• Citi is trading at 60% of tangible book value and I would expect a return to a more normal 80-90% of TBV.
• Citi's net interest margin, while it has suffered along with the rest of the industry, seems to be slightly higher than peers.
• Share repurchases were very strong at C before the Fed put a halt to them, and dividend increases were also very significant.

I must confess when I began doing my research for this article I thought I'd arrive at a different conclusion than I did. I have owned Citigroup Inc. (C) stock since October 2007. Awesome time to buy a financial stock by the way. Spot on.

Anyway, I held straight through everything that happened during the financial crisis and suffered the dividend cuts, the dividend suspension, and the 1-for-10 reverse split that occurred in May of 2011. I was kind of shell-shocked and had very much soured on the stock of Citi.

So for the last nearly 10 years, I have owned 5 shares of Citi. Not exactly a stock I was doing a lot of due diligence on because even if it went to zero, the damage was already done to my portfolio. It also didn't feel like enough money to even cash out those five shares and put the money to work elsewhere because it wasn't really worth the effort or, until recently, the commission. But that is water under the bridge. Sunk costs are sunk, as we say in this world of business. So what are the prospects of the bank going forward?

Well, let's take a look at how they stack up to several of their peers and a couple of smaller concerns as well.

Banks I Researched

At about the same time I purchased the Citi stock, I also bought 100 shares of Bank of America Corp. (BAC). With them I also suffered a dividend cut (down to a penny per quarter for several years) but they never suspended the dividend and they did not do a reverse split. So I still own 100 shares and figured it's time to look under the hood there too. I am throwing in JPMorgan Chase & Co. (JPM) because many consider them to be one of the best-run banks in the country. I'm also looking at two much smaller banks: Bank OZK (OZK) and thanks to a reader suggestion, I'm going to be looking at Washington Trust Bancorp Inc. (WASH).

Earnings Per Share

The past 8-10 months have been harmful to the earnings of many companies and the banks have not been exempt. Back in 2008, Citi lost $56.30 per share! Gone. We do not want to invest in a company or industry where something like that may occur again. Thankfully, Citi and all of the banks are much better capitalized these days.

This virus has been awful in more ways than one, but none of the banks I evaluated had lost anything close to that kind of money. In fact, over the past several quarters, while you can see the slowdown in the results, none of them have lost any money. They have made a lot less than they thought they were going to, but they have still been profitable.

The following table lists Net Income to Company (millions), pulled from the pages of Seeking Alpha. Here is the link to BAC's income statement.

So we can see that both BAC and Citi have gotten back partway to where they were in September of 2019 while JPM is fully back and OZK and WASH are close. It is important to note that Citi had a net allowance for credit loss build of $314M while JPM had $569M in net reserve releases. Additionally, Citi had a $0.4B civil penalty which also depressed their net income in Q3.

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