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Republic Ranked As The Best-Performing Bank In The U.S.

By Lane Report Staff

Louisville-based Republic Bancorp has been identified as the best-performing bank in the United States based on financial performance and level of capital in a listing compiled by Bank Director magazine.

In the first-quarter 2012 edition of the magazine, Republic Bancorp was rated No. 1 based on a combined ranking of 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 publicly traded U.S. banks from July 1, 2009 through June 30, 2011.

According to Bank Director Editor Jack Milligan, “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 (return on equity) 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.”

Republic Bancorp CEO Steve Trager said that Republic’s high TCE ratio is central to its business strategy.

“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. 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.”

Last month, Republic expanded into Tennessee with the acquisition of Tennessee Commerce Bank, a banking institution that was closed down by the Tennessee Department of Financial Institutions in late January. In addition to assuming approximately $1 billion of the TCB deposits, Republic purchased approximately $122 million of loans and other real estate owned for $65 million. TCB’s only office, located in Franklin, Tenn., will continue to operate under the TCB name as a division of Republic.

The acquisition brings the Republic’s total number of banking centers to 43, with locations in Kentucky, Indiana, Ohio and Tennessee. The company also operates Tax Refund Solutions, a nationwide tax refund loan and check provider.