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Earnings season is here once again. We're about a week in, but we've already seen some impressive numbers from banking behemoths JPMorgan Chase (NYSE: JPM ) , Wells Fargo (NYSE: WFC ) , Citigroup (NYSE: C ) , and Bank of America (NYSE: BAC ) . While these results are important to those of us that follow the banking sector, my interest lies in some of the smaller banks beyond the behemoths.
The latest regional bank to check in with earnings is Citizens Republic Bancorp (Nasdaq: CRBC ) , which will be released after the market closes on Thursday. With that in mind, here are some things I will be watching for in the earnings release.
What analysts are expecting
Analysts are expecting a decrease in both revenue and earnings from the same quarter last year, with $76.1 million in revenue and $0.48 in earnings per share. It wasn't so long ago that Citizens Republic was coming off of 12 consecutive quarters of losses, but the bank has rebounded quite nicely. For example, 2010 losses totaled $314.6 million as the bank decided to write down millions in bad loans. Last year saw improvement, with only a $16.3 million loss. This year, analysts are expecting a return to profitability for the Michigan bank, expecting approximately $84.7 millionÂ in income.
Balance sheet improvement
Citizens Republic checked in as the best performing regional bank in 2011, and it is well on its way to repeat again in 2012. Over the past 12 months, the bank joined Regions Financial (NYSE: RF ) and Synovus Financial (NYSE: SNV ) in outperforming Apple (NASDAQ: AAPL ) , returning over 150% in the process. For this to happen, Citizens Republic needs to continue to improve its asset quality by reducing nonperforming loans and increasing deposits. If it manages to do so, it could be one of the most exciting regional bank opportunities going forward.
What else to look for
In announcing a merger with FirstMerit (Nasdaq: FMER ) in September, Citizens Republic has put away its "for sale" sign. That's may be a disappointment to regional banking favorite Huntington Bancshares (Nasdaq: HBAN ) , which had been rumored to be a potential suitor. Citizens investors will now want to turn their focus to determining whether they want to cash in their chips, or stick around to become shareholders of the combined banks.
It seems that Citizens Republic will soon be off the market, but there still appears to be ample opportunity among smaller banks in the U.S. You can read about another small, under-the-radar bank that's been called one of The Stocks Only the Smartest Investors Are Buying. Learn about it, and more, in our exclusive free report. Just click here to keep reading.