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Citizens Republic To Take $270 Million Q2 Charge

June 26, 2009 (FinancialWire) — Citizens Republic Bancorp, Inc. (NASDAQ: CRBC) (Current Market Cap: $117.89 Mil.) said it will post a non-cash goodwill impairment charge of around $270 million during the second quarter of 2009.

The company said that its finances have been hurt by “recent and ongoing deteriorating economic conditions across the United States in general, and in Michigan and the Upper Midwest specifically. Citizens cited bankruptcy filings by significant automotive manufacturers and suppliers, as well as announced automotive plant and dealer closings, as issues that particularly affect the Flint, Michigan-based bank holding company.

Citizens said it is exploring several initiatives to bolster capital and strengthen its balance sheet. The company plans to offer holders of its 5.75% subordinated debentures due in 2013 shares of the company’s common stock in exchange for the debt. Citizens said that such an exchange would convert up to $125 million of outstanding debt to common stock.

The company will also offer to exchange shares of common stock for outstanding trust preferred securities that are traded on the New York Stock Exchange. There is currently $150 million aggregate liquidation amount of these securities outstanding, according to Citizens. Distributions on the securities are payable quarterly in arrears at an annual rate of 7.5%.

Citizens also plans to launch one or more offerings of common stock or convertible preferred stock for cash. It also anticipates an investment by the U.S. Treasury of up to $190 million pursuant to its Capital Assistance Program and up to an additional $100 million under the Capital Assistance Program that would be used to redeem a portion of the outstanding preferred stock issued to the U.S. Treasury under its Capital Purchase Program in 2008.

Citizens Republic Bancorp serves communities in Michigan, Ohio, Wisconsin, and Indiana as Citizens Bank and in Iowa as F&M Bank, with 231 offices and 267 AT

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