This summary highlights selected information from this document and may not contain all of the information that is important to you. You should carefully read this entire document and the other documents to which this document refers to fully understand the merger. See “Where You Can Find More Information” on page 90. Most items in this summary include a page reference directing you to a more complete description of those items.

 

THE COMPANIES (see page 72)

 

Citizens Banking Corporation

328 South Saginaw Street

Flint, Michigan 48502

(810) 766-7500

 

Citizens is a diversified financial services holding company providing a full range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base. As of September 30, 2006 Citizens operates 181 branch, private banking, and financial center locations and 196 ATMs throughout Michigan, Wisconsin, and Iowa.

 

Republic Bancorp Inc.

1070 East Main Street

Owosso, Michigan 48867

(989) 725-7337

 

Republic is a bank holding company. Republic provides commercial, retail and mortgage banking products and services and as of September 30, 2006 operates 88 offices and 90 ATMs in 7 market areas in Michigan, Ohio and Indiana.

 

THE MERGER (see page 26)

 

The terms and conditions of the merger are contained in the merger agreement, which is attached as Annex A to this document. Please carefully read the merger agreement as it is the legal document that governs the merger.

 

Republic Will Merge into Citizens

 

We propose a merger of Republic with and into Citizens. As a result, Citizens will continue as the surviving company and it is anticipated that the combined company will be renamed Citizens Republic Bancorporation and its banking operations will be operated under the Citizens Bank name.

 

Republic Shareholders Will Receive Cash and/or Shares of Citizens Common Stock in the Merger depending on their Election and any Proration (see pages 55-59)

 

Republic shareholders will have the right to elect to receive merger consideration for each of their shares of Republic common stock in the form of cash or shares of Citizens common stock, subject to proration in the circumstances described below. In the event of proration, a Republic shareholder may receive a portion of the merger consideration in a form other than that which such shareholder elected.

 

The value of the merger consideration will fluctuate with the market price of Citizens common stock and will be determined based on the average closing price of Citizens common stock on Nasdaq for the ten trading days ending the day before the completion of the merger. As explained in more detail in this document, whether a Republic shareholder makes a cash election or a stock election, the value of the consideration such shareholder receives as of the date of completion of the merger will be substantially the same based on that average Citizens closing price. A Republic shareholder may specify different elections with respect to different shares that such shareholder holds (if, for example, a Republic shareholder owns 100 shares of Republic common stock, that shareholder could make a cash election with respect to 50 shares and a stock election with respect to the other 50 shares).

As an example, based on the average closing price of Citizens common stock on Nasdaq for the ten trading days ending on October 25, 2006, for each share of Republic common stock held, a Republic shareholder would receive either approximately $13.56 in cash or 0.5170 of a share of Citizens common stock, subject to possible proration. We will compute the actual amount of cash and number of shares of Citizens common stock that each Republic shareholder will receive in the merger using the formula contained in the merger agreement. For a summary of the formula contained in the merger agreement, see “The Merger Agreement — Consideration To Be Received in the Merger” beginning on page 55.

 

Set forth below is a table showing the consideration that a Republic shareholder would receive in a cash election, on the one hand, or in a stock election, on the other hand, under the merger consideration formula if the actual average closing price of Citizens common stock on Nasdaq for the ten trading days ending the day before the completion of the merger were equal to the hypothetical range contained in the table. The table does not reflect the fact that cash will be paid instead of fractional shares. As described below, regardless of whether a Republic shareholder makes a cash election or a stock election, that Republic shareholder may nevertheless receive a mix of cash and stock.

 

 

 

 

The examples above are illustrative only. The value of the merger consideration that a Republic shareholder actually receives will be based on the actual average closing price of Citizens common stock on Nasdaq for the ten trading days ending the day before the completion of the merger, as described below. The actual average closing price may be outside the range of the amounts set forth above, and as a result, the actual value of the merger consideration per share of Republic common stock may not be shown in the above table.

 

Regardless of Whether Republic Shareholders Make a Cash Election or a Stock Election, Republic Shareholders May Nevertheless Receive a Mix of Cash and Stock (see pages 55-59)

 

The aggregate number of shares of Citizens common stock that will be issued in the merger is approximately 32.7 million, based on the number of shares of Republic common stock outstanding on October 13, 2006, and the aggregate amount of cash that will be paid in the merger is fixed at $154,850,330. As a result, if more Republic shareholders make valid elections to receive either Citizens common stock or cash than is available as merger

consideration under the merger agreement, those Republic shareholders electing the over-subscribed form of consideration will have the over-subscribed consideration proportionately reduced and substituted with consideration in the other form, despite their election.

 

If shares of Republic common stock are issued upon the exercise of outstanding Republic stock options or warrants or as otherwise permitted by the merger agreement, the aggregate number of shares of Citizens common stock to be issued as consideration in the merger will be increased accordingly. The aggregate amount of cash consideration payable as merger consideration will always remain fixed at $154,850,330.

 

What Holders of Republic Stock Options and Other Equity-Based Awards Will Receive (see page 59)

 

When we complete the merger, stock options to acquire Republic common stock that are outstanding immediately before the completion of the merger will become options to acquire shares of Citizens common stock. The number of shares of Citizens common stock subject to such stock options, and the exercise price of the Republic stock options, will be adjusted to reflect the exchange ratio.

 

Each Republic restricted share outstanding immediately before completing the merger will be converted (to the extent they do not vest and become free of restrictions upon completion of the merger, in which case they will be converted into the right to receive the merger consideration) into a restricted stock right with respect to Citizens common stock upon the completion of the merger. The number of shares of Citizens common stock subject to such Citizens restricted stock will be adjusted to reflect the exchange ratio.

 

Upon completion of the merger, warrants to acquire Republic common stock that are outstanding immediately before the completion of the merger will become warrants to acquire shares of Citizens common stock. The number of shares of Citizens common stock subject to such warrants, and the exercise price of the Republic warrants, will be adjusted to reflect the exchange ratio.

 

In Order To Make a Valid Election, Republic Shareholders Must Properly Complete and Deliver the Form of Election (see pages 60-61)

 

Republic shareholders who wish to elect the type of merger consideration they prefer to receive in the merger should carefully review and follow the instructions set forth in the form of election, which is being mailed to Republic shareholders separately on or about the date of this document. Republic shareholders will need to sign, date and complete the election form and transmittal materials and return them to the exchange agent at the address given in the materials, together with the certificates representing shares of Republic common stock (or a properly completed notice of guaranteed delivery) prior to the election deadline. The form of election also includes delivery instructions for shares held in book-entry form. Republic shareholders should NOT send their stock certificates with their proxy card.

 

The election deadline will be November 29, 2006 or such other date as the parties agree. If a Republic shareholder does not submit a properly completed and signed form of election to the exchange agent by the election deadline, such shareholder will have no control over the type of merger consideration such shareholder may receive, and, consequently, may receive only cash, only Citizens common stock or a combination of cash and Citizens common stock in the merger. If you are a Republic shareholder who holds shares in “street name,” you will have to follow your broker’s instructions to make an election.

 

Once Republic shareholders have tendered their Republic stock certificates to the exchange agent, they may not transfer their shares of Republic common stock represented by those stock certificates until the merger is completed, unless they revoke their election by written notice to the exchange agent that is received prior to the election deadline. If the merger is not completed and the merger agreement is terminated, stock certificates will be returned by the exchange agent.

 

If registered Republic shareholders fail to submit a properly completed form of election, together with their Republic stock certificates (or a properly completed notice of guaranteed delivery), prior to the election deadline, they will be deemed not to have made an election. As non-electing holders, they will be paid merger consideration in an amount per share that is equivalent in value to the amount paid per share to holders making elections, but they may be paid all in cash, all in Citizens common stock, or in part cash and in part Citizens common stock, depending

on the remaining pool of cash and Citizens common stock available for paying merger consideration after honoring the cash elections and stock elections that other shareholders have made, and without regard to their preference.

 

Dividend Policy of Citizens; Anticipated Citizens Share Repurchase; Dividends from Republic (see page 61)

 

The holders of Citizens common stock receive dividends if and when declared by the Citizens board of directors out of legally available funds. Citizens declared quarterly cash dividends of $0.285 per share of common stock for each quarter in 2005 and the first quarter of 2006. Citizens declared quarterly cash dividends of $0.29 per share of common stock for the second and third quarters of 2006. Following the completion of the merger, Citizens expects to continue paying quarterly cash dividends on a basis consistent with past practice. However, the declaration and payment of dividends will depend upon business conditions, operating results, capital and reserve requirements and consideration by the Citizens board of directors of other relevant factors.

 

Prior to completion of the merger, Republic shareholders will continue to receive any regular quarterly dividends declared and paid by Republic. See “The Merger Agreement — Conversion of Shares; Exchange of Certificates; Elections as to Form of Consideration — Dividends and Distributions.”

 

Source of Funds

 

Citizens’ obligation to complete the merger is not conditioned upon Citizens obtaining financing. Citizens anticipates that $154,850,330 will be required to pay the aggregate cash merger consideration to Republic shareholders. Citizens intends to finance the cash component of the transaction through internal cash resources and additional capital raising transactions.

 

Citizens’ Financial Advisor Has Delivered to Citizens’ Board of Directors an Opinion as to the Fairness, from a Financial Point of View, to Citizens of the Consideration to be Paid by Citizens in the Merger (see pages 32-39)

 

UBS Securities LLC, or “UBS,” has delivered to the Citizens board of directors an opinion, dated June 26, 2006, to the effect that, as of that date and based on and subject to the matters described in its opinion, the merger consideration to be paid by Citizens was fair, from a financial point of view, to Citizens. We have attached the full text of UBS’ opinion to this document as Annex B, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken by UBS in connection with its opinion. We encourage you to read the opinion carefully in its entirety. UBS’ opinion was provided to Citizens’ board of directors in its evaluation of the merger consideration from a financial point of view, does not address any other aspect of the merger and does not constitute a recommendation to any shareholder as to how to vote or act with respect to the merger.

 

Republic’s Financial Advisor Has Delivered to Republic’s Board of Directors an Opinion as to the Fairness of the Merger Consideration, from a Financial Point of View, to Republic’s Shareholders (see pages 39-45)

 

Goldman, Sachs & Co., or “Goldman Sachs,” has delivered to the Republic board of directors an opinion, dated June 26, 2006, to the effect that, as of that date and based upon and subject to the considerations described in its opinion and other matters as Goldman Sachs considered relevant, the consideration to be received by the holders of Republic common stock in the merger, taken in the aggregate, was fair, from a financial point of view, to such shareholders. We have attached the full text of Goldman Sachs’ opinion to this document as Annex C, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Goldman Sachs in connection with its opinion. We encourage you to read the opinion in its entirety. The opinion of Goldman Sachs is addressed to the board of directors of Republic and is among many factors considered by the board in deciding to approve the merger agreement. The opinion is directed only to the consideration to be received in the merger and does not constitute a recommendation to any shareholder as to how that shareholder should vote on the merger agreement.

 

Citizens’ Board of Directors Recommends that Citizens Shareholders Vote “FOR” the Issuance of Citizens Common Stock in Connection with the Merger Agreement (see page 32)

 

Citizens’ board of directors has unanimously determined that the merger and the merger agreement are advisable to, and in the best interests of, Citizens shareholders and unanimously recommends that Citizens shareholders vote FOR the proposal to approve the issuance of Citizens common stock as contemplated by the merger agreement.

 

In reaching its decision to approve the merger agreement, Citizens’ board of directors consulted with certain of its senior management and with its legal and financial advisors and also considered the factors described under “The Merger — Citizens’ Reasons for the Merger; Recommendation of Citizens’ Board of Directors.”

 

Republic’s Board of Directors Recommends that Republic Shareholders Vote “FOR” Approval and Adoption of the Merger Agreement (see page 31)

 

Republic’s board of directors has unanimously determined that the merger and the merger agreement are advisable to, and in the best interests of, Republic shareholders and unanimously recommends that Republic shareholders vote FOR the proposal to approve and adopt the merger agreement.

 

In reaching its decision to approve the merger agreement, Republic’s board of directors consulted with certain of its senior management and with its legal and financial advisors and also considered the factors described under “The Merger — Republic’s Reasons for the Merger; Recommendation of Republic’s Board of Directors.”

 

Interests of Citizens Executive Officers and Directors in the Merger (see pages 45-49)

 

Citizens’ executive officers, including William R. Hartman, who is also a director of Citizens, have interests in the merger that are in addition to, or different from, the interests of Citizens stockholders generally. The executive officers of Citizens have existing change-in-control agreements with Citizens that provide for severance benefits in connection with certain terminations of employment in the three months prior to or the two years following a change in control of Citizens. However, pursuant to an employment agreement that Citizens entered into with Mr. Hartman in connection with the merger (which is more fully described on pages 45-46 and will supersede Mr. Hartman’s existing employment agreement with Citizens), Mr. Hartman has waived his rights under his change in control agreement in connection with the merger with Republic. Under the new agreement, Mr. Hartman will serve as the Chief Executive Officer of Citizens from the effective date of the merger until December 31, 2010 and as Executive Chairman of Citizens from January 1, 2011 to December 31, 2012. Mr. Hartman will also continue as a member of the Citizens board of directors and will serve as the Chairman of the board beginning on the first anniversary of the completion of the merger. Citizens has also entered into retention agreements with four of its executive officers (which are more fully described on page 46), pursuant to which the executive officers are entitled to certain benefits, including retention bonuses, which will be paid on December 31, 2008, subject to an executive’s continued employment with Citizens through that date. Pursuant to these retention agreements, the executive officers have agreed that the merger with Republic will not constitute a change in control under their existing change in control agreements with Citizens. In addition, under the terms of Citizens’ equity compensation plans and award agreements, stock options and restricted shares granted to the executive officers prior to the date on which the merger agreement was entered into will become fully vested and free of restrictions in connection with the completion of the merger.

 

The Citizens board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement.

 

Interests of Republic Executive Officers and Directors in the Merger (see pages 45-49)

 

Jerry D. Campbell, Dana M. Cluckey, Barry J. Eckhold, Thomas F. Menacher and Debra A. Hanses (each a director and/or an executive officer) have interests in the merger that are in addition to, or different from, the interests of Republic Shareholders generally.

 

Messrs. Campbell, Cluckey, Eckhold and Menacher each has a change in control agreement with Republic that provides severance benefits if the executive officer’s employment is terminated within either the six months

preceding a change of control or the two years following a change of control by Republic without “cause” (as defined in the agreement) or by the executive officer with “good reason” (as defined in the agreement).

 

Also, in connection with the signing of the merger agreement, Citizens has entered into employment agreements with Mr. Cluckey and Mr. Campbell and letter agreements with Mr. Menacher and Ms. Hanses, all of which are more fully described on pages 47-49. Upon completion of the merger, these agreements will supersede the officers’ existing agreements with Republic. Under his new agreement, Mr. Cluckey will serve as President and Chief Operating Officer of Citizens from the effective date of the merger until December 31, 2010 and as President and Chief Executive Officer of Citizens from January 1, 2011 to December 31, 2011. Mr. Cluckey will also be a member of the Citizens board of directors. Under his new agreement, Mr. Campbell will serve as an employee of Citizens, member of Citizens’ board of directors, the non-executive Chairman of the Citizens board of directors until the first anniversary of the date on which the merger is consummated and, if he chooses, Chairman of the board of directors of Citizens Bank Wealth Management, N.A. throughout the term.

 

In addition, consistent with the terms of outstanding Republic equity award agreements, restricted shares granted to the executive officers prior to the date on which the merger agreement was entered into will become fully vested and free of restrictions in connection with the completion of the merger.

 

The Citizens and Republic boards of directors were aware of these interests and considered them, among other matters, in approving the merger agreement.

 

Board of Directors after the Merger (see pages 49-50)

 

Upon completion of the merger, Citizens will cause its board of directors to consist of sixteen directors, nine of whom will be current directors of Citizens or their nominees and seven of whom will be current Republic directors or their nominees. Messrs. Hartman, Campbell and Cluckey will be among the surviving corporation’s directors. At the Citizens’ 2008 annual shareholders’ meeting eight Citizens-designated directors and six Republic-designated directors will be elected, and at the Citizens’ 2009 annual shareholders’ meeting seven Citizens-designated directors and five Republic-designated directors will be elected. The board arrangements are described under “The Merger Agreement — Board of Directors of the Surviving Corporation; Bylaw Amendment.”

 

Non-Solicitation (see pages 65-66)

 

Each party has agreed that it will not solicit or encourage any inquiries or proposals regarding any acquisition proposals by third parties. However, each party may respond to unsolicited proposals in certain circumstances if required by its board of directors’ fiduciary duties. Upon receiving any such proposal, the party receiving the proposal must promptly notify the other.

 

Conditions to Completion of the Merger (see page 68)

 

Each of Citizens’ and Republic’s obligations to complete the merger is subject to the satisfaction or waiver of a number of mutual conditions including:

 

 

Each of Citizens’ and Republic’s obligations to complete the merger is also separately subject to the satisfaction or waiver of a number of conditions including:

 

 

 

Citizens’ obligation to complete the merger is further subject to the condition that the regulatory approvals received in connection with the completion of the merger not include any conditions or restrictions that, in the aggregate, would reasonably be expected to have a material adverse effect on Republic or Citizens, with materiality being measured on a scale relative to Republic.

 

Termination of the Merger Agreement (see pages 68-70)

 

Citizens and Republic may mutually agree at any time to terminate the merger agreement without completing the merger, even if shareholders have approved the merger. Also, either of Citizens or Republic can terminate the merger agreement in various circumstances, including the following:

 

 

Republic may also terminate the merger agreement if the value of the aggregate consideration to be paid by Citizens declines by more than 15% and the five-day average closing price of Citizens common stock underperforms a peer-group index by more than 17.65%.

 

Dissenters’ Rights (see page 50)

 

Under Michigan law, Republic shareholders are not entitled to appraisal rights in connection with the merger because Republic common stock is designated as a national market system security on an interdealer quotation system by the national association of securities dealers.

 

Citizens Will Hold its Special Meeting on November 30, 2006 (see pages 21-23)

 

The Citizens special meeting will be held at the Genesys Conference & Banquet Center, 805 Healthpark Blvd., Grand Blanc, Michigan 48439, on November 30, 2006 at 9:00 a.m., local time. At the special meeting, Citizens shareholders will be asked:

 

 

 

You can vote at the Citizens special meeting if you owned Citizens common stock at the close of business on October 13, 2006. On that date, there were 42,904,277 shares of Citizens common stock outstanding and entitled to vote, approximately 4% of which were owned and entitled to be voted by Citizens directors and executive officers and their affiliates. You can cast one vote for each share of Citizens common stock you owned on that date. In order to approve the issuance of common stock contemplated by the merger agreement, the holders of a majority of the shares of Citizens common stock voted at the special meeting must vote in favor of doing so.

 

Republic Will Hold its Special Meeting on November 30, 2006 (see pages 24-26)

 

The Republic special meeting will be held at the Kellogg Hotel and Conference Center, Michigan State University, 55 South Harrison Road, East Lansing, Michigan 48824, on November 30, 2006 at 9:00 a.m., local time. At the special meeting, Republic shareholders will be asked:

 

 

You can vote at the Republic special meeting if you owned Republic common stock at the close of business on October 13, 2006. On that date, there were 74,632,790 shares of Republic common stock outstanding and entitled to vote, approximately 4% of which were owned and entitled to be voted by Republic directors and executive officers and their affiliates. You can cast one vote for each share of Republic common stock you owned on that date. In order to approve and adopt the merger agreement, the holders of a majority of the outstanding shares of Republic common stock entitled to vote must vote in favor of doing so.

 

Regulatory Approvals Required for the Merger (see pages 50-51)

 

Completion of the transactions contemplated by the merger agreement is subject to various regulatory approvals, including approval from the Federal Reserve Board.

 

Citizens and Republic have completed, or will complete, filing all of the required applications and notices with regulatory authorities.

 

Although we do not know of any reason why we would not be able to obtain the necessary regulatory approvals in a timely manner, we cannot be certain when or if we will get them.

 

The Merger Has Been Structured to Be Generally Tax-Free to Holders of Republic Common Stock to the Extent They Receive Citizens Common Stock (see pages 51-54)

 

The exchange by U.S. holders of Republic common stock for Citizens common stock has been structured to be generally tax free for U.S. federal income tax purposes, except that:

 

 

 

For further information, please refer to “The Merger — Material U.S. Federal Income Tax Consequences of the Merger.”

 

COMPARATIVE PER SHARE MARKET PRICE INFORMATION

 

Citizens common stock trades on Nasdaq under the symbol “CBCF” and Republic common stock trades on Nasdaq under the symbol “RBNC.” The following table presents the closing sale prices of Citizens common stock and Republic common stock on June 26, 2006, the last trading day before we announced the merger agreement and October 25, 2006, the last practicable trading day prior to mailing this document. The table also presents the equivalent value of the merger consideration per share of Republic common stock on June 26, 2006 and October 25, 2006 calculated in accordance with the formula contained in the merger agreement (except using the average closing price of Citizens common stock on Nasdaq for the ten trading days ending on those dates instead of using the average of the closing price of Citizens common stock on Nasdaq for the ten trading days ending the day before the completion of the merger).

 

 

The market prices of both Citizens common stock and Republic common stock will fluctuate prior to the merger. You should obtain current stock price quotations for Citizens common stock and Republic common stock.

 

Unaudited Comparative Per Share Data

 

The table on the following page shows historical information about Citizens’ and Republic’s respective earnings per share, dividends per share and book value per share, and similar information reflecting the merger, which is referred to as “pro forma” information, at or for the six months ended June 30, 2006, and for the year ended December 31, 2005. The pro forma and pro forma per equivalent share information give effect to the merger as if the merger had been effective on the date presented in the case of the book value data, and as if the merger had been effective as of January 1, 2005 in the case of the earnings per share and cash dividends data.

 

The pro forma data in the table assumes that the merger will be accounted for under the purchase method of accounting. Under the purchase method of accounting, Citizens will record the assets and liabilities of Republic at their estimated fair values as of the date the merger is completed. Financial statements for Citizens issued after merger completion will reflect such values and will not be restated retroactively to reflect Republic’s historical financial position or results of operations.

 

The information listed as “equivalent pro forma” for Republic was obtained by multiplying the pro forma amounts listed for Citizens by the equivalent 0.5182 exchange ratio calculated as of the June 30, 2006 balance sheet date. This information is presented to reflect the fact that Republic shareholders will receive the equivalent of 0.5182 shares of Citizens common stock for each share of their Republic common stock exchanged in the merger.

 

The pro forma financial information includes estimated adjustments to record certain assets and liabilities of Republic at their respective fair values and to record certain exit costs related to Republic. The pro forma adjustments included herein are subject to updates as additional information becomes available and as additional analyses are performed. Pending more detailed analyses, additional pro forma adjustments may be made, including additional intangible assets which may be identified. Any change in the fair value of Republic’s net assets will change the amount of the purchase price allocable to goodwill. Additionally, changes to Republic’s shareholders’ equity, including dividends and net income from July 1, 2006 through the date the merger is completed, will also change the amount of goodwill recorded. The final adjustments may be materially different from the unaudited pro forma adjustments presented herein.

 

The information in the following table is based on historical information and related notes Citizens and Republic previously filed with the SEC. The reader should read all of the summary financial information provided in the following tables together with this historical financial information and related notes. The historical financial information is also incorporated into this document by reference. See “Where You Can Find More Information” for a description of where to find the historical information.

 

Citizens also anticipates that the merger will provide financial benefits that include increased revenue opportunities and reduced operating expenses, but these financial benefits are not reflected in the pro forma information. Accordingly, the pro forma information does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during the periods presented.

Unaudited Comparative Historical and Pro Forma Per Common Share Data of

Citizens Banking Corporation and Republic Bancorp Inc.

 

 

 

Selected Consolidated Historical Data of Citizens

 

The selected historical financial data in the table below for the six-month periods ended June 30, 2006 and June 30, 2005 were derived from Citizens’ unaudited consolidated financial statements. The data for the five years ended December 31, 2005 were derived from Citizens’ audited consolidated financial statements. The information is based on historical information and related notes Citizens previously filed with the SEC. The reader should read all of the summary financial information provided in the following table together with this historical financial information and related notes, which is also incorporated into this document by reference. See “Where You Can Find More Information” for a description of where to find the historical information.

 

 

 

 

The following selected unaudited pro forma condensed consolidated financial information has been derived from and should be read in conjunction with, the “Unaudited Pro Forma Condensed Combined Financial Information” section beginning on page 75 of this proxy statement/prospectus. This table displays pro forma information reflecting the effect of accounting for the merger under the purchase method of accounting. The pro forma condensed combined statements of income data assume a merger completion date of January 1, 2005. The pro forma condensed combined period-end balance sheet data assumes a merger completion date of June 30, 2006.

 

Selected Unaudited Pro Forma Condensed Combined Financial Data of Citizens Banking Corporation and Republic Bancorp Inc.

 

Since announcement of the merger, merger integration teams have been formed and are developing plans to integrate Republic’s operations into Citizens so that we can continue to provide an extraordinary client experience while beginning to realize merger efficiencies. These plans will continue to be refined over the next several months and will address staff, premises and equipment, systems, contractual arrangements and other integration activities for both Republic and Citizens.

 

The costs associated with merger integration activities that impact certain Republic staff, premises and equipment, systems, and contractual arrangements will be recorded as purchase accounting adjustments as described above when the appropriate plans are in place, with potential refinements up to one year after merger completion as additional information becomes available. Citizens currently estimates the exit cost purchase accounting adjustments will be approximately $34.4 million after-tax. The costs associated with integrating systems and operations will be recorded as merger-related expenses based on the nature and timing of the related expenses, but generally will be recorded as the expenses are incurred. Restructuring charges will be recorded based on the nature and timing of the expenses and generally will include merger integration activities that impact Citizens staff, premises and equipment, systems, and contractual arrangements. Citizens expects merger-related and restructuring expenses will be approximately $7.4 million after-tax and will be incurred and reported through 2007.