Citizens Republic Bancorp Inc. (CRBC, Financial) filed Quarterly Report for the period ended 2012-06-30.
Citizens Republic Bancorp, Inc. has a market cap of $770.1 million; its shares were traded at around $19.75 with a P/E ratio of 9.8 and P/S ratio of 1.5.
The decreases in net interest income in the three and six months ended June 30, 2012 from the comparable periods of 2011 were the result of lower average earning assets, partially offset by the effects of the higher net interest margin.
Noninterest income for the six months ended June 30, 2012 was essentially unchanged from the comparable period of 2011 as increases in gains on loans held for sale and the absence of investment securities losses were offset by decreases in mortgage and other loan income, service charges on deposit accounts, and trust fees. The higher net gain on loans held for sale was primarily the result of fewer writedowns to reflect fair value declines of the underlying collateral. In addition, Citizens recorded no sales on investment securities in 2012 as compared to net losses on sales of investment securities in 2011. The reduced mortgage and other loan income was primarily due to lower commitment fees. 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. The decrease in trust fees was the result of a reduced level of trust assets under administration.
Net income for the Other line of business increased for the three months ended June 30, 2012 as compared to the prior year. The Other line of business recorded net income for the six months ended June 30, 2012 compared to a net loss in the same period of the prior year. The increases were directly related to the elimination of the valuation allowance on the deferred tax asset. These increases were partially offset by decreases in net interest income, 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. Noninterest expense increased for the three months ended June 30, 2012 as compared to the prior year, primarily related to increases in occupancy expenses. For the six months ended June 30, 2012, noninterest expense decreased as a result of decreases in ORE expenses.
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 six months of 2012 and 2011, Citizens repurchased $2.1 million and $0.5 million of loans, respectively, pursuant to such provisions. Citizens estimates its
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Citizens Republic Bancorp, Inc. has a market cap of $770.1 million; its shares were traded at around $19.75 with a P/E ratio of 9.8 and P/S ratio of 1.5.
Highlight of Business Operations:
The following tables display the calculation of the efficiency ratio for the past five quarters and the calculation of the remainder of these non-GAAP measures other than pre-tax pre-provision profit, the calculation of which is set forth in the Results of Operations Summary section, as of the end of each of those periods. The quantitative reconciliation of adjusted net income attributable to common shareholders to GAAP net income attributable to common shareholders is provided for the three and six months ending June 30, 2012 and 2011, respectively.The decreases in net interest income in the three and six months ended June 30, 2012 from the comparable periods of 2011 were the result of lower average earning assets, partially offset by the effects of the higher net interest margin.
Noninterest income for the six months ended June 30, 2012 was essentially unchanged from the comparable period of 2011 as increases in gains on loans held for sale and the absence of investment securities losses were offset by decreases in mortgage and other loan income, service charges on deposit accounts, and trust fees. The higher net gain on loans held for sale was primarily the result of fewer writedowns to reflect fair value declines of the underlying collateral. In addition, Citizens recorded no sales on investment securities in 2012 as compared to net losses on sales of investment securities in 2011. The reduced mortgage and other loan income was primarily due to lower commitment fees. 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. The decrease in trust fees was the result of a reduced level of trust assets under administration.
Net income for the Other line of business increased for the three months ended June 30, 2012 as compared to the prior year. The Other line of business recorded net income for the six months ended June 30, 2012 compared to a net loss in the same period of the prior year. The increases were directly related to the elimination of the valuation allowance on the deferred tax asset. These increases were partially offset by decreases in net interest income, 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. Noninterest expense increased for the three months ended June 30, 2012 as compared to the prior year, primarily related to increases in occupancy expenses. For the six months ended June 30, 2012, noninterest expense decreased as a result of decreases in ORE expenses.
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 six months of 2012 and 2011, Citizens repurchased $2.1 million and $0.5 million of loans, respectively, pursuant to such provisions. Citizens estimates its
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