Republic Bank & Trust

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Locally based Republic Bank & Trust Company (the "Bank" or "Institution") has received its Community Reinvestment Act Performance Evaluation (the "CRA Evaluation") from the Federal Deposit Insurance Corporation ("FDIC").

The CRA Evaluation assesses the Bank's initiatives and performance that are designed to help meet the credit needs of the areas it serves, including low and moderate-income individuals, neighborhoods and businesses. The CRA Evaluation also includes a review of the Bank's community development services and investments in the Bank's assessment areas. Overall, the Bank originated community development loans of $44 million during the time period covered by this CRA Evaluation.

The Bank received "High Satisfactory" ratings on the Investment Test component and the Service Test component evaluated as part of the CRA Evaluation. Based on issues identified within the Bank's Refund Anticipation Loan ("RAL") program, the Bank received a "Needs to Improve" rating on the Lending Test component, and as a result, on its overall rating. The Bank received many favorable regulator comments regarding its performance under all three test components. Quoting from the CRA Evaluation, specifically regarding each of the three tests, Republic's banking regulator stated the following:

INVESTMENT TEST: "The Bank has a significant level of qualified community development investments and grants. The Bank actively seeks out potential investment opportunities, and the Bank's investments vary in complexity."

SERVICE TEST: "Retail banking services, through the use of branches, ATM's, telephone, and internet banking are reasonably accessible to essentially all portions of the Bank's assessment areas. The bank provides a relatively high level of community development services to organizations throughout the assessment area, particularly in Jefferson County."

LENDING TEST: "Lending levels reflect good responsiveness to assessment area credit needs. The distribution of loans to borrowers reflects, given the product lines offered by the institution, good penetration among retail customers of different income levels and to business customers of different sizes. The Bank has made a relatively high level of community development loans; and makes use of innovative and flexible lending practices in order to serve assessment area credit needs."

As stated in the CRA Evaluation, the FDIC concluded that the Bank violated Regulation B ("Reg B"), which implements the Equal Credit Opportunity Act ("ECOA"), specifically related to the Bank's tax refund business and its refund anticipation loan ("RAL") program. The Reg B issues involved the Bank's requirement that both spouses who file a joint tax return sign a RAL proceeds check, even if one spouse opted out of the RAL transaction. The RAL is ultimately repaid to the Bank by the IRS with funds made payable to both spouses. The Reg B issues also involved a claim that one electronic return originator ("ERO") did not allow spouses to opt out of a RAL transaction. In 2008, the Bank offered its tax related products through over 8,000 EROs nationwide.

According to Republic's CEO Steve Trager, "This requirement that both spouses sign the RAL proceeds check has always been our practice as an over abundance of caution and is part of our extensive fraud prevention effort to ensure that the tax refunds we process go to the right people. However, in response to the FDIC's concerns we will no longer include a spouse on the refund loan check if they opt out of the loan on the application."

Trager continued, "We are certainly disappointed by this FDIC rating change, since 2 years ago we received a high satisfactory rating in the Lending category. Our efforts to reinvest in the community are well documented and have been applauded by various community groups including the Louisville Urban League, Community Ventures Corporation, Reach, The Housing Partnership, the Louisville Real Estate Development Company, the Federal Home Loan Bank and Simmons College, among others. Our history includes several 'Outstanding' ratings from the FDIC."

In addition, and in response to the compliance risk associated with the tax business, the Bank and the FDIC have also agreed upon the issuance of a cease and desist order which provides, in part, for the additional training and monitoring of third party EROs with whom the Bank works. Steve Trager commented that "I am very pleased that we have effectively managed the financial risk in our tax business over the last 13 years but we are also open to suggestion on enhancing our processes. While we don't always agree with our regulators, we recognize the importance of what they do for the industry and we are dedicated to compliance with their direction."

Republic Bancorp ("Republic" or the "Company"), parent company of the Bank, was recently ranked number 10 on a list of 150 of America's top performing banks with assets of $3 billion or more. The rankings (compiled by Sandler O'Neill & Partners L.P., a New York- based investment banking firm which specializes in the financial services industry) are published in the current issue of Bank Director magazine. Republic solidified its position as one of the highest performing financial institutions in the country as a result of record net income from continuing operations in 2008 of $33.7 million, industry strong credit quality as evidenced by a non performing loan to total loan ratio of 0.58% at the end of 2008, and a capital position exceeding "well capitalized" under regulatory guidelines.

Annually, in a 'mini' economic stimulus initiative, the Bank will screen, employ and train nearly 400 seasonal workers from the Jefferson County area to expedite the Bank's tax products. Many of those employed are retired teachers or accountants. Trager noted: "We're proud to be able to offer these folks the opportunity to use their skills and to earn some extra income, and we consider this portion of our overall business to be yet another way Republic re-invests in our community. As a locally-based financial institution, what we make here stays here, and our corporate 'mantra' is very succinct: "We were here for you yesterday, we're here for you today, and we'll be here for you tomorrow."

Forward Looking Statements

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Accordingly, readers are advised not to place undue reliance on any forward-looking statements herein that pertain to the timing of regulatory compliance and/or the meeting of all requirements of the cease-and-desist order, as such events may differ materially from any projections herein due to a variety of factors, including, but not limited to: uncertainties and charges associated with federal and state regulatory oversight processes; impact of local, national, and international economies and events on the Company's business and operations, and other factors including but not limited to those found in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. In addition, the Company filed a Report on Form 8-K with the Securities and Exchange Commission today regarding the subject matter discussed in this press release. The Company undertakes no obligation to publicly update any forward-looking statements.

Republic Bancorp, Inc. (Republic) has 45 banking centers and is the parent company of: Republic Bank & Trust Company with 36 banking centers in 14 Kentucky communities - Bowling Green, Covington, Crestwood, Elizabethtown, Florence, Fort Wright, Frankfort, Georgetown, Independence Lexington, Louisville, Owensboro, Shelbyville and Shepherdsville and three banking centers in southern Indiana: Floyds Knobs, Jeffersonville and New Albany. Republic Bank has banking centers in Hudson, Palm Harbor, Port Richey, New Port Richey and Temple Terrace, Florida as well as Cincinnati, Ohio. Republic operates Tax Refund Solutions, a nationwide tax refund loan and check provider. Republic offers internet banking at www.republicbank.com. Republic has $3.9 billion in assets and $1 billion in trust assets under custody and management. Republic is headquartered in Louisville, Kentucky, and Republic's Class A Common Stock is listed under the symbol 'RBCAA' on the NASDAQ Global Select Market.

    Source: Republic Bank & Trust Company