REPUBLIC BANCORP INC /KY/

Previous wording

The consolidated financial statements include the accounts of Republic Bancorp, Inc. (the “Parent Company”) and its wholly owned subsidiaries, Republic Bank & Trust Company and Republic Insurance Services, Inc. As used in this filing, the terms “Republic,” the “Company,” “we,” “our,” and “us” refer to Republic Bancorp, Inc., and, where the context requires, Republic Bancorp, Inc. and its subsidiaries. The term the “Bank” refers to the Company’s subsidiary bank: Republic Bank & Trust Company. The term the “Captive” refers to the Company’s insurance subsidiary: Republic Insurance Services, Inc. All significant intercompany balances and transactions are eliminated in consolidation.

Current wording

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.

Previous wording

Republic is a financial holding company headquartered in Louisville, Kentucky. The Bank is a Kentucky-based, state-chartered non-member financial institution that provides both traditional and non-traditional banking products through five reportable segments using a multitude of delivery channels. While the Bank operates primarily in its geographical market footprint where it has physical locations, its non-brick-and-mortar delivery channels allow it to reach clients across the U.S. During the last quarter of 2023, the Company dissolved its Captive, a Nevada-based, wholly owned insurance subsidiary of the Company. The Captive provided property and casualty insurance coverage to the Company and the Bank, as well as a group of third-party insurance captives.

Current wording

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.

Previous wording

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.”

Current wording

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

Previous wording

Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by the forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties, including, but not limited to the following:

Current wording

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.”

Previous wording

For disclosure regarding the impact to the Company’s financial statements of ASUs, see Footnote 1 “Summary of Significant Accounting Policies” of Part II Item 8 “Financial Statements and Supplementary Data.”

Current wording

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.”

Previous wording

Critical accounting policies are those that management believes are the most important to the portrayal of the Company’s financial condition and operating results and require management to make estimates that are difficult, subjective and complex. Most accounting policies are not considered by management to be critical accounting policies. Several factors are considered in determining whether or not a policy is critical in the preparation of the financial statements. These factors include, among other things, whether the estimates have a significant impact on the financial statements, the nature of the estimates, the ability to readily validate the estimates with other information including independent third parties or available pricing, sensitivity of the estimates to changes in economic conditions and whether alternative methods of accounting may be utilized under GAAP. Management has discussed each critical accounting policy and the methodology for the identification and determination of critical accounting policies with the Company’s Audit Committee.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

As of December 31, 2024, the Bank maintained an ACLL for expected credit losses inherent in the Bank’s loan portfolio, which includes overdrawn deposit accounts. Management evaluates the adequacy of the ACLL monthly and presents and discusses the ACLL with the Audit Committee and the Board of Directors quarterly.

Current wording

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.

Previous wording

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. For its CRE loan pool, the Company employs a one-year forecast of general CRE values.

Current wording

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.

Previous wording

See additional detail regarding the Company’s adoption of ASC 326 and the CECL method under Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplementary Data.”

Current wording

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.”

Previous wording

Management evaluated the reasonableness of its Core Bank ACLL by evaluating absorption and exhaustion rates that account for CECL life-of-loan considerations. The absorption rate considered 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 considered how many years of gross Core Bank 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.

Current wording

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.

Previous wording

Management considered the range of absorption rates and exhaustion rates calculated for the Core Bank as of December 31, 2024 and 2023 to be within acceptable ranges under current economic conditions. Based on management’s evaluation, a Core Bank ACLL of $61 million, or 1.19% of total Core Bank loans, was an adequate estimate of expected losses within the loan portfolio as of December 31, 2024 and resulted in Core Banking Provision for its loans of a net charge of $3.8 million during 2024. This compares to an ACLL of $60 million as of December 31, 2023 and $52 million as of December 31, 2022 with Provisions of a net charge of $8.5 million for 2023 and net charge of $312,000 for 2022.

Current wording

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.

Previous wording

The RPG ACLL as of December 31, 2024 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 significant portion of RCS clients considered subprime or near-prime borrowers.

Current wording

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.

Previous wording

As of December 31, 2024, 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 line-of-credit portfolios. A lower reserve percentage was provided for RCS’s healthcare receivables as of December 31, 2024, as such receivables have recourse back to the Company’s third-party service providers in the transactions.

Current wording

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.

Previous wording

Management only evaluated the ACLL on its active RCS products that had incurred meaningful losses since their inception, which were its line-of-credit products. Due to the general short-term nature of these products, management utilized the current year net charge-offs for 2023 and 2024 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, 2024 and 2023. Based on management’s calculation, an ACLL of $21 million, or 16.30%, of total RCS loans was an adequate estimate of expected losses within the RCS portfolio as of December 31, 2024.

Current wording

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.

Previous wording

RPG’s TRS segment offered its RA credit product during the first two months of 2024, 2023, and 2022, and its ERA credit product during the Decembers of 2024, 2023 and 2022 related to the subsequent first quarter tax filing seasons. An ACLL for losses on RAs and ERAs is estimated during the limited, short-term period the product is offered. RAs originated during the first two months of 2024, were repaid, on average, within 32 days of origination. Provisions for RA and ERA 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, 2024 was $9.8 million for $139 million of ERAs originated during December 2024. The ACLL as of December 31, 2023 was $3.9 million for $103 million of ERAs originated during December 2023. The ACLL as of December 31, 2022 was $3.8 million for $98 million of ERAs originated during December 2022.

Current wording

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.

Previous wording

Related to the overall credit losses on RAs and ERAs, 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 RA and ERA 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.

Current wording

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.

Previous wording

See additional discussion regarding the RA product under the sections titled:

Current wording

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

Previous wording

RPG recorded a net charge of $50.6 million, $39.1 million, and $22.0 million to the Provision during 2024, 2023, and 2022, 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.

Current wording

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.

Previous wording

Total Company net income was $101.4 million and Diluted EPS was $5.21 for 2024, compared to net income of $90.4 million and Diluted EPS of $4.62 for 2023. Table 1 below presents Republic’s financial performance for the years ended December 31, 2024, 2023, and 2022:

Current wording

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:

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Banking operations are significantly dependent upon net interest income. Net interest income is the difference between interest income on interest-earning assets, such as loans and investment securities and the interest expense on interest-bearing liabilities used to fund those assets, such as interest-bearing deposits, securities sold under agreements to repurchase, and FHLB advances. Net interest income is impacted by both changes in the amount and composition of interest-earning assets and interest-bearing liabilities, as well as market interest rates.

Current wording

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.

Previous wording

Net interest income within the TRS segment was up $4.9 million from 2023 to 2024. Loan-related interest and fees increased $5.7 million for the period and was generally driven by a 5% increase in tax season loan origination volume from period to period. In addition, loan fees includeda $560,000 payment received during the second quarter of 2024 representing a Tax Provider yield enhancement for the RA program to help offset the Company’s higher funding costs. This yield enhancement was new for the 2024 tax season. The increase in loan interest and fees was partially offset by an $882,000 increase to the segment’s cost of funds net of its FTP credit for its deposit accounts.

Current wording

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.

Previous wording

See additional detail regarding the Company’s Income Tax Expense under Footnote 18 “Income Taxes” of Part II Item 8 “Financial Statements and Supplemental Data.”

Current wording

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.”

Previous wording

RCS’s LOC II loan fees, which are recorded as interest income on loans, increased $10.1 million during 2024 to $29.4 million, an 52% increase compared to the $19.3 million recorded during 2023. The growth in interest income on loans generally resulted from a $7.9 million, or 51%, increase in average loan balances from 2023 to 2024.

Current wording

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.

Previous wording

Overall customer demand for the RCS segment’s products has historically not been interest rate sensitive and therefore management does not believe a changing interest rate environment would materially impact origination volume for its various consumer loan products. A decreasing interest rate environment likely would positively impact the Company’s internal FTP cost allocated to this segment, which would increase the NIM for the segment. The exact amount of the impact would depend on the final internal FTP cost assigned, as well as the overall volume and mix of loans the segment generates.

Current wording

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.

Previous wording

Table 2 presents the average balance sheets for the years ended December 31, 2024, 2023, and 2022, along with the related calculations of tax-equivalent net interest income, net interest margin and net interest spread for the related periods.

Current wording

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.

Previous wording

Table 3 illustrates the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities impacted Republic’s interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

Current wording

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.

Previous wording

Total Company Provision was a net charge of $54.4 million for 2024 compared to a net charge of $47.6 million for 2023.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

The Traditional Banking Provision during 2024 was a net charge of $3.2 million compared to a net charge of $8.7 million for 2023. An analysis of the Provision for 2024 compared 2023 follows:

Current wording

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.

Previous wording

As a percentage of total Traditional Bank loans, the Traditional Banking ACLL was 1.31% as of December 31, 2024 compared to 1.28% as of December 31, 2023. The Company believes, based on information presently available, that it has adequately provided for Traditional Banking loan losses as of December 31, 2024.

Current wording

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.

Previous wording

Warehouse recorded a net charge of $527,000 for 2024 compared to a net credit of $162,000 for 2023. Provision for both periods reflected changes in general reserves consistent with changes in outstanding period-end balances. Outstanding Warehouse period-end balances increased $211 million during 2024 compared to a decrease of $64 million during 2023.

Current wording

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.

Previous wording

As a percentage of total Warehouse outstanding balances, the Warehouse ACLL was 0.25% as of December 31, 2024, and December 31, 2023. The Company believes, based on information presently available, that it has adequately provided for Warehouse loan losses as of December 31, 2024.

Current wording

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

Previous wording

TRS recorded a net charge to the Provision of $30.0 million during 2024 compared to a net charge of $22.6 million for 2023. Substantially all TRS Provision in both periods was related to its RA product.

Current wording

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.

Previous wording

See additional detail regarding the RA and ERA products under Footnote 4 “Loans and Allowance for Credit Losses” of Part II Item 8 “Financial Statements and Supplemental Data.”

Current wording

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.”

Previous wording

There is no Allowance or Provision for RPS, as the segment offers Prepaid and Debit Solutions to consumers.

Current wording

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

Previous wording

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 16.30% as of December 31, 2024 and 13.82% as of December 31, 2023. The Company believes, based on information presently available, that it has adequately provided for RCS loan losses as of December 31, 2024.

Current wording

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.

Previous wording

Total Company noninterest income increased $1.2 million from 2023.

Current wording

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