Louisville Bank Discontinues Payday Loans, Watches Profits Plummet
Times haven't changed for Republic Bancorp since it discontinued its payday loan practice. We reported earlier this year that first quarter profits fell after such a decision was reached; the same occurred last quarter.
On Friday, the business reported a 28 percent profit drop for the quarter ending June 30, largely because the company’s results from a year earlier included the aforementioned payday advance business.
Not counting the payday loan revenue, profits were $6 million, down from $6.6 million a year earlier.
“Although we did not post record earnings, we believe our results were solid and are a testament to the core banking principles that we practice each and every day,” Steve Trager, Republic CEO, said in a statement.
He cited the slight difference between the short-term interest rates the bank pays for deposits and the long-term rates it charges for loans as a pressure on profits. The company said its loan portfolio, particularly residential real estate, has lifted banking net interest income. Non-interest income increases included a 24 percent increase in deposit service charges, primarily because of new checking accounts.
The bank did not say it had any plans to bring back offers on bad credit payday loans for its clients.