##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2009
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For
the transition period from  to
 Commission file Number 001-33063
 CITIZENS REPUBLIC BANCORP, INC.
  MICHIGAN
    
    38-2378932(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)328 S. Saginaw St., Flint, Michigan
    
    48502(Address of principal executive offices)
    
    (Zip Code)
  (Registrants telephone number, including area code)
 (Former name, former address and former fiscal year, if changed since last report)
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ
   Class
    
    Outstanding at May 1, 2009Common Stock, No Par Value
    
    126,298,743 Shares




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##### 



Citizens Republic Bancorp, Inc.
 PagePart I  Financial Information (unaudited)Item 1 - Financial Statements (unaudited)Consolidated Balance Sheets
    
    
    3Consolidated Statements of Operations
    
    
    4Consolidated Statements of Changes in Shareholders Equity
    
    
    5Consolidated Statements of Cash Flows
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2 - Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    25Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    44Item 4. Controls and Procedures
    
    
    44Part II  Other InformationItem 1A. Risk Factors
    
    
    45Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    46Item 6. Exhibits
    
    
    46Signatures
    
    
    47Exhibit Index
    
    
    48EX-10.52EX-10.53EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



Consolidated Balance Sheet  Citizens Republic Bancorp and Subsidiaries
 March 31,
    
    
    December 31,
    
    
    March 31,(in thousands)
    
    2009
    
    
    2008
    
    
    2008(unaudited)
    
    
    (Note 1)
    
    
    (unaudited)AssetsCash and due from banks
    
    $
    163,456
    
    
    $
    171,695
    
    
    $
    222,677Money market investments:Federal funds sold
    
    
    
    
    
    
    
    
    
    
    20,000Interest-bearing deposits with banks
    
    
    481,489
    
    
    
    214,925
    
    
    
    2,488Total money market investments
    
    
    481,489
    
    
    
    214,925
    
    
    
    22,488Investment Securities:Securities available for sale, at fair value
    
    
    2,271,998
    
    
    
    2,248,772
    
    
    
    2,085,867Securities held to maturity, at amortized cost
(fair value of $138,840, $137,846 and $134,233, respectively)
    
    
    138,581
    
    
    
    138,575
    
    
    
    132,905Total investment securities
    
    
    2,410,579
    
    
    
    2,387,347
    
    
    
    2,218,772FHLB and Federal Reserve stock
    
    
    148,764
    
    
    
    148,764
    
    
    
    148,838Portfolio loans:Commercial and industrial
    
    
    2,394,436
    
    
    
    2,602,334
    
    
    
    2,653,799Commercial real estate
    
    
    2,944,265
    
    
    
    2,964,721
    
    
    
    3,174,384Total commercial
    
    
    5,338,701
    
    
    
    5,567,055
    
    
    
    5,828,183Residential mortgage
    
    
    1,207,973
    
    
    
    1,262,841
    
    
    
    1,393,801Direct consumer
    
    
    1,405,659
    
    
    
    1,452,166
    
    
    
    1,531,905Indirect consumer
    
    
    802,116
    
    
    
    820,536
    
    
    
    818,901Total portfolio loans
    
    
    8,754,449
    
    
    
    9,102,598
    
    
    
    9,572,790Less: Allowance for loan losses
    
    
    (282,647
    )
    
    
    (255,321
    )
    
    
    (176,528
    )Net portfolio loans
    
    
    8,471,802
    
    
    
    8,847,277
    
    
    
    9,396,262Loans held for sale
    
    
    89,820
    
    
    
    91,362
    
    
    
    81,537Premises and equipment
    
    
    122,810
    
    
    
    124,217
    
    
    
    127,329Goodwill
    
    
    597,218
    
    
    
    597,218
    
    
    
    775,308Other intangible assets
    
    
    19,377
    
    
    
    21,414
    
    
    
    28,099Bank owned life insurance
    
    
    218,917
    
    
    
    218,333
    
    
    
    216,336Other assets
    
    
    258,058
    
    
    
    263,464
    
    
    
    301,645Total assets
    
    $
    12,982,290
    
    
    $
    13,086,016
    
    
    $
    13,539,291LiabilitiesNoninterest-bearing deposits
    
    $
    1,174,392
    
    
    $
    1,143,294
    
    
    $
    1,113,773Interest-bearing demand deposits
    
    
    865,441
    
    
    
    780,176
    
    
    
    751,130Savings deposits
    
    
    2,683,425
    
    
    
    2,504,320
    
    
    
    2,592,214Time deposits
    
    
    4,396,266
    
    
    
    4,624,616
    
    
    
    4,029,860Total deposits
    
    
    9,119,524
    
    
    
    9,052,406
    
    
    
    8,486,977Federal funds purchased and securities sold
under agreements to repurchase
    
    
    53,086
    
    
    
    65,015
    
    
    
    503,430Other short-term borrowings
    
    
    13,845
    
    
    
    10,377
    
    
    
    36,859Other liabilities
    
    
    163,887
    
    
    
    164,274
    
    
    
    136,193Long-term debt
    
    
    2,064,575
    
    
    
    2,192,623
    
    
    
    2,798,802Total liabilities
    
    
    11,414,917
    
    
    
    11,484,695
    
    
    
    11,962,261Shareholders EquityPreferred stock  no par value
Authorized - 5,000,000 shares; Issued and outstanding - 300,000 at 3/31/09
and 12/31/08, redemption value of $300 million
    
    
    267,566
    
    
    
    266,088
    
    
    
    Common stock  no par value
Authorized - 150,000,000 shares; Issued and outstanding - 126,298,743 at
3/31/09,
125,996,938 at 12/31/08, and 75,747,627 at 3/31/08
    
    
    1,214,173
    
    
    
    1,214,469
    
    
    
    976,445Retained earnings
    
    
    121,106
    
    
    
    170,358
    
    
    
    586,502Accumulated other comprehensive (loss) income
    
    
    (35,472
    )
    
    
    (49,594
    )
    
    
    14,083Total shareholders equity
    
    
    1,567,373
    
    
    
    1,601,321
    
    
    
    1,577,030Total liabilities and shareholders equity
    
    $
    12,982,290
    
    
    $
    13,086,016
    
    
    $
    13,539,291
  3




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##### Table of Contents



Consolidated Statements of Operations (Unaudited)
Citizens Republic Bancorp and Subsidiaries
 Three Months EndedMarch 31,(in thousands, except per share amounts)
    
    2009
    
    
    2008Interest IncomeInterest and fees on loans
    
    $
    119,191
    
    
    $
    157,001Interest and dividends on investment securities:Taxable
    
    
    21,912
    
    
    
    21,023Tax-exempt
    
    
    6,957
    
    
    
    7,370Dividends on FHLB and Federal Reserve stock
    
    
    1,366
    
    
    
    1,693Money market investments
    
    
    263
    
    
    
    30Total interest income
    
    
    149,689
    
    
    
    187,117Interest ExpenseDeposits
    
    
    47,140
    
    
    
    61,578Short-term borrowings
    
    
    67
    
    
    
    4,971Long-term debt
    
    
    25,536
    
    
    
    32,256Total interest expense
    
    
    72,743
    
    
    
    98,805Net Interest Income
    
    
    76,946
    
    
    
    88,312Provision for loan losses
    
    
    64,017
    
    
    
    30,619Net interest income after provision for loan losses
    
    
    12,929
    
    
    
    57,693Noninterest IncomeService charges on deposit accounts
    
    
    10,268
    
    
    
    11,466Trust fees
    
    
    3,419
    
    
    
    4,784Mortgage and other loan income
    
    
    3,079
    
    
    
    3,344Brokerage and investment fees
    
    
    1,327
    
    
    
    1,916ATM network user fees
    
    
    1,454
    
    
    
    1,413Bankcard fees
    
    
    1,894
    
    
    
    1,744Gains (losses) on loans held for sale
    
    
    (6,152
    )
    
    
    1Other income
    
    
    3,944
    
    
    
    6,257Total noninterest income
    
    
    19,233
    
    
    
    30,925Noninterest ExpenseSalaries and employee benefits
    
    
    33,917
    
    
    
    42,225Occupancy
    
    
    7,923
    
    
    
    7,675Professional services
    
    
    3,136
    
    
    
    3,763Equipment
    
    
    2,850
    
    
    
    3,230Data processing services
    
    
    4,274
    
    
    
    4,304Advertising and public relations
    
    
    1,425
    
    
    
    1,838Postage and delivery
    
    
    1,575
    
    
    
    1,727Other loan expenses
    
    
    5,937
    
    
    
    1,811Other real estate (ORE) expenses
    
    
    8,360
    
    
    
    1,242Intangible asset amortization
    
    
    2,037
    
    
    
    2,447Other expense
    
    
    9,344
    
    
    
    6,300Total noninterest expense
    
    
    80,778
    
    
    
    76,562Income (Loss) Before Income Taxes
    
    
    (48,616
    )
    
    
    12,056Income tax provision (benefit)
    
    
    (3,467
    )
    
    
    929Net Income (Loss)
    
    
    (45,149
    )
    
    
    11,127Dividend on redeemable preferred stock
    
    
    (4,103
    )
    
    
    Net Income (Loss) Attributable to Common Shareholders
    
    $
    (49,252
    )
    
    $
    11,127Net Income (Loss) Per Common Share:Basic
    
    $
    (0.39
    )
    
    $
    0.15Diluted
    
    
    (0.39
    )
    
    
    0.15Cash Dividends Declared Per Common Share
    
    
    
    
    
    
    0.29Average Common Shares Outstanding:Basic
    
    
    125,400
    
    
    
    75,248Diluted
    
    
    125,400
    
    
    
    75,273
  4




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##### Table of Contents



Consolidated Statements of Changes in Shareholders Equity
Citizens Republic Bancorp and Subsidiaries
 AccumulatedOtherPreferred
    
    
    Common Stock
    
    
    Retained
    
    
    Comprehensive(in thousands, except per share amounts)
    
    Stock
    
    
    Shares
    
    
    Amount
    
    
    Earnings
    
    
    Income (Loss)
    
    
    TotalBalance at December 31, 2008
    
    $
    266,088
    
    
    
    125,997
    
    
    $
    1,214,469
    
    
    $
    170,358
    
    
    $
    (49,594
    )
    
    $
    1,601,321Comprehensive income, net of tax:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,149
    )
    
    
    
    
    
    
    (45,149
    )Other comprehensive income (loss):Net unrealized loss on securities
available-for-sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,838Net change in unrealized gain on
qualifying cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,212
    )Net change in unrecognized pension
and postretirement costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,504
    )Other comprehensive income total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,122Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,027
    )Accretion of preferred stock discount
    
    
    1,478
    
    
    
    
    
    
    
    
    
    
    
    (1,478
    )
    
    
    
    
    
    
    Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,625
    )
    
    
    
    
    
    
    (2,625
    )Proceeds from stock options exercised and
restricted stock activity
    
    
    
    
    
    
    312
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Recognition of stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (275
    )
    
    
    
    
    
    
    
    
    
    
    (275
    )Shares purchased for taxes
    
    
    
    
    
    
    (10
    )
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    (21
    )Balance  March 31, 2009
    
    $
    267,566
    
    
    
    126,299
    
    
    $
    1,214,173
    
    
    $
    121,106
    
    
    $
    (35,472
    )
    
    $
    1,567,373Balance at December 31, 2007
    
    $
    
    
    
    
    75,722
    
    
    $
    975,446
    
    
    $
    597,333
    
    
    $
    5,101
    
    
    $
    1,577,880Comprehensive income, net of tax:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,127
    
    
    
    
    
    
    
    11,127Other comprehensive income:Net unrealized loss on securities
available-for-sale, net of
reclassification adjustment for net gains
included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,570Net change in unrealized loss on
qualifying
cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    412Other comprehensive income total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,982Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,109Proceeds from stock options exercised and
restricted stock activity
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Recognition of stock-based compensation
    
    
    
    
    
    
    
    
    
    
    1,068
    
    
    
    
    
    
    
    
    
    
    
    1,068Cash dividends declared on common shares -
$0.29 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,958
    )
    
    
    
    
    
    
    (21,958
    )Shares purchased for taxes
    
    
    
    
    
    
    (5
    )
    
    
    (69
    )
    
    
    
    
    
    
    
    
    
    
    (69
    )Balance  March 31, 2008
    
    $
    
    
    
    
    75,748
    
    
    $
    976,445
    
    
    $
    586,502
    
    
    $
    14,083
    
    
    $
    1,577,030
  5




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##### Table of Contents



Consolidated Statements of Cash Flows
Citizens Republic Bancorp and Subsidiaries
 Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008Operating Activities:Net (loss) income
    
    $
    (45,149
    )
    
    $
    11,127Adjustments to reconcile net income to net cash provided by
operating activities:Provision for loan losses
    
    
    64,017
    
    
    
    30,619Depreciation and software amortization
    
    
    2,953
    
    
    
    3,005Amortization of intangibles
    
    
    2,037
    
    
    
    2,447Net (increase) decrease in current and deferred income taxes
    
    
    (3,359
    )
    
    
    934Amortization and fair value adjustments of purchase accounting mark-to-market, net
    
    
    (2,690
    )
    
    
    (5,556
    )Fair value adjustment on loans held for sale and other real estate
    
    
    13,153
    
    
    
    Discount accretion and amortization of issuance costs on long term debt
    
    
    302
    
    
    
    304Net accretion on investment securities
    
    
    (537
    )
    
    
    (2,306
    )Loans originated for sale
    
    
    (102,055
    )
    
    
    (107,965
    )Proceeds from loans held for sale
    
    
    95,995
    
    
    
    104,814Net gains from loan sales
    
    
    (2,170
    )
    
    
    (2,234
    )Net loss on other real estate
    
    
    79
    
    
    
    937Recognition of stock-based compensation expense
    
    
    (275
    )
    
    
    1,068Other
    
    
    (7,180
    )
    
    
    (13,489
    )Net cash provided by operating activities
    
    
    15,121
    
    
    
    23,705Investing Activities:Net increase in money market investments
    
    
    (266,564
    )
    
    
    (22,316
    )Securities available-for-sale:Proceeds from maturities and payments
    
    
    174,699
    
    
    
    144,339Purchases
    
    
    (168,412
    )
    
    
    (81,729
    )Securities held-to-maturity:Proceeds from maturities and payments
    
    
    
    
    
    
    475Purchases
    
    
    
    
    
    
    (5,076
    )Net decrease (increase) in loans and leases
    
    
    305,149
    
    
    
    (102,590
    )Proceeds from sales of other real estate
    
    
    5,688
    
    
    
    4,545Net increase in properties and equipment
    
    
    (1,546
    )
    
    
    (586
    )Net cash provided (used) by investing activities
    
    
    49,014
    
    
    
    (62,938
    )Financing Activities:Net increase in demand and savings deposits
    
    
    295,468
    
    
    
    326,449Net decrease in time deposits
    
    
    (228,590
    )
    
    
    (141,110
    )Net decrease in short-term borrowings
    
    
    (8,434
    )
    
    
    (1,795
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    250,000Principal reductions in long-term debt
    
    
    (128,172
    )
    
    
    (390,711
    )Cash dividends paid on common stock
    
    
    
    
    
    
    (21,958
    )Cash dividends paid on preferred stock
    
    
    (2,625
    )
    
    
    Shares acquired for retirement and purchased for taxes
    
    
    (21
    )
    
    
    (69
    )Net cash (used) provided by financing activities
    
    
    (72,374
    )
    
    
    20,806Net decrease in cash and due from banks
    
    
    (8,239
    )
    
    
    (18,427
    )Cash and due from banks at beginning of period
    
    
    171,695
    
    
    
    241,104Cash and due from banks at end of period
    
    $
    163,456
    
    
    $
    222,677Supplemental Cash Flow Information:Interest paid
    
    $
    73,977
    
    
    $
    103,243Income tax (refund) paid, net
    
    
    (108
    )
    
    
    5Loans transferred to other real estate
    
    
    8,786
    
    
    
    17,860Loans held for sale transferred to other real estate
    
    
    4,546
    
    
    
    Accretion on redeemable preferred stock
    
    
    1,478
    
    
    
    
  6




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##### Table of Contents



Part I  Financial Information
 
 Item 1  Consolidated Financial Statements
 
 Notes to Consolidated Financial Statements (Unaudited)
 Citizens Republic Bancorp, Inc. and Subsidiaries
 Note 1. Basis of Presentation and Accounting Policies
 www.citizensbanking.com
  Statements of Financial Accounting Standards
 SFAS 161 Disclosures about Derivative Instruments and Hedging Activities  An Amendment of FASB
Statement No. 133.
  7




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##### Table of Contents



FASB Staff Position (FSP) on SFAS No. 157-2.
 FSP EITF 03-6-1 Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities.
 Note 2. New Accounting Pronouncements
 FASB Staff Position (FSP)
 FSP-SFAS 157-4 Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.
 FSP-SFAS 115-2 and SFAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments.
  FSP-SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments.
 8




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##### Table of Contents



FSP SFAS 141(R)-1 , Accounting for Assets Acquired and Liabilities Assumed in a Business
Combination That Arise from Contingencies.
 FSP SFAS 132(R)-1 , Employers Disclosures about Postretirement Benefit Plan Assets.
 Note 3. Investment Securities
  March 31, 2009
    
    
    December 31, 2008Estimated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Fair
    
    
    Gross Unrealized
    
    
    Amortized
    
    
    Fair
    
    
    Gross Unrealized(in thousands)
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    Losses
    
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    LossesAvailable For Sale:Federal Agencies
    
    $
    219,912
    
    
    $
    226,027
    
    
    $
    6,115
    
    
    $
    
    
    
    $
    248,819
    
    
    $
    257,445
    
    
    $
    8,626
    
    
    $
    Collateralized Mortgage Obligations
    
    
    519,305
    
    
    
    476,886
    
    
    
    5,337
    
    
    
    47,756
    
    
    
    528,626
    
    
    
    471,010
    
    
    
    4,147
    
    
    
    61,763Mortgage-backed
    
    
    1,002,249
    
    
    
    1,030,363
    
    
    
    28,134
    
    
    
    20
    
    
    
    960,841
    
    
    
    973,961
    
    
    
    13,929
    
    
    
    809State and municipal
    
    
    519,055
    
    
    
    527,493
    
    
    
    11,169
    
    
    
    2,731
    
    
    
    531,625
    
    
    
    538,761
    
    
    
    10,990
    
    
    
    3,854Other
    
    
    11,234
    
    
    
    11,229
    
    
    
    
    
    
    
    5
    
    
    
    7,598
    
    
    
    7,595
    
    
    
    
    
    
    
    3Total available for sale
    
    $
    2,271,755
    
    
    $
    2,271,998
    
    
    $
    50,755
    
    
    $
    50,512
    
    
    $
    2,277,509
    
    
    $
    2,248,772
    
    
    $
    37,692
    
    
    $
    66,429Held to Maturity:State and municipalTotal held to maturity
    
    $
    138,581
    
    
    $
    138,840
    
    
    $
    2,024
    
    
    $
    1,765
    
    
    $
    138,575
    
    
    $
    137,846
    
    
    $
    1,708
    
    
    $
    2,437FHLB and Fed Reserve stock
    
    $
    148,764
    
    
    $
    148,764
    
    
    $
    
    
    
    $
    
    
    
    $
    148,764
    
    
    $
    148,764
    
    
    $
    
    
    
    $
    
  9




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##### Table of Contents



As of March 31, 2009
    
    Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalEstimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized(in thousands)
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesAvailable For Sale:Collateralized Mortgage Obligations
    
    $
    50,857
    
    
    $
    6,354
    
    
    $
    177,186
    
    
    $
    41,402
    
    
    $
    228,043
    
    
    $
    47,756Mortgage-backed
    
    
    1,521
    
    
    
    6
    
    
    
    639
    
    
    
    14
    
    
    
    2,160
    
    
    
    20State and municipal
    
    
    93,324
    
    
    
    2,463
    
    
    
    6,024
    
    
    
    268
    
    
    
    99,348
    
    
    
    2,731Other
    
    
    7
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    5Total available for sale
    
    
    145,709
    
    
    
    8,828
    
    
    
    183,849
    
    
    
    41,684
    
    
    
    329,558
    
    
    
    50,512Held to Maturity:State and municipal
    
    
    49,987
    
    
    
    1,415
    
    
    
    5,206
    
    
    
    350
    
    
    
    55,193
    
    
    
    1,765Total held to maturity
    
    
    49,987
    
    
    
    1,415
    
    
    
    5,206
    
    
    
    350
    
    
    
    55,193
    
    
    
    1,765Total
    
    $
    195,696
    
    
    $
    10,243
    
    
    $
    189,055
    
    
    $
    42,034
    
    
    $
    384,751
    
    
    $
    52,277
 As of December 31, 2008
    
    Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalEstimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized(in thousands)
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesAvailable For Sale:Collateralized Mortgage Obligations
    
    $
    231,892
    
    
    $
    61,436
    
    
    $
    3,085
    
    
    $
    327
    
    
    $
    234,977
    
    
    $
    61,763Mortgage-backed
    
    
    74,081
    
    
    
    796
    
    
    
    421
    
    
    
    13
    
    
    
    74,502
    
    
    
    809State and municipal
    
    
    112,353
    
    
    
    3,688
    
    
    
    3,220
    
    
    
    166
    
    
    
    115,573
    
    
    
    3,854Other
    
    
    7
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    3Total available for sale
    
    
    418,333
    
    
    
    65,923
    
    
    
    6,726
    
    
    
    506
    
    
    
    425,059
    
    
    
    66,429Held to Maturity:State and municipal
    
    
    51,896
    
    
    
    1,967
    
    
    
    6,481
    
    
    
    470
    
    
    
    58,377
    
    
    
    2,437Total held to maturity
    
    
    51,896
    
    
    
    1,967
    
    
    
    6,481
    
    
    
    470
    
    
    
    58,377
    
    
    
    2,437Total
    
    $
    470,229
    
    
    $
    67,890
    
    
    $
    13,207
    
    
    $
    976
    
    
    $
    483,436
    
    
    $
    68,866
   10




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##### Table of Contents



Note 4. Allowance for Loan Losses and Impaired Loans
  Analysis of Allowance for Loan Losses
 Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008Allowance for loan losses  beginning of period
    
    $
    255,321
    
    
    $
    163,353Provision for loan losses
    
    
    64,017
    
    
    
    30,619Charge-offs:Commercial and industrial
    
    
    8,108
    
    
    
    1,045Commercial real estate
    
    
    18,977
    
    
    
    9,132Total commercial
    
    
    27,085
    
    
    
    10,177Residential mortgage
    
    
    804
    
    
    
    1,769Direct consumer
    
    
    4,707
    
    
    
    3,522Indirect consumer
    
    
    5,507
    
    
    
    3,141Charge-offs
    
    
    38,103
    
    
    
    18,609Recoveries:Commercial
    
    
    128
    
    
    
    142Commercial real estate
    
    
    404
    
    
    
    50Total commercial
    
    
    532
    
    
    
    192Residential mortgage
    
    
    3
    
    
    
    Direct consumer
    
    
    334
    
    
    
    472Indirect consumer
    
    
    543
    
    
    
    501Recoveries
    
    
    1,412
    
    
    
    1,165Net charge-offs
    
    
    36,691
    
    
    
    17,444Allowance for loan losses  end of period
    
    $
    282,647
    
    
    $
    176,528
  11




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##### Table of Contents



Impaired Loan Information
    
    Balances
    
    
    Valuation ReserveMarch 31,
    
    
    December 31,
    
    
    March 31,
    
    
    December 31,(in thousands)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008BalancesImpaired loans with valuation reserve
    
    $
    148,039
    
    
    $
    101,671
    
    
    $
    46,567
    
    
    $
    39,885Impaired loans with no valuation reserve
    
    
    123,576
    
    
    
    87,330
    
    
    
    
    
    
    
    Total impaired loans
    
    $
    271,615
    
    
    $
    189,001
    
    
    $
    46,567
    
    
    $
    39,885Impaired loans on nonaccrual basis
    
    $
    271,615
    
    
    $
    189,001
    
    
    $
    46,567
    
    
    $
    39,885Impaired loans on accrual basis
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total impaired loans
    
    $
    271,615
    
    
    $
    189,001
    
    
    $
    46,567
    
    
    $
    39,885
  Note 5. Goodwill
   March 31,
    
    
    December 31,(in thousands)
    
    2009
    
    
    2008Regional Banking
    
    $
    595,417
    
    
    $
    595,417Wealth Management
    
    
    1,801
    
    
    
    1,801Total Goodwill
    
    $
    597,218
    
    
    $
    597,218
 12




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##### Table of Contents



Note 6. Long-Term Debt
  March 31,
    
    
    December 31,(in thousands)
    
    2009
    
    
    2008Citizens (Parent only):Subordinated debt:5.75% subordinated notes due February 2013
    
    $
    120,400
    
    
    $
    120,136Variable rate junior subordinated debenture due June 2033
    
    
    25,774
    
    
    
    25,7747.50% junior subordinated debentures due September 2066
    
    
    147,183
    
    
    
    146,927Subsidiaries:Federal Home Loan Bank advances
    
    
    1,666,507
    
    
    
    1,666,483Other borrowed funds
    
    
    104,711
    
    
    
    233,303Total long-term debt
    
    $
    2,064,575
    
    
    $
    2,192,623
 Note 7. Income Taxes
   Note 8. Accumulated Other Comprehensive Income
  Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    (49,594
    )
    
    $
    5,101Net change in unrealized gain on securities, net of tax effect of $10,143 in
2009 and $4,615 in 2008
    
    
    18,838
    
    
    
    8,570Net change in unrealized (loss) gain on cash flow hedges, net of tax effect
of ($652) in 2009 and $222 in 2008
    
    
    (1,212
    )
    
    
    412Net change in unrecognized pension and postretirement costs, net of tax
effect of ($1,887) in 2009
    
    
    (3,504
    )
    
    
    Accumulated other comprehensive (loss) income, net of tax
    
    $
    (35,472
    )
    
    $
    14,083
  13




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##### Table of Contents



Note 9. Fair Values of Assets and Liabilities
       ASSETS AND LIABILITIES RECORDED AT FAIR VALUE ON A RECURRING BASIS
 Investment Securities Available for Sale.
  14




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##### Table of Contents



Derivative Financial Instruments.
 Deferred Compensation Assets.
  March 31, 2009(in thousands)
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Investment Securities Available for Sale
    
    $
    2,271,998
    
    
    $
    
    
    
    $
    2,265,947
    
    
    $
    6,051Other assets (1)
    
    
    84,665
    
    
    
    3,676
    
    
    
    80,989
    
    
    
    Total Assets
    
    $
    2,356,663
    
    
    $
    3,676
    
    
    $
    2,346,936
    
    
    $
    6,051Other liabilities (2)
    
    $
    40,775
    
    
    $
    
    
    
    $
    40,775
    
    
    $
    
 
 (1)
    
    Includes Derivative Financial Instruments and Deferred Compensation Assets.(2)
    
    Includes Derivative Financial Instruments.  InvestmentSecurities(in thousands)
    
    Available for SaleAssetsBalance at 12/31/08
    
    $
    6,045Discount Accretion
    
    
    6Balance at 3/31/09
    
    $
    6,051
 ASSETS AND LIABILITIES RECORDED AT FAIR VALUE ON A NONRECURRING BASIS
 Mortgage Servicing Rights
 15




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##### Table of Contents



Loans Held for Sale.
  Impaired Loans.
 Goodwill.
 Core Deposit Intangible.
 Other Real Estate.
 Repossessed Assets.
  16




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##### Table of Contents



March 31, 2009(in thousands)
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Loans (1)
    
    $
    114,828
    
    
    $
    
    
    
    $
    
    
    
    $
    114,828Commercial Loans Held For Sale (2)
    
    
    4,926
    
    
    
    
    
    
    
    
    
    
    
    4,926Other Real Estate (3)
    
    
    7,859
    
    
    
    
    
    
    
    
    
    
    
    7,859Repossessed Assets (4)
    
    
    2,884
    
    
    
    
    
    
    
    
    
    
    
    2,884Total Assets
    
    $
    130,497
    
    
    $
    
    
    
    $
    
    
    
    $
    130,497
 
 (1)
    
    Impaired Loans with an initial carrying value of $148.7 million were written down
to their fair value of $114.8 million.(2)
    
    Impaired Loans with an initial carrying value of $9.6 million were written down
to their fair value of $4.9 million.(3)
    
    ORE properties with an initial carrying value of $14.6 million were written down
to their fair value of $7.9 million.(4)
    
    Repossessed Consumer Assets with an initial carrying value of $5.2 million were
written down to their fair value of $2.9 million. Note 10. Pension Benefit Cost
  Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008| |Defined Benefit Pension PlansInterest cost
    
    $
    1,105
    
    
    $
    1,165Expected return on plan assets
    
    
    (1,570
    )
    
    
    (1,900
    )Amortization of unrecognized:Prior service cost
    
    
    8
    
    
    
    10Net actuarial loss
    
    
    335
    
    
    
    75Net pension cost
    
    $
    (122
    )
    
    $
    (650
    )Supplemental Pension PlansInterest cost
    
    $
    189
    
    
    $
    190Curtailment loss
    
    
    941
    
    
    
    Amortization of unrecognized:Prior service cost
    
    
    
    
    
    
    118Net actuarial loss
    
    
    3
    
    
    
    5Net pension cost
    
    $
    1,133
    
    
    $
    313Postretirement Benefit PlansInterest cost
    
    $
    152
    
    
    $
    129Amortization of unrecognized:Prior service cost
    
    
    (67
    )
    
    
    (64
    )Net actuarial gain
    
    
    (8
    )
    
    
    (9
    )Net pension cost
    
    $
    77
    
    
    $
    56Defined contribution retirement and 401K PlansEmployer contributions
    
    $
    1,349
    
    
    $
    1,845Total periodic benefit cost
    
    $
    2,437
    
    
    $
    1,564
  17




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##### Table of Contents



Note 11. Stock-Based Compensation
   Three Months EndedAnalysis of Stock-Based Compensation Expense
    
    March 31,(in thousands)
    
    2009
    
    
    2008Stock Option Compensation
    
    $
    4
    
    
    $
    8Restricted Stock Compensation
    
    
    (279
    )
    
    
    1,060Stock-based compensation expense before income taxes
    
    
    (275
    )
    
    
    1,068Income tax provision (benefit)
    
    
    96
    
    
    
    (374
    )Total stock-based compensation expense after income taxes
    
    $
    (179
    )
    
    $
    694
     18




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##### Table of Contents



Weighted-AverageNumber of
    
    Grant Date FairShares
    
    Value| |Outstanding restricted stock at December 31, 2008
    
    
    609,032
    
    
    $
    14.43Granted
    
    
    384,818
    
    
    
    1.29Vested
    
    
    (37,352
    )
    
    
    19.19Forfeited
    
    
    (72,354
    )
    
    
    18.98Restricted stock at March 31, 2009
    
    
    884,144
    
    
    
    8.14
  Note 12. Shareholders Equity and Earnings Per Share
    Three Months EndedMarch 31,(in thousands, except per share amounts)
    
    2009
    
    
    2008Basic and diluted earnings per share  net income (loss)
    
    $
    (45,149
    )
    
    $
    11,127Dividend on redeemable preferred stock
    
    
    (4,103
    )
    
    
    Net income (loss) available to common shareholders
    
    
    (49,252
    )
    
    
    11,127Net income (loss) allocated to participating securities
    
    
    (311
    )
    
    
    71Net income (loss) allocated to common shareholders
    
    $
    (48,941
    )
    
    $
    11,056Weighted average shares outstanding
    
    
    126,198
    
    
    
    75,731Less: Participating securities included in weighted average shares outstanding
    
    
    (798
    )
    
    
    (483
    )Weighted average shares outstanding for basic earnings per common share
    
    
    125,400
    
    
    
    75,248Effect of dilutive securities  potential conversion of employee stock options and
restricted stock awards
    
    
    
    
    
    
    25Weighted average shares outstanding for dilutive earnings per common share
    
    
    125,400
    
    
    
    75,273Basic earnings per common share
    
    $
    (0.39
    )
    
    $
    0.15Diluted earnings per common share
    
    $
    (0.39
    )
    
    $
    0.15
 19




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##### Table of Contents



Note 13. Lines of Business
  Line of Business Information
 Specialty
    
    
    Regional
    
    
    Wealth(in thousands)
    
    Commercial
    
    
    Banking
    
    
    Mgmt
    
    
    Other
    
    
    Total| | | | |Earnings Summary  Three Months Ended
March 31, 2009Net interest income (taxable equivalent)
    
    $
    15,152
    
    
    $
    67,086
    
    
    $
    119
    
    
    $
    (1,074
    )
    
    $
    81,283Provision for loan losses
    
    
    27,298
    
    
    
    24,085
    
    
    
    
    
    
    
    12,634
    
    
    
    64,017Net interest income after provision
    
    
    (12,146
    )
    
    
    43,001
    
    
    
    119
    
    
    
    (13,708
    )
    
    
    17,266Noninterest income
    
    
    (5,812
    )
    
    
    17,693
    
    
    
    4,740
    
    
    
    2,612
    
    
    
    19,233Noninterest expense
    
    
    4,371
    
    
    
    56,752
    
    
    
    4,066
    
    
    
    15,589
    
    
    
    80,778Income before income taxes
    
    
    (22,329
    )
    
    
    3,942
    
    
    
    793
    
    
    
    (26,685
    )
    
    
    (44,279
    )Income tax expense (taxable equivalent)
    
    
    (7,815
    )
    
    
    1,380
    
    
    
    278
    
    
    
    7,027
    
    
    
    870Net income
    
    $
    (14,514
    )
    
    $
    2,562
    
    
    $
    515
    
    
    $
    (33,712
    )
    
    $
    (45,149
    )Average assets (in millions)
    
    $
    1,762
    
    
    $
    5,014
    
    
    $
    11
    
    
    $
    6,293
    
    
    $
    13,080Earnings Summary  Three Months
Ended March 31, 2008(1)Net interest income (taxable equivalent)
    
    $
    15,111
    
    
    $
    69,898
    
    
    $
    (9
    )
    
    $
    7,991
    
    
    $
    92,991Provision for loan losses
    
    
    18,093
    
    
    
    7,196
    
    
    
    
    
    
    
    5,330
    
    
    
    30,619Net interest income after provision
    
    
    (2,982
    )
    
    
    62,702
    
    
    
    (9
    )
    
    
    2,661
    
    
    
    62,372Noninterest income
    
    
    253
    
    
    
    19,521
    
    
    
    6,690
    
    
    
    4,461
    
    
    
    30,925Noninterest expense
    
    
    4,204
    
    
    
    55,290
    
    
    
    5,175
    
    
    
    11,893
    
    
    
    76,562Income before income taxes
    
    
    (6,933
    )
    
    
    26,933
    
    
    
    1,506
    
    
    
    (4,771
    )
    
    
    16,735Income tax expense (taxable equivalent)
    
    
    (2,427
    )
    
    
    9,427
    
    
    
    528
    
    
    
    (1,920
    )
    
    
    5,608Net income
    
    $
    (4,506
    )
    
    $
    17,506
    
    
    $
    978
    
    
    $
    (2,851
    )
    
    $
    11,127Average assets (in millions)
    
    $
    1,941
    
    
    $
    6,113
    
    
    $
    13
    
    
    $
    5,375
    
    
    $
    13,442
 
 (1)
    
    Certain amounts have been reclassified to conform to current year presentation. Note 14. Commitments, Contingent Liabilities and Guarantees
  20




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##### Table of Contents



March 31,
    
    
    December 31,(in thousands)
    
    2009
    
    
    2008| |Loan commitments and letters of credit:Commitments to extend credit
    
    $
    1,829,610
    
    
    $
    2,048,258Financial standby letters of credit
    
    
    251,927
    
    
    
    225,675Performance standby letters of credit
    
    
    21,658
    
    
    
    21,692Total loan commitments and letters of credit
    
    $
    2,103,195
    
    
    $
    2,295,625
  Note 15. Derivatives and Hedging Activities
 Risk Management Objective of Using Derivatives
  Fair Values of Derivative Instruments on the Balance Sheet
  Location
    
    Other Assets
    
    
    Other LiabilitiesFair Value
    
    
    Fair ValueMar 31,
    
    
    Dec 31,
    
    
    Mar 31,
    
    
    Dec 31,(in thousands)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Derivatives designated as hedging
instruments under SFAS 133
Interest Rate Products
    
    $
    30,119
    
    
    $
    30,984
    
    
    $
    
    
    
    $
    Derivatives notdesignated as hedging
instruments under SFAS 133
Interest Rate Products
    
    
    44,505
    
    
    
    47,950
    
    
    
    40,775
    
    
    
    44,837Total Derivatives
    
    $
    74,624
    
    
    $
    78,934
    
    
    $
    40,775
    
    
    $
    44,837
 Cash Flow Hedges of Interest Rate Risk
  21




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##### Table of Contents



Derivative Impact on OCI gain (loss)
    
    
    Derivative Ineffectiveness gain (loss)Location
    
    
    Reclassified from
    
    
    Location(in thousands)
    
    
    
    
    
    
    
    
    
    Reclassified into
    
    
    Accumulated OCI into
    
    
    Recognized inDerivatives Relationship
    
    Recognized in OCI
    
    
    Income
    
    
    Income
    
    
    Income
    
    
    AmountMar 31,
    
    
    Mar 31,
    
    
    
    
    
    
    Mar 31,
    
    
    Mar 31,
    
    
    
    
    
    
    Mar 31,
    
    
    Mar 31,2009
    
    
    2008
    
    
    
    
    
    
    2009
    
    
    2008
    
    
    
    
    
    
    2009
    
    
    2008Cash flow hedges:Interest Rate Products
    
    $
    1,896
    
    
    $
    807
    
    
    Interest income
    
    $
    3,433
    
    
    $
    173
    
    
    Other income
    
    $
    (78
    )
    
    $
    Other income
    
    
    327
    
    
    
    Total
    
    $
    1,896
    
    
    $
    807
    
    
    
    
    
    
    $
    3,760
    
    
    $
    173
    
    
    
    
    
    
    $
    (78
    )
    
    $
    
 Fair Value Hedges of Interest Rate Risk
    22




---



##### Table of Contents



Statement of OperationsDerivative Contract Gain (Loss)
    
    Hedged Item Gain (Loss)(in thousands)
    
    
    
    
    
    Mar 31,
    
    Mar 31,
    
    
    
    
    
    Mar 31,
    
    Mar 31,Derivatives Relationship
    
    Location
    
    2009
    
    2008
    
    Location
    
    2009
    
    2008Fair value hedges:Interest Rate Products
    
    Interest expense
    
    $
    313
    
    
    $
    238
    
    
    Interest expense
    
    $
    1,920
    
    
    $
    (238
    )
 Non-designated Hedges
   Amount of Gain or(Loss) Recognized inIncome StatementLocation of Gain or(in thousands)
    
    (Loss) Recognized in
    
    Mar 31,
    
    Mar 31,Derivative Relationship
    
    Income Statement
    
    2009
    
    2008Derivatives Not Designated
as HedgesInterest Rate Products
    
    Other income
    
    $
    2,444
    
    
    $
    514
 Credit-Risk-Related Contingent Features
   23




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##### Table of Contents



Note 16. Subsequent Event
  24




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##### Table of Contents



Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
 Selected Quarterly Information
Citizens Republic Bancorp and Subsidiaries
 Three Months EndedMarch 31,
    
    December 31,
    
    September 30,
    
    June 30,
    
    March 31,2009
    
    2008
    
    2008
    
    2008
    
    2008Summary of Operations (thousands)Net interest income
    
    $
    76,946
    
    
    $
    85,687
    
    
    $
    87,318
    
    
    $
    87,615
    
    
    $
    88,312Provision for loan losses
    
    
    64,017
    
    
    
    118,565
    
    
    
    58,390
    
    
    
    74,480
    
    
    
    30,619Total fees and other income
    
    
    19,233
    
    
    
    15,755
    
    
    
    28,005
    
    
    
    27,058
    
    
    
    30,925Investment securities gains (losses)
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    Noninterest expense (1)
    
    
    80,778
    
    
    
    78,611
    
    
    
    74,301
    
    
    
    261,228
    
    
    
    76,562Income tax provision (benefit)
    
    
    (3,467
    )
    
    
    99,634
    
    
    
    (10,192
    )
    
    
    (19,401
    )
    
    
    929Net income (loss) (2)
    
    
    (45,149
    )
    
    
    (195,369
    )
    
    
    (7,176
    )
    
    
    (201,634
    )
    
    
    11,127Net income (loss) attributable to common shareholders (3)
    
    
    (49,252
    )
    
    
    (195,596
    )
    
    
    (18,913
    )
    
    
    (201,634
    )
    
    
    11,127Taxable equivalent adjustment
    
    
    4,337
    
    
    
    4,519
    
    
    
    4,593
    
    
    
    4,611
    
    
    
    4,679Cash dividends on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,958Per Common Share DataBasic net income
    
    $
    (0.39
    )
    
    $
    (1.56
    )
    
    $
    (0.20
    )
    
    $
    (2.53
    )
    
    $
    0.15Diluted net income
    
    
    (0.39
    )
    
    
    (1.56
    )
    
    
    (0.20
    )
    
    
    (2.53
    )
    
    
    0.15Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.290Market value (end of period)
    
    
    1.55
    
    
    
    2.98
    
    
    
    3.08
    
    
    
    2.82
    
    
    
    12.43Common shareholders equity (end of period)
    
    
    10.29
    
    
    
    10.60
    
    
    
    12.20
    
    
    
    14.93
    
    
    
    20.82At Period End (millions)Assets
    
    $
    12,982
    
    
    $
    13,086
    
    
    $
    13,116
    
    
    $
    13,170
    
    
    $
    13,539Portfolio loans
    
    
    8,754
    
    
    
    9,103
    
    
    
    9,378
    
    
    
    9,449
    
    
    
    9,573Deposits
    
    
    9,120
    
    
    
    9,052
    
    
    
    9,006
    
    
    
    8,661
    
    
    
    8,487Shareholders equity
    
    
    1,567
    
    
    
    1,601
    
    
    
    1,537
    
    
    
    1,546
    
    
    
    1,577Average for the Quarter (millions)Assets
    
    $
    13,080
    
    
    $
    13,074
    
    
    $
    13,157
    
    
    $
    13,296
    
    
    $
    13,442Portfolio loans
    
    
    8,908
    
    
    
    9,267
    
    
    
    9,456
    
    
    
    9,514
    
    
    
    9,499Deposits
    
    
    9,117
    
    
    
    8,998
    
    
    
    8,837
    
    
    
    8,604
    
    
    
    8,417Shareholders equity
    
    
    1,607
    
    
    
    1,559
    
    
    
    1,551
    
    
    
    1,546
    
    
    
    1,579Ratios (annualized)Return on average assets
    
    
    (1.40
    )%
    
    
    (5.94
    )%
    
    
    (0.22
    )%
    
    
    (6.10
    )%
    
    
    0.33
    %Return on average shareholders equity
    
    
    (11.40
    )
    
    
    (49.86
    )
    
    
    (1.84
    )
    
    
    (52.47
    )
    
    
    2.83Average equity to average assets
    
    
    12.28
    
    
    
    11.92
    
    
    
    11.79
    
    
    
    11.62
    
    
    
    11.74Net interest margin (FTE) (4)
    
    
    2.73
    
    
    
    3.03
    
    
    
    3.09
    
    
    
    3.11
    
    
    
    3.12Efficiency ratio (5)
    
    
    80.36
    
    
    
    74.19
    
    
    
    61.96
    
    
    
    219.00
    
    
    
    61.79Net loans charged off to average portfolio loans
    
    
    1.67
    
    
    
    3.48
    
    
    
    0.94
    
    
    
    2.93
    
    
    
    0.74Allowance for loan losses to portfolio loans
    
    
    3.23
    
    
    
    2.80
    
    
    
    2.32
    
    
    
    1.92
    
    
    
    1.84Allowance for loan loss as a percent of nonperforming loans
    
    
    65.94
    
    
    
    83.43
    
    
    
    94.13
    
    
    
    130.54
    
    
    
    69.64Allowance for loan loss as a percent of nonperforming assets
    
    
    51.33
    
    
    
    58.13
    
    
    
    59.75
    
    
    
    63.55
    
    
    
    54.05Nonperforming assets to portfolio loans plus ORAA (end of period)
    
    
    6.25
    
    
    
    4.79
    
    
    
    3.87
    
    
    
    3.01
    
    
    
    3.39Nonperforming assets to total assets (end of period)
    
    
    4.24
    
    
    
    3.36
    
    
    
    2.78
    
    
    
    2.17
    
    
    
    2.41Ratio of earnings to fixed charges (6)
    
    
    
    
    
    
    
    
    
    
    0.46
    
    
    
    
    
    
    
    1.32Leverage ratio
    
    
    9.32
    
    
    
    9.66
    
    
    
    8.76
    
    
    
    8.71
    
    
    
    7.40Tier 1 capital ratio
    
    
    12.16
    
    
    
    12.21
    
    
    
    10.88
    
    
    
    10.80
    
    
    
    9.04Total capital ratio
    
    
    14.21
    
    
    
    14.49
    
    
    
    13.13
    
    
    
    13.03
    
    
    
    11.26
 (1)
    
    Noninterest expense includes a goodwill impairment
charge of $178.1 million in the second quarter of 2008.(2)
    
    Net income (loss)
includes a deferred tax valuation allowance of $136.6 million in the
fourth quarter of 2008.(3)
    
    Net income (loss) attributable to common shareholders includes a dividend
on redeemable preferred stock in the amount of: $4.1 million, $0.2 million, and $11.7
million in the first quarter of 2009, the fourth quarter of 2008, and the third quarter of
2008, respectively.(4)
    
    Net interest margin is presented on an annual basis, includes taxable equivalent
adjustments to interest income and is based on a tax rate of 35%.(5)
    
    The Efficiency
Ratio measures how efficiently a bank spends its revenues. The formula is: Noninterest expense/(Net
interest income + Taxable equivalent adjustment + Total fees and other income).(6)
    
    Earnings represent net income from continuing operations before income tax
provision. Fixed charges, excluding interest on deposits, include interest on short-term
borrowings and long term debt, amortization of debt expense and one-third of net rental
expense (which we believe is representative of the interest factor). For the quarters ended
March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008 earnings were
insufficient to cover fixed charges by $48.6 million, $95.7 million, $17.4 million, and $221.0 million,
respectively. 25




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##### Table of Contents



Introduction
  Forward  Looking Statements
   
    
    Citizens faces the risk that loan losses, including unanticipated loan losses due to
changes in loan portfolios, fraud and economic factors, could exceed the allowance for loan
losses and that additional increases in the allowance will be required. Additions to the
allowance for loan losses would cause Citizens net income to decline and could have a
negative impact on its capital and financial position.
 
    
    While Citizens attempts to manage the risk from changes in market interest rates, interest
rate risk management techniques are not exact. In addition, Citizens may not be able to
economically hedge its interest rate risk. A rapid or substantial increase or decrease in
interest rates could adversely affect Citizens net interest income and results of operations.
 
    
    Difficult economic conditions have adversely affected the banking industry and financial
markets generally and may significantly affect Citizens business, financial condition, and
results of operations.
 
    
    An economic downturn, and the negative economic effects caused by terrorist attacks,
potential attacks and other destabilizing events, would likely contribute to the deterioration
of the quality of Citizens loan portfolio and could reduce its customer base, its level of
deposits, and demand for its financial products such as loans.
 
    
    If Citizens is unable to continue to attract and retain core deposits, to obtain third
party financing on favorable terms, or to have access to interbank or other liquidity sources
(as a result of rating agency downgrades or other market factors), its cost of funds will
increase, adversely affecting its ability to generate the funds necessary for lending
operations, reducing net interest margin and negatively affecting its results of operations.
 
    
    Increased competition with other financial institutions or an adverse change in Citizens
relationship with a number of major customers could reduce its net interest margin and net
income by decreasing the number and size of loans originated, the interest rates charged on
these loans and the fees charged for services to customers. If Citizens lends to customers who
are less likely to pay in order to maintain historical origination levels, it may not be able
to maintain current loan quality levels.
 
    
    Events such as significant adverse changes in the business climate, adverse action by a
regulator, unanticipated changes in the competitive environment, and a decision to change
Citizens operations or dispose of an operating unit could have a negative effect on its
goodwill or other intangible assets such that it may need to record an impairment charge,
which could have a material adverse impact on its results of operations.
 
    
    If the FDIC raises the assessment rate charged to its insured financial institutions, our
FDIC insurance premium may increase and this could have a negative effect on our expenses and
results of operations.
 
    
    Citizens may not realize its deferred income tax assets.
 
    
    Citizens stock price can be volatile.
 
    
    The trading volume in Citizens common stock is less than that of other larger financial
services companies.
 26




---



##### Table of Contents




    
    If Citizens stock does not continue to be traded on an established exchange, an active
trading market may not continue and the trading price of its stock may decline.
 
    
    An investment in Citizens common stock is not an insured deposit.
 
    
    Citizens may be adversely affected by the soundness of other financial institutions.
 
    
    Citizens could face unanticipated environmental liabilities or costs related to real
property owned or acquired through foreclosure. Compliance with federal, state and local
environmental laws and regulations, including those related to investigation and clean-up of
contaminated sites, could have a negative effect on expenses and results of operations.
 
    
    Citizens is a party to various lawsuits incidental to its business. Litigation is subject
to many uncertainties such that the expenses and ultimate exposure with respect to many of
these matters cannot be ascertained.
 
    
    The financial services industry is undergoing rapid technological changes. If Citizens is
unable to adequately invest in and implement new technology-driven products and services, it
may not be able to compete effectively, or the cost to provide products and services may
increase significantly.
 
    
    Citizens business may be adversely affected by the highly regulated environment in which
it operates. Changes in banking or tax laws, regulations, and regulatory practices at either
the federal or state level may adversely affect Citizens, including its ability to offer new
products and services, obtain financing, pay dividends from its subsidiaries to its parent
company, attract deposits, or make loans at satisfactory spreads. Such changes may also result
in the imposition of additional costs.
 
    
    The products and services offered by the banking industry and customer expectations
regarding them are subject to change. Citizens attempts to respond to perceived customer needs
and expectations by offering new products and services, which are often costly to develop and
market initially. A lack of market acceptance of these products and services would have a
negative effect on its financial condition and results of operations.
 
    
    As a bank holding company that conducts substantially all of its operations through its
subsidiaries, the ability of Citizens parent company to pay dividends, repurchase its shares
or to repay its indebtedness depends upon the results of operations of its subsidiaries and
their ability to pay dividends to the parent company. Dividends paid by these subsidiaries are
subject to limits imposed by federal and state law.
 
    
    New accounting or tax pronouncements or interpretations may be issued by the accounting
profession, regulators or other government bodies which could change existing accounting
methods. Changes in accounting methods could negatively impact Citizens results of operations
and financial condition.
 
    
    Citizens business continuity plans or data security systems could prove to be inadequate,
resulting in a material interruption in, or disruption to, its business and a negative impact
on its results of operations.
 
    
    Citizens vendors could fail to fulfill their contractual obligations, resulting in a
material interruption in, or disruption to, its business and a negative impact on its results
of operations.
 
    
    Citizens potential inability to integrate acquired operations could have a negative effect
on its expenses and results of operations.
 
    
    Citizens controls and procedures may fail or be circumvented which could have a material
adverse effect on its business, results of operations and financial condition.
 
    
    Citizens articles of incorporation and bylaws as well as certain banking laws may have an
anti-takeover effect.
 www.sec.gov
 Critical Accounting Policies
  27




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##### Table of Contents



Derivative Financial Instruments
  Use of Non-GAAP Financial Measures
  Non-GAAP ReconciliationCitizens Republic Bancorp and Subsidiaries
 (dollars in thousands)
    
    1st Qtr 2009
    
    
    4th Qtr 2008
    
    
    3rd Qtr 2008
    
    
    2nd Qtr 2008
    
    
    1st Qtr 2008Net Interest Income (A)
    
    $
    76,946
    
    
    $
    85,687
    
    
    $
    87,318
    
    
    $
    87,615
    
    
    $
    88,312Taxable Equivalent Adjustment (B)
    
    
    4,337
    
    
    
    4,519
    
    
    
    4,593
    
    
    
    4,611
    
    
    
    4,679Noninterest Income (C)
    
    
    19,233
    
    
    
    15,754
    
    
    
    28,005
    
    
    
    27,058
    
    
    
    30,925Noninterest Expense (D)
    
    
    80,778
    
    
    
    78,611
    
    
    
    74,301
    
    
    
    261,228
    
    
    
    76,562Efficiency Ratio: D/(A+B+C)
    
    
    80.36
    %
    
    
    74.19
    %
    
    
    61.96
    %
    
    
    219.00
    %
    
    
    61.79
    %
 28




---



##### Table of Contents



Mar 31, 2009
    
    
    Dec 31, 2008
    
    
    Sep 30, 2008
    
    
    Jun 30, 2008
    
    
    Mar 31, 2008Ending Balances (millions)Assets
    
    $
    12,982
    
    
    $
    13,086
    
    
    $
    13,116
    
    
    $
    13,170
    
    
    $
    13,539Goodwill
    
    
    (597
    )
    
    
    (597
    )
    
    
    (597
    )
    
    
    (597
    )
    
    
    (775
    )Core deposit intangible assets
    
    
    (19
    )
    
    
    (21
    )
    
    
    (24
    )
    
    
    (26
    )
    
    
    (28
    )Deferred taxes
    
    
    7
    
    
    
    7
    
    
    
    8
    
    
    
    9
    
    
    
    10Tangible assets
    
    $
    12,373
    
    
    $
    12,475
    
    
    $
    12,503
    
    
    $
    12,556
    
    
    $
    12,746Equity
    
    $
    1,567
    
    
    $
    1,601
    
    
    $
    1,537
    
    
    $
    1,546
    
    
    $
    1,577Goodwill
    
    
    (597
    )
    
    
    (597
    )
    
    
    (597
    )
    
    
    (597
    )
    
    
    (775
    )Core deposit intangible assets
    
    
    (19
    )
    
    
    (21
    )
    
    
    (24
    )
    
    
    (26
    )
    
    
    (28
    )Deferred taxes
    
    
    7
    
    
    
    7
    
    
    
    8
    
    
    
    9
    
    
    
    10Tangible equity
    
    $
    958
    
    
    $
    990
    
    
    $
    924
    
    
    $
    932
    
    
    $
    784Tangible equity
    
    $
    958
    
    
    $
    990
    
    
    $
    924
    
    
    $
    932
    
    
    $
    784Preferred Stock
    
    
    (268
    )
    
    
    (266
    )
    
    
    
    
    
    
    (114
    )
    
    
    Tangible common equity
    
    $
    690
    
    
    $
    724
    
    
    $
    924
    
    
    $
    818
    
    
    $
    784Equity to Assets
    
    
    12.07
    %
    
    
    12.24
    %
    
    
    11.72
    %
    
    
    11.74
    %
    
    
    11.65
    %Tangible Equity to Tangible Assets
    
    
    7.74
    
    
    
    7.93
    
    
    
    7.39
    
    
    
    7.42
    
    
    
    6.15Tangible Common Equity to Tangible Assets
    
    
    5.58
    
    
    
    5.80
    
    
    
    7.39
    
    
    
    6.51
    
    
    
    6.15
  Results of Operations
 Summary
      RegulatoryMinimum for
    
    
    
    
    
    
    
    
    
    
    
    
    
    Excess CapitalWell-
    
    
    
    
    
    
    
    
    
    
    
    
    
    over MinimumCapitalized
    
    3/31/09
    
    12/31/08
    
    9/30/08
    
    (in millions)Tier 1 capital ratio
    
    
    6.00
    %
    
    
    12.16
    %
    
    
    12.21
    %
    
    
    10.88
    %
    
    $
    587.9Total capital ratio
    
    
    10.00
    
    
    
    14.21
    
    
    
    14.49
    
    
    
    13.13
    
    
    
    402.3Tier 1 leverage ratio
    
    
    5.00
    
    
    
    9.32
    
    
    
    9.66
    
    
    
    8.76
    
    
    
    537.8Tangible equity to tangible assets1
    
    
    
    
    
    
    7.74
    
    
    
    7.93
    
    
    
    7.39Tangible common equity to tangible assets1

    
    
    
    
    
    
    5.58
    
    
    
    5.80
    
    
    
    7.39
 
 1
    
    Tangible common equity, tangible equity, and tangible assets exclude goodwill and core
deposit intangible assets, net of tax.This amount totaled $0.6 million for March 31, 2009, December 31, 2008, and September 30, 2008. Net Interest Income and Net Interest Margin
  29




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##### Table of Contents



Average Balances/Net Interest Income/Average Rates
 2009
    
    
    2008Three Months Ended March 31,
    
    Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average(dollars in thousands)
    
    Balance
    
    
    Interest(1)
    
    
    Rate(2)
    
    
    Balance
    
    
    Interest (1)
    
    
    Rate (2)Earning AssetsMoney market investments
    
    $
    426,824
    
    
    $
    263
    
    
    
    0.25
    %
    
    $
    4,490
    
    
    $
    30
    
    
    
    2.66
    %Investment securities (3):Taxable
    
    
    1,738,346
    
    
    
    21,912
    
    
    
    5.04
    
    
    
    1,528,754
    
    
    
    21,023
    
    
    
    5.50Tax-exempt
    
    
    651,797
    
    
    
    6,957
    
    
    
    6.57
    
    
    
    678,699
    
    
    
    7,370
    
    
    
    6.68FHLB and Federal Reserve stock
    
    
    148,763
    
    
    
    1,366
    
    
    
    3.71
    
    
    
    148,840
    
    
    
    1,693
    
    
    
    4.57Portfolio Loans (4):Commercial and industrial
    
    
    2,485,161
    
    
    
    27,928
    
    
    
    4.65
    
    
    
    2,564,023
    
    
    
    37,146
    
    
    
    5.93Commercial real estate
    
    
    2,944,144
    
    
    
    38,760
    
    
    
    5.34
    
    
    
    3,142,244
    
    
    
    53,887
    
    
    
    6.90Residential mortgage
    
    
    1,237,705
    
    
    
    16,949
    
    
    
    5.48
    
    
    
    1,417,712
    
    
    
    22,963
    
    
    
    6.48Direct consumer
    
    
    1,431,983
    
    
    
    21,542
    
    
    
    6.10
    
    
    
    1,553,348
    
    
    
    27,906
    
    
    
    7.23Indirect consumer
    
    
    809,025
    
    
    
    13,511
    
    
    
    6.77
    
    
    
    821,882
    
    
    
    13,869
    
    
    
    6.79Total portfolio loans
    
    
    8,908,018
    
    
    
    118,690
    
    
    
    5.42
    
    
    
    9,499,209
    
    
    
    155,771
    
    
    
    6.62Loans held for sale
    
    
    93,379
    
    
    
    501
    
    
    
    2.15
    
    
    
    74,057
    
    
    
    1,230
    
    
    
    6.63Total earning assets (3)
    
    
    11,967,127
    
    
    
    149,689
    
    
    
    5.20
    
    
    
    11,934,049
    
    
    
    187,117
    
    
    
    6.45Nonearning AssetsCash and due from banks
    
    
    173,181
    
    
    
    
    
    
    
    
    
    
    
    205,102Bank premises and equipment
    
    
    123,573
    
    
    
    
    
    
    
    
    
    
    
    130,216Investment security fair value adjustment
    
    
    (6,471
    )
    
    
    
    
    
    
    
    
    
    
    32,294Other nonearning assets
    
    
    1,083,358
    
    
    
    
    
    
    
    
    
    
    
    1,306,441Allowance for loan losses
    
    
    (260,483
    )
    
    
    
    
    
    
    
    
    
    
    (165,815
    )Total assets
    
    $
    13,080,285
    
    
    
    
    
    
    
    
    
    
    $
    13,442,287Interest-Bearing LiabilitiesDeposits:Interest-bearing demand
    
    $
    823,161
    
    
    $
    930
    
    
    
    0.46
    %
    
    $
    776,756
    
    
    $
    1,269
    
    
    
    0.66
    %Savings deposits
    
    
    2,596,840
    
    
    
    5,965
    
    
    
    0.93
    
    
    
    2,412,725
    
    
    
    14,249
    
    
    
    2.38Time deposits
    
    
    4,548,786
    
    
    
    40,245
    
    
    
    3.59
    
    
    
    4,137,557
    
    
    
    46,060
    
    
    
    4.48Short-term borrowings
    
    
    71,374
    
    
    
    67
    
    
    
    0.38
    
    
    
    632,655
    
    
    
    4,971
    
    
    
    3.16Long-term debt
    
    
    2,116,545
    
    
    
    25,536
    
    
    
    4.88
    
    
    
    2,665,362
    
    
    
    32,256
    
    
    
    4.86Total interest-bearing liabilities
    
    
    10,156,706
    
    
    
    72,743
    
    
    
    2.90
    
    
    
    10,625,055
    
    
    
    98,805
    
    
    
    3.74Noninterest-Bearing Liabilities and
Shareholders EquityNoninterest-bearing demand
    
    
    1,148,419
    
    
    
    
    
    
    
    
    
    
    
    1,090,255Other liabilities
    
    
    168,525
    
    
    
    
    
    
    
    
    
    
    
    148,339Shareholders equity
    
    
    1,606,635
    
    
    
    
    
    
    
    
    
    
    
    1,578,638Total liabilities and shareholders equity
    
    $
    13,080,285
    
    
    
    
    
    
    
    
    
    
    $
    13,442,287Net Interest Income
    
    
    
    
    
    $
    76,946
    
    
    
    
    
    
    
    
    
    
    $
    88,312Interest Spread(5)
    
    
    
    
    
    
    
    
    
    
    2.30
    %
    
    
    
    
    
    
    
    
    
    
    2.71
    %Contribution of noninterest bearing sources of funds
    
    
    
    
    
    
    
    
    
    
    0.43
    
    
    
    
    
    
    
    
    
    
    
    0.41Net Interest Margin(5)(6)
    
    
    
    
    
    
    
    
    
    
    2.73
    %
    
    
    
    
    
    
    
    
    
    
    3.12
    %
 
 (1)
    
    Interest income is shown on actual basis and does not include taxable equivalent
adjustments.(2)
    
    Average rates are presented on an annual basis and include taxable equivalent
adjustments to interest income of $4.3 million and $4.7 million for the three months ended March
31, 2009 and 2008, respectively, based on a tax rate of 35%.(3)
    
    For presentation in this table, average balances and the corresponding average
rates for investment securities are based upon historical cost, adjusted for amortization of
premiums and accretion of discounts.(4)
    
    Nonaccrual loans are included in average balances for
each applicable loan category.(5)
    
    The interest spread
and net interest margin are presented on a tax-equivalent basis.(6)
    
    Because noninterest-bearing funding sources, demand deposits, other liabilities and
shareholders equity also support earning assets, the net interest margin exceeds the interest
spread. 30




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##### Table of Contents



Analysis of Changes in Interest Income and Interest Expense
 Three Months Ended March 31,Increase (Decrease)2009 compared with 2008
    
    Net
    
    
    Due to Change in(in thousands)
    
    Change(1)
    
    
    Rate(2)
    
    
    Volume(2)Interest Income on Earning Assets:Money market investments
    
    $
    233
    
    
    $
    (52
    )
    
    $
    285Investment securities:Taxable
    
    
    889
    
    
    
    (1,844
    )
    
    
    2,733Tax-exempt
    
    
    (413
    )
    
    
    (124
    )
    
    
    (289
    )FHLB and Federal Reserve stock
    
    
    (327
    )
    
    
    (326
    )
    
    
    (1
    )Loans:Commercial and industrial
    
    
    (9,218
    )
    
    
    (8,106
    )
    
    
    (1,112
    )Commercial real estate
    
    
    (15,127
    )
    
    
    (11,898
    )
    
    
    (3,229
    )Residential mortgage loans
    
    
    (6,014
    )
    
    
    (3,302
    )
    
    
    (2,712
    )Direct consumer
    
    
    (6,364
    )
    
    
    (4,299
    )
    
    
    (2,065
    )Indirect consumer
    
    
    (358
    )
    
    
    (142
    )
    
    
    (216
    )Total portfolio loans
    
    
    (37,081
    )
    
    
    (27,747
    )
    
    
    (9,334
    )Loans held for sale
    
    
    (729
    )
    
    
    (989
    )
    
    
    260Total
    
    
    (37,428
    )
    
    
    (31,082
    )
    
    
    (6,346
    )Interest Expense on Interest-Bearing Liabilities:Deposits:Interest-bearing demand
    
    
    (339
    )
    
    
    (411
    )
    
    
    72Savings
    
    
    (8,284
    )
    
    
    (9,298
    )
    
    
    1,014Time
    
    
    (5,815
    )
    
    
    (10,086
    )
    
    
    4,271Short-term borrowings
    
    
    (4,904
    )
    
    
    (2,443
    )
    
    
    (2,461
    )Long-term debt
    
    
    (6,720
    )
    
    
    (98
    )
    
    
    (6,622
    )Total
    
    
    (26,062
    )
    
    
    (22,336
    )
    
    
    (3,726
    )Net Interest Income
    
    $
    (11,366
    )
    
    $
    (8,746
    )
    
    $
    (2,620
    )
 
 (1)
    
    Changes are based on actual interest income and do not reflect taxable equivalent adjustments.(2)
    
    The change in interest not solely due to changes in volume or rates has been allocated in proportion to the absolute dollar amounts of the change in each.  31




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##### Table of Contents



Noninterest Income
  Noninterest Income
 Three Months EndedMarch 31,
    
    
    Change in 2009(dollars in thousands)
    
    2009
    
    
    2008
    
    
    Amount
    
    
    PercentService charges on deposit accounts
    
    $
    10,268
    
    
    $
    11,466
    
    
    $
    (1,198
    )
    
    
    (10.5
    )%Trust fees
    
    
    3,419
    
    
    
    4,784
    
    
    
    (1,365
    )
    
    
    (28.5
    )Mortgage and other loan income
    
    
    3,079
    
    
    
    3,344
    
    
    
    (265
    )
    
    
    (7.9
    )Brokerage and investment fees
    
    
    1,327
    
    
    
    1,916
    
    
    
    (589
    )
    
    
    (30.7
    )ATM network user fees
    
    
    1,454
    
    
    
    1,413
    
    
    
    41
    
    
    
    2.9Bankcard fees
    
    
    1,894
    
    
    
    1,744
    
    
    
    150
    
    
    
    8.6Gains (losses) on loans held for sale
    
    
    (6,152
    )
    
    
    1
    
    
    
    (6,153
    )
    
    
    N/MOther income
    
    
    3,944
    
    
    
    6,257
    
    
    
    (2,313
    )
    
    
    (37.0
    )Total noninterest income
    
    $
    19,233
    
    
    $
    30,925
    
    
    $
    (11,692
    )
    
    
    (37.8
    )
 
   Noninterest Expense
  Noninterest Expense
 Three Months EndedMarch 31,
    
    
    Change in 2009(dollars in thousands)
    
    2009
    
    
    2008
    
    
    Amount
    
    
    PercentSalaries and employee benefits
    
    $
    33,917
    
    
    $
    42,225
    
    
    $
    (8,308
    )
    
    
    (19.7
    )%Occupancy
    
    
    7,923
    
    
    
    7,675
    
    
    
    248
    
    
    
    3.2Professional services
    
    
    3,136
    
    
    
    3,763
    
    
    
    (627
    )
    
    
    (16.7
    )Equipment
    
    
    2,850
    
    
    
    3,230
    
    
    
    (380
    )
    
    
    (11.8
    )Data processing services
    
    
    4,274
    
    
    
    4,304
    
    
    
    (30
    )
    
    
    (0.7
    )Advertising and public relations
    
    
    1,425
    
    
    
    1,838
    
    
    
    (413
    )
    
    
    (22.5
    )Postage and delivery
    
    
    1,575
    
    
    
    1,727
    
    
    
    (152
    )
    
    
    (8.8
    )Other loan expenses
    
    
    5,937
    
    
    
    1,811
    
    
    
    4,126
    
    
    
    227.8Other real estate (ORE) expenses
    
    
    8,360
    
    
    
    1,242
    
    
    
    7,118
    
    
    
    573.1Intangible asset amortization
    
    
    2,037
    
    
    
    2,447
    
    
    
    (410
    )
    
    
    (16.8
    )Other expenses
    
    
    9,344
    
    
    
    6,300
    
    
    
    3,044
    
    
    
    48.3Total noninterest expense
    
    $
    80,778
    
    
    $
    76,562
    
    
    $
    4,216
    
    
    
    5.5
 
   32




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##### Table of Contents



FDIC Assessments
    Income Taxes
  Lines of Business Results
  Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008Specialty Commercial
    
    $
    (14,514
    )
    
    $
    (4,506
    )Regional Banking
    
    
    2,562
    
    
    
    17,506Wealth Management
    
    
    515
    
    
    
    978Other
    
    
    (33,712
    )
    
    
    (2,851
    )Net Income
    
    $
    (45,149
    )
    
    $
    11,127
 Specialty Commercial
  33




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##### Table of Contents



Regional Banking
  Wealth Management
  Other
  Financial Condition
  Investment Securities
  Portfolio Loans
   34




---



##### Table of Contents



Commercial Loan Portfolio
 Mar 31
    
    
    Dec 31
    
    
    Sep 30
    
    
    Jun 30
    
    
    Mar 31(in millions)
    
    2009
    
    
    2008
    
    
    2008
    
    
    2008
    
    
    2008Land Hold
    
    $
    54.2
    
    
    $
    45.0
    
    
    $
    48.3
    
    
    $
    49.8
    
    
    $
    61.6Land Development
    
    
    121.2
    
    
    
    132.7
    
    
    
    125.0
    
    
    
    128.2
    
    
    
    159.2Construction
    
    
    257.7
    
    
    
    263.5
    
    
    
    364.2
    
    
    
    344.1
    
    
    
    370.7Income Producing
    
    
    1,558.2
    
    
    
    1,556.2
    
    
    
    1,533.2
    
    
    
    1,569.9
    
    
    
    1,567.3Owner-Occupied
    
    
    953.0
    
    
    
    967.3
    
    
    
    999.6
    
    
    
    1,009.3
    
    
    
    1,015.6Total Commercial Real Estate
    
    
    2,944.3
    
    
    
    2,964.7
    
    
    
    3,070.3
    
    
    
    3,101.3
    
    
    
    3,174.4Commercial and Industrial
    
    
    2,394.4
    
    
    
    2,602.4
    
    
    
    2,703.7
    
    
    
    2,703.8
    
    
    
    2,653.8Total Commercial Loans
    
    $
    5,338.7
    
    
    $
    5,567.1
    
    
    $
    5,774.0
    
    
    $
    5,805.1
    
    
    $
    5,828.2
    Credit Quality
   
    
    Delinquency Rates by Loan Portfolio  This table illustrates the loans where the
contractual payment is 30 to 89 days past due and interest is still accruing. While these
loans are actively worked to bring them current, past due loan trends may be a leading
indicator of potential future nonperforming loans and charge-offs.
 35




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##### Table of Contents




    
    Commercial Watchlist  This table illustrates the commercial loans that, while still
accruing interest, may be at risk due to general economic conditions or changes in a
borrowers financial status.
 
    
    Nonperforming Assets  This table illustrates the loans that are in nonaccrual status,
loans past due 90 days or more on which interest is still accruing, nonperforming loans that
are held for sale, and other repossessed assets acquired. The commercial loans included in
this table are reviewed as part of the watchlist process in addition to the loans displayed in
the commercial watchlist table.
 
    
    Net Charge-Offs  This table illustrates the portion of loans that have been charged-off
during each quarter.
 
    
    Analysis of Allowance for Loan Losses  This table illustrates the changes that result in
the period-end allowance for loan losses position.
 Delinquency Rates by Loan Portfolio
  Table 1  Delinquency Rates By Loan Portfolio
 30 to 89 days Past Due
    
    Mar 31, 2009
    
    
    Dec 31, 2008
    
    
    Sep 30, 2008
    
    
    Jun 30, 2008
    
    
    Mar 31, 2008% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of(dollars in millions)
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    PortfolioLand Hold
    
    $
    3.7
    
    
    
    6.83
    %
    
    $
    3.9
    
    
    
    8.67
    %
    
    $
    7.3
    
    
    
    15.11
    %
    
    $
    9.3
    
    
    
    18.67
    %
    
    
    6.6
    
    
    
    10.71
    %Land Development
    
    
    11.1
    
    
    
    9.16
    
    
    
    5.2
    
    
    
    3.92
    
    
    
    10.3
    
    
    
    8.24
    
    
    
    1.1
    
    
    
    0.86
    
    
    
    16.3
    
    
    
    10.24Construction
    
    
    16.7
    
    
    
    6.48
    
    
    
    27.3
    
    
    
    10.36
    
    
    
    26.1
    
    
    
    7.17
    
    
    
    11.9
    
    
    
    3.46
    
    
    
    10.5
    
    
    
    2.83Income Producing
    
    
    64.2
    
    
    
    4.12
    
    
    
    76.7
    
    
    
    4.93
    
    
    
    50.1
    
    
    
    3.27
    
    
    
    48.5
    
    
    
    3.09
    
    
    
    29.3
    
    
    
    1.87Owner-Occupied
    
    
    37.4
    
    
    
    3.92
    
    
    
    37.5
    
    
    
    3.88
    
    
    
    21.3
    
    
    
    2.13
    
    
    
    18.6
    
    
    
    1.84
    
    
    
    19.0
    
    
    
    1.87Total Commercial Real Estate
    
    
    133.1
    
    
    
    4.52
    
    
    
    150.6
    
    
    
    5.08
    
    
    
    115.1
    
    
    
    3.75
    
    
    
    89.4
    
    
    
    2.88
    
    
    
    81.7
    
    
    
    2.57Commercial and Industrial
    
    
    47.1
    
    
    
    1.97
    
    
    
    56.5
    
    
    
    2.17
    
    
    
    29.1
    
    
    
    1.08
    
    
    
    29.5
    
    
    
    1.09
    
    
    
    39.9
    
    
    
    1.50Total Commercial Loans
    
    
    180.2
    
    
    
    3.38
    
    
    
    207.1
    
    
    
    3.72
    
    
    
    144.2
    
    
    
    2.50
    
    
    
    118.9
    
    
    
    2.05
    
    
    
    121.6
    
    
    
    2.09Residential Mortgage
    
    
    25.9
    
    
    
    2.14
    
    
    
    39.5
    
    
    
    3.13
    
    
    
    37.7
    
    
    
    2.95
    
    
    
    38.5
    
    
    
    2.94
    
    
    
    33.5
    
    
    
    2.40Direct Consumer
    
    
    20.4
    
    
    
    1.45
    
    
    
    25.5
    
    
    
    1.76
    
    
    
    19.5
    
    
    
    1.32
    
    
    
    18.4
    
    
    
    1.22
    
    
    
    21.7
    
    
    
    1.42Indirect Consumer
    
    
    14.7
    
    
    
    1.83
    
    
    
    18.5
    
    
    
    2.25
    
    
    
    13.6
    
    
    
    1.61
    
    
    
    14.4
    
    
    
    1.73
    
    
    
    13.3
    
    
    
    1.62Total Delinquent Loans
    
    $
    241.2
    
    
    
    2.76
    %
    
    $
    290.6
    
    
    
    3.19
    %
    
    $
    215.0
    
    
    
    2.29
    %
    
    $
    190.2
    
    
    
    2.01
    %
    
    
    190.1
    
    
    
    1.99
    %
  Commercial Watchlist
  36




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##### Table of Contents



Table 2  Commercial Watchlist
 Accruing loans only
    
    Mar 31, 2009
    
    
    Dec 31, 2008
    
    
    Sep 30, 2008
    
    
    Jun 30, 2008
    
    
    Mar 31, 2008% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of(dollars in millions)
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    PortfolioLand Hold
    
    $
    15.7
    
    
    
    28.97
    %
    
    $
    18.5
    
    
    
    41.11
    %
    
    $
    20.7
    
    
    
    42.86
    %
    
    $
    24.2
    
    
    
    48.59
    %
    
    $
    27.7
    
    
    
    44.97
    %Land Development
    
    
    62.4
    
    
    
    51.49
    
    
    
    49.3
    
    
    
    37.15
    
    
    
    51.8
    
    
    
    41.44
    
    
    
    47.5
    
    
    
    37.05
    
    
    
    55.9
    
    
    
    35.11Construction
    
    
    86.6
    
    
    
    33.60
    
    
    
    74.8
    
    
    
    28.39
    
    
    
    104.8
    
    
    
    28.78
    
    
    
    86.3
    
    
    
    25.08
    
    
    
    66.7
    
    
    
    17.99Income Producing
    
    
    421.9
    
    
    
    27.08
    
    
    
    401.0
    
    
    
    25.77
    
    
    
    290.3
    
    
    
    18.93
    
    
    
    239.3
    
    
    
    15.24
    
    
    
    221.3
    
    
    
    14.12Owner-Occupied
    
    
    224.2
    
    
    
    23.53
    
    
    
    178.4
    
    
    
    18.44
    
    
    
    167.0
    
    
    
    16.71
    
    
    
    161.8
    
    
    
    16.03
    
    
    
    155.8
    
    
    
    15.34Total Commercial Real Estate
    
    
    810.8
    
    
    
    27.54
    
    
    
    722.0
    
    
    
    24.35
    
    
    
    634.6
    
    
    
    20.67
    
    
    
    559.1
    
    
    
    18.03
    
    
    
    527.4
    
    
    
    16.61Commercial and Industrial
    
    
    479.7
    
    
    
    20.03
    
    
    
    436.8
    
    
    
    16.78
    
    
    
    431.2
    
    
    
    15.95
    
    
    
    432.5
    
    
    
    16.00
    
    
    
    407.1
    
    
    
    15.34Total Watchlist Loans
    
    $
    1,290.5
    
    
    
    24.17
    %
    
    $
    1,158.8
    
    
    
    20.82
    %
    
    $
    1,065.8
    
    
    
    18.46
    %
    
    $
    991.6
    
    
    
    17.08
    %
    
    $
    934.5
    
    
    
    16.03
    %
  Nonperforming Assets
  Table 3  Nonperforming Assets
 Mar 31, 2009
    
    
    Dec 31, 2008
    
    
    Sep 30, 2008
    
    
    Jun 30, 2008
    
    
    Mar 31, 2008% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of(dollars in millions)
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    Portfolio
    
    
    $
    
    
    PortfolioLand Hold
    
    $
    12.0
    
    
    
    22.14
    %
    
    $
    10.4
    
    
    
    23.11
    %
    
    $
    11.0
    
    
    
    22.77
    %
    
    $
    3.4
    
    
    
    6.83
    %
    
    $
    5.5
    
    
    
    8.93
    %Land Development
    
    
    14.6
    
    
    
    12.05
    
    
    
    23.4
    
    
    
    17.63
    
    
    
    20.6
    
    
    
    16.48
    
    
    
    22.8
    
    
    
    17.78
    
    
    
    46.4
    
    
    
    29.15Construction
    
    
    26.5
    
    
    
    10.28
    
    
    
    18.3
    
    
    
    6.94
    
    
    
    25.7
    
    
    
    7.06
    
    
    
    12.6
    
    
    
    3.66
    
    
    
    51.9
    
    
    
    14.00Income Producing
    
    
    116.3
    
    
    
    7.46
    
    
    
    78.6
    
    
    
    5.05
    
    
    
    57.6
    
    
    
    3.76
    
    
    
    23.1
    
    
    
    1.47
    
    
    
    40.5
    
    
    
    2.58Owner-Occupied
    
    
    66.5
    
    
    
    6.98
    
    
    
    31.8
    
    
    
    3.29
    
    
    
    17.7
    
    
    
    1.77
    
    
    
    13.1
    
    
    
    1.30
    
    
    
    23.5
    
    
    
    2.31Total Commercial Real Estate
    
    
    235.9
    
    
    
    8.01
    
    
    
    162.5
    
    
    
    5.48
    
    
    
    132.6
    
    
    
    4.32
    
    
    
    75.0
    
    
    
    2.42
    
    
    
    167.8
    
    
    
    5.29Commercial and Industrial
    
    
    83.7
    
    
    
    3.50
    
    
    
    64.6
    
    
    
    2.48
    
    
    
    38.2
    
    
    
    1.41
    
    
    
    31.6
    
    
    
    1.17
    
    
    
    20.3
    
    
    
    0.76Total Nonperforming Commercial Loans
    
    
    319.6
    
    
    
    5.99
    
    
    
    227.1
    
    
    
    4.08
    
    
    
    170.8
    
    
    
    2.96
    
    
    
    106.6
    
    
    
    1.84
    
    
    
    188.1
    
    
    
    3.23Residential Mortgage
    
    
    84.6
    
    
    
    7.00
    
    
    
    59.5
    
    
    
    4.71
    
    
    
    40.2
    
    
    
    3.14
    
    
    
    12.4
    
    
    
    0.95
    
    
    
    45.8
    
    
    
    3.29Direct Consumer
    
    
    21.0
    
    
    
    1.49
    
    
    
    15.1
    
    
    
    1.04
    
    
    
    16.3
    
    
    
    1.10
    
    
    
    16.3
    
    
    
    1.09
    
    
    
    13.5
    
    
    
    0.88Indirect Consumer
    
    
    2.0
    
    
    
    0.25
    
    
    
    2.6
    
    
    
    0.32
    
    
    
    2.1
    
    
    
    0.25
    
    
    
    1.4
    
    
    
    0.17
    
    
    
    1.7
    
    
    
    0.21Loans 90+ days still
accruing and restructured
    
    
    1.4
    
    
    
    0.02
    
    
    
    1.7
    
    
    
    0.02
    
    
    
    1.9
    
    
    
    0.02
    
    
    
    2.5
    
    
    
    0.03
    
    
    
    4.4
    
    
    
    0.05Total Nonperforming Portfolio Loans
    
    
    428.6
    
    
    
    4.90
    %
    
    
    306.0
    
    
    
    3.36
    %
    
    
    231.3
    
    
    
    2.47
    %
    
    
    139.2
    
    
    
    1.47
    %
    
    
    253.5
    
    
    
    2.65
    %Nonperforming Held for Sale
    
    
    64.6
    
    
    
    
    
    
    
    75.2
    
    
    
    
    
    
    
    86.6
    
    
    
    
    
    
    
    92.6
    
    
    
    
    
    
    
    22.8Other Repossessed Assets Acquired
    
    
    57.4
    
    
    
    
    
    
    
    58.0
    
    
    
    
    
    
    
    46.5
    
    
    
    
    
    
    
    54.1
    
    
    
    
    
    
    
    50.3Total Nonperforming Assets
    
    $
    550.6
    
    
    
    
    
    
    $
    439.2
    
    
    
    
    
    
    $
    364.4
    
    
    
    
    
    
    $
    285.9
    
    
    
    
    
    
    $
    326.6
   37




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##### Table of Contents



Net Charge-Offs, Provision for Loan Losses, and Allowance for Loan Losses
  Table 4  Net Charge-Offs
 Three Months EndedMar 31, 2009
    
    
    Dec 31, 2008
    
    
    Sep 30, 2008
    
    
    Jun 30, 2008
    
    
    Mar 31, 2008% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of(dollars in millions)
    
    $
    
    
    Portfolio**
    
    
    $
    
    
    Portfolio**
    
    
    $
    
    
    Portfolio**
    
    
    $
    
    
    Portfolio**
    
    
    $
    
    
    Portfolio**Land Hold
    
    $
    
    
    
    
    
    %
    
    $
    4.6
    
    
    
    40.89
    %
    
    $
    1.7
    
    
    
    14.08
    %
    
    $
    0.7
    
    
    
    5.62
    %
    
    $
    0.5
    
    
    
    3.25
    %Land Development
    
    
    6.3
    
    
    
    20.79
    
    
    
    5.8
    
    
    
    17.48
    
    
    
    6.9
    
    
    
    22.08
    
    
    
    16.4
    
    
    
    51.17
    
    
    
    6.6
    
    
    
    16.58Construction
    
    
    2.0
    
    
    
    3.10
    
    
    
    10.7
    
    
    
    16.24
    
    
    
    0.5
    
    
    
    0.55
    
    
    
    13.8
    
    
    
    16.04
    
    
    
    1.2
    
    
    
    1.29Income Producing
    
    
    7.8
    
    
    
    2.00
    
    
    
    21.7
    
    
    
    5.58
    
    
    
    4.4
    
    
    
    1.15
    
    
    
    7.7
    
    
    
    1.96
    
    
    
    0.9
    
    
    
    0.23Owner-Occupied
    
    
    2.4
    
    
    
    1.01
    
    
    
    3.1
    
    
    
    1.28
    
    
    
    1.3
    
    
    
    0.52
    
    
    
    3.4
    
    
    
    1.35
    
    
    
    (0.1
    )
    
    
    (0.04
    )Total Commercial Real Estate
    
    
    18.5
    
    
    
    2.51
    
    
    
    45.9
    
    
    
    6.19
    
    
    
    14.8
    
    
    
    1.93
    
    
    
    42.0
    
    
    
    5.42
    
    
    
    9.1
    
    
    
    1.15Commercial and Industrial
    
    
    8.0
    
    
    
    1.34
    
    
    
    21.9
    
    
    
    3.37
    
    
    
    0.4
    
    
    
    0.06
    
    
    
    0.6
    
    
    
    0.09
    
    
    
    0.9
    
    
    
    0.14Total Commercial Loans
    
    
    26.5
    
    
    
    1.99
    
    
    
    67.8
    
    
    
    4.87
    
    
    
    15.2
    
    
    
    1.05
    
    
    
    42.6
    
    
    
    2.94
    
    
    
    10.0
    
    
    
    0.69Residential Mortgage
    
    
    0.8
    
    
    
    0.26
    
    
    
    1.6
    
    
    
    0.51
    
    
    
    0.5
    
    
    
    0.16
    
    
    
    20.7
    
    
    
    6.33
    
    
    
    1.8
    
    
    
    0.52Direct Consumer
    
    
    4.4
    
    
    
    1.25
    
    
    
    5.9
    
    
    
    1.63
    
    
    
    3.3
    
    
    
    0.89
    
    
    
    3.1
    
    
    
    0.83
    
    
    
    3.0
    
    
    
    0.79Indirect Consumer
    
    
    5.0
    
    
    
    2.49
    
    
    
    5.7
    
    
    
    2.78
    
    
    
    3.4
    
    
    
    1.61
    
    
    
    2.9
    
    
    
    1.39
    
    
    
    2.6
    
    
    
    1.27Total Net Charge-offs
    
    $
    36.7
    
    
    
    1.67
    %
    
    $
    81.0
    
    
    
    3.48
    %
    
    $
    22.4
    
    
    
    0.94
    %
    
    $
    69.3
    
    
    
    2.93
    %
    
    $
    17.4
    
    
    
    0.74
    %
 
 **
    
    Represents an annualized rate.    Analysis of Allowance for Loan Losses
 Three Months EndedMarch 31,(dollars in thousands)
    
    2009
    
    
    2008Allowance for loan losses  beginning of period
    
    $
    255,321
    
    
    $
    163,353Provision for loan losses
    
    
    64,017
    
    
    
    30,619Charge-offs
    
    
    38,103
    
    
    
    18,609Recoveries
    
    
    1,412
    
    
    
    1,165Net charge-offs
    
    
    36,691
    
    
    
    17,444Allowance for loan losses  end of period
    
    $
    282,647
    
    
    $
    176,528Portfolio loans outstanding at period end (1)
    
    $
    8,754,449
    
    
    $
    9,572,790Average portfolio loans outstanding during period (1)
    
    
    8,908,018
    
    
    
    9,499,209Allowance for loan losses as a percentage of portfolio loans
    
    
    3.23
    %
    
    
    1.84
    %Ratio of net charge-offs during period to average portfolio loans (annualized)
    
    
    1.67
    
    
    
    0.74
 
 (1)
    
    Balances exclude mortgage loans held for sale. 38




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##### Table of Contents



Effects of Chrysler LLC Bankruptcy Filing
   Loans Held for Sale
  39




---



##### Table of Contents



Goodwill
  Deposits
   Borrowed Funds
   Capital Resources
  40




---



##### Table of Contents



Capital Ratios
 Regulatory MinimumWell-
    
    March 31,
    
    December 31,
    
    March 31,Required
    
    Capitalized
    
    2009
    
    2008
    
    2008Risk based:Tier 1 capital
    
    
    4.00
    %
    
    
    6.00
    %
    
    
    12.16
    %
    
    
    12.21
    %
    
    
    9.04
    %Total capital
    
    
    8.00
    
    
    
    10.00
    
    
    
    14.21
    
    
    
    14.49
    
    
    
    11.26Tier 1 leverage
    
    
    4.00
    
    
    
    5.00
    
    
    
    9.32
    
    
    
    9.66
    
    
    
    7.40
   Contractual Obligations and Off-Balance Sheet Arrangements
  Liquidity and Liquidity Risk Management
    41




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##### Table of Contents



Credit Ratings
 DominionMoodys
    
    
    
    
    
    BondStandard
    
    Investor
    
    Fitch
    
    Rating& Poors
    
    Service
    
    Ratings
    
    ServiceCitizens Republic Bancorp
(Holding Company)Long-Term Debt
    
    BBB-
    
    
    A3
    
    
    BBB-
    
    BBB (low)Short-Term Debt
    
    
    A-3
    
    
    P
    -2
    
    
    
    F3
    
    
    R-2 (low)Trust Preferred
    
    BB
    
    Baa1
    
    BB+
    
    BB (high)Citizens BankCertificate of Deposit
    
    
    
    
    
    
    A2
    
    
    BBB
    
    BBBF&M Bank-IowaCertificate of Deposit
    
    
    
    
    
    
    
    
    
    BBB
    
    BBB
      42




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##### Table of Contents



Interest Rate Risk
       43




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
   44




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors
   If the FDIC raises the assessment rate charged to its insured financial institutions, our FDIC
insurance premium may increase and this could have a negative effect on our expenses and results of
operations.
     45




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Total Number ofShares Purchased as
    
    Maximum Number ofPart of Publicly
    
    Shares That May YetTotal Number of
    
    Average Price Paid
    
    Announced Plans or
    
    Be Purchased UnderPeriod
    
    Shares Purchased
    
    Per Share
    
    Programs
    
    The Plans or ProgramsJanuary 2009
    
    
    1,295
    (a)
    
    
    3.14
    
    
    
    
    
    
    
    1,241,154February 2009
    
    
    9,364
    (a)
    
    
    1.35
    
    
    
    
    
    
    
    1,241,154March 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,241,154Total
    
    
    10,659
    
    
    
    1.56
    
    
    
    
    
    
    
    1,241,154
 (a)
    
    Shares repurchased in connection with taxes due from employees as a result of the vesting of
certain restricted share awards in accordance with the related grant agreements. These
repurchases were not part of the repurchase program approved in October 2003.
 ®
 
 Item 6. Exhibits
 10.50
    
    Letter Agreement, dated January 22, 2009, between Citizens Republic Bancorp, Inc. and
Cathleen H. Nash (Citizens Current Report on Form 8-K filed on January 23, 2009)10.51
    
    Agreement between Citizens Republic Bancorp, Inc. and William R. Hartman, dated
January 22, 2009 (Citizens Current Report on Form 8-K filed on January 23, 2009)10.52
    
    Form of Long Term Incentive Award Agreement, dated January 29, 200910.53
    
    Amendment to the Citizens Banking Corporation Stock Compensation Plan, dated February 21, 200731.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 193431.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 193432.1
    
    Certification pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(b) of the Securities
Exchange Act of 1934
 46




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##### Table of Contents



SIGNATURES
   Date: May 8, 2009
    By
    /s/ Charles D. ChristyCharles D. ChristyChief Financial Officer

(principal financial officer and duly authorized officer) 47




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##### Table of Contents



10-Q EXHIBIT INDEX
 Exhibit No.
    
    Description10.50
    
    Letter Agreement, dated January 22, 2009, between Citizens Republic Bancorp, Inc. and
Cathleen H. Nash (Citizens Current Report on Form 8-K filed on January 23, 2009)10.51
    
    Agreement between Citizens Republic Bancorp, Inc. and William R. Hartman, dated
January 22, 2009 (Citizens Current Report on Form 8-K filed on January 23, 2009)10.52
    
    Form of Long Term Incentive Award Agreement, dated January 29, 200910.53
    
    Amendment to the Citizens Banking Corporation Stock Compensation Plan, dated February 21, 200731.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 193431.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 193432.1
    
    Certification pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(b) of the Securities
Exchange Act of 1934
 48