Safe and Sound

The Republic Banking Company

Republic, OH
4
Star Rating
Started in 1906, The Republic Banking Company is an FDIC-insured bank based in Republic, OH. The bank has equity of $6.8 million on $49.3 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 7 full-time employees, the bank holds loans and leases worth $39.9 million, including real estate loans of $32.2 million. The bank currently holds $39.7 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, The Republic Banking Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial strength, capital is essential. It acts as a cushion against losses and affords protection for accountholders during periods of economic trouble for the bank. From a safety and soundness perspective, more capital is better.

The Republic Banking Company did better than the national average of 13.13 points on our test to measure capital adequacy, achieving a score of 18 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. The Republic Banking Company's Tier 1 capital ratio was 20.57 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic downturns.

Overall, The Republic Banking Company held equity amounting to 13.72 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

Having a large number of these kinds of assets means a bank may eventually have to use capital to cover losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and increasing the chances of a future failure.

The Republic Banking Company scored 32 out of a possible 40 points on Bankrate's asset quality test, less than the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 2.66 percent of The Republic Banking Company'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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on The Republic Banking Company's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.

On Bankrate's test of earnings, The Republic Banking Company scored 16 out of a possible 30, exceeding the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important measure of a bank's earnings. The Republic Banking Company's most recent annualized quarterly return on equity was 7.09 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $476,000 on total equity of $6.8 million. The bank had an annualized return on average assets, or ROA, of 1.00 percent, right at the level deemed satisfactory in accordance with industry standards, and equal to the average for U.S. banks of 1.00 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.