Safe and Sound

Republic Bank of Chicago

Oak Brook, IL
4
Star Rating
Republic Bank of Chicago is an Oak Brook, IL-based, FDIC-insured bank dating back to 1964. Regulatory filings show the bank having equity of $198.5 million on assets of $1.89 billion, as of June 30, 2017.

Thanks to the efforts of 276 full-time employees in 19 offices in IL, the bank holds loans and leases worth $1.33 billion, including real estate loans of $964.0 million. The bank currently holds $1.52 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Republic Bank of Chicago exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three major criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is important. It acts as a bulwark against losses and affords protection for depositors when a bank is struggling financially. When looking at safety and soundness, the higher the capital, the better.
Republic Bank of Chicago received a score of 12 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 13.38.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Republic Bank of Chicago's Tier 1 capital ratio was 11.78 percent, exceeding the 6 percent level regulators consider adequate, but under the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic headwinds.

Overall, Republic Bank of Chicago held equity amounting to 10.49 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with extensive holdings of these types of assets could eventually be required to use capital to cover losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, diminishing earnings and increasing the chances of a future failure.

On Bankrate's test of asset quality, Republic Bank of Chicago scored 32 out of a possible 40 points, falling short of the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 1.51 percent of Republic Bank of Chicago's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." Comparing the the size of that reserve to the total amount of problem loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Republic Bank of Chicago's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the bank better able to withstand economic shocks. Conversely, losses lessen a bank's ability to do those things.

On Bankrate's test of earnings, Republic Bank of Chicago scored 24 out of a possible 30, exceeding the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Republic Bank of Chicago was 16.38 percent, above the national average of 9.28 percent.

The bank reported net income of $15.9 million on total equity of $198.5 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.71 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.