Exhibit 99.1
[CITIZENS LOGO] [REPUBLIC LOGO]
FOR IMMEDIATE RELEASE
CITIZENS BANKING CORPORATION REPUBLIC BANCORP INC.
NASDAQ symbol: CBCF NASDAQ symbol: RBNC
Charles D. Christy Thomas F. Menacher
EVP & Chief Financial Officer EVP, Treasurer, & Chief
(810) 237-4200 Financial Officer
Charlie.Christy@cbcf-net.com (989) 725-7337
tmenacher@republicbancorp.com
Kathleen Miller Kristine D. Brenner
Investor Relations Director of Investor Relations
(810) 257-2506 (989) 725-7337
Kathleen.Miller@cbcf-net.com kbrenner@republicbancorp.com
JUNE 27, 2006
CITIZENS BANKING CORPORATION AND REPUBLIC BANCORP INC.
ANNOUNCE MERGER AGREEMENT TO CREATE A LEADING MIDWESTERN FRANCHISE
FLINT, MICHIGAN AND ANN ARBOR, MICHIGAN --- Citizens Banking Corporation
("Citizens") and Republic Bancorp Inc. ("Republic") announced today that they
have agreed to merge Republic into Citizens to create the new Citizens Republic
Bancorp in a transaction currently valued at approximately $1.048 billion in
stock and cash. Citizens Republic Bancorp will be the 45th largest bank holding
company headquartered in the United States, based on March 31, 2006 assets of
$13.9 billion.
"This exciting partnership with Republic is the culmination of the outstanding
results our leadership team has achieved in completing the turnaround
initiatives we established in 2002. It enhances our core markets, sales culture,
product capabilities, and credit competencies as well as improves our presence
in attractive, high-growth markets. Most importantly, it positions us to enhance
long-term shareholder value," stated William R. Hartman, chairman, president and
CEO of Citizens. "Led by a strong leadership team, Republic has a long track
record of consistent financial performance based on high-touch and high-quality
service, which are also core values of our Vision," added Hartman.
"Republic's top-notch management team has built a solid, focused organization
through consistent growth since we started as a de novo bank 21 years ago. We're
excited to join Republic with Citizens to create a leading Midwestern
franchise," stated Jerry D. Campbell, chairman and founder of Republic. "We
believe this is an excellent transaction for our shareholders and demonstrates
our commitment since inception to continually increase shareholder value,"
continued Campbell.
"We are very enthusiastic about working with the outstanding Citizens leadership
team. Our companies complement each other in many ways and by implementing the
best practices from each organization, we will have an even greater ability to
deliver superior products and services to our customers. This translates into an
opportunity for stronger financial performance and enhanced shareholder value.
The appeal of this combination by every strategic, financial, and operational
measure is a win for our customers, shareholders, and employees," stated Dana M.
Cluckey, president and CEO of Republic.
KEY HIGHLIGHTS OF THE TRANSACTION:
o Based on Citizens' average closing price for the ten trading day period
ended June 26, 2006, the transaction is valued at $13.86 per Republic share
and represents total consideration of $1.048 billion. The aggregate
consideration is fixed at approximately $155 million in cash and 33.2
million Citizens shares (approximately 15% cash and 85% stock).
o Republic shareholders will have the right to elect to receive either cash
or Citizens common stock, subject to pro-ration if either cash or stock is
oversubscribed. At closing, each Republic shareholder will receive, in
exchange for each share of Republic common stock they hold, cash or
Citizens common stock, in either case having a value equal to $2.08 in cash
plus 0.4378 shares of Citizens common stock based on the average closing
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price for the ten trading day period immediately preceding the completion
of the merger. Common stock received by Republic shareholders is expected
to qualify as a tax-free exchange.
o The transaction is projected to close in the fourth quarter of 2006,
subject to regulatory and shareholder approvals.
o Assuming no revenue synergies, the transaction is expected to be
immediately GAAP and cash accretive to earnings per share for all
shareholders in 2007.
o The new entity will be named Citizens Republic Bancorp ("Citizens
Republic") and will retain the familiar Citizens' colors and weatherball as
part of its logo.
o Key facts about Citizens Republic Bancorp:
o $2.0 billion in combined market capitalization
o 275 branches and loan production offices in Michigan, Wisconsin,
Ohio, Iowa, and Indiana
o $13.9 billion in assets
o $8.6 billion in deposits
o $2.6 billion in trust assets under administration
MANAGEMENT STRUCTURE
The executive management of Citizens Republic Bancorp will be comprised of Jerry
D. Campbell as chairman, William R. Hartman as CEO, Dana M. Cluckey as president
and chief operating officer, Charles D. Christy as chief financial officer, John
D. Schwab as chief credit officer, and Thomas F. Menacher as merger integration
officer. The Board of Directors for Citizens Republic will be comprised of nine
current Citizens directors and seven current Republic directors. In addition to
being familiar with the communities served, the existing corporate cultures and
strategies for both companies are very compatible and the new leadership team is
committed to improving upon the strong sales and service-oriented philosophy of
both Citizens and Republic.
CITIZENS REPUBLIC BANCORP
Upon completion of the transaction, Citizens Republic Bancorp will represent a
strong regional brand and will be better positioned to compete with
super-regional as well as community banks. The combined entity will be the 45th
largest bank holding company headquartered in the United States with market
capitalization of $2.0 billion, assets of $13.9 billion, deposits of $8.6
billion, and trust assets under administration of $2.6 billion. Citizens
Republic will provide a full complement of commercial, cash management, wealth
management, and specialty lending products and services to Republic customers as
well as enhanced SBA, commercial real estate and mortgage banking products and
services for Citizens' customers through 275 branch and loan production offices
with modest location overlap and 279 ATMs in Michigan, Wisconsin, Ohio, Iowa,
and Indiana. This partnership will significantly increase the Southeast Michigan
presence to 39 locations, giving Citizens Republic almost 5% of total deposit
market share in Michigan, and placing over 35% of its deposits in high-growth
markets. The merger will improve net charge-offs to total average loans as a
result of a more diversified loan portfolio, diversify the revenue mix through
complementary lines of business and reduce the efficiency ratio as a result of
the enhanced scale of operations. Shareholders of the new entity are expected to
receive dividends of $1.16 per share annually. This represents a 4.3% yield,
based on Citizens' average closing price for ten trading days ended June 26,
2006 of $26.92. This is consistent with Citizens' current policy and represents
an increase of 36% for Republic shareholders who receive Citizens stock. The
complementary strengths of the two companies are expected to generate
significant revenue opportunities. These enhancements are not included in the
financial assumptions for the transaction but are expected to further improve
operating results and other key financial ratios.
RESTRUCTURING AND INTEGRATION
The transaction will improve financial returns by utilizing existing operating
capacity to improve efficiency. Annual cost savings of $28 million, or 9% of the
combined expense base, are expected, of which 70% are projected for 2007 and
100% for 2008 and thereafter. Citizens Republic anticipates $87 million in
pre-tax restructuring costs, comprised of personnel, facilities/branch, systems
and other expenses. While the entire management team at both banks has
successful acquisition integration experience, Thomas F. Menacher will lead the
merger integration to ensure a successful transition for customers. Branch
divestitures, if required after regulatory review, and system conversions are
expected to occur in the first quarter of 2007.
As part of the transaction, management plans to improve the interest rate risk
and credit risk positions at Citizens Republic by selling approximately $1
billion in mortgage loans and securities, liquidating $1 billion in wholesale
funding, and recording $20 million of credit-related adjustments. These
estimated improvements are based on the current economic and interest rate
environment and may change prior to completion of the merger and the
restructuring. Additional actions are planned to improve the revenue and deposit
mix of the new entity by adding enhanced loan and deposit product capabilities
and leveraging the expanded branch network to increase lower-cost core deposits.
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Advisors to Citizens included UBS Investment Bank and Wachtell, Lipton, Rosen &
Katz. Advisors to Republic were Goldman, Sachs & Co. and Cadwalader, Wickersham
& Taft LLP.
INVESTOR CONFERENCE CALL
Jerry D. Campbell, chairman of Republic, William R. Hartman, chairman,
president, and CEO of Citizens, Dana M. Cluckey, president and CEO of Republic,
Charles D. Christy, CFO of Citizens, Thomas F. Menacher, EVP, treasurer, and CFO
of Republic, John D. Schwab, chief credit officer of Citizens, and Martin E.
Grunst, treasurer of Citizens, will review an investor presentation filed with
the SEC and posted to our website today at 10:30AM EDT ON TUESDAY, JUNE 27,
2006.
To participate in the conference call, please call the number below
approximately 10 minutes prior to the scheduled conference time. US/Canada
Dial-in Number: (877) 407-8031 International Dial-In Number: (201) 689-8031
Conference Name: "Citizens Banking Corporation Conference Call." RSVP is not
required.
MEDIA CONFERENCE CALL
The executive management team will conduct a conference call with media
representatives to review an investor presentation filed with the SEC and posted
to our website today and to answer questions at 1:00PM EDT ON TUESDAY, JUNE 27,
2006.
To participate in the conference call, please call the number below
approximately 10 minutes prior to the scheduled conference time. US/Canada
Dial-in Number: (888) 664-9958 Participant Passcode: 7410344 Conference Name:
"Media Conference." RSVP is not required.
CORPORATE PROFILES
Citizens Banking Corporation is a diversified financial services company
providing a full range of commercial, consumer, mortgage banking, trust and
financial planning services to a broad client base. Citizens operates 183
branch, private banking, and financial center locations and 188 ATMs throughout
Michigan, Wisconsin, and Iowa.
Republic Bancorp Inc., has consistently been the number one Small Business
Administration bank lender based in Michigan and one of the Midwest's top retail
mortgage lenders. Republic was named the 17th Best Company to Work For by
FORTUNE magazine (marking the sixth year on FORTUNE's "100 Best Companies to
Work For" list) and named to WORKING MOTHER magazine's list of "100 Best
Companies for Working Mothers" for the fifth year in a row. Republic operates 92
retail, commercial, and mortgage banking offices and 91 ATMs throughout
Michigan, Ohio and Indiana.
SAFE HARBOR STATEMENT
Discussions in this release that are not statements of historical fact
(including statements that include terms such as "will," "may," "should,"
"believe," "expect," "anticipate," "estimate," "intend," and "plan") are
forward-looking statements that involve risks and uncertainties. Any
forward-looking statement is not a guarantee of future performance and actual
results could differ materially from those contained in the forward-looking
information. Such forward-looking statements include, but are not limited to,
statements about the benefits of the business combination transaction involving
Citizens and Republic, including future financial and operating results, the new
company's plans, objectives, expectations and intentions and other statements
that are not historical facts.
The following factors, among others, could cause actual results to differ from
those set forth in the forward-looking statements: the ability to obtain
regulatory approvals of the transaction on the proposed terms and schedule; the
failure of Citizens or Republic shareholders to approve the transaction; the
risk that the businesses will not be integrated successfully; deposit attrition
and disruption from the transaction making it more difficult to maintain
relationships with customers, employees or suppliers; the risk that the cost
savings and any other synergies from the transaction may not be fully realized
or may take longer to realize than expected; competition and its effect on
pricing, spending, third-party relationships and revenues; movements in market
interest rates and secondary market volatility; divestitures assumed and/or
required; potential conditions that may affect the tax-free status of the
Republic stock exchange for Citizens' common shares; and unfavorable changes in
economic and business conditions or the regulatory environment. Additional
factors that may affect future results are contained in Citizens' and Republic's
filings with the SEC, which are available at the SEC's web site
http://www.sec.gov. Citizens and Republic disclaim any obligation to update and
revise statements contained in these materials based on new information or
otherwise.
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ADDITIONAL INFORMATION
In connection with the proposed merger, Citizens and Republic will file a joint
proxy statement/prospectus with the Securities and Exchange Commission ("SEC").
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE JOINT PROXY STATEMENT/
PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders may obtain a free copy of the joint
proxy statement/prospectus (when available) and other documents filed by
Citizens and Republic with the SEC at the SEC's website at http://www.sec.gov.
Free copies of the joint proxy statement/prospectus (when available) and each
company's other filings with the SEC may also be obtained by accessing Citizens'
website at http://www.citizensonline.com under the Investor Relations section or
by accessing Republic's website at http://www.republicbancorp.com under the
Investor Relations section.
Citizens and Republic and their respective directors, executive officers and
other members of their management may be soliciting proxies from their
respective shareholders in favor of the merger. Information concerning persons
who may be considered participants in the solicitation of Citizens' shareholders
under the rules of the SEC is set forth in the Proxy Statement filed by Citizens
with the SEC on March 22, 2006, and information concerning persons who may be
considered participants in the solicitation of Republic's shareholders under the
rules of the SEC is set forth in the Proxy Statement filed by Republic with the
SEC on March 14, 2006. Additional information regarding the interests of those
participants and other persons who may be deemed participants in the transaction
may be obtained by reading the joint proxy statement/prospectus regarding the
proposed merger when it becomes available. You may obtain free copies of these
documents as described above.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities, nor shall there be any sale of securities in any
jurisdiction in which such solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of such jurisdiction.
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Visit our websites at HTTP://WWW.CITIZENSONLINE.COM and
HTTP://WWW.REPUBLICBANCORP.COM for more information.
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