RBCAA Republic Bancorp Inc /Ky/ - 10-K

Item 1A. Risk Factors.

Republic’s Class A Common Stock is traded on the NASDAQ under the symbol “RBCAA.” There is no established public trading market for the Company’s Class B Common Stock, however, the Company’s Class B Common Stock is fully convertible into the Company’s publicly-traded Class A Common Stock on a one-for-one basis.

FACTORS THAT MAY AFFECT FUTURE RESULTS

An investment in Republic’s common stock is subject to risks inherent in its business. There are factors, many beyond the Company’s control, which may significantly change the results or expectations of the Company. The following are the material risk factors that impact the Company of which it is currently aware. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all the other information included in this report. In addition to the risks and uncertainties described below, other risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially and adversely affect its business, financial condition, and results of operations in the future. The value or market price of the Company’s common stock could decline due to any of these identified or other risks, and an investor could lose all or part of their investment.

For information regarding forward-looking statements, see the section titled “Cautionary Statement Regarding Forward-Looking Statements.”

Risks Related to Republic’s Business and Industry

ECONOMIC, INTEREST RATE, AND LIQUIDITY RISKS

Fluctuations in interest rates could reduce profitability. The Bank’s asset/liability management strategy may not be able to prevent changes in interest rates from having a material adverse effect on financial condition and results of operations. The Bank’s primary source of income is from the difference between interest earned on loans and investments and the interest paid on deposits and borrowings. The Bank expects to periodically experience “gaps” in the interest rate sensitivities of its assets and liabilities, meaning that either interest-bearing liabilities will be more sensitive to changes in market interest rates than interest-earning assets, or vice versa. In either event, if market interest rates move contrary to the Bank’s balance sheet position, earnings may be negatively affected.

Inversion of the interest rate yield curve may reduce profitability. Changes in the slope of the “yield curve,” or the spread between short-term and long-term interest rates, could reduce the Bank’s NIM. Normally, the yield curve is upward sloping, meaning short-term rates are lower than long-term rates. Because the Bank’s interest-bearing liabilities tend to be shorter in duration than its interest-earning assets, when the yield curve flattens or even inverts, the Bank’s NIM generally decreases, as its cost of funds rises higher and at a faster pace than the yield on its interest-earning assets. A rise in the Bank’s cost of interest-bearing liabilities without a corresponding increase in the yield on its interest-earning assets would have an adverse effect on the Bank’s NIM and overall results of operations.

The Bank may be compelled to offer market-leading interest rates to maintain sufficient funding and liquidity levels. The Bank has traditionally relied on client deposits (with approximately 8% of deposits concentrated with the Bank’s top 20 depositors as of December 31, 2025), brokered deposits, and advances from the FHLB to fund operations. Such traditional sources may be unavailable, limited, or insufficient in the future. 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 curtailed, such as its borrowing line at the FHLB, or if the Bank cannot obtain brokered deposits, the Bank may be compelled to offer market-leading interest rates to meet its funding and liquidity needs. Obtaining funds at market-leading interest rates would have an adverse impact on the Company’s net interest income and overall results of operations.

The loss of large deposit relationships could increase the Bank’s funding costs. The Bank has several large deposit relationships that do not require collateral; therefore, cash from these accounts can generally be utilized to fund the loan portfolio. If any of these balances are moved from the Bank, the Bank would likely utilize overnight borrowing lines on a short-term basis to replace the balances. The overall cost of gathering brokered deposits and/or FHLB advances, however, could be substantially higher than the Traditional Bank deposits they replace, increasing the Bank’s funding costs and reducing the Bank’s overall results of operations.

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The proportion of Republic’s deposit account balances that exceed FDIC insurance limits may expose the Bank to enhanced liquidity risk and earnings risks in times of financial distress. Historically, uninsured deposits have been less stable than insured deposits. As a result, in the event of financial distress, uninsured depositors historically have been more likely to withdraw their deposits. The Company estimates that 41% of its total deposits as of December 31, 2025, were uninsured as they were above the FDIC’s insurance limit. If a sizable portion of these uninsured deposits were to be withdrawn within an abbreviated period of time such that additional sources of funding would be required to meet withdrawal demands, the Bank may be unable to obtain funding at favorable terms or obtain funding at all, which may have an adverse effect on its NIM. Moreover, obtaining adequate funding to meet the Bank’s deposit obligations may be more challenging during periods of elevated prevailing interest rates. The Bank’s ability to attract depositors during a time of actual or perceived distress or instability in the marketplace may be limited. Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits. If the Bank had to rely more on higher-cost wholesale borrowings to fund a loss of deposits, it could materially, negatively impact the Company’s results of operations.

Prepayment of loans may negatively impact the Bank’s financial condition and results of operations. The Bank’s clients may prepay the principal amount of their outstanding loans at any time. The speeds at which such prepayments occur, as well as the size of such prepayments, are within the Bank’s clients’ discretion. If clients prepay the principal amount of their loans, and the Bank is unable to lend those funds to other clients or invest the funds at the same or higher interest rates, the Bank’s interest income will be reduced. A significant reduction in interest income would have a negative impact on the Bank’s financial condition and results of operations.

CREDIT RISKS

RAs represent a significant credit risk, and if the Bank is unable to collect a sizable portion of its RAs, it would materially, negatively impact the Company’s financial condition and results of operations. There is credit risk associated with an RA because the funds are disbursed to the taxpayer customer prior to the Bank receiving the taxpayer customer’s refund as claimed on the return. Management annually reviews and revises its RAs underwriting criteria. These changes in the RAs underwriting criteria do not ensure positive results and could have an overall material negative impact on the performance of the RA and therefore on the Company’s financial condition and results of operations.

Because there is no recourse to the taxpayer customer if the RA is not paid off by the taxpayer customer’s tax refund, the Bank must collect all of its payments related to RAs through the refund process. Losses will generally occur on RAs when the Bank does not receive payment due to several reasons, such as IRS revenue protection strategies, including audits of returns, errors in the tax return, tax return fraud, and tax debts not previously disclosed to the Bank during its underwriting process. The Bank’s underwriting during the RA approval process takes these factors into consideration based on prior years’ payment patterns, such that if the IRS significantly alters its revenue protection strategies, if refund payment patterns for a given tax season meaningfully change, if the federal government fails to timely deliver refunds, or if the Bank is incorrect in its underwriting assumptions, the Bank could experience higher loan loss provisions above those projected. The Provision is a significant determining factor of the RPG division’s overall net earnings.

In addition, as a result of 2015 PATH Act, the federal government mandates that tax refunds for tax returns with certain characteristics cannot receive their corresponding refunds before February 15th each year. Substantially all the tax returns driving TRS’s product volume meet the criteria of those subject to this later funding under the PATH Act. These funding delays effectively restrict the Bank’s ability to make in-season modifications to its RA underwriting model based on then-current year tax refund funding patterns, because the substantial majority of all RAs are issued prior to February 15th. As a result, the underwriting criteria that TRS establishes for the RA product at the beginning of the tax season could have a material negative impact on the performance of the RA before mitigating revisions can be made.

Consumer loans originated through the RCS segment represent a higher credit risk. Loss rates for some RCS products have consistently been significantly higher than Traditional Bank loss rates for unsecured consumer loans. A material increase in RCS loan charge-offs would have a material adverse effect on the Bank’s financial condition and results of operations and, if such increase in RCS loan charge-offs persisted for an extended period of time, could lead to the discontinuation of the underlying products.

Consumer installment loans originated for sale through the RCS segment represent a higher risk of loss on sale. RCS originates its installment loan product for sale and sells this product at a loss if the originated loan defaults on its first payment to RCS, which is generally 16 days following the loan’s origination date. A material increase in first payment defaults for RCS installment loans would result in a material increase in these loans being sold at a loss. Such an increase could have a material adverse impact on the program, and if such losses persisted for an extended period, it could lead to the discontinuation of the underlying product.

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Management’s changes to RPG product parameters could have a material negative impact on the performance of the RPG products. In response to changes in the legal, regulatory, and competitive environment, management annually reviews and revises RPG product parameters. Further changes in product parameters do not ensure positive results and could have an overall material negative impact on the performance of the product and therefore on the Company’s financial condition and results of operations.

The ACLL could be insufficient to cover the Bank’s actual loan losses. The Bank makes various assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of its borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of its loans. In determining the amount of the ACLL, the Bank considers, among other factors, its historical loss and delinquency experience and prevailing economic conditions. If its assumptions are incorrect, the ACLL may not be sufficient to cover losses inherent in its loan portfolio, resulting in additions to its ACLL. In addition, regulatory agencies periodically review the ACLL and may require the Bank to increase its Provision or recognize further loan charge-offs. A material increase in the ACLL or loan charge-offs would have a material adverse effect on the Bank’s financial condition and results of operations.

Deterioration in the quality of the Traditional Banking loan portfolio may result in additional charge-offs, which would adversely impact the Bank’s financial condition and results of operations. When borrowers default on their loan obligations, it may result in lost principal and interest income and increased operating expenses associated with the increased allocation of management time and resources associated with collection efforts. In certain situations where collection efforts are unsuccessful or acceptable “work-out” arrangements cannot be reached or performed, the Bank may charge-off loans, either in part or in whole. Additional charge-offs will adversely affect the Bank’s financial condition and results of operations.

The Bank’s financial condition and results of operations could be negatively impacted to the extent the Bank relies on borrower information that is false, misleading, or inaccurate. The Bank relies on the accuracy and completeness of information provided by vendors, clients, and other parties in deciding whether to extend credit and/or enter into transactions with other parties. If the Bank relies on incomplete and/or inaccurate information, the Bank may incur additional charge-offs that adversely affect its financial condition and results of operations.

The Traditional Bank uses appraisals as part of the decision process to make a loan for, or secured by, real property. In addition, appraisals are used to value a loan if it becomes “collateral dependent” as a problem credit. Appraisals do not ensure the value of the real property collateral. As part of the new loan process or in valuing a collateral dependent problem credit, the Bank generally requires an independent third-party appraisal of the real property. An appraisal, however, is only an estimate of the value of the property at the time the appraisal is made. An error in fact or judgment could adversely affect the reliability of the appraisal. In addition, events occurring after the appraisal may cause the value of the real estate to decrease. As a result of any of these factors, the value of collateral securing a loan may be less than supposed, and if a default occurs, the Bank may not recover the outstanding balance of the loan. Approximately 38% of the Traditional Bank’s portfolio is secured by RRE and 40% is secured by CRE properties as of December 31, 2025. Both of these loan types are heavily dependent upon third-party appraisals in the decision process. Additional charge-offs in either of these portfolios as a result of inaccurate appraisals could adversely affect the Bank’s financial condition and results of operations.

The Warehouse Lending business is subject to numerous risks that may have a material adverse impact on the Bank’s financial statements and results of operations. Risks associated with warehouse loans include, without limitation, (i) credit risks relating to the mortgage bankers that borrow from the Bank, including but not limited to bankruptcy, (ii) the risk of intentional misrepresentation or fraud by any of such mortgage bankers and their third-party service providers, (iii) changes in the market value of mortgage loans originated by the mortgage banker during the time in warehouse, the sale of which is the expected source of repayment of the borrowings under a warehouse LOC, or (iv) unsalable or impaired mortgage loans so originated, which could lead to decreased collateral value and the failure of a purchaser of the mortgage loan to purchase the loan from the mortgage banker. Failure to mitigate these risks could have a material adverse impact on the Bank’s financial statements and results of operations.

The Bank holds a significant amount of BOLI, which creates credit risk relative to the insurers and liquidity risk relative to the product. The Bank holds BOLI on certain employees. The eventual repayment of the cash surrender value is subject to the ability of the various insurance companies to pay death benefits or to return the cash surrender value to the Bank if needed for liquidity purposes. The Bank continually monitors the financial strength of the various insurance companies that carry these policies. However, any one of these companies could experience a decline in financial strength, which could impair its ability to pay benefits or return the Bank’s cash surrender value. If the Bank needs to liquidate these policies for liquidity purposes, it would be subject to taxation on the increase in cash surrender value and penalties for early termination, both of which would adversely impact earnings.

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OPERATIONAL AND STRATEGIC RISKS

RPG products represent a significant operational risk, and RPG relies heavily on the accuracy and timeliness of data received from the Bank’s third-party marketers and service providers. To conduct its RPG businesses, the Bank must implement and test new systems, train associates for new products and changes to existing products, and process information and data received from third-party marketers and service providers. Due to the high volume of transaction activity across all the RPG product lines, the Bank relies heavily on the communications and information systems of the Bank, as well as the communications and information systems of its third-party providers to operate these products. Any failure, sustained interruption, or breach in security, including the cybersecurity, of these systems could result in failures or disruptions in client relationship management and other systems. If the Bank were unable to properly service this business as a result of inaccurate or untimely data from its third-party marketers and service providers, it could materially impact earnings.

RCS revenues and earnings are highly concentrated in its LOC products. The discontinuation of these LOC products, or a substantial change in the terms under which these products are offered, would have a material adverse effect on the Company’s financial condition and results of operations.

Many of the RCS programs are heavily reliant on the ability of the Bank to sell all or a sizable portion of the loans originated to a third party in order to fund the programs. If the Bank were unable to sell these loans to a third-party purchaser for any reason, RCS would likely cease originating new loans under that product line, which would significantly and negatively impact the overall earnings of RCS. RCS originates installment loans and lines of credits through its various product lines. For some of its installment products, RCS sells 100% of the balances after its origination. For its LOC products, the Bank sells a 90% or 95% participation in the product after origination, depending upon the product. If the Bank were unable to sell these loan balances for any reason, RCS would likely cease originating new loans for that particular product as soon as practical under the terms of its various agreements. The inability of RCS to originate new loans under any of its higher-yield RCS products would cause a material adverse impact to the results of operation of RCS.

In addition, the agreements between the Bank and the consumer for many of its LOC products do not allow RCS to stop originating new customer draws on that product if RCS chooses to exit the product line. For these products, if the Bank were unable to sell these balances for any reason, RCS would retain 100% of the balances it originates on those products. In those circumstances, the credit risk for the Bank would increase substantially, as it would then be responsible for 100% of any charge-offs for these loans, as opposed to 5% or 10%, when it is able to sell participating balances to a third-party purchaser. While the Bank would also be retaining 100% of the revenue from these balances as well, there is no guarantee the additional revenue would offset the charge-offs in the event of an economic downturn. Such an increase in charge-offs could have a material adverse impact on the results of operations of the RCS segment and the Company, as a whole.

Difficult or volatile market conditions in the national financial markets, the U.S. economy generally, or the Company’s markets in particular may adversely affect the Company’s lending activity or other businesses, as well as its financial condition. The Company’s business and financial performance are vulnerable to weak economic conditions in the financial markets and economic conditions generally and specifically in the markets in which the Company operates. The Company conducts its Core Banking operations across Kentucky (Louisville MSA/central/northern), Indiana (southern), Florida (Tampa MSA), Ohio (Cincinnati MSA), and Tennessee (Nashville MSA). Because of this geographic concentration, the Company’s financial condition and results of operations depend heavily on economic conditions within these specific markets. A favorable business environment is typically characterized by sustained economic growth, low inflation, low unemployment, strong business and investor confidence, solid business earnings, and healthy capital markets. Conversely, unfavorable or uncertain economic and market conditions may arise from a decline in economic growth locally or nationally; reductions in business activity or consumer confidence; limited availability or increased cost of credit and capital; rising inflation or interest rates; elevated unemployment; commodity price volatility; natural disasters; or a combination of these or other factors. Any regional or local economic downturn affecting the Company’s geographic markets—particularly one that impacts existing or prospective borrowers, depositors, or real estate values—could adversely affect the Company’s profitability more significantly than competitors with more geographically diversified operations.

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The Company operates in a highly competitive banking and financial services environment and competes with significantly larger regional, national, and international institutions, many of which have limited or no physical presence in the Company’s markets and instead compete through digital channels and other electronic delivery platforms. In addition, banking and financial services competitors—including newly formed institutions—may enter the Company’s geographic markets through branch expansion or acquisitions of existing competitors. FinTech companies continue to emerge and expand in key areas of banking, further intensifying competition. Many competitors possess substantially greater financial resources, higher lending limits, broader geographic reach, and, in some cases, lower cost structures, and may offer products and services that the Company does not or cannot provide. Certain non-bank competitors are also subject to fewer regulatory constraints. Increased competition may result in reduced loan and deposit volumes, compressed interest margins, or more favorable pricing and terms for customers, any of which could have a material adverse effect on the Company’s business, financial condition, results of operations, or liquidity.

Clients may pursue alternatives to traditional bank deposits, which could reduce the Bank’s access to a relatively inexpensive and stable source of funding . Checking and savings account balances, as well as other forms of client deposits, may decline if clients perceive alternative investments—such as equity or bond markets, money-market funds, or other higher-yield financial products—as offering superior expected returns. If clients reallocate funds away from deposit accounts in favor of these alternatives, the Bank could experience deposit outflows, resulting in a loss of low-cost funding. Replacing these deposits with higher-cost funding sources, such as brokered deposits or wholesale borrowings, would increase the Bank’s overall funding costs and could negatively impact its NIM and results of operations.

The Company may be adversely affected by the soundness of other financial institutions. Financial services institutions are interrelated because of trading, clearing, counterparty, or other relationships. The Company has exposure to many different industries and counterparties and routinely executes transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks, and other institutional clients. Many of these transactions expose the Company to credit risk in the event of a default by a counterparty or client. In addition, the Company’s credit risk may be exacerbated when the collateral held by the Company cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due to the Company. Any such losses could have a material adverse effect on the Company’s financial condition and results of operations.

The Company’s information systems may experience an interruption that could adversely impact the Company’s financial condition and results of operations . The Company relies heavily on communications and information systems to conduct its business. Any failure or interruption of these systems could result in failures or disruptions in client relationship management, general ledger, deposit, loan, and other systems. While the Company has policies and procedures designed to prevent or limit the impact of the failure or interruption of information systems, there can be no assurance that any such failures or interruptions will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures or interruptions of the Company’s information systems could damage the Company’s reputation, result in a loss of client business, subject the Company to additional regulatory scrutiny, or expose the Company to civil litigation and possible financial liability, any of which could have a material adverse effect on the Company’s financial condition and results of operations.

The Company’s operations could be impacted if its third-party service providers experience difficulty . The Company depends on several relationships with third-party service providers, including core systems processing and web hosting. These providers are well-established vendors that provide these services to a sizable number of financial institutions. If these third-party service providers experience difficulty, including but not limited to a cybersecurity incident, or terminate their services, and the Company is unable to replace them with other providers, its operations could be interrupted, which would adversely impact its business.

The Company’s operations, including third-party and client interactions, are increasingly done via electronic means, and this has increased the risks related to cybersecurity threats. The Company is exposed to the risk of cyber-attacks in the normal course of business and incurs substantial cybersecurity protection costs. In general, cyber incidents can result from deliberate attacks or unintentional events. Management has observed an increased level of attention in the industry focused on cyber-attacks that include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as by causing denial-of-service attacks on websites. Further, the rapid evolution and increased adoption of AI technologies may further intensify cybersecurity risks by making cyber-attacks more difficult to detect, contain or mitigate. Cyber-attacks may be carried out directly against the Company, or against the Company’s clients or service providers/vendors by third parties or insiders using techniques that range from highly sophisticated efforts to electronically circumvent network security or overwhelm

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websites to more traditional intelligence gathering and social engineering aimed at obtaining information necessary to gain access. While the Company, to its knowledge, has not incurred any material losses related to cyber-attacks, the Bank may incur substantial costs and suffer other negative consequences if the Bank, the Bank’s clients, or one of the Bank’s third-party service providers fall victim to successful cyber-attacks. Such negative consequences could include: remediation costs for stolen assets or information; system repairs; consumer protection costs; increased cybersecurity protection costs that may include organizational changes; deploying additional personnel and protection technologies, training employees, and engaging third-party experts and consultants; lost revenues resulting from unauthorized use of proprietary information or the failure to retain or attract clients following an attack; litigation and payment of damages; and reputational damage adversely affecting client or investor confidence.

The evolving federal “AI Action Plan” and related regulatory initiatives could increase compliance costs, constrain the Company’s use of AI, and expose the Company to new legal, operational, and reputational risks. The U.S. federal government has announced an “AI Action Plan” pursuant to a January 2025 Executive Order directing federal agencies to develop a coordinated framework for the governance, development, and use of AI. The Company is in the initial stages of incorporating AI into its business activities to increase employee productivity. The Company has not deployed AI-driven systems in critical decision making or client-facing processes. While the scope, timing, and final form of the AI Action Plan and any resulting laws, regulations, supervisory guidance, or enforcement priorities remain uncertain, these initiatives may significantly affect how financial institutions develop, deploy, and oversee AI-enabled systems.

The AI Action Plan may result in new or enhanced requirements related to model governance, data usage, explainability, human oversight, testing, recordkeeping, vendor management, and accountability for AI-driven outcomes. Compliance with these requirements could require substantial investments in technology, personnel, controls, documentation, and third-party risk management, and may reduce the efficiency or effectiveness of certain AI-enabled processes. In addition, heightened regulatory scrutiny of AI systems—particularly in areas such as fair lending, consumer protection, privacy, and model risk management—could increase the risk of supervisory findings, enforcement actions, civil litigation, or reputational harm, even where AI systems are designed and implemented in good faith. The use of third-party AI models or data sources may further increase these risks if such vendors fail to meet evolving regulatory expectations or contractual standards.

If the AI Action Plan or related regulatory actions limit the Company’s ability to use AI technologies, require material changes to existing systems, or impose inconsistent or overlapping obligations across federal and state regulators, operating costs could increase and the Company’s ability to compete with other financial institutions or non-bank competitors could be adversely affected. Any of these outcomes could have a material adverse effect on our business, financial condition, results of operations, or reputation.

The adoption of cryptocurrency and blockchain technology has rapidly expanded in recent years, and future regulatory changes may lead to additional growth of digital assets. In the past year, there has been an increased governmental focus on digital assets with the passage of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, which was signed into law in July 2025 and provides a regulatory framework for the adoption and issuance of stablecoins. Cryptocurrency and other new forms of payment could result in increased BSA/AML compliance risks, particularly with respect to “know-your-customer” and transaction monitoring requirements. In addition, future regulatory developments may increase the ability of Fin-tech’s and other competitors to compete with traditional banks, including through the use of cryptocurrency and other digital assets or alternative payment systems.

New lines of business or new products and services may subject the Company to additional risks. From time to time, the Company may develop and grow new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, the Company may invest considerable amounts of time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Furthermore, any new line of business and/or new product or service could have a significant impact on the effectiveness of the Company’s system of internal control. Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on the Company’s business, financial condition and results of operations. All service offerings, including current offerings and those that may be provided in the future, may become riskier due to changes in economic, competitive, and market conditions beyond the Company’s control.

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The Company is dependent upon retaining and recruiting key qualified personnel and the loss of one or more of these key individuals could curtail its growth and adversely affect its prospects. The Company is materially dependent upon the ability and experience of a number of its key management personnel who have substantial experience with Company operations, including specialized products and services, and the markets in which the Company offers services. It is possible that the loss of the services of one or more of its key personnel would have an adverse effect on operations. Management believes that future results also will depend in part upon attracting and retaining highly skilled and qualified management, as well as sales and marketing personnel. The failure to attract or retain, including as a result of an untimely death or illness, key personnel, or to find suitable replacements for them, could have a negative effect on Company operating results. Competition for such personnel is intense, and management cannot be sure that the Company will be successful in attracting or retaining such personnel.

REGULATORY AND LEGAL RISKS

The Bank’s RPG products represent a significant legal, compliance, and regulatory risk, and if the Bank fails to comply with all statutory and regulatory requirements, it could have a material negative impact on earnings. Federal and state laws and regulations govern numerous matters relating to the offering of consumer loan products and consumer deposits. Failure to comply with disclosure requirements or with laws relating to the permissibility of interest rates and fees charged could have a material negative impact on earnings. In addition, failure to comply with applicable laws and regulations could also expose the Bank to civil money penalties and litigation risk, including client and shareholder actions. Various states and consumer groups have, from time to time, questioned the fairness of the products offered by RPG. Initiatives at the federal and state level, including by governmental agencies and consumer groups, could result in regulatory, governmental, or legislative action or litigation, which could have a material adverse effect on the Company’s RPG operations. If the Company can no longer offer or must substantially alter its RPG products, it will have a material negative impact on earnings.

The Company is significantly impacted by the regulatory, fiscal, and monetary policies of federal and state governments that could negatively impact the Company’s liquidity position and earnings. These policies can materially affect the value of the Company’s financial instruments and can also adversely affect the Company’s clients and their ability to repay their outstanding loans. In addition, failure to comply with laws, regulations or policies, or adverse examination findings, could result in significant penalties, negatively impact operations, or result in other sanctions against the Company. The Board of Governors of the Federal Reserve System regulates the supply of money and credit in the U.S. Its policies determine, in large part, the Company’s cost of funds for lending and investing and the return the Company earns on these loans and investments, all of which impact NIM.

The Company and the Bank are heavily regulated at both the federal and state levels and are subject to various routine and non-routine examinations by federal and state regulators. This regulatory oversight is primarily intended to protect depositors, the DIF, and the banking system, not the shareholders of the Company. Changes in policies, regulations and statutes, or the interpretation thereof, could significantly impact the product offerings of Republic causing the Company to terminate or modify its product offerings in a manner that could materially adversely affect the earnings of the Company.

Federal and state laws and regulations govern numerous aspects of the business of banking, including changes in the ownership or control of banks and BHC’s, maintenance of adequate capital and the financial condition of a financial institution, permissible types, amounts and terms of extensions of credit and investments, permissible non-banking activities, the level of reserves against deposits and restrictions on dividend payments. Various federal and state regulatory agencies possess cease and desist powers and other authority to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulations. The FRB possesses similar powers with respect to BHC’s. These, and other restrictions, can limit in varying degrees the way Republic conducts its business.

Federal and state laws and regulations also govern numerous matters relating to the offering of banking products. Failure to comply with these laws and regulations, including those mandating disclosure requirements or relating to the permissibility of interest rates and fees charged, could have a material negative impact on earnings. In addition, failure to comply with applicable laws and regulations could also expose the Bank to civil money penalties and litigation risk, including shareholder actions. Initiatives of the current President and the current Congress, along with actions of the states, governmental agencies, and consumer groups, could result in regulatory, governmental, or legislative action or litigation that could have a material adverse effect on the Company’s operations.

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Legislative and regulatory actions taken now or in the future may increase Republic’s costs and impact its business, governance structure, financial condition, or results of operations. Enacted financial reform legislation has changed and will continue to change the bank regulatory framework. Ongoing uncertainty and adverse developments in the financial services industry and the domestic and international credit markets, and the effect of new legislation and regulatory actions in response to these conditions, may adversely affect Company operations by restricting business activities, including the Company’s ability to originate or sell loans, modify loan terms, or foreclose on property securing loans. These measures are likely to increase the Company’s costs of doing business and may have a significant adverse effect on the Company’s lending activities, financial performance, and operating flexibility. In addition, these risks could affect the performance and value of the Company’s loan and investment securities portfolios, which also would negatively affect financial performance.

Federal and state regulatory agencies frequently adopt changes to their regulations or change the manner in which existing regulations are applied. Regulatory or legislative changes to laws applicable to the financial services industry, if enacted or adopted, may impact the profitability of the Company’s business activities, require more oversight or change certain business practices, including the ability to offer new products, obtain financing, attract deposits, make loans and achieve satisfactory interest spreads, and could expose Republic to additional costs, including increased compliance costs. These changes also may require Republic to invest significant management attention and resources to make any necessary changes to operations and could have an adverse effect on its business, financial condition, and results of operations.

Use of third parties creates a third-party management risk. If RB&T’s third-party service providers fail to comply with all the statutory and regulatory requirements for products offered or if RB&T fails to properly monitor its third-party service providers offering these products, it could have a material negative impact on earnings. The Bank, including RPG, and its third-party service providers operate in a highly regulated environment and deliver products and services that are subject to strict legal and regulatory requirements. Failure by the Bank’s third-party service providers to comply with, or failure of the Bank to properly monitor the compliance of its third-party service providers with, laws and regulations could result in fines and penalties that materially and adversely affect the Bank’s earnings. Such penalties could include the discontinuance of any or all third-party program manager products and services.

The Bank’s “Overdraft Honor” program represents a significant business risk, and if the Bank terminated the program, it would materially impact the earnings of the Bank. There can be no assurance that Congress, the Bank’s regulators, or others will not impose additional limitations on this program or prohibit the Bank from offering the program. The Bank’s “Overdraft Honor” program permits eligible customers to opt into the Bank’s overdraft program and overdraft their checking accounts up to a limit that is calculated and assigned each day for the Bank’s customary overdraft fee(s). Generally, to be eligible for the Overdraft Honor program, customers must qualify for one of the Bank’s traditional checking products when the account is opened and have recurring deposit activity. During the first 30 days after an account is opened, a client may participate in the Overdraft Honor program with a small, fixed limit amount depending upon the account type. After the initial 30-day period a daily overdraft limit is calculated based upon deposits and other activity in the account. If an overdraft occurs, the Bank may pay the overdraft, at its discretion, up to the client’s individual overdraft limit. Under regulatory guidelines, customers utilizing the Overdraft Honor program may remain in overdraft status for no more than 60 days before it must be closed and charged off. Substantially altering this program, or terminating it altogether, would have an adverse impact to the Company’s results of operations.

Loans originated through the Bank’s Consumer Direct and Correspondent Lending channels subject the Bank to regulatory and legal risks that the Bank does not have through its historical origination and servicing channels. Loans serviced outside the Bank’s traditional footprint also subject the Bank to various state-level servicing laws and regulations that are different than those within the Bank’s traditional footprint and may impact the Bank’s ability to collect a deficiency and timely foreclose on a loan. Failure by the Bank to properly comply with these various state-level laws and regulations could subject the Bank to fines and penalties that materially and adversely affect the Bank’s earnings. Such penalties could include the discontinuance of the Consumer Direct Channel or Correspondent Lending operations. Failure to appropriately manage these additional risks could lead to regulatory and compliance risks, as well as create burdens that reduce profitability or cause operating losses from these origination channels.

Republic’s management is required to evaluate the effectiveness of the Company’s disclosure controls and internal control over financial reporting. If the Company is unable to maintain effective disclosure controls and internal control over financial reporting, investors may lose confidence in the accuracy of the Company’s financial reports. As a public company, the Company is required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act requires that management evaluate and determine the effectiveness of the Company’s internal control over financial

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reporting. Additionally, the Company’s independent registered public accounting firm is required to deliver an attestation report on the effectiveness of the Company’s internal control over financial reporting.

In order to maintain and improve the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting, the Company has expended and anticipates that it will continue to expend significant resources, including for accounting, internal audit, and compliance costs, along with significant management oversight. If any of these new or improved controls and systems do not perform as expected, the Company may experience further deficiencies in its controls.

The Company’s current controls and any new controls that it develops may become inadequate because of changes in conditions in its business. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm the Company’s results of operations, cause the Company to fail to meet its reporting obligations, and adversely affect the results of periodic management evaluations and the Company’s independent registered public accounting firm’s attestation reports required by the SEC. Ineffective internal control over financial reporting could diminish investor confidence, negatively affect the price of the Company’s Class A common stock, and could result in the Company’s delisting from the NASDAQ. See Item 9A. “Controls and Procedures” for further discussion.

The Company is required to use judgment in applying accounting policies and different estimates and assumptions in the application of these policies could result in a decrease in capital and/or other material changes to the Company’s reports of financial condition and results of operations. Material estimates that are particularly susceptible to meaningful change relate to the determination of the ACLL, the fair value of certain financial instruments, particularly securities, goodwill, and purchase accounting. While the Company has identified those accounting policies that it considers critical and has procedures in place to facilitate the associated judgments, different assumptions in the application of these policies could have a material adverse effect on the Company’s financial condition and results of operations.

The Company may be adversely affected by changes in tax laws. Any change in federal or state tax laws or regulations, including any increase in the federal corporate income tax rate from the current level of 21%, could have a material adverse effect on the Company’s financial condition and results of operations.

The Company may be subject to examinations by taxing authorities that could adversely affect the Company’s financial condition and results of operations. Republic is subject to multiple taxing jurisdictions outside of those in which its branches are located. In the normal course of business, the Company may be subject to examinations from federal and state taxing authorities regarding the amount of taxes due in connection with investments it has made and the businesses in which the Company is engaged. Federal and state taxing authorities have continued to be aggressive in challenging tax positions taken by financial institutions. The challenges made by taxing authorities may result in adjustments to the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. If any such challenges are made and are not resolved in the Company’s favor, they could have an adverse effect on the Company’s financial condition and results of operations.

Risks Related to Acquisition Activity

The Company’s ability to successfully complete acquisitions will affect its ability to grow and compete effectively in its market footprint . The Company pursues a policy of strategic growth through acquisitions to supplement organic growth. The Company’s efforts to acquire other financial institutions and financial service companies or branches may not be successful. Numerous potential acquirers exist for many acquisition candidates, creating intense competition, which affects the purchase price for which the institutions can be acquired. In many cases, the Company’s competitors have significantly greater resources than the Company has, and greater flexibility to structure the consideration for the transaction. The Company may also not be the successful bidder in acquisition opportunities that it pursues due to the willingness or ability of other potential acquirers to propose a higher purchase price or more attractive terms and conditions than the Company is willing or able to propose. Further, there can be no assurance that the Company will be able to secure any regulatory approvals required for the Company to acquire another financial institution, financial services company, or branch. Additionally, the pursuit and completion of acquisitions may divert the attention of management away from the operation of our existing business. The Company intends to continue to pursue acquisition opportunities in its market footprint. The risks presented by the acquisition of other financial institutions could adversely affect the Bank’s financial condition and results of operations.

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Successful Company acquisitions present many risks that could adversely affect the Company’s financial condition and results of operations. An institution that the Company acquires may have unknown asset quality issues or unknown or contingent liabilities that the Company did not discover or fully recognize in the due diligence process, thereby resulting in unanticipated losses. The acquisition of other institutions also typically requires the integration of different corporate cultures, loan and deposit products, pricing strategies, data processing systems and other technologies, accounting, internal audit and financial reporting systems, operating systems and internal controls, marketing programs, and personnel of the acquired institution, to make the transaction economically advantageous. The integration process is complicated and time consuming and could divert the Company’s attention from other business concerns and may be disruptive to its clients and the clients of the acquired institution. The Company’s failure to successfully integrate an acquired institution could result in the loss of key clients and employees and prevent the Company from achieving expected synergies and cost savings. Acquisitions and failed acquisitions also result in professional fees and may result in creating goodwill that could become impaired, thereby requiring the Company to recognize further charges. The Company may finance acquisitions with borrowed funds, thereby increasing the Company’s leverage and reducing liquidity, or with potentially dilutive issuances of equity securities.

Risks Related to the Company’s Common Stock

The Company’s common stock generally has a low average daily trading volume, which limits shareholders’ ability to quickly accumulate or quickly sell large numbers of shares of Republic’s common stock without causing wide price fluctuations. Republic’s common stock price can fluctuate widely in response to a variety of factors, as detailed in the next risk factor. A low average daily stock trading volume can lead to significant price swings even when a relatively small number of shares are being traded.

The market price for the Company’s common stock may be volatile. The market price of the Company’s common stock could fluctuate substantially in the future in response to several factors, including those discussed below. Some of the factors that may cause the price of the Company’s common stock to fluctuate include, but are not limited to:

Variations in the Company’s and its competitors’ operating results;

Actual or anticipated quarterly or annual fluctuations in cash flows, financial condition and results of operations;

Changes in earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to the Bank or other financial institutions;

Announcements by the Company or its competitors of mergers, acquisitions, and strategic partnerships;

Additions or departures of key personnel;

The announced exiting of or significant reductions in material lines of business within the Company;

Changes or proposed changes in banking laws or regulations or enforcement of these laws and regulations;

Events affecting other companies that the market deems comparable to the Company;

Developments relating to regulatory examinations;

Speculation in the press or investment community generally or relating to the Company’s reputation or the financial services industry;

Future issuances or re-sales of equity or equity-related securities, or the perception that they may occur;

General conditions in the financial markets and real estate markets in particular, as well as developments related to market conditions for the financial services industry;

Domestic and international economic factors, including but not limited to international conflicts, government trade restrictions, sanctions, and tariffs, unrelated to the Company’s performance;

Developments related to litigation or threatened litigation;

The presence or absence of short selling of the Company’s common stock; and

Future sales of the Company’s common stock or debt securities.

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In addition, the stock market, in general, has historically experienced extreme price and volume fluctuations. This is due, in part, to investors’ shifting perceptions of the effect of changes and potential changes in the economy on various industry sectors. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their performance or prospects. These broad market fluctuations may adversely affect the market price of the Company’s common stock, notwithstanding its actual or anticipated cash flows, financial condition and results of operations. The Company expects that the market price of its common stock will continue to fluctuate due to many factors, including prevailing interest rates, other economic conditions, operating performance, and investor perceptions of the outlook for the Company specifically and the banking industry in general. There can be no assurance about the level of the market price of the Company’s common stock in the future or that investors will be able to resell their shares at times or at prices they find attractive.

The Company’s insiders hold voting rights that give them significant control over matters requiring shareholder approval. The Company’s Executive Chair/CEO and Vice Chair hold substantial voting authority over the Company’s Class A Common Stock and Class B Common Stock. Each share of Class A Common Stock is entitled to one vote and each share of Class B Common Stock is entitled to ten votes. This group generally votes together on matters presented to shareholders for approval. These actions may include, for example, the election of directors, the adoption of amendments to corporate documents, the approval of mergers and acquisitions or sales of assets, and the continuation of the Company as a registered company with obligations to file periodic reports and other filings with the SEC. Consequently, other shareholders’ ability to influence Company actions through their vote may be limited and the non-insider shareholders may not have sufficient voting power to approve a change in control even if a significant premium is being offered for their shares. Majority shareholders may not vote their shares in accordance with minority shareholder interests.

The Company is classified as a “controlled company” for purposes of the NASDAQ Listing Rules and, as a result, it qualifies for certain exemptions from certain corporate governance requirements. Shareholders may not have the same protections afforded to shareholders of companies that are subject to such requirements. As of the date of this report, the Trager family controls a majority of the voting power of the Company’s outstanding common stock. As a result, the Company is classified as a “controlled company” within the meaning of the corporate governance standards of the NASDAQ Listing Rules. Under the NASDAQ Listing Rules, a company of which more than 50% of the outstanding voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain stock exchange corporate governance requirements, including:

The requirement that a majority of the Board consists of independent directors as defined under the NASDAQ continued listing requirements;

The requirement to have director nominations be made, or recommended to the full Board, by its independent directors or by a nominating and corporate governance committee of the Board that is composed entirely of independent directors; and

The requirement to have a compensation committee of the Board that is composed entirely of independent directors or have a written charter addressing the compensation committee’s purpose and responsibilities.

Although the Company is permitted to rely on these exemptions, it has not historically elected to reduce its corporate governance practices on this basis. Nonetheless, because the Company qualifies as a controlled company, shareholders may not have the same protections afforded to shareholders of companies that are fully subject to all NASDAQ corporate governance requirements.

An investment in the Company’s common stock is not an insured deposit . The Company’s common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in the Company’s common stock is inherently risky for the reasons described in this section and elsewhere in this report and is subject to the same market forces that affect the price of common stock in any company. As a result, if an individual acquires the Company’s common stock, the shareholder could lose some or all of that investment.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The consolidated financial statements included in this report include the accounts of Republic Bancorp, Inc. and its wholly owned subsidiary, Republic Bank & Trust Company. As used in this report, the terms “Republic,” the “Company,” “we,” “our,” and “us” refer to Republic Bancorp, Inc. and, where the context requires, Republic Bancorp, Inc. and its subsidiary. The term the “Bank” refers to the Company’s subsidiary bank, Republic Bank & Trust Company, as well as its wholly owned subsidiary, RBT Insurance Agency LLC. The Company dissolved Republic Insurance Services, Inc., its former insurance captive subsidiary, in 2023. All significant intercompany balances and transactions are eliminated in consolidation.

Republic is an FHC headquartered in Louisville, Kentucky, which is the most populous city in Kentucky. The Bank is a Kentucky-based, state-chartered non-member financial institution that provides both traditional and non-traditional banking products and services through five reportable segments using a multitude of delivery channels. While the Bank operates primarily in its geographical market footprint where it has physical locations, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S.

General Business Overview

The Company’s Executive Chair/CEO serves as the Company’s CODM. Income before income tax expense is the reportable measure of segment profit or loss that the CODM regularly reviews and utilizes to allocate resources and evaluate performance.

As of December 31, 2025, the Company was divided into five reportable segments: (I) Traditional Banking, (II) Warehouse Lending, (III) TRS, (IV) RPS, and (V) RCS. Management considers the first two segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last three segments collectively constitute RPG operations. Prior to the first quarter of 2024, Republic had reported mortgage banking as a separate reportable segment.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Republic should be read in conjunction with Part II Item 8 “Financial Statements and Supplementary Data .”

Forward-looking Statements

Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to differ materially from those expressed or implied in such statements. These statements are often, but not always, identified by words or phrases such as “anticipate,” “believe,” “can,” “conclude,” “continue,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,” “possible,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “will likely,” “would,” or similar expressions. Forward-looking statements are not historical facts; rather, they are based on current expectations, estimates, and projections about the Company’s industry, management’s beliefs, and certain assumptions made by management—many of which are inherently uncertain and beyond management’s control. For additional information regarding forward-looking statements, see the section titled “Cautionary Statement Regarding Forward-Looking Statements.”

Accounting Standards Updates

For disclosure regarding the impact to the Company’s financial statements of ASUs, see the Footnote titled “Summary of Significant Accounting Policies” of Part II Item 8 “Financial Statements and Supplementary Data.”

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Critical Accounting 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.

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 results of operations 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 the ACLL and Provision. 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.

As of December 31, 2025, the Bank maintained an ACLL for expected credit losses inherent in Company’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 quarterly.

The Company’s CECL method is a “static-pool” method that analyzes historical closed pools of loans over their expected lives to attain a loss rate, which is then adjusted for current conditions and reasonable, supportable forecasts prior to being applied to the current balance of the analyzed pools. Due to its reasonably strong correlation to the Company's historical net loan losses, the Company has chosen to use the U.S. national unemployment rate as its primary forecasting tool. Additionally, the Company reviews and utilizes CRE and C&I vacancy rates as a secondary forecasting tool. Subsequent to the one-year forecasts, loss rates are assumed to immediately revert back to long-term historical averages. 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.

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

See additional detail regarding the Company’s adoption of ASC 326 and the CECL method under the Footnote titled “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data.”

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Management evaluates the reasonableness of its Core Bank ACLL by evaluating absorption and exhaustion rates that account for CECL life-of-loan considerations. The absorption rate considers a range of total Core Bank net loan losses to the Total Core Bank ACLL using the 2008 to 2013 “Great Recession” timeframe as a baseline. The exhaustion rate considers how many years of total Core Bank gross loan charge-offs the end-of-year Core Bank ACLL could withstand based on a range of average annual net Core Bank loan losses, also using the 2008 to 2013 timeframe as a baseline. The years 2008 to 2013 represent a six-year period during which the U.S. unemployment rate rose above 8% and the Core Bank incurred a historically high period of loan losses relative to an average year of loan losses for the Core Bank. The timeframe of 2008 to 2013 is the most recent period in which the Core Bank incurred notable loan losses, and as such, Management believes is an appropriate baseline starting point in its overall absorption and exhaustion analyses.

Management considered the range of absorption rates and exhaustion rates calculated for the Core Bank as of December 31, 2025 and 2024 to be within acceptable ranges under current economic conditions. Based on management’s evaluation, a Core Bank ACLL of $66 million, or 1.24%, of total Core Bank loans, was an adequate estimate of expected losses within the loan portfolio as of December 31, 2025 and resulted in Core Banking Provision for its loans of a net charge of $6.0 million during 2025.

If the mix and amount of future charge-off percentages differ significantly from those assumptions used by management in making its determination, an adjustment to the Core Bank ACLL and the resulting effect on the income statement could be material.

The RPG ACLL as of December 31, 2025 primarily related to loans originated and held for investment through the RCS segment. RCS generally originates small-dollar, consumer credit products. For its healthcare receivable products, the Bank originates the loans, and in some instances, sells 100% of the balances and in other instances retains 100% of the balances. For its LOC products, the Bank originates these products, sells 90% or 95% of the balances within three business days of loan origination, and retains a 5% or 10% interest. RCS LOC products typically earn a higher yield but also have higher credit risk compared to loans originated through Core Banking operations, with a sizable portion of RCS clients considered subprime or near-prime borrowers.

As of December 31, 2025, the ACLL to total loans estimated for each RCS product ranged from as low as 0.25% for its healthcare-receivables portfolios to as high as 70.63% for its LOC portfolios. A lower reserve percentage was provided for RCS’s healthcare receivables as of December 31, 2025, as such receivables have recourse back to the Company’s third-party service providers.

Management only evaluates the ACLL on its active RCS products that have incurred meaningful losses since their inception, which are its LOC products. Due to the general short-term nature of these products, management utilized the current year net charge-offs for 2024 and 2025, along with the end-of-the-year ACLL to calculate each years’ absorption rate and exhaustion rate. The absorption and exhaustion rates were both considered to be within acceptable ranges as of December 31, 2025 and 2024. Based on management’s calculation, an ACLL of $19 million, or 17.15%, of total RCS loans was an adequate estimate of expected losses within the RCS portfolio as of December 31, 2025.

RPG’s TRS segment offered its RA credit product during the first two months of 2025, 2024 and 2023, and its ERA credit product during the month of December in 2025, 2024 and 2023 related to the subsequent first quarter tax filing seasons. An ACLL for losses on ERAs /RAs is estimated during the limited, short-term period the product is offered. RAs originated during the first two months of 2025, were repaid, on average, within 32 days of origination. Provisions for ERAs/RAs losses are estimated when advances are made and adjusted to actual net charge-offs as of June 30 th of each year. The ACLL for ERAs as of December 31, 2025 was $296,000 for $13 million of ERAs originated during the month of December 2025.

Related to the overall credit losses on ERAs/RAs, 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 ERA/RA approval model is based primarily on the prior-year’s tax refund funding patterns. Because much of the loan volume occurs each year before that year’s tax refund funding 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 funding patterns change materially between years.

See additional discussion regarding ERAs/RAs under the sections titled:

Part I Item 1A “Risk Factors”

Part II Item 8 “Financial Statements and Supplementary Data,” Footnote titled “Loans and Allowance for Credit Losses”

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RPG recorded a net charge of $25.6 million, $50.6 million, and $39.1 million to the Provision during 2025, 2024, and 2023, with the Provision for each year primarily due to net losses on RAs and growth in short-term, consumer loans originated through the RCS segment. If the number of future charge-offs on RAs and RCS loans differ significantly from assumptions used by management in making its determination, an adjustment to the RPG ACLL and the resulting effect on the income statement could be material.

RECENT DEVELOPMENTS

Republic Bank Finance Division Divestiture

On December 22, 2025, the Bank entered into an Asset Purchase Agreement with CAN Capital Merchant Services, Inc. (“CAN”) pursuant to which CAN is expected to purchase substantially all of the assets of RBF, a division of the Bank, consisting of approximately $82 million of loans and leases, and to assume approximately $3 million of related liabilities. CAN will also assume all on-going operations of RBF upon the closing of the transaction. Located in Marietta, Georgia, CAN is engaged in the business of alternative small business finance. Republic acquired RBF as part of its March 2023 acquisition of CBank

Per the Asset Purchase Agreement the aggregate purchase price is equal to the net book value of RBF’s assets and liabilities at Closing, plus a fixed premium. In connection with the transaction the Bank recorded a gain, net of broker commissions, of approximately $6 million during the first quarter of 2026.

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OVERVIEW

Total Company net income was $131.3 million and Diluted EPS was $6.72 for 2025, compared to net income of $101.4 million and Diluted EPS of $5.21 for 2024. The following table presents Republic’s financial performance for the years ended December 31, 2025, 2024, and 2023:

Table 1 — Summary

Percent Increase/(Decrease)

Years Ended December 31, (dollars in thousands, except per share data)

Income before income tax expense

Net income

Diluted EPS of Class A Common Stock

ROA

ROE

General highlights by reportable segment for the year ended December 31, 2025 compared to the year ended December 31, 2024 consisted of the following:

(I) Traditional Banking segment

Net income increased $7.3 million , or 13%, from 2024.

Net interest income increased $23.5 million , or 12%, compared to 2024.

Provision was a net charge of $5.5 million for 2025 compared to a net charge of $3.2 million for 2024.

As a percentage of total Traditional Bank loans, the Traditional Banking ACLL was 1.40 % as of December 31, 2025, compared to 1.31% as of December 31, 2024.

Noninterest income increased $8.0 million , or 20%, from 2024.

Noninterest expense increased $19.8 million , or 12%, over 2024.

Total Traditional Bank loans outstanding decreased $23 million, or 1%, during 2025.

Nonperforming loans to total loans for the Traditional Banking segment was 0.52% as of December 31, 2025, compared to 0.50% as of December 31, 2024.

Delinquent loans to total loans for the Traditional Banking segment was 0.31% as of December 31, 2025, compared to 0.22% as of December 31, 2024.

Total Traditional Bank deposits increased $192 million, or 4%, from December 31, 2024, to $4.76 billion as of December 31, 2025.

(II) Warehouse Lending segment

Net income increased $1.6 million , or 24%, over 2024.

Net interest income increased $2.2 million, or 17%, over 2024.

Provision was a net charge of $508,000 for 2025 compared to a net charge of $527,000 for 2024.

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Average committed Warehouse lines of credit increased to $1.05 billion during 2025 compared to $938 million during 2 024.

Average Warehouse LOC usage increased to 53% during 2025 compared to 50% during 2024.

(III) Tax Refund Solutions segment

Net income increased $15.6 million from 2024.

Net interest income decreased $3.9 million , or 11%, from 2024.

Provision was a net charge $9.5 million for 2025, compared to a net charge of $30.0 million for 2024.

Noninterest income was $18.0 million for 2025 compared to $15.5 million for 2024.

Within noninterest income, n et RT revenue increased $ 2.3 million , or 15 %, from 2024 to 2025.

Noninterest expense totaled $10.9 million for 2025 compared to $11.6 million for 2024.

TRS’s largest Tax Provider contract was not renewed for the 2026 Tax Season.

(IV) Republic Payment Solutions segment

Net income increased $1.0 million , or 12%, from 2024.

Net interest income increased $2.0 million , or 17%, from 2024.

Noninterest income was $3.1 million for 2025 compared to $3.3 million for 2024.

Noninterest expense totaled $4.6 million for 2025 compared to $4.1 million for 2024.

Republic Credit Solutions segment

Net income increased $4.4 million , or 19%, over 2024.

Net interest income decreased $1.2 million , or 2%, over 2024.

Provision was a net charge of $16.1 million during 2025 compared to a net charge of $20.6 million for 2024.

Noninterest income decreased $41,000 from 2024.

Noninterest expense totaled $11.8 million for 2025 compared to $14.1 million for 2024.

Nonperforming loans to total loans for the RCS segment was 0.14% as of December 31, 2025, compared to 0.11% as of December 31, 2024.

Delinquent loans to total loans for the RCS segment was 7.87% as of December 31, 2025, compared to 8.00% as of December 31, 2024.

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RESULTS OF OPERATIONS

This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “ Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 6, 2025.

Net Interest Income

See the section titled “Asset/Liability Management and Market Risk” in this section of the report regarding the Bank’s interest rate sensitivity.

Traditional Banking results of operations are primarily dependent upon net interest income, which represents the difference between the interest income and fees on interest-earning assets and the interest expense on interest-bearing liabilities used to fund those assets. Principal interest-earning Traditional Banking assets represent investment securities and commercial and consumer loans primarily secured by real estate and/or personal property. Interest-bearing liabilities primarily consist of interest-bearing deposit accounts, SSUAR, as well as short-term and long-term borrowing sources. FHLB advances have traditionally served as a significant borrowing and liquidity source for the Bank. 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.

Over the past 15 months, the FRB has reduced the FFTR by 175 bps. The most recent cut occurred on December 10, 2025, when the FRB lowered the FFTR by 25 bps to 3.75%, marking the third consecutive monthly reduction. Earlier adjustments included a 50-bp cut in September 2024 and two 25-bp cuts in November and December 2024. The FOMC has indicated the potential for further rate reductions in 2026.

Total Company net interest income was $334.7 million during 2025 and represented a $22.5 million, or 7%, increase over 2024. Total Company NIM increased to 5.05% during 2025 compared to 4.85% for 2024. In general, notably lower interest-bearing deposit costs combined with a modest decline in interest-earning assets yields during 2025 led to NIM expansion and strong net interest income for the year.

The following were the most significant components comprising the total Company’s net interest income and NIM fluctuations by reportable segment:

Traditional Banking segment

Traditional Banking net interest income increased $23.5 million, or 12%, for 2025 compared to 2024. The increase in net interest income was primarily driven by year-over-year growth in average interest-earning assets and NIM expansion. Overall, the Traditional Bank’s NIM increased from 3.55% for 2024 to 3.88% for 2025, driven by primarily by lower interest-bearing deposit costs as well as improved loan and investment yields.

Items of note impacting the Traditional Bank’s change in net interest income and NIM between 2024 and 2025 follows:

Traditional Bank average loans decreased $18 million, from $4.60 billion in 2024 to $4.58 billion in 2025, while the weighted-average yield increased from 5.56% to 5.68%, resulting in a $4.8 million year-over-year increase in interest income. The higher yield was driven primarily by the runoff of lower-yielding loans through amortization and payoffs combined with the origination of new loans at higher rates.

The modest decline in average loan balances reflected the second-quarter 2024 sale of $67 million in RRE loans previously held for investment. In addition, on December 19, 2025, management agreed to sell $82 million of lease financing receivables, which were reclassified from held for investment to HFS as of December 31, 2025. While this reclassification did not materially impact 2025 average balances, it will affect period-to-period comparability going forward.

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From 2024 through the first nine months of 2025, management maintained a more conservative pricing strategy across its lending function. As expected, this approach resulted in slower origination volume across most product categories during that timeframe. Management shifted this strategy in the fourth quarter of 2025, contributing to a $32 million increase in average Traditional Bank loans when comparing the fourth quarter of 2025 to the fourth quarter of 2024. Given the current positively sloped shape of the yield curve, management expects to continue this pricing approach into 2026, provided market conditions remain favorable and funding costs remain stable.

Average interest-earning cash—managed as a separate but complementary component of the Company’s investment portfolio—rose $33 million, or 7%, to $505 million in 2025, compared to $473 million in 2024. This increase was driven primarily by excess liquidity generated from growth in average interest-bearing deposits. The weighted-average yield on interest-earning cash declined from 5.26% in 2024 to 4.32% in 2025, reflecting the 175-basis-point decrease in the FFTR over the past 15 months.

Beginning in 2020, the Company pursued an investment strategy focused on shorter-term securities while maintaining a significant level of excess cash at the FRB. As market conditions improved, the Company shifted its strategy in the fourth quarter of 2024 and throughout 2025, purchasing longer-duration investment securities, primarily MBSs, to take advantage of higher yields relative to overnight cash. The yield curve, which began to steepen in the fourth quarter of 2024, became positively sloped in late March 2025 and generally remained so through year-end 2025.

Average investments increased $107 million, or 16%, to $754 million in 2025 from $647 million in 2024, while the weighted-average yield rose from 3.10% to 3.88%, driving a $6.1 million, or 14%, increase in interest income. The higher year-over-year yield was driven primarily by a more favorable yield curve and the strategic redeployment of cash from maturing investments into longer-term securities that offered yields superior to overnight interest-earning cash alternatives.

The Traditional Bank’s average cost of interest-bearing liabilities decreased from 2.45% during 2024 to 2.03% for 2025 driven primarily by the following:

The weighted-average cost of total interest-bearing deposits decreased from 2.67% during 2024 to 2.26% for 2025, while average interest-bearing deposit balances grew $203 million, or 6%, for the same period, driving a $9.6 million, or 10% decline in interest expense. Included within this growth in interest-bearing deposits was a $262 million net increase in the average balances for business and consumer money market accounts, which generally pay premium rates, and a $63 million increase in average time deposits. The combined increase in average money market and time balances was partially offset by an $84 million decrease in average transaction accounts and $21 million decrease in the average balance of third-party listing service deposits.

Average FHLB advances increased from $400 million for 2024 to $410 million for 2025, while the weighted-average cost of these borrowings decreased from 4.55% to 4.33% for the same time periods. The decrease in the overall weighted-average cost reflects the benefit prior year term extension strategies and the decline in the overnight borrowing rates during 2025, which are generally tied to the FFTR.

Average noninterest-bearing deposits declined $48 million, or 4%, in 2025 compared to 2024. This decline reflects an industry-wide trend that began in late 2022, as the interest rate environment—particularly during periods of an inverted yield curve—combined with heightened deposit competition, has continued to make premium-rate interest-bearing checking and savings products more attractive to both consumer and business clients.

Management believes that further reductions to the FFTR are unlikely to benefit the Traditional Bank’s net interest income or NIM in 2026. The extent of any impact from the most recent or future FFTR decreases will depend on several factors, including the ongoing shift from noninterest-bearing to interest-bearing deposits, the steepness and shape of the yield curve, demand for the Company’s lending and deposit products, the Company’s ability to reduce deposit costs in line with rate cuts, and overall liquidity needs.

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Warehouse Lending segment

Warehouse Lending net interest income increased $2.2 million, or 17%, from 2024 to 2025, driven by a $1.9 million, or 5%, increase in total interest income and a $287,000 reduction in interest expense. Although Warehouse NIM and loan yields declined by 2 bps and 91 bps, respectively, the segment benefited from higher average outstanding balances, which grew $87 million, or 18%, year-over-year.

Average committed Warehouse lines of credit increased from $938 million in 2024 to $1.05 billion in 2025, and average LOC usage rose from 50% to 53% over the same periods.

Because consumer mortgage activity drives utilization of Warehouse LOCs, overall usage has historically been sensitive to movements in long-term interest rates. A meaningful decline in long-end rates could increase Warehouse demand by stimulating mortgage origination volume. Conversely, declines limited to the short-end of the yield curve would not be expected to materially affect Warehouse demand.

(III)

Tax Refund Solutions segment

TRS’s net interest income decreased $3.9 million, or 11%, from 2024 to 2025. Loan-related interest and fees decreased $5.3 million, or 13%, during 2025, consistent with the $72 million, or 8% decline in total ERA/RA volume for the 2025 Tax Season. In addition, TRS received a $560,000 payment during the 2024 representing a Tax Provider yield enhancement for the RA program to offset the Company’s higher funding costs. This yield enhancement was new for the 2024 Tax Season and was eliminated for the 2025 Tax Season.

As previously disclosed, the Company’s largest Tax Provider contract within TRS based on product volume expired in October 2025 and the Company did not enter into a new contract with this Tax Provider for the 2026 Tax Season (which began in December 2025).

ERAs/RAs originated through this Tax Provider represented approximately 67% of total ERA/RA dollars originated through TRS from December 2024 through February 2025. As a result, ERA/RA fee income attributable to this Tax Provider accounted for 61% of TRS’s total ERA/RA fee income for the 2025 calendar year, 88% for the fourth quarter of 2024 and 0% during the fourth quarter of 2025.

Management does not believe that the net revenue from this Tax Provider will be replaced during the 2026 calendar year.

See additional detail regarding the ERA/RA product under the Footnote titled “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplemental Data.”

Republic Payment Solutions segment

Net interest income from the Company’s prepaid card division increased $2.0 million, or 17%, in 2025 compared to 2024. This increase was driven primarily by a reduction in the segment’s revenue share component, as its largest marketer-servicer did not meet the minimum contractual deposit balance thresholds required to earn revenue share for 2025. By comparison, revenue share payments totaled $4.8 million in 2024 and were recorded as interest expense. Management is currently unable to predict the level of future revenue share expense as future revenue-share payments are possible but not certain.

Partially offsetting the benefit of the reduced revenue share, RPS earned a lower yield on an average balance of $340 million in prepaid program deposits during 2025, driven primarily by the 175 bp decrease in the FFTR over the past 15 months.

Historically, customer demand for prepaid card products has not been sensitive to interest rate movements, and management therefore does not expect changes in the rate environment to materially affect origination volumes. However, a declining interest rate environment would likely reduce the internal FTP credit allocated to this segment more than it would reduce any revenue-share expense, resulting in lower NIM for the segment. The magnitude of this impact will depend on the final FTP rate applied as well as the overall volume of balances generated.

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(V) Republic Credit Solutions segment

RCS’s net interest income decreased $1.2 million, or 2%, from 2024 to 2025, driven primarily by a decrease in fee income from RCS’s LOC II product. RCS’s LOC II loan fees, which are recorded as interest income on loans, decreased $1.5 million during 2025 to $27.9 million, a 5% decrease compared to the $29.4 million recorded during 2024. The decrease in fee income for the LOC II product was generally driven by a decline in new loan origination volume.

Historically, customer demand for RCS consumer loan products has not been sensitive to changes in interest rates, and management therefore does not expect rate movements to materially affect origination volumes. However, a declining interest rate environment would likely reduce the internal FTP cost allocated to this segment, which in turn would be favorable to the segment’s NIM. The magnitude of this benefit would depend on the final FTP rate applied, as well as the overall volume and mix of loans the segment originates.

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The following table presents average balances, along with the related calculations of tax-equivalent net interest income, NIM and net interest spread for the related periods.

Table 2 — Total Company Average Balance Sheets and Interest Rates

Years Ended December 31,

Average

Average

Average

Average

Average

Average

(in thousands)

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

ASSETS

Interest-earning assets:

Federal funds sold and other interest-earning deposits

Investment securities, including FHLB stock (a)

TRS Refund Advances (b)

RCS LOC products (b)

Other RPG loans (c)

Outstanding Warehouse lines of credit

Traditional Bank loans (c)

Total loans (d)

Total interest-earning assets

Allowance for credit losses

Noninterest-earning assets:

Noninterest-earning cash and cash equivalents

Premises and equipment, net

Bank owned life insurance

Other assets (a)

Total assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest-bearing liabilities:

Transaction accounts

Money market accounts

Time deposits

Reciprocal money market and time deposits

Brokered deposits

Total interest-bearing deposits

SSUARs and other short-term borrowings

Federal Home Loan Bank advances

Total interest-bearing liabilities

Noninterest-bearing liabilities and Stockholders’ equity:

Noninterest-bearing deposits

Other liabilities

Stockholders’ equity

Total liabilities and stockholders’ equity

Net interest income

Net interest spread

Net interest margin

For the purpose of this calculation, the debt securities fair market value adjustment is included as a component of other assets.

Interest income is composed either entirely or predominantly of loan fees. See the following table titled “Loan Fee Income.”

The average balance includes the principal balance of nonaccrual loans and loans HFS (not carried at fair value), and are inclusive of all loan premiums, discounts, fees and costs.

See the following table for detail of loan fees by reporting segment.

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Table 3 — Loan Fee Income

The amount of loan fee income can meaningfully impact total interest income, loan yields, NIM, and net interest spread. The following table illustrates loan fees recorded as interest income on loans by segment:

Years Ended December 31,

(in thousands)

Traditional Banking

Warehouse Lending

Total Core Bank loan fees

TRS

RCS

Total RPG loan fees

Total Company loan fees

The following table 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 4 — Total Company Volume/Rate Variance Analysis

Year Ended December 31, 2025

Year Ended December 31, 2024

Compared to

Compared to

Year Ended December 31, 2024

Year Ended December 31, 2023

Total Net

Increase / (Decrease) Due to

Total Net

Increase / (Decrease) Due to

(in thousands)

Change

Volume

Rate

Change

Volume

Rate

Interest income:

Federal funds sold and other interest-earning deposits

Investment securities, including FHLB stock

TRS Refund Advance loans*

RCS LOC products

Other RPG loans

Outstanding Warehouse lines of credit

Traditional Bank loans

Net change in interest income

Interest expense:

Transaction accounts

Money market accounts

Time deposits

Reciprocal money market and time deposits

Brokered deposits

SSUARs and other short-term borrowings

Federal Home Loan Bank advances

Net change in interest expense

Net change in net interest income

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Provision

Total Company Provision was a net charge of $31.6 million for 2025 compared to a net charge of $54.4 million for 2024.

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

(I) Traditional Banking segment

The Traditional Banking Provision during 2025 was a net charge of $5.5 million compared to a net charge of $3.2 million for 2024.

The net charge for 2025 was primarily driven by the following:

During the fourth quarter of 2025, the Traditional Bank recorded a $4.8 million specific allocation related to a $16 million C&I participation relationship, in which Republic is not the lead bank. This credit has been impacted by strong competition, declining revenues and rising expenses.

During the fourth quarter of 2025, the Traditional Bank recorded a net credit to the Provision of $342,000 related to the transfer of the substantial majority of its RBF loan/lease portfolio into the HFS category.

D uring the first quarter of 2025, approximately $5 million of consumer credit cards were transferred from held for investment to HFS, which generated a net credit to the Provision of $414,000. The consumer credit card sale was completed during the second quarter of 2025.

During the second quarter of 2025, as a practical expedient, the Company established a minimum loan balance threshold in assessing credits for impairment resulting in a $518,000 credit adjustment to the Provision.

The Traditional Bank recorded net charge-offs of $1.6 million during 2025.

The net charge for 2024 was primarily driven by the following:

The Traditional Bank recorded a net charge to the Provision of $747,000 during 2024 related to general formula reserves applied to Traditional Bank loans. While loan balances at the Traditional Bank decreased by $49 million during 2024, the segment continued to experience a change in loan mix, growing in categories with higher loan loss reserve requirements thus driving its higher Provision.

The Traditional Bank recorded $1.9 million in charge-offs related to three linked, broker-related marine loans during the third quarter of 2024. During the first quarter of 2025, the Traditional Bank recorded a $1.6 million insurance recovery to noninterest income associated with these loans. The Company discontinued originating broker-related marine loans during the third quarter of 2024 . As of December 31, 2025, the Bank had $3 million of broker-related marine loans remaining in its loan portfolio.

As a percentage of total Traditional Bank loans, the Traditional Banking ACLL was 1.40% as of December 31, 2025, compared to 1.31% as of December 31, 2024.

The Company believes, based on information presently available, that it has adequately provided for Traditional Banking loan losses as of December 31, 2025.

(II) Warehouse Lending segment

Warehouse recorded a net charge to the Provision of $508,000 during 2025 compared to a net charge of $527,000 for 2024. Provision for both periods reflected changes in general reserves consistent with changes in outstanding period-end balances. Outstanding Warehouse period-end balances increased $203 million, or 37%, during 2025 compared to an increase of $211 million, or 62%, during 2024.

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As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was 0.25% as of both December 31, 2025 and December 31, 2024.

The Company believes, based on information presently available, that it has adequately provided for Warehouse loan losses as of December 31, 2025.

(III)

Tax Refund Solutions segment

TRS recorded a net charge to the Provision of $9.5 million during 2025 compared to a net charge of $30.0 million during 2024. Substantially all TRS Provision in both periods was related to its ERA/RA products.

The Bank’s ability to control ERA/RA 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. In addition, the Bank’s ability to control losses for the ERA product is highly dependent upon the taxpayer returning to a Tax Provider for the filing of their final tax return. Each year, the Bank’s ERA/RA approval model is based primarily on the prior-year’s tax refund payment patterns. Because the substantial majority of the ERA/RA volume occurs each year before that year’s tax refund payment patterns can be analyzed and subsequent underwriting changes implemented, credit losses during a given year could be higher than management’s predictions if tax refund payment patterns change materially between years.

2025 Tax Season Fee Structure Changes and Corresponding Shift and Decline in Total Origination Volume:

During the fourth quarter of 2024, the Company revised its agreement with its largest Tax Provider based on product volume for the 2025 Tax Season. Under the revised structure, the ERA fee was increased and a new ERA-specific loss-cap guarantee was added, while the fee applicable to RAs was reduced. Consistent with these changes, TRS experienced a shift in product mix and an overall decline in total ERA/RA volume for the 2025 Tax Season compared to the 2024 Tax Season.

Total ERA/RA volume for the 2025 Tax Season declined $72 million, or 9%, from $874 million originated for the 2024 Tax Season to $802 million for the 2025 Tax Season. Total RA origination volume was $663 million during 2025 compared to $771 million during 2024, with originations for both periods occurring during the first quarter. Total ERA origination volume was $139 million during the 2025 Tax Season compared to $103 million during the 2024 Tax Season, with originations occurring in December 2024 and December 2023, respectively.

2026 Tax Season Contract Expiration:

As previously disclosed, the Company’s largest Tax Provider contract within TRS based on product volume, expired in October 2025, and the Company did not enter into a new contract with this Tax Provider for the 2026 Tax Season (which began in December 2025). Provision for ERAs/RAs originated through this Tax Provider represented 58% of TRS’s total ERA/RA Provision for the 2025 calendar year, 96% for the fourth quarter of 2024 and 0% for the fourth quarter of 2025. Management does not believe that the net revenue from this Tax Provider will be replaced during the 2026 calendar year.

The lower Provision during 2025 compared to 2024 related to the following factors:

Significant improvement in payments received from the U.S. Treasury to fund federal tax refunds for the first quarter 2025 Tax Season.

The 2025 Tax Season fee structure changes and corresponding shift and decline in total ERA and RA volume detailed above.

A larger percentage of ERA Provision was recorded during December 2024 compared to December 2023, effectively leading to a lower comparable Provision during 2025 versus 2024. ERA provisioning in December 2024 was based on the final loss rate realized from the ERAs originated December 2023. Included in the Provision for 2023 was a $3.9 million charge related to $ 103 million of ERAs originated in December 2023 for tax returns that were anticipated to be filed during the first quarter of 2024.

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The 2026 Tax Season contract expiration detailed earlier in this section and ERA provisioning.

During December 2024, $139 million of ERAs were originated and outstanding at period end related to tax returns that were anticipated to be filed during the first quarter 2025 Tax Season. ERA originations related to the largest Tax Provider contract totaled $123 million, resulting in a $9.5 million charge to provision during 2025. During December 2025, $13 million of ERAs were originated and outstanding at period end related to tax returns that anticipated to be filed during the first quarter 2026 Tax Season, resulting in approximately $300,000 of provision expense for 2025.

The Company believes, based on information presently available, that it has adequately provided for TRS loan losses as of December 31, 2025.

See additional detail regarding the ERA/RA products under the Footnote titled “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplemental Data.”

Republic Payment Solutions segment

There is no ACLL or Provision for RPS, as the segment offers prepaid and debit solutions to consumers.

Republic Credit Solutions segment

As illustrated in the following table, RCS recorded a net charge to the Provision of $16.1 million during 2025 compared to a net charge of $20.6 million for 2024. RCS recorded net charge-offs of $17.7 million during 2025 compared to $17.9 million during 2024. In addition, the RCS Provision fluctuation from 2024 to 2025 was meaningfully impacted by calculated reserve requirements tied to period-to-period balance fluctuations in the higher risk LOC II product, whose period-end balances grew nearly $4.6 million during 2024 and declined $1.6 million during 2025.

RCS recorded a net charge to the Provision of $20.6 million during 2024 compared to a net charge to the Provision of $16.5 million for 2023. The increase in the Provision during 2024 was substantially within the LOC II product and was generally in-line with its calculated required requirements tied to the increase in its period-end loan balances from 2023 to 2024.

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 17.30% as of December 31, 2025 compared to 16.30% as of December 31, 2024.

The Company believes, based on information presently available, that it has adequately provided for RCS loan losses as of December 31, 2025.

Table 5 — Republic Credit Solutions Provision by Product Type

Years Ended December 31,

(in thousands)

Product:

Lines of credit

Healthcare receivables

Total RCS provision

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Noninterest Income

Table 6 — Analysis of Noninterest Income

Percent Increase/(Decrease)

Years Ended December 31, (dollars in thousands)

Service charges on deposit accounts

Net refund transfer fees

Mortgage banking income

Interchange fee income

Program fees

Increase in cash surrender value of bank owned life insurance

Death benefits in excess of cash surrender value of life insurance

Net losses on other real estate owned

Gain on sale of Visa Class B-1 shares

Other

Total noninterest income

Total Company noninterest income increased $10.2 million, or 14%, from 2024 to 2025.

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

Traditional Banking segment

Noninterest income increased $8.0 million, or 20%, from 2024 to 2025, primarily driven by the following:

Mortgage Banking income increased $2.0 million, or 36% from 2024 to 2025. Approximately $1.0 million of the increase was the result of a negative fair value adjustment recorded during the first quarter of 2024 related to $67 million of correspondent loans that were re-classified from held for investment to HFS during the period. The remaining $1.0 increase related to a $32 million, or 17%, increase in the volume of fixed rate loans that were sold into the secondary market during 2025 compared to 2024. In general, mortgage activity strengthened in late 2025 as long-term market interest rates declined.

BOLI income increased $388,000 in 2025 compared to 2024 driven by appreciation in cash-surrender values within the policy plans and a §1035 policy exchange executed in 2025 to enhance the overall yield of the portfolio. BOLI assets are currently being carried at $111 million on the balance sheet.

The Bank recorded a $4.1 million gain on sale of Visa Class B-1 shares during the first quarter of 2025. The Visa Class B-1 common stock was issued to Visa’s U.S. member banks during 2008 in connection with a reorganization and Initial Public Offering.

Other noninterest income increased $2.1 million, or 56%, during 2025 compared to 2024, led by a $1.6 million insurance recovery related to a $1.9 million charge-off recorded in 2024. In addition, swap fee income increased $266,000 year over year and the Traditional Bank recognized a $328,000 non-recurring gain in 2025 related to the sale of the consumer credit card portfolio.

The Traditional 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 2025, and 2024 was $7.4 million in both periods. The total daily overdraft charges, net of refunds, included in interest income for 2025, and 2024 was $ 1.2 million in both periods .

(II) Warehouse Lending segment

Warehouse noninterest income, which consists entirely of service charges on deposit accounts, increased $21,000 from $62,000 in 2024 to $83,000 in 2025.

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(III)

Tax Refund Solutions segment

TRS’s noninterest income increased $2.4 million, or 16%, during 2025 compared to 2024, with RT fees representing the majority of noninterest income for each period. Despite a 5.6% decrease in overall volume, RT income expanded $2.3 million, or 15%, in 2025 attributable to a 22.8% increase in the per-unit net fee earned. The better per-unit profitability was led by select product price increases combined with a minimal change in revenue share.

As previously disclosed, the Company’s largest Tax Provider contract within TRS based on product volume expired in October 2025 and the Company did not enter into a new contract with this Tax Provider for the 2026 Tax Season (which began in December 2025).

Net RT revenue generated from this Tax Provider accounted for approximately 20% of TRS’s total net RT revenue for the 2025 calendar year. The RT product is primarily earned and recognized during the first half of the year. Management does not believe that the net revenue from this Tax Provider will be replaced during the 2026 calendar year.

Republic Payment Solutions segment

RPS’s noninterest income decreased $172,000, or 5%, for 2025 compared to 2024. RPS program fees, which are volume based and represent a portion of the net interchange revenue earned for cardholder activity, drove the noninterest income decline.

Republic Credit Solutions segment

RCS’s noninterest income decreased $41,000, during 2025 compared to 2024, with program fees representing the substantial majority of RCS’s noninterest income. As noted in the following table, lower sales volume from RCS’s LOC products from 2024 to 2025 was offset by expansion within the installment products.

The following table presents program fees by RPG Segment:

Table 7 — Program Fees by Republic Processing Group Segment

Years Ended December 31,

(in thousands)

Segment:

TRS

RPS

RCS

Total RPG program fees

The following table presents RCS program fees by product type:

Table 8 — Program Fees by Republic Credit Solutions Product

Years Ended December 31,

(in thousands)

Product:

Lines of credit

Healthcare receivables

Installment loans*

Total RCS program fees

*The Company has elected the fair value option for this product, with mark-to-market adjustments recorded as a component of Program Fees.

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Noninterest Expense

Table 9 — Analysis of Noninterest Expense

Percent Increase/(Decrease)

Years Ended December 31, (dollars in thousands)

Salaries and employee benefits

Technology, equipment, and communication

Occupancy

Marketing and development

FDIC insurance expense

Interchange related expense

Legal and professional fees

Merger expense

Core conversion and related contract consulting fees

Other

Total noninterest expense

Total Company noninterest expense increased $17.5 million, or 9%, during 2025 compared to 2024.

The following were the most significant components comprising the total Company’s noninterest expense fluctuation by reportable segment:

Traditional Banking segment

Traditional Bank noninterest expense increased $19.8 million, or 12%, for 2025 compared to the same period in 2024, driven primarily by the following:

Salaries and employee benefits increased by a combined $7.1 million, or 7%, driven primarily by a $2.5 million increase in health insurance claims and a $3.1 million increase in bonus-related expenses. The larger bonus-related expenses for 2025 were consistent with the Company’s strong operating results compared to plan.

Technology, equipment, and communication expenses increased $3.5 million, or 13%, over 2024. The increase in Technology expense was driven primarily by expanded data storage, enhanced security, and new ancillary systems, including additional costs resulting from the transition to a new call center management system. Also, 2024 included a $450,000 refund related to a prior year contract billing dispute. In addition, the Company operated on a month-to-month contract basis from July to mid-October, as it transitioned to a new core system provider. Under the month-to-month contract terms, the Company paid a 25% premium above its previous contractual run rate. Management expects to incur a net benefit in technology costs in the future as a result of the new call center management system and core system conversion.

Marketing and development expenses increased $1.0 million, or 28%, over 2024 driven primarily by the Bank’s current marketing campaigns which include a new branding initiative. Overall, Traditional Banking marketing expenses are expected to remain near current levels into the near future.

Interchange related expense increased $576,000, or 10%, for the year ended December 31, 2025 compared to the prior year, consistent with the increase in transaction volume and customer base expansion.

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The Traditional Bank recorded $6.2 million during 2025, primarily during the first quarter, for deconversion and consulting fees related to its Core System contract. Included within these costs were the following:

Approximately $4.1 million of the expense related to contract negotiation assistance from a third-party consultant that was calculated as a percentage of anticipated savings over the five-year term of the new contract. Republic projects a savings in excess of $16 million over the contract’s five-year term.

Approximately $2.1 million of this expense related to data conversion and secondary system migration costs in preparation for the conversion to the core conversion.

Warehouse Lending segment

Noninterest expense at the Warehouse Lending segment increased $157,000, or 4%, during 2024 to 2025.

(III) Tax Refund Solutions segment

Noninterest expense at the TRS segment decreased $740,000, or 6%, during 2025 compared to 2024, as various underwriting and administrative related expenses declined consistent with ERA/RA volume.

Republic Payment Solutions segment

Noninterest expense at the RPS segment increased $536,000, or 13%, during 2025 compared to 2024, primarily due to a $657,000 increase in salary and employee benefits resulting from an increase in allocated staff.

(V) Republic Credit Solutions segment

Noninterest expense at the RCS segment decreased $2.3 million, or 16%, during 2025 compared 2024, driven primarily by a $2.5 million, or 47%, reduction in marketing and development expenses, which generally fluctuate in-line with o verall origination volume. Under the terms of the Company’s contract with its LOC II marketer-servicer, RCS reimburses the marketer-servicer a certain dollar amount for marketing costs based on each new product originated during the period.

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FINANCIAL CONDITION

Overview

Total assets increased $195 million, or 3%, to $7.04 billion at December 31, 2025 from $6.85 billion at December 31, 2024, driven primarily by expansion within the investment portfolio.

Total liabilities increased $85 million, or 1%, to $5.94 billion at December 31, 2025 from $5.85 billion at December 31, 2024, due mainly to a $111 million, or 28%, increase in total FHLB advances outstanding.

Stockholders’ equity increased $110 million, or 11%, to $1.10 billion at December 31, 2025, compared to $992 million at December 31, 2024. This increase reflected net income of $131.3 million and an improvement in AOCI, partially offset by $35 million of cash dividends declared during 2025. The improvement in AOCI was attributable to changes in the interest-rate environment and the corresponding impact on the valuation of the AFS debt-securities portfolio and cash-flow-hedging derivatives.

Cash and Cash Equivalents

Cash and cash equivalents include cash, deposits with other financial institutions with original maturities of less than 90 days, and federal funds sold. The Company had $220 million in cash and cash equivalents as of December 31, 2025, compared to $432 million as of December 31, 2024. Average interest-earning cash and cash equivalents totaled $671 million for 2025, compared to $612 million for 2024. For cash held at the FRB, the Bank earns a yield on balances in excess of required reserves, with these funds earning a weighted-average yield of 4.33% during 2025 compared to 5.26% during 2024. Cash held within the Bank’s banking centers and ATM/ITM networks does not earn interest. Despite the year-over-year increase in average interest-earning cash balances, the Company has, over the past several months, deployed a higher percentage of its excess cash into investment securities resulting in a decrease in period-end cash balances.

In prior years, the Company maintained elevated cash balances during the fourth quarter due to near-term funding requirements for ERAs/RAs related to the upcoming Tax Season. As previously disclosed, the Company’s largest Tax Provider contract within TRS, based on product volume, expired in October 2025, and the Company did not enter into a replacement agreement. Consistent with the non-renewal of this contract, the Company did not acquire any short-term brokered deposits at year-end 2025, compared to $200 million acquired at year-end 2024.

Beginning in 2020, the Company employed an investment strategy focused on purchasing securities with shorter-term durations while maintaining significant excess cash at the FRB. Beginning in the fourth quarter of 2024 and continuing throughout 2025, the Company shifted to purchasing longer-duration investment securities in response to a more favorable yield curve and the relatively higher yields available compared to overnight cash. The yield curve, which began to steepen during the fourth quarter of 2024, became positively sloped in late March 2025 and remained so through year-end 2025.

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Investment Securities

Table 10 — Investment Securities Portfolio

December 31, (in thousands)

Available-for-sale debt securities (fair value):

U.S. Treasury securities and U.S. Government agencies

Private label mortgage-backed security

Mortgage-backed securities - residential

Collateralized mortgage obligations

Corporate bonds

Trust preferred security

Total available-for-sale debt securities

Held-to-maturity debt securities (amortized cost):

Mortgage backed securities - residential

Collateralized mortgage obligations

Corporate bonds

Total held-to-maturity debt securities

Equity securities with a readily determinable fair value (fair value):

Freddie Mac preferred stock

Total equity securities with a readily determinable fair value

Total investment securities

The primary purpose of the Company’s investment securities portfolio is to provide a stable source of interest income and serve as an important liquidity management tool. In managing overall balance-sheet composition, the Company seeks to balance earnings generation with credit quality and liquidity considerations.

At December 31, 2025, the Company’s AFS debt securities primarily consisted of U.S. Treasury securities and U.S. Government agency obligations, including agency MBSs and agency CMOs. The agency MBSs consist mainly of hybrid mortgage securities and other ARM-based securities underwritten and guaranteed by GNMA, FHLMC, or FNMA. The agency CMOs held in the portfolio are predominantly floating-rate securities that reset monthly. A portion of the investment portfolio is pledged to support client SSUAR balances, while remaining eligible securities not pledged for SSUARs may be pledged to the FHLB as collateral for the Bank’s borrowing capacity.

Beginning in 2020, the Company employed an investment strategy focused on purchasing securities with shorter-term durations while maintaining significant excess cash at the FRB. Beginning in the fourth quarter of 2024 and continuing throughout 2025, the Company shifted to purchasing longer-duration investment securities in response to a more favorable yield curve and the relatively higher yields available compared to overnight cash. The yield curve, which began to steepen during the fourth quarter of 2024, became positively sloped in late March 2025 and remained so through year-end 2025. As a result of this strategy, Republic’s investment portfolio increased $295 million, or 50%, from December 31, 2024, to December 31, 2025. This growth was driven by $771 million of securities purchases, partially offset by $492 million in calls and maturities of debt securities and paydowns on MBS’s.

Strategies for the investment securities portfolio are influenced by economic and market conditions, loan demand, deposit mix, and liquidity needs. The Company’s investment management strategy for 2026 and beyond will depend on a variety of factors, including the Company’s current and projected liquidity position, customer demand for loan and deposit products, the Company’s overall interest-rate-risk profile, the shape of the yield curve and prevailing interest-rate environment, as well as expectations for short-term and long-term interest-rate trends.

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Table 11 — Available-for-Sale Debt Securities

Weighted

Weighted

Average

Amortized

Fair

Average

Maturity in

December 31, 2025 (dollars in thousands)

Cost

Value

Yield

Years

U.S. Treasury securities and U.S. Government agencies:

Due in one year or less

Due from one year to five years

Total U.S. Treasury securities and U.S. Government agencies

Corporate bonds, due in one year or less

Trust preferred security, due beyond ten years

Private label mortgage backed security

Total mortgage backed securities - residential

Total collateralized mortgage obligations

Total available-for-sale debt securities

Table 12 — Held-to-Maturity Debt Securities

Weighted

Weighted

Average

Amortized

Fair

Average

Maturity in

December 31, 2025 (dollars in thousands)

Cost

Value

Yield

Years

Total mortgage backed securities - residential

Total collateralized mortgage obligations

Total held-to-maturity debt securities

Actual maturities for MBS may differ from contractual maturities due to prepayments on underlying collateral.

See the Footnote titled “Investment Securities” of Part II Item 8 “Financial Statements and Supplementary Data” for further information regarding the Bank’s investment securities.

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Loan Portfolio

Table 13 — Loan Portfolio Composition

Years Ended December 31, (in thousands)

Traditional Banking:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate:

Owner-occupied

Nonowner-occupied

Multi-family

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft*

Home equity

Consumer:

Credit cards

Overdrafts

Automobile loans

Other consumer

Total Traditional Banking

Warehouse lines of credit*

Total Core Banking

Republic Processing Group*:

Tax Refund Solutions:

Refund Advances

Other TRS commercial & industrial loans

Republic Credit Solutions

Total Republic Processing Group

Total loans**

Allowance for credit losses

Total loans, net

Note: Loan segments as of December 31, 2024 changed from those defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as the CRE loan pool was further segmented into Owner-occupied CRE, Nonowner-occupied CRE, and Multi-family beginning in 2025.

*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.

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The Company’s credit exposure is diversified across both commercial and consumer borrowers, with no single industry representing more than 10% of total loans outstanding. Although the loan portfolio is broadly diversified, a borrower’s ability to meet contractual obligations remains influenced by the economic conditions and industry dynamics affecting that borrower. Loans outstanding and related unfunded commitments are primarily concentrated within the Company’s core market footprint, which includes Kentucky, Indiana, Florida, Ohio, and Tennessee.

Total Company gross loans increased $7 million during 2025, reaching $5.45 billion outstanding as of December 31, 2025. The most significant components comprising the change in loans by reportable segment follow:

(I) Traditional Banking segment

Traditional Banking period-end loan balances decreased $23 million, or 1%, from December 31, 2024 to December 31, 2025. Excluding the $82 million of RBF lease-financing receivables that were reclassified from held for investment to HFS, the Traditional Bank would have generated $59 million of year-over-year loan growth. The primary drivers of the decline in Traditional Banking loan balances are as follows:

For 2024 and the first nine months of 2025, management maintained a stricter pricing strategy across all lending types in response to then-current economic conditions. As expected, this approach resulted in slower origination volume across most product categories during the period. In the fourth quarter of 2025, however, supported by a more positively sloped yield curve, the Traditional Bank achieved its first quarter-over-prior-quarter average loan balance growth of the year, with average loans increasing by $32 million.

During the fourth quarter of 2025, approximately $82 million of lease finance receivables were reclassified from held for investment to HFS as the Bank entered into an Asset Purchase Agreement to sell its St. Louis-based RBF operations. The transaction closed in February 2026, and the Company recorded a gain of approximately $6 million, net of broker commissions, as a result of the sale during the first quarter of 2026.

Increased LOC usage within the Traditional Bank HELOC and C&I portfolios was more than offset by contraction within the Lease Financing Receivable, RRE, CRE and aircraft lending portfolios.

During March 2025, the Company reached an agreement to sell approximately $5 million of consumer credit cards that were previously classified as held for investment. The sale of these credit cards was completed during the second quarter of 2025.

During March 2024 , the Company reached an agreement to sell approximately $67 million of correspondent loans that were previously classified as held for investment. The sale of these loans was completed during the second quarter of 2024.

(II) Warehouse Lending segment

Outstanding Warehouse period-end balances increased $203 million, or 37%, from December 31, 2024, to December, 2025. Average committed Warehouse lines of credit increased from $938 million for the year ended December 31, 2024, to $1.05 billion during 2025, with higher demand driving average usage rates for Warehouse lines of credit from 50% to 53% for the same periods.

Due to mortgage-market volatility and seasonality, projecting future outstanding balances for Warehouse lines of credit remains challenging; however, portfolio expansion has historically aligned with broader industry trends. Since entering the business in 2011, the Bank has experienced fluctuations in Warehouse balances consistent with overall mortgage-origination activity. Weighted-average quarterly usage rates have ranged from a low of 31% during the first quarter of 2023 to a high of 71% during the fourth quarter of 2019. On an annual basis, weighted-average usage rates have ranged from a low of 39% during 2022 to a high of 66% during 2020.

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(III)

Tax Refund Solutions segment

As previously disclosed, the Company’s largest Tax Provider contract within TRS based on product volume expired in October 2025 and the Company did not enter into a new contract with this Tax Provider for the 2026 Tax Season (which began in December 2025).

ERAs/RAs originated through this Tax Provider represented approximately 67% of total ERA/RA dollars originated through TRS from December 2024 through February 2025. As a result, ERA/RA fee income attributable to this Tax Provider accounted for 61% of TRS’s total ERA/RA fee income for the 2025 calendar year, 88% for the fourth quarter of 2024 and 0% during the fourth quarter of 2025.

During December 2024, $139 million of ERAs were originated and outstanding at period end related to tax returns that were anticipated to be filed during the first quarter 2025 Tax Season. ERA originations related to the largest Tax Provider contract totaled $123 million, during 2025. During December 2025, $13 million of ERAs were originated and outstanding at period end related to tax returns that anticipated to be filed during the first quarter 2026 Tax Season.

Republic Credit Solutions segment

Outstanding period-end RCS balances decreased $15 million, or 12%, to $114 million as of December 31, 2025, consistent with pay off activity and decreased origination volume primarily associated with the healthcare receivable and LOC products.

Republic Payment Solutions segment

There are no outstanding loans at RPS, as the segment offers prepaid and debit solutions to consumers.

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The following table presents the maturity distribution and rate sensitivity of the loan portfolio:

Table 14 — Selected Loan Distribution

Over One

Over Five

One Year

Through

Through

Over

December 31, 2025 (in thousands)

Total

Or Less

Five Years

15 Years

15 Years

Fixed rate loan maturities:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate:

Owner-occupied

Nonowner-occupied

Multi-Family

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Warehouse lines of credit

Home equity

Consumer

Total fixed rate loans

Variable rate loan maturities:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate

Owner-occupied

Nonowner-occupied

Multi-Family

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Warehouse lines of credit

Home equity

Consumer

Total variable rate loans

Total:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate

Owner-occupied

Nonowner-occupied

Multi-Family

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Warehouse lines of credit

Home equity

Consumer

Total loans

Loans at maturity interval to overall total loans

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Allowance for Credit Losses

The Bank maintains an ACLL on the balance for expected credit losses inherent in the Bank’s loan portfolio, which includes overdrawn deposit accounts. The Bank also maintains an ACLC for expected OBS credit exposure losses. Management evaluates the adequacy of the ACLL monthly and the adequacy of the ACLC for OBS quarterly. The ACLL calculation is presented to and discussed with the Audit Committee and the Board on a quarterly basis.

The Company’s ACLL decreased to $85 million at December 31, 2025, compared to $92 million at December 31, 2024, with the total Company ACLL as a percentage of total loans declining to 1.57% at year-end 2025 from 1.69% at year-end 2024.

The most significant components comprising the change in ACLL by reportable segment follow:

(I) Traditional Banking segment

While Traditional Bank loan balances decreased $23 million during 2025, the corresponding ACLL increased $4 million to $64 million as of December 31, 2025, primarily due to the following:

During the fourth quarter of 2025, the Traditional Bank recorded a specific allocation of approximately $4.8 million related to a $16 million C&I participation relationship in which Republic is not the lead bank. This credit has been negatively affected by strong competition, declining revenues, and rising expenses.

Throughout 2025, the Traditional Banking ACLL continued to reflect a shift in loan mix, as growth occurred in categories that carry higher loan-loss reserve requirements.

During the fourth quarter of 2025, approximately $82 million of loans and leases were reclassified from held for investment to HFS as the Bank entered into an Asset Purchase Agreement to sell its St. Louis-based RBF operations. As a result of this reclassification, the Company reversed approximately $850,000 of reserves related to the performing loans. The Company also maintained a specific reserve of approximately $508,000 related to loans not expected to be sold in the transaction.

As a percentage of total Traditional Bank loans, the Traditional Banking ACLL was 1.40% as of December 31, 2025, compared to 1.31% as of December 31, 2024.

Warehouse Lending segment

The Warehouse ACLL increased $508,000 to $1.9 million, while the Warehouse ACLL as a percentage of total Warehouse loans remained at 0.25% when comparing December 31, 2025 to December 31, 2024. Outstanding Warehouse period-end balances increased $203 million, or 37%, over the same period As of December 31, 2025, the Warehouse ACLL remained entirely qualitative in nature, with no adjustments required to the qualitative reserve percentage for 2025.

(III) Tax Refund Solutions segment

The TRS ACLL decreased approximately $10 million from December 31, 2024 to approximately $300,000 as of December 31, 2025, reflecting the impact of the previously-disclosed non-renewal of a large tax provider contract, which significantly impacted period-to-period comparability. During the fourth quarter of 2024, ERA originations through this Tax Provider totaled $123 million, resulting in a $10 million ACLL at year-end. ERAs are primarily originated during December of each year in connection with the upcoming first-quarter tax filing season.

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Republic Credit Solutions segment

The RCS ACLL decreased $2 million to $19 million as of December 31, 2025, primarily due to declines in spot loan balances within the LOC II and healthcare receivables products.

RCS maintained an ACLL for two distinct credit products as of December 31, 2025: its LOC products and its healthcare receivables products. As of year-end, the ACLL-to-total-loans percentage for these products ranged from as low as 0.25% for healthcare receivables to as high as 70.63% for LOC products. The lower reserve percentage for healthcare receivables reflects the recourse the Bank maintains to the third-party service providers for these balances.

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 17.15% as of December 31, 2025 compared to 16.30% as of December 31, 2024. The RCS segment continued to experience a change in loan mix, growing in categories with higher loan loss reserve requirements thus driving its higher ACLL for the quarter.

For additional discussion regarding Republic’s methodology for determining the adequacy of the ACLL, see the section titled “Critical Accounting Policies and Estimates” in this section of the report.

See additional detail regarding RCS’ loan products under Item 1 “Business.”

Republic Payment Solutions segment

There is no ACLL or Provision for RPS, as the segment offers prepaid and debit solutions to consumers.

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Table 15 — Summary of Loan and Lease Loss Experience

Years Ended December 31, (in thousands)

ACLL at beginning of period

CBank Fair Value Adjustment

Charge-offs:

Traditional Banking:

Residential real estate

Commercial real estate

Construction & land development

Commercial & industrial

Lease financing receivables

Home equity

Consumer

Total Traditional Banking

Warehouse lines of credit

Total Core Banking

Republic Processing Group:

Tax Refund Solutions:

Refund Advances

Other TRS loans

Republic Credit Solutions

Total Republic Processing Group

Total charge-offs

Recoveries:

Traditional Banking:

Residential real estate

Commercial real estate

Commercial & industrial

Lease financing receivables

Home equity

Consumer

Total Traditional Banking

Warehouse lines of credit

Total Core Banking

Republic Processing Group:

Tax Refund Solutions:

Refund Advances

Other TRS commercial & industrial loans

Republic Credit Solutions

Total Republic Processing Group

Total recoveries

Net loan recoveries (charge-offs)

Provision - Core Bank Loans

Provision - RPG Loans

Total Provision for All Loans

ACLL at end of period

Credit Quality Ratios - Total Company:

ACLL to total loans

ACLL to nonperforming loans

Net loan charge-offs (recoveries) to average loans

Credit Quality Ratios - Core Banking:

ACLL to total loans

ACLL to nonperforming loans

Net loan charge-offs (recoveries) to average loans

Note: Loan segments as of December 31, 2024 changed from those defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as the CRE loan pool was further segmented into Owner-occupied CRE, Nonowner-occupied CRE, and Multi-family beginning in 2025.

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Table 16 — Net Loan Charge-offs (Recoveries) to Average Loans by Loan Category

Net Loan Charge-Offs (Recoveries) to Average Loans

Years Ended December 31,

Traditional Banking:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate:

Owner-occupied

Nonowner-occupied

Multi-Family

Total commercial real estate

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Home equity

Consumer:

Credit cards

Overdrafts

Automobile loans

Other consumer

Total Traditional Banking

Warehouse lines of credit

Total Core Banking

Republic Processing Group:

Tax Refund Solutions:

Refund Advances*

Other TRS commercial & industrial loans

Republic Credit Solutions

Total Republic Processing Group

Total

Note: Loan segments as of December 31, 2024 changed from those defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as the CRE loan pool was further segmented into Owner-occupied CRE, Nonowner-occupied CRE, and Multi-family beginning in 2025.

* All loss rates above are based on net charge-offs as a function of average outstanding portfolio balances. RAs are originated during the first two months of each year, and ERAs for the upcoming first quarter tax filing season are originated during the fourth quarter of the year. All RAs, including ERAs, are charged-off by June 30 th of each year.

Total Company net charge-offs to average total loans decreased from 0.84% in 2024 to 0.71% in 2025, reflecting a $6.3 million, or 14%, decline in net charge-offs and a $43 million increase in average total Company loans over the same periods. The reduction in net charge-offs was driven primarily by a $5.1 million, or 21%, year-to-year decrease in net charge-offs within the Company’s TRS operations, attributable to significantly improved payment performance from the U.S. Treasury on ERAs/RAs during the 2025 Tax Season.

Total Traditional Bank net charge-offs to average total loans decreased from 0.05% in 2024 to 0.03% in 2025, driven by a $914,000, or 37%, decline in net charge-offs, alongside an $18 million decrease in average Traditional Bank loans over the same periods. While 2025 reflected elevated charge-offs within the lease-financing receivable and C&I portfolios, 2024 included $1.9 million in charge-offs related to three linked, broker-related marine loans. During the first quarter of 2025, the Traditional Bank recorded a $1.6 million insurance recovery in noninterest income associated with these broker-related loans. The Company discontinued originating broker-related marine loans in 2024 and had $3 million outstanding as of December 31, 2025.

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During the fourth quarter of 2025, the Traditional Bank recorded a $4.8 million specific allocation related to a $16 million C&I participation relationship, in which Republic is not the lead bank.

The following table sets forth management’s allocation of the ACLL by loan class. The allocation reflects management’s assessment of prevailing economic conditions, historical loss experience, forecasts for unemployment and vacancy rates, and various other life-of-loan and forward-looking considerations, as well as qualitative factors.

Table 17 — Management’s Allocation of the Allowance for Credit Losses on Loans

December 31, 2025

December 31, 2024

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

Nonowner-occupied

Commercial real estate

Owner-occupied

Nonowner-occupied

Multi-Family

Total commercial real estate

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Home equity

Consumer:

Credit cards

Overdrafts

Automobile loans

Other consumer

Total Traditional Banking

Warehouse lines of credit

Total Core Banking

Republic Processing Group:

Tax Refund Solutions:

Refund Advances

Other TRS commercial & industrial loans

Republic Credit Solutions

Total Republic Processing Group

Total

Note: Loan segments as of December 31, 2024 changed from those defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as the CRE loan pool was further segmented into Owner-occupied CRE, Nonowner-occupied CRE, and Multi-family beginning in 2025.

*See the Table titled “Loan Portfolio Composition” in this section of the report for loan portfolio balances. Values of less than 50 bps in the table above are rounded down to zero.

Management believes, based on information presently available, that it has adequately provided for loan and lease credit losses as of December 31, 2025.

For additional discussion regarding Republic’s methodology for determining the adequacy of the ACLL, see the section titled “Critical Accounting Policies and Estimates” in this section of the report.

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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, which are informed by regulatory standards. Loans rated “Loss,” “Doubtful,” “Substandard,” and PCD-Substandard are considered “Classified.”

Total Classified loans increased by $22 million from December 31, 2024 to December 31, 2025, while Special Mention loans decreased approximately $19 million for the same period.

During the fourth quarter of 2025, the Traditional Bank downgraded a $16 million C&I participation relationship, in which Republic is not the lead bank, from Pass to Substandard and recorded a $4.8 million specific allocation. This credit has been negatively affected by strong competition, declining revenues, and rising operating expenses. The Company does not have a material concentration in this credit type. The Company does not have a material concentration of credits of this nature.

In the second quarter of 2025, the Company downgraded a $22 million hospitality relationship from Special Mention to Substandard based on the overall performance of the underlying operations. This relationship was graded Special Mention at December 31, 2024. This relationship exited the Bank in the fourth quarter of 2025, with no loss recognized.

See the Footnote titled “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data” for additional discussion regarding Classified and Special Mention loans.

Table 18 — Classified and Special Mention Loans

December 31, (dollars in thousands)

Loss

Doubtful

Substandard

PCD - Substandard

Total Classified Loans

Special Mention

PCD - Special Mention

Total Special Mention Loans

Total Classified and Special Mention Loans

Nonperforming Loans

Nonperforming loans include loans on nonaccrual status and loans past due 90-days-or-more and still accruing. Nonperforming loans to total loans increased to 0.44% as of December 31, 2025, from 0.42% as of December 31, 2024, as the total balance of nonperforming loans increased by $1 million and total loans increased $7 million.

The ACLL to total nonperforming loans decreased to 356% as of December 31, 2025, from 404% as of December 31, 2024, as the total ACLL decreased $7 million and the balance of nonperforming loans increased by $1 million.

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Table 19 — Nonperforming Loans and Nonperforming Assets Summary

December 31, (dollars in thousands)

Loans on nonaccrual status*

Loans past due 90-days-or-more and still on accrual**

Total nonperforming loans

Other real estate owned

Total nonperforming assets

Credit Quality Ratios - Total Company:

ACLL to total loans

ACLL to nonperforming loans

Nonperforming loans to total loans

Nonperforming assets to total loans (including OREO)

Nonperforming assets to total assets

Credit Quality Ratios - Core Bank:

ACLL to total loans

ACLL to nonperforming loans

Nonperforming loans to total loans

Nonperforming assets to total loans (including OREO)

Nonperforming assets to total assets

* Loans on nonaccrual status include collateral-dependent loans. See the Footnote titled “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data” for the components within the nonaccrual loans to total loans and ACLL to nonaccrual loans ratios, as well as additional discussion regarding nonaccrual loans and collateral-dependent loans.

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

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Table 20 — Nonperforming Loan Composition

December 31, (dollars in thousands)

Balance

Percent of Total Loan Class

Balance

Percent of Total Loan Class

Traditional Banking:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate:

Owner-occupied

Nonowner-occupied

Multi-Family

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Home equity

Consumer:

Credit cards

Overdrafts

Automobile loans

Other consumer

Total Traditional Banking

Warehouse lines of credit

Total Core Banking

Republic Processing Group:

Tax Refund Solutions:

Refund Advances

Other TRS commercial & industrial loans

Republic Credit Solutions

Total Republic Processing Group

Total nonperforming loans

Note: Loan segments as of December 31, 2024 changed from those defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as the CRE loan pool was further segmented into Owner-occupied CRE, Nonowner-occupied CRE, and Multi-family beginning in 2025.

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Table 21 — Stratification of Nonperforming Loans

Number of Nonperforming Loans and Recorded Investment

Balance

Balance

Balance

Total

December 31, 2025 (dollars in thousands)

Balance

Traditional Banking:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate:

Owner-occupied

Nonowner-occupied

Multi-Family

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Home equity

Consumer:

Credit cards

Overdrafts

Automobile loans

Other consumer

Total Traditional Banking

Warehouse lines of credit

Total Core Banking

Republic Processing Group:

Tax Refund Solutions:

Refund Advances

Other TRS commercial & industrial loans

Republic Credit Solutions

Total Republic Processing Group

Total

Number of Nonperforming Loans and Recorded Investment

Balance

Balance

Balance

Total

December 31, 2024 (dollars in thousands)

Balance

Traditional Banking:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate:

Owner-occupied

Nonowner-occupied

Multi-Family

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Home equity

Consumer:

Credit cards

Overdrafts

Automobile loans

Other consumer

Total Traditional Banking

Warehouse lines of credit

Total Core Banking

Republic Processing Group:

Tax Refund Solutions:

Refund Advances

Other TRS commercial & industrial loans

Republic Credit Solutions

Total Republic Processing Group

Total

NM – Not meaningful. RCS loans are small dollar homogenous consumer loans.

Note: Loan segments as of December 31, 2024 changed from those defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as the CRE loan pool was further segmented into Owner-occupied CRE, Nonowner-occupied CRE, and Multi-family beginning in 2025.

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Table 22 — Rollforward of Nonperforming Loans

Years Ended December 31, (in thousands)

Nonperforming loans at the beginning of the period

Loans added to nonperforming status during the period that remained nonperforming at the end of the period

Loans removed from nonperforming status during the period that were nonperforming at the beginning of the period (see table below)

Principal balance paydowns of loans nonperforming at both period ends

Net change in principal balance of other nonperforming loans*

Nonperforming loans at the end of the period

*Includes RCS loans which are small dollar homogenous consumer loans.

Table 23 — Detail of Loans Removed from Nonperforming Status

Years Ended December 31, (in thousands)

Loans charged-off

Loans transferred to OREO

Loan payoffs and paydowns

Loans returned to accrual status

Total loans removed from nonperforming status during the period that were nonperforming at the beginning of the period

Interest income that would have been recorded if nonaccrual loans were on a current basis in accordance with their original terms was $1.5 million, $703,000, and $912,000 in 2025, 2024 and 2023.

Based on the Bank’s review as of December 31, 2025, management believes that its reserves are adequate to absorb expected losses on all nonperforming credits.

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Delinquent Loans

Total Company delinquent loans to total loans increased to 0.42% as of December 31, 2025, from 0.38% as of December 31, 2024. Core Bank delinquent loans to total Core Bank loans increased to 0.26% as of December 31, 2025, from 0.20% as of December 31, 2024. Except for small-dollar consumer loans, all Traditional Bank loans past due 90-days-or-more as of December 31, 2025, and December 31, 2024, were on nonaccrual status.

Table 24 — Delinquent Loan Composition *

Percent of

Percent of

Total

Total

Years Ended December 31, (in thousands)

Balance

Loan Class

Balance

Loan Class

Traditional Banking:

Residential real estate:

Owner-occupied

Nonowner-occupied

Commercial real estate:

Construction & land development

Commercial & industrial

Lease financing receivables

Aircraft

Home equity

Consumer:

Credit cards

Overdrafts

Automobile loans

Other consumer

Total Traditional Banking

Warehouse lines of credit

Total Core Banking

Republic Processing Group:

Tax Refund Solutions:

Refund Advances

Other TRS commercial & industrial loans

Republic Credit Solutions

Total Republic Processing Group

Total delinquent loans

Note: Loan segments as of December 31, 2024 changed from those defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as the CRE loan pool was further segmented into Owner-occupied CRE, Nonowner-occupied CRE, and Multi-family beginning in 2025.

*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.

Table 25 — Rollforward of Delinquent Loans

Years Ended December 31, (in thousands)

Delinquent loans at the beginning of the period

Loans added to delinquency status during the period and remained in delinquency status at the end of the period

Loans removed from delinquency status during the period that were in delinquency status at the beginning of the period (see table below)

Principal balance paydowns of loans delinquent at both period ends

Net change in principal balance of other delinquent loans*

Delinquent loans at the end of period

*Includes RCS loans which are small dollar homogenous consumer loans.

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Table 26 — Detail of Loans Removed from Delinquent Status

Years Ended December 31, (in thousands)

Loans charged-off

Loans transferred to OREO

Loan payoffs and paydowns

Loans paid current

Total loans removed from delinquency status during the period that were in delinquency status at the beginning of the period

Collateral-Dependent Loans and Loan Modifications

When management determines that a loan is collateral dependent and that foreclosure is probable, expected credit losses are measured using the fair value of the collateral as of the reporting date, adjusted for estimated selling costs, when applicable.

In accordance with the Bank’s charge-off policy, the Bank will charge-off all, or the portion of, its recorded investment in a collateral-dependent loan when it concludes that the full amount of contractual principal and interest is not expected to be collected.

A loan modification occurs when, due to a borrower’s financial difficulties, the Bank grants a concession that it would not otherwise consider. Most modifications involve restructuring the loan’s original terms, including—depending on the borrower’s circumstances—a temporary payment reduction requiring only interest and escrow (if applicable), a reduction in the contractual interest rate, and/or an extension of the loan’s maturity date.

Loans on nonaccrual status that are subsequently modified continue to remain on nonaccrual and are reported as nonperforming until the borrower demonstrates sustained repayment capacity in accordance with the modified terms.

Accruing loans that are modified are evaluated for nonaccrual classification based on a current assessment of the borrower’s financial condition and their demonstrated ability and willingness to repay under the modified terms.

Collateral-dependent loan modifications made during 2025 totaled $5 million and there were $33 million of collateral-dependent loans outstanding on the Company’s balance sheet at December 31, 2025.

Collateral-dependent loan modifications made during 2024 totaled $885,000 and there were $30 million of collateral-dependent loans outstanding on the Company’s balance sheet at December 31, 2024.

Federal Home Loan Bank Stock

FHLB stock holdings increased $8 million, or 31%, to $32 million at December 31, 2025, compared to $25 million at December 31, 2024. As FHLB members are required to hold specified levels of FHLB stock based on the amount of outstanding advances, the Company’s FHLB stock holdings fluctuate in line with its borrowing activity from period to period.

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Premises and Equipment

Premises and equipment are presented on the consolidated balance sheets net of related accumulated depreciation, as well as fair-value adjustments associated with purchase accounting. Premises and equipment increased $4 million, or 11%, between December 31, 2024 and December 31, 2025. The Company’s branch network currently consists of 47 locations across Kentucky, Indiana, Florida, Ohio, and Tennessee.

Right-of-Use Assets and Operating Lease Liabilities

The Company records right-of-use assets for the underlying leased property. Operating lease liabilities represent the present value of its required minimum lease payments plus any amounts probable of being owed under a residual value guarantee.

Goodwill

At December 31, 2025 and December 31, 2024, the Company had $41 million of goodwill recorded on its balance sheet. Of this amount, $24 million related to the CBank acquisition (2023), while Goodwill of $6 million and $10 million were attributed to the acquisitions of Cornerstone Community Bank (2016) and GulfStream Community Bank (2006).

Events that may trigger goodwill impairment include deterioration in economic conditions, declines in market-dependent valuation metrics (such as the Company’s stock price falling below tangible book value), negative trends in overall financial performance, and regulatory actions. As of September 30, 2025, the Company performed its annual qualitative assessment to evaluate whether it was more-likely-than-not that the fair value of its reporting units exceeded their carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting units exceeded their fair value.

Core Deposit Intangible Assets

CDIs arising from business acquisitions are initially measured at fair value and are subsequently amortized using an accelerated method over their estimated useful lives. As of December 31, 2025 and December 31, 2024, the Company’s CDI assets totaled $1.5 million and $2.0 million, respectively.

Other Real Estate Owned

The fair value of OREO represents the estimated amount management expects to realize upon the sale of the property, net of estimated costs to sell. Fair value estimates are based on the most recent available real estate appraisals, adjusted as necessary for factors such as property type, the age of the appraisal, the current condition and status of the property, and other relevant market or property-specific considerations.

Table 27 — Rollforward of Other Real Estate Owned Activity

Years Ended December 31, (in thousands)

OREO at beginning of period

Transfer from loans to OREO

Proceeds from sale*

Net gain on sale

Writedowns

OREO at end of period

*Inclusive of non-cash proceeds where the Bank financed the sale of the property.

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Bank Owned Life Insurance

BOLI offers tax advantaged noninterest income that serves to offset employee benefits expenses. BOLI assets increased $4 million, or 3%, to $111 million at December 31, 2025, compared to $107 million at December 31, 2024. The increase was driven by appreciation in cash-surrender values within the policy plans and a §1035 policy exchange executed in 2025 to enhance the overall yield of the portfolio.

Table 28 — Rollforward of Bank Owned Life Insurance

Years ended December 31, (in thousands)

BOLI at beginning of period

BOLI acquired

Death benefits paid from cash surrender value

Increase in cash surrender value

BOLI at end of period

Other Assets and Other Liabilities

Other assets increased $4 million, or 2%, to $201 million between December 31, 2024, and December 31, 2025. Other liabilities increased $1 million, or 1%, to $110 million over the same period.

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Deposits

Table 29 — Deposit Composition

December 31, (dollars in thousands)

Core Bank:

Demand

Money market

Savings

Reciprocal money market

Individual retirement accounts (1)

Time deposits, $250 and over (1)

Other certificates of deposit (1)

Reciprocal time deposits (1)

Wholesale brokered deposits (1)

Total Core Bank interest-bearing deposits

Total Core Bank noninterest-bearing deposits

Total Core Bank deposits

Republic Processing Group:

Wholesale brokered deposits (1)

Interest-bearing prepaid card deposits

Money market accounts

Total RPG interest-bearing deposits

Noninterest-bearing prepaid card deposits

Other noninterest-bearing deposits

Total RPG noninterest-bearing deposits

Total RPG deposits

Total deposits

Represents time deposits.

Total Company deposits decreased $7 million from December 31, 2024, to $5.20 billion as of December 31, 2025.

Core Bank

Total Core Bank deposits increased by $203 million, or 4%, from December 31, 2024 to December 31, 2025, as a $224 million increase in interest-bearing deposits was partially offset by a $21 million decline in noninterest-bearing deposits over the same period.

Core Bank consumer and money market accounts—which generally pay premium rates—grew $203 million, or 16%, during 2025. Time deposits also increased $77 million, ending the year at $481 million. These increases within the interest-bearing deposit category were partially offset by a $55 million decline in NOW/savings accounts, which include lower costing Traditional Bank client accounts and higher costing third party listing service accounts. The Core Bank continues to experience a migration from lower-costing interest-bearing and noninterest-bearing deposits into higher-costing deposit categories as customers respond to the current rate environment.

While Core Bank period-end noninterest-bearing deposits decreased $21 million for the 2025, the average balances of Core Bank noninterest-bearing deposits for 2025 decreased $44 million, or 4%, compared to 2024. Overall, the Core Bank’s noninterest-bearing deposits have experienced a general quarterly decline in balances dating back to the fourth quarter of 2022.

Management believes the Company is more likely to experience slower overall growth, and possibly, contraction in its noninterest-bearing deposits over the near future.

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Republic Processing Group

Within RPG, period-end total deposit balances decreased $210 million, or 35%, during 2025. Of this decline, $200 million related to the scheduled maturity of short-term brokered deposits that had been used to partially fund TRS ERA/RA loan volume for the 2025 Tax Season. The Company did not utilize short-term brokered deposits during the fourth quarter of 2025 to fund the upcoming 2026 Tax Season.

Deposits related to the RPS prepaid card program declined $20 million, or 6%, during 2025 driven primarily by a contraction in balances from the segment’s largest marketer-servicer. As previously disclosed, RPS began sharing a sizable portion of the interest income earned on its prepaid card balances with its prepaid card marketer-servicer beginning in the first quarter of 2024. This revenue share, recorded as interest expense on deposits, totaled $4.8 million in 2024. However, throughout 2025, program balances did not reach the minimum contractual thresholds required to earn a revenue share. Partially offsetting the favorable reduction in revenue share expense, RPS earned a lower yield on average prepaid program balances during the year due to reductions in the overnight FFTR.

All prepaid card deposit balances subject to a revenue-share arrangement are reported as interest-bearing deposits for as long as they remain subject to such arrangements. Conversely, for any periods reported prior to 2024, these balances are classified as noninterest-bearing deposits, as they were not subject to a revenue-share arrangement during those periods.

Table 30 — Average Deposits

Average

Average

Average

Average

Average

Average

Years ended December 31, (dollars in thousands)

Balance

Rate

Balance

Rate

Balance

Rate

Transaction accounts

Money market accounts

Time deposits

Reciprocal money market accounts

Reciprocal time deposits

Brokered deposits

Total average interest-bearing deposits

Total average noninterest-bearing deposits

Total average deposits

Table 31 — Maturity Schedule of Time Deposits in Excess of the FDIC Limit and Estimated Time Deposits that are Otherwise Uninsured as of December 31, 2025

Individual Instruments

Estimated

Estimated

that Meet or Exceed the

Otherwise Uninsured

Otherwise Insured

Maturity (dollars in thousands)

FDIC Insurance Limit

Time Deposits

Time Deposits

Three months or less

Over three months through six months

Over six months through 12 months

Over 12 months

Total

The Bank held total estimated uninsured deposits of $2.15 billion as of December 31, 2025 and $1.91 billion as of December 31, 2024.

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Securities Sold Under Agreements to Repurchase

SSUARs are collateralized by securities and are accounted for as financings. Accordingly, the securities underlying these agreements are recorded as assets and held by a safekeeping agent, while the related obligations to repurchase the securities are recorded as liabilities. All underlying securities remain under the Bank’s control throughout the term of the agreements. SSUARs generally represent large customer deposit relationships that require collateralization in excess of the $250,000 FDIC insurance limit, and the Bank pledges securities to satisfy these collateral requirements.

SSUARs decreased $15 million, or 14%, during 2025 to $89 million as of December 31, 2025. Due to the size of the underlying relationships, large fluctuations in the underlying account balances from period to period are common.

Table 32 — Securities Sold Under Agreements to Repurchase

As of and for the Years Ended December 31,  (dollars in thousands)

Outstanding balance at end of period

Weighted-average interest rate at period end

Average outstanding balance during the period

Average interest rate during the period

Maximum outstanding at any month end

Federal Home Loan Bank Advances

FHLB advances totaled $506 million as of December 31, 2025, compared to $395 million as of December 31, 2024. Overnight borrowings increased to $130 million at year-end 2025 from $25 million at year-end 2024 and were generally utilized to fund growth in outstanding Warehouse balances.

The Bank’s utilization of FHLB advances during any given period depends on several factors, including asset growth, deposit growth, current earnings, and expectations for future interest rates. More recently, the Company has used FHLB advances to partially offset outflows in noninterest-bearing deposits and to support overall loan growth.

During the second quarter of 2024, the Bank elected to extend $100 million of FHLB borrowings through a third-party fixed-rate swap executed in May and June. The transaction allowed the Bank to capitalize on the then-inverted yield curve and reduce its overall borrowing costs. As a result, the Bank effectively locked in an annualized cost of 4.42% on this $100 million over a five-year term.

As of December 31, 2025, the Company’s outstanding term FHLB advances had a weighted-average maturity of 1.98 years and a weighted-average cost of 4.16%, both including the impact of the related swaps. 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.

Table 33 — Federal Home Loan Bank Advances

As of and for the Years Ended December 31,  (dollars in thousands)

Outstanding balance at end of period

Weighted-average interest rate at period end

Average outstanding balance during the period

Average interest rate during the period

Maximum outstanding at any month end

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Interest Rate Swaps

Interest rate swap derivatives are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies for hedge accounting as part of a cash flow hedging relationship. For a derivative designated as a cash flow hedge, the effective portion of the derivative’s unrealized gain or loss is recorded as a component of OCI. The amount included in AOCI would be reclassified to current earnings should the hedge no longer be considered effective. Derivatives not designated as hedges are economic derivatives with the gain or loss recognized in current period earnings.

Interest Rate Swaps Used as Cash Flow Hedges

The Bank entered into three interest rate swap agreements during the second quarter of 2024 related to FHLB advances tied to the 1-month SOFR index. The counterparty for all three swaps met the Bank’s credit standards and the Bank believes that the credit risk inherent in the swap contracts is not significant. As of August 8, 2024 the Bank designated the swaps to be effective for hedge accounting purposes. The Bank expects the hedges to remain fully effective during the remaining term of the swaps.

Non-hedge Interest Rate Swaps

The Bank also 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.

Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty or client owes the Bank, and results in credit risk to the Bank. When the fair value of a derivative instrument contract is negative, the Bank owes the client or counterparty, and therefore, has no credit risk.

A summary of the Bank’s interest rate swaps related to clients follows:

Table 34 — Non-hedge Interest Rate Swaps

Notional

Notional

(in thousands)

Bank Position

Amount

Fair Value

Amount

Fair Value

Interest rate swaps with Bank clients - Other assets and accrued interest receivable

Pay variable/receive fixed

Interest rate swaps with Bank clients - Other liabilities and accrued interest payable

Pay variable/receive fixed

Interest rate swaps with Bank clients - Total

Pay variable/receive fixed

Offsetting interest rate swaps with institutional swap dealer - Other assets and accrued interest receivable

Pay fixed/receive variable

Offsetting interest rate swaps with institutional swap dealer - Other liabilities and accrued interest payable

Pay fixed/receive variable

Offsetting interest rate swaps with institutional swap dealer - Total

Pay fixed/receive variable

Total

See the Footnote titled “Interest Rate Swaps” of Part II Item 8 “Financial Statements and Supplementary Data” for further information 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 unencumbered 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 MBSs, and proceeds realized from loans HFS.

Table 35 — Liquid Assets and Borrowing Capacity

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

December 31, (in thousands)

Cash and cash equivalents

Unencumbered debt securities

Total liquid assets

Available borrowing capacity with the FHLB

Available borrowing capacity with the FRB

Available borrowing capacity through unsecured credit lines

Total available borrowing capacity

Total liquid assets and available borrowing capacity

Republic had a period-end loan-to-deposit ratio (excluding brokered deposits) of 107% as of December 31, 2025 and 111% as of December 31, 2024. 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 December 31, 2025, the Bank had approximately $1.2 billion in deposits from 217 large non-sweep deposit relationships, including reciprocal deposits, where the individual relationship exceeded $2 million for a depositor’s taxpayer identification number. Total uninsured deposits for the Bank were $2.2 billion, or 41%, of total deposits as of December 31, 2025. The 20 largest non-sweep deposit relationships represented approximately $421 million, or 8%, of the Company’s total deposit balances as of December 31, 2025. 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 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, SSUAR, FHLB advances, and for other purposes, as required by law. As of December 31, 2025, and December 31, 2024, these pledged investment securities had a fair value of $131 million and $152 million.

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Capital

Table 36 — Capital

Information pertaining to the Company’s capital balances and ratios follows:

As of and for the Years Ended December 31,  (dollars in thousands, except per share data)

Stockholders’ equity

Book value per share at December 31,

Tangible book value per share at December 31,

Dividends declared per share - Class A Common Stock

Dividends declared per share - Class B Common Stock

Average stockholders’ equity to average total assets

Total risk-based capital

Common equity tier 1 capital

Tier 1 risk-based capital

Tier 1 leverage capital

Dividend payout ratio

Dividend yield

*See the section titled “Non-GAAP Financial Measures” at the end of this section of the report.

The Company and the Bank elected in 2020 to defer the regulatory capital impact of adopting CECL. The deferral period spanned five years and allowed 100% of the estimated CECL impact to be deferred during the first two years, followed by a phased-in recognition over the subsequent three years. Absent this election, the Company’s regulatory capital ratios as of December 31, 2024 would have been approximately 3 bps lower than the ratios presented in the table above.

Total stockholders’ equity increased from $992 million as of December 31, 2024, to $1.10 billion as of December 31, 2025. The increase in stockholders’ equity was attributable to net income earned during 2025 reduced primarily by cash dividends declared.

See Part II, Item 5. “Unregistered Sales of Equity Securities and Use of Proceeds” for additional detail regarding stock repurchases and stock buyback programs.

Common Stock — The Class A Common shares are entitled to cash dividends equal to 110% of the cash dividend paid per share on Class B Common Stock. Class A Common shares have one vote per share and Class B Common shares have ten votes per share. Class B Common shares may be converted, at the option of the holder, to Class A Common shares on a share for share basis. The Class A Common shares are not convertible into any other class of Republic’s capital stock.

Dividend Restrictions — The Parent Company’s principal source of funds for dividend payments are dividends received from RB&T. Banking regulations limit the amount of dividends that may be paid to the Parent Company by the Bank without prior approval of the respective states’ banking regulators. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years. As of January 1, 2026, RB&T could, without prior approval, declare dividends of approximately $179 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.

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 OBS 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

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8.0% Tier 1 Risk-Based Capital ratio, and a 5.0% Tier 1 Leverage ratio. Additionally, 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. Formal measurements of the capital ratios for Republic and the Bank are performed by the Company at each quarter end.

Contractual Obligations and Commitments

The Company or the Bank has required future payments under various contractual obligations and other commitments.

See the following titled Footnotes within Part II Item 8 “Financial Statements and Supplementary Data” for additional detail regarding contractual obligations and other commitments of the Company or Bank :

“Right-of-Use Assets and Operating Lease Liabilities”

“Deposits”

“Securities Sold Under Agreements to Repurchase”

“Off-Balance Sheet Risks, Commitments, and Contingent Liabilities”

“Benefit Plans”

“Low Income Housing Tax Credit Investments”

In addition, the Bank maintains contractual obligations for its technological needs, including its enterprise risk management application, customer relationship management application, internet banking platform, and its core accounting application.

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 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 bp 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 December 31, 2025, a dynamic simulation model was run for interest rate changes from “Down 400” bps to “Up 400” bps. The following table illustrates the Bank’s projected percent change from its Base net interest income over the period beginning January 1, 2026, and ending December 31, 2026, based on instantaneous movements in interest rates from Down 400 to Up 400 bps equally across all points on the yield curve. The Bank’s dynamic earnings simulation model includes secondary market loan fees, which are a component of mortgage banking income within noninterest income and excludes Traditional Bank loan fees.

Table 37 — Bank Interest Rate Sensitivity

Change in Rates

Basis Points

Basis Points

Basis Points

Basis Points

Basis Points

Basis Points

Basis Points

Basis Points

% Change from base net interest income as of December 31, 2025

% Change from base net interest income as of December 31, 2024

The results of the interest rate sensitivity analysis performed as of December 31, 2025, were derived from subjective assumptions the Company uses in its earnings simulation model, particularly in relation to deposit betas, which measure how responsive management’s deposit repricing may be to changes in market rates based on historical data. Management uses different betas in the rising and falling rate scenarios to better simulate expected earnings trends.

The Company’s current interest rate sensitivity analysis projects that increases in market interest rates (in all illustrated scenarios) would have a positive effect on net interest income, while decreases in market interest rates (in all illustrated scenarios) would have a negative impact. These results depict an asset-sensitive interest rate risk profile.

In comparing the Company’s interest rate sensitivity projections from December 31, 2024, to December 31, 2025, there were notable changes in all illustrated scenarios. In declining market interest rate scenarios, the Company projects that the rates the Company pays for its non-maturity, interest-bearing deposits cannot be lowered sufficiently to offset the decrease in interest income associated with its declining asset yields. Conversely, the Company projects a notable improvement in all illustrated scenarios, as the yield the Company projects it will earn for its interest-earning assets is expected to increase more than the increase in its projected funding costs.

More specifically, driving the period-to-period improvement in net interest income in the illustrated up-rate scenarios are the following:

The Company had higher floating rate loan balances as of December 31, 2025, most notably within the Warehouse lending portfolio, with yields that increase immediately in an up-rate scenario. More specifically, driving the period-to-period deterioration in net interest income in the illustrated down-rate scenarios are the following:

The elevated average interest-earning cash balances that are projected to benefit net interest income in the illustrated up-rate scenarios are projected to drive corresponding declines to net interest income in the illustrated down-rate rate scenarios; and

Management lowered its deposit beta assumptions to assume that, due to greater competition for deposits and liquidity, it will not be able to sufficiently lower the rates the Company pays for its premium rate, non-maturity interest-bearing deposits in order to offset the projected decline in the Company’s interest-earning assets yields.

For additional discussion regarding the Bank’s net interest income, see the sections titled “Net Interest Income” in this section of the report under “RESULTS OF OPERATIONS.”

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Non-GAAP Financial Measures

The following table provides a reconciliation of total stockholders’ equity in accordance with GAAP to tangible stockholders’ equity, a non-GAAP disclosure. The Company provides the tangible book value per share, a non-GAAP measure, in addition to those defined by banking regulators, because of its widespread use by investors to evaluate capital adequacy.

(dollars in thousands, except per share data)

December 31, 2025

December 31, 2024

Total stockholders' equity - GAAP (a)

Less: Goodwill

Less: Mortgage servicing rights

Less: Core deposit intangible

Tangible stockholders' equity - Non-GAAP (c)

Total assets - GAAP (b)

Less: Goodwill

Less: Mortgage servicing rights

Less: Core deposit intangible

Tangible assets - Non-GAAP (d)

Total stockholders' equity to total assets - GAAP (a/b)

Tangible stockholders' equity to tangible assets - Non-GAAP (c/d)

Number of shares outstanding (e)

Book value per share - GAAP (a/e)

Tangible book value per share - Non-GAAP (c/e)

The efficiency ratio, a non-GAAP measure, equals total noninterest expense divided by the sum of net interest income and noninterest income (total revenue). The adjusted efficiency ratio, a non-GAAP measure with no GAAP comparable, excludes notable nonrecurring revenues and expenses related to the gain on the sale of Visa Class B-1 shares, gain on sale of consumer credit cards, insurance proceeds, expenses related to the Bank’s planned core system conversion, as well as merger expenses.

Years Ended

(dollars in thousands)

December 31, 2025

December 31, 2024

December 31, 2023

Net interest income - GAAP (a)

Noninterest income - GAAP (b)

Total net revenue - GAAP (c)

Less: Gain on sale of Visa Class B-1 shares

Less: Gain on sale of consumer credit card portfolio

Less: Insurance proceeds

Less: BOLI benefit payment received

Total adjusted revenue - Non-GAAP (e)

Noninterest expense - GAAP (d)

Less: Merger expenses

Less: Core conversion and contract consulting fees

Total adjusted noninterest expense - Non-GAAP (f)

Efficiency Ratio - GAAP (d/c)

Adjusted Efficiency Ratio - Non-GAAP (f/e)