease in average receivables from period to period.

Overall product demand for the RCS segment is not assumed to be interest rate
sensitive and therefore management does not believe a rising interest rate
environment will impact demand for its various consumer loan products. A rising
interest rate environment, however, likely will impact the Company's internal
FTP cost allocated to this segment. As a result, the impact of rising interest
rates to RCS during 2022 will be negative to the segment's financial results,
although the exact amount of the negative impact will depend on the internal FTP
cost assigned, as well as, the overall volume and mix of loans it generates.

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Table 2 - Total Company Average Balance Sheets and Interest Rates

                                           Three Months Ended June 30, 2022                Three Months Ended June 30, 2021
                                           Average                      Average            Average                      Average
(dollars in thousands)                     Balance         Interest      Rate              Balance         Interest      Rate

ASSETS

Interest-earning assets:
Federal funds sold and other
interest-earning deposits               $      813,956     $   1,638       0.80 %       $      938,728      $    262       0.11 %
Investment securities, including
FHLB stock (1)                                 691,427         2,766       1.60                562,509         1,913       1.36
TRS Easy Advance loans (2)                      12,680            81       2.56                 17,220           294       6.83
RCS LOC products (2)                            27,119         5,782      85.28                 16,462         3,837      93.23
Other RPG loans (3) (7)                         91,007         1,387       6.10                105,217         1,190       4.52
Outstanding Warehouse lines of
credit (4) (7)                                 578,676         5,074       3.51                727,091         6,824       3.75
Paycheck Protection Program loans
(5) (7)                                         16,668           167       4.01                349,643         4,582       5.24
All other Core Bank loans (6) (7)            3,613,282        35,425       3.92              3,331,114        32,913       3.95

Total interest-earning assets                5,844,815        52,320       3.58              6,047,984        51,815       3.43

Allowance for credit losses                   (72,037)                                        (74,258)

Noninterest-earning assets:
Noninterest-earning cash and cash
equivalents                                    172,382                                         144,327
Premises and equipment, net                     34,322                                          39,119
Bank owned life insurance                      100,152                                          97,257
Other assets (1)                               164,090                                         186,133
Total assets                            $    6,243,724                                  $    6,440,562

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest-bearing liabilities:
Transaction accounts                    $    1,698,754     $     168      

0.04 % $ 1,599,721 $ 93 0.02 %
Money market accounts

                          788,534           168       0.09                773,838            93       0.05
Time deposits                                  233,644           575       0.98                303,468           930       1.23
Reciprocal money market and time
deposits                                        59,009            34       0.23                319,509           206       0.26
Brokered deposits                                    -             -          -                 23,632             2       0.03

Total interest-bearing deposits              2,779,941           945      

0.14              3,020,168         1,324       0.18

SSUARs and other short-term
borrowings                                     294,388            49       0.07                169,888             8       0.02

Federal Home Loan Bank advances                 20,000            94       1.88                 25,000            10       0.16
Subordinated note                                    -             -          -                 41,240           169       1.64

Total interest-bearing liabilities           3,094,329         1,088       0.14              3,256,296         1,511       0.19

Noninterest-bearing liabilities and
Stockholders' equity:
Noninterest-bearing deposits                 2,197,300                                       2,226,070
Other liabilities                              100,937                                         108,891
Stockholders' equity                           851,158                                         849,305
Total liabilities and stockholders'
equity                                  $    6,243,724                                  $    6,440,562

Net interest income                                        $  51,232                                       $  50,304

Net interest spread                                                        3.44 %                                          3.24 %

Net interest margin                                                        3.51 %                                          3.33 %

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

securities is included as a component of other assets.

(2) Interest income for Easy Advances and RCS line-of-credit products is composed

entirely of loan fees.

(3) Interest income includes loan fees of $2,000 and $4,000 for the three months

ended June 30, 2022 and 2021.

(4) Interest income includes loan fees of $500,000 and $789,000 for the three

months ended June 30, 2022 and 2021.

(5) Interest income includes loan fees of $124,000 and $3.7 million for the three

months ended June 30, 2022 and 2021.

(6) Interest income includes loan fees of $1.5 million and $963,000 for the three

months ended June 30, 2022 and 2021.

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.


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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 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

                                                  Three Months Ended June 30, 2022
                                                            Compared to
                                                  Three Months Ended June 30, 2021
                                       Total Net           Increase / (Decrease) Due to
(in thousands)                           Change             Volume                 Rate

Interest income:

Federal funds sold and other
interest-earning deposits             $      1,376     $            (39)       $       1,415
Investment securities, including
FHLB stock                                     853                   482                 371
TRS Easy Advance loans*                      (213)                    59               (272)
RCS LOC products                             1,945                 2,297               (352)
Other RPG loans                                197                 (176)                 373
Outstanding Warehouse lines of
credit                                     (1,750)               (1,324)               (426)
Paycheck Protection Program loans          (4,415)               (3,540)   

           (875)
All other Core Bank loans                    2,512                 2,768               (256)
Net change in interest income                  505                   527                (22)

Interest expense:

Transaction accounts                            75                     6                  69
Money market accounts                           75                     2                  73
Time deposits                                (355)                 (191)               (164)
Reciprocal money market and time
deposits                                     (172)                 (152)                (20)
Brokered deposits                              (2)                   (2)                   -
SSUARs and other short-term
borrowings                                      41                     9                  32

Federal Home Loan Bank advances                 84                   (3)                  87
Subordinated note                            (169)                 (169)                   -
Net change in interest expense               (423)                 (500)                  77

Net change in net interest income     $        928     $           1,027   

$ (99)

* Since interest income for Easy Advances is composed entirely of loan fees and
EAs are only offered during the first two months of each year, volume and rate
measurements for this product are based on total EAs originated instead of
average EA balances during the period. EA originations totaled $311 million and
$250 million for the three months ended June 30, 2022 and 2021. The unannualized
EA yield as a function of total EA originations was 0.03% and 0.12% for the
three months ended June 30, 2022 and 2021.

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Provision

Total Company Provision was a net charge of $3.7 million for the second quarter
of 2022 compared to a net credit of $4.3 million for the same period in 2021.

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

Traditional Banking segment

The Traditional Banking Provision during the second quarter of 2022 was a net
charge of $146,000 compared to a net credit of $77,000 for the second quarter of
2021. An analysis of the Provision for the second quarter of 2022 compared to
the same period in 2021 follows:

? For the second quarter of 2022, the Traditional Bank Provision primarily

reflected the following:

Approximately $1.5 million of additional Provision driven by formula reserves

o primarily tied to general loan growth. Non-PPP Traditional Bank loans grew

$106 million from March 31, 2022 to June 30, 2022.

Offsetting the above was the release of approximately $1.4 million in reserves

o following the payoff or upgrade of loans previously downgraded during the

   height of the pandemic.


   For the second quarter of 2021, the Traditional Bank Provision was a net

credit, generally based on an improving economic outlook in conjunction with

limited 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 second quarter of 2021 primarily included 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 June 30, 2021.

As a percentage of total Traditional Bank loans, the Traditional Banking ACLL
was 1.35% as of June 30, 2022 compared to 1.41% as of December 31, 2021 and
1.37% as of June 30, 2021. The Company believes, based on information presently
available, that it has adequately provided for Traditional Banking loan losses
as of June 30, 2022.

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 $234,000 for the second
quarter of 2022 compared to a net credit of $65,000 for the same period in 2021.
Provision for both periods reflected changes in general reserves consistent with
changes in outstanding period-end balances. Outstanding Warehouse period-end
balances decreased $93 million during the second quarter of 2022 compared to a
decrease of $26 million during the second quarter of 2021.

As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was
0.25% as of June 30, 2022, December 31, 2021, and June 30, 2021. The Company
believes, based on information presently available, that it has adequately
provided for Warehouse loan losses as of June 30, 2022.

Tax Refund Solutions segment

The TRS Provision swung from a net credit of $5.8 million during the second
quarter of 2021 to a net charge of $360,000 during the second quarter of 2022.
While the overall net total Provision for TRS is a positive benefit on a
year-to-date basis, the later timing of payments received during 2021 versus
2022 resulted in a large credit to the Provision during the second quarter of
2021 versus a minimal additional expense to the Provision during the second
quarter of 2022. EAs are originated only during the first two months of each
year, with losses on those originations initially estimated during the same
origination period. All unpaid EAs are charged off by June 30th of each year,
with first quarter loss estimates trued-up to actual charge-offs incurred
through a second quarter Provision charge or credit. EAs collected during the
second half of each year are recorded as recoveries of previously charged-off
loans unless such recovery is subject to guarantor reimbursement under a
loan-loss guaranty.

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During the second quarter of 2022, TRS trued-up its first quarter EA loss
estimate with a charge to the Provision of $564,000, increasing its weighted
average net EA loss rate from an estimated 2.67% as of March 31, 2022 to 2.85%
as of June 30, 2022. During the second quarter of 2021, TRS trued-up its first
quarter EA loss estimate with a credit to the Provision of $5.8 million,
decreasing its weighted average net EA loss rate from 6.41% as of March 31, 2021
to 4.09% as of June 30, 2021. The significant true-up credit to the Provision
during the second quarter of 2021 resulted primarily from a higher volume of
loan payments received by the Company during the second quarter, exceeding the
conservative estimates originally made by the Company during the first quarter
of 2021 when the tax season experienced a two-week delay to its start.

For the 2022 and 2021 tax seasons, the following table presents information
regarding EA originations, actual charge-offs, first quarter Provision
estimates, and second quarter Provision true-ups:

(dollars in thousands)                            2022 Tax Season     2021

Tax Season 2022/2021 Change

EAs originated during the first two
months of the year                       (a)      $      311,207      $    

250,045 $ 61,162

Actual EA losses incurred compared to
loss estimates ($):
Actual losses recognized for the first
six months ended June 30,                (b)      $        8,879      $       10,226      $       (1,347)
First quarter Provision estimate made
during three months ended March 31,      (c)               8,315              16,019              (7,704)
Second quarter Provision true-up for
three months ended June 30,              (d)      $          564      $    

(5,793) $ 6,357

EA actual losses incurred compared to
loss estimates (%):
Actual losses recognized for the first
six months ended June 30,              (b)/(a)              2.85 %              4.09 %             (1.24) %
First quarter Provision estimate made
during three months ended March 31,    (c)/(a)              2.67                6.41               (3.74)
Second quarter Provision true-up for
three months ended June 30,            (d)/(a)              0.18 %            (2.32) %               2.50 %


In-line with its customary June 30th charge-off policy for EA loans, with
approximately $2.6 million of the EA loans having been recovered during the
second quarter of 2022 under a loan-loss guaranty, the Company completely
charged-off all remaining unpaid EAs as of June 30, 2022.  EA payments received
after June 30th will be credited as a direct recovery to the Provision in the
period it is received unless such payment is subject to guarantor reimbursement
under the previously mentioned loan-loss guaranty.

For factors affecting the comparison of the TRS results of operations for the
second quarter of 2022 and the second quarter of 2021, see section titled
"OVERVIEW (Three Months Ended June 30, 2022 Compared to Three Months Ended June
30, 2021) - Tax Refund Solutions."

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
$3.4 million during the second quarter of 2022 compared to a net charge to the
Provision of $1.6 million for the same period in 2021. The increase in the
Provision was driven primarily by a $1.6 million increase in net charge-offs on
RCS's line-of-credit products. Net charge-offs for RCS's LOC I product increased
to $1.5 million for the second quarter of 2022 from $520,000 during the second
quarter of 2021, with government stimulus programs generally driving down usage
of this product during the second quarter of 2021. Net charge-offs for RCS's LOC
II product were $621,000 for the second quarter of 2022 compared to no net
charge-offs during the second 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 14.41% as of June 30, 2022, 13.91% as of December 31,
2021, and 7.68% as of June 30, 2021. The Company believes, based on information
presently available, that it has adequately provided for RCS loan losses as of
June 30, 2022.

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

Table 4 - RCS Provision by Product

                              Three Months Ended Jun. 30,
(dollars in thousands)        2022                        2021     $ Change   % Change
Product:
Lines of credit         $          3,428                 $ 1,581  $    1,847       117 %
Hospital receivables                   5                      11         (6)      (55)
Total                   $          3,433                 $ 1,592  $    1,841       116 %


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Table 5 - Summary of Loan and Lease Loss Experience

                                                         Three Months Ended
                                                             June 30,
(dollars in thousands)                                   2022          2021

ACLL at beginning of period                           $   71,656    $   75,336

Charge-offs:

Traditional Banking:
Commercial real estate                                         -             -
Consumer                                                   (245)         (161)
Total Traditional Banking                                  (245)         (161)
Warehouse lines of credit                                      -             -
Total Core Banking                                         (245)         (161)

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                           (11,505)      (10,256)
Other TRS loans                                            (153)          (30)
Republic Credit Solutions                                (2,411)         (597)
Total Republic Processing Group                         (14,069)      (10,883)
Total charge-offs                                       (14,314)      (11,044)

Recoveries:

Traditional Banking:
Residential real estate                                       26            19
Commercial real estate                                         1            12
Commercial & industrial                                        8             4
Home equity                                                  109            34
Consumer                                                     106            97
Total Traditional Banking                                    250           166
Warehouse lines of credit                                      -             -
Total Core Banking                                           250           166

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                              2,626            30
Other TRS loans                                              302             -
Republic Credit Solutions                                    264            79

Total Republic Processing Group                            3,192          

109

Total recoveries                                           3,442           275

Net loan recoveries (charge-offs)                       (10,872)      (10,769)

Provision - Core Banking                                   (128)          (95)
Provision - RPG                                            3,793       (4,181)
Total Provision                                            3,665       (4,276)
ACLL at end of period                                 $   64,449    $   60,291

Credit Quality Ratios - Total Company:

ACLL to total loans                                         1.48 %        1.32 %
ACLL to nonperforming loans                                  398          

270

Net loan charge-offs (recoveries) to average loans 1.00 0.95

Credit Quality Ratios - Core Banking:

ACLL to total loans                                         1.20 %        1.16 %
ACLL to nonperforming loans                                  317          

238

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

 -


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

                                                          Net Loan 

Charge-Offs (Recoveries) to Average Loans

                                                                          Three Months Ended
                                                                               June 30,
                                                       2022                                                      2021

Traditional Banking:
Residential real estate:
Owner occupied                                             (0.01) %                                                 (0.01) %
Nonowner occupied                                               -                                                        -
Commercial real estate                                          -                                                        -

Construction & land development                            (0.01)          

                                             -
Commercial & industrial                                         -                                                        -
Paycheck Protection Program                                     -                                                        -
Lease financing receivables                                     -                                                        -
Aircraft                                                        -                                                        -
Home equity                                                (0.20)                                                   (0.06)
Consumer:
Credit cards                                                 0.22                                                     0.59
Overdrafts                                                  67.77                                                    26.81
Automobile loans                                           (0.13)                                                   (0.09)
Other consumer                                               0.55                                                     0.75
Total Traditional Banking                                       -                                                        -
Warehouse lines of credit                                       -                                                        -
Total Core Banking                                              -                                                        -

Republic Processing Group:
Tax Refund Solutions:
Easy Advances*                                             280.08                                                   237.36
Other TRS loans                                          (303.76)                                                    12.02
Republic Credit Solutions                                    2.36                                                     0.47

Total Republic Processing Group                             10.46          

                                          8.35
Total                                                        1.00 %                                                   0.95 %


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

The Company's net charge-offs to average total Company loans increased from
0.95% during the second quarter of 2021 to 1.00 % during the second quarter of
2022, with net charge-offs increasing $103,000 and average total Company loans
decreasing $207 million, or 5%. The increase in net charge-offs was primarily
driven by a $103,000 increase in net charge-offs within the Company's RPG
operations, which has historically conducted higher-risk lending activities than
the Company's Core Banking operations.

From the second quarter of 2021 to the second quarter of 2022, RPG experienced a
$1.7 million decrease in net charge-offs within its TRS segment, as TRS amended
one of its existing Tax Provider contracts to place a cap on loan losses from
EAs originated through this Tax Provider. For factors affecting the comparison
of the TRS results of operations for the second quarter of 2022 and the second
quarter of 2021, see section titled "OVERVIEW (Three Months Ended June 30, 2022
Compared to Three Months Ended June 30, 2021) - Tax Refund Solutions."

From the second quarter of 2021 to the second quarter of 2022, RPG experienced a
$1.6 million increase in net charge-offs within its RCS segment. Net charge-offs
for RCS's LOC I product increased to $1.5 million for the second quarter of 2022
from $520,000 for the second quarter of 2021, with government stimulus programs
generally driving down usage of this product during the second quarter of 2021.
Net charge-offs for RCS's LOC II product were $621,000 for the second quarter of
2022 compared to no net charge-offs for the second quarter of 2021, with this
product first piloted during the first quarter of 2021.

During the second quarters of 2022 and 2021, the Company's Core Bank net
charge-offs to average Core Bank loans remained near zero.

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Noninterest Income

Total Company noninterest income increased $8.9 million during the second
quarter of 2022 compared to the same period in 2021.

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 decreased $241,000, or 3%, for the
second quarter of 2022 compared to the same period in 2021, driven primarily by
the following:

The Traditional Bank's Other Noninterest Income for the second quarter of 2021

? included a $399,000 non-recurring gain recognized from the sale of a former

banking center in Hudson, Florida.

Partially offsetting the above, Service Charges on Deposit Accounts increased

? $294,000, driven by a 1,443 count increase in the Traditional Bank's

transactional accounts from June 30, 2021 to June 30, 2022.

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
three months ended June 30, 2022 and 2021 were $1.7 million and $1.3 million.
The total daily overdraft charges, net of refunds, included in interest income
for the three months ended June 30, 2022 and 2021 were $308,000 and $257,000.

Mortgage Banking segment

A significant rise in long-term interest rates during 2022 led to a significant
slowdown in the origination and subsequent sale of mortgage loans into the
secondary market. As a result, Mortgage Banking income decreased from $4.2
million during the second quarter of 2021 to $1.8 million for the second quarter
of 2022. For the second quarter of 2022, the Bank sold $68 million in secondary
market loans and achieved an average cash-gain-as-a-percent-of-loans-sold during
the quarter of 2.85%. During the second quarter of 2021, however, long-term
interest rates were closer to historical lows, driving secondary market loan
sales of $176 million with comparable cash-gain-as-a-percent-of-loans-sold
consistent at 2.85%.

With the FOMC moving forward with its quantitative tightening program during
2022, management believes it is likely that the Core Bank's mortgage origination
volume will continue to be negatively impacted by rising interest rates causing
additional declines in mortgage banking income throughout 2022.

Tax Refund Solutions segment

TRS's noninterest income increased $11.1 million, or 163%, during the second
quarter of 2022 compared to the same period in 2021. As previously disclosed,
Green Dot paid RB&T $13.0 million during the second quarter of 2022 to settle
RB&T's lawsuit against Green Dot.

Regarding TRS's RT product, net RT revenue decreased $2.0 million, or 33%, from
$5.9 million for the second quarter of 2021 to $4.0 million for the same period
in 2022. The decrease was primarily driven by an 8% overall decrease in RT
volume from the 2021 to the 2022 tax season, with 4% of that decrease driven by
the loss of one of TRS's tax providers following the announcement of the
now-cancelled May 2021 Asset Purchase Agreement. Also impacting the decrease in
net RT fees from the second quarter of 2021 to the second quarter of 2022 was
the previously mentioned two-week delay in the 2021 tax season, which pushed a
greater percentage of RT volume into the second quarter of 2021.

For factors affecting the comparison of the TRS results of operations for the
second quarter of 2022 and the second quarter of 2021, see section titled
"OVERVIEW (Three Months Ended June 30, 2022 Compared to Three Months Ended June
30, 2021) - Tax Refund Solutions."

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Republic Credit Solutions segment

RCS's noninterest income increased $522,000, or 20%, during the second quarter
of 2022 compared to the same period in 2021, with program fees representing the
entirety of RCS's noninterest income. The increase in RCS program fees primarily
reflected higher sales volume from RCS's line of credit and installment loan
products, as sales volume was negatively impacted during the second quarter of
2021 by federal government stimulus programs implemented to combat the economic
impact of the COVID pandemic. Proceeds from the sale of RCS loan products
totaled $269 million during the second quarter of 2022, a 49% increase from the
same period in 2021.

The following table presents RCS program fees by product:

Table 7 - RCS Program Fees by Product

                              Three Months Ended Jun. 30,
(dollars in thousands)        2022                        2021     $ Change   % Change
Product:
Lines of credit         $          1,630                 $ 1,147  $      483        42 %
Hospital receivables                  38                      63        (25)      (40)
Installment loans*                 1,481                   1,417          64         5
Total                   $          3,149                 $ 2,627  $      522        20 %

* 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 increased $1.9 million, or 4%, during the
second quarter of 2022 compared to the same period in 2021.

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

Traditional Banking segment

Traditional Banking noninterest expense increased $1.4 million, or 4%, for the
second quarter of 2022 compared to the same period in 2021. The following
primarily drove the change in noninterest expense:

? Other expenses increased $801,000, with the following other expenses reflecting

the largest increases:

Meals, Entertainment, and Travel expenses, in total, increased $301,000, with

o in-person business travel and community outreach increasing during the quarter

toward pre-pandemic levels.

Fraud and other losses, primarily losses on debit and credit card disputes,

o increased $230,000, as the Bank's clients experienced a general increase in

these categories during 2022.

Provision for losses on off-balance sheet commitments increased $141,000,

o driven primarily by an increase in the Bank's committed but unused lines of

credit during the previous 12 months.

Salaries and benefits expense increased approximately $798,000, or 4%,

? primarily driven by an increase in health benefits costs and annual merit

increases partially offset by a 49-count decrease in FTEs from period to

period.

Republic Credit Solutions segment

Noninterest expense at the RCS segment increased $933,000, or 93%, during the
second quarter of 2022 compared to the same period in 2021, primarily due to
increased marketing of RCS's LOC II product. The LOC II product was first
piloted during the first quarter of 2021.

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OVERVIEW (Six Months Ended June 30, 2022 Compared to Six Months Ended June 30,
2021)

Total Company net income for the first six months of 2022 was $51.8 million, a
$1.9 million, or 4%, increase from the same period in 2021. Diluted EPS
increased to $2.59 for the first six months of 2022 compared to $2.41 for the
same period in 2021. The increase in net income primarily reflected the
following:

? The benefit of a $13.0 million pre-tax legal settlement;

? The benefit of a $5.0 million pre-tax contract termination fee;

? A $10.2 million decrease in PPP income within interest income; and

? A $7.0 million decrease in Mortgage Banking income.

Compared to the first six months of 2022, the first six months of 2021 was
significantly and positively impacted by strong fee income from the PPP and
higher demand for mortgage refinancing, driving strong mortgage banking income.

The following are general highlights by reportable segment:

Traditional Banking segment

? Net income decreased $5.1 million, or 31%, for the first six months of 2022

compared to the same period in 2021.

? Net interest income decreased $4.1 million, or 5%, for the first six months of

2022 compared to the same period in 2021.

? Provision was a net charge of $466,000 for the first six months of 2022

compared to a net credit of $82,000 for the same period in 2021.

? Noninterest income increased $209,000, or 1%, for the first six months of 2022

compared to the same period in 2021.

? Noninterest expense increased $2.3 million, or 3%, for the first six months of

2022 compared to the same period in 2021.

? Total Traditional Bank loans increased $172 million, or 5%, during the first

six months of 2022, driven primarily by strong CRE loan growth.

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

was 0.44% as of June 30, 2022 compared to 0.59% as of December 31, 2021.

? Delinquent loans to total loans for the Traditional Banking segment was 0.15%

as of June 30, 2022 compared to 0.21% as of December 31, 2021.

? Total Traditional Bank deposits remained at $4.3 billion from December 31, 2021

   to June 30, 2022.


Warehouse Lending segment

? Net income decreased $3.2 million, or 37%, for the first six months of 2022

compared to the same period in 2021.

? Net interest income decreased $4.7 million, or 36%, for the first six months of

2022 compared to the same period in 2021.

? The Warehouse Provision was a net credit of $635,000 for the first six months

of 2022 compared to a net credit of $307,000 for the same period in 2021.

? Average committed Warehouse lines remained at $1.4 billion in the first six

months of 2022 compared to the first six months of 2021.

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? Average line usage was 42% during the first six months of 2022 compared to 52%

during the same period in 2021.

Mortgage Banking segment

Within the Mortgage Banking segment, mortgage banking income decreased $7.0

? million, or 61%, during the first six months of 2022 compared to the same

period in 2021.

Overall, Republic's proceeds from sale of secondary market loans totaled $187

? million during the first six months of 2022 compared to $380 million during the

   same period in 2021, with the Company's cash-gain-as-a-percent-of-loans-sold

decreasing to 2.23% from 3.26% from period to period.

Tax Refund Solutions segment

? Net income increased $14.9 million, or 119%, for the first six months of 2022

compared to the same period in 2021.

? Net interest income increased $1.7 million, or 11%, for the first six months of

2022 compared to the same period in 2021.

? Total EA originations were $311 million during the first six months of 2022

compared to $250 million for the first six months of 2021.

Overall, TRS recorded a net charge to the Provision of $8.3 million during the

? first six months of 2022 compared to a net charge to the Provision of $10.1

million for the same period in 2021.

Noninterest income increased $15.3 million for the first six months of 2022

? compared to the same period in 2021. Noninterest income for the first six

months of 2022 included a $5.0 million non-recurring contract termination fee

and the receipt of a $13.0 million non-recurring legal settlement payment.

? Net RT revenue decreased $2.6 million for the first six months of 2022 compared

to the same period in 2021.

? Noninterest expense was $8.7 million for the first six months of 2022 compared

to $9.0 million for the same period in 2021.

TRS had multiple factors during 2021 and 2022 that impacted and will continue to
impact its 2022 performance and the comparability of that performance to the
same periods in 2021. By year, these factors discussed below include, but may
not be limited to, the following:

2021

1) The start of the IRS processing season was delayed approximately two weeks

later than a typical tax season; and

The Company believes stimulus programs from the Federal Government and

2) pandemic-related restrictions during early 2021 negatively impacted demand for

    TRS's RT and EA products.


2022

TRS amended one of its existing third-party contracts to provide for a small

1) revenue share from Republic to the third party, along with a cap on loan

losses from the third party to Republic for all EA products originated through

this provider;

2) TRS experienced a loss of RT and EA product volume to Green Dot directly

following the execution of the TRS Purchase Agreement;

Although to a lesser degree than in the 2021 tax season, management believes

3) stimulus programs from the Federal Government during the latter half of 2021

negatively impacted the 2022 tax season;

4) The Bank received a $5.0 million non-recurring termination fee in January 2022

    following the cancellation of the Sales Transaction; and


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5) The Bank received a $13.0 million non-recurring legal settlement in June 2022

upon settling its lawsuit against Green Dot.

As it relates to factors impacting 2021, the processing season with the IRS
started approximately two weeks later than normal. As a result, RT funding
volume and loan repayments from the IRS lagged normal funding patterns in
non-COVID-impacted years and effectively pushed RT revenue and loan recovery
activity later into the 2021 calendar year. In addition, government stimulus
programs during 2021 negatively impacted demand for TRS EA and RT products.

Conversely, the timing of the IRS tax season during the first six months of 2022
was more in-line with non-COVID seasons than the first six months of 2021. As a
result, the Company believes that it likely received a greater percentage of its
funded RT volume in the first six months of 2022 as compared to 2021, and that
it likely received a greater percentage of its EA loan repayments in the first
six months of 2022 than it did during 2021. This estimated timing, if correct,
generally provided more favorable results for TRS during the first six months of
2022 as compared to the first six months of 2021, but will likely provide for
less favorable quarterly comparisons throughout the remainder of 2022 as
compared to 2021.

In addition to the more normal timing of the tax season in 2022 as compared to
2021, the first six months of 2022 tax season was also favorably impacted by a
contractual change with one of the Company's large Tax Providers. As a result of
the amended contract, TRS provides this tax provider a revenue share, while this
tax provider covers certain overhead costs of the program and furnishes to RB&T
a loan loss guaranty for EAs originated through this provider. Through this
specific provider, TRS originated $172 million of EAs during the first six
months of 2022 as compared to $135 million originated during the first six
months of 2021. The net cost of the revenue share to the provider from RB&T was
approximately $275,000 for the $172 million of EA volume. Under the amended
contract, during the first six months of 2022 the net benefit to TRS of the
covered overhead costs and to the Provision from the loan loss guaranty was
approximately $2.8 million.

Negatively impacting the first six months of the 2022 tax season as compared to
the first six months of 2021 was a loss of RT and EA volume by RB&T to Green Dot
from certain third-party Tax Providers following the execution of the TRS
Purchase Agreement. While TRS was able to partially offset this lost volume
through higher volume from other existing relationships, the loss of volume to
Green Dot will have a negative impact to the overall results of TRS for 2022 and
well into the future if TRS is unable to win this business back through its
normal solicitation process.

As a net result of all the factors in the preceding paragraphs, TRS experienced
a significant net positive improvement to its first six months of 2022 tax
results as compared to the first six months of 2021. Because many of these
factors may only be timing in nature, management believes TRS's results of
operations, and more specifically RT revenue and net recoveries for previously
charged-off EAs for the remainder of 2022, will likely be negative as compared
to the same periods in 2021.

Republic Credit Solutions segment

? Net income increased $332,000, or 4%, for the first six months of 2022 compared

to the same period in 2021.

? Net interest income increased $2.9 million, or 29%, for the first six months of

2022 compared to the same period in 2021.

Overall, RCS recorded a net charge to the Provision of $4.8 million during the

? first six months of 2022 compared to a net charge of $1.2 million for the same

period in 2021.

? Noninterest income increased $2.3 million, or 59%, from the first six months of

2022 to the first six months of 2022.

? Noninterest expense was $3.5 million for the first six months of 2022 and $2.1

million for the same period in 2021.

? Total nonperforming loans to total loans for the RCS segment was 0.05% as of

June 30, 2022 and December 31, 2021.

? Delinquent loans to total loans for the RCS segment was 6.64% as of June 30,

   2022 compared to 6.48% as of December 31, 2021.


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RESULTS OF OPERATIONS (Six Months Ended June 30, 2022 Compared to Six Months
Ended June 30, 2021)

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 rates trended
lower with the onset of the COVID pandemic, as the FOMC reduced the FFTR to
approximately 25 basis points during 2020. With the rise of inflation during the
latter half of 2021 and a steep inflationary rise during the first half of 2022,
representing inflationary levels not seen in approximately 40 years, the FOMC
began executing a quantitative tightening program by reducing its balance sheet,
selling certain types of bonds in the market, and repeatedly increasing the
FFTR. The increases to the FFTR included a 25-basis-point increase in March
2022, another 50-basis-point increase in May 2022, and another 75-basis-point
increase in June 2022 (the highest one-time increase in 28 years). The FOMC also
increased the FFTR by another 75 basis points in July 2022. Along with these
increases, the FOMC continued to signal that additional 2022 FFTR increases were
likely.

The FOMC's actions and signals continued to place upward pressure on long-term
market interest rates for bonds and loans during the second quarter of 2022.
Further monetary tightening by the Federal Reserve in the future will likely
cause both short-term and long-term market interest rates to increase during the
remainder of 2022. Increases in market interest rates are expected to impact the
various business segments of the Company differently and will be discussed in
further detail in the sections below.

Total Company net interest income was $113.8 million during the first six months
of 2022 and represented a decrease of $4.3 million, or 4%, from the first six
months of 2021. Total Company net interest margin decreased to 3.90% during the
first six months of 2022 compared to 3.98% for the same period in 2021.

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 decreased $4.1 million, or 5%, for
the first six months of 2022 compared to the same period in 2021. Traditional
Banking's net interest margin was 2.98% for the first six months of 2022, a
decrease of 23 basis points from the same period in 2021.

The decrease in the Traditional Bank's net interest income and net interest
margin during the first six months of 2022 was primarily attributable to the
following factors:

The Traditional Bank recognized $1.1 million of fees and interest on its PPP

portfolio during the first six months of 2022 compared to $11.3 million of

? similar income during the same period in 2021. The $10.2 million decrease in

PPP fees and interest primarily highlighted the short-term nature of this

program, which was closer to its peak during the first six months of 2021.

Offsetting the decrease above, Traditional Bank net interest income, excluding

PPP fees and interest, increased $6.1 million, or 9%, from the first six months

of 2021, as average non-PPP loans at the Traditional Bank grew from $3.3

billion for the first six months of 2021 to $3.5 billion for the first six

? months of 2022. Offsetting the benefit of growth in non-PPP Traditional Bank

loans was a 2-basis point decrease in the Traditional Bank's net interest

margin excluding PPP loans and related fees and interest. The Traditional

Bank's net interest margin, excluding the PPP-related elements, declined from

2.97% for the first six months of 2021 to 2.95% for the first six months of

   2022.


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Table 8 - 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 performance of 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 Income                                        Interest-Earning Assets                                 Net Interest Margin
                                                               Six Months Ended Jun. 30,                                     Six Months Ended Jun. 30,                                   Six Months Ended Jun. 30,
(dollars in thousands)                                          2022               2021          $ Change     % Change          2022            2021         $ Change    % Change         2022                2021        % Change

Traditional Banking - GAAP                                  $      75,306  

$ 79,380 $ (4,074) (5) % $ 5,053,387 $ 4,946,416 $ 106,971 2 % 2.98 %

              3.21 %       (0.23) %
Less: Impact of PPP fees and interest                               1,123             11,280      (10,157)        (90)             23,596        357,163      (333,567)      (93)          0.03                0.24        

(0.21)

Traditional Banking ex PPP fees and interest - non-GAAP $ 74,183

    $      68,100    $    6,083           9     $    5,029,791    $ 4,589,253    $   440,538        10          2.95                2.97       

(0.02)

As previously disclosed, both short-term and long-term market interest rates are
expected to continue to increase during 2022 as a result of expected monetary
tightening by the FOMC. Additional increases in short-term interest rates and
overall market rates are generally believed by management to be favorable to the
Traditional Bank's net interest income and net interest margin in the near term,
while decreases in short-term interest rates and overall market rates are
generally believed by management to be unfavorable to the Traditional Bank's net
interest income and net interest margin in the near term.

Increases in market interest rates, however, could have a negative impact on net
interest income and net interest margin if the Traditional 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 Traditional
Bank's net interest income and net interest margin. Variables which may impact
the Traditional Bank'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 Traditional Bank's financial products, and the Traditional Bank's
overall future liquidity needs.

Warehouse Lending segment

Net interest income within the Warehouse segment decreased $4.7 million, or 36%,
from the first six months of 2021 to the first six months of 2022, driven by
decreases in both average outstanding balances and net interest margin. Overall
average outstanding Warehouse balances declined from $758 million during the
first six months of 2021 to $582 million for the first six months of 2022, as
home-mortgage refinancing dipped from historically high volume in early 2021.
The Warehouse net interest margin compressed 56 basis points from 3.45% during
the first six months of 2021 to 2.89% during the first six months of 2022, as
competitive forces began driving down the contractual interest rates on the
Company's Warehouse lines during the third quarter of 2021.

In general, the decline in net interest income within Warehouse Lending was
driven largely by a sharp rise in long-term interest rates during the first half
of 2022, which led to a decrease in mortgage refinancing demand, a sharp drop in
Warehouse line usage, and an overall decrease in outstanding Warehouse balances.
In addition, Warehouse's net interest margin was negatively impacted during the
first six months of 2022, as many adjustable rate Warehouse lines remained below
their interest rate floors. These interest rate floors, which benefitted
Warehouse's net interest margin significantly during 2020 and 2021 when market
rates declined to historical lows, negatively impacted its net interest margin
during the first half of 2022, as its cost of funding rose while its loan yield
remained relatively stable. The negative impact of these floors is expected to
diminish in the near term as interest rates on many Warehouse lines are expected
to begin exceeding their floors during the third quarter of 2022, assuming
projected FFTR increases, currently projected by the financial markets, come to
fruition.

Committed Warehouse lines-of-credit remained at $1.4 billion from June 30, 2021
to June 30, 2022, while average usage rates for Warehouse lines were 42% and
52%, respectively, during the first six months of 2022 and 2021.

Additional increases in short-term interest rates and overall market rates are
generally believed by management to be favorable to Warehouse's net interest
income and net interest margin in the near term, however, the benefit of an
increase in rates could be partially or entirely offset by a reduction in
average outstanding balances driven by a decline in demand from Warehouse
clients, as higher long-term interest rates generally drive lower demand for
Warehouse borrowings. In addition, a lower demand for Warehouse

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borrowings could cause additional competitive pricing pressures for the
industry, driving down the yield Warehouse earns on its lines of credits.

Tax Refund Solutions segment

TRS's net interest income increased $1.7 million for the first six months of
2022 compared to the same period in 2021, driven by an increase in EA fees, an
increase in outstanding commercial loan balances, and an increase in interest
income on TRS's prepaid card balances as a function of the Company's FTP
methodology and a rise in interest rates. TRS's EA product earned $13.5 million
in interest income during the first six months of 2022, a $442,000 increase from
the first six months of 2021 resulting primarily from a $61 million increase in
EA originations from period to period. For factors affecting the comparison of
the TRS results of operations for the first six months of 2022 and the first six
months of 2021, see section titled "OVERVIEW (Six Months Ended June 30, 2022
Compared to Six Months Ended June 30, 2021) - Tax Refund Solutions."

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

RCS's net interest income increased $2.9 million, or 29%, from the first six
months of 2021 to the first six months of 2022. The increase was driven
primarily by an increase in fee income from RCS's LOC products partially offset
by a decrease in interest income from RCS's hospital receivables.

RCS's LOC loan fees, which are recorded as interest income on loans, increased
to $11.5 million during the first six months of 2022 compared to $7.7 million
during the same period in 2021.

Interest income on RCS's LOC I product increased $2.0 million, driven by a $5
million increase in average outstanding balances for this product from the first
six months of 2021 to the first six months of 2022. Interest income on RCS's LOC
II product increased $1.8 million, as the Company first piloted this product
during the first six months of 2021 with limited outstanding balances during the
pilot phase.

Interest income from RCS's hospital receivables decreased $774,000 from the
first six months 2021 to the same period in 2022 resulting from a $36 million
decrease in average receivables from period to period.

Overall product demand for the RCS segment is not assumed to be interest rate
sensitive and therefore management does not believe a rising interest rate
environment will impact demand for its various consumer loan products. A rising
interest rate environment, however, likely will impact the Company's internal
FTP cost allocated to this segment. As a result, the impact of rising interest
rates to RCS during 2022 will be negative to the segment's financial results,
although the exact amount of the negative impact will depend on the internal FTP
cost assigned, as well as, the overall volume and mix of loans it generates.

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Table 9 - Total Company Average Balance Sheets and Interest Rates

                                      Six Months Ended June 30, 2022        

Six Months Ended June 30, 2021

                                     Average                    Average           Average                    Average
(dollars in thousands)               Balance       Interest      Rate             Balance       Interest      Rate

ASSETS

Interest-earning assets:
Federal funds sold and other
interest-earning deposits          $    837,757    $   2,067       0.49 %       $    725,764    $     416       0.11 %
Investment securities, including
FHLB stock (1)                          649,040        4,877       1.50              563,243        3,930       1.40
TRS Easy Advance loans (2)               48,420       13,525      55.87               53,276       13,083      49.11
RCS LOC products (2)                     26,701       11,484      86.02               16,536        7,686      92.96
Other RPG loans (3) (7)                 105,879        3,372       6.37              122,225        3,984       6.52
Outstanding Warehouse lines of
credit (4) (7)                          581,581        9,953       3.42              758,493       14,194       3.74
Paycheck Protection Program
loans (5) (7)                            23,596        1,123       9.52              357,163       11,280       6.32
All other Core Bank loans (6)
(7)                                   3,561,122       69,474       3.90    

3,337,969 66,885 4.01

Total interest-earning assets 5,834,096 115,875 3.97

5,934,669 121,458 4.09

Allowance for credit loss              (70,670)                            

(70,390)

Noninterest-earning assets:
Noninterest-earning cash and
cash equivalents                        262,772                            

196,793

Premises and equipment, net              34,888                            

          39,152
Bank owned life insurance                99,844                                       82,837
Other assets (1)                        172,389                                      188,785
Total assets                       $  6,333,319                                 $  6,371,846

LIABILITIES AND STOCKHOLDERS'
EQUITY

Interest-bearing liabilities:
Transaction accounts               $  1,695,456    $     266       0.03 %       $  1,542,685    $     175       0.02 %
Money market accounts                   793,709          261       0.07              753,198          196       0.05
Time deposits                           247,596        1,215       0.98              309,155        2,035       1.32
Reciprocal money market and time
deposits                                 66,826           82       0.25              316,493          461       0.29
Brokered deposits                             -            -          -               43,369           22       0.10

Total interest-bearing deposits 2,803,587 1,824 0.13

       2,964,900        2,889       0.19

SSUARs and other short-term
borrowings                              297,263           77       0.05              181,216           17       0.02

Federal Home Loan Bank advances          21,657          130       1.20    

          34,033           41       0.24
Subordinated note                             -            -          -               41,240          341       1.65

Total interest-bearing
liabilities                           3,122,507        2,031       0.13            3,221,389        3,288       0.20

Noninterest-bearing liabilities
and Stockholders' equity:
Noninterest-bearing deposits          2,255,104                                    2,186,274
Other liabilities                       106,603                                      121,357
Stockholders' equity                    849,105                                      842,826
Total liabilities and
stock-holders' equity              $  6,333,319                                 $  6,371,846

Net interest income                                $ 113,844                                    $ 118,170

Net interest spread                                                3.84 %                                       3.89 %

Net interest margin                                                3.90 %                                       3.98 %

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

securities is included as a component of other assets.

(2) Interest income for Easy Advances and RCS line-of-credit products is composed

entirely of loan fees.

(3) Interest income includes loan fees of $664,000 and $1.7 million for the six

months ended June 30, 2022 and 2021.

(4) Interest income includes loan fees of $1.1 million and $1.7 million for the

six months ended June 30, 2022 and 2021.

(5) Interest income includes loan fees of $1.0 million and $9.4 million for the

six months ended June 30, 2022 and 2021.

(6) Interest income includes loan fees of $3.0 million and $1.9 million for the

six months ended June 30, 2022 and 2021.

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.


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Table 10 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 10 - Total Company Volume/Rate Variance Analysis

                                                 Six Months Ended June 30, 2022
                                                           Compared to
                                                 Six Months Ended June 30, 2021
                                        Total Net         Increase / (Decrease) Due to
(in thousands)                           Change            Volume               Rate

Interest income:

Federal funds sold and other
interest-earning deposits             $       1,651    $            73     $        1,578
Investment securities, including
FHLB stock                                      947                629                318
TRS Easy Advance loans*                         442              2,880            (2,438)
RCS LOC products                              3,798              4,410              (612)
Other RPG loans                               (612)              (523)               (89)
Outstanding Warehouse lines of
credit                                      (4,241)            (3,103)     

(1,138)

Paycheck Protection Program loans          (10,157)           (13,997)     

        3,840
All other Core Bank loans                     2,589              4,387            (1,798)
Net change in interest income               (5,583)            (5,244)              (339)

Interest expense:

Transaction accounts                             91                 19                 72
Money market accounts                            65                 11                 54
Time deposits                                 (820)              (360)              (460)
Reciprocal money market and time
deposits                                      (379)              (315)               (64)
Brokered deposits                              (22)               (22)                  -
SSUARs and other short-term
borrowings                                       60                 19                 41

Federal Home Loan Bank advances                  89               (20)     

109

Subordinated note                             (341)              (341)                  -
Net change in interest expense              (1,257)            (1,009)     

(248)

Net change in net interest income $ (4,326) $ (4,235) $ (91)

* Since interest income for Easy Advances is composed entirely of loan fees and
EAs are only offered during the first two months of each year, volume and rate
measurements for this product are based on total EAs originated instead of
average EA balances during the period. EA originations totaled $311 million and
$250 million for the six months ended June 30, 2022 and 2021. The unannualized
EA yield as a function of total EA originations was 4.35% and 5.23% for the six
months ended June 30, 2022 and 2021.

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Provision

Total Company Provision was a net charge of $12.9 million for the first six
months of 2022 compared to a net charge of $10.9 million for the same period in
2021.

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 six months of 2022 was a net
charge of $466,000 compared to a net credit of $82,000 for the first six months
of 2021. An analysis of the Provision for the first six months of 2022 compared
to the same period in 2021 follows:

? For the first six months of 2022, the Traditional Bank Provision primarily

reflected the following:

Approximately $2.5 million of additional Provision driven by formula reserves

o tied to general loan growth. Non-PPP Traditional Bank loans grew $213 million

from December 31, 2021 to June 30, 2022.

Offsetting the above was the release of approximately $2.0 million of reserves

o following the payoff or upgrade of loans previously downgraded during the

   height of the pandemic.


   For the first six 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 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 six months of 2021 primarily

included 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 June 30, 2021.

As a percentage of total Traditional Bank loans, the Traditional Banking ACLL
was 1.35% as of June 30, 2022 compared to 1.41% as of December 31, 2021 and
1.37% as of June 30, 2021. The Company believes, based on information presently
available, that it has adequately provided for Traditional Banking loan losses
as of June 30, 2022.

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 $635,000 for the first six
months of 2022 compared to a net credit of $307,000 for the same period in 2021.
Provision for both periods reflected changes in general reserves consistent with
changes in outstanding period-end balances. Outstanding Warehouse period-end
balances decreased $254 million during the first six months of 2022 compared to
a decrease of $123 million during the first six months of 2021.

As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was
0.25% as of June 30, 2022, December 31, 2021, and June 30, 2021. The Company
believes, based on information presently available, that it has adequately
provided for Warehouse loan losses as of June 30, 2022.

Tax Refund Solutions segment

TRS recorded a net charge to the Provision of $8.3 million during the first six
months of 2022 compared to a net charge of $10.1 million for the same period in
2021. Substantially all TRS Provision in both periods was related to its EA
product.

TRS recorded a charge to the Provision for EA loans of $8.9 million, or 2.85% of
its $311 million in EAs originated during the first six months of 2022 compared
to a charge to the Provision of $10.2 million, or 4.09% of its $250 million of
EAs originated during the first six months of 2021. The decrease in Provision
for the first six months of 2022 was primarily due to the following two factors:

TRS received a contractual guaranty during 2022 that limits its EA losses for

EAs originated through one of its largest Tax Providers. Through this

1) particular provider, TRS originated $172 million of EAs during the first six

months of 2022. The net benefit to the Provision for TRS during the first six

    months of 2022 was approximately $2.6 million.


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In addition to its contractual guaranty discussed in the previous bullet (1),

TRS experienced delayed EA paydowns during the first six months of 2021 with

2) the start of the IRS tax season delayed into mid-February 2021, combined with

federal government stimulus programs during the first six months of 2021,

which generally utilized resources of the IRS and U.S. Treasury to administer

the programs.

In-line with its customary June 30th charge-off policy for EA loans, with
approximately $2.6 million of the EA loans having been recovered during the
second quarter of 2022 under a loan-loss guaranty, the Company completely
charged-off all remaining unpaid EAs as of June 30, 2022.  EA payments received
after June 30th will be credited as a direct recovery to the Provision in the
period it is received unless such payment is subject to guarantor reimbursement
under the previously mentioned loan-loss guaranty.

For factors affecting the comparison of the TRS results of operations for the
first six months of 2022 and the first six months of 2021, see section titled
"OVERVIEW (Six Months Ended June 30, 2022 Compared to Six Months Ended June 30,
2021) - Tax Refund Solutions."

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 11 below, RCS recorded a net charge to the Provision of
$4.8 million during the first six months of 2022 compared to a net charge to the
Provision of $1.2 million for the same period in 2021. The increase in the
Provision was driven primarily by a $3.4 million increase in net charge-offs on
RCS's line-of-credit products. Net charge-offs for RCS's LOC I product increased
to $3.2 million for the first six months of 2022 from $1.2 million during the
first six months of 2021, with government stimulus programs generally driving
down usage of this product during the first six months of 2021. Net charge-offs
for RCS's LOC II product were $1.3 million for the first six months of 2022
compared to no net charge-offs during the first six months 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 14.41% as of June 30, 2022, 13.91% as of December 31,
2021, and 7.68% as of June 30, 2021. The Company believes, based on information
presently available, that it has adequately provided for RCS loan losses as of
June 30, 2022.

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

Table 11 - RCS Provision by Product

                            Six Months Ended Jun. 30,
(in thousands)             2022                       2021    $ Change   % Change
Product:
Lines of credit       $         4,831               $ 1,207  $    3,624      300 %
Hospital receivables              (3)                    10        (13)    (130)
Total                 $         4,828               $ 1,217  $    3,611      297 %


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Table 12 - Summary of Loan and Lease Loss Experience

                                            Six Months Ended
                                               June 30,
(dollars in thousands)                     2022          2021

ACLL at beginning of period             $   64,577    $   61,067

Charge-offs:

Traditional Banking:
Commercial real estate                           -         (428)
Consumer                                     (508)         (370)
Total Traditional Banking                    (508)         (798)
Warehouse lines of credit                        -             -
Total Core Banking                           (508)         (798)

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                             (11,505)      (10,256)
Other TRS loans                              (153)          (51)
Republic Credit Solutions                  (5,084)       (1,362)
Total Republic Processing Group           (16,742)      (11,669)
Total charge-offs                         (17,250)      (12,467)

Recoveries:

Traditional Banking:
Residential real estate                         69            46
Commercial real estate                           2            80
Commercial & industrial                         17            11
Home equity                                    112            41
Consumer                                       195           243
Total Traditional Banking                      395           421
Warehouse lines of credit                        -             -
Total Core Banking                             395           421

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                2,626            30
Other TRS loans                                664             8
Republic Credit Solutions                      539           171
Total Republic Processing Group              3,829           209
Total recoveries                             4,224           630

Net loan charge-offs                      (13,026)      (11,837)

Provision - Core Banking                     (202)         (267)
Provision - RPG                             13,100        11,328
Total Provision                             12,898        11,061
ACLL at end of period                   $   64,449    $   60,291

Credit Quality Ratios - Total Company:

ACLL to total loans                           1.48 %        1.32 %
ACLL to nonperforming loans                    398           270

Net loan charge-offs to average loans 0.60 0.51

Credit Quality Ratios - Core Banking:

ACLL to total loans                           1.20 %        1.16 %
ACLL to nonperforming loans                    317           238

Net loan charge-offs to average loans 0.01 0.02

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Table 13 - Annualized Net Loan Charge-offs (Recoveries) to Average Loans by Loan
Category

                                                        Net Loan 

Charge-Offs (Recoveries) to Average Loans

                                                                         Six Months Ended
                                                                             June 30,
                                                     2022                                                      2021

Traditional Banking:
Residential real estate:
Owner occupied                                          (0.02) %                                                 (0.01) %
Nonowner occupied                                            -                                                        -
Commercial real estate                                       -                                                     0.05

Construction & land development                              -             

                                          -
Commercial & industrial                                 (0.01)                                                   (0.01)
Paycheck Protection Program                                  -                                                        -
Lease financing receivables                                  -                                                        -
Aircraft                                                     -                                                        -
Home equity                                             (0.11)                                                   (0.04)
Consumer:
Credit cards                                              0.39                                                     0.84
Overdrafts                                               79.18                                                    24.51
Automobile loans                                        (0.06)                                                   (0.18)
Other consumer                                            0.12                                                        -
Total Traditional Banking                                 0.01                                                     0.02
Warehouse lines of credit                                    -                                                        -
Total Core Banking                                        0.01                                                     0.02

Republic Processing Group:
Tax Refund Solutions:
Easy Advances*                                           71.16                                                    74.92
Other TRS loans                                        (10.54)                                                     0.63
Republic Credit Solutions                                 9.09                                                     2.18

Total Republic Processing Group                          19.16             

                                      15.40
Total                                                     0.60 %                                                   0.51 %


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

The Company's net charge-offs to average total Company loans increased from
0.51% during the first six months of 2021 to 0.60 % during the first six months
of 2022, with net charge-offs increasing $1.2 million and average total Company
loans decreasing $298 million, or 6%. The increase in net charge-offs was
primarily driven by a $1.5 million increase in net charge-offs within the
Company's RPG operations, which has historically conducted higher-risk lending
activities than the Company's Core Banking operations.

From the first six months of 2021 to the first six months of 2022, RPG
experienced a $3.4 million increase in net charge-offs within its RCS segment.
Net charge-offs for RCS's LOC I product increased to $3.2 million for the first
six months of 2022 from $1.2 million for the first six months of 2021, with
government stimulus programs generally driving down usage of this product during
the first six months of 2021. Net charge-offs for RCS's LOC II product were $1.3
million for the first six months of 2022 compared to no net charge-offs for the
first six months of 2021, with this product first piloted during the first
quarter of 2021.

From the first six months of 2021 to the first six months of 2022, RPG
experienced a $1.9 million decrease in net charge-offs within its TRS segment,
as TRS amended one of its existing Tax Provider contracts to place a cap on loan
losses from EAs originated through this Tax Provider. For factors affecting the
comparison of the TRS results of operations for the first six months of 2022 and
the first six months of 2021, see section titled "OVERVIEW (Three Months Ended
June 30, 2022 Compared to Three Months Ended June 30, 2021) - Tax Refund
Solutions."

During the first six months of 2022 and 2021, the Company's Core Bank net
charge-offs to average Core Bank loans remained near zero.

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Noninterest Income

Total Company noninterest income increased $10.9 million during the first six
months of 2022 compared to the same period in 2021.

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 $209,000, or 1%, for the
first six months of 2022 compared to the same period in 2021, driven primarily
by a $648,000 increase in Service Charges on Deposit Accounts offset by a
$399,000 nonrecurring gain on sale of a former banking center recorded during
the first six months of 2021.

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
six months ended June 30, 2022 and 2021 were $3.2 million and $2.5 million. The
total daily overdraft charges, net of refunds, included in interest income for
the six months ended June 30, 2022 and 2021 were $597,000 and $506,000.

Mortgage Banking segment

A significant rise in long-term interest rates during the first six months of
2022 led to a significant slowdown in the origination and subsequent sale of
mortgage loans into the secondary market. As a result, Mortgage Banking income
decreased from $11.4 million during the first six months of 2021 to $4.4 million
for the first six months of 2022. For the first six months of 2022, the Bank
sold $187 million in secondary market loans and achieved an average
cash-gain-as-a-percent-of-loans-sold during the quarter of 2.23%. During the
first six months of 2021, however, long-term interest rates were closer to
historical lows, driving secondary market loan sales of $380 million with
comparable cash-gain-as-a-percent-of-loans-sold of 3.26%.

With the FOMC moving forward with its quantitative tightening program during
2022, management believes it is likely that the Core Bank's mortgage origination
volume will continue to be negatively impacted by rising interest rates causing
additional declines in mortgage banking income throughout 2022.

Tax Refund Solutions segment

TRS's noninterest income increased $15.3 million, or 75%, during the first six
months of 2022 compared to the same period in 2021. Green Dot paid RB&T a total
of $18 million in nonrecurring payments during the first six months of 2022
related to the now-cancelled TRS Purchase Agreement. These nonrecurring payments
included the following:

A contract termination fee of $5.0 million in January 2022 after RB&T provided

? Green Dot a notice of termination of the May 2021 TRS Purchase Agreement for

the sale of substantially all of RB&T's TRS assets and operations to Green Dot.

? A legal settlement of $13.0 million in June 2022 regarding RB&T's lawsuit

against Green Dot.

Regarding TRS's RT product, net RT revenue decreased 14% from $18.6 million
during the first six months of 2021 to $16.0 million during the same period in
2022. The decrease was primarily driven by an 8% overall decrease in RT volume
from the 2021 to the 2022 tax season, with 4% of that decrease driven by the
loss of one of TRS's tax providers following the announcement of the
now-cancelled May 2021 Asset Purchase Agreement.

For factors affecting the comparison of the TRS results of operations for the
first six months of 2022 and the first six months of 2021, see section titled
"OVERVIEW (Six Months Ended June 30, 2022 Compared to Six Months Ended June 30,
2021) - Tax Refund Solutions."

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Republic Credit Solutions segment

RCS's noninterest income increased $2.3 million, or 59%, during the first six
months of 2022 compared to the same period in 2021, with program fees
representing the entirety of RCS's noninterest income. The increase in RCS
program fees primarily reflected higher sales volume from RCS's line of credit
and installment loan products as sales volume was negatively impacted during the
first six months of 2021 by federal government stimulus programs implemented to
combat the economic impact of the COVID pandemic. Proceeds from the sale of RCS
loan products totaled $526 million during the first six months of 2022, an 82%
increase from the same period in 2021.

The following table presents RCS program fees by product:

Table 14 - RCS Program Fees by Product

                              Six Months Ended Jun. 30,
(dollars in thousands)       2022                      2021     $ Change  

% Change
Product:
Lines of credit         $         2,818               $ 1,899  $      919       48 %
Hospital receivables                 99                   111        (12)     (11)
Installment loans*                3,359                 1,930       1,429       74
Total                   $         6,276               $ 3,940  $    2,336       59 %

* 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 increased $2.6 million, or 3%, during the
first six months of 2022 compared to the same period in 2021.

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

Traditional Banking segment

Traditional Banking noninterest expense increased $2.3 million for the first six
months of 2022 compared to the same period in 2021. The following primarily
drove the change in noninterest expense:

? Other expenses increased $1.5 million, with the following other expenses

reflecting the largest increases:

Meals, Entertainment, and Travel expenses, in total, increased $520,000, with

o in-person business travel and community outreach increasing during the quarter

toward pre-pandemic levels.

o Fraud losses, primarily check fraud, increased $473,000, as the Bank's clients

experienced a general increase in fraudulent check activity during 2022.

Charitable contributions increased $217,000, with these outlays also

o progressing towards pre-pandemic levels following the reduction of various

restrictions.

Salaries and benefits expense increased approximately $618,000, or 1%,

? primarily driven by annual merit increases partially offset by a 49-count

   decrease in FTE's and a decrease in health benefits costs.


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Tax Refund Solutions segment

Noninterest expense at the TRS segment decreased $321,000, or 4%, during the
first six months of 2022 compared to the same period in 2021, primarily due to
consulting costs incurred during 2021 connected to the now-cancelled TRS
Purchase Agreement.

Republic Credit Solutions segment

Noninterest expense at the RCS segment increased $1.4 million, or 66%, during
the first six months of 2022 compared to the same period in 2021, primarily due
to increased marketing of RCS's LOC II product. The LOC II product was first
piloted during the first quarter of 2021.

COMPARISON OF FINANCIAL CONDITION AS OF JUNE 30, 2022 AND DECEMBER 31, 2021

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 $795 million in cash and cash equivalents as of June 30, 2022
compared to $757 million as of December 31, 2021. Although the Company deployed
some of its excess cash through the purchase of long-term investment securities
during the fourth quarter of 2021and the first quarter of 2022 as a result of
movements in the yield curve, it has maintained an overall general strategy of
keeping a large amount of cash on balance sheet for interest rate risk
protection. This strategy benefitted the Traditional Bank's net interest income
during the second quarter of 2022 as the FOMC began raising the FFTR.

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 June 30, 2022 Compared to Three
Months Ended June 30, 2021) and "RESULTS OF OPERATIONS (Six Months Ended June
30, 2022 Compared to Six Months Ended June 30, 2021).

For cash held at the FRB, the Bank earns a yield on amounts exceeding required
reserves. This cash earned a weighted-average yield of 0.49% during the first
six months of 2022 with a spot balance yield of 1.65% on June 30, 2022. For cash
held within the Bank's banking center and ATM networks, the Bank does not earn
interest.

Investment Securities

Table 15 - Purchases of Investment Securities

                                                             Six Months Ended June 30, 2022
                                                       Purchase               Yield to      Average
(in thousands)                                           Cost                 Maturity       Life

Purchases by Class for the Three Months Ended
March 31, 2022
U.S. Treasury                                       $       85,614               1.51 %       2.5 yrs
U.S. Government Agencies                                    10,028               1.39        10.0

Mortgage-backed securities - residential                    20,134               1.25        10.0
Total                                               $      115,776         

1.45 4.4 yrs

Purchases by Class for the Three Months Ended
June 30, 2022
U.S. Treasury                                       $       74,043               2.62 %       2.1 yrs
Total                                               $       74,043               2.62         2.1 yrs

Total Purchases for the Six Months Ended June
30, 2022                                            $      189,819         

1.91 % 3.5 yrs

During the second quarter, management generally targeted purchases of investment
securities with maturities of approximately two years. While the Company will
likely continue to replace some of its maturing investments with new purchases,
it will likely maintain a general policy of limited growth in the total
securities portfolio in the near-term as long as its yield on interest-earning
cash continues to rise in proportion to future FFTR increases.

The overall timing and amount of any purchases will depend on many factors
including, but not limited to, the Company's overall current and projected
liquidity positions, its customers' demand for its loans and deposit products,
the interest rate environment at the time, as well as the anticipated interest
rate environment in the near and long term.

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Table 16 - Loan Portfolio Composition

(dollars in thousands)                 June 30, 2022      December 31, 2021     $ Change     % Change

Traditional Banking:
Residential real estate:
Owner occupied                        $       832,137    $           820,731   $    11,406        1 %
Nonowner occupied                             313,534                306,323         7,211        2
Commercial real estate                      1,569,119              1,456,009       113,110        8
Construction & land development               137,452                129,337         8,115        6
Commercial & industrial                       394,175                340,363        53,812       16
Paycheck Protection Program                    14,657                 56,014      (41,357)     (74)
Lease financing receivables                    11,345                  8,637         2,708       31
Aircraft                                      159,958                142,894        17,064       12
Home equity                                   214,069                210,578         3,491        2
Consumer:
Credit cards                                   15,419                 14,510           909        6
Overdrafts                                        901                    683           218       32
Automobile loans                                9,579                 14,448       (4,869)     (34)
Other consumer                                  1,245                  1,432         (187)     (13)
Total Traditional Banking                   3,673,590              3,501,959       171,631        5
Warehouse lines of credit*                    596,678                850,550     (253,872)     (30)
Total Core Banking                          4,270,268              4,352,509      (82,241)      (2)

Republic Processing Group*:
Tax Refund Solutions:
Easy Advances                                       -                      -             -       NM
Other TRS loans                                   149                 50,987      (50,838)    (100)
Republic Credit Solutions                      91,816                 93,066       (1,250)      (1)
Total Republic Processing Group                91,965                

144,053 (52,088) (36)

Total loans**                               4,362,233              4,496,562     (134,329)      (3)
Allowance for credit losses                  (64,449)               (64,577)           128      (0)

Total loans, net                      $     4,297,784    $         4,431,985   $ (134,201)      (3)

*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.

Gross loans decreased by $134 million, or 3%, during the first six months of
2022 to $4.4 billion as of June 30, 2022. The most significant components
comprising the change in loans by reportable segment follow:

Traditional Banking segment

Period-end balances for Traditional Banking loans increased $172 million, or 5%,
from December 31, 2021 to June 30, 2022. The following primarily drove the
change in loan balances during the first six months of 2022:

CRE loans grew $113 million, or 8%, during the first six months of 2022, as the

? Traditional Bank experienced strong loan demand within its Corporate Lending

division, its Private, CRE, and Commercial Banking division, and its Northern

Kentucky/Cincinnati market.

With mortgage refinance volume at all-time record levels during 2020 and 2021,

balances of 1-4 family loans, including HELOCs, generally declined as the vast

majority of the volume of refinancings was sold into the secondary market. This

? trend began to change in 2022, however, as a significant rise in long-term,

fixed-rate mortgages caused portfolio level ARM loans to become generally more

attractive than secondary market loans. As a result, residential real estate

loans increased $19 million during the first six months of 2022, while HELOCs

   increased $4 million during the same period.


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Offsetting the growth above, during the first six months of 2022, the Core

? Bank's PPP portfolio decreased $41 million, as this temporary government

program continued to wind down.

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 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 June 30, 2022, net
PPP loans of $15 million remained on the Traditional Bank's balance sheet.

Warehouse Lending segment

Outstanding Warehouse period-end balances decreased $254 million from December
31, 2021 to June 30, 2022. 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.

As previously discussed, additional increases in short-term interest rates and
overall market rates are generally believed by management to be unfavorable to
Warehouse's client demand, likely leading to a reduction in average outstanding
balances as higher long-term interest rates generally drive lower demand for
Warehouse borrowings.

Tax Refund Solutions segment

Outstanding TRS loans decreased $51 million from December 31, 2021 to June 30,
2022 primarily reflecting a $51 million reduction in other TRS loans. Other TRS
loans as of December 31, 2021 were primarily commercial loans to Tax Providers.
These loans are typically made in the fourth quarter of each year and fully
repaid by the end of the first six months of the following year.

Allowance for Credit Losses

As of June 30, 2022, 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.

The Company's ACLL decreased $128,000 from $65 million as of December 31, 2021
to $64 million as of June 30, 2022. As a percent of total loans, the total
Company's ACLL increased to 1.48% as of June 30, 2022 compared to 1.44% as of
December 31, 2021. An analysis of the ACL by reportable segment follows:

Traditional Banking segment

The Traditional Banking ACLL increased approximately $320,000 to $50 million as
of June 30, 2022 driven primarily by formula reserves tied to loan growth during
the first six months of 2022 partially offset by reserves released following the
payoff or upgrade of loans downgraded during the height of the pandemic.

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Warehouse Lending segment

The Warehouse ACLL decreased to approximately $1.5 million, and the Warehouse
ACLL to total Warehouse loans remained at 0.25% when comparing June 30, 2022 to
December 31, 2021. As of June 30, 2022, the Warehouse ACLL was entirely
qualitative in nature with no adjustments to the qualitative reserve percentage
required for the first six months of 2022.

Republic Credit Solutions segment

The RCS ACLL increased $283,000 from $13 million as of December 31, 2021 to $13
million as of June 30, 2022.

RCS maintained an ACLL for two distinct credit products offered as of June 30,
2022, including its line-of-credit products and its healthcare-receivables
products. As of June 30, 2022, 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 56% for its LOC II product. 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.

Table 17 - Management's Allocation of the Allowance for Credit Losses on Loans

                                               June 30, 2022                              December 31, 2021
                                               Percent of       Percent of                Percent of         Percent of
                                                Loans to          ACLL to                  Loans to           ACLL to
                                                 Total             Total                    Total              Total
(dollars in thousands)               ACLL        Loans*         Loan Class      ACLL        Loans*          Loan Class*

Traditional Banking:
Residential real estate:
Owner occupied                     $  8,445            20 %         1.01 %    $  8,647            19 %            1.05
Nonowner occupied                     2,733             7           0.87         2,700             7              0.88
Commercial real estate               24,341            36           1.55        23,769            32              1.63

Construction & land development       3,591             3           2.61   

     4,128             3              3.19
Commercial & industrial               3,768             9           0.96         3,487             8              1.02
Paycheck Protection Program               -             -              -             -             1                 -
Lease financing receivables             119             -           1.05            91             -              1.05
Aircraft                                400             4           0.25           357             3              0.25
Home equity                           4,113             5           1.92         4,111             5              1.95
Consumer:                                 -             -              -
Credit cards                            994             -           6.45           934             -              6.44
Overdrafts                              901             -         100.00           683             -            100.00
Automobile loans                        122             -           1.27           186             -              1.29
Other consumer                          200             -          16.06           314             -             21.93
Total Traditional Banking            49,727            84           1.35        49,407            78              1.41
Warehouse lines of credit             1,491            14           0.25         2,126            19              0.25
Total Core Banking                   51,218            98           1.20        51,533            97              1.18

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                             -             -              -             -             -                 -
Other TRS loans                           -             -              -            96             1              0.19
Republic Credit Solutions            13,231             2          14.41        12,948             2             13.91

Total Republic Processing Group      13,231             2          14.39   

    13,044             3              9.06
Total                              $ 64,449           100           1.48      $ 64,577           100              1.44

* Values of less than 50 basis points are rounded down to zero.

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Asset Quality

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 decreased approximately $39 million during the first six
months of 2022, driven primarily by commercial-purpose loans repaid or upgraded
to a Pass rating during the first six months of 2022.

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 18 - Classified and Special Mention Loans

(dollars in thousands)                June 30, 2022      December 31, 2021     $ Change    % Change

Loss                                 $             -    $                 -   $        -          - %
Doubtful                                           -                      -            -          -
Substandard                                   16,471                 21,714      (5,243)       (24)
PCD - Substandard                              1,595                  1,692         (97)        (6)
Total Classified Loans                        18,066                 23,406      (5,340)       (23)

Special Mention                               81,034                114,496     (33,462)       (29)
PCD - Special Mention                            757                    795         (38)        (5)
Total Special Mention Loans                   81,791                115,291     (33,500)       (29)

Total Classified and Special
Mention Loans                        $        99,857    $           138,697   $ (38,840)       (28) %


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 $5 million and $6 million as of June 30, 2022 and
December 31, 2021.

Nonperforming loans to total loans decreased to 0.37% at June 30, 2022 from
0.46% at December 31, 2021, as the total balance of nonperforming loans
decreased by $4 million, or 21%, while total loans decreased $134 million, or
3%, during the first six months of 2022. As presented in Tables 22 and 23 below,
the decrease in nonperforming loans during 2022, including the nonaccrual loan
component, was primarily driven by the refinancing of $5 million of these loans
to another financial institution.

The ACLL to total nonaccrual loans increased to 399% as of June 30, 2022 from
315% as of December 31, 2021, as the total ACLL decreased $128,000 and the
balance of nonaccrual loans decreased by $4 million, or 21%. The driver of the
decrease in nonaccrual loans was primarily the refinancing out of the Bank of $5
million of these loans during the first six months of 2022.

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Table 19 - Nonperforming Loans and Nonperforming Assets Summary

(dollars in thousands)                          June 30, 2022         December 31, 2021

Loans on nonaccrual status*                   $          16,168      $            20,504
Loans past due 90-days-or-more and still
on accrual**                                                 42                       48
Total nonperforming loans                                16,210                   20,552
Other real estate owned                                   1,687                    1,792
Total nonperforming assets                    $          17,897      $            22,344

Credit Quality Ratios - Total Company:
ACLL to total loans                                        1.48 %                   1.44 %
Nonaccrual loans to total loans                            0.37            

0.46

ACLL to nonaccrual loans                                    399            

315

Nonperforming loans to total loans                         0.37            

0.46

Nonperforming assets to total loans
(including OREO)                                           0.41            

0.50

Nonperforming assets to total assets                       0.29            

0.37

Credit Quality Ratios - Core Bank:
ACLL to total loans                                        1.20 %                   1.18 %
Nonaccrual loans to total loans                            0.38            

0.47

ACLL to nonaccrual loans                                    317            

251

Nonperforming loans to total loans                         0.38            

0.47

Nonperforming assets to total loans
(including OREO)                                           0.42            

0.51

Nonperforming assets to total assets                       0.32            

0.40

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 20 - Nonperforming Loan Composition

                                       June 30, 2022            December 31, 2021
                                               Percent of                   Percent of
                                                  Total                       Total
(dollars in thousands)              Balance    Loan Class     Balance       Loan Class

Traditional Banking:
Residential real estate:
Owner occupied                       $ 11,538      1.39 %     $    12,039     1.47 %
Nonowner occupied                         128      0.04                95     0.03
Commercial real estate                  3,228      0.21             6,557     0.45

Construction & land development             -         -                 -  

     -
Commercial & industrial                     -         -                13     0.00
Paycheck Protection Program                 -         -                 -        -
Lease financing receivables                 -         -                 -        -
Aircraft                                    -         -                 -        -
Home equity                             1,016      0.47             1,700     0.81
Consumer:
Credit cards                                -         -                 -        -
Overdrafts                                  -         -                 1     0.15
Automobile loans                           36      0.38                97     0.67
Other consumer                            222     17.83                 3     0.21
Total Traditional Banking              16,168      0.44            20,505     0.59
Warehouse lines of credit                   -         -                 -        -
Total Core Banking                     16,168      0.38            20,505     0.47

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                               -         -                 -        -
Other TRS loans                             -         -                 -        -
Republic Credit Solutions                  42      0.05                47     0.05

Total Republic Processing Group            42      0.05                47  

  0.03

Total nonperforming loans            $ 16,210      0.37 %     $    20,552     0.46 %



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Table 21 - Stratification of Nonperforming Loans

                                                  Number of Nonperforming 

Loans and Recorded Investment

                                                                  Balance
June 30, 2022                               Balance              > $100 &               Balance                 Total
(dollars in thousands)              No.     <= $100       No.     <= $500       No.      > $500        No.     Balance

Traditional Banking:
Residential real estate:
Owner occupied                       145    $  4,669       30    $   5,403        1    $    1,466       176    $ 11,538
Nonowner occupied                      4         128        -            -        -             -         4         128
Commercial real estate                 -           -        1          251        2         2,977         3       3,228

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

      -             -         -           -
Aircraft                               -           -        -            -        -             -         -           -
Home equity                           27         714        2          302        -             -        29       1,016
Consumer:
Credit cards                           -           -        -            -        -             -         -           -
Overdrafts                            NM           -        -            -        -             -        NM           -
Automobile loans                       6          36        -            -        -             -         6          36
Other consumer                         3           2        1          220        -             -         4         222

Total Traditional Banking            185       5,549       34        6,176        3         4,443       222      16,168
Warehouse lines of credit              -           -        -            -        -             -         -           -
Total Core Banking                   185       5,549       34        6,176 

3 4,443 222 16,168

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                                185    $  5,591       34    $   6,176        3    $    4,443       222    $ 16,210


                                                   Number of Nonperforming Loans and Recorded Investment
                                                                   Balance
December 31, 2021                            Balance              > $100 &               Balance                 Total
(dollars in thousands)              No.      <= $100       No.     <= $500       No.      > $500        No.     Balance

Traditional Banking:
Residential real estate:
Owner occupied                       146     $  5,042       27    $   4,857        2    $    2,140       175    $ 12,039
Nonowner occupied                      3           95        -            -        -             -         3          95
Commercial real estate                 -            -        4          872        3         5,685         7       6,557

Construction & land development        -            -        -            -

       -             -         -           -
Commercial & industrial                1           13        -            -        -             -         1          13
Paycheck Protection Program            -            -        -            -        -             -         -           -
Lease financing receivables            -            -        -            -        -             -         -           -
Aircraft                               -            -        -            -        -             -         -           -
Home equity                           25          695        5        1,005        -             -        30       1,700
Consumer:
Credit cards                           -            -        -            -        -             -        NM           -
Overdrafts                            NM            1        -            -        -             -        NM           1
Automobile loans                      13           97        -            -        -             -        13          97
Other consumer                         4            3        -            -        -             -         4           3
Total Traditional Banking            192        5,946       36        6,734        5         7,825       233      20,505
Warehouse lines of credit              -            -        -            -        -             -         -           -
Total Core Banking                   192        5,946       36        6,734        5         7,825       233      20,505

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                          -            -        -            -        -             -         -           -
Other TRS loans                        -            -        -            -        -             -         -           -
Republic Credit Solutions             NM           47        -            -        -             -        NM          47

Total Republic Processing Group       NM           47        -            -

       -             -        NM          47

Total                                192     $  5,993       36    $   6,734        5    $    7,825       233    $ 20,552


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Table 22 - Rollforward of Nonperforming Loans

                                             Three Months Ended         Six Months Ended
                                                 June 30,                   June 30,
(in thousands)                                2022         2021         2022        2021

Nonperforming loans at the beginning
of the period                             $     16,966   $  22,520    $  20,552   $  23,595
Loans added to nonperforming status
during the period that remained
nonperforming at the end of the period           1,313       1,042        2,324       1,772
Loans removed from nonperforming
status during the period that were
nonperforming at the beginning of the
period (see table below)                       (1,381)       (934)      (5,633)     (2,838)
Principal balance paydowns of loans
nonperforming at both period ends                (699)       (490)      (1,028)       (860)
Net change in principal balance of
other loans nonperforming at both
period ends*                                        11         206         

(5) 675

Nonperforming loans at the end of the
period                                    $     16,210   $  22,344    $  

16,210 $ 22,344

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

Table 23 - Detail of Loans Removed from Nonperforming Status

                                              Three Months Ended          Six Months Ended
                                                  June 30,                   June 30,
(in thousands)                                2022          2021         2022         2021

Loans charged off                          $         -    $       -    $       -    $       -
Loans transferred to OREO                            -            -            -            -

Loans refinanced at other institutions (1,381) (752) (5,429) (2,650)
Loans returned to accrual status

                     -        (182)        

(204) (188)

Total loans removed from nonperforming
status during the period that were
nonperforming at the beginning of the
period                                     $   (1,381)    $   (934)    $ 

(5,633) $ (2,838)

Based on the Bank's review as of June 30, 2022, 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 0.26% as of
June 30, 2022 from 0.30% as of December 31, 2021. Core Bank delinquent loans to
total Core Bank loans decreased to 0.13% as of June 30, 2022 from 0.17% as of
December 31, 2021. With the exception of small-dollar consumer loans, all
Traditional Bank loans past due 90-days-or-more as of June 30, 2022 and
December 31, 2021 were on nonaccrual status.

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Table 24 - Delinquent Loan Composition*

                                        June 30, 2022           December 31, 2021
                                                Percent of                Percent of
                                                   Total                     Total
(dollars in thousands)               Balance    Loan Class    Balance     Loan Class

Traditional Banking:
Residential real estate:
Owner occupied                        $  2,469      0.30 %      $  1,599      0.19 %
Nonowner occupied                           41      0.01               -         -
Commercial real estate                   2,142      0.14           5,292      0.36

Construction & land development              -         -               -   

     -
Commercial & industrial                    321      0.08              21      0.01
Paycheck Protection Program                  -         -               -         -
Lease financing receivables                  -         -               -         -
Aircraft                                     -         -               -         -
Home equity                                150      0.07             314      0.15
Consumer:
Credit cards                                24      0.16              30      0.21
Overdrafts                                 199     22.09             164     24.01
Automobile loans                             6      0.06               9      0.06
Other consumer                               -         -               1      0.07
Total Traditional Banking                5,352      0.15           7,430      0.21
Warehouse lines of credit                    -         -               -         -
Total Core Banking                       5,352      0.13           7,430      0.17

Republic Processing Group:
Tax Refund Solutions:
Easy Advances                                -         -               -         -
Other TRS loans                              -         -               -         -
Republic Credit Solutions                6,099      6.64           6,035      6.48

Total Republic Processing Group          6,099      6.63           6,035   

  4.19

Total delinquent loans                $ 11,451      0.26 %      $ 13,465      0.30 %

* 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.

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Table 25 - Rollforward of Delinquent Loans

                                             Three Months Ended         Six Months Ended
                                                 June 30,                  June 30,
(in thousands)                               2022         2021         2022         2021

Delinquent loans at the beginning of
the period                                 $  16,215    $  14,986    $  13,465    $  19,947
Loans added to delinquency status
during the period and remained in
delinquency status at the end of the
period                                         1,714        2,717        2,348        3,276
Loans removed from delinquency status
during the period that were in
delinquency status at the beginning of
the period (see table below)                 (1,944)      (1,425)      (4,104)      (3,016)
Principal balance paydowns of loans
delinquent at both period ends                 (344)         (31)        (348)         (54)
Net change in principal balance of
other loans delinquent at both period
ends*                                        (4,190)        2,471          

90 (1,435)
Delinquent loans at the end of period $ 11,451 $ 18,718 $ 11,451 $ 18,718

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

Table 26 - Detail of Loans Removed from Delinquent Status

                                             Three Months Ended         Six Months Ended
                                                 June 30,                  June 30,
(in thousands)                               2022         2021         2022         2021

Loans charged off                          $     (1)    $     (2)    $     (1)    $     (1)

Easy Advances paid off or charged off              -            -            -            -
Loans transferred to OREO                          -            -            -            -

Loans refinanced at other institutions (601) (667) (3,676) (1,796)
Loans paid current

                           (1,342)        (756)        

(427) (1,219)

Total loans removed from delinquency
status during the period that were in
delinquency status at the beginning of
the period                                 $ (1,944)    $ (1,425)    $ 

(4,104) $ (3,016)

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 27 - Collateral-Dependent Loans and Troubled Debt Restructurings

(dollars in thousands)                 June 30, 2022      December 31, 2021

$ Change % Change

Cashflow-dependent TDRs               $         5,399    $             5,960   $      (561)       (9)  %
Collateral-dependent TDRs                       8,213                  9,426        (1,213)      (13)
Total TDRs                                     13,612                 15,386        (1,774)      (12)
Collateral-dependent loans (which
are not TDRs)                                  10,632                 14,645        (4,013)      (27)
Total recorded investment in TDRs
and collateral-dependent loans        $        24,244    $            

30,031 $ (5,787) (19) %

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.

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Deposits

Table 28 - Deposit Composition

(dollars in thousands)               June 30, 2022      December 31, 2021     $ Change     % Change

Core Bank:
Demand                              $     1,338,061    $         1,381,522   $  (43,461)        (3) %
Money market accounts                       775,560                789,876      (14,316)        (2)
Savings                                     331,508                311,624        19,884          6
Individual retirement accounts
(1)                                          41,305                 43,724       (2,419)        (6)
Time deposits, $250 and over (1)             51,976                 81,050      (29,074)       (36)
Other certificates of deposit
(1)                                         132,536                154,174      (21,638)       (14)
Reciprocal money market and time
deposits (1)                                 52,862                 77,950      (25,088)       (32)
Total Core Bank interest-bearing
deposits                                  2,723,808              2,839,920     (116,112)        (4)
Total Core Bank
noninterest-bearing deposits              1,676,974              1,579,173        97,801          6
Total Core Bank deposits                  4,400,782              4,419,093      (18,311)        (0)

Republic Processing Group:
Money market accounts                         9,285                  9,717         (432)        (4)
Total RPG interest-bearing
deposits                                      9,285                  9,717         (432)        (4)

Brokered prepaid card deposits              319,455                320,907       (1,452)        (0)
Other noninterest-bearing
deposits                                     98,007                 90,701         7,306          8
Total RPG noninterest-bearing
deposits                                    417,462                411,608         5,854          1
Total RPG deposits                          426,747                421,325         5,422          1

Total deposits                      $     4,827,529    $         4,840,418   $  (12,889)        (0) %


(1) Includes time deposit

Total Company deposits decreased $13 million from December 31, 2021 to $4.8
billion as of June 30, 2022.

Total Core Bank deposits decreased minimally by $18 million with a $116 million
decrease interest-bearing deposits offset by a $98 million increase in
noninterest-bearing deposits. The net decrease in deposit balances for the first
six months of 2022, compares unfavorably to the net growth in deposits for the
previous two calendar years when deposit growth generally reached historical
highs for the Company. Management believes the Company is more likely to
experience slower overall growth in its deposits over the foreseeable future as
the excess liquidity in the United States is expected to decline due to the
tightening of monetary and fiscal policy by the Federal Government.

Federal Home Loan Bank Advances

The Bank held $20 million of long-term FHLB advances as of June 30, 2022
compared to $25 million of overnight FHLB advances as of December 31, 2021.
During the first six months of 2022, the Bank extended the term on $20 million
of its FHLB advances in anticipation of increasing long-term interest rates and
repaid the remaining $5 million. As of June 30, 2022, the Company's $20 million
of FHLB advances had a weighted average maturity of five years and a weighted
average cost of 1.89%.

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.

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Liquidity

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

Table 29 - Liquid Assets and Borrowing Capacity

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

(in thousands)                                        June 30, 2022      December 31, 2021

Cash and cash equivalents                            $       795,143    $           756,971
Unincumbered debt securities                                 239,863                219,775
Total liquid assets                                        1,035,006                976,746

Borrowing capacity with the FHLB                             904,785       

900,424

Borrowing capacity through unsecured credit lines            125,000       

125,000

Total borrowing capacity                                   1,029,785       

1,025,424

Total liquid assets and borrowing capacity           $     2,064,791    $  

2,002,170

The Bank had a loan to deposit ratio (excluding brokered deposits) of 97% as of
June 30, 2022 and 99% as of December 31, 2021. 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 cancelled, or if the Bank cannot obtain brokered deposits,
the Bank would be compelled to offer market leading deposit interest rates to
meet its funding and liquidity needs.

As of June 30, 2022, the Bank had approximately $1.4 billion in deposits from
234 large non-sweep deposit relationships, including reciprocal deposits, where
the individual relationship exceeded $2 million. The 20 largest non-sweep
deposit relationships represented approximately $523 million, or 11%, of the
Company's total deposit balances as of as of June 30, 2022. 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.

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
June 30, 2022 and December 31, 2021, these pledged investment securities had a
fair value of $415 million and $320 million.

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Capital

Total stockholders' equity increased from $834 million as of December 31, 2021
to $842 million as of June 30, 2022. The increase in stockholders' equity was
primarily attributable to net income earned during 2022 reduced primarily by
cash dividends declared, repurchases of Class A Common shares, and a $24 million
decrease in AOCI.

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 July 1, 2022, RB&T could, without
prior approval, declare dividends of approximately $135 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 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 13.41% as of
June 30, 2022 and 13.41% as of December 31, 2021. Formal measurements of the
capital ratios for Republic and the Bank are performed by the Company at each
quarter end.

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Table 30 - Capital Ratios (1)

                                           As of June 30, 2022         As of December 31, 2021
(dollars in thousands)                       Amount        Ratio         Amount           Ratio

Total capital to risk-weighted assets
Republic Bancorp, Inc.                    $    910,392     18.07 %   $      878,488         17.47 %
Republic Bank & Trust Company                  880,873     17.51           

861,815 17.14

Common equity tier 1 capital to
risk-weighted assets
Republic Bancorp, Inc.                    $    853,027     16.94 %   $      823,504         16.37 %
Republic Bank & Trust Company                  823,508     16.37            806,831         16.05

Tier 1 (core) capital to risk-weighted
assets
Republic Bancorp, Inc.                    $    853,027     16.94 %   $      823,504         16.37 %
Republic Bank & Trust Company                  823,508     16.37            806,831         16.05

Tier 1 leverage capital to average
assets
Republic Bancorp, Inc.                    $    853,027     13.69 %   $      823,504         13.35 %
Republic Bank & Trust Company                  823,508     13.18            806,831         13.10

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 10 basis points lower than those

presented in the table above as of June 30, 2022 and December 31, 2021.

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.

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As of June 30, 2022, the Company ran a dynamic simulation model 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 July 1, 2022 and ending June 30,
2023 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 31 - Bank Interest Rate Sensitivity

                                                                       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 June 30, 2022                    (1.8) %            1.6 %            4.0 %            6.6 %            9.3 %
% Change from base net interest
income as of December 31, 2021                  1.3 %          (0.6) %            0.7 %            4.7 %            9.3 %


For the Up-100, Up-200, and Up-300 scenarios, the June 30, 2022 simulation
reflected a more positive outcome for the Bank's net interest income than the
comparable December 31, 2021 simulation.  For the Down-100 scenario, the
December 2021 simulation reflected a more positive outcome than the June 2022
simulation.  The Up-400 scenario saw no change in expectation from December to
June. For the Up-rate scenarios, the changes in simulation outcomes from
December 2021 to June 2022 were primarily due, in general, to a positive impact
to interest income for those loans with rates that are no longer below their
interest rate floors as of June 2022 compared to December 2021 when the base
market interest rates were considerably lower.

LIBOR Exposure

In July 2017, the Financial Conduct Authority ("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. In compliance with regulatory guidance, the Bank
discontinued referencing LIBOR for new financial instruments during 2021 and
chose SOFR to be its primary alternative reference rate for most transaction
types upon the discontinuance or unavailability of LIBOR.

Regarding its legacy assets that reference LIBOR, the Bank has previously
disclosed that the underlying contracts for these assets may not include
adequate "fallback" language to use alternative indexes and margins when LIBOR
ceases. However, on March 15, 2022, President Biden signed into law the
Adjustable Interest Rate (LIBOR) Act (the "LIBOR Law"), which is designed to
accomplish the following:

Establish a clear and uniform process, on a nationwide basis, for replacing

? LIBOR in existing contracts the terms of which do not provide for the use of a

clearly defined or practicable replacement benchmark rate, without affecting

the ability of parties to use any appropriate benchmark rate in new contracts;

Preclude litigation related to existing contracts, the terms of which do not

? provide for the use of a clearly defined or practicable replacement benchmark

rate;

Allow existing contracts that reference LIBOR but provide for the use of a

? clearly defined and practicable replacement rate to operate according to their

terms; and

? Address LIBOR references in federal law.

With limited exception, the LIBOR Law generally covers legacy LIBOR contracts
with no or inadequate fallback provisions. Additionally, under the LIBOR Law, by
September 11, 2022, the Board of Governors of the Federal Reserve System (the
"Board") must issue regulations to give effect to the law, including the
selection of a Board-Selected Benchmark Replacement that is based on SOFR and
incorporates an applicable tenor spread adjustment and the identification of any
related conforming changes.

As of June 30, 2022, the Company had approximately $773 million of legacy assets
that reference LIBOR, with short-term Warehouse loans representing $331 million
of these assets and commercial and mortgage loans primarily making up the
remainder. As of June 30, 2022, of the Bank's legacy assets that reference
LIBOR, approximately $406 million of those assets were scheduled to mature after
June 30, 2023. These amounts exclude derivative assets and liabilities on the
Company's consolidated balance sheet. As of June 30, 2022, the notional amount
of the Company's LIBOR-referenced interest rate derivative contracts was
approximately $232 million, with $230 million of such notional amount scheduled
to mature after June 30, 2023.

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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 June 30, 2022 Compared to Three
Months Ended June 30, 2021) and "RESULTS OF OPERATIONS (Six Months Ended June
30, 2022 Compared to Six Months Ended June 30, 2021."