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'Mini-Crat' Profile: Republic Bancorp - A Smaller Kentucky Bank With 16 Years Of Dividend Increases

Published Thu, 08 Feb 2018 00:00:00 -0500 on Seeking Alpha

Republic Bancorp (Nasdaq: RBCAA) is a bank holding company whose primary place of business is in Kentucky. It has a smattering of branches in Ohio and Indiana. It purchased Cornerstone Bancorp in 2016 to increase its presence in Florida. Like any bank, RBCAA’s business success is tied to the economic fortunes of its state of residence. Thankfully, Kentucky is doing well:

The above chart shows that the Y/Y percentage gain in Kentucky GDP has increased consistently between 2% and 3% on a Y/Y basis over the past four years. The latest state-level leading indicators from the Philadelphia Fed point towards continued expansion:

Finviz classifies RBCAA as a Southwest regional bank. The overall index of this sector is up about 8% over the last year:

Republic is a smaller issue: it ranks 17th out of 29th of the Southeast banks on a market cap basis ($731 million). It is the fifth cheapest stock in the group on a P/E basis (17.34) and the sixth cheapest on a forward P/E basis (11.90). Finally, the bank has the fifth highest dividend that it has increased for 16 consecutive years.
There are three key balance sheet metrics for any bank: deposits, loans, and investments. Deposits feed loans, which are the bank's primary assets. The investment portfolio provides a third income stream. The following table shows the growth of each for the past five years:

(Data from Morningstar; author’s calculations)
The most important number above... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
REPUBLIC BANCORP 47.22   12.4 3.81 1.06 2.18


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