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Citizens Republic Bancorp Inc. (CRBC) filed Quarterly Report for the period ended 2011-09-30.
Citizens Republic Bancorp Inc. has a market cap of $382.3 million; its shares were traded at around $9.5 with and P/S ratio of 0.6.
This is the annual revenues and earnings per share of CRBC over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CRBC.
Highlight of Business Operations:
The decreases in net interest income in the three and nine months ended September 30, 2011 from the comparable periods of 2010 were the result of lower average earning assets, partially offset by the effects of the higher net interest margins.Net loss from discontinued operations was $3.8 million for the first nine months of 2010. The loss included a net loss of $4.5 million related to the sale of F&M. During the first quarter of 2010, the carrying value of F&M’s equity exceeded the contractual sales price. Therefore Citizens recorded a $10.2 million loss to mark the assets (primarily loans) and liabilities being sold to fair value, less cost to sell. In the second quarter of 2010 Citizens recognized an unrealized gain of $5.7 million associated with the F&M investment portfolio as of the transaction sale date.
The Other line of business recorded net income for the three and nine months ended September 30, 2011 as compared to net losses in the same periods of the prior year. This was primarily due to higher net interest income, lower noninterest expense, and lower taxes, and for the nine month period, losses from discontinued operations in 2010. The improvement were partially offset by lower noninterest income. The increases in net interest income were primarily the result of the internal profitability methodology utilized at Citizens that insulates the other lines of business from interest-rate risk and assigns the risk to the asset/liability management function, which is a component of this segment. The decreases in noninterest expense were primarily the result of a temporary decrease in FDIC insurance costs. The 2010 loss on discontinued operations was directly related to the fair value adjustment in the first quarter of 2010 related to the sale of F&M. The decreases in noninterest income were primarily the result of net gains on investment securities sales during 2010.
In June 2008, Citizens entered into a master sales agreement to sell its residential mortgage originations to its third-party servicer at a fixed rate with no recourse. Under this agreement, Citizens sells more than 90% of new mortgage origination, resulting in minimal new loans being retained in the residential mortgage portfolio. During 2011, the amount of new mortgage loans underwritten to non-GSE standards, all of which are retained in the residential mortgage loan portfolio, was immaterial. Prior to June 2008, when Citizens sold its residential mortgage originations to several secondary market participants, it made various standard representations and warranties. The specific representations and warranties made by Citizens depended on the nature of the transaction and the requirements of the buyer. In the event of a breach of the representations and warranties, Citizens may be required to either repurchase the mortgage loans (generally at unpaid principal balance plus accrued interest) with the identified defects or indemnify the investor for losses resulting from the breach. During the first nine months of 2011 and 2010, Citizens repurchased $1.5 million and $2.1 million of loans, respectively, pursuant to such provisions. Citizens estimates its exposure to losses from its obligation to repurchase previously sold loans based on the individual circumstances applicable to each loan submitted for potential repurchase by an investor, and as a result, Citizens maintains a liability included in Other Liabilities on the balance sheet for estimated losses on loans expected to be repurchased or on which indemnification is expected to be provided. Citizens recorded $3.5 million and $2.5 million in the first nine months of 2011 and 2010, respectively in Other Expense on the Consolidated Statements of Operations related to repurchasing or indemnifying such loans.
Credit ratings by the nationally recognized statistical rating agencies are an important component of Citizens’ liquidity profile. Credit ratings relate to the Corporation’s ability to issue debt securities and the cost to borrow money, and should not be viewed as an indication of future stock performance or a recommendation to buy, sell, or hold securities. Among other factors, the credit ratings are based on financial strength, credit quality and concentrations in the loan portfolio, the level and volatility of earnings, capital adequacy, the quality of management, the liquidity of the balance sheet, the availability of a significant base of core deposits, and Citizens’ ability to access a broad array of wholesale funding sources. Adverse changes in these factors could result in a negative change in credit ratings and impact not only the ability to raise funds in the capital markets, but also the cost of these funds. Citizens’ credit rating was downgraded by Moody’s Investor Service, Standard & Poor’s, Dominion Bond Rating Service, and Fitch Ratings throughout 2009 and 2010. During 2010, Standard & Poor’s and Dominion Bond Rating Service discontinued rating Citizens. In the first quarter of 2011, Fitch Ratings lowered Citizens’ credit ratings. Ratings are subject to revision or withdrawal at any time and each rating should be evaluated independently of any other rating. The current credit ratings for the Holding Company and the Bank, the dates on which the ratings were last issued and the outlook watch status of the ratings are displayed in the following table. An explanation of these ratings may be obtained from the respective rating agency.
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