 Investor Presentation Second Quarter 2012 Exhibit 99.1 |
 2 Safe Harbor Statement Discussions and statements in this presentation that are not statements of historical fact (including without limitation statements that include terms such as “will,” “may,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “project”, “intend,” and “plan”) and statements regarding Citizens’ future financial and operating results, plans, objectives, expectations and intentions, are forward- looking statements that involve risks and uncertainties, many of which are beyond Citizens’ control or are subject to change. No forward–looking statement is a guarantee of future performance and actual results could differ materially. Factors that could cause or contribute to such differences include, without limitation, risks and uncertainties detailed from time to time in Citizens’ filings with the Securities and Exchange Commission. Other factors not currently anticipated may also materially and adversely affect Citizens’ results of operations, cash flows, financial position and prospects. There can be no assurance that future results will meet expectations. While Citizens believes that the forward-looking statements in this presentation are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. Citizens does not undertake, and expressly disclaims any obligation to update or alter any statements, whether as a result of new information, future events or otherwise, except as required by applicable law. |
 Who We Are |
 4 Who We Are Established in 1871 57 th largest bank holding company in the U.S. ranked by assets – $9.7 billion assets and $7.3 billion deposits – Presence in 3 Upper Midwest states with 219 branches and 248 ATMs Increased market share in 49% of our counties since 2008 Growing number of new clients 10% annually 80% of revenue is Michigan based Company Overview 219 Branches / 248 ATMs |
 5 How We Deliver Our Service Core Banking 86% of revenue Retail consumer Commercial clients up to $5 million loan size Treasury Management: 31% of commercial clients use TM services Public Funds: focus on generating lasting relationships rather than temporary deposits Preferred SBA Lender: dedicated specialists to fast track process. Expertise in other state and local loan programs. Mortgage: accommodate and sell Indirect marine and RV lending Investment Center: introduce single service CD clients to financial consultants Corporate Banking 10% of revenue Asset Based Lending Corporate Specialty healthcare focus in assisted living & skilled nursing Wealth Management 4% of revenue Personal Trust Employee Benefits Institutional Trust |
 Local teams focus on delivery of : Client service Closing pipeline opportunities Referring business 6 Wealth Business Development Officer Local Advisory Board Commercial Banker Mortgage Loan Officer Public Funds Officer Branch Manager Treasury Management Officer Investment Consultant Client Local Delivery of Service |
 Where We’ve Been |
 8 Strategically Managed Through Cycle Acquired Michigan-based bank with heavy real estate concentrations in late 2006 Economic downturn and challenging Michigan economy resulted in elevated credit costs Employed strategies to reduce balance sheet risk Enhanced capital – suspended dividend (1Q08) – $200 million common equity raise (3Q08) – $300 million TARP issuance (4Q08) – exchanged sub debt & trust preferred for $200 million of common equity (3Q09) |
 9 Successful Leaders in Key Roles Name Title Held Position Since Cathy Nash Chief Executive Officer Feb. 09 Lisa McNeely Chief Financial Officer Aug. 10 Mark Widawski Chief Credit Officer Feb. 09 Brian Boike Treasurer Oct. 09 Judi Klawinski Director of Core Banking Oct. 09 Ray Green Director of Corporate Banking May 10 Joe Czopek Controller Oct. 09 Ken Duetsch Director of Wealth Management Aug. 11 |
 Since 2009, focused on clients/revenue while working through credit issues 10 $26.6 $20.6 $29.6 $33.1 $34.7 $34.5 $36.2 $32.1 $30.7 $32.8 $37.8 $36.9 $31.7 $31.7 $0 $10 $20 $30 $40 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Pre-tax Pre-provision Profit* Revenue Focus Problem Asset Resolution Focus Strengthened franchise value Eliminated uncertainty around credit 0% 1% 2% 3% 4% 5% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q112 2Q12 NPAs / Assets % CRBC Peer Median** Regional Peer Median** (in millions) * Non-GAAP measure, as defined by management, represents net income (loss) excluding income tax provision (benefit) provision for loan losses, securities (gains)/losses, and any impairment charges (including goodwill, credit write downs and fair-value adjustments) caused by this economic cycle. ** Source: SNL Financial MRQ data |
 Strategy from 2009 – 2010 1. Preserved capital by managing assets 2. Grew and maintained reserve levels in recognition of portfolio risk 11 $0 $100 $200 $300 $400 $500 $600 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Allowance for Loan Losses Non-Performing Loans $12,982 $12,288 $12,072 $11,932 $11,652 $10,834 $10,639 $9,966 $9,724 $9,496 $9,600 $9,463 $9,577 $9,670 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Total Assets |
 Strategy from 2009 – 2010 3. Aggressively and actively worked out of problem assets 4. Carefully managed capital levels to allow execution of problem asset reduction 12 June 30, 2011 Sept. 30, 2011 Dec. 31, 2011 March 31, 2012 June 30, 2012 Leverage ratio 7.83% 8.21% 8.45% 8.71% 9.77% Tier 1 capital ratio 12.43 12.81 13.51 13.70 14.70 Total capital ratio 13.77 14.14 14.84 14.97 15.96 Tier 1 common equity (non-GAAP) 6.36 6.77 7.24 7.49 8.50 $549 $601 $606 $591 $551 $468 $436 $280 $175 $139 $137 $102 $91 $94 4.4% 5.0% 5.2% 5.1% 4.9% 4.3% 4.1% 2.8% 1.8% 1.5% 1.4% 1.1% 1.0% 1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% $0 $100 $200 $300 $400 $500 $600 $700 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Non-Performing Assets NPAs as a % of Total Assets |
 Where We’re Going |
 Continue to Provide Top Tier Client Service 14 * Surveys conducted by Prime Performance ™ 76 78 80 82 84 86 88 90 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 June 12 Likelihood to Recommend * Citizens' Score PPI Industry Average |
 Rebuild Loan Portfolio Focused on proven competencies – Business owner lending – Corporate lending – structured finance, ABL, healthcare expertise – Indirect marine and RV 15 $8,625 $8,302 $8,097 $7,788 $7,439 $7,138 $6,888 $6,217 $5,704 $5,628 $5,672 $5,530 $5,528 $5,522 $4,000 $6,000 $8,000 $10,000 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Loan Portfolio Balances (in millions) |
 Mitigate Expected Margin Pressure 16 2.74% 2.75% 2.99% 3.13% 3.14% 3.35% 3.32% 3.42% 3.53% 3.56% 3.63% 3.62% 3.56% 3.60% 2.00% 2.50% 3.00% 3.50% 4.00% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net Interest Margin (FTE) Reduce single service CD clients Manage liquidity levels to reflect improved credit trends 10,000 12,000 14,000 16,000 18,000 12/31/10 3/31/11 6/30/11 9/30/11 12/31/11 3/31/12 6/30/12 Single Service CD Clients 0 100 200 300 400 500 600 700 Fed Funds Sold (average) (in millions) 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Continue focus on core deposits Core Deposits Retail CDs Brokered CDs |
 Reserve Reductions Follow Improved Metrics 17 Reserve model is historical looking; future modeling will continue to reflect significantly improved credit metrics Ensure reserves reflect reduced portfolio risk and support growth initiatives 0% 1% 2% 3% 4% 5% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Loan Loss Reserves / Loans % CRBC Peer Median* Regional Peer Median* * Source: SNL Financial MRQ data |
 Report Consistent Profits 18 * Excludes discontinued operations Reprice and add new fee income streams to replace lost revenue from regulatory changes $0 $10 $20 $30 $40 $50 $60 $70 $80 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Operating Non-Interest Expense* Salaries and Employee Benefits Other Expenses * Non-GAAP measure. See Appendix for reconciliation. Continue prudent expense management while adding key revenue generating positions - 5,000 10,000 15,000 20,000 25,000 30,000 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Operating Non-Interest Income* Service charges on deposit accounts Card-based and other nondeposit fees Other non-interest income* (49) (359) (69) (68) (85) (35) (57) (103) (69) 14 20 21 25 26 -400 -350 -300 -250 -200 -150 -100 -50 0 50 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Income (Loss) before Tax* |
 19 2Q12 Highlights Restored deferred tax asset Reported consistent quarterly profit from banking operations – Consistent net interest margin at 3.60% – Fee income from core banking services remained solid – Maintained control over operating expenses Loan growth in focused areas of expertise – 3% growth in C&I portfolio; 22% annualized YTD growth – 6% growth in Indirect portfolio; 12% annualized YTD growth – Strong origination and pipeline activity in C&I and Indirect Credit trends showed continued stability and improvement |
 Solid Core Earnings 20 2.74% 2.75% 2.99% 3.13% 3.14% 3.35% 3.32% 3.42% 3.53% 3.56% 3.63% 3.62% 3.56% 3.60% 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 3.20% 3.40% 3.60% 3.80% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net Interest Margin (FTE) $109.9 $137.5 $138.2 $0 $20 $40 $60 $80 $100 $120 $140 $160 2009 2010 2011 Pre-tax Pre-provision Profit* 2.90% 3.31% 3.58% 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 3.20% 3.40% 3.60% 3.80% 2009 2010 2011 Net Interest Margin (FTE) $26.6 $20.6 $29.6 $33.1 $34.7 $34.5 $36.2 $32.1 $30.7 $32.8 $37.8 $36.9 $31.7 $31.7 $0 $10 $20 $30 $40 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Pre-tax Pre-provision Profit* |
 Efficiency Ratio Trends 21 70.16% 76.84% 79.23% 70.89% 68.39% 70.40% 64.19% 68.22% 67.09% 63.85% 59.89% 61.39% 65.20% 65.99% 50% 55% 60% 65% 70% 75% 80% 85% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Quarterly Efficiency Ratio Peer Data Source: SNL Financial 74.21% 67.73% 63.05% 50% 55% 60% 65% 70% 75% 80% 2009 2010 2011 Annual Efficiency Ratio Revenue per FTE of $207,000 is in line with peer median of $210,000 Salary & benefits expense per FTE of $62,500 is better than peer median of $72,200 |
    Organically Growing Strong Capital Position 0% 2% 4% 6% 8% 10% 12% 14% 16% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Total Capital Tier 1 Capital Tier 1 Common (non-GAAP) 22 Accelerated resolution of over $920 million of problem assets |
 23 Positioned for Growth Successfully managed through credit cycle with a strategic focus on revenue generation and problem asset resolutions Strategically focused into 2012 to – Continue providing top tier client service – Rebuild loan portfolio – Mitigate expected margin pressure – Evaluate reserve levels – Report consistent profitability |
 24 Appendix |
 25 Upper Midwest Franchise MSA Rank Number of Branches Total Deposits ($000) % of Franchise % Market Share Michigan: Flint, MI 1 20 1,529,744 20.4 40.48 Detroit-Warren-Livonia, MI 11 31 1,154,717 15.4 1.28 Saginaw-Saginaw Township North, 1 15 589,977 7.9 29.97 Lansing-East Lansing, MI 3 14 521,070 6.9 10.42 Jackson, MI 2 8 373,118 5.0 24.57 Bay City, MI 3 5 212,226 2.8 20.34 Ann Arbor, MI 11 6 208,963 2.8 3.37 Cadillac, MI 1 7 188,460 2.5 35.99 Owosso, MI 3 6 135,722 1.8 20.54 Sturgis, MI 3 4 107,782 1.4 15.76 Alpena, MI 1 2 94,514 1.3 27.74 Houghton, MI 3 3 87,682 1.2 13.87 Total Michigan 8 155 6,024,966 80.3 3.82 Non-Michigan: Cleveland-Elyria-Mentor, OH 17 12 321,077 4.3 0.64 Green Bay, WI 9 9 218,449 2.9 3.29 Appleton, WI 11 6 159,161 2.1 4.10 Stevens Point, WI 5 2 92,474 1.2 7.83 Platteville, WI 8 4 74,056 1.0 6.32 Total Non-Michigan 60 1,480,553 19.7 Source: SNL Financial as of 6/30/11 |
 26 Continued Stabilization and Diversification in Michigan’s Economy Source: U.S. Bureau of Labor Statistics Michigan Nonfarm Employment Michigan Employment by Industry May 2012 May 2002 $000s % $000s % Trade, Transportation, and Utilities 654.9 16.3% 754.7 16.7% Government 617.2 15.4% 694.6 15.3% Professional Services 579.2 14.4% 603.4 13.3% Health Care 550.7 13.7% 472.9 10.4% Leisure and Hospitality 389.6 9.7% 411.0 9.1% Other Manufacturing 385.6 9.6% 486.6 10.7% Motor Vehicle 208.7 5.2% 362.2 8.0% Financial Activities 199.7 5.0% 214.1 4.7% Other Services 169.2 4.2% 180.5 4.0% Construction 123.9 3.1% 207.1 4.6% Education Services 80.8 2.0% 65.2 1.4% Information 53.6 1.3% 71.3 1.6% Mining and Logging 7.7 0.2% 8.9 0.2% Total Nonfarm 4,020.8 4,532.5 Total Manufacturing 594.3 14.8% 848.8 18.7% in thousands Michigan NonFarm Employment (Seasonally Adjusted) Trend 3,500 3,600 3,700 3,800 3,900 4,000 4,100 4,200 4,300 |
 27 Continued Stabilization and Diversification in Michigan’s Economy Unemployment Trends Source: U.S. Bureau of Labor Statistics and Freddie Mac 4% 6% 8% 10% 12% 14% 16% US Unemployment Rate Michigan Unemployment Rate -20% -15% -10% -5% 0% 5% 10% 15% Freddie Mac House Price Index Michigan United States |
 28 Core Earnings Strength Pre-Tax Pre-Provision Profit (non-GAAP) (in millions) 3Q11 4Q11 1Q12 2Q12 Income(loss) from continuing operations $32.9 $18.2 $24.9 $303.2 Income tax (benefit) provision (12.6) 2.5 - (276.8) Provision for loan losses 17.5 15.0 8.4 5.3 Investment securities (gains) losses - - - - Net losses (gains) on LHFS (2.0) 0.2 (0.9) (0.0) (Gains) losses on ORE 1.2 1.1 (0.4) (0.2) Fair-value adjustment on BOLI 0.4 (0.1) (0.2) 0.1 Fair-value adjustment on swaps 0.3 (0.0) (0.1) 0.1 Pre-Tax Pre-Provision Profit (1) $37.8 $36.9 $31.7 $31.7 Last 12 Months $138.1 (1) Non-GAAP measure, as defined by management, represents total revenue (total net interest income and non-interest income) excluding any securities gains/losses, fair value adjustments on loans held for sale, interest rate swaps, and bank owned life insurance, less non-interest expense excluding any goodwill impairment charges, credit write downs, fair value adjustments and special assessments. |
 29 (in millions) 2009 2010 2011 Income (loss) from continuing operations ($505.7) ($289.1) $6.7 Income tax (benefit) provision (29.6) 12.9 (20.2) Provision for loan losses 323.8 392.9 138.8 Goodwill impairment charge 256.3 - - Net loss on debt extinguishment 15.9 - - Investment securities (gains) losses (0.0) (13.9) 1.3 FDIC special assessment 5.4 - - Net losses (gains) on LHFS 20.1 20.6 (1.8) Losses on ORE 23.3 13.4 12.8 Fair-value adjustment on BOLI (0.1) (0.1) 0.2 Fair-value adjustment on swaps 0.6 0.8 0.4 Pre-Tax Pre-Provision Profit (1) $109.9 $137.5 $138.2 Core Earnings Strength Pre-Tax Pre-Provision Profit (non-GAAP) (1) Non-GAAP measure, as defined by management, represents total revenue (total net interest income and non-interest income) excluding any securities gains/losses, fair value adjustments on loans held for sale, interest rate swaps, and bank owned life insurance, less non-interest expense excluding any goodwill impairment charges, credit write downs, fair value adjustments and special assessments. |
 30 Quarterly Non-Interest Income Trends (in thousands) 2Q 11 3Q 11 4Q 11 1Q12 2Q12 Service charges on deposit accounts $9,753 $10,362 $9,724 $8,985 $9,355 Trust fees 3,811 3,622 3,747 3,602 3,582 Mortgage and other loan income 1,883 2,089 2,705 1,858 1,952 Brokerage and investment fees 1,533 1,188 1,243 1,324 1,331 Card-based and other nondeposit fees 4,394 4,475 4,305 4,265 4,444 Net (losses) gains on loans held for sale 1,179 1,952 (217) 916 6 Investment securities gains (losses) (993) 3 38 - - Other income 1,765 736 2,818 3,290 1,675 Total Non-Interest Income (GAAP) $23,325 $24,427 $24,363 $24,240 $22,345 Investment securities gains (losses) $993 (3) $ (38) $ - $ - $ Net (losses) gains on loans held for sale (1,179) (1,952) 217 (916) (6) Fair value adjustment on BOLI 48 385 (100) (205) 118 Fair value adjustment on swaps 77 268 (46) (61) 74 Operating Non-interest Income (Non-GAAP) $23,264 $23,125 $24,396 $23,058 $22,531 |
 31 Annual Non-Interest Income Trends (in thousands) 2009 2010 2011 Service charges on deposit accounts $42,116 $40,336 $39,268 Trust fees 14,784 15,603 15,103 Mortgage and other loan income 12,393 10,486 9,620 Brokerage and investment fees 5,194 4,579 5,072 ATM network user fees 6,283 7,057 7,511 Bankcard fees 7,714 8,859 9,656 Net (losses) gains on loans held for sale (20,086) (20,617) 1,808 Net loss on debt extinguishment (15,929) - - Investment securities gains (losses) 5 13,896 (1,336) Other income 10,659 14,460 8,555 Total Non-Interest Income (GAAP) $63,133 $94,659 $95,257 Net loss on debt extinguishment $15,929 - $ - $ Investment securities gains (losses) (5) (13,896) 1,336 Net (losses) gains on loans held for sale 20,086 20,617 (1,808) Fair value adjustment on BOLI (144) (67) 233 Fair value adjustment on swaps 606 782 413 Operating Non-interest Income (Non-GAAP) $99,605 $102,095 $95,431 |
 32 Quarterly Non-Interest Expense Trends (in thousands) 2Q 11 3Q 11 4Q 11 1Q12 2Q12 Salaries and employee benefits $31,265 $30,280 $30,952 $33,298 $32,801 Occupancy 6,047 6,125 6,326 6,696 6,140 Professional services 2,407 2,394 2,311 2,023 2,465 Equipment 2,841 2,918 3,326 3,303 2,904 Data processing services 4,247 3,823 3,709 4,048 3,721 Advertising and public relations 1,802 2,179 1,298 1,335 1,708 Postage and delivery 1,120 1,142 1,165 1,099 1,119 Other loan expenses 3,314 3,941 3,497 3,186 3,266 Losses on other real estate (ORE) 1,355 1,210 1,081 (385) (173) ORE expenses 1,029 529 995 450 266 Intangible asset amortization 778 732 688 578 545 Other expense 13,239 10,138 11,292 11,470 11,577 Total Non-Interest Expense (GAAP) $69,444 $65,411 $66,640 $67,101 $66,339 Losses (gains) on ORE 1,355 1,210 1,081 (385) (173) Operating Non-Interest Expense (Non-GAAP) $68,089 $64,201 $65,559 $67,486 $66,512 |
 33 Annual Non-Interest Expense Trends (in thousands) 2009 2010 2011 Salaries and employee benefits $135,389 $126,384 $123,514 Occupancy 26,723 26,963 26,059 Professional services 11,877 10,550 9,331 Equipment 11,714 12,482 12,136 Data processing services 17,692 18,734 16,131 Advertising and public relations 7,113 6,530 5,848 Postage and delivery 5,525 4,571 4,543 Other loan expenses 24,553 20,311 16,007 Losses on other real estate (ORE) 23,312 13,438 12,768 ORE expenses 4,389 4,970 4,322 Intangible asset amortization 7,036 3,923 3,027 Goodwill impairment 256,272 - - Other expense 53,544 58,231 49,464 Total Non-Interest Expense (GAAP) $585,139 $307,087 $283,150 Goodwill impairment 256,272 $ - $ - $ FDIC Special Assessment 5,351 - - Fair-value adjustment on ORE 23,312 13,438 12,768 Operating Non-Interest Expense (Non-GAAP) $300,204 $293,649 $270,382 |
 34 ($ in millions) Market % of Credit Rating Value Total Gov't & Agency 2,538 $ 89.7% AAA 26 0.9% AA 143 5.0% A 43 1.5% BAA1, BAA2 & BAA3 58 2.0% BA1 & Lower 2 0.1% Non-rated 19 0.7% Total 2,829 $ 100.0% • Over $2.1 billion in unpledged securities • No OTTI concerns • Over 70% of portfolio are GNMA securities purchased over the last 2 – 3 years ($ in millions) Book Market TEY* Duration Type Value Value (%) (years) MBS Agency 989 $ 1,028 $ 2.87% 2.13 CMO - Agency 264 270 2.65% 1.50 CMO - Non-agency 69 68 3.53% 0.85 Municipals 108 114 6.31% 2.75 Total Available for Sale 1,430 $ 1,480 $ 3.12% 2.00 MBS Agency 873 $ 911 $ 3.04% 1.94 CMO - Agency 321 329 1.94% 2.00 Municipals 102 109 5.98% 3.06 Total Held to Maturity 1,296 $ 1,349 $ 3.00% 2.04 Total Investment Securities 2,726 $ 2,829 $ 3.06% 2.02 Investment Portfolio at June 30, 2012 * Taxable equivalent yield, except for Municipal yields which are before tax effect Effective Management of Securities Portfolio Provides Source of Liquidity |
 35 Maintaining Strong Capital Levels ($ in millions) 6/30/10 9/30/10 12/31/10 3/31/11 6/30/11 9/30/11 12/31/11 3/31/12 6/30/12 Tier 1 capital $ 952 $ 886 $ 777 $ 706 $ 727 $ 758 $ 773 $ 795 $ 860 Qualifying LLR 96 92 83 76 74 75 73 74 74 Qualifying capital securities 7 7 7 3 3 3 3 - - Total risk-based capital $ 1,055 $ 985 $ 867 $ 785 $ 805 $ 836 $ 850 $ 869 $ 934 Tier 1 capital $ 952 $ 886 $ 777 $ 706 $ 727 $ 758 $ 773 $ 795 $ 860 Qualifying capital securities (74) (74) (74) (74) (74) (74) (74) (74) (74) Preferred stock (275) (277) (278) (280) (282) (283) (285) (287) (289) Tier 1 common equity $ 603 $ 535 $ 425 $ 352 $ 371 $ 401 $ 415 $ 435 $ 497 Total Capital Ratio 14.17% 13.80% 13.51% 13.24% 13.77% 14.14% 14.84% 14.97% 15.96% Tier 1 Capital Ratio 12.79% 12.41% 12.11% 11.90% 12.43% 12.81% 13.51% 13.70% 14.70% Tier 1 Leverage Ratio 8.72% 8.50% 7.71% 7.39% 7.83% 8.21% 8.45% 8.71% 9.77% Tier 1 Common Ratio * 8.10% 7.50% 6.62% 5.93% 6.36% 6.77% 7.24% 7.49% 8.50% TCE to TA * 5.83% 5.34% 4.20% 3.59% 4.05% 4.31% 4.47% 4.68% 7.73% TA - tangible assets * Non-GAAP TCE - tangible common equity |
 36 Non-GAAP Common Equity Ratios (1) Other assets deducted from Tier 1 capital and risk-weighted assets consist of intangible assets (excluding goodwill) ($ in thousands) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Total assets $9,724 $9,496 $9,600 $9,463 $9,577 $9,670 Goodwill (318) (318) (318) (318) (318) (318) Other intangible assets (10) (9) (8) (7) (7) (6) Tangible assets $9,396 $9,169 $9,274 $9,137 $9,252 $9,346 Total shareholders' equity $945 $980 $1,009 $1,020 $1,045 $1,336 Goodwill (318) (318) (318) (318) (318) (318) Other intangible assets (10) (9) (8) (7) (7) (6) Tangible equity $618 $653 $683 $694 $720 $1,011 Preferred stock (280) (282) (283) (285) (287) (289) Tangible common equity $338 $371 $400 $409 $433 $723 Total shareholders' equity $945 $980 $1,009 $1,020 $1,045 $1,336 Qualifying capital securities 74 74 74 74 74 74 Goodwill (318) (318) (318) (318) (318) (318) Disallowed tax assets - - - - - (236) Accumulated other comprehensive income 14 1 1 6 2 10 Other assets (1) (10) (9) (8) (7) (7) (6) Total Tier 1 capital (regulatory) $706 $728 $758 $773 $795 $860 Qualifying capital securities (74) (74) (74) (74) (74) (74) Preferred stock (280) (282) (283) (285) (287) (289) Total Tier 1 common equity (non-GAAP) $352 $372 $401 $415 $435 $497 Net risk-weighted assets (regulatory) (1) $5,930 $5,850 $5,913 $5,723 $5,804 $5,852 Tangible common equity to tangilbe assets ratio 3.59% 4.05% 4.31% 4.47% 4.68% 7.73% Tier 1 common equity ratio (non-GAAP) 5.93% 6.36% 6.77% 7.24% 7.49% 8.50% |
 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 37 Proactive Credit Management $0 $50 $100 $150 $200 $250 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 30-89 Day Past Due Portfolio Balances Non-Performing Loans ($ in millions) $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net Charge-Offs $0 $2,000 $4,000 $6,000 $8,000 $10,000 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Residential Mtg Consumer Income Producing Land Hold, Land Dev. & Const. Owner Occupied C&I |
 $0 $5 $10 $15 $20 $25 $30 $35 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 $0 $20 $40 $60 $80 $100 $120 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 $0 $10 $20 $30 $40 $50 $60 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 38 Commercial & Industrial Portfolio $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 30-89 Day Past Due Portfolio Balances ($ in millions) C&I Non-Performing Loans Net Charge-Offs Small Business |
 39 Commercial Portfolio Size Characteristics < $5 million $5 - $10 million > $10 million Total Total Commercial Portfolio Total (millions) 1,982 $ 578 $ 569 $ 3,129 $ # of loans 7,005 83 37 7,125 Average loan size $283,000 $6,961,000 $15,368,000 $439,000 Delinquencies Total (millions) 4 $ - $ - $ 4 $ # of loans 28 - - 28 Average loan size $144,000 - $ - $ $144,000 Nonperforming Loans Total (millions) 53 $ 6 $ - $ 60 $ # of loans 198 1 - 199 Average loan size $269,000 $6,375,000 - $ $299,000 Loan size category: |
 $0 $40 $80 $120 $160 $200 $240 $280 $320 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 $0 $20 $40 $60 $80 $100 $120 $140 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 40 Commercial Real Estate Portfolio $0 $400 $800 $1,200 $1,600 $2,000 $2,400 $2,800 $3,200 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 30-89 Day Past Due Portfolio Balances ($ in millions) Owner Occupied Income Producing Land Hold, Land Development & Construction Non-Performing Loans $0 $20 $40 $60 $80 $100 $120 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net Charge-Offs |
 41 Commercial Real Estate Portfolio By Collateral By Region |
 $0 $20 $40 $60 $80 $100 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 42 Consumer Portfolio $0 $20 $40 $60 $80 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 30-89 Day Past Due * Portfolio Balances Non-Performing Loans * Net Charge-Offs * $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 1Q092Q093Q094Q091Q102Q103Q104Q101Q112Q113Q114Q111Q122Q12 ($ in millions) $0 $20 $40 $60 $80 $100 $120 $140 $160 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Indirect Other Direct Home Equity Residential Mortgage * Other direct included with Home Equity |
 43 Consumer Portfolio Profiles Home Equity $36,200 avg loan size Indirect (1) $23,700 avg loan size (1) Indirect loans are RV and marine only (no auto) Consumer Portfolio Strong refreshed FICO scores 740 Home Equity 740 Indirect 726 Other Direct 45% of home equity is first lien position Indirect NPLs have been less than $2.6 million, or 0.33% of total, throughout the cycle Other Direct $19,500 avg loan size Residential Mortgage Portfolio $165,000 average loan size 721 refreshed FICO score 66% average original LTV Seasoned portfolio – 53% originated 2004 or earlier Foreclosures are handled by PHH; Michigan does not follow a judicial foreclosure process Michigan 84% Ohio 6% Wisconsin 4% Other 6% |
 44 Non-Performing Loans Commercial Real Estate $37.9 45.0% Commercial $21.7 25.7% Residential Mortgage $13.5 16.0% ($ in millions) Direct Consumer $9.3 11.0% $84.3 million or 1.53% of portfolio Indirect Consumer $1.9 2.2% Loans 90+ Accruing $0.01 Loan loss reserve = $136.1 million Allowance for loan losses to NPLs = 161.5% |
 45 (in millions) 3Q11 4Q11 1Q12 2Q12 Beginning NPAs $139.4 $136.9 $102.2 $90.6 Commercial: Additions 23.9 13.3 14.0 23.8 Payments (11.0) (8.0) (11.7) (12.0) Returned to accruing status (0.3) - - (0.5) Charge-Offs/ OREO writedown (6.3) (12.7) (10.3) (0.9) Consumer - net change (8.8) (27.3) (3.6) (7.1) Ending NPAs $136.9 $102.2 $90.6 $94.0 Aggressive Non-Performing Asset Management Quarterly Non-Performing Asset Activity * * 2Q12 inflows include a single $14 million relationship |
 46 Peer Groups Company Name Ticker Company Name Ticker Associated Banc-Corp ASBC Huntington Bancshares Incorporated HBAN Comerica Incorporated CMA KeyCorp KEY Commerce Bancshares, Inc. CBSH MB Financial, Inc. MBFI Fifth Third Bancorp FITB Old National Bancorp ONB First Midwest Bancorp, Inc. FMBI PNC Financial Services Group, Inc. PNC FirstMerit Corporation FMER TCF Financial Corporation TCB Flagstar Bancorp, Inc. FBC Wintrust Financial Corporation WTFC Company Name Ticker Company Name Ticker Associated Banc-Corp ASBC MB Financial, Inc. MBFI BancorpSouth, Inc. BXS National Penn Bancshares, Inc. NPBC Chemical Financial Corporation CHFC Old National Bancorp ONB Commerce Bancshares, Inc. CBSH Park National Corporation PRK Cullen/Frost Bankers, Inc. CFR Sterling Financial Corporation STSA F.N.B. Corporation FNB Susquehanna Bancshares, Inc. SUSQ First Citizens BancShares, Inc. FCNCA TFS Financial Corporation (MHC) TFSL First Midwest Bancorp, Inc. FMBI Trustmark Corporation TRMK FirstMerit Corporation FMER UMB Financial Corporation UMBF Flagstar Bancorp, Inc. FBC Valley National Bancorp VLY Fulton Financial Corporation FULT Wintrust Financial Corporation WTFC Regional Peers Selected Peers |
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