Republic Bancorp Inc. in Louisville, Ky., reported higher first-quarter profit despite lower volume in its controversial refund-anticipation loan business.
The $3.4 billion-asset company said its earnings rose 60% from a year earlier, to $71.4 million.
Net income in Republic's tax refund solutions division rose 67% from a year earlier, to $69 million. Though the division's dollar volume was a third of the levels from a year earlier, increased pricing offset the decline.
The division's loan-loss provision fell $200,000 from a year earlier, to $13.8 million. The provision was based on an estimated loan-loss rate of 2.5%; through March 31 the loss rate in the division was 1.75%.
Republic's moves with pricing and the provision were tied to a decision by the Internal Revenue Service to stop providing debt indicators for refund anticipation loans.
The Federal Deposit Insurance Corp. wants Republic to quit making such loans. The company responded in March by filing a lawsuit against the FDIC for allegedly abusing its authority.
Republic did not mention the lawsuit in its quarterly earnings press release Thursday.