Citizens Bank Showing Signs of Trouble

Citizens Republic Bancorp like many other banks are showing signs of trouble. A regional bank, Citizens Bank is headquartered in Flint Michigan and posted a quarterly loss of $201 Million.

This operating loss together with a credit write-down and charge for “goodwill impairment” topped out at $220.5 Million.

The Chairman of the bank, William Hartman said, “assuming our provision for loan losses stabilizes as we expect” the bank could right the ship by the fourth quarter.

That’s a pretty big “If” if you ask me…but once again folks just because a bank has a bad quarter or two is no reason to panic.

Depositors have no exposure. The FDIC covers depositors up to $100,000. So if you have more than a $100,000 spread it around. But my guess if you are smart enough to accumulate that kind of money, you don’t need me to tell you that.

The folks who should worry are shareholders or small businesses in Flint needing loans. The credit crisis will hit the small business operators more than the bank’s depositors.

It’s going to a bumping ride as bank failure after bank failure further scares the public. But in the end, we need a “house cleaning”. The weak must go to make way for the strong.

If bad borrowers can get swept away by foreclosure, then bad banks can get swept away too. It’s only fair.

Good Luck!

PS: If you want to check out their website, go to www.citizensbanking.com not the more seemingly obvious citizensbank.com. ..that belongs to another bank.

Author: Rob K. Blake
Published July 21, 2008