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Citizens Republic Bancorp

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Citizens Republic Bancorp (CRBC) is a small bank that has seen its Zacks Consensus Earnings Estimates move higher of late. The stock is a Zacks #1 Rank (Strong Buy).

Company Description

Citizen Republic Bancorp is a $9.6 billion bank holding company headquartered in Flint Michigan. The bank offers commercial, retail & wealth management capabilities in the Midwest. Its 220 branches are located in Michigan , Wisconsin, northeastern Ohio and Indiana.

Analysts see Earnings Improving

The Zacks Consensus Earnings Estimate for the upcoming quarter has been creeping higher over the last 90 days, moving from $0.20 to $0.31 as of today. Sixty days ago, the estimate was at $0.25 and then increased to $0.28 thirty days ago.

With only four analysts covering the company, a certain degree of caution should be used when looking at CRBC. Take for example the two most recent quarters and the magnitude of earnings surprises. In the June quarter of 2011, the Zacks Consensus Earnings Estimate was calling for a loss of $0.23 per share, and CRBC reported a gain of $0.46, a difference of $0.69 per share. The September quarter saw a similar positive surprise of $0.50.

These large surprises resulted in positive moves for the stock in the amount of 8% in the June quarter and 11% in the September quarter.

TARP still hold the stock back

TARP repayments of $300 million are still a drag on the company, as investors are worried that the company may opt to sell more equity to assist in the repayment. In selling more equity, existing investors stand to lose their present percentage ownership of the bank and would like to avoid that potential dilution. While some dilution may be inevitable given a few more quarters of good earnings, a new debt issue will likely also be used to lessen that potential dilution.


Financials, especially those that have outstanding TARP obligations are not in the crosshairs of most investors these days. The volatility in and uncertainty in the sector has kept most investors on the sidelines of late. Many worry that it may be too early to increase any exposure to this group.

A sign of how cautious investors are is when they measure the valuation primarily off the tangible book value of the company. This is true for CRBC, whose standard book value calculation of $18.51 is almost double that of the tangible book value of $9.92. This cautious view is warranted given recent history, but should the earnings improvements of the last few quarter persist, growth investors will return.

The Chart

CRBC is a Zacks #1 Rank (Strong Buy), and has shown some strong earnings surprises of late. On the bigger picture it’s hard to see what those surprises have done for the stock, but continued increases in earnings estimates will likely lift this stock out of its present range.

Citizens Republic Bancorp  
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Brian Bolan is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Home Run Investor service

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