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FLINT, MI-In a transaction valued at just above $1 billion, Ann Arbor-based Republic Bancorp Inc., will be merged into locally based Citizens Banking Corp., creating the 45th largest bank holding company headquartered in the US. The new entity will be named Citizens Republic Bancorp.

Citizens will pay approximately $155 million in cash, which is about 15% of the total price tag, and the rest in 33.2 million shares of Citizens' common stock. The transaction is scheduled to close in the fourth quarter of this year.

As of March 31, the companies' combined assets were $13.9 billion. The merged entity will have 275 branches in five Midwestern states. Citizens now operates 183 branches and financial centers throughout Michigan, Wisconsin and Iowa. They and Republic's 92 locations throughout Michigan, Ohio and Indiana will be reflagged with a Citizens Republic banner that incorporates Citizens' colors and weatherball logo.

System conversions are expected to occur in the first quarter of 2007. During a conference call, management said that if branch divestitures were required following a regulatory review, they would also take place early next year.

Jerry D. Campbell, founder and current chairman of Republic, will be chairman of the new entity. William R. Hartman, current chairman, president and CEO of Citizens, will be CEO. Dana M. Cluckey, now president and CEO of Republic, will be president and COO. The board will include nine current Citizens directors and seven Republic directors. "We're very enthusiastic about working with [the Citizens' team]", Cluckey says in a statement. "Our companies complement each other in many ways."

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