Republic Bancorp NIM Expands as Deposit Costs Recede
Core Bank net interest income rose 12% year-over-year to $63.2 million for the first quarter of 2026.
Republic Bancorp (RBCAA), a regional banking and processing services provider, saw its Core Bank net interest margin expand 26 basis points year-over-year to 3.96% for the first quarter of 2026. The expansion followed a decline in the cost of deposits and higher yields on average interest-earning assets.
Net interest income for the Core Bank increased 12% year-over-year to $63.2 million, up from $56.3 million in the first quarter of 2025. This growth occurred as the weighted-average cost of total interest-bearing deposits declined 28 basis points year-over-year to 1.98%. Average interest-bearing deposit balances for the Core Bank rose 8% year-over-year, an increase of $277 million.
Loan activity showed divergent trends across portfolios. Average loans for the Traditional Bank increased by $42 million year-over-year to $4.62 billion, with the weighted-average yield rising 3 basis points to 5.64%. Conversely, average outstanding warehouse lines of credit increased 33% year-over-year to $610 million, though the weighted-average yield for those lines declined 72 basis points to 6.34%.
Adjusted net income for the Core Bank rose 21% year-over-year to $21.1 million. This gain was partially offset by the Republic Processing Group (RPG), which saw adjusted net income decline 12% year-over-year to $18.8 million.
Noninterest performance remained stable. Adjusted noninterest income rose 2% year-over-year to $10.0 million, supported by a 12% increase in service charges on deposits. Adjusted noninterest expenses remained flat at $45.0 million, compared to $45.1 million in the prior-year period.
Credit quality metrics softened during the quarter. The Core Bank provision for expected credit losses shifted to a net charge of $394,000, compared to a net credit of $722,000 in the first quarter of 2025. Nonperforming loans to total loans increased to 0.61% as of March 31, 2026, up from 0.44% a year earlier.
Capital levels continued to strengthen. The Core Bank Common Equity Tier 1 (CET1) Capital Ratio reached 15.6% as of December 31, 2025, compared to 14.9% at the end of 2024 and 13.0% at the end of 2023.