Citizens Republic Bancorp Inc. (CRBC, Financial) filed Quarterly Report for the period ended 2012-03-31.
Citizens Bkng has a market cap of $636.8 million; its shares were traded at around $17.08 with a P/E ratio of 8.3 and P/S ratio of 1.3.
Citizens did not record any tax benefit or expense for the first quarter of 2012 as compared to a tax provision of $0.1 million for the same period in 2011. Although Citizens was profitable during the first quarter of 2012, the estimated utilization of a net operating loss carryforward resulted in no tax expense being recognized.
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 and 2012, 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 three months of 2012 and 2011, Citizens repurchased $1.0 million and $0.1 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 $1.9 million and $1.1 million in the first three months of 2012 and 2011, respectively in Other Expense on the Consolidated Statements of Operations related to repurchasing or indemnification obligations on such loans.
Credit ratings by the nationally recognized statistical rating agencies are an important component of Citizens liquidity profile. Credit ratings relate Citizens 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 ratings were downgraded by Moodys Investor Service, Standard & Poors, Dominion Bond Rating Service, and Fitch Ratings throughout 2009 and 2010. During 2010, Standard & Poors and Dominion Bond Rating Service discontinued rating Citizens. In January of 2012, Fitch Ratings raised Citizens Long-term Issuer rating from CCC to B with a positive outlook. In February of 2012, Moodys affirmed Citizens ratings and raised the long-term issuer rating outlook to stable. 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.
Read the The complete Report
Citizens Bkng has a market cap of $636.8 million; its shares were traded at around $17.08 with a P/E ratio of 8.3 and P/S ratio of 1.3.
Highlight of Business Operations:
The increase in noninterest income reflects a net gain in loans held for sale and the absence of investment securities losses, partially offset by decreases in mortgage and other loan income, and service charges on deposit accounts. The net gains on loans held for sale were primarily the result of fewer writedowns to reflect fair value declines of the underlying collateral. In addition, Citizens recorded no sales on investment securities as compared to net losses in 2011. The decrease in mortgage and other loan income was the result of lower loan origination volume. The reduction in service charges on deposit accounts was directly related to the impact of regulatory changes resulting from the Dodd-Frank Act and guidance issued by the FDIC related to overdraft payment programs.Citizens did not record any tax benefit or expense for the first quarter of 2012 as compared to a tax provision of $0.1 million for the same period in 2011. Although Citizens was profitable during the first quarter of 2012, the estimated utilization of a net operating loss carryforward resulted in no tax expense being recognized.
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 and 2012, 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 three months of 2012 and 2011, Citizens repurchased $1.0 million and $0.1 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 $1.9 million and $1.1 million in the first three months of 2012 and 2011, respectively in Other Expense on the Consolidated Statements of Operations related to repurchasing or indemnification obligations on such loans.
Credit ratings by the nationally recognized statistical rating agencies are an important component of Citizens liquidity profile. Credit ratings relate Citizens 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 ratings were downgraded by Moodys Investor Service, Standard & Poors, Dominion Bond Rating Service, and Fitch Ratings throughout 2009 and 2010. During 2010, Standard & Poors and Dominion Bond Rating Service discontinued rating Citizens. In January of 2012, Fitch Ratings raised Citizens Long-term Issuer rating from CCC to B with a positive outlook. In February of 2012, Moodys affirmed Citizens ratings and raised the long-term issuer rating outlook to stable. 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.
Read the The complete Report
