Two weeks ago for the first time in a very long time small regional banks started to show up on our model selection list. It was refreshing to see them after a half dozen years in financial Siberia and one of them appears will have a very good short term payoff. Just as in the case of Sun Healthcare in June, we’ve only had a short time to build the position but the position is in place for most client portfolios.
Citizens Republic Bancorp is a small regional bank operating in Ohio, Michigan and Wisconsin.
Our client cost basis is in the $17 t0 $18 range which may not seem like much with the stock now trading at $19.17 up $1.53 on the day. Its the news that matters: CRBC announced it is hiring JP Morgan to seek a buyer for the bank.
Assuming JP Morgan can find a buyer the big question will be at what price. Here we have to dig into the financials of the bank:
CRBC Book Value: $26.53
Capital ratios are healthy and non-performing assets are improving.
Over the past three months insiders have purchased 11,200 shares.