921557--3/14/2008--REPUBLIC_BANCORP_INC

related topics

{tax, income, asset}

{loan, real, estate}

{condition, economic, financial}

{system, service, information}

{regulation, change, law}

{regulation, government, change}

{debt, indebtedness, cash}

{provision, law, control}

{financial, litigation, operation}

{stock, price, operating}

The Company s accounting policies and estimates are critical components of the Company s presentation of its financial statements. Management must exercise judgment in selecting and adopting various accounting policies and in applying estimates. Actual outcomes may be materially different than amounts previously estimated. The Company s lines of business and products not typically associated with traditional banking expose the Company s earnings to additional risks and uncertainties. RALs represent a significant business risk, and if the Company terminated the business it would materially impact the earnings of the Company. See the sections titled Results of Operations and Critical Accounting Policies and Estimates in Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations, as well as Footnote 5 Securitization and Footnote 24 Segment Information of Item 8 Financial Statements and Supplementary Data for additional discussion regarding TRS. The TRS business segment represents a significant operational risk, and if the Company were unable to properly service the anticipated growth in the business it could materially impact the earnings of the Company. See the sections titled Results of Operations and Critical Accounting Policies and Estimates in Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations, as well as Footnote 5 Securitization and Footnote 24 Segment Information of Item 8 Financial Statements and Supplementary Data for additional discussion regarding TRS. RALs represent a significant compliance and regulatory risk, and if the Company fails to comply with all statutory and regulatory requirements it could have a material negative impact on the Company s earnings. Federal and state laws and regulations See the sections titled Results of Operations and Critical Accounting Policies and Estimates in Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations, as well as Footnote 5 Securitization and Footnote 24 Segment Information of Item 8 Financial Statements and Supplementary Data for additional discussion regarding TRS. RALs represent a significant liquidity risk. Significantly overestimating or underestimating the Company s liquidity need for the upcoming tax season could have a material negative impact on the Company s overall earnings. Funding for the RAL liquidity requirements may also cost more than the Company s current estimates. See the sections titled Results of Operations and Critical Accounting Policies and Estimates in Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations, as well as Footnote 5 Securitization and Footnote 24 Segment Information of Item 8 Financial Statements and Supplementary Data for additional discussion regarding TRS. RALs represent a significant credit risk, and if the Company is unable to collect a significant portion of its RALs it would materially impact the earnings of the Company. See the sections titled Results of Operations and Critical Accounting Policies and Estimates in Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations, as well as Footnote 5 Securitization and Footnote 24 Segment Information of Item 8 Financial Statements and Supplementary Data for additional discussion regarding TRS. RB T has substantial risk in connection with the RAL securitization See the sections titled Results of Operations and Critical Accounting Policies and Estimates in Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations, as well as Footnote 5 Securitization and Footnote 24 Segment Information of Item 8 Financial Statements and Supplementary Data for additional discussion regarding TRS. The Company s Overdraft Honor program represents a significant business risk, and if the Company terminated the program it would materially impact the earnings of the Company. There can be no assurance that the Company s regulators, or others, will not impose additional limitations on this program or prohibit the Company from offering the program. The Company owns $35 million of securities which the Company believes have an elevated level of credit risk and are extremely illiquid. Mortgage banking activities would be significantly adversely impacted by rising long-term interest rates. The Company s stock generally has a low average daily trading volume, which limits a shareholder s ability to quickly accumulate or quickly sell large numbers of shares of Republic s stock without causing wide price fluctuations. The Company s insiders hold voting rights that give them significant control over matters requiring stockholder approval. Fluctuations in interest rates may negatively impact the Company s banking business. Republic is subject to regulatory capital adequacy guidelines, and if the Company fails to meet these guidelines the Company s financial condition may be adversely affected. The Company s financial condition and earnings could be negatively impacted to the extent the Company relies on information that is false, misleading or inaccurate. Defaults in the repayment of loans may negatively impact the Company Prepayment of loans may negatively impact Republic s business.

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921557--3/14/2008--REPUBLIC_BANCORP_INC_/KY/