Nonperforming assets continued to rise at an already stressed Citizens Republic Bancorp Inc. of Flint, Mich., in the second quarter, as the Michigan economy deteriorated further.
Nonperformers climbed 10% from the first quarter and 112% from a year earlier, to $604.7 million, contributing to a fifth consecutive loss for the $12.3 billion-asset company.
The second-quarter loss widened by 73% from a year earlier, to $347.4 million, or $2.81 a share.
Though a $266.5 million goodwill impairment charge accounted for most of the loss, Citizens Republic also had a $100 million provision for loan losses. The provision was up 56% from the first quarter and 34% from a year earlier.
Chargeoffs totaled $49.2 million, up 34% from the first quarter, but down 28% from a year earlier.
The company built its loan-loss reserve to 3.96% of total loans, from 3.23% at March 31.
It highlighted a drop in loans delinquent 30 to 89 days. At June 30, the delinquencies were $172 million, down 30% from the first quarter and 10% from a year earlier.
However, its watch list loans that are still accruing but have shown weakness grew. At June 30 the list totaled $1.5 billion, up 13% from the first quarter and 47% from a year earlier.
Nonperforming assets made up 7.13% of total loans plus other repossessed assets acquired.
Capital ratios at its Citizens Republic Bank remain well above regulatory minimums, but the company's tangible common equity ratio a metric that investors watch closely thinned to 5.09%.
To boost that ratio, the company announced last month that it aims to convert up to $125 million in subordinated debt into common equity. It also disclosed then that it has applied for $290 million through the Capital Assistance Program, created in February.
Of that, as much as $100 million would be used to redeem a third of the preferred shares Citizens Republic sold to the Treasury last year. CAP's main advantage is that preferred shares issued to the government are convertible to common ones.