SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2021

SEGMENT INFORMATION

SEGMENT INFORMATION

25. SEGMENT INFORMATION

Reportable segments are determined by the type of products and services offered and the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business (such as banking centers and business units), which are then aggregated if operating performance, products/services, and clients are similar.

As of December 31, 2021, the Company was divided into five reportable segments: Traditional Banking, Warehouse, Mortgage Banking, TRS and RCS. Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last two segments collectively constitute RPG operations.

The nature of segment operations and the primary drivers of net revenues by reportable segment are provided below:

Reportable Segment:	Nature of Operations:	Primary Drivers of Net Revenue:
Core Banking:
Traditional Banking	Provides traditional banking products to clients in its market footprint primarily via its network of banking centers and to clients outside of its market footprint primarily via its digital delivery channels.	Loans, investments, and deposits
Warehouse Lending	Provides short-term, revolving credit facilities to mortgage bankers across the United States.	Mortgage warehouse lines of credit
Mortgage Banking	Primarily originates, sells and services long-term, single-family, first-lien residential real estate loans primarily to clients in the Bank's market footprint.	Loan sales and servicing
Republic Processing Group:
Tax Refund Solutions	TRS offers tax-related credit products and facilitates the receipt and payment of federal and state tax refunds through Refund Transfer products. The RPS division of TRS offers general-purpose reloadable cards. TRS and RPS products are primarily provided to clients outside of the Bank’s market footprint.	Loans, refund transfers, and prepaid cards.
Republic Credit Solutions	Offers consumer credit products. RCS products are primarily provided to clients outside of the Bank’s market footprint, with a substantial portion of RCS clients considered subprime or near-prime borrowers.	Unsecured, consumer loans

The accounting policies used for Republic’s reportable segments are the same as those described in the summary of significant accounting policies. Segment performance is evaluated using operating income. Goodwill is allocated to the Traditional Banking segment. Income taxes are generally allocated based on income before income tax expense unless specific segment allocations can be reasonably made. Transactions among reportable segments are made at carrying value.

Segment information for the years ended December 31, 2021, 2020, and 2019 is as follows:

	Year Ended December 31, 2021
	Core Banking												Republic Processing Group
										Total			Tax			Republic
	Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	157,249		$	25,218		$	1,081		$	183,548		$	15,837		$	21,209		$	37,046		$	220,594
Provision for expected credit loss expense		(38)			(281)			—			(319)			6,683			8,444			15,127			14,808
Net refund transfer fees		—			—			—			—			20,248			—			20,248			20,248
Mortgage banking income		—			—			19,994			19,994			—			—			—			19,994
Program fees		—			—			—			—			3,171			11,350			14,521			14,521
Other noninterest income		31,492			57			191			31,740			356			—			356			32,096
Total noninterest income		31,492			57			20,185			51,734			23,775			11,350			35,125			86,859
Total noninterest expense		145,376			4,210			12,356			161,942			16,344			4,018			20,362			182,304
Income before income tax expense		43,403			21,346			8,910			73,659			16,585			20,097			36,682			110,341
Income tax expense		7,681			4,962			1,960			14,603			3,964			4,985			8,949			23,552
Net income	$	35,722		$	16,384		$	6,950		$	59,056		$	12,621		$	15,112		$	27,733		$	86,789
Period-end assets	$	4,717,836		$	850,703		$	43,929		$	5,612,468		$	371,647		$	109,517		$	481,164		$	6,093,632
Net interest margin		3.18	%		3.37	%		NM			3.20	%		NM			NM			NM			3.75	%
Net-revenue concentration*		61	%		8	%		7	%		76	%		13	%		11	%		24	%		100	%

	Year Ended December 31, 2020
	Core Banking												Republic Processing Group
										Total			Tax			Republic
	Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	159,381		$	25,957		$	1,362		$	186,700		$	22,972		$	22,643		$	45,615		$	232,315
Provision for expected credit loss expense		16,257			613			—			16,870			13,189			1,219			14,408			31,278
Net refund transfer fees		—			—			—			—			20,297			—			20,297			20,297
Mortgage banking income		—			—			31,847			31,847			—			—			—			31,847
Program fees		—			—			—			—			2,193			4,902			7,095			7,095
Other noninterest income		27,404			24			103			27,531			283			—			283			27,814
Total noninterest income		27,404			24			31,950			59,378			22,773			4,902			27,675			87,053
Total noninterest expense		149,061			4,387			10,760			164,208			17,514			3,735			21,249			185,457
Income before income tax expense		21,467			20,981			22,552			65,000			15,042			22,591			37,633			102,633
Income tax expense		1,395			4,721			4,736			10,852			3,323			5,212			8,535			19,387
Net income	$	20,072		$	16,260		$	17,816		$	54,148		$	11,719		$	17,379		$	29,098		$	83,246
Period-end assets	$	4,750,460		$	962,692		$	62,400		$	5,775,552		$	285,612		$	107,161		$	392,773		$	6,168,325
Net interest margin		3.42	%		3.19	%		NM			3.39	%		NM			NM			NM			4.10	%
Net-revenue concentration*		59	%		8	%		10	%		77	%		14	%		9	%		23	%		100	%

	Year Ended December 31, 2019
	Core Banking												Republic Processing Group
										Total			Tax			Republic
	Traditional			Warehouse			Mortgage			Core			Refund			Credit			Total			Total
(dollars in thousands)	Banking			Lending			Banking			Banking			Solutions			Solutions			RPG			Company
Net interest income	$	168,076		$	15,801		$	697		$	184,574		$	21,626		$	29,926		$	51,552		$	236,126
Provision for expected credit loss expense		2,444			622			—			3,066			11,249			11,443			22,692			25,758
Net refund transfer fees		—			—			—			—			21,158			—			21,158			21,158
Mortgage banking income		—			—			9,499			9,499			—			—			—			9,499
Program fees		—			—			—			—			437			4,275			4,712			4,712
Gain on branch divestiture		7,829			—			—			7,829			—			—			—			7,829
Other noninterest income		30,724			(46)			213			30,891			260			659			919			31,810
Total noninterest income		38,553			(46)			9,712			48,219			21,855			4,934			26,789			75,008
Total noninterest expense		143,671			3,268			6,112			153,051			16,539			2,593			19,132			172,183
Income before income tax expense		60,514			11,865			4,297			76,676			15,693			20,824			36,517			113,193
Income tax expense		9,651			2,670			902			13,223			3,454			4,817			8,271			21,494
Net income	$	50,863		$	9,195		$	3,395		$	63,453		$	12,239		$	16,007		$	28,246		$	91,699
Period-end assets	$	4,684,116		$	717,994		$	26,469		$	5,428,579		$	86,849		$	104,891		$	191,740		$	5,620,319
Net interest margin		3.76	%		2.42	%		NM			3.61	%		NM			NM			NM			4.46	%
Net-revenue concentration*		67	%		5	%		3	%		75	%		14	%		11	%		25	%		100	%

*Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue.

NM - Not Meaningful