Republic Bancorp (RBCAA)

Financial holding company Republic Bancorp (NASDAQGS:RBCA.A) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 23.1% year on year to $94.27 million. Its non-GAAP profit of $1.16 per share was 11.8% below analysts’ consensus estimates.

Company Overview

With roots dating back to 1974 and operating across multiple states including Kentucky, Indiana, Florida, Ohio, and Tennessee, Republic Bancorp (NASDAQGS:RBCA.A) is a Kentucky-based financial holding company that operates a bank offering traditional banking, mortgage services, and specialized financial products.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

Republic Bancorp competes with regional banks like Fifth Third Bancorp (NASDAQ: FITB), PNC Financial Services (NYSE: PNC), and Truist Financial (NYSE: TFC) in its traditional banking markets. In its tax refund and payment processing segments, it competes with MetaBank (NASDAQ: CASH), Green Dot Corporation (NYSE: GDOT), and Pathward Financial (NASDAQ: CASH).

Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Unfortunately, Republic Bancorp’s 6.6% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the banking sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Republic Bancorp’s annualized revenue growth of 12.9% over the last two years is above its five-year trend, suggesting its demand recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Republic Bancorp reported robust year-on-year revenue growth of 23.1%, and its $94.27 million of revenue topped Wall Street estimates by 2%.

Net interest income made up 85.9% of the company’s total revenue during the last five years, meaning Republic Bancorp barely relies on non-interest income to drive its overall growth.

Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Republic Bancorp’s EPS grew at a decent 10.8% compounded annual growth rate over the last five years, higher than its 6.6% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its efficiency ratio didn’t improve.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Republic Bancorp, its two-year annual EPS growth of 20.7% was higher than its five-year trend. This acceleration made it one of the faster-growing banking companies in recent history.

In Q4, Republic Bancorp reported adjusted EPS of $1.16, up from $0.98 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Republic Bancorp’s full-year EPS of $6.67 to shrink by 7.8%. This is unusual as its revenue and operating margin are anticipated to increase, signaling the fall likely stems from "below-the-line" items such as taxes.

Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.

This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.

Republic Bancorp’s TBVPS grew at a solid 6.9% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 9.4% annually over the last two years from $45.06 to $53.91 per share.

Over the next 12 months, Consensus estimates call for Republic Bancorp’s TBVPS to grow by 8.4% to $58.42, paltry growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, Republic Bancorp has averaged a Tier 1 capital ratio of 16%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Republic Bancorp has averaged an ROE of 10.9%, respectable for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired.

It was encouraging to see Republic Bancorp beat analysts’ net interest income expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its EPS missed. Overall, this was a softer quarter. The stock remained flat at $73.00 immediately following the results.

Updated: January 30, 2026 at 4:05 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Republic Bancorp.

Republic Bancorp isn’t a terrible business, but it doesn’t pass our bar. For starters, its revenue growth was uninspiring over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its admirable net interest margin a wonderful starting point for the overall profitability of the business, the downside is its projected EPS for the next year is lacking. On top of that, its estimated net interest income for the next 12 months are weak.

Republic Bancorp’s P/B ratio based on the next 12 months is 1.2x. This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're pretty confident there are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $75 on the company (compared to the current share price of $73.00).