After Strong 1Q, Citizens Republic Aims to Recover Deferred-Tax Asset

Citizens Republic Bancorp (CRBC) in Flint, Mich., reported its fourth-straight quarterly Thursday profit as loan quality continued to improve and a surge of new deposits helped generate fresh income from investment securities.

The $9.6 billion-asset said it earned $18.9 million in the first quarter, compared to a loss of $74.3 million in last year's first quarter. Its earnings per share totaled 47 cents, which beat estimates of analysts polled by Thomson Reuters by 15 cents.

The company, which was hit hard by the real estate bust and at one point reported losses in 12 straight quarters, attributed the results primarily to a 44% decline in credit expenses, which included a 91% decline in its loan-loss provision, to $8.4 million. Nonperforming assets fell by nearly 50% year over year, to $90.6 million.

Earnings were also aided by reduced expenses and continued growth in core deposits, which it has been deploying into investment securities. On the loan side, the company said its commercial and industrial portfolio increased 7% from the prior quarter, though that gain was offset by declines in other loan categories.

The company last week was released from an enforcement order from the Federal Reserve and its next milestone is recovering its nearly $312 million deferred-tax asset that it removed from its books during its string of unprofitable quarters. Citizens said Thursday that it expects to restore that asset this quarter.