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Don’t you just love it when someone else does your homework? Cale Smith is the open man and has been doing a fantastic job analyzing Citizens Republic (CRBC). He even has an Excel model for those of you that like Excel models: not me but it has excellent data. So it might be better to play second violin and only complement it with further analysis over the next weeks.

CRBC was mentioned in passing a couple of times including one with other financials for January effect picks. I remember that one of those picks was an aggressive one: The South Financial Group, Inc. (TSFG), a bank that might be better for a what not to do while investing in banking. Luckily, it seems that Cale and I decided that to be conservative was better for a first pick in a troubled sector and bought CRBC.

To complete, you might want to check CRBC’s results reported yesterday afternoon. A very solid performance with NPAs, NPLs, delinquencies, provisions, charge-offs, watchlist loans all down. Despite the small loss, all capital ratios and the loan loss reserve were way up … and the disclosure was excellent.

Annual pre-tax pre-provision earnings of $131 million and $613 million of tangible common equity for a $317 million market capitalization.

Cale mentioned he will next tackle the Michigan economy – do not ignore the economy while investing in banking – and if he convinces us that things are improving I might add a second pick in the region.

Disclosure: Long CRBC

Source: Banks in My Mind: Citizens Republic Bancorp