10 Cheapest Bank Stocks for 2011

2. Republic Bancorp

Company Profile

Shares of Republic Bancorp (RBCAA) of Louisville, Ky. closed at $19.52 Friday, declining 4% year-to-date. The forward price-to-earnings ratio was 6.2, based on the consensus 2011 earnings-per-share estimate among analysts polled by Thomson Reuters.

The company boasted the highest dividend yield among this group of ten holding companies. Shares were yielding 2.93% as of Friday's close, based on a quarterly payout of 14.3 cents a share.

Income Statement

Republic Bancorp earned $8.4 million or 40 cents a share during the second quarter, down from $44.6 million or $2.14 in the first quarter when the company reported a revenue spike from its Tax Refunds Solutions business, which makes tax refund anticipation loans and facilitates those loans through third-party tax preparers and also charges fees to process refunds electronically. For the second quarter of 2009, the company reported net income of $6.9 million or 33 cents a share.

Balance Sheet

Republic Bancorp had $3.1 billion in total assets as of June 30. The nonperforming assets ratio was 1.41% -- quite low in the current environment - and loan losses have been minimal through the credit crisis.

Stock Ratios

Shares were trading for 1.1 times tangible book value. The forward P/E of 6.2 appeared quite low, although it remains to be seen if Republic will continue the stellar seasonal performance of its tax services businesses. The P/E was 17.4 at the end of 2005, 21.3 at the end of 2006 and 13.3 at the end of 2007.

Analyst Ratings

Two analysts cover the shares and both recommend investors hold. Lingering regulatory concerns about the bank's tax refund loan business are probably dragging on the shares, as the company has not followed up on an announcement in December that it would meet with the FDIC to discuss the future of its tax loan program.