Republic Bancorp in Louisville, Ky., reported higher third-quarter profits, driven by a combination of organic loan growth and asset quality improvements.
The $3.6 billion-asset company earned $5.2 million, up 14% from a year earlier, or 25 cents per share.
Total assets increased 8.8% from a year earlier. Loans increased 12% from a year earlier, to $2.9 billion. Held-for-sale mortgages fell by nearly 40%, to $5.9 million.
Credit quality also improved. Nonperforming assets fell nearly 6%, to $33.4 million. The loan-loss reserve declined by 31%, to $1.5 million.
Total deposits also increased almost 2%, to over $2 billion, as non-interest bearing deposits increased by 8.6% to nearly $535 million.
Despite the balance sheet growth, net interest income dipped 0.3%, to $28.4 million as Republic Bancorp's net interest margin dropped to 3.38% during the quarter, from 3.54% a year earlier.
Noninterest income fell 4.7%, to $7.1 million, as mortgage banking income dropped 14.6%, to $876,000, and gains on the sale of foreclosed homes fell 83%.
Noninterest expenses also fell to $25.8 billion, down almost 1.8% despite a nearly 37% increase in marketing and development costs that was offset by lower salaries and employee benefits, reduced data processing costs and other savings.
In addition to strong loan growth, Republic Bancorp benefitted from expanding its warehouse and correspondent lending channels, Steve Trager, Republic's chairman and chief executive officer, said in a press release. "We are encouraged that our loan growth momentum will continue during the fourth quarter of 2014," he said, and acquisitions remain "a key growth initiative in our long-term plans."