LOUISVILLE, Ky. (Feb. 16, 2012) – Republic Bancorp has been identified as the best performing bank in the United States based on financial performance and level of capital. In the first quarter 2012 edition of Bank Directormagazine, Louisville-based Republic Bancorp was rated number one based on a combined ranking on two financial metrics: core return on tangible common equity (ROTCE) and the ratio of average tangible common equity (TCE) to tangible assets.
Data was collected by the New York-based investment banking firm Sandler O’Neill + Partners from 484 publically traded U.S. banks from July 1, 2009, through June 30, 2011.
According to Jack Milligan, editor of Bank Director magazine, “… banks with a higher capital ratio are making better use of its shareholders’ money. In the good old days, when banks were able to operate with significantly more leverage than they can today, it was much easier to post ROEs in the high teens and even low twenties. Attaining that level of performance today is a truer test of a bank’s strategy, business model and the operating skill of its management team.”
“The ranking is a good measurement of how companies are deploying their capital and those companies that are better at getting a return on that capital,” said Mark Fitzgibbon, director of research at Sandler.
Republic’s high TCE ratio is central to its business strategy, Republic CEO Steve Trager said .
“We pump a lot of earnings back into the business,” Trager said. “We don’t pay high dividends. We want to manage Republic Bancorp for the long term.”
A high level of capital also allows Republic to react quickly to opportunities when they arise, whether it’s a potential acquisition or a new product that meets a need in the market. “It’s nice to know that we can pursue opportunity without depending on others to raise capital, because raising capital when you need it is tough,” Trager states.