Kentucky-based Republic Bank has record first quarter

Republic Bancorp, the parent company of Republic Bank & Trust, announced record first-quarter earnings on Wednesday, in large part due to massive growth in its tax-refund loan program.

Republic reported net income of $25.8 million, up 16 percent from the first quarter of 2008. Earnings per share increased to $1.24 compared to $1.07 in the same period a year ago.

Republic's Tax Refund Solutions business saw net interest income explode from $19.4 million in last year's first quarter to $52.6 million this year. The company's provision for loan losses increased, too, but the division saw its overall net income increase from $16.5 million in last year's first quarter to $20.9 million this year.

The business has come under scrutiny, though, as the Federal Deposit Insurance Corp. recently ruled certain portions of it violated consumer protection laws. The program, administered through tax preparers nationwide, offers a loan in the amount of the tax refund, minus fees, if taxpayers sign the refund checks over to Republic.

Republic is retraining those involved in the loan program as part of its agreement with the FDIC, which did not admit or deny guilt.

Republic's traditional banking business also grew net income but did see some one-time charges, including a $3.1 million impairment charge to its private label securities portfolio and a $1.7 million write down for certain real estate properties.

The company said its mortgage banking saw a rise in net income of $2.6 million, as it sold $114 million more year-over-year in 15- and 30-year fixed-rate loans into the secondary market.

Republic Bank, whose headquarters is in Louisville, has 45 locations in Kentucky, Indiana, Ohio and Florida.