“Citigroup’s stock looks perfectly priced – for more mediocrity.

“The bank’s $3.9 billion first-quarter net income was no disaster. And, unlike JPMorgan, Citi beat analysts’ estimates. Its bad bank, Citi Holdings, is no longer much of a drag. And the bank even managed to use a chunk of its substantial tax breaks and thus increase capital.

“For now, though, shareholders don’t have much more to cheer about. Citi’s shares jumped as much as 4.4 percent on the better-than-expected earnings report. But even with that, the bank is trading at just 83 percent of its tangible book value, the only major financial firm currently stuck at less than its net worth.

“The discount makes sense based on Citi’s reported earnings. Annualized return on equity for the first three months of the year was 7.8 percent, below the 10 percent rule-of-thumb threshold for banks to cover their cost of capital.”

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Read full NY Times article here.