REPUBLIC BANCORP INC /KY/ (Form: 10-Q, Received: 11/08/2005 18:09:57)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2005

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 0-24649

REPUBLIC BANCORP, INC.

(Exact name of registrant as specified in its charter)

Kentucky		61-0862051
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

601 West Market Street, Louisville, Kentucky		40202
(Address of principal executive offices)		(Zip Code)

(502) 584-3600

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days.

ý Yes o No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

ý Yes o No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes ý No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

16,338,356 shares of Class A Common Stock, no par value and 2,144,933 shares of Class B Common Stock, no par value were outstanding at October 31, 2005, the latest practicable date.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.

Item 4.	Controls and Procedures.

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.

Item 6.	Exhibits.

EX-10.1	Lease between Republic Bank & Trust Company and Teeco Properties
EX-10.2	Lease between Republic Bank & Trust Company and Jaytee Properties
EX-31.1	Section 302 Certification of Principal Executive Officer
EX-31.2	Section 302 Certification of Principal Financial Officer
EX-32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C Section 1350
EX-32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C Section 1350

	SIGNATURES

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

REPUBLIC BANCORP, INC.

CONSOLIDATED BALANCE SHEETS ( in thousands )

	September 30			December 31
	2005			2004
	(unaudited)
ASSETS:
Cash and cash equivalents	$	87,810		$	77,850
Securities available for sale	391,641			453,360
Securities to be held to maturity (fair value of $64,424 in 2005 and $98,129 in 2004)	64,157			98,233
Mortgage loans held for sale	15,616			16,485
Loans, net of allowance for loan losses of $11,123 and $13,554 (2005 and 2004)	1,955,017			1,775,545
Federal Home Loan Bank stock, at cost	21,336			20,321
Premises and equipment, net	31,683			33,843
Other assets and accrued interest receivable	36,067			23,285

TOTAL ASSETS	$	2,603,327		$	2,498,922

LIABILITIES:
Deposits:
Non-interest-bearing	$	284,870		$	261,993
Interest-bearing	1,273,707			1,155,937
Total deposits	1,558,577			1,417,930
Securities sold under agreements to repurchase and other short-term borrowings	281,562			364,828
Federal Home Loan Bank borrowings	483,673			496,387
Subordinate note	41,240			—
Other liabilities and accrued interest payable	24,354			23,708

Total liabilities	2,389,406			2,302,853

STOCKHOLDERS’ EQUITY:
Preferred stock, no par value	—			—
Class A Common Stock and Class B Common Stock, no par value	4,517			4,381
Additional paid in capital	77,821			58,117
Retained earnings	135,365			135,949
Unearned shares in Employee Stock Ownership Plan	(1,577		)	(1,894		)
Accumulated other comprehensive loss	(2,205		)	(484		)

Total stockholders’ equity	213,921			196,069

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,603,327		$	2,498,922

See accompanying notes to consolidated financial statements.

REPUBLIC BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME ( UNAUDITED )

( in thousands, except per share data )

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2005			2004			2005			2004
INTEREST INCOME:
Loans, including fees	$	31,844		$	27,660		$	101,646		$	89,169
Securities	4,466			3,205			13,393			8,608
Federal Home Loan Bank stock and other	623			296			2,025			961
Total interest income	36,933			31,161			117,064			98,738

INTEREST EXPENSE:
Deposits	8,101			5,262			22,366			15,210
Securities sold under agreements to repurchase and other short-term borrowings	2,613			1,113			7,190			2,471
Federal Home Loan Bank borrowings	5,155			4,196			14,781			12,503
Subordinate note	317			—			317			—

Total interest expense	16,186			10,571			44,654			30,184

NET INTEREST INCOME	20,747			20,590			72,410			68,554

Provision for loan losses	(2,585		)	(127		)	(968		)	1,475

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	23,332			20,717			73,378			67,079

NON-INTEREST INCOME:
Service charges on deposit accounts	4,145			3,578			11,218			9,902
Electronic refund check fees	77			61			5,905			5,253
Title insurance commissions	481			329			1,266			1,087
Mortgage banking income	797			757			2,149			2,299
Debit card interchange fee income	787			663			2,311			1,774
Other	273			210			967			870
Total non-interest income	6,560			5,598			23,816			21,185

NON-INTEREST EXPENSES:
Salaries and employee benefits	9,244			8,411			28,335			26,277
Occupancy and equipment, net	3,319			3,444			9,897			10,466
Communication and transportation	689			741			2,192			2,094
Marketing and development	728			534			1,772			1,722
Bankshares tax	600			485			1,680			1,604
Data processing	509			405			1,359			1,181
Debit card interchange fee expense	348			287			1,003			801
Other	2,268			1,394			6,477			4,679
Total non-interest expenses	17,705			15,701			52,715			48,824

INCOME BEFORE INCOME TAX EXPENSE	12,187			10,614			44,479			39,440

INCOME TAX EXPENSE	4,137			3,632			15,167			13,552

NET INCOME	$	8,050		$	6,982		$	29,312		$	25,888

	Three Months Ended					Nine Months Ended
	September 30					September 30
	2005			2004		2005			2004
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Change in unrealized gain (loss) on securities	$	(643	)	$	1,181	$	(1,721	)	$	(774	)
Less: Reclassification of realized amount	—			—		—			—
Net unrealized gain (loss) recognized in comprehensive income	(643		)	1,181		(1,721		)	(774		)

COMPREHENSIVE INCOME	$	7,407		$	8,163	$	27,591		$	25,114

BASIC EARNINGS PER SHARE:
Class A Common Share	$	0.43		$	0.37	$	1.56		$	1.38
Class B Common Share	0.42			0.36		1.53			1.36

DILUTED EARNINGS PER SHARE:
Class A Common Share	$	0.41		$	0.36	$	1.49		$	1.33
Class B Common Share	0.40			0.35		1.47			1.31

See accompanying notes to consolidated financial statements.

REPUBLIC BANCORP, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY ( UNAUDITED )

( in thousands, except per share data )

														Unearned
	Common Stock													Shares in			Accumulated
	Class A		Class B					Additional						Empl. Stock			Other			Total
	Shares		Shares					Paid In			Retained			Ownership			Comprehensive			Stockholders’
(in thousands, except per share data)	Outstanding		Outstanding		Amount			Capital			Earnings			Plan			Loss			Equity

BALANCE, January 1, 2005	16,738		2,149		$	4,381		$	58,117		$	135,949		$	(1,894	)	$	(484	)	$	196,069

Net Income	—		—		—			—			29,312			—			—			29,312

Net change in accumulated other comprehensive loss	—		—		—			—			—			—			(1,721		)	(1,721		)

Dividend declared Common Stock:
Class A ($0.249 per share)	—		—		—			—			(4,207		)	—			—			(4,207		)
Class B ($0.227 per share)	—		—		—			—			(487		)	—			—			(487		)

Stock options exercised, net of shares redeemed	28		—		7			412			(217		)	—			—			202

Repurchase of Class A Common Stock	(269	)	—		(65		)	(1,132		)	(4,760		)	—			—			(5,957		)

Conversion of Class B Common Stock to Class A Common Stock	4		(4	)	—			—			—			—			—			—

Shares committed to be released under the Employee Stock Ownership Plan	27		—		—			296			—			317			—			613

Stock dividend	—		—		194			20,031			(20,225		)	—			—			—

Note receivable on common stock, net of cash payments	—		—		—			2			—			—			—			2

Deferred compensation expense	—		—		—			95			—			—			—			95

BALANCE, September 30, 2005	16,528		2,145		$	4,517		$	77,821		$	135,365		$	(1,577	)	$	(2,205	)	$	213,921

See accompanying notes to consolidated financial statements.

REPUBLIC BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS ( UNAUDITED )

NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 ( in thousands )

	2005			2004
OPERATING ACTIVITIES:
Net income	$	29,312		$	25,888
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion, net	3,417			7,097
Federal Home Loan Bank stock dividends	(745		)	(605		)
Provision for loan losses	(968		)	1,475
Net gain on sale of mortgage loans held for sale	(1,787		)	(2,182		)
Origination of mortgage loans held for sale	(171,273		)	(189,163		)
Proceeds from sale of mortgage loans held for sale	173,929			193,324
Employee Stock Ownership Plan expense	613			465
Changes in other assets and liabilities:
Other assets and accrued interest receivable	(11,276		)	(2,129		)
Other liabilities and accrued interest payable	147			1,092
Net cash provided by operating activities	21,369			35,262

INVESTING ACTIVITIES:
Purchases of securities available for sale	(3,339,058		)	(2,871,540		)
Purchases of securities to be held to maturity	—			(31,514		)
Purchases of Federal Home Loan Bank stock	(270		)	(353		)
Proceeds from calls, maturities and paydowns of securities available for sale	3,400,240			2,815,718
Proceeds from calls, maturities and paydowns of securities to be held to maturity	34,040			56,701
Net increase in loans	(178,796		)	(154,015		)
Investment in unconsolidated subsidiary	(1,240		)	—
Purchases of premises and equipment, net	(2,088		)	(6,348		)
Net cash used in investing activities	(87,172		)	(191,351		)

FINANCING ACTIVITIES:
Net increase in deposits	140,647			103,552
Net change in securities sold under agreements to repurchase and other short-term borrowings	(83,266		)	97,744
Payments on Federal Home Loan Bank borrowings	(53,047		)	(5,676		)
Proceeds from Federal Home Loan Bank borrowings	40,333			5,807
Net proceeds from subordinate note	41,240			—
Common Stock repurchases	(5,957		)	(301		)
Proceeds from Common Stock options exercised, net	202			746
Cash dividends paid	(4,389		)	(3,601		)
Net cash provided by financing activities	75,763			198,271

NET CHANGE IN CASH AND CASH EQUIVALENTS	9,960			42,182

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	77,850			60,876

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	87,810		$	103,058

	2005		2004
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:
Interest	$	43,658	$	30,644
Income taxes	13,264		12,055

SUPPLEMENTAL NON-CASH DISCLOSURES:

Transfers from loans to real estate acquired in settlement of loans	$	294	$	1,158

See accompanying notes to consolidated financial statements.

REPUBLIC BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – SEPTEMBER 30, 2005 AND 2004

(UNAUDITED) AND DECEMBER 31, 2004

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – 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 Bank & Trust Company of Indiana (together referred to as the “Bank”), Republic Funding Company, Republic Invest Co. and Republic Bancorp Capital Trust. Republic Invest Co. includes its subsidiary, Republic Capital LLC. Republic Bancorp Capital Trust is a Delaware statutory business trust that is a 100%-owned unconsolidated finance subsidiary of Republic Bancorp, Inc. The consolidated financial statements also include the wholly-owned subsidiaries of Republic Bank & Trust Company: Republic Financial Services, LLC and Republic Insurance Agency, LLC. All companies are collectively referred to as “Republic” or the “Company”. All significant intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter and nine months ended September 30, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. For further information, refer to the consolidated financial statements and footnotes thereto included in Republic’s Annual Report on Form 10-K for the year ended December 31, 2004.

Stock Option Plans – Employee compensation expense under stock option plans is reported using the intrinsic value method. No stock based compensation cost is reflected in net income, as all options granted had an exercise price equal to or greater than the market price of the underlying common stock at date of grant.

The following table illustrates the effect on net income and earnings per share if expense was measured using the fair value recognition provisions of Financial Accounting Standards Board (“FASB”) Statement No. 123, “Accounting for Stock Based Compensation”:

	Three months ended				Nine months ended
	September 30				September 30
(dollars in thousands, except per share data)	2005		2004		2005		2004

Net income, as reported	$	8,050	$	6,982	$	29,312	$	25,888
Deduct:
Stock based compensation expense determined under the fair value based method, net of tax	379		133		1,090		397
Pro forma net income	$	7,671	$	6,849	$	28,222	$	25,491

Earnings per share as reported:
Class A Common Share	$	0.43	$	0.37	$	1.56	$	1.38
Class B Common Share	0.42		0.36		1.53		1.36

Pro forma earnings per share:
Class A Common Share	0.42		0.36		1.52		1.35
Class B Common Share	0.41		0.35		1.50		1.34

Diluted earnings per share as reported:
Class A Common Share	0.41		0.36		1.49		1.33
Class B Common Share	0.40		0.35		1.47		1.31

Pro forma diluted earnings per share:
Class A Common Share	0.40		0.35		1.46		1.31
Class B Common Share	0.39		0.34		1.43		1.29

Options granted during the nine months ended September 30, 2005 totaled 41,000. There were no options granted during the third quarter of 2005. There were approximately 508,000 options granted during the nine month period ended September 30, 2004 with all of these options being granted during the third quarter of 2004.

In April 2005, an amendment was issued to Statement of Financial Accounting Standard (“SFAS”) No. 123 (Revised 2004) (“SFAS No. 123R”), “Share-Based Payment” regarding the compliance date for implementation. The Company will prospectively adopt SFAS 123R on January 1, 2006, as required by this amendment.

The effect on results of operations of future option grants will depend on the level of future option grants and the calculation of the fair value of the options granted at such future date, as well as the vesting periods provided, and so the future impact to the results of operations cannot currently be predicted. Upon adoption, there will be no significant effect on the Company’s financial position.

Recently Adopted Accounting Standards – There are no new accounting pronouncements other than SFAS 123R discussed above in the section titled “ Stock Option Plans ” that will have a material impact on Republic’s consolidated financial statements.

Reclassifications – Certain amounts presented in prior periods have been reclassified to conform to the current period presentation. All prior period share and per share data have been restated to reflect the five percent (5%) stock dividend that was declared in the first quarter of 2005.

2. SECURITIES

Securities available for sale:

			Gross		Gross
	Amortized		Unrealized		Unrealized
September 30, 2005 (in thousands)	Cost		Gains		Losses			Fair Value

U.S. Treasury securities and U.S. Government agencies	$	267,960	$	—	$	(2,321	)	$	265,639
Mortgage backed securities, including CMOs	127,073		202		(1,270		)	126,005

Total securities available for sale	$	395,033	$	202	$	(3,591	)	$	391,641

			Gross		Gross
	Amortized		Unrealized		Unrealized
December 31, 2004 (in thousands)	Cost		Gains		Losses			Fair Value

U.S. Treasury securities and U.S. Government agencies	$	292,925	$	29	$	(1,257	)	$	291,697
Mortgage backed securities, including CMOs	161,179		755		(271		)	161,663

Total securities available for sale	$	454,104	$	784	$	(1,528	)	$	453,360

Securities to be held to maturity:

			Gross		Gross
	Amortized		Unrecognized		Unrecognized
September 30, 2005 (in thousands)	Cost		Gains		Losses			Fair Value

U.S. Treasury securities and U.S. Government agencies	$	12,110	$	—	$	(112	)	$	11,998
Mortgage backed securities, including CMOs	52,047		679		(300		)	52,426

Total securities to be held to maturity	$	64,157	$	679	$	(412	)	$	64,424

			Gross		Gross
	Amortized		Unrecognized		Unrecognized
December 31, 2004 (in thousands)	Cost		Gains		Losses			Fair Value

U.S. Treasury securities and U.S. Government agencies	$	20,112	$	—	$	(55	)	$	20,057
Mortgage backed securities, including CMOs	78,121		131		(180		)	78,072

Total securities to be held to maturity	$	98,233	$	131	$	(235	)	$	98,129

Securities pledged to secure public deposits, securities sold under agreements to repurchase and for other purposes, as required or permitted by law are as follows:

(in thousands)	September 30, 2005		December 31, 2004
Amortized cost	$	380,368	$	454,483
Fair value	377,737		453,677

3. ALLOWANCE FOR LOAN LOSSES

An analysis of the allowance for loan losses follows:

	Three months ended September 30						Nine months ended September 30
(in thousands)	2005			2004			2005			2004

Balance, beginning of period	$	13,382		$	13,530		$	13,554		$	13,959
Provision for loan losses	(2,585		)	(127		)	(968		)	1,475
Charge offs - Banking	(220		)	(412		)	(854		)	(981		)
Charge offs - Tax Refund Solutions	—			(2		)	(2,213		)	(3,403		)
Recoveries - Banking	200			337			562			789
Recoveries - Tax Refund Solutions	346			209			1,042			1,696
Balance, end of period	$	11,123		$	13,535		$	11,123		$	13,535

Information regarding Republic’s impaired loans is as follows:

(in thousands)	September 30, 2005		December 31, 2004
Loans with no allocated allowance for loan losses	$	—	$	—
Loans with allocated allowance for loan losses	2,713		2,687

Total	$	2,713	$	2,687
Amount of the allowance for loan losses allocated	$	846	$	1,065

No additional funds are committed to be advanced in connection with the above impaired loans.

Detail of non-performing loans is as follows:

(in thousands)	September 30, 2005		December 31, 2004
Non-performing loans were as follows:
Loans past due 90 days or more and still on accrual	$	2,484	$	371
Non-accrual loans	6,661		5,763

4. FEDERAL HOME LOAN BANK (“FHLB”) BORROWINGS

(in thousands)	September 30, 2005		December 31, 2004

FHLB convertible fixed interest rate advances with a weighted average interest rate of 5.17% (1) due through 2011	$	115,000	$	115,000

FHLB fixed interest rate advances with a weighted average interest rate of 3.86% due through 2035	368,673		381,387
	$	483,673	$	496,387

(1) Represents convertible advances with the FHLB. These advances have original fixed rate periods ranging from one to five years with the original maturities ranging from three to ten years if not converted earlier by the FHLB. The Company has $90 million in these advances that are currently eligible to be converted on their quarterly repricing date. Based on market conditions at this time, management does not believe these advances are likely to be converted in the short- term.

FHLB advances are collateralized by a blanket pledge of eligible real estate loans. At September 30, 2005, Republic had available collateral to borrow an additional $191 million from the FHLB.

5. TRUST PREFERRED SECURITIES

On August 16, 2005, Republic Bancorp Capital Trust (“RBCT”), an unconsolidated trust subsidiary of Republic Bancorp, Inc., issued $40 million in Trust Preferred Securities. The Trust Preferred Securities pay a fixed interest rate for 10 years and adjust with LIBOR thereafter. Currently treated as Tier 1 capital for regulatory purposes, the Trust Preferred Securities mature on September 30, 2035 and are redeemable at the Company’s option after ten years. The sole asset of RBCT represents the proceeds of the offering loaned to Republic Bancorp, Inc. in exchange for subordinated debentures which have terms that are similar to the Trust Preferred Securities. The subordinated debentures and the related interest expense, currently payable quarterly at the annual rate of 6.015%, are included in the consolidated financial statements. The proceeds obtained from the Trust Preferred Securities offering will be used to fund loan growth, support an existing stock repurchase program and for other general business purposes.

6. COMMITMENTS TO EXTEND CREDIT

As of September 30, 2005, the Company had various commitments outstanding that arose in the normal course of business, such as standby letters of credit and commitments to extend credit, which are properly not reflected in the financial statements. In management’s opinion, commitments to extend credit of $559 million, including standby letters of credit of $39 million, represent normal banking transactions, and no significant losses are anticipated to result from these commitments as of September 30, 2005. Commitments to extend credit were $382 million, including letters of credit of $35 million, as of December 31, 2004. The Company’s exposure to credit loss in the event of nonperformance by the other parties to these commitments is represented by the contractual amount of these instruments. The Company uses the same credit and collateral policies in making commitments and conditional guarantees as it does with on-balance sheet instruments. At September 30, 2005, no amounts have been accrued in the financial statements related to these instruments.

Commitments to extend credit are agreements to lend to clients as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each client’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the client. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties.

Standby letters of credit and financial guarantees written are conditional commitments issued by the Company to guarantee the performance of a client to a third party. These guarantees are primarily issued to support private borrowing arrangements.

7. EARNINGS PER SHARE

Class A and Class B shares participate equally in undistributed earnings. The difference in earnings per share between the two classes of common stock results solely from the 10% per share dividend premium paid on Class A Common Stock over that paid on Class B Common Stock.

A reconciliation of the combined Class A and Class B Common Stock numerators and denominators of the earnings per share and diluted earnings per share computations is presented below:

	Three Months Ended				Nine Months Ended
	September 30				September 30
(in thousands, except per share data)	2005		2004		2005		2004

Net Income, basic and diluted	$	8,050	$	6,982	$	29,312	$	25,888

Weighted average shares outstanding	18,838		18,854		18,876		18,817
Effect of dilutive securities	746		728		794		704
Average shares outstanding including dilutive securities	19,584		19,582		19,670		19,521

Basic earnings per share:
Class A Common Share	$	0.43	$	0.37	$	1.56	$	1.38
Class B Common Share	0.42		0.36		1.53		1.36

Diluted earnings per share:
Class A Common Share	$	0.41	0.36		$	1.49	$	1.33
Class B Common Share	0.40		0.35		1.47		1.31

Stock options for 47,550 shares and 44,400 shares of Class A Common Stock were respectively excluded from the three and nine months ended September 30, 2005 diluted earnings per share calculation because their impact was antidilutive. There were no antidilutive stock options during the three and nine months ended September 30, 2004.

8. SEGMENT INFORMATION

The reportable segments are determined by the types of products and services offered: (i) banking operations, (ii) mortgage banking operations, (iii) Tax Refund Solutions (“TRS”) and (iv) deferred deposits. Loans, investments and deposits provide the majority of revenue from banking operations; servicing fees and loan sales provide the majority of revenue from mortgage banking operations; Refund Anticipation Loan (“RAL”) fees, Electronic Refund Check (“ERC”) fees and Electronic Refund Deposit (“ERD”) fees provide the majority of the revenue from TRS; and fees for providing deferred deposits represent the primary revenue source for the deferred deposit segment. Revenue from ERC/ERD fees are recorded in the financial statements in the line item “Electronic Refund Check fees”.

The accounting policies used for Republic’s reportable segments are the same as those described in the summary of significant accounting policies. Income taxes are allocated based on income before income tax expense. Transactions among reportable segments are made at fair value.

Segment information for the three and nine months ended September 30, 2005 and 2004 follows:

	Three Months Ended September 30, 2005
(in thousands)	Banking		Tax Refund Solutions			Mortgage Banking			Deferred Deposits			Consolidated Totals

Net interest income	$	18,900	$	31		$	156		$	1,660		$	20,747
Provision for loan losses	46		(346		)	—			(2,285		)	(2,585		)
Electronic Refund Check fees	—		77			—			—			77
Mortgage banking income	—		—			797			—			797
Other revenue	6,024		14			(355		)	3			5,686
Income tax expense	3,152		(269		)	82			1,172			4,137
Net income	6,119		(502		)	160			2,273			8,050
Segment assets	2,578,766		3,248			15,624			5,689			2,603,327

	Three Months Ended September 30, 2004
(in thousands)	Banking			Tax Refund Solutions			Mortgage Banking			Deferred Deposits		Consolidated Totals

Net interest income	$	17,623		$	(341	)	$	93		$	3,215	$	20,590
Provision for loan losses	(90		)	(207		)	—			170		(127		)
Electronic Refund Check Fees	—			61			—			—		61
Mortgage banking income	—			—			757			—		757
Other revenue	4,978			12			(223		)	13		4,780
Income tax expense	2,818			(194		)	118			890		3,632
Net income	5,405			(355		)	227			1,705		6,982
Segment assets	2,296,663			2,582			11,766			41,725		2,352,736

	Nine Months Ended September 30, 2005
(in thousands)	Banking			Tax Refund Solutions		Mortgage Banking			Deferred Deposits			Consolidated Totals

Net interest income	$	55,468		$	8,753	$	328		$	7,861		$	72,410
Provision for loan losses	(748		)	1,171		—			(1,391		)	(968		)
Electronic refund check fees	—			5,905		—			—			5,905
Mortgage banking income	—			—		2,149			—			2,149
Other revenue	16,386			79		(724		)	21			15,762
Income tax expense	8,917			3,256		320			2,674			15,167
Net income	17,232			6,292		619			5,169			29,312
Segment assets	2,578,766			3,248		15,624			5,689			2,603,327

	Nine Months Ended September 30, 2004
(in thousands)	Banking			Tax Refund Solutions		Mortgage Banking			Deferred Deposits		Consolidated Totals

Net interest income	$	51,337		$	8,321	$	316		$	8,580	$	68,554
Provision for loan losses	(444		)	1,707		—			212		1,475
Electronic refund check fees	—			5,253		—			—		5,253
Mortgage banking income	—			—		2,299			—		2,299
Other revenue	14,385			22		(803		)	29		13,633
Income tax expense	7,592			3,189		350			2,421		13,552
Net income	14,502			6,093		669			4,624		25,888
Segment assets	2,296,663			2,582		11,766			41,725		2,352,736

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

GENERAL

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Republic Bancorp, Inc. (“Republic” or the “Company”) analyzes the major elements of Republic’s consolidated balance sheets and consolidated statements of income. Republic, a bank holding company headquartered in Louisville, Kentucky, is the Parent Company of Republic Bank & Trust Company, Republic Bank & Trust Company of Indiana (together referred to as the “Bank”), Republic Funding Company, Republic Invest Co. and Republic Bancorp Capital Trust. Republic Invest Co. includes its subsidiary Republic Capital LLC. Republic Bancorp Capital Trust is a Delaware statutory business trust that is a 100%-owned unconsolidated finance subsidiary of Republic Bancorp, Inc. The Consolidated Financial Statements also include the wholly-owned subsidiaries of Republic Bank & Trust Company: Republic Financial Services, LLC and Republic Insurance Agency, LLC. This section should be read in conjunction with the Consolidated Financial Statements and accompanying Notes and other detailed information.

This discussion includes various forward-looking statements with respect to credit quality, including but not limited to, delinquency trends and the adequacy of the allowance for loan losses, banking products, corporate objectives, the Company’s interest rate sensitivity model and other financial and business matters. Broadly speaking, forward-looking statements may include:

• projections of revenues, income, earnings per share, capital expenditures, dividends, capital structure or other financial items;

• descriptions of plans or objectives of the Company’s management for future operations, products or services;

• forecasts of future economic performance; and

• descriptions of assumptions underlying or relating to any of the foregoing.

The Company may make forward-looking statements discussing management’s expectations about:

• future credit losses and non-performing assets;

• the future value of mortgage servicing rights;

• the impact of new accounting standards;

• future short-term and long-term interest rate levels and the respective impact on net interest margin, net income, liquidity and capital;

• legal and regulatory matters; and

• future capital expenditures.

Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements often include words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would,” or similar expressions. Do not rely on forward-looking statements. Forward-looking statements detail management’s expectations about the future and are not guarantees. Forward-looking statements are assumptions based on information known to management only as of the date they are made and management may not update them to reflect changes that occur after the date the statements are made. ( See additional discussion under the section titled “Factors that May Affect Future Results”).

OVERVIEW

Net income for the third quarter of 2005 was $8.1 million, representing an increase of $1.1 million or 15% compared to the same period in 2004. Diluted earnings per Class A Common Share increased 14% to $0.41 for the third quarter of 2005 compared to $0.36 for the same period in 2004. The increase in net income for the quarter benefited primarily from a reduction in the allowance for loan losses. The Company also benefited from increases in net

interest income and service charges on deposit accounts, which were offset by higher costs primarily associated with additions to staff throughout the Company.

Net income for the first nine months of 2005 was $29.3 million, an increase of $3.4 million, or 13%, compared to the same period in 2004. Diluted earnings per Class A Common Share increased 12% for the first nine months of 2005 to $1.49. Similar to the third quarter, net income for the nine months ended September 30, 2005 benefited primarily from a reduction in the allowance for loan losses. The Company also benefited during the same period from increases in net interest income and service charges on deposit accounts, which were offset by higher costs primarily associated with additions to staff.

BUSINESS SEGMENT COMPOSITION

The Company is divided into four distinct business segments. Total assets and net income for the three and nine months ended September 30, 2005 and 2004 are presented below:

Three months ended September 30, 2005			Tax Refund			Mortgage		Deferred		Consolidated
(in thousands)	Banking		Solutions			Banking		Deposits		Totals

Net Income	$	6,119	$	(502	)	$	160	$	2,273	$	8,050
Total Assets	2,578,766		3,248			15,624		5,689		2,603,327

Three months ended September 30, 2004			Tax Refund			Mortgage		Deferred		Consolidated
(in thousands)	Banking		Solutions			Banking		Deposits		Totals

Net Income	$	5,405	$	(355	)	$	227	$	1,705	$	6,982
Total Assets	2,296,663		2,582			11,766		41,725		2,352,736

Nine months ended September 30, 2005			Tax Refund		Mortgage		Deferred		Consolidated
(in thousands)	Banking		Solutions		Banking		Deposits		Totals

Net Income	$	17,232	$	6,292	$	619	$	5,169	$	29,312
Total Assets	2,578,766		3,248		15,624		5,689		2,603,327

Nine months ended September 30, 2004			Tax Refund		Mortgage		Deferred		Consolidated
(in thousands)	Banking		Solutions		Banking		Deposits		Totals

Net Income	$	14,502	$	6,093	$	669	$	4,624	$	25,888
Total Assets	2,296,663		2,582		11,766		41,725		2,352,736

(I) Banking

As of September 30, 2005, Republic had a total of 34 full-service banking centers with 32 located in Kentucky and two in southern Indiana. Republic’s primary market areas are located in metropolitan Louisville, central Kentucky and southern Indiana. Louisville, the largest city in Kentucky, is the location of Republic’s headquarters and the location of 19 banking centers. Republic’s central Kentucky market includes 13 banking centers in the following Kentucky cities: Bowling Green (1); Elizabethtown (1); Frankfort (2); Georgetown (1); Lexington, the second largest city in Kentucky (5); Owensboro (2); and Shelbyville (1). Republic Bank & Trust Company of Indiana has banking centers located in New Albany and Jeffersonville, Indiana. Republic also has two loan production offices (“Republic Finance”) located in Louisville, Kentucky that operate as a division of Republic Bank & Trust Company. Republic Finance offers an array of loan products to individuals who may not qualify under the Bank’s standard underwriting guidelines.

Banking related operating revenues are derived primarily from interest earned from the Bank’s loan and investment securities portfolios and fee income from loans, deposits and other banking products. The Company has historically

extended credit and provided general banking services through its banking center network to individuals and businesses. Over the past several years, the Company expanded into new lines of business to diversify its asset mix and further enhance its profitability. The Company principally markets its banking products and services through the following delivery channels:

Mortgage Lending – The Company generally retains adjustable rate residential real estate loans with fixed terms up to ten years. These loans are originated through the Company’s retail banking center network and “Republic Finance” offices. Fixed rate residential real estate loans that are sold into the secondary market, and their accompanying servicing rights, which may be either sold or retained, are included as a component of the Company’s “Mortgage Banking” segment and are discussed below.

Commercial Lending – Commercial loans are primarily real estate secured and are generated through banking centers in the Company’s market areas. The Company makes commercial loans to a variety of industries and intends to promote this business through focused calling programs, in order to broaden relationships by providing business clients with loan, deposit and cash management services.

Consumer Lending – Traditional consumer loans made by the Company include home improvement and home equity loans and personal loans (secured and unsecured). With the exception of home equity loans, which are actively marketed in conjunction with single family first lien mortgage loans, traditional consumer loan products are not actively promoted in Republic’s markets.

Cash Management Services – Republic provides various deposit products designed for businesses located throughout its market areas. Lockbox processing, business online banking, account reconciliation and Automated Clearing House (“ACH”) processing are additional services offered to businesses through the Cash Management department. The “Premier First” product is the Company’s premium money market sweep account designed for businesses.

Internet Banking – Republic expands its market penetration and service delivery by offering clients Internet banking services and products through its Internet site, www.republicbank.com.

Other Banking Services – The Bank also provides trust services, title insurance products and other related financial institution lines of business.

(II) Tax Refund Solutions (“TRS”)

Republic Bank & Trust Company is one of a limited number of financial institutions that facilitates the payment of federal and state tax refunds through tax preparers located throughout the United States. The Company facilitates the payment of these tax refunds through three primary products. For those taxpayers who apply and qualify, the Company will offer a Refund Anticipation Loan (“RAL”) up to $8,000. RALs are repaid when the taxpayers’ refunds are electronically received by the Company from the government. For those taxpayers who wish to receive their funds electronically via a check or ACH, the Company will provide an Electronic Refund Check (“ERC”) or an Electronic Refund Deposit (“ERD”) to the taxpayer. An ERC/ERD is issued to the taxpayer after the Company has received the tax refund from the federal or state government. Revenue from ERC/ERD fees are recorded in the financial statements in the line item “Electronic Refund Check fees”.

(III) Mortgage Banking

Mortgage banking activities primarily include 15, 20 and 30-year fixed rate real estate loans that are sold into the secondary market. Republic typically retains servicing on substantially all loans sold into the secondary market. Administration of loans with the servicing retained by the Company includes collecting principal and interest payments, escrowing funds for taxes and insurance and remitting payments to the secondary market investors. A fee is received by Republic for performing these standard servicing functions.

(IV) Deferred Deposits (commonly referred to as “Payday Lending”)

Deferred deposits are transactions whereby customers receive cash advances in exchange for a check or authorization to electronically debit the customer’s checking account for the advanced amount plus a fixed fee. Under the Marketer/Servicer model, customers can reclaim their checks in cash for the amount of the advance plus the fee, on or before the due date of the advance. If the customer does not reclaim the check in cash by the advance due date, the check is deposited. Under the Company’s recently developed Internet model, the customer’s account will be electronically debited on the advance due date. If the ACH is not honored due to insufficient funds, the Company may electronically debit the customer’s account additional times in an effort to collect the amount due. These transactions are recorded as loans on the Company’s financial statements and the corresponding fees are recorded as a component of interest income on loans.

The Company originates deferred deposits under a marketing and servicing contract with ACE Cash Express, Inc. (“ACE”) in the states of Texas, Arkansas and Pennsylvania, with the substantial majority of these transactions concentrated in the state of Texas. As of September 30, 2005, Republic had deferred deposits outstanding of approximately $5 million through its contract with ACE. For the quarter ended September 30, 2005, Republic recognized net income of approximately $533,000 under the ACE contract, which represented approximately 7% of the Company’s total net income for the period.

Traditionally, the Company also operated its deferred deposit program through a marketing/servicing relationship with Advance America in Texas and North Carolina. On July 5, 2005, the Company was notified by Advance America, Cash Advance Centers, Inc. that the marketing and servicing agreements with Advance America Cash Advance Centers of North Carolina, Inc. and Advance America Servicing of Texas, L.P. (collectively referred to as “Advance America”) were terminated effective July 6, 2005. As a result, Republic did not originate any new deferred deposit transactions through Advance America stores after July 6, 2005. At September 30, 2005, the Company had no deferred deposits outstanding under the two Advance America contracts, as all previously outstanding transactions had paid off. For the third quarter of 2005, Republic recognized net income of approximately $1.9 million under the Advance America contracts, which represented approximately 23% of the Company’s total net income for the period.

Due to the termination of the Advance America contracts and, to a lesser extent, implementation of the revised FDIC guidelines on August 1, 2005, Republic experienced a $31 million decline in its payday loan portfolio during the third quarter of 2005. As a result of the decline in the payday loan portfolio, the Company had a $2.3 million reduction in the amount specifically allocated within the Company’s allowance for loan losses for payday loans. At this time, the Company cannot predict the final impact of the revised FDIC guidelines on its remaining ACE payday loan portfolio during the fourth quarter of 2005 but does expect the balances to be significantly lower than fourth quarter of 2004.

On July 11, 2005, Republic commenced offering, on a test basis, deferred deposits through its Indiana bank subsidiary without a Marketer/Servicer. On September 15, 2005, Republic transitioned into a faxless, Internet-based payday loan program offered direct to customers on a nationwide basis at www.republicbankpayday.com. Unlike deferred deposits originated through the Company’s third party Marketer/Servicer, which feature a guarantee from the Marketer/Servicer, deferred deposits originated directly by the Company are 100% unsecured and have no third party guarantee. As a result, the Company will sustain credit losses, which could be material and fluctuate significantly from period to period depending on overall volume. If overall credit losses render the Internet deferred deposit product unprofitable, the Company will cease to offer the Internet product. At this time, management cannot predict the degree of consumer demand for Republic’s Internet product or project its potential profitability, if any.

All deferred deposits originated by Republic are subject to the revised FDIC Guidance (the “Guidance”) on payday lending dated March 1, 2005, which became effective July 1, 2005. The Guidance essentially limits customers from having deferred deposits outstanding from any bank lender more than 90 days in the previous twelve months. FDIC guidance also requires that banks limit deferred deposits outstanding to the lesser of 25% of Tier I capital or the amount that actual capital levels exceed the “well capitalized” classification for Tier I and total capital. Based on the Company’s capital levels at September 30, 2005, deferred deposits outstanding were significantly below the Banks’

regulatory limits. See additional discussion about this product under the section titled “Factors that May Affect Future Results – Company Factors”.

FACTORS THAT MAY AFFECT FUTURE RESULTS

There are factors, many beyond our control, which may significantly change the results or expectations of the Company. Some of these factors are described below in the sections titled “Company Factors” and “Industry Factors”; however, many are described in the sections that follow. There also may be other items, which are included in the Annual Report on Form 10-K for the year ended December 31, 2004. Any factor described in this report, or in the Company’s 2004 Annual Report on Form 10-K could, by itself or with other factors, adversely affect the Company’s business, results of operations or financial condition. There may also be other factors not described in this report, or in the 2004 Annual Report on Form 10-K, which could cause our expectations to differ or could produce significantly different results.

Company Factors

The Parent Company relies on dividends from its subsidiaries for substantially all of its revenue. Republic Bancorp, Inc. is a separate legal entity from its subsidiaries and it receives substantially all of its cash from dividends from its largest subsidiary, Republic Bank & Trust Company. Various federal and state laws and regulations limit the amount of dividends that may be paid to the Parent Company.

The Company’s accounting policies and estimates are critical components of the Company’s presentment of its financial statements. Our management must exercise judgment in selecting and adopting various accounting policies and in applying estimates. Actual outcomes may be materially different than amounts previously estimated. Management has identified two accounting policies as being critical to the presentation of the Company’s financial statements. These policies are described in our 2004 Annual Report on Form 10-K under the section titled “ Critical Accounting Policies and Estimates ” and relate to the allowance for loan losses and the valuation of mortgage servicing rights. Due to the inherent uncertainty of estimates, we cannot provide any assurance that the Company will not significantly increase its allowance for loan losses if actual losses are more than the amount reserved or recognize a significant provision for impairment of its mortgage servicing rights.

The Company has lines of business and products not typically associated with traditional banking. In addition to traditional banking products, i.e. customer loans and deposits, the Company provides RALs, ERCs/ERDs, mortgage banking products, “Overdraft Honor” deposit accounts and deferred deposits. Management believes diverse product offerings mitigate the Company’s exposure to downturns in any one segment of the banking industry; however, non-traditional banking products also expose the Company’s earnings to additional risks and uncertainties. The following details specific risk factors related to Republic’s lines of business:

• RALs represent a significant business risk, and if the Company terminated the business it would materially impact the earnings of the Company. TRS offers bank products to facilitate the payment of tax refunds for customers that electronically file their tax returns across the country. The Company is one of only a few financial institutions in the United States that provides this service to taxpayers. Under this program, the taxpayer may receive a RAL or an ERC/ERD. In return, the Company charges a fee for the service. There is credit risk associated with a RAL because the money is disbursed to the client before the Company receives the client’s refund from the Internal Revenue Service (“IRS”). There is minimal credit risk with an ERC/ERD because the Company does not disburse the funds to the client until the Company has received the refund from the state or IRS.

Various consumer groups have, from time to time, questioned the fairness of the TRS program and have accused this industry of charging excessive rates of interest, via the fee, and engaging in predatory lending practices. Consumer groups have also claimed that customers are not adequately advised that a RAL is a loan product and that alternative, less expensive means of obtaining the tax refund proceeds may be available. Pressure from these groups, regulatory or legislative changes or material litigation could result in the Company exiting this business or selected markets at any time.

The Company’s liquidity risk is increased during the first quarter of each year due to the RAL program. The Company has committed to the electronic filers and tax preparers that it will make RALs available to their customers under the terms of its contracts with them. This requires the Company to estimate liquidity needs for the RAL program well in advance of the tax season. If management materially overestimates the need for liquidity during the tax season, a significant expense could be incurred with no offsetting revenue stream. If management materially underestimates the need for liquidity during the tax season, the Bank could experience a significant shortfall of capital needed to fund RALs and could potentially be required to stop originating new loans.

A competing RAL financial institution is defending two lawsuits in the state of California relating to the enforceability of cross-collection provisions contained in its RAL contracts with customers. The two cases are the Hood case in the Santa Barbara Superior Court (Case No. 1156354) and the Clark case in the San Francisco Superior Court (Case No. CGC-04-427959). Various companies, including the Company, previously entered into agreements to facilitate the cross-collection of unpaid RALs from prior years. The Company was not named as a Defendant by the Plaintiffs regarding its cross-collection activities with customers. The competing RAL financial institution, however, named the Company and other financial institutions as parties pursuant to the indemnity provisions of the cross-collection contracts between the various companies. The Hood case in Santa Barbara was dismissed by the trial court on federal preemption grounds, but the Plaintiff appealed the trial court ruling. That appeal remains pending. The Clark case in San Francisco remains pending at the trial court level. The issue of cross-collection provisions in RAL contracts could result in further litigation exposure for all financial institutions that offer RALs, including the Company, as consumer groups have shown a willingness to challenge the RAL cross-collection contract provisions through litigation.

Exiting this line of business, either voluntarily or involuntarily, would significantly reduce the Company’s earnings. (See additional discussion about this product under the separate section titled “Tax Refund Solutions”).

• Mortgage banking activities can be significantly impacted by interest rates. Changes in interest rates can impact the gain on sale of loans, loan origination fees and loan servicing fees, which account for a significant portion of mortgage banking income. A decline in interest rates generally results in higher demand for mortgage products, while an increase in rates generally results in reduced demand. If demand increases, mortgage banking income will be positively impacted by more gains on sale; however, the valuation of existing mortgage servicing rights will decrease and may result in a significant impairment. In addition to the previously mentioned risks, a decline in demand for mortgage banking products could also adversely impact other programs/products such as home equity lending, title insurance commissions and service charges on deposit accounts.

• Deferred deposits offered though third party Marketer/Servicers represent a significant business risk and if the Company terminated its remaining marketing/servicing contract it would further materially impact Company earnings. Deferred deposits through a marketing/servicing arrangement are transactions whereby customers receive cash advances in exchange for a check for the advanced amount plus a fixed fee. Various consumer groups have, from time to time, questioned the fairness of deferred deposits and have accused this industry of charging excessive rates of interest via the fixed fee and engaging in predatory lending practices. Various federal and state agencies have also questioned whether this business should be permitted by member banks and whether or not this business can be lawfully conducted in various states.

Recently, the Company’s two Marketing/Servicing contracts with Advance America were terminated. This will have a material adverse impact on the earnings of the Company for the remainder of 2005. In addition, there can be no assurance that the FDIC, state legislatures, or others will not impose additional limitations on, or prohibit banks from, engaging altogether in deferred deposits. The potential exists that private litigation or regulatory requirements may require the Company to cease offering the product in one or more jurisdictions. State legislation could provide the Company’s remaining Marketer/Servicer with the statutory authority to offer deferred deposits more profitably or on a direct basis. The Company’s remaining Marketer/Servicer could also elect to directly offer a more profitable alternative credit product to a payday loan, thus eliminating the current advantages of operating under a banking model for product delivery. Such developments could affect the

continuation of the Bank’s contract with its remaining Marketer/Servicer. See additional discussion regarding the termination of Republic’s contracts with Advance America under the section titled “Deferred Deposits”.

On August 26, 2004, the Attorney General of North Carolina issued an investigative demand to Advance America Cash Advance Centers of North Carolina, Inc. (“Advance America North Carolina”), the Company’s former Marketer/Servicer in the state of North Carolina. The Attorney General and the Banking Commissioner of North Carolina seek to make a determination as to whether or not the Company’s former Marketer/Servicer complied with North Carolina law. Management does not believe this proceeding will have any affect on the Company, as the Company’s contract with Advance America North Carolina was terminated and the Company was not named as a party to the proceedings. Advance America North Carolina also has litigation pending against it in the State of North Carolina regarding the delivery of deferred deposits in that jurisdiction. The Company is not a party to that litigation.

• The Company’s “Overdraft Honor” program represents a significant business risk, and if the Company terminated the program it would materially impact the earnings of the Company. Republic’s “Overdraft Honor” program permits selected clients to overdraft their checking accounts up to a predetermined dollar amount ranging from $500 to $750, for the Company’s customary fee. Clients’ checking accounts that have been current for a certain period of time are allowed to enter the program. Under regulatory guidelines, this service is not considered an extension of credit, but rather is considered a fee for paying checks when sufficient funds are not otherwise available. This fee, if computed as a percentage of the amount overdrawn, results in a high rate of interest when annualized and thus is considered excessive by some consumer groups. There can be no assurance that the Company’s regulators or others will not impose additional limitations on this program or that the Company’s ability to offer the program could be eliminated by regulatory authorities. Additional limitations or elimination, or adverse modifications to this program, either voluntarily or involuntarily, could significantly reduce Company earnings.

Republic’s stock price can be volatile. The Company’s stock price can fluctuate widely in response to a variety of factors. Factors include actual or anticipated variations in the Company’s operating results, recommendations by securities analysts, operating and stock price performance of other companies, news reports, results of litigation, regulatory actions or changes in government regulations, among other factors. The Company’s stock also generally has a low average daily trading volume, which limits a shareholder’s ability to quickly accumulate or quickly divest large blocks of Republic’s stock. In addition, a low average daily trading volume can lead to significant price swings even when a relatively small number of shares are being traded.

Republic may not be able to attract and retain banking clients. Competition in the banking industry, coupled with the size of our institution, may limit our ability to attract and retain banking clients. In particular, Republic’s competitors include major financial institutions whose greater resources may afford them a marketplace advantage by enabling them to maintain and establish numerous banking center locations and mount extensive promotional and advertising campaigns. Additionally, banks and other financial institutions with larger capitalization and financial intermediaries may not be subject to the same regulatory restrictions and may have larger lending limits than the Company. Areas of competition include interest rates for loans and deposits, efforts to obtain deposits and range of services provided. Republic also faces competition from out of state financial intermediaries. Because Republic maintains a smaller staff and has fewer financial and other resources compared to larger institutions with which we compete, we may be limited in our ability to attract a broad segment of clients or dramatically increase market share. In addition, some of our current commercial banking clients may seek alternative banking sources as they develop needs for credit facilities larger than what the Company can accommodate. If Republic is unable to attract and retain clients, the Company may be unable to continue to meet growth and profit objectives.

Industry Factors

General business and economic conditions can significantly impact the Company’s earnings. General business and economic conditions in the United States and abroad can impact the Company. Conditions include short-term and long-term interest rates, inflation, monetary supply and fluctuations in both debt and equity markets and the federal and state economies in which we operate.

The Company is significantly impacted by the regulatory, fiscal and monetary policies of federal and state governments. The Board of Governors of the Federal Reserve Bank regulates the supply of money and credit in the United States. Its policies determine, in large part, our cost of funds for lending and investing and the return we earn on these loans and investments, all of which impact our net interest margin. Its policies can materially affect the value of the Company’s financial instruments and earnings and can also adversely affect the Company’s borrowers and their ability to repay their outstanding loans.

The Company and the Bank are heavily regulated at both federal and state levels. This regulatory oversight is primarily intended to protect depositors, the federal deposit insurance funds and the banking system as a whole, not the shareholders of the Company. Changes in policies, regulations and statutes could significantly impact the earnings or products of Republic. Also, failure to comply with laws, regulations or policies, or adverse examination findings, could result in significant penalties, negatively impact operations, or result in other sanctions by regulatory agencies.

Federal and state laws and regulations govern numerous matters including changes in the ownership or control of banks and bank holding companies, maintenance of adequate capital and the financial condition of a financial institution, permissible types, amounts and terms of extensions of credit and investments, permissible non-banking activities, the level of reserves against deposits and restrictions on dividend payments. Various federal and state regulatory agencies possess cease and desist powers, and other authority to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulations. The Federal Reserve Bank possesses similar powers with respect to bank holding companies. These, and other restrictions, can limit in varying degrees, the manner in which Republic conducts its business.

Republic is subject to regulatory capital adequacy guidelines, and if we fail to meet these guidelines our financial condition may be adversely affected. Under regulatory capital adequacy guidelines, and other regulatory requirements, Republic and the Bank must meet guidelines that include quantitative measures of assets, liabilities and certain off balance sheet items, subject to qualitative judgments by regulators about components, risk weightings and other factors. If Republic fails to meet these minimum capital guidelines and other regulatory requirements, Republic’s financial condition will be materially and adversely affected. Republic’s failure to maintain the status of “well capitalized” under our regulatory framework, or “well managed” under regulatory exam procedures, or regulatory violations, could compromise our status as a financial holding company and related eligibility for a streamlined review process for acquisition proposals and limit financial product diversification.

Republic’s industry is highly competitive. The Company operates in a highly competitive industry that could become even more competitive as a result of legislation, regulatory and technological changes, new market entries and acquisition activity. Many of our competitors have fewer regulatory constraints, and some have lower cost structures.

The Company relies on the accuracy and completeness of information provided by vendors, clients and other counterparties. In deciding whether to extend credit or enter into transactions with other parties, the Company relies on information furnished by, or on behalf of, clients or entities related to that client. Our financial condition and earnings could be negatively impacted to the extent the Company relies on information that is false, misleading or inaccurate.

Defaults in the repayment of loans may negatively impact our business . When borrowers default on obligations of one or more of their loans, it may result in lost principal and interest income and increased operating expenses as a result of the increased allocation of management time and resources to the collection and work out of the loans. In certain situations where collection efforts are unsuccessful or acceptable “work out” arrangements cannot be reached, the Company may have to write off the loan in part or in whole. In such situations, the Company may acquire real estate or other assets, if any, which secures the loan through foreclosure or other similar available remedies. In such cases, the amount owed under the defaulted loan often exceeds the liquidation value of the assets acquired.

Fluctuations in interest rates may negatively impact our banking business. Republic’s core source of income from operations consists of net interest income, which is equal to the difference between interest income received on interest-earning assets (usually loans and investment securities) and the interest expenses incurred in connection with

interest-bearing liabilities (usually deposits and borrowings). These rates are highly sensitive to many factors beyond our control, including general economic conditions, both domestic and foreign, and the monetary and fiscal policies of various governmental and regulatory authorities. Republic’s net interest income can be affected significantly by changes in market interest rates. Changes in relative interest rates may reduce Republic’s net interest income as the difference between interest income and interest expense decreases. As a result, Republic has adopted asset and liability management policies to minimize potential adverse effects of changes in interest rates on net interest income, primarily by altering the mix and maturity of loans, investments and funding sources. However, even with these policies in place, a change in interest rates could negatively impact the Company’s results from operations or financial position.

An increase in interest rates could also have a negative impact on Republic’s results of operations by reducing the ability of our clients to repay their outstanding loans, which could not only result in increased loan defaults, foreclosures and charge offs, but may also likely necessitate further increases to Republic’s allowance for loan losses.

Prepayment of loans may negatively impact Republic’s business. Generally, our clients may prepay the principal amount of their outstanding loans at any time. The speed at which such prepayments occur, as well as the size of such prepayments, are within our clients’ discretion. If clients prepay the principal amount of their loans, and we are unable to lend those funds to other clients or invest the funds at the same or higher interest rates, Republic’s interest income will be reduced. A significant reduction in interest income would have a negative impact on Republic’s results of operations and financial condition.

RESULTS OF OPERATIONS

Net Interest Income

The principal source of Republic’s revenue is net interest income. Net interest income is the difference between interest income on interest-earning assets, such as loans and securities, and the interest expense on liabilities used to fund those assets, such as interest-bearing deposits and borrowings. 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.

For the third quarter of 2005, net interest income was $20.7 million, an increase of $157,000, or 1%, over the same period in 2004. Republic was able to increase its net interest income primarily through growth in the Company’s traditional loan portfolio combined with an increase in yield on its investment portfolio. Net interest income was negatively impacted by a decrease of $1.6 million in net interest income from the deferred deposit business segment resulting primarily from the termination of the two Advance America contracts. Republic’s net interest income was also negatively impacted by increasing short-term interest rates which have caused the Company’s interest bearing liabilities to reprice sooner than its interest earning assets.

For the first nine months of 2005, net interest income was $72.4 million, an increase of $3.9 million, or 6%, over the same period in 2004. Consistent with the quarterly increase, the Company was able to increase its net interest income for the first nine months of 2005 primarily through growth in the Company’s traditional loan portfolio combined with an increase in yield on its investment portfolio. Net interest income for the first nine months of 2005 was negatively impacted by the decrease of $719,000 in net interest income from the deferred deposit business segment during the third quarter. Republic’s net interest income was also negatively impacted during the first nine months of 2005 by increasing short-term interest rates which have caused the Company’s interest bearing liabilities to reprice sooner than its interest earning assets. (For additional information on the past effect of rising short-term interest rates on Republic’s net interest income, see section titled “Volume/Rate Variance Analysis” in this document.)

Management believes, based on current economic indicators regarding short-term interest rates, that the Company will likely continue to experience contraction in its net interest spread and margin through the remainder of 2005. Management is unable to precisely determine the impact of continued contraction on the Company’s net interest

spread and margin in the future. (For additional information on the future effect of rising short-term interest rates on Republic’s net interest income, see section titled “Interest Rate Sensitivity” in this document.)

In addition to the contraction described above, the Company’s net interest spread and margin have been and will continue to decline as a direct result of the termination of the Company’s contracts with Advance America, as well as the impact of the recent Guidance on Republic’s deferred deposit transactions originated through its relationship with ACE. Republic’s net interest spread and margin was 2.81% and 3.31% for the three months ended September 30, 2005. Republic’s net interest spread and margin, excluding the fee income recognized through the Advance America relationship, would have been 2.01% and 2.52% for the quarter ended September 30, 2005. Management is unable to determine the actual impact of the FDIC Guidance on Republic’s loans originated through ACE, however net interest spread and margin, exclusive of other factors, will be negatively impacted by the FDIC Guidance.

Table 1 and Table 2 provide detailed information as to average balances, interest income/expense and rates by major balance sheet category for the three and nine month periods ended September 30, 2005 and 2004, respectively. Table 3 provides an analysis of the changes in net interest income attributable to changes in rates and changes in volume of interest-earning assets and interest-bearing liabilities.

Table 1 – Average Balance Sheets and Interest Rates for the Three Months Ended September 30, 2005 and 2004

	September 30, 2005						September 30, 2004
(dollars in thousands)	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate

ASSETS

Earning assets:

Investment securities (1)	$	507,848	$	4,746	3.74	%	$	450,172	$	3,419	3.04	%
Federal funds sold and other	38,226		343		3.59		21,097		82		1.55
Total loans and fees (2)	1,959,910		31,844		6.50		1,718,513		27,660		6.44
Total earning assets	2,505,984		36,933		5.90		2,189,782		31,161		5.69
Less: Allowance for loan losses	13,376						13,533

Non-earning assets:
Cash and cash equivalents	61,517						74,521
Premises and equipment, net	31,980						35,277
Other assets (1)	32,420						17,499
Total assets	$	2,618,525					$	2,303,546

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest-bearing liabilities:

Transaction accounts	$	309,088	$	758	0.98	%	$	333,256	$	651	0.78	%
Money market accounts	326,020		2,033		2.49		303,911		784		1.03
Time deposits	489,856		4,287		3.50		415,782		3,466		3.33
Brokered deposits	117,255		1,023		3.49		46,362		361		3.11
Repurchase agreements and other short-term borrowings	336,302		2,613		3.11		325,114		1,113		1.37
Federal Home Loan Bank borrowings	498,109		5,155		4.14		420,995		4,196		3.99
Subordinate note	20,620		317		6.15		—		—		—

Total interest-bearing liabilities	2,097,250		16,186		3.09		1,845,420		10,571		2.29

Non-interest-bearing liabilities and stockholders’ equity:
Non-interest-bearing deposits	281,033						245,736
Other liabilities	24,543						23,754
Stockholders’ equity	215,699						188,636

Total liabilities and stockholders’ equity	$	2,618,525					$	2,303,546

Net interest income			$	20,747					$	20,590

Net interest spread
					2.81	%					3.40	%
Net interest margin
					3.31	%					3.76	%

(1) For the purpose of this calculation, the fair market value adjustment on investment securities resulting from SFAS 115 is included as a component of other assets.

(2) The amount of fee income included in interest on loans was $2.1 million and $3.8 million for the three months ended September 30, 2005 and 2004.

Table 2 – Average Balance Sheets and Interest Rates for the Nine Months Ended September 30, 2005 and 2004

	September 30, 2005						September 30, 2004
(dollars in thousands)	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate

ASSETS

Earning assets:

Investment securities (1)	$	534,369	$	14,138	3.53	%	$	421,150	$	9,212	2.92	%
Federal funds sold and other	60,370		1,280		2.83		44,818		357		1.06
Total loans and fees (2)	1,910,474		101,646		7.09		1,691,424		89,169		7.03
Total earning assets	2,505,213		117,064		6.23		2,157,392		98,738		6.10

Less: Allowance for loan losses	13,934						14,120

Non-earning assets:
Cash and cash equivalents	71,968						76,187
Premises and equipment, net	32,742						35,755
Other assets (1)	30,427						19,321
Total assets	$	2,626,416					$	2,274,535

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest-bearing liabilities:

Transaction accounts	$	327,715	$	2,382	0.97	%	$	323,332	$	1,845	0.76	%
Money market accounts	302,718		4,668		2.06		303,572		2,184		0.96
Time deposits	477,954		12,111		3.38		410,377		10,050		3.27
Brokered deposits	127,496		3,205		3.35		51,234		1,131		2.94
Repurchase agreements and other short-term borrowings	366,041		7,190		2.62		299,360		2,471		1.10
Federal Home Loan Bank borrowings	486,697		14,781		4.05		423,371		12,503		3.94
Subordinate note	6,949		317		6.08		—		—		—

Total interest-bearing liabilities	2,095,570		44,654		2.84		1,811,246		30,184		2.22

Non-interest-bearing liabilities and stockholders’ equity:

Non-interest-bearing deposits	294,629						257,272
Other liabilities	25,496						25,651
Stockholders’ equity	210,721						180,366

Total liabilities and stockholders’ equity	$	2,626,416					$	2,274,535

Net interest income			$	72,410					$	68,554

Net interest spread
					3.39	%					3.88	%
Net interest margin
					3.85	%					4.24	%

(1) For the purpose of this calculation, the fair market value adjustment on investment securities resulting from SFAS 115 is included as a component of other assets.

(2) The amount of fee income included in interest on loans was $18.1 million and $19.2 million for the nine months ended September 30, 2005 and 2004.

Table 3 illustrates the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities affected 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) the 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.

Table 3 – Volume/Rate Variance Analysis

	Three months ended September 30, 2005 Compared to Three months ended September 30, 2004								Nine months ended September 30, 2005 compared to Nine months ended September 30, 2004
	Increase/(Decrease) Due to								Increase/(Decrease) due to
(in thousands)	Total Net Change		Volume			Rate			Total Net Change		Volume			Rate

Interest income:
Investment securities	$	1,327	$	474		$	853		$	4,926	$	2,768		$	2,158
Federal funds sold and other	261		100			161			923		160			763
Total loans and fees	4,184		3,920			264			12,477		11,647			830
Net change in interest income	5,772		4,494			1,278			18,326		14,575			3,751

Interest expense:
Transaction accounts	107		(50		)	157			538		26			512
Money market accounts	1,248		61			1,187			2,483		(6		)	2,489
Time deposits	822		642			180			2,062		1,703			359
Brokered deposits	662		614			48			2,075		1,898			177
Repurchase agreements and other short-term borrowings	1,500		40			1,460			4,717		656			4,061
Federal Home Loan Bank borrowings	959		793			166			2,278		1,915			363
Subordinate note	317		317			—			317		317			—
Net change in interest expense	5,615		2,417			3,198			14,470		6,509			7,961
Increase (decrease) in net interest income	$	157	$	2,077		$	(1,920	)	$	3,856	$	8,066		$	(4,210	)

Non-interest Income

Non-interest income increased $962,000, or 17%, for the third quarter ended September 30, 2005 compared to the same period in 2004. A significant component of the increase related to service charges on deposit accounts which increased $567,000, or 16%, during the third quarter of 2005 compared to the same period in 2004. The increase was due primarily to growth in the Company’s checking account base supported by the Bank’s “Overdraft Honor” program, which permits selected clients to overdraft their accounts up to $750 for the Bank’s customary fee. Total overdraft fees increased $483,000, or 18%, while the total number of accounts eligible for the “Overdraft Honor” program increased to 54,000 from 48,000 at September 30, 2004. Additionally, the Company increased its overdraft fee by 7% in July 2005.

Non-interest income increased $2.6 million, or 12%, for the first nine months of 2005 compared to the same period in 2004. Service charges on deposit accounts increased $1.3 million, or 13%, during the first nine months of 2005 compared to the same period in 2004. Total overdraft fees increased $874,000, or 12%, for the first nine months of the year. The increase in service charges on deposit accounts for the year was primarily related to the same reasons stated in the preceding paragraph.

Non-interest Expense

Non-interest expenses increased $2.0 million during the quarter ended September 30, 2005 compared to the same period in 2004. Salaries and employee benefits increased $833,000 during the quarter, primarily attributable to the increase in full time equivalent employees (“FTE’s”) from 587 at September 30, 2004 to 667 at September 30, 2005. The substantial portion of the increase in FTE’s occurred in the technology area of Tax Refund Solutions due to the development of a new, more efficient operating system for the upcoming tax season.

Non-interest expenses increased $3.9 million during the nine months ended September 30, 2005 compared to the same period in 2004. Salaries and employee benefits increased $2.1 million for the nine months ended September 30, 2005 primarily attributable to the same reasons stated in the preceding paragraph.

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2005 AND DECEMBER 31, 2004

Table 4 – Loan Portfolio Composition

(in thousands)	September 30, 2005		December 31, 2004

Residential real estate	$	987,156	$	851,736
Commercial real estate	542,947		495,827
Real estate construction	80,906		70,220
Commercial	46,303		36,807
Consumer	39,363		67,997
Home equity	269,573		267,231
Total loans	1,966,248		1,789,818
Less:
Unearned interest income and amortized loan fees	108		719
Allowance for loan losses	11,123		13,554

Loans, net	$	1,955,017	$	1,775,545

Net loans, primarily consisting of secured real estate loans, increased by $179 million to $2.0 billion at September 30, 2005. This growth is primarily attributable to the residential real estate portfolio, which increased $133 million as a result of the Company’s promotional “$299 Closing Cost” products. This growth was offset by a decline in the

consumer loan portfolio. (For the discussion related to the decline in consumer loan balances, see section titled “Deferred Deposits” under “Business Segment Composition”.)

Allowance for Loan Losses and Provision for Loan Losses

The Company posted a net credit to the provision for loan losses of $2.6 million for the quarter ended September 30, 2005, compared to a net credit of $127,000 for the same period in 2004. A decrease in Republic’s payday loan portfolio of $31 million during the quarter led to a significant reduction in the amount specifically allocated within the Company’s allowance for loan losses for payday loans, resulting in an overall net credit to the provision for the quarter of $2.3 million for the deferred deposit segment. The reduction in the Company’s payday loan portfolio was primarily due to the termination of its contracts with Advance America as described previously in this document, as well as a reduction in the balance of loans outstanding at ACE due to the FDIC Guidance which effectively limited the number of times a customer may have a payday loan.

The Company posted a net credit to the provision for loan losses of $968,000 for the nine months ended September 30, 2005 compared to a provision for loan losses of $1.5 million for the same period in 2004, resulting in a net change of $2.4 million for the period. As with the third quarter, the primary reason for the change in the provision for the nine months ended September 30, 2005 related to the net change in the amount specifically allocated within the Company’s allowance for loan losses for payday loans.

An analysis of the changes in the allowance for loan losses and selected ratios follows:

Table 5 - Summary of Loan Loss Experience

	Three months ended							Nine months ended
	September 30							September 30
(dollars in thousands)	2005			2004				2005				2004
Allowance for loan losses at beginning of period	$	13,382		$	13,530			$		13,554		$	13,959

Charge offs:
Real estate:
Residential	(31		)	(71			)	(214			)	(192			)
Commercial	(33		)	—				(135			)	(4			)
Construction	—			—				—				—
Commercial	—			—				—				(8			)
Consumer	(156		)	(233			)	(450			)	(662			)
Home equity	—			(108			)	(55			)	(115			)
Tax Refund Solutions	—			(2			)	(2,213			)	(3,403			)
Total	(220		)	(414			)	(3,067			)	(4,384			)
Recoveries:
Real estate:
Residential	26			11				156				114
Commercial	63			201				83				281
Construction	33			35				33				35
Commercial	13			6				28				34
Consumer	61			78				229				277
Home equity	4			6				33				48
Tax Refund Solutions	346			209				1,042				1,696
Total	546			546				1,604				2,485
Net loan charge offs / recoveries	327			132				(1,462			)	(1,899			)
Provision for loan losses	(2,585		)	(127			)	(968			)	1,475
Allowance for loan losses at end of period	$	11,123		$		13,535		$	11,123			$		13,535

Ratios:
Allowance for loan losses to total loans	0.57		%	0.78			%	0.57			%	0.78			%
Provision for loan losses to average loans*	(0.52		)	(0.03			)	(0.07			)	0.11
Net loan charge offs to average loans outstanding*	(0.07		)	(0.03			)	0.10				0.15
Allowance for loan losses to non-performing loans	122			159				122				159

* - Calculations are annualized

LIQUIDITY

Republic maintains sufficient liquidity to fund loan demand and routine deposit withdrawal activity. Liquidity is managed by maintaining sufficient liquid assets in the form of investment securities. Funding and cash flows can also be realized by the sale of securities available for sale, principal paydowns on loans and Mortgage Backed Securities (“MBSs”) and proceeds realized from loans held for sale. The Company’s liquidity is impacted by its ability to sell securities, which is limited, due to the level of securities that are needed to secure public deposits, securities sold under agreements to repurchase and for other purposes, as required by law. At September 30, 2005, these securities had a fair market value of $378 million.

Republic’s banking centers and its Internet site, www.republicbank.com, provide access to retail deposit markets. These retail deposits, if offered at attractive rates, have historically been a source of additional funding when needed. The

Company also utilized brokered deposits during 2004 and the first nine months of 2005 to partially fund RALs and to fund anticipated loan growth.

Traditionally, the Company has also utilized secured and unsecured borrowing lines to supplement its funding requirements. On September 30, 2005, the Company had capacity with the Federal Home Loan Bank to borrow an additional $191 million. The Company also had $175 million in approved unsecured line of credit facilities available at September 30, 2005 through various third party sources.

The Company’s principal source of funds for dividend payments is dividends received from the Bank. Kentucky and Indiana banking regulations limit the amount of dividends that may be paid to the Parent Company by the Bank without prior approval of the respective states’ banking regulators. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years. At September 30, 2005, Republic Bank & Trust Company and Republic Bank & Trust Company of Indiana could, without prior approval, declare dividends of approximately $41 million and $1 million, respectively. The Company does not plan to pay dividends from Republic Bank & Trust Company of Indiana in the foreseeable future.

CAPITAL

Total stockholders’ equity increased from $196 million at December 31, 2004 to $214 million at September 30, 2005. The increase in stockholders’ equity was primarily attributable to net income earned during the first nine months of 2005 reduced by dividends declared and the decline in accumulated other comprehensive income/loss as a result of a decrease in the value of the available for sale securities portfolio.

During the third quarter of 2005 the Company purchased 260,000 shares for $5.8 million. For the nine months ended September 30, 2005, the Company purchased 269,300 shares for $6.0 million. During the third quarter the Company’s Board of Directors also approved the repurchase from time-to-time of an additional 250,000 shares if market conditions are deemed favorable to the Company. The repurchase program will remain effective until the number of shares authorized is repurchased or until Republic’s Board of Directors terminates the program. As of September 30, 2005, the Company had 240,000 shares which could be repurchased under the current stock buyback program.

Regulatory Capital Requirements – The Parent Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on Republic’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Parent Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

On August 16, 2005, Republic Bancorp Capital Trust, an unconsolidated trust subsidiary of Republic Bancorp, Inc., issued $40 million in Trust Preferred Securities. The Trust Preferred Securities pay a fixed interest rate for 10 years and adjust with LIBOR thereafter. Treated as Tier 1 capital for regulatory purposes, the Trust Preferred Securities mature on September 30, 2035 and are redeemable at the Company’s option after ten years. The sole asset of RBCT represents the proceeds of the offering loaned to Republic Bancorp, Inc. in exchange for subordinated debentures which have terms that are similar to the Trust Preferred Securities. The subordinated debentures and the related interest expense, which are payable quarterly at the annual rate of 6.015%, are included in the consolidated financial statements. The proceeds obtained from the Trust Preferred Securities offering will be used to fund loan growth, support an existing stock repurchase program and for other general business purposes.

Quantitative measures established by regulation to ensure capital adequacy require the Parent Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of Total and Tier I capital (as defined in

the regulations) to risk weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined). As of September 30, 2005, the Parent Company and the Bank met all capital adequacy requirements.

The FDIC has categorized the Bank as well capitalized. To be categorized as well capitalized, the Bank must maintain minimum Total Risk Based, Tier I Risk Based and Tier I Leverage ratios as set forth in the table. Regulatory agencies measure capital adequacy within a framework that makes capital requirements, in part, dependent on the individual risk profiles of financial institutions. Republic continues to exceed the regulatory requirements for Tier I leverage, Tier I risk based and total risk based capital. Republic and the Bank intend to maintain a capital position that meets or exceeds the “well capitalized” requirements as defined by the Federal Reserve and FDIC. Republic’s average capital to average assets ratio was 8.02% for the nine months ended September 30, 2005 compared to 8.01% for the year ended December 31, 2004. Republic has elected and successfully maintains financial holding company status. Formal measurements of the capital ratios for the Company and Republic Bank & Trust Company are performed at each quarter end.

The following table sets forth the Company’s risk based capital amounts and ratios as of September 30, 2005 and December 31, 2004.

Table 6 – Capital Ratios

	As of September 30, 2005				As of December 31, 2004
	Actual				Actual
(dollars in thousands)	Amount		Ratio		Amount		Ratio

Total Risk Based Capital (to Risk Weighted Assets)
Republic Bancorp, Inc.	$	266,651	15.67	%	$	209,575	13.03	%
Republic Bank & Trust Co.	215,096		13.01		198,146		12.61
Republic Bank & Trust Co. of Indiana	11,461		23.64		6,193		16.46

Tier I Capital (to Risk Weighted Assets)
Republic Bancorp, Inc.	255,528		15.01		196,021		12.18
Republic Bank & Trust Co.	181,054		10.95		161,579		10.28
Republic Bank & Trust Co. of Indiana	10,930		22.54		5,756		15.30

Tier I Leverage Capital (to Average Assets)
Republic Bancorp, Inc.	255,528		9.76		196,021		8.03
Republic Bank & Trust Co.	181,054		7.11		161,579		6.78
Republic Bank & Trust Co. of Indiana	10,930		15.12		5,756		10.53

REGULATORY MATTERS

On July 22, 2005 Republic Bank & Trust Company received its most recent Community Reinvestment Act (“CRA”) performance evaluation prepared as of October 4, 2004. Republic Bank & Trust Company was assigned a “Needs to Improve” rating due in part to alleged violations of Regulation B related to its RAL line of business. Republic Bank & Trust Company voluntarily changed certain procedures and processes to address the Regulation B issues raised by the FDIC during the CRA Evaluation. By statute, the FDIC will refer the Regulation B violations to the Department of Justice (“DOJ”). Also by statute, a financial holding company, such as the Company, that controls a Bank with a “less than satisfactory” CRA rating has limitations on certain future business activities until the CRA rating improves. Management does not believe these limitations will have any affect on the Company’s current business plans. At this time, there has been no corrective action imposed by the FDIC or the DOJ.

ASSET/LIABILITY MANAGEMENT AND MARKET RISK

Asset/liability management control is designed to ensure safety and soundness, maintain liquidity and regulatory capital standards and achieve acceptable net interest income. Interest rate risk is the exposure to adverse changes in net interest income as a result of market fluctuations in interest rates. Management, on an ongoing basis, monitors interest rate and liquidity risk in order to implement appropriate funding and balance sheet strategies. Management considers interest rate risk to be Republic’s most significant market risk in a fluctuating rate environment.

The interest sensitivity profile of Republic at any point in time will be affected by a number of factors. These factors include the mix of interest sensitive assets and liabilities, as well as their relative pricing schedules. It is also influenced by market interest rates, deposit growth, loan growth and other factors.

Republic utilizes an earnings simulation model to analyze net interest income sensitivity. Potential changes in market interest rates and their subsequent effects on net interest income are then evaluated. The model projects the effect of instantaneous movements in interest rates of both 100 and 200 basis point increments equally across all points on the yield curve. These projections are computed based on various assumptions, which are used to determine the 100 and 200 basis point increments, as well as the base case (which is a twelve month projected amount) scenario. Assumptions based on growth expectations and on the historical behavior of Republic’s deposit and loan rates and their related balances in relation to changes in interest rates are also incorporated into the model. These assumptions are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions and the application and timing of various management strategies. Additionally, actual results could differ materially from the model if interest rates do not move equally across all points on the yield curve. The September 30, 2005 simulation analysis indicates that an increase in interest rates would have a negative effect on net interest income, and a decrease in interest rates would have a positive effect on net interest income.

Table 8 illustrates Republic’s estimated annualized earnings sensitivity profile based on the asset/liability model as of September 30, 2005:

Table 8 – Interest Rate Sensitivity

	Net Interest
	Income Change
Increase 200 basis points	-9.31	%
Increase 100 basis points	-4.27
Decrease 100 basis points	1.64
Decrease 200 basis points	2.33

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Information required by this item is included under Part I, Item 2., “ Management’s Discussion and Analysis of Financial Condition and Results of Operations .”

ITEM 4. CONTROLS AND PROCEDURES.

As of the end of the period covered by this report, an evaluation was carried out by Republic Bancorp, Inc.’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report. In addition, no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

In regard to Tax Refunds Solutions, a competing RAL financial institution is defending two lawsuits in the state of California relating to the enforceability of cross-collection provisions contained in its RAL contracts with customers. The two cases are the Hood case in the Santa Barbara Superior Court (Case No. 1156354) and the Clark case in the San Francisco Superior Court (Case No. CGC-04-427959). Various companies, including the Company, previously entered into agreements to facilitate the cross-collection of unpaid RALs from prior years. The Company was not named as a Defendant by the Plaintiffs regarding its cross-collection activities with customers. The competing RAL financial institution, however, named the Company and other financial institutions as parties pursuant to the indemnity provisions of the cross-collection contracts between the various companies. The Hood case in Santa Barbara was dismissed by the trial court on federal preemption grounds, but the Plaintiff appealed the trial court ruling. That appeal remains pending. The Clark case in San Francisco remains pending at the trial court level. The issue of cross-collection provisions in RAL contracts could result in further litigation exposure for all financial institutions that offer RALs, including the Company, as consumer groups have shown a willingness to challenge the RAL cross-collection contract provisions through litigation.

In regard to the deferred deposit product, on August 26, 2004, the Attorney General of North Carolina issued an investigative demand to Advance America Cash Advance Centers of North Carolina, Inc. (“Advance America North Carolina”), the Company’s former Marketer/Servicer in the state of North Carolina. The Attorney General and the Banking Commissioner of North Carolina seek to make a determination as to whether or not the Company’s former Marketer/Servicer complied with North Carolina law. Management does not believe this proceeding will have any affect on the Company, as the Company’s contract with Advance America North Carolina was terminated and the Company was not named as a party to the proceedings. Advance America North Carolina also has litigation pending against it in the State of North Carolina regarding the delivery of deferred deposits in that jurisdiction. The Company is not a party to that litigation.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Details of Republic’s Common Stock purchases during the third quarter of 2005 are included in the following table:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plan or Programs

July 1– July 31	4,433	*	$	21.99	4,433	240,378
August 1– August 31	150,000		21.96		150,000	240,378
Sept. 1 – Sept. 30	110,000		22.48		110,000	240,378
Total	264,433		$	22.14	264,433

* - Represents shares repurchased by the Company in connection with stock option exercises.

During the third quarter of 2005 the Company purchased 260,000 shares for $5.8 million. For the nine months ended September 30, 2005, the Company purchased 269,300 shares for $6.0 million. During the third quarter the Company’s Board of Directors also approved the repurchase of an additional 250,000 shares from time-to-time if market conditions are deemed favorable to the Company. The repurchase program will remain effective until the number of shares authorized is repurchased or until Republic’s Board of Directors terminates the program. As of September 30, 2005, the Company had 240,000 shares which could be repurchased under the current stock buyback program.

There were no equity securities of the registrant sold without registration during the quarter covered by this report.

ITEM 6. EXHIBITS.

(a) Exhibits

The following exhibits are filed or furnished as a part of this report:

Exhibit Number		Description of Exhibit

10.1		Lease between Republic Bank & Trust Company and Teeco Properties, dated October 1, 2005, relating to property at 601 West Market Street, Louisville, KY, amending and modifying previously filed exhibit 10.1 of Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002.

10.2		Lease between Republic Bank & Trust Company and Jaytee Properties, dated September 1, 2005, as amended, relating to 661 South Hurstbourne Parkway, Louisville, KY, amending and modifying previously filed exhibit 10.12 of Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.

31.1		Certification of Principal Executive Officer, pursuant to Rules 13a-14(a) of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer, pursuant to Rules 13a-14(a) of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	REPUBLIC BANCORP, INC.
	(Registrant)

	Principal Executive Officer:

Date: November 8, 2005	By:	/s/ Steven E. Trager
	Steven E. Trager
	President & Chief Executive Officer

	Principal Financial Officer:

Date: November 8, 2005	By:	/s/ Kevin Sipes
	Kevin Sipes
	Executive Vice President, Chief Financial Officer & Chief Accounting Officer

EXHIBIT 10.1

REPUBLIC BANK & TRUST COMPANY

4 ^TH FLOOR CORPORATE CENTER

LOUISVILLE, KENTUCKY

10-1-05

INDEX TO LEASE

Article

I.				Premises

II.				Term/Option To Renew

III.				Rent

IV.				Use

V.				Possession

VI.				Services to be Provided

VII.				Maintenance and Repair; Alterations

VIII.				Access

IX.				Damage or Destruction

X.				Indemnity

XI.				Insolvency, Etc.

XII.				Remedies

XIII.				Insurance

XIV.				Liens

XV.				Assignment; Subletting; Mortgaging

XVI.				Estoppel Certificate

XVII.				Taxes

Article

XVIII.				Priority of Lease

XIX.				Fixtures and Personal Property; Surrender

XX.				Hold Over Tenancy

XXI.				Waiver of Subrogation

XXII.				Notices

XXIII.				Rights Reserved by Landlord

XXIV.				Condemnation

XXV.				Miscellaneous Provisions

OFFICE LEASE

THIS LEASE, dated effective this first day of October, 2005, is between TEECO Properties, hereinafter referred to as “Landlord” and Republic Bank & Trust Company, hereinafter referred to as “Tenant”. As parties hereto, Landlord and Tenant agree:

ARTICLE I. PREMISES

SECTION 1. Tenant leases from Landlord and Landlord leases to Tenant the following described premises (hereinafter called the “Premises”):

Being approximately 7,903 square feet of rentable office space located on the 4th floor of the Republic Corporate Center (hereinafter called the “Building”) located at the corner of Sixth and Market Streets in Jefferson County, Kentucky.

SECTION 2. The Premises shall be provided in “as is” condition. Upon occupancy of the Premises, Tenant acknowledges they have examined the Premises, know the condition of the Premises, and accept the Premises in the condition as then existing. Any remodeling, construction and/or redecorating within the Premises shall be performed to the complete and absolute satisfaction of Landlord. The Landlord’s approval shall be obtained by Tenant prior to commencement of any and all improvements and the construction of improvements shall be supervised and approved by Landlord on a continuous basis.

ARTICLE II. TERM/OPTION TO RENEW

Landlord leases the Premises to Tenant and Tenant hires and takes the Premises from Landlord, for a term of five (5) Lease Years commencing on the first day of October, 2005 (the “Lease Commencement Date”) and expiring at midnight on the last day of the 60 ^th month thereafter unless sooner terminated pursuant to the terms hereof. “Lease Year” shall mean a year period beginning on the first day of a month, which is the first calendar month of the term of the Lease and ending on the day before the anniversary of the first day of such year.

Tenant shall have one five-year option to renew this lease for an additional five-year period at a rent adjustment proportionate with the increase in the Consumer Price Index, all urban consumers over each year of the preceding term. Tenant shall notify Landlord of Tenant’s intent to exercise such option within 90 days of the expiration of the original term of this lease.

ARTICLE III. RENT

SECTION 1. Tenant shall pay to Landlord at Landlord’s office in the Building or at such place as Landlord may from time to time designate, as rental for the Premises, the sum of Eleven Thousand Eight Hundred Fifty Two Dollars and no cents ($11,852.00) per month (the “Rent”). Rent shall be payable in advance on the first day of each calendar month during each Lease Years.

SECTION 2. In the event that the Rent or any other sum payable by Tenant to Landlord under this lease shall not be received (paid) within ten (10) days of the due date thereof, Landlord may, at its option, add a monthly service charge at a rate which shall be the greater of $25.00 or 1% for each month or fraction thereof from such Rent due date during which such Rent or other sum remains unpaid. Further, in the event that any check which has been remitted to Landlord by Tenant for payment of the Rent or any other sum payable under this Lease shall not be

honored upon its presentation for payment, then the monthly service charge shall be similarly imposed on said amount from the due date until paid. Acceptance by the Landlord for such service charge shall not be deemed to be a waiver by Landlord of any default nor shall it restrict the remedies otherwise available to Landlord hereunder.

ARTICLE IV. USE

The Premises are to be used only for the purpose of conducting therein the operation of banking business and any and all related services and for no other business or purpose without the prior written consent of Landlord. Tenant shall not do or permit to be done in or about the Premises anything which is illegal or unlawful; or which is of a hazardous or dangerous nature; or which will increase the rate(s) of insurance upon the Building. Tenant shall (and shall cause its employees to) observe the rules and regulations set forth in Exhibit A attached hereto and made a part hereof, as the same may be amended by Landlord from time to time, and Tenant shall comply with all governmental laws and ordinances and all regulations applicable to the use and occupancy of the Building.

ARTICLE V. POSSESSION

If Landlord permits Tenant to enter into possession of the Premises prior to the Lease Commencement Date, all of the terms and conditions of this Lease shall apply during such prior period. Tenant’s taking of possession of the Premises constitutes Tenant’s certification that the premises are in good and tenantable condition and acceptable for Tenant’s use thereof as provided in this Lease.

ARTICLE VI. SERVICES TO BE PROVIDED

Landlord shall furnish reasonable amounts of heat, air conditioning, water, elevator service and janitor service (collectively “Services”) to the Premises, all such services being subject to energy availability or Energy Consumption Regulations which may be hereafter promulgated. All services at any other times and all special equipment which may be required for such services and all above normal service and special equipment which may be requested for such service during normal business hours or otherwise should be furnished only upon the request of and at the sole cost of lessee. It is expressly agreed that should any local, state or federal governmental body, agency or public utility restrict or reduce the amount of fuel or energy which may be utilized to provide the utilities and services as specified above, then such restriction or reduction, and the reduction in utilities and services which may result therefrom, shall in no way create or constitute a default on the part of the Landlord, and there shall be no reduction or abatement in the Rent or any other sum payable by Tenant thereunder. Further, Landlord shall not be liable for any injury, damage, inconvenience, or otherwise which may arise or result should the furnishing of any such services by interrupted or prevented by fire, accident, strike, riot, act of God, the making of necessary repairs or improvements, or any other cause beyond the reasonable control or prevention of Landlord, nor, subject only to the provisions of Article IX of this Lease, shall the Rent payable by Tenant hereunder abate.

ARTICLE VII. MAINTENANCE AND REPAIR; ALTERATIONS

SECTION 1. Landlord shall keep and maintain the roof, foundations, floor slab, and all structural walls (including windows and plate glass), gutters and downspouts of the Premises in good order and repair. Landlord shall keep or cause to be kept in good repair all common areas of the Building and appurtenant areas, including lighting systems; drainage systems; mechanical, plumbing, and electrical systems; heat and air conditioning units; duct work, lines, pipes, and conduits serving the Premises; and parking areas and driveways. Any maintenance, repairs or replacements to any of the foregoing made necessary by any acts or omissions of the Tenants, its agents or employees shall be paid for by Tenant and Tenant shall reimburse Landlord on demand for the cost of repairing any damage to the Premises or the Building caused by Tenant or its agents or employees. In the event, after reasonable notice to Landlord, Landlord fails to make any repairs as hereinbefore provided, then Tenant shall have the right to make these repairs and deduct the cost thereof from any future rental payments.

SECTION 2. All maintenance, repairs, or replacements relating to the Premises that are not the obligation of Landlord as set forth in Section 1 above shall be the obligation of Tenant and shall be made by Tenant at Tenant’s sole cost and expense. Tenant shall maintain, at its expense, the interior of the Premises in good repair and in a clean and attractive condition. Tenant’s obligation to maintain, repair and replace includes, but is not limited to, all the interior of the Premises. In the event Tenant fails to comply with the requirements of this Section, Landlord may effect such maintenance and repair and the cost thereof, with interest at the rate of 8.5% per annum, shall be payable immediately to Landlord as additional rent. In the event the applicable Statute of the Commonwealth of Kentucky at any time shall allow for a higher rate of interest under an instrument in writing, then such higher rate shall apply and be payable. If Tenant is a corporation, then the interest rate to be so payable hereunder shall be at the rate of 12% per annum.

SECTION 3. Tenant shall not make any alterations, additions or improvements to the Premises without first obtaining Landlord’s prior written consent. In connection with any such request for Landlord’s consent to such alterations, additions or improvements to the Premises, Landlord may retain the services of an architect and/or engineer; and the reasonable costs for the services of such architect and/or engineer shall be reimbursed to Landlord by Tenant. Landlord may make any repairs for the preservation, safety or improvement of the Premises or the Building. All alterations, and improvements made by Tenant shall become the property of Landlord upon making thereof and shall be surrendered to Landlord upon the expiration of this Lease.

ARTICLE VIII. ACCESS

Landlord and its agents shall have the right to enter into and upon the Premises at all reasonable times with reasonable notice for the purpose of inspecting, cleaning, repairing, altering or improving the Premises or the Building with the exception of an emergency situation. Landlord shall have the right to show the Premises to prospective tenants during the ninety (90) day period prior to the expiration of the terms of this Lease and shall have the right at all reasonable times to show the Premises to prospective purchasers of and lenders upon the Building. Any damage or loss caused to the Premises and/or to the Tenant by any use of or access to the Premises by Landlord shall be repaired by Landlord at Landlord’s expense.

ARTICLE IX. DAMAGE OR DESTRUCTION

SECTION 1. If the Premises is damaged or destroyed, in whole or in substantial part and Section 2 does not apply, then Landlord may elect to terminate this Lease as of the date of the damage or destruction by notice given to Tenant in writing not more than twenty (20) days following the date of damage or destruction. If Landlord does not elect to terminate, Landlord shall, at Landlord’s expense, proceed to restore the property to substantially the same form, condition and quality as prior to the damage or destruction. If Landlord elects to rebuild and repair, Landlord shall proceed as soon as reasonably possible and thereafter shall proceed without interruption and be completed within one hundred-eighty (180) days after notice has been given of Landlord’s intent to rebuild and repair, except for work stoppages on account of labor disputes and matters not under the control of the Landlord. During such period of repair or restoration, the Rent shall be abated in the same proportion as the untenantable portion of the Premises bears to the entire Premises identified in Section 1 of Article I of the Lease.

SECTION 2. If the Premises is damaged or destroyed, (i) to the extent that more than fifty percent (50%) of the Building is damaged or destroyed, or (ii) to the extent that more than fifty percent (50%) of the Premises is damaged or destroyed, then in such event, Tenant may elect to terminate this Lease as of the date of the damage or destruction by notice given to Landlord in writing not more than twenty (20) days following the date of damage or destruction.

SECTION 3. Notwithstanding anything contained in this Article to the contrary, Landlord shall not be required to repair, replace, restore, or rebuild any property which Tenant shall be entitled to remove from the Premises under the provisions of this Lease; it being agreed that Tenant shall bear the entire risk of loss, damage or destruction of such property while it is in

the Building.

SECTION 4. If either party elects to terminate the Lease, Tenant shall be entitled to reimbursement for any prepaid rent or other amounts paid by Tenant and attributable to the unused term of the Lease.

ARTICLE X. INDEMNITY

Tenant shall indemnify and hold Landlord harmless from all loss, damage, liability or expense resulting from an injury to or death of any person or any loss of or damage to any property caused by or resulting from any act or omission of Tenant or any officer, agent, employee, guest, invitee or visitor of Tenant in or about the Premises or the Building, but the foregoing provision shall not be construed to make Tenant responsible for injuries to third parties caused by the negligence of Landlord or any agent or employee of Landlord. The Landlord shall remain responsible for any injury to or death of any person or any loss of or damage to property sustained by any person whatsoever which may be caused by the Building or any equipment or appurtenances thereto or thereof being or becoming defective or out of repair. Landlord shall be and remain liable for the negligent acts or omissions of Landlord, its agents and employees.

ARTICLE XI. INSOLVENCY, ETC.

If leasehold interest of Tenant be levied upon under the execution or be attached, or if any voluntary or involuntary petition or similar pleading under any Act of Congress relating to bankruptcy shall be filed by or against Tenant or a majority of Tenant’s shareholders, or if any voluntary proceedings in any court or tribunal shall be instituted by or against Tenant or the majority of its shareholders to declare Tenant or the majority of its shareholders insolvent or unable to pay debts of Tenant or the majority of its shareholders, or if Tenant makes an assignment for the benefit of creditors, or if a receiver be appointed for any property of Tenant, or if Tenant shall default in payment of any other debt or obligation to Landlord, then in such event Landlord may, if Landlord so elects and with or without notice of such election and with or without any demand whatsoever, forthwith terminate this Lease upon notice to Tenant, and upon such termination all rights of Tenant hereunder shall thereupon cease and Tenant shall surrender possession and vacate the Premises immediately.

ARTICLE XII. REMEDIES

SECTION 1. If at any time Tenant shall (a) fail to remedy any default in the payment of any sum due under this Lease for ten (10) days after notice; (b) fail to remedy any default with respect to any other of these provisions, covenants or conditions of this Lease to be kept or performed by Tenant, within thirty (30) days after notice (or, in the event the default is of such a nature that it cannot be remedied within said thirty (30) day period, then such additional time as may be necessary for Tenant to cure such default, within the thirty (30) day period and thereafter diligently prosecutes the same to completion); or (c) vacate or abandon the Premises, or fail to conduct its business therein, for a period of five (5) consecutive business days, and then fail to reoccupy and reestablish the conduct of business in the Premises within ten (10) days following the date of written notice from Landlord of such failure; then Landlord shall have all such rights and remedies as are provided by law in respect of such default, including at Landlord’s election, the right to terminate this Lease and all Tenant’s rights hereunder shall be terminated.

The liability of Tenant for the Rent, and other payments provided for herein shall not be extinguished for the balance of this Lease, and Tenant shall make good to Landlord any deficiency arising from such reletting of the Premises, plus the costs and expenses of renovating, altering and reletting the Premises, and including attorneys’ fees or brokers’ fees incident to Landlord’s reentry or reletting. Tenant shall pay any such deficiency each month, as the amount thereof is ascertained by Landlord, or at Landlord’s option, Landlord may recover, in addition to any other sums, the amount at the time of judgement by which the unpaid Rent and other payments for the balance of the term, after judgement, exceeds the amount thereof which Tenant proves could be reasonably avoided, discounted at the rate of 7%. In reletting the Premises, Landlord may grant rent concessions and Tenant shall not be credited therefor.

Nothing herein shall be deemed to affect the right of Landlord to recover for indemnification under Article X herein arising prior to the termination of this Lease.

SECTION 2. Landlord shall in no event be in default in the performance of any of its obligations in this Lease contained unless and until Landlord shall have failed to perform such obligation within thirty (30) days, or such additional time as is reasonably required to correct any such default after notice by Tenant to Landlord properly specifying wherein Landlord has failed to perform any such obligation.

ARTICLE XIII. INSURANCE

SECTION 1. Tenant covenants and agrees that from and after the date of delivery of the Premises from Landlord to Tenant and at all times during possession thereof, Tenant will procure and maintain in full force and effect, at its sole cost and expense, the following types of insurance, in the minimum amounts specified below:

A. Public Liability and Property Damage. Personal injury liability, bodily injury liability and property damage insurance in a single limit of not less than One Million Dollars ($1,000,000), of which insurance shall insure the performance by Tenant of the indemnity agreement as to liability for injury to or death of persons and injury or damage to property as provided in Article X hereof. All of such insurance shall be primary and noncontributing with any insurance which may be carried by Landlord. The adequacy of the coverage afforded by said liability and property damage insurance shall be subject to review by Landlord from time to time, and Landlord retains the right to increase or decrease said limits at such times.

B. Tenant Improvements. Insurance covering all of the leasehold improvements (excepting only the structural components of the Building and demising partitions), Tenant’s trade fixtures and personal property from time to time in and/or upon the Premises, in an amount of not less than the full replacement cost thereof without deduction for depreciation, providing protection against any peril included within the classification “Fire and Extended Coverage”, together with insurance against sprinkler damage, vandalism and malicious mischief. Any policy proceeds shall be used for the repair or replacement of the property damaged or destroyed unless this Lease shall cease and terminate under the applicable provisions herein. If the Premises shall not be repaired or restored following damage or destruction in accordance with other provisions herein, Landlord shall receive from such insurance proceeds an amount equal to the replacement cost of Tenant’s leasehold improvements.

C. Business Interruptions. Business interruption insurance with sufficient coverage to provide for payment of Rent and other fixed costs during any interruption of Tenant’s business by reason of fire or other similar cause.

SECTION 2. All policies shall be for the mutual and joint benefit and protection of Landlord and Tenant, with Landlord being named as an additional insured. Certificates of such policies shall be delivered to Landlord within ten (10) days after delivery of possession of the Premises to Tenant and thereafter within thirty (30) days prior to the expiration of the term of each such policy. All public liability and property damage policies shall contain a provision that Landlord, although named as an insured, shall nevertheless be entitled to recovery under said policies for any loss occasioned to it, its servants, agents, and employees by reason of the acts, omissions and/or negligence of Tenant. As often as any such policy shall expire or terminate, renewal or additional policies shall be procured and maintained by Tenant in like manner and to like extent. All policies of insurance must contain a provision that the company writing said policy will give to Landlord thirty (30) days’ notice in writing in advance of any cancellation or lapse, or the effective date of any reduction in the amounts of insurance. All public liability, property damage and other casualty policies shall be written as primary policies, not contributing with and not in excess of coverage which Landlord may carry. Landlord may from time to time request Tenant to provide Landlord with a certified copy of all insurance coverage carried by Tenant.

insurance maintained in force by Landlord on the Building, of which the Premises are a part, resulting from Tenant doing any act in or about said Premises which does so increase the insurance rates, whether or not Landlord shall have consented to such act on the part of Tenant. If Tenant installs upon the Premises any electrical equipment which constitutes an overload on the electrical lines of the Premises, Tenant shall at its own expense make whatever changes are necessary to comply with the requirements of the insurance underwriters any governmental authority having jurisdiction thereover, but nothing herein contained shall be deemed to constitute Landlord’s consent to such overloading.

ARTICLE XIV. LIENS

Tenant shall keep the Premises free and clear of, and shall indemnify Landlord against all mechanics’ liens and other liens on account of work done for or materials, supplies and equipment furnished to Tenant by persons claiming under it for maintenance, repairs and alterations. Tenant shall reimburse Landlord for all costs and attorneys’ fees incurred by Landlord in investigating, defending or clearing such lien. Lien is to be cleared within thirty (30) days of filing of same unless Tenant shall have provided security acceptable to Landlord against any loss to Landlord on account thereof. As a condition to Landlord’s consent pursuant to Article VII, Landlord may require Tenant to provide Landlord with reasonable payment and performance bonds of those persons contracted by Tenant to perform work on or in the Premises that could be the subject of such a lien in order to protect the Premises, the Landlord and any mortgagee from and against liens of mechanics and materialmen performing work in or providing services and equipment to the Premises.

ARTICLE XV. ASSIGNMENT; SUBLETTING; MORTGAGING

SECTION 1. Tenant shall not voluntarily, involuntarily or by operation of law assign, transfer, mortgage or otherwise encumber all or any part of Tenant’s interest in this Lease, or sublet the Premises or any part thereof, without first obtaining in each and every instance Landlord’s prior written consent. Subject to the foregoing, Tenant shall not assign, transfer or sublet the Premises, or any part thereof, at a rent to Assignee, Transferee or Sublessee, greater than $14 per square foot. Any transfer of this Lease by merger, consolidation, or liquidation, or any change in the ownership of or power to vote the majority of its outstanding voting stock resulting in a change in ownership of more than 50% of the total issued and outstanding shares of Tenant shall constitute an assignment for the purposes of the paragraph. If consent is once given by Landlord to any such assignment or subletting, such consent shall not operate as a waiver of the necessity for obtaining Landlord’s consent to any subsequent assignment or subletting. Any legal costs incurred by Landlord related to such assignment or subletting shall be paid by Tenant to Landlord upon demand. Tenant shall provide Landlord with executed copies of any Assignment, Transfer or Sublease Agreement entered into as provided herein.

ARTICLE XVI. ESTOPPEL CERTIFICATE

Tenant shall at any time and from time to time execute, acknowledge and deliver to Landlord a statement in writing certifying: (a) that this Lease is unmodified and in full force and effect (or if there has been any modification hereof that the same is in full force and effect as modified and stating the nature of the modification or modifications); (b) that to the best of its knowledge Landlord is not in default under this Lease (or if any such default exists the specific nature and extent thereof); and (c) the date to which Rent and other charges have been paid in advance, if any.

ARTICLE XVII. TAXES

SECTION 1. Tenant shall pay before delinquency any and all taxes and assessments, and license, sales, business, occupation or other taxes, fees or charges levied, assessed or imposed upon its business operations in the Premises.

SECTION 2. Tenant shall pay before delinquency any and all taxes and assessments levied, assessed or imposed upon its trade fixtures, leasehold improvements, merchandise and other personal property in, on, or upon the Premises.

SECTION 3. In the event any taxes, fees or charges referred to in the preceding Section 1 and/or Section 2 shall be assessed, levied or imposed upon or in connection with the business or property of Landlord, such assessment, taxes, fees or charges shall be paid by Tenant to Landlord promptly upon Landlord’s request for such payment.

SECTION 4. Landlord shall pay before delinquency any and all costs and expenses of every kind and nature for real estate ad valorem taxes, and/or fees, assessments, charges or payments in lieu thereof, to the Commonwealth of Kentucky, and/or any political subdivision thereof, including, without limitation, Jefferson County, and/or any city, municipality, agency or special district, the Jefferson County School Board; Louisville Water Company, and/or the Louisville and Jefferson County Metropolitan Sewer District, whether general or special assessments, including, but not limited to, sewer rents, rates and charges; drainage fees; water charges; taxes based upon the receipt of rent; and any other federal, state or local government charge, general, special, ordinary or extraordinary (but not including income or franchise taxes or any other taxes imposed upon or measured by Landlord’s net income or profits, unless the same is imposed in lieu of real estate taxes), which may now or hereafter be levied or assessed against the Building or the land on which the Building and appurtenant parking areas and driveways are located. If at any time during the term of this Lease the method of taxation then prevailing shall be altered so that any new tax, assessment, levy, imposition or charge shall be imposed upon Landlord in place or partly in place of any such taxes and shall be measured by or be based in whole or in part upon the Building or the rents or other income therefrom, then all such new taxes, assessments, levies, impositions or charges or part thereof, to the extent that they are measured or based, shall be included in the definition of Landlord’s costs and expenses within the meaning of this subparagraph. Tenant shall only be directly responsible for taxes, if any, on its personal property and on the value of its special leasehold improvements exclusive of standard building improvements.

ARTICLE XVIII. PRIORITY OF LEASE

This Lease shall, unless Landlord otherwise elects, be subordinate to any and all mortgages and other security instruments now existing, or which may hereafter be made covering the Building and/or the real property underlying the same or any portion or portions thereof, and for the full amount of all advances made or to be made thereunder (without regard to the time or character of such advances), together with the interest thereon, and subject to all the terms and provisions thereof and to any renewals, extensions, modifications and consolidations thereof; and Tenant covenants within ten (10) days of demand to make, execute, acknowledge and deliver upon request any and all documents or instruments demanded by Landlord which are or may be necessary or proper for more fully and certainly assuring the subordination of this Lease to any such mortgages or other security instruments, provided, however, that any person or persons purchasing or otherwise acquiring any interest at any sale and/or other proceedings under such mortgages or other security instruments may elect to continue this Lease in full force and effect in the same manner, and with like effect, as if such person or persons had been named as Landlord herein, and in the event of such election, this Lease shall continue in full force and effect as aforesaid, and Tenant hereby shall continue in full force and effect as aforesaid, and Tenant hereby attorns and agrees to attorn to such person or persons. Tenant hereby irrevocably appoints Landlord the attorney-in-fact of Tenant, to execute and deliver any document provided for herein, for and in the name of Tenant.

ARTICLE XIX. FIXTURES AND PERSONAL PROPERTY; SURRENDER

SECTION 1. Upon the termination of this Lease, Tenant shall surrender to Landlord the Premises (including, without limitation, all non-moveable leasehold improvements) in good condition and repair reasonable wear, tear and damage by casualty not caused by Tenant or its agents or employees excepted. All improvements, additions, and fixtures made or installed from time to time by Landlord to, in, upon, or about the Premises, including, but not limited to, all lighting fixtures, shall be the property of Landlord and upon any such termination, shall be surrendered to Landlord by Tenant without any injury, damage or disturbance thereto or payment thereof.

SECTION 2. All fixtures, furniture, movable partitions, machinery, equipment and other personal property installed or placed in said Premises at the cost of or by Tenant shall at all times remain, be considered and treated as the personal property of Tenant and in no sense part of the real estate, and Tenant shall have the right at any time during the term of this Lease and any extension thereof, or within a period of ten (10) days after any termination hereof to remove the same or any part thereof from said Premises, provided, however, that upon the removal of any such personal property, Tenant agrees to restore the area from which the same has been removed to substantially the same condition as it was prior to the installation thereof and to the extent necessary to keep Premises in a leasable and usable condition for future tenants. If Tenant fails to remove any such personal property, Landlord may at Landlord’s option retain all or any of such property and title thereto shall thereupon vest in Landlord, Landlord may remove from the Premises and dispose of in any manner all or any of such property, in which latter event Tenant shall, upon demand, pay to Landlord the actual expense of such removal and disposition, and the cost of repair of any and all damage to the Premises resulting from or caused by such removal.

ARTICLE XX. HOLD OVER TENANCY

If Tenant shall, without execution of a new Lease or written extension, and with consent of Landlord, hold over after the expiration of the terms of this Lease, such tenancy shall be a month-to-month tenancy, which may be terminated as provided by law. During such tenancy, Tenant shall pay to Landlord the greater of (a) the rental rate then being quoted by Landlord for comparable space in the Building; or (b) 150% the Rent pursuant to Article III. During such tenancy, Tenant shall be bound by all of the terms, covenants, and conditions as herein specified, as far as applicable; provided, however that if Tenant fails to surrender the Premises upon the termination of this Lease, in addition to any other liabilities to Landlord arising therefrom Tenant shall indemnify and hold Landlord harmless from loss or liability resulting from such failure, including any claims made by any succeeding Tenant founded on such failure.

ARTICLE XXI. WAIVER OF SUBROGATION

Landlord and Tenant each releases and relieves the other and on behalf of its insurer(s) waives its entire right of recovery against the other for loss or damage arising out of or incident to the perils of fire, explosion, or any other perils generally described in the “extended coverage” insurance endorsements used in Louisville which occur in, on or about the Building and/or the Premises, whether due to the negligence of such other party, its agents or employees, or otherwise.

ARTICLE XXII. NOTICES

Wherever in this Lease it shall be required or permitted that notice, approval, advice, consent or demand be given or served by either party to this Lease to or on the other, such notice or demand shall be given or served and shall not be deemed to have been duly given or served unless in writing and forwarded by certified or registered mail, addressed as follows:

To Landlord:	Mr. Steve Trager
	Republic Corporate Center
	601 W. Market Street
	Louisville, KY 40202-2700

To Tenant:	At the Premises

Either party may change such address by written notice by certified or registered mail to the other.

ARTICLE XXIII. RIGHTS RESERVED BY LANDLORD

SECTION 1. Landlord shall have the sole and exclusive right to designate (and from time to time, in its discretion, re-designate) the name, address, number and/or designation of the Building.

ARTICLE XXIV. CONDEMNATION

In the event that during the term of this Lease the Premises as identified in Article I, Section 1 hereof, or any part thereof, or the use or possession thereof, is taken in condemnation proceedings or by any right of eminent domain or for any public or quasi-public use, this Lease and the term hereby granted shall terminate and expire on the date when possession shall be taken by the condemnor, and rent and all other charges payable hereunder shall be apportioned and paid in full up to that date and all prepaid unearned rent and all other charges payable and paid in full up to that date and all prepaid unearned rent and all other charges payable hereunder shall forthwith be repaid by Landlord to Tenant, and Tenant shall not be liable to Landlord for rent or any other charges payable hereunder, damage, or otherwise, for, or by reason of any matter or thing occurring thereafter. Tenant hereby waives any and all rights in, or to any condemnation awards. In the event that during the term of this Lease a material amount of the parking area or a material amount of the use or possession thereof is taken in condemnation proceedings or by any right of eminent domain or for any public or quasi-public use and no alternative parking is provided, the term of this Lease shall at the option of Tenant cease and terminate from the date of title vesting in such proceeding.

ARTICLE XXV. MISCELLANEOUS PROVISIONS

SECTION 1. The term “Landlord” as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner or co-owners, at the time in question, of the Premises, and in the event of any transfer or transfers of the title to the Premises, Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall be automatically freed and relieved from and after the date of such transfer or conveyance of all liability as respects the performance or any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed.

SECTION 2. The captions of Articles of this Lease are for convenience only and shall not be considered or referred to in resolving questions of interpretation or construction.

SECTION 3. The terms “Landlord and Tenant”, wherever used herein shall be applicable to one or more persons, as the case may be, and the singular shall include the plural, and the neuter shall include the masculine and feminine, and if there be more than one, the obligations hereof shall be joint and several.

SECTION 4. The word “person” and the word “persons” wherever used in this Lease shall both include individuals, partnerships, firms, associations, and corporations of any other form of business entity.

SECTION 5. The various rights, options, elections, powers, and remedies contained in this Lease shall be construed as cumulative and no one of them shall be exclusive of any of the others, or of any other legal or equitable remedy which either party might otherwise have in the event of breach or default in the terms thereof, and the exercise of one right or remedy by such party shall not impair its right to any other right or remedy until all obligations upon the other party have been fully performed.

SECTION 6. Time is of essence with respect to the performance of each of the covenants and agreements under this Lease.

SECTION 7. Each and all of the provisions of this Lease shall be binding upon and inure to the benefit of the parties hereto and, except as set forth in Section 1 of this Article and as otherwise specifically provided elsewhere in this Lease, their respective heirs, executors, administrators, successors, and assigns, subject at all times, nevertheless, to all agreements and restrictions contained elsewhere in this Lease with respect to the assignment, transfer, encumbering or sub-letting of all or any part of Tenant’s interest in this Lease.

SECTION 8. This Lease shall be interpreted in accordance with the law of the Commonwealth of Kentucky.

SECTION 9. No waiver of any default by Tenant hereunder shall be implied from any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver, and that only for the time and to the extent therein stated. The acceptance by Landlord of rent with knowledge of the breach of any of the covenants of this Lease by Tenant shall not be deemed a waiver of any such breach. One or more waivers of any breach of any covenant, term or condition of this Lease shall not be construed as a waiver of any subsequent breach of the same covenants, term of condition. The consent or approval by Landlord to or of any act by Tenant requiring Landlord’s consent or approval shall not be deemed to waive or render unnecessary Landlord’s consent or approval to or of any subsequent similar acts by Tenant.

SECTION 10. If Tenant shall default in the performance of any covenant on its part to be performed by virtue of any provisions of this Lease, Landlord may, after any notice and the expiration of any period with respect thereto as required pursuant to the applicable provisions of this Lease, perform the same for the account of Tenant. If Landlord, at any time, is compelled to pay or elects to pay any sum of money or do any acts which would require the payment of any sum of money by reason of the failure of Tenant, after any notice and the expiration of any period with respect thereto, as required pursuant to the applicable provisions of the Lease, to comply with any provisions of this Lease, the sum or sums so paid by Landlord with all interest, costs and damages, shall be deemed to be additional rental hereunder and shall be due from Tenant to Landlord on the first day of the month following the incurring of such respective expenses, except as otherwise herein specifically provided.

SECTION 11. If Tenant or Landlord shall bring any action for any relief against the other, declaratory or otherwise, arising out of this Lease, including any suit by Landlord for the recovery of rent, additional rent or other payments hereunder or possession of the Premises, the losing party shall pay the prevailing party a reasonable sum for attorneys’ fees in such suit, at trial and on appeal, and such attorneys’ fees shall be deemed to have accrued on the commencement of such action.

SECTION 12. This Lease contains all covenants and agreements between Landlord and Tenant relating in any manner to the rental, use and occupancy of the Premises and Tenant’s licensed use of the Building and other matters set forth in this Lease. No prior agreement or understanding pertaining to the same shall be valid or of any force or effect, and the covenants and agreements of this Lease cannot be altered, changed, modified or added to except in writing signed by Landlord and Tenant. No representation, inducement, understanding or anything of any nature whatsoever made, stated or represented on Landlord’s behalf, either orally or in writing (except this Lease) has induced Tenant to enter into this Lease.

SECTION 13. Any provision or provisions of this Lease which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and the remaining provisions hereof shall nevertheless remain in full force and effect.

SECTION 14. Except with respect to those conditions, covenants and agreements of this Lease which by their nature could only be applicable after the commencement of, during or throughout the term of this Lease, all of the other conditions, covenants and agreements of this Lease shall be deemed to be effective as of the date of execution of this Lease.

SECTION 15. Landlord and Tenant each represents and warrants to the other that it has not engaged any broker, finder or other person who would be entitled to any commission or fee in respect of the negotiation, execution or delivery of this Lease, and shall indemnify each other against loss, cost, liability, or expense incurred by either as a result of any claim asserted by any such broker, finder or other person on the basis on any arrangements or agreements made or alleged to have been made by or on behalf of either Landlord or Tenant, as the case may be, in breach of the foregoing warranty.

SECTION 16. Any and all consents and approvals of Landlord required by or referred to in the Lease shall not be unreasonably withheld.

SECTION 17. Notwithstanding any other provisions contained in this lease, in the event the Tenant is closed or taken over by the banking authority of the State of Kentucky, or other bank supervisory authority, the Landlord may terminate the lease only with the concurrence of such banking authority or other bank supervisory authority, and any such authority shall in any event have the election either to continue or to terminate the lease: Provided, that in the event this lease is terminated, the maximum claim of Landlord for damages or indemnity for injury resulting from the rejection or abandonment of the unexpired term of the lease shall in no event be in an amount exceeding the rent reserved by the lease, without acceleration, for the year next succeeding the date of the surrender of the premises to the Landlord, or the date of re-entry of the Lessor, whichever first occurs, whether before or after the closing of the bank, plus an amount equal to the unpaid rent accrued without acceleration up to such date.

IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and delivered as of the day and year first above written.

ATTEST:	TEECO


BY: /s/ Pamela Anderson	BY:	/s/ Steve Trager


ATTEST:	REPUBLIC BANK & TRUST COMPANY /S/ MAR


BY: /s/ Lara Recktenwald	BY:	/s/ Kevin Sipes

EXHIBIT A

RULES AND REGULATIONS

1. No advertisement, sign, lettering, notice or device shall be placed in or upon the Premises or the Building, including any windows, walls and exterior doors, except such as may be approved in writing by Landlord.

2. Lettering upon the doors as required by Tenant shall be made by the sign company designated by Landlord, but the cost shall be paid by Tenant. The directories of the Building will be provided exclusively for the display of the name and location of Tenant and its designated representative only, and Landlord reserves the right to exclude any other names therefrom.

3. No additional locks shall be placed upon any doors of the Premises, and Tenant agrees not to have any duplicate keys made without the consent of Landlord. If more than two keys for any door lock are desired, such additional keys shall be paid for by Tenant. Upon termination of this Lease, Tenant shall surrender all keys.

4. No furniture, freight, supplies not carried by hand or equipment of any kind shall be brought into or removed from the Building without the consent of Landlord. Landlord shall have the right to limit the weight and size and to designate the position of all safes and other heavy property brought into the Building. Such furniture, freight, equipment, safes and other heavy property shall be moved in or out of the Building only at the times and in the manner permitted by Landlord. Landlord will not be responsible for loss of or damage to any of the items above referred to, and all damage done to the Premises or the Building by moving or maintaining any of such items shall be repaired at the expense of Tenant. Any merchandise not capable of being carried by hand shall utilize hand trucks equipped with rubber tires and rubber side guards.

5. The entrances, corridors, stairways and elevators shall not be obstructed by Tenant, or used for any other purpose than ingress or egress to and from Premises. Tenant shall not bring into or keep any animal within the Building, or any bicycle or other type of vehicle.

6. Tenant shall not disturb other occupants of the Building by making an undue or unseemly noise, or otherwise. Tenant shall not, without Landlord’s prior written consent, install or operate in or on Premises any machine or machinery causing noise or vibration perceptible outside the Premises, electric heater, stove or machinery or any kind or carry on any mechanical business thereon, or keep or use thereon oils, burning fluids, camphene, kerosene, naphtha, gasoline, or other coustible materials. No explosives shall be brought into the Building.

7. Tenant shall not mark, drive nails, screw or drill into woodwork or plaster, paint or in any way deface the Building or any part thereof, or the Premises or any part thereof, or fixtures therein. The expense of remedying any breakage, damage or stoppage resulting from a violation of this rule shall be borne by Tenant.

8. If Tenant installs upon the Premises any electrical equipment which constitutes an overload on the electrical line serving the Premises or the Building, Tenant shall make all necessary changes to reduce such overload, or at the option of Landlord, eliminate such equipment as Landlord deems necessary to reduce the electrical capacity required to serve the Premises.

9. Canvassing, soliciting, and peddling in the Building is prohibited and Tenant shall cooperate to prevent such activity.

10. The requirements of Tenant will be attended to only upon application at the Landlord’s office in the Building. Building employees shall not perform any work or do anything outside of the regular duties, except on issuance of special instructions from the office of the Building. If the Building employees are made available for the assistance of Tenant, Landlord shall be paid for their services by Tenant at reasonable hourly rates. No Building

employee will admit any person (Tenant or otherwise) to any office without specific instructions from the office of the Building.

11. Landlord reserves the right to close and keep locked all entrance and exit doors of the Building on Saturdays, Sundays, legal holidays, and between the hours of 5:30 p.m. of any day and 8:00 a.m. of the following day, and during such further hours as Landlord may deem advisable for the adequate protection of the Building and the property of the tenants. Tenant shall have 24-hour access to the Premises.

EXHIBIT 10.2

REPUBLIC BANK PLACE

3RD FLOOR, HURSTBOURNE

LOUISVILLE, KENTUCKY

9-1-05

INDEX TO LEASE

Article

I.			Premises

II.			Term/Option to Renew

III.			Rent

IV.			Use

V.			Possession

VI.			Services to be Provided

VII.			Maintenance and Repair; Alterations

VIII.			Access

IX.			Damage or Destruction

X.			Indemnity

XI.			Insolvency, Etc.

XII.			Remedies

XIII.			Insurance

XIV.			Liens

XV.			Assignment; Subletting; Mortgaging

XVI.			Estoppel Certificate

XVII.			Taxes

XVIII.			Priority of Lease

Article

XIX.			Fixtures and Personal Property; Surrender

XX.			Hold over Tenancy

XXI.			Waiver of Subrogation

XXII.			Notices

XXIII.			Rights Reserved by Landlord

XXIV.			Condemnation

XXV.			Miscellaneous Provisions

OFFICE LEASE

THIS LEASE, dated this 1st day of September, 2005, is between Jaytee Properties, a Kentucky general partnership, hereinafter referred to as “Landlord” and Republic Bank & Trust Company, hereinafter referred to as the “Tenant”. As parties hereto, Landlord and Tenant agree:

ARTICLE I. PREMISES

SECTION 1. Tenant leases from Landlord and Landlord leases to Tenant the following described premises (hereinafter called the “Premises”):

Being approximately 10,798 square feet of rentable office space located on the third floor in Republic Bank Place (hereinafter called “the Building”) located at Hurstbourne Parkway and Stone Creek Parkway in Jefferson County, Kentucky.

SECTION 2. The Premises shall be provided in “as is” condition. Tenant acknowledges he has examined the Premises, knows the condition of the Premises, and accepts the Premises in the condition as currently existing. Any remodeling construction and/or redecorating within the Premises shall be performed to the complete and absolute satisfaction of Landlord. The Landlord’s written approval shall be obtained by Tenant prior to commencement of any and all improvements and the construction of improvements shall be supervised and approved by Landlord on a continuous basis.

SECTION 3. This lease confers no rights with respect to the Building other than tenancy of the Premises and the non-exclusive license to use, during such tenancy, the following facilities provided by Landlord: (i) toilet facilities on the floor which the Premises are located (and such other toilet facilities located elsewhere in the Building as may be designated by Landlord for the general use of tenants); and (ii) the public entrances to, and main floor lobby in, the Building; (iii) the passenger elevators serving the Building; (iv) the areas adjacent to the Building dedicated from time to time for parking purposes by Landlord for the parking of motor vehicles; and (v) the roadways and passageways adjacent to the Building for passage by motor vehicle and on foot, as said roadways and passageways may respectively be dedicated by Landlord.

ARTICLE II. TERM/OPTION TO RENEW

Landlord leases the Premises to Tenant, and Tenant hires and takes the Premises from Landlord, for a term of five (5) Lease Years commencing on the first day of September, 2005, or, upon actual possession no later than sixty days from Landlord’s delivery of the Premises to the Tenant for construction of Tenant’s improvements, whichever occurs later (the “Lease Commencement Date”) and expiring at midnight on the last day of the sixtieth month thereafter unless sooner terminated pursuant to the terms hereof. “Lease Year” shall mean a year period beginning on the first day of a month, which is the first calendar month of the term of the Lease and ending on the day before the anniversary of the first day of such year.

ARTICLE III. RENT

SECTION 1. Tenant shall pay to Landlord, at Landlord’s office in the Building or at such place as Landlord may from time to time designate, as rental for the Premises, the sum of Sixteen Thousand Two Hundred Dollars and no cents ($16,200.00) per month (the “Rent”). Rent shall be payable in advance on the first day of each calendar month during the first five Lease Years.

SECTION 2. In the event that the Rent, or any other sum payable by Tenant to Landlord under this lease, shall not be received (paid) within ten (10) days of the due date thereof, Landlord may, at its option, add a monthly service charge, at a rate which shall be the greater of $25.00 or 1% for each month or fraction thereof from such rent due date during which such Rent or other sum remains unpaid. Further, in the event that any check which has been remitted to Landlord by Tenant for payment of the Rent, or any other sum payable under this Lease, shall not be honored upon its presentation for payment, then the monthly service charge shall be similarly imposed on said amount from the due date until paid. Acceptance by the Landlord for such service charge shall not be deemed to be a waiver by Landlord of any default nor shall it restrict the remedies otherwise available to Landlord hereunder.

ARTICLE IV. USE

The Premises are to be used only for the purpose of conducting therein the operation of a Bank and any and all related services and for no other business or purpose without the prior written consent of Landlord. Tenant shall not do or permit to be done in or about the Premises anything which is illegal or unlawful; or which is of a hazardous or dangerous nature; or which will increase the rate(s) of insurance upon the Building. Tenant shall (and shall cause its employees to) observe the rules and regulations set forth in Exhibit A attached hereto and made a part hereof, as the same may be amended by Landlord from time to time, and Tenant shall comply with all governmental laws and ordinances and all regulations applicable to the use and occupancy of the Building.

ARTICLE V. POSSESSION

ARTICLE VI. SERVICES TO BE PROVIDED

ARTICLE VII. MAINTENANCE AND REPAIR; ALTERATIONS

SECTION 1. Landlord shall keep and maintain the roof, foundations, floor slab, and all structural walls (including windows and plate glass), gutters and downspouts of the Premises in good order and repair. Landlord shall keep or cause to be kept in good repair all common areas of the Building and appurtenant areas, including lighting systems; drainage systems; mechanical, plumbing, and electrical systems; heat and air conditioning units; ductwork, lines, pipes, and conduits serving the Premises; and parking areas and driveways. Any maintenance, repairs or replacements to any of the foregoing made necessary by any acts or omissions of the Tenant, its agents or employees, shall be paid for by Tenant and Tenant shall reimburse Landlord on demand for the cost of repairing any damage to the Premises or the Building caused by Tenant or its agents or employees. In the event, after reasonable notice to Landlord, Landlord fails to make any repairs as hereinbefore provided, then Tenant shall have the right to make these repairs and deduct the cost thereof from any future rental payments.

SECTION 2. All maintenance, repairs, or replacements relating to the premises that are not the obligation of Landlord as set forth in Section 1 above, shall be the obligation of Tenant and shall be made by Tenant at Tenant’s sole cost and expense. Tenant shall maintain, at its expense, the interior of the Premises in good repair and in a clean and attractive condition. Tenant’s obligation to maintain, repair and replace includes, but is not limited to, all the interior of the Premises. In the event Tenant fails to comply with the requirements of this Section, Landlord may effect such maintenance and repair and the cost thereof, with interest at the rate of 8.5% per annum, shall be payable immediately to Landlord as additional rent. In the event the applicable Statute of the Commonwealth of Kentucky at any time shall allow for a higher rate of interest under an instrument in writing, then such higher rate shall apply and be payable. If Tenant is a corporation, then the interest rate to be so payable hereunder shall be at the rate of 12% per annum.

ARTICLE VIII. ACCESS

Landlord and its agents shall have the right to enter into and upon the Premises at all reasonable times with reasonable notice for the purpose of inspecting, cleaning, repairing, altering or improving the Premises or the Building with the exception of an emergency situation. Landlord shall have the right to show the Premises to prospective tenants during the ninety (90) day period prior to the expiration of the term of this Lease and shall have the right at all reasonable times to show the Premises to prospective purchasers of and lenders upon the Building. Any damage or loss caused to the Premises and/or to the Tenant by any use of or access to the Premises by Landlord shall be repaired by Landlord at Landlord’s expense.

ARTICLE IX. DAMAGE OR DESTRUCTION

SECTION 1. If the Premises is damaged or destroyed, in whole or in substantial part, and Section 2 does not apply, then Landlord may elect to terminate this Lease as of the date of the damage or destruction by notice given to Tenant in writing not more than twenty (20) days following the date of damage or destruction. If Landlord does not elect to terminate, Landlord shall, at Landlord’s expense, proceed to restore the property to substantially the same form, condition and quality as prior to the damage or destruction. If Landlord elects to rebuild and repair, Landlord shall proceed as soon as reasonably possible and thereafter shall proceed without interruption and be completed within one hundred-eighty (180) days after notice has been given of Landlord’s intent to rebuild and repair, except for work stoppages on account of labor disputes and matters not under the control of the Landlord. During such period of repair or restoration, the Rent shall be abated in the same proportion as the untenantable portion of the Premises bears to the entire Premises identified in Section 1 of Article I of the Lease.

ARTICLE X. INDEMNITY

ARTICLE XI. INSOLVENCY, ETC.

ARTICLE XII. REMEDIES

SECTION 1. If at any time Tenant shall (a) fail to remedy any default in the payment of any sum due under this Lease for ten (10) days after notice; (b) fail to remedy any default with respect to any other of these provisions, covenants or conditions of this Lease to be kept or performed by Tenant, within thirty (30) days after notice (or, in the event the default is of such a nature that it cannot be remedied within said thirty (30) day period, then such additional time as may be necessary for Tenant to cure such default, within the thirty (30) day period and thereafter diligently prosecutes the same to completion); or (c) vacate or abandon the Premises, or fail to conduct its business therein, for a period of five (5) consecutive business days, and then fail to reoccupy and reestablish the conduct of business in the Premises within ten (10) days following the date of written notice from Landlord of such failure; then Landlord shall have all such rights and remedies as are provided by law in respect of such default, including, at Landlord’s election, the right to terminate this Lease, and all Tenant’s rights hereunder shall be terminated.

The liability of Tenant for the Rent, and other payments provided for herein shall not be extinguished for the balance of this Lease, and Tenant shall make good to Landlord any deficiency arising from such reletting of the Premises, plus the costs and expenses of renovating, altering and reletting the Premises, and including attorneys’ fees or brokers’ fees incident to Landlord’s reentry or reletting. Tenant shall pay any such deficiency each month, as the amount thereof is ascertained by Landlord, or, at Landlord’s option, Landlord may recover, in addition to any other sums, the amount at the time of judgement by which the unpaid Rent, and other payments for the balance of the term, after judgement, exceeds the amount thereof which Tenant proves could be reasonably avoided, discounted at the rate of 7%. In reletting the Premises, Landlord may grant rent concessions and Tenant shall not be credited therefor. Nothing herein shall be deemed to affect the right of Landlord to recover for indemnification under Article X herein arising prior to the termination of this Lease.

such additional time as is reasonably required to correct any such default after notice by Tenant to Landlord properly specifying wherein Landlord has failed of perform any such obligation.

ARTICLE XIII. INSURANCE

B. Tenant Improvements. Insurance covering all of the lease-hold improvements, (excepting only the structural components of the Building and demising partitions), and Tenant’s trade fixtures, and personal property from time to time in and/or upon the Premises, in an amount of not less than the full replacement cost thereof without deduction for depreciation, providing protection against any peril included within the classification “Fire and Extended Coverage”, together with insurance against sprinkler damage, vandalism and malicious mischief. Any policy proceeds shall be used for the repair or replacement of the property damaged or destroyed unless this Lease shall cease and terminate under the applicable provisions herein. If the Premises shall not be repaired or restored following damage or destruction in accordance with other provisions herein, Landlord shall received from such insurance proceeds and amount equal to the replacement cost of the Tenant’s leasehold improvements.

C. Business Interruption. Business interruption insurance with sufficient coverage to provide for payment of rent and other fixed costs during any interruption of Tenant’s business by reason of fire or other similar cause.

SECTION 2. All policies shall be for the mutual and joint benefit and protection of Landlord and Tenant, with Landlord being named as an additional insured. Certificates of such policies shall be delivered to Landlord within ten (10) days after delivery of possession of the Premises to Tenant and thereafter within thirty (30) days prior to the expiration of the term of each such policy. All public liability and property damage policies shall contain a provision that Landlord, although named as an insured, shall nevertheless be entitled to recovery under said policies for any loss occasioned to it, its servants, agents, and employees by reason of the acts, omissions and/or negligence of Tenant. As often as any such policy shall expire or terminate, renewal or additional policies shall be procured and maintained by Tenant in like manner and to like extent. All policies of insurance must contain a provision that the company writing said policy will give to Landlord thirty (30) days’ notice, in writing, in advance of any cancellation or lapse, or the effective date of any reduction in the amounts of insurance. All public liability, property damage and other casualty policies shall be written as primary policies, not contributing with and not in excess of coverage which Landlord may carry. Landlord may, from time to time, request Tenant to provide Landlord with a certified copy of all insurance coverage carried by Tenant.

SECTION 3. Tenant agrees to pay to Landlord forthwith upon demand the amount of any increase in premiums for insurance against loss by fire that may be charged during the term of this Lease on the amount of insurance maintained in force by Landlord on the Building, of which the Premises are a part, resulting from Tenant doing any act in or about said Premises which does so increase the insurance rates, whether or not Landlord shall have consented to such act on the part of Tenant. If Tenant installs upon the Premises any electrical equipment which constitutes an overload on the electrical lines of the Premises, Tenant shall at its own expense make whatever changes are necessary to comply with the requirements of the insurance underwriters any governmental authority

having jurisdiction thereover, but nothing herein contained shall be deemed to constitute Landlord’s consent to such overloading.

ARTICLE XIV. LIENS

Tenant shall keep the Premises free and clear of, and shall indemnify Landlord against all mechanics’ liens and other liens on account of work done for or materials, supplies and equipment furnished to Tenant by persons claiming under it for maintenance, repairs and alterations. Tenant shall reimburse Landlord for all costs and attorneys’ fees incurred by Landlord in investigating, defending or clearing such lien to be cleared within thirty (30) days of filing of same unless Tenant shall have provided security acceptable to landlord against any loss to Landlord on account thereof. As a condition to Landlord’s consent pursuant to Article VII, Landlord may require Tenant to provide Landlord with reasonable payment and performance bonds of those persons contracted by Tenant to perform work on or in the Premises that could be the subject of such a lien in order to protect the Premises, the Landlord, and any mortgagee from and against liens of mechanics and materialmen performing work in or providing services and equipment to the Premises.

ARTICLE XV. ASSIGNMENT; SUBLETTING; MORTGAGING

SECTION 1. Tenant shall not voluntarily, involuntarily or by operation of law assign, transfer, mortgage or otherwise encumber all or any part of Tenant’s interest in this Lease, or sublet the Premises or any part thereof, without first obtaining in each and every instance Landlord’s prior written consent. Subject to the foregoing, Tenant shall not assign, transfer or sublet the Premises, or any part thereof, at a rent to Assignee, Transferee or Sublessee, greater than $19 per square foot. Any transfer of this Lease by merger, consolidation, or liquidation, or any change in the ownership of, or power to vote the majority of its outstanding voting stock resulting in a change in ownership of more than 50% of the total issued and outstanding shares of Tenant shall constitute an assignment for the purposes of the paragraph. If consent is once given by Landlord to any such assignment or subletting, such consent shall not operate as a waiver of the necessity for obtaining Landlord’s consent to any subsequent assignment or subletting. Any legal costs incurred by Landlord related to such assignment or subletting shall be paid by Tenant to Landlord upon demand. Tenant shall provide Landlord with executed copies of any Assignment. Transfer or Sublease Agreement entered into as provided herein.

ARTICLE XVI. ESTOPPEL CERTIFICATE

Tenant shall at any time and from time to time execute, acknowledge and deliver to Landlord a statement in writing certifying: (a) that this Lease is unmodified and in full force and effect (or if there has been any modification hereof that the same is in full force and effect as modified and stating the nature of the modification or modifications); (b) that to the best of its knowledge Landlord is not in default under this Lease (or if any such default exists the specific nature and extent thereof); and (c) the date to which rent and other charges have been paid in advance, if any.

ARTICLE XVII. TAXES

SECTION 4. Landlord shall pay before delinquency any and all costs and expenses of every kind and nature for real estate ad valorem taxes, and/or fees, assessments, charges or payments in lieu thereof, to the Commonwealth of Kentucky, and/or any political subdivision thereof, including, without limitation, Jefferson County, and/or any city, municipality, agency or special district, the Jefferson County School Board, Louisville Water Company, and/or the Louisville and Jefferson County Metropolitan Sewer District, whether general or special assessments, including, but not limited to, sewer rents, rates and charges; drainage fees; water charges; taxes based upon the receipt of rent; and any other federal, state or local government charge, general, special, ordinary or extra—ordinary (but not including income or franchise taxes or any other taxes imposed upon or measured by Landlord’s net income or profits, unless the same is imposed in lieu of real estate taxes), which may now or hereafter be levied or assessed against the Building or the land on which the Building and appurtenant parking areas and driveways are located. If at any time during the term of this Lease the method of taxation then prevailing shall be altered so that any new tax, assessment, levy, imposition or charge shall be imposed upon Landlord in place or partly in place of any such taxes and shall be measured by or be based in whole or in part upon the Building or the rents or other income therefrom, then all such new taxes, assessments, levies, imposition or charge shall be imposed upon Landlord in place or partly in place of any such taxes and shall be measured by or be based in whole or in part upon the Building or the rents or other income therefrom, then all such new taxes, assessments, levies, impositions or charges or part thereof, to the extent that they are measured or based, shall be included in the definition of Landlord’s costs and expenses within the meaning of this subparagraph. Tenant shall only be directly responsible for taxes, if any, on its personal property and on the value of its special leasehold improvements exclusive of standard building improvements.

ARTICLE XVIII. PRIORITY OF LEASE

This Lease shall, unless Landlord otherwise elects, be subordinate to any and all mortgages and other security instruments now existing, or which may hereafter be made covering the Building and/or the real property underlying the same or any portion or portions thereof, and for the full amount of all advances made or to be made thereunder (without regard to the time or character of such advances), together with interest thereon, and subject of all the terms and provisions thereof and to any renewals, extensions, modifications and consolidations thereof; and Tenant covenants within ten days of demand to make, execute, acknowledge and deliver upon request any and all documents or instruments demanded by Landlord which are or may be necessary or proper for more fully and certainly assuring the subordination of this Lease to any such mortgages or other security instruments, provided, however, that any person or persons purchasing or otherwise acquiring any interest at any sale and/or other proceedings under such mortgages or other security instruments may elect to continue this Lease in full force and effect in the same manner, and with like effect, as if such person or persons had been named as Landlord herein, and in the event of such election, this Lease shall continue in full force and effect as aforesaid, and Tenant hereby shall continue in full force and effect as aforesaid, and Tenant hereby attorns and agrees to attorn to such person or persons. Tenant hereby irrevocably appoints Landlord the attorney-in-fact of Tenant, to execute and deliver any document provided for herein, for and in the name of Tenant.

ARTICLE XIX. FIXTURES AND PERSONAL PROPERTY; SURRENDER

SECTION 1. Upon the termination of this Lease, Tenant shall surrender to Landlord the Premises (including, without limitation, all non-moveable leasehold improvements) in good condition and repair reasonable wear, tear and damage by casualty not caused by Tenant or its agents or employees excepted. All improvements, additions, and fixtures made or installed from time-to-time by Landlord to, in, upon, or about the Premises, including, but not limited to, all lighting fixtures, shall be the property of Landlord and upon any such termination, shall be surrendered to Landlord by Tenant without any injury, damage or disturbance thereto or payment thereof.

Landlord’s option retain all or any of such property and title thereto shall thereupon vest in Landlord, Landlord may remove from the Premises and dispose of in any manner all or any of such property, in which latter event Tenant shall, upon demand, pay to Landlord the actual expense of such removal and disposition, and the cost of repair of any and all damage to the Premises resulting from or caused by such removal.

ARTICLE XX. HOLD OVER TENANCY

If Tenant shall, without execution of a new Lease or written extension, and with consent of Landlord, hold over after the expiration of the terms of this Lease, such tenancy shall be a month-to-month tenancy, which may be terminated as provided by law. During such tenancy, Tenant shall pay to Landlord the greater of (a) the rental rate then being quoted by Landlord for comparable space in the Building; or (b) the Rent pursuant to Article III. During such tenancy, Tenant shall be bound by all of the terms, covenants, and conditions as herein specified, as far as applicable; provided, however that if Tenant fails to surrender the Premises upon the termination of this Lease, in addition to any other liabilities to Landlord arising therefrom Tenant shall indemnify and hold Landlord harmless from loss or liability resulting from such failure, including any claims made by any succeeding Tenant founded on such failure.

ARTICLE XXI. WAIVER OF SUBROGATION

ARTICLE XXII. NOTICES

To Landlord:		Jaytee Properties
		Republic Corporate Center
		Louisville, Kentucky 40202-2700
		Attention: Mr. Steve Trager

To Tenant:		At the Premises

Either party may change such address by written notice by certified or registered mail to the other.

ARTICLE XXIII. RIGHTS RESERVED BY LANDLORD

SECTION 1. Landlord shall have the sole and exclusive right to designate (and from time to time, in its discretion, re-designate) the name, address, number and/or designation of the Building.

ARTICLE XXIV. CONDEMNATION

rights in, or to any condemnation awards. In the event that during the term of this Lease a material amount of the parking area or a material amount of the use or possession thereof is taken in condemnation proceedings or by any right of eminent domain or for any public or quasi-public use and no alternative parking is provided, the term of this Lease shall at the option of Tenant cease and terminate from the date of title vesting in such proceeding.

ARTICLE XXV. MISCELLANEOUS PROVISIONS

SECTION 2. The captions of Articles of this Lease are for convenience only and shall not be considered or referred to in resolving questions of interpretation or construction.

SECTION 6. Time is of essence with respect to the performance of each of the covenants and agreements under this Lease.

SECTION 8. This Lease shall be interpreted in accordance with the law of the Commonwealth of Kentucky.

payment of any sum of money by reason of the failure of Tenant, after any notice and the expiration of any period with respect thereto, as required pursuant to the applicable provisions of the Lease, to comply with any provisions of this Lease, the sum or sums so paid by Landlord with all interest, costs and damages, shall be deemed to be additional rental hereunder and shall be due from Tenant to Landlord on the first day of the month following the incurring of such respective expenses, except as otherwise herein specifically provided.

SECTION 16. Any and all consents and approvals of Landlord required by or referred to in the Lease shall not be unreasonably withheld.

IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and delivered as of the day and year first above written.

ATTEST:		JAYTEE PROPERTIES

BY:	/s/ Pamela Anderson	BY:	/s/ Steve Trager

ATTEST :		REPUBLIC BANK & TRUST COMPANY /s/ MAR


BY:	/s/ Lara Recktenwald	BY:	/s/ Kevin Sipes

EXHIBIT A

RULES AND REGULATIONS

9. Canvassing, soliciting, and peddling in the Building is prohibited and Tenant shall cooperate to prevent such activity.

11. Landlord reserves the right to close and keep locked all entrance and exit doors of the Building on Sundays, legal holidays, and between the hours of 7:00 p.m. of any day and 7:00 a.m. of the following day, and during such further hours as Landlord may deem advisable for the adequate protection of the Building and the property of the tenants. Tenant shall have 24-hour access to the Premises.

EXHIBIT 31.1

SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Steven E. Trager, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Republic Bancorp, Inc.;

2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this quarterly report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Steven E. Trager

Steven E. Trager
President & Chief Executive Officer

Date: November 8, 2005

EXHIBIT 31.2

SECTION 302 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Kevin Sipes, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Republic Bancorp, Inc.;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Kevin Sipes

Kevin Sipes
Executive Vice President , Chief Financial Officer and Chief Accounting Officer

Date: November 8, 2005

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Republic Bancorp, Inc. (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the three and nine month periods ended September 30, 2005 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 8, 2005		/s/ Steven E. Trager
		Steven E. Trager
		President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350

Date: November 8, 2005		/s/ Kevin Sipes
		Kevin Sipes
		Executive Vice President, Chief
		Financial Officer and Chief
		Accounting Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

For the quarterly period ended September 30, 2005

601 West Market Street, Louisville, Kentucky

40202

PART I – FINANCIAL INFORMATION

REPUBLIC BANCORP, INC.

OVERVIEW

RESULTS OF OPERATIONS

Table 4 – Loan Portfolio Composition

LIQUIDITY

Table 6 – Capital Ratios

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

ITEM 4. CONTROLS AND PROCEDURES.

ITEM 1. LEGAL PROCEEDINGS.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.