Safe and Sound

Republic Bank & Trust Company

Louisville, KY
5
Star Rating
Louisville, KY-based Republic Bank & Trust Company is an FDIC-insured bank started in 1982. Regulatory filings show the bank having equity of $563.9 million on $4,947,774,000 in assets, as of June 30, 2017.

U.S. bank customers have $3.23 billion on deposit at 46 offices in multiple states run by 976 full-time employees. With that footprint, the bank currently holds loans and leases worth $3.89 billion, $2.86 billion of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, Republic Bank & Trust Company exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank faired on the three key criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for depositors when a bank is struggling financially. It follows then that when it comes to measuring an an institution's financial strength, capital is essential. When looking at safety and soundness, more capital is preferred.
Republic Bank & Trust Company received a score of 12 out of a possible 30 points on our test to measure capital adequacy, coming in below the national average of 13.38.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Republic Bank & Trust Company's Tier 1 capital ratio was 12.99 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to financial downturns.

Overall, Republic Bank & Trust Company held equity amounting to 11.40 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 effect of troubled assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with lots of these types of assets may eventually have to use capital to cover losses, shrinking 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, pushing down earnings and elevating the chances of a failure in the future.

On Bankrate's test of asset quality, Republic Bank & Trust Company scored 40 out of a possible 40 points, above the national average of 37.62 points.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.40 percent of Republic Bank & Trust Company's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

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

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic trouble. Losses, on the other hand, take away from a bank's ability to do those things.

On Bankrate's test of earnings, Republic Bank & Trust Company scored 20 out of a possible 30, beating out the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. Republic Bank & Trust Company's most recent annualized quarterly return on equity was 10.83 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $30.0 million on total equity of $563.9 million. The bank had an annualized return on average assets, or ROA, of 1.25 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.