Exhibit 99.3
TO: All Employees
RE: Proposed Merger with Citizens Banking Corporation
DATE: June 27, 2006
- --------------------------------------------------------------------------------
As we discussed on our Telerap call this morning, we are pleased to announce
that Republic Bancorp has signed a definitive agreement to merge into Citizens
Banking Corporation, to form the new Citizens Republic Bancorp. Pending
shareholder and regulatory approval, the merger is expected to be completed
sometime late in the 4th quarter of 2006.
This Question & Answer document is designed to help you understand the reasons
for the merger and the advantages this partnership will offer. As we proceed
forward, you will receive periodic updates through a new merger newsletter and
other global emails to keep you informed.
In the meantime, should you have any other questions or suggestions, please feel
free to contact your Manager or Human Resources team, or send your questions to
employeequestions@republicbk.com and we'll try and address them the best we can.
Q. Who is Citizens and where are their offices located?
A. Citizens Banking Corporation is currently the 2nd largest bank holding
company in Michigan and employs over 2,100 people. Citizens is a
diversified financial services company providing a wide range of
commercial, consumer, mortgage, trust, and financial planning services to
a broad client base. Citizens Banking Corporation serves markets through
Citizens Bank offices in Michigan and Wisconsin, and through F&M Bank
offices in Iowa. Citizens Banking Corporation has roots going back to 1871
in Flint, Michigan. Citizens is the 64th largest bank holding company in
the United States, with assets of $7.7 billion as of March 31, 2006.
Citizens Banking Corporation common stock trades on NASDAQ under the
symbol CBCF. More information about Citizens Banking Corporation is
available at http://www.citizensonline.com.
Q. What are the reasons for the merger?
A. As you know, increasing our presence in terms of both size and capability
in our markets is an important part of our strategic growth plans. One of
the ways we can do that in a significant manner is through strategic
alliances with other successful financial partners. The merger with
Citizens presents a significant growth opportunity for our Company and
will position us to compete even better on a national basis.
The highlights of the combined entity include:
----------------------------------------------
o The 2nd largest bank holding company headquartered in Michigan with $13.9
billion in assets;
o The 45th largest bank holding company in the country;
o 275 branch locations in 5 states;
o The #1 SBA bank lender in Michigan;
o Over 3,000 employees;
o National Employer of Choice recognition through FORTUNE and Working Mother
Magazine's 100 Best Companies to Work For in America lists.
As part of the merger agreement, our shareholders will receive a premium
for their shares of RBNC which will be paid in a combination of converted
Citizens stock and cash. Each share of Republic will receive .4378 shares
of Citizens plus $2.08 in cash. The merger will pay approximately $1.0
billion in stock and cash to our shareholders.
Your Board of Directors unanimously approved the merger, which will also
result in a substantial 36% increase in the quarterly cash dividend at
closing.
The wide network of bank branches and ATM locations will provide greater
customer access and market share penetration for our business lines.
Citizens Bank brings 188 ATMs and 183 additional branch locations,
including 120 in Michigan, for our customers' improved convenience.
We are always looking at new and expanded product lines that allow us to
offer our customers greater service, increase our services per household
and grow revenues for the Company. The merger with Citizens will provide
many of those opportunities. Citizens has Wealth Management (insurance,
trust and investments), a C&I/Business Lending function, and Treasury/Cash
Management products and services which we are very excited to be able to
offer to our customers.
Equally important, Citizens brings over 2,100 financial service
professionals to the Citizens Republic team. These individuals have worked
closely with their individual and business clients to grow, and we are
excited to have them bring their expertise and experience to us. Together
we'll have more than 3,000 top-notch employees providing service that will
exceed our customers' expectations.
Q. How will the new company operate?
A. Republic will join Citizens to form a new bank holding company called
Citizens Republic Bancorp (CRB) with its own board of directors and senior
management team. CRB will operate as one combined team, with a common
management team and vision.
Q. How will organizational efficiencies and future improvements be handled?
A. A transition committee comprised of both Republic and Citizens team
members will be formed to evaluate products, processes and strengths that
can be shared or improved upon between teams. We call this "sharing best
practices." Tom Menacher will lead the integration efforts of the new
organization.
Q. How will our customers be impacted by these changes?
A. The merger will provide many positive benefits to our customers. They will
continue to receive top-notch personalized, customer service from
outstanding team members. Our customers will have 183 more branch
locations and 188 additional ATMs to access for their convenience. We'll
be able to handle more of their personal and business financial services
needs through a broader and more comprehensive product menu. We are
committed to keeping customers as our primary focus and will work hard to
minimize changes to customers on items related to account numbers, check
reordering, etc. For now, it is business as usual and we'll keep you
updated so you are well prepared to assist them and answer their
questions.
Q. Who will serve on the Board of Directors for Citizens Republic Bancorp?
A. After the merger, the Citizens Republic Bancorp Board of Directors will be
comprised of 7 current Republic directors, including Jerry Campbell and
Dana Cluckey, as well as 9 current Citizens directors.
Q. Who will manage the new bank?
A. The management team for CRB will truly be a team effort and a leadership
of best practices. Jerry D. Campbell, Chairman of Republic will be
Chairman of CRB for one year, and then continue to serve as a member of
the Board of Directors. Bill Hartman, President and CEO of Citizens, will
be the CEO of CRB and then also take over Chairman of the Board duties
after the first year. Dana M. Cluckey, President and CEO of Republic will
be President and COO of CRB and after 4 years will become CEO. Barry J.
Eckhold, President and CEO of Republic Bank will transition away from
day-to-day operational responsibilities upon completion of the merger, but
will continue to be a shareholder and outstanding supporter of our
Company. As you all know, Barry was the first employee of Republic Bank,
and in fact, the first and only President and CEO of Republic Bank, and
his vision and leadership brought us all to this new and exciting
opportunity.
Q. Will this change provide greater career opportunities for employees?
A. As the new bank - Citizens Republic Bancorp - comes together, we
anticipate that there will be new and exciting opportunities for top
performing employees as part of a much larger financial services
organization. As we continue to grow through internal expansion as well as
branch, product and expanded market opportunities, our team members will
have increased opportunities to expand and enrich skills. Certainly there
will be some overlap in departments and functions common to both
companies, as well as in branch locations that are near to each other. Our
plan is to form a number of transition teams comprised of key employees
from both banks to work together to identify best practices and plan for
the future in each area. As product, staff or branch changes are
recommended, any displaced team member will have opportunities to apply
for open positions with CRB, or to receive severance pay, continued
medical and dental benefits and outplacement assistance (as outlined in
our workforce reduction policy) to assist their transition. These teams
will begin working shortly and throughout the coming months, we'll
communicate changes and opportunities to employees as they arise.
Q. What is the impact on our 2006 benefits, base salaries, incentive and
bonus compensation plans?
A. While we expect to close the transaction sometime late in the 4th quarter
of this year, we all need to focus on running the business and continue to
work together toward achieving our 2006 budgeted financial, objective and
strategic plan goals. Therefore, your 2006 compensation, incentive,
benefits, and other such programs will remain in effect through the year.
We'll address 2007 compensation programs in conjunction with the new
bank's 2007 goals and financial targets like we do each year.
You can expect that employees of the new bank will have the opportunity to
participate in comprehensive health, dental, 401(k) plan and other benefit
programs similar to, or perhaps even enhanced over, what we currently
offer. You will receive information on 2007 benefit offerings during an
open enrollment period late in the fall like we do each year so you can
make informed choices at that time for you and your family.
Q. What is the timetable for the merger?
A. The merger is subject to shareholder and regulatory approvals. We expect
to be completed sometime late in the 4th quarter of 2006.
Q. What should I say to customers if they ask about the merger?
A. Feel free to share highlights from the attached Citizens Republic Bancorp
Fact Sheet. You should also refer them to the press release that was
issued this morning announcing the proposed merger. The press release is
posted on our website under the Investor Relations section. Our customers
will also receive a letter notifying them of the transaction and the many
positive benefits. A copy of the customer letter will be posted on our
intranet for your information.
If you are contacted by a reporter or receive other customer, shareholder
or media inquiries, you should refer them to Kristine Brenner, Director of
Investor Relations, as outlined in our corporate communications policy.
These changes are exciting for our shareholders, customers and employees. We
will keep you informed along the way through global emails, meetings, Teleraps
and a new bank merger newsletter and will continue our efforts to grow your
company as a "Great Place to Work(R) and Bank!"
Sincerely,
Dana M. Cluckey Barry J. Eckhold
President and Vice Chairman, President and
Chief Executive Officer Chief Executive Officer
Republic Bancorp Inc. Republic Bank
We hope that you have found this information helpful. However, this document is
only a summary. If there is any conflict between this information and the
official plan documents relating to any benefit plan referred to herein, the
terms of the plan documents will govern. Also, as always, Republic reserves the
right to interpret, modify or terminate its plans and policies at any time.
CITIZENS REPUBLIC BANCORP (CRB) FACT SHEET
- ------------------------------------------
o Exciting partnership to form a new bank - Citizens Republic Bancorp - so
that we may offer expanded convenience and products to our customers
throughout the Midwest
o Continued relationships with our top-notch team members and no changes to
existing lending, internet banking, deposit or other accounts, payments,
etc. are needed or required at this time
o 2nd Largest bank holding company headquartered in Michigan
o 45th Largest bank holding company headquartered in the country
o $13.9 billion in assets
o 275 Locations in 5 states:
o Michigan - 193 (73 former Republic Bank; 120 former Citizens Bank)
o Ohio - 16 (former Republic Bank)
o Indiana - 3 (former Republic Bank)
o Iowa - 11 (former Citizens Bank)
o Wisconsin - 52 (former Citizens Bank)
o 279 ATMs throughout the branch network
o Full range of products and services - retail banking, commercial real
estate, SBA lending, C&I business lending, treasury/cash management,
consumer and mortgage lending, trust, investment, insurance and financial
planning services
o The #1 SBA bank lender in Michigan
o Experienced leadership from both Republic and Citizens to lead CRB:
o CRB Chairman of the Board: Jerry Campbell
o CRB Chief Executive Officer: Bill Hartman
o CRB President and Chief Operating Officer: Dana Cluckey
o 3,000+ employees and National Employer of Choice recognition through
FORTUNE and Working Mother Magazine's 100 Best Companies to Work For in
America lists
o Merger expected to be completed late in the 4th quarter of 2006, subject
to shareholder and regulatory approvals
o Investor Relations/Stock Questions: Kristine Brenner @ 989-725-7337
o Customer Questions: Information Center @ 800-968-4425
o Employee Questions: employeequestions@republicbk.com
Safe Harbor Statement
- ---------------------
Discussions in this document 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
Republic and Citizens, 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 Republic or Citizens 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 Republic's and Citizens'
filings with the SEC, which are available at the SEC's web site
http://www.sec.gov. Republic and Citizens disclaim any obligation to update and
revise statements contained in these materials based on new information or
otherwise.
Additional Information
- ----------------------
The proposed transaction will be submitted to Republic Bancorp Inc.'s and
Citizens Banking Corporation's shareholders for their consideration. Republic
Bancorp Inc. will file a registration statement on a Form S-4, which will
include a joint proxy statement/prospectus to be sent to each company's
shareholders, and each of Republic and Citizens may file other relevant
documents concerning the proposed transaction with the SEC. Shareholders are
urged to read the registration statement and the joint proxy
statement/prospectus regarding the proposed transaction when they become
available and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they contain important
information. A free copy of the joint proxy statement/prospectus, as well as
other filings containing information about Republic and Citizens, will be
available at the SEC's website (http://www.sec.gov). These documents will also
be available, free of charge, by accessing Republic's website
(http://www.republicbancorp.com) and Citizens' website
(http://www.citizensonline.com) under the "Investor Relations" tab and then
under the heading "SEC Filings".
Under SEC rules, Republic Bancorp Inc. and Citizens Banking Corporation and
their respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from shareholders of Republic and/or
Citizens in connection with the proposed transaction. Information about the
directors and executive officers for Republic is set forth in the Schedule 14A
proxy statement for Republic's 2006 annual meeting of shareholders, as filed
with the SEC on March 14, 2006. Information about the directors and executive
officers for Citizens is set forth in the Schedule 14A proxy statement for
Citizens' 2006 annual meeting of shareholders, as filed with the SEC on March
22, 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
transaction when it becomes available. Free copies of these documents may be
obtained as described above.
REPUBLIC BANCORP INC.
SENIOR MANAGEMENT CONFERENCE CALL
Tuesday, June 27, 2006
8:00 a.m. E.S.T.
I would like to welcome all of you to our special senior management conference
call. We have our CEC and TNL team members on the line representing all of our
business lines and primary support functions.
I am very excited to talk to you first about an important announcement we made
this morning. As you all know, increasing our presence in terms of both size and
capability in our markets is an important part of our strategic growth plans.
One of the ways we can do that in a significant fashion is through strategic
alliances with other successful financial partners.
We have a terrific opportunity for growth in front of us, and it will be a new
and exciting adventure for our team, our shareholders and our customers. This
morning we have announced that our board of directors has approved the signing
of a definitive agreement for our Company to merge into Citizens Banking
Corporation - based in Flint, Michigan, to create the new Citizens Republic
Bancorp. Pending shareholder and regulatory approval, the merger is expected to
be completed sometime late in the 4th quarter of 2006.
In a little bit here, we'll be having a special Telerap to announce our new
partnership to our employees, and we'll also be sending out a copy of our press
release and a Question & Answer memo via global email to all employees but I
want to hit some of the highlights with you first.
As senior leaders of our Company, your support and positive leadership by
example will be needed more than ever during the coming days, weeks and months
as we all enter exciting, but unchartered territory.
So let me tell you a bit more about our new Company -
Our partner, Citizens Banking Corporation is the parent company for Citizens
Bank, headquartered in Flint, Michigan. It's the second largest bank in
Michigan, with approximately $7.7 billion in assets. Citizens Bank has 183
branch and financial center locations, and 188 ATM locations throughout
Michigan, Wisconsin and Iowa. They provide a full range of commercial, consumer,
mortgage, trust and financial planning services to a broad client base. Citizens
has over 2,100 employees.
I'm sure many of you are thinking - why are we merging? Well, as I said earlier,
the merger with Citizens presents a significant growth opportunity for our
Company. In order to compete with the other banks and financial services
companies, we're always driving toward a greater presence in terms of both size
and capability. This strategic alliance will position our Company even better to
compete on a national basis.
The highlights of the combined entity include:
----------------------------------------------
o The 2nd largest bank holding company in Michigan with $13.9 billion in
assets;
o The 45th largest bank holding company in the country;
o 275 retail branch locations in 5 states;
o The #1 SBA bank lender in Michigan;
o Over 3,000 employees;
o National Employer of Choice recognition through FORTUNE and Working Mother
Magazine's 100 Best Companies to Work For in America lists.
As part of the merger agreement, our shareholders will receive a premium for
their shares of RBNC which will be paid in a combination of converted Citizens
stock and cash. Each share of Republic will receive .4378 shares of Citizens
plus $2.08 in cash. The merger will pay approximately $1.0 billion in stock and
cash to our shareholders.
Your Board of Directors unanimously approved the merger, which will also result
in a substantial 36% increase in the quarterly cash dividend at closing.
The wide network of bank branches and ATM locations will provide greater
customer access and market share penetration for our business lines. As I
mentioned, Citizens brings 188 ATMs and 183 additional branch locations,
including 120 in Michigan, for our customers' improved convenience.
We are always looking at new and expanded product lines that allow us to offer
our customers greater service, increase our services per household and grow
revenues for the Company. The merger with Citizens will provide many of those
opportunities. For example, Citizens has Wealth Management (insurance, trust and
investments), a C&I/Business Lending function, and Treasury/Cash Management
products and services which we are very excited to be able to offer to our
customers.
Equally important, Citizens brings over 2,100 financial service professionals to
the new Citizens Republic team. These individuals have worked closely with their
individual and business clients to grow, and we are excited to have them bring
their expertise and experience to us. Together we'll have over 3,000 top-notch
employees providing service that exceeds our customers' expectations.
To operate our new Company, Republic will join Citizens to form a new bank
holding company called Citizens Republic Bancorp (CRB) with its own board of
directors and senior management team. CRB will operate as one combined team,
with a common management team and vision.
As we move forward, numerous transition committees comprised of both Republic
and Citizens team members will be formed to evaluate products, processes and
strengths that can be shared or improved upon between teams. Successful
acquisition integration is a strength for both companies so we expect the merger
integration will go well.
When the merger is complete, we'll have a new Citizens Republic Board of
Directors which will be comprised of 7 current Republic directors, including
Jerry Campbell and myself, as well as 9 current Citizens' directors.
The Senior Management team for Citizens Republic (CRB) will truly be a team
effort and a leadership of best practices.
Our Chairman of the Board, Jerry Campbell, will serve as Chairman of CRB for one
year, and then serve as a member of the Board of Directors; Bill Hartman,
President and C.E.O. of Citizens Bank will be the C.E.O. of CRB and then also
take over Chairman of the Board duties after our first year. I will serve as
President and C.O.O. of CRB, and after 4 years will become the C.E.O.
As our new bank comes together, there will be many new and exciting
opportunities for our top performing employees as part of a much larger
financial services company. Again, we will be the 45th largest bank in the
country.
While we expect to close the transaction sometime late in the 4th quarter of
this year, we all need to focus on running the business and continue to work
together toward achieving of our 2006 budgeted financial, objective and
strategic plan goals. Therefore, we'll keep our 2006 compensation, incentive,
benefits, and other such programs in place through the end of the year. Next
year's compensation programs will be in line with the new bank's 2007 goals and
financial targets.
During the transition period between now and the actual closing of the deal, the
normal black out periods will apply regarding the trading of Republic stock.
As you can see, this will be a very busy and exciting time for our shareholders,
employees and customers so here's a few more details on what else will be
happening this week -
At 8:30 a.m. we'll have a company wide Telerap in which I'll announce our merger
to our employees. They will all receive a global email after the call with a
memo that includes a detailed Q & A including and expanding upon the information
I shared with you just now.
Later this morning, Jerry, Tom and I will be headed to Flint to join Citizens'
CEO, Bill Hartman, and together we'll be conducting an analyst conference call
and contacting several media contacts, key customers, investors, etc. and
continuing to do so through the week. This is a terrific story for both banks
and for the customers and shareholders in Michigan, Indiana, Ohio, Wisconsin and
Iowa and we are excited to spread the word.
I encourage you to proactively contact your key customers - internal and
external - and do the same. Deb will also include a fact sheet with the Q&A memo
that will be emailed to each of you as soon as we're done here.
As a reminder, if you or any of your employees are contacted by the media,
analysts, or shareholders with specific questions, you should direct them to
Kristine Brenner in Owosso.
Barry and I will also be sending a letter to all Bank customers to ensure they
have heard about our great news and explain the positive benefits the new bank
will provide for them. We'll include a copy of that letter in the email Deb
sends to you as well.
In addition to Telerap we'll have here shortly, we'll be sending out regular
communications via global email and the intranet to keep everyone informed
through the process. We'll also spend time at our next senior officers meeting
talking about this new company, and hope to have Bill Hartman from Citizens join
us as well. We also have a lot of other ideas in process such as a merger
newsletter that will go out to employees on a regular basis to keep them
informed, and some joint key employee team meetings with employees from both
banks to get to know each other and get our transition process rolling. More
information will follow as we get started on our new path.
I personally want to thank you and say congratulations to all of you. We've
grown Republic into a strong, top performing organization and our new
partnership with Citizens will position our new bank - Citizens Republic - to
serve many more customers throughout the Midwest. We can be proud of the
organization we have built and the one that will continue to grow into the
future. We couldn't have done it without each of you and your dedication and
hard work.
Lastly, as I said before, we need all of you to lead by example through the
transition period. Open communication and a positive, team-orientation have
never been more important to our success.
Thank you for your time. We'll talk to you all on Telerap in a few minutes.
If you have additional questions after our Telerap call, I encourage you to call
your manager, Barry, Tom, or Deb. Thanks again.
Safe Harbor Statement
- ---------------------
Discussions in this document 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
Republic and Citizens, 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 Republic or Citizens 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 Republic's and Citizens'
filings with the SEC, which are available at the SEC's web site
http://www.sec.gov. Republic and Citizens disclaim any obligation to update and
revise statements contained in these materials based on new information or
otherwise.
Additional Information
- ----------------------
The proposed transaction will be submitted to Republic Bancorp Inc.'s and
Citizens Banking Corporation's shareholders for their consideration. Republic
Bancorp Inc. will file a registration statement on a Form S-4, which will
include a joint proxy statement/prospectus to be sent to each company's
shareholders, and each of Republic and Citizens may file other relevant
documents concerning the proposed transaction with the SEC. Shareholders are
urged to read the registration statement and the joint proxy
statement/prospectus regarding the proposed transaction when they become
available and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they contain important
information. A free copy of the joint proxy statement/prospectus, as well as
other filings containing information about Republic and Citizens, will be
available at the SEC's website (http://www.sec.gov). These documents will also
be available, free of charge, by accessing Republic's website
(http://www.republicbancorp.com) and Citizens' website
(http://www.citizensonline.com) under the "Investor Relations" tab and then
under the heading "SEC Filings".
Under SEC rules, Republic Bancorp Inc. and Citizens Banking Corporation and
their respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from shareholders of Republic and/or
Citizens in connection with the proposed transaction. Information about the
directors and executive officers for Republic is set forth in the Schedule 14A
proxy statement for Republic's 2006 annual meeting of shareholders, as filed
with the SEC on March 14, 2006. Information about the directors and executive
officers for Citizens is set forth in the Schedule 14A proxy statement for
Citizens' 2006 annual meeting of shareholders, as filed with the SEC on March
22, 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
transaction when it becomes available. Free copies of these documents may be
obtained as described above.
REPUBLIC BANCORP INC.
"TELERAP" CONFERENCE CALL
Tuesday, June 27, 2006
8:30 a.m. E.S.T.
I would like to welcome all of you to a special TeleRap. This morning we have a
very important announcement to make, and I'm excited to share it with you now.
Our board of directors has approved the signing of a definitive agreement to
merge our bank holding company into Citizens Banking Corporation - a $7.7
billion bank holding company based in Flint, Michigan - to create the new
Citizens Republic Bancorp.
Pending shareholder and regulatory approval, the transaction is expected to be
completed sometime late in the 4th quarter of this year.
An announcement memo that includes detailed Question & Answer information and a
fact sheet will be global emailed to all of you right after this call. But I
wanted to take the time to fill you in first on some of the important highlights
of the proposed merger and the formation of our new bank holding company.
First off, you're probably wondering why our board would think it is a good idea
for us to merge with another organization, and that's a very good question.
There are many very positive and exciting reasons for both Republic and
Citizens. Republic has the ability to offer our distinctive personal service,
mortgage lending and commercial real estate expertise to Citizens customers.
Citizens has successful business lines that we will be able to offer to our
customers. For example, Citizens has wealth management products like insurance,
trust and investments, a C&I Business lending function, and Treasury/Cash
Management products and services which we are very excited to be able to offer
to our customers. We're always driving toward a greater presence in terms of
both size and capability and this strategic alliance will position us even
better to compete on a national basis.
The wide network of bank branches and ATM locations will provide greater
customer access and market share penetration for our business lines. Citizens
Bank brings 188 ATMs and 183 additional branch locations, including 120 in
Michigan, for our customers' improved convenience.
The highlights of the combined entity include:
----------------------------------------------
o The 2nd largest bank holding company in Michigan with $13.9 billion in assets;
o The 45th largest bank holding company in the country;
o 275 retail branch locations in 5 states;
o The #1 SBA bank lender in Michigan;
o Over 3,000 employees;
o National Employer of Choice recognition through FORTUNE and Working
Mother Magazine's 100 Best Companies to Work For in America lists.
As we move forward between now and when the merger deal closes late in the 4th
quarter, many employees of both organizations will serve on transition
committees which will evaluate products, processes and strengths that can be
shared or improved upon between teams. We call this "sharing best practices."
Successful acquisition integration is a strength of both Republic and Citizens
so we expect the merger integration will go well.
When the merger is complete, we'll have a new Citizens Republic Board of
Directors which will be comprised of 7 current Republic directors, including
Jerry Campbell and myself, as well as 9 current Citizens' directors.
The management team for Citizens Republic Bancorp (CRB) will truly be a team
effort and a leadership of best practices. Our Chairman, Jerry Campbell, will be
Chairman of CRB for one year and then serve as a member of the Board of
Directors; Bill Hartman, President and C.E.O. of Citizens will be the C.E.O. of
CRB and then also take over Chairman of the Board duties after our first year. I
will serve the new bank as President and C.O.O. of CRB, and after 4 years will
become the C.E.O.
As the new bank comes together, there will be many new and exciting
opportunities for our top performing employees as part of a much larger
financial services company.
As the transition teams identify best practices and a plan for the future in
each area, we'll communicate changes and opportunities to employees as they
arise.
While we expect to close the transaction sometime late during the 4th quarter of
this year, we all need to continue to focus on running the business and continue
to work together toward achieving our 2006 budgeted financial, objective and
strategic plan goals. Therefore, we'll keep our 2006 compensation, incentive,
benefits, and other such programs in place through the end of the year. Next
year's compensation programs will be in line with the new bank's 2007 goals and
financial targets.
As you can see, this will be a very busy and exciting time for our shareholders,
employees and customers.
Later this morning, Jerry, Tom and I will be headed to Flint to join Citizens'
CEO, Bill Hartman, and CFO, Charlie Christy, to conduct an analyst conference
call. We'll also be contacting the media, key customers and investors throughout
the week. This is a terrific story for both banks and for the customers and
shareholders in Michigan, Indiana, Ohio, Wisconsin and Iowa and we are excited
to spread the word. We'll also be sending a letter to all of our bank customers
to ensure that they have heard about our great news and explain the positive
benefits the new bank will provide for them.
Many more details will follow in the memo that is on its way to all of you. And
in the coming weeks, a new merger newsletter will be sent to all of you on a
regular basis to keep you informed.
I personally want to thank you and say congratulations to all of you. We've
grown Republic into a strong, top performing organization and our new
partnership with Citizens will position our new bank - Citizens Republic - to
serve many more customers throughout the Midwest. We can be proud of the
organization we have built and the one that will continue to grow into the
future. We couldn't have done it without each of you and your dedication and
hard work.
Thanks again for your time and we'll talk to you soon.
Safe Harbor Statement
- ---------------------
Discussions in this document 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
Republic and Citizens, 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 Republic or Citizens 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 Republic's and Citizens'
filings with the SEC, which are available at the SEC's web site
http://www.sec.gov. Republic and Citizens disclaim any obligation to update and
revise statements contained in these materials based on new information or
otherwise.
Additional Information
- ----------------------
The proposed transaction will be submitted to Republic Bancorp Inc.'s and
Citizens Banking Corporation's shareholders for their consideration. Republic
Bancorp Inc. will file a registration statement on a Form S-4, which will
include a joint proxy statement/prospectus to be sent to each company's
shareholders, and each of Republic and Citizens may file other relevant
documents concerning the proposed transaction with the SEC. Shareholders are
urged to read the registration statement and the joint proxy
statement/prospectus regarding the proposed transaction when they become
available and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they contain important
information. A free copy of the joint proxy statement/prospectus, as well as
other filings containing information about Republic and Citizens, will be
available at the SEC's website (http://www.sec.gov). These documents will also
be available, free of charge, by accessing Republic's website
(http://www.republicbancorp.com) and Citizens' website
(http://www.citizensonline.com) under the "Investor Relations" tab and then
under the heading "SEC Filings".
Under SEC rules, Republic Bancorp Inc. and Citizens Banking Corporation and
their respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from shareholders of Republic and/or
Citizens in connection with the proposed transaction. Information about the
directors and executive officers for Republic is set forth in the Schedule 14A
proxy statement for Republic's 2006 annual meeting of shareholders, as filed
with the SEC on March 14, 2006. Information about the directors and executive
officers for Citizens is set forth in the Schedule 14A proxy statement for
Citizens' 2006 annual meeting of shareholders, as filed with the SEC on March
22, 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
transaction when it becomes available. Free copies of these documents may be
obtained as described above.
June 27, 2006
RE: Republic Bancorp Inc. and Citizens Banking Corporation to merge to form
new Citizens Republic Bancorp
Dear _________________:
You may have already heard or read about the announcement today that our
Company, Republic Bancorp Inc., has signed an agreement to merge into Citizens
Banking Corporation, based in Flint, Michigan, to create the new Citizens
Republic Bancorp.
We are excited that our increased scale promises even more convenient banking
opportunities and product lines to offer our personal and business customers.
Once the new bank holding company is fully integrated, you'll have complete
access to all Citizens Republic locations.
Some highlights of the new Citizens Republic include:
o The 2nd largest bank headquartered in Michigan, with $13.9 billion in
assets;
o The 45th largest bank holding company in the country;
o 275 offices and 279 ATMs in the states of Michigan, Indiana, Ohio,
Wisconsin and Iowa;
o 3,000+ outstanding employees to serve you;
o The #1 SBA bank lender based in Michigan; and,
o National Recognition as an Employer of Choice through our #17 ranking on
FORTUNE magazine's "100 Best Companies to Work For" list, and through our
inclusion on Working Mother magazine's "100 Best Companies For Working
Mothers" list.
Both Republic and Citizens have incredibly strong commitments to our
shareholders, employees and customers. Each organization also brings special
product and service strengths to our new partnership. For example, Republic's
expertise in commercial real estate and retail mortgage lending complement
Citizens' depth in business lending, asset-based finance and leasing,
treasury/cash management, and wealth management services such as insurance,
trust and investment products.
As we move forward, we are determined to blend the best qualities of each
company to create the best possible customer experience for you - one that will
"exceed your expectations." In the meantime, your banking experience will be
business as usual. You do not need to make any changes to your loan payments,
on-line banking arrangements or other relationships and accounts you have with
Republic. Feel free to contact your Personal Banker or Loan Officer if you have
any specific questions.
We value your relationship with Republic. On behalf of our directors, officers
and employees at Republic Bancorp Inc. and Republic Bank, we want to thank you
for your continued trust and confidence.
Sincerely,
Dana M. Cluckey Barry J. Eckhold
President and Vice Chairman, President and
Chief Executive Officer Chief Executive Officer
Republic Bancorp Inc. Republic Bank
Safe Harbor Statement
- ---------------------
Discussions in this document 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
Republic and Citizens, 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 Republic or Citizens 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 Republic's and Citizens'
filings with the SEC, which are available at the SEC's web site
http://www.sec.gov. Republic and Citizens disclaim any obligation to update and
revise statements contained in these materials based on new information or
otherwise.
Additional Information
- ----------------------
The proposed transaction will be submitted to Republic Bancorp Inc.'s and
Citizens Banking Corporation's shareholders for their consideration. Republic
Bancorp Inc. will file a registration statement on a Form S-4, which will
include a joint proxy statement/prospectus to be sent to each company's
shareholders, and each of Republic and Citizens may file other relevant
documents concerning the proposed transaction with the SEC. Shareholders are
urged to read the registration statement and the joint proxy
statement/prospectus regarding the proposed transaction when they become
available and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they contain important
information. A free copy of the joint proxy statement/prospectus, as well as
other filings containing information about Republic and Citizens, will be
available at the SEC's website (http://www.sec.gov). These documents will also
be available, free of charge, by accessing Republic's website
(http://www.republicbancorp.com) and Citizens' website
(http://www.citizensonline.com) under the "Investor Relations" tab and then
under the heading "SEC Filings".
Under SEC rules, Republic Bancorp Inc. and Citizens Banking Corporation and
their respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from shareholders of Republic and/or
Citizens in connection with the proposed transaction. Information about the
directors and executive officers for Republic is set forth in the Schedule 14A
proxy statement for Republic's 2006 annual meeting of shareholders, as filed
with the SEC on March 14, 2006. Information about the directors and executive
officers for Citizens is set forth in the Schedule 14A proxy statement for
Citizens' 2006 annual meeting of shareholders, as filed with the SEC on March
22, 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
transaction when it becomes available. Free copies of these documents may be
obtained as described above.