Amend: Fitch Affirms Citizens Banking & Republic Bancorp; Places RBNC's 'F3' on Watch Positive.

NEW YORK -- (This amends a release issued earlier today and contains revised information on the acquisition structure, merger-related restructuring costs and post-closing projections.)

Fitch affirms the Issuer Default Ratings (IDRs) of Citizens Banking Corporation (CBCF) and Republic Bancorp Inc. (RBNC) and their principal banking subsidiaries at 'BBB'. Fitch also affirms all other ratings with the exception of RBNC's short-term rating of 'F3' which is placed on Rating Watch Positive. The Rating Outlook remains Stable for both organizations.

The rating actions follow Flint, Michigan-based CBCF's announcement today of an agreement to acquire Owosso, Michigan-based RBNC. Fitch anticipates aligning RBNC's short-term rating with CBCF's short-term rating of 'F2' at consummation of the transaction. A complete list of ratings follows at the end of this release.

CBCF ($7.8 billion in total assets) has agreed to acquire RBNC ($6.2 billion) for total consideration of $1.0 billion. The acquisition structure will be approximately 85% stock and 15% cash. The merger is expected to close in the fourth quarter of 2006, subject to the required regulatory and shareholder approvals.

Fitch views the proposed merger positively from several strategic standpoints and notes certain factors that help contain and manage the level of integration risk. The merger is largely in-market, but does provide CBCF entry into the Cleveland and Indianapolis markets and strengthens its presence in the attractive Oakland County market in southeastern Michigan. The two organizations have lending expertise that are complementary. Fitch notes the strides CBCF management has made in strengthening its franchise over the last three years. This is perhaps most evident in asset quality and credit risk management. Additionally, CBCF has secured the retention of key personnel at both companies.

Merger-related restructuring costs are projected at $87 million pre-tax with an additional $20 million in credit-related costs. Fitch views CBCF's proposed loan loss and provision recognition and the proposed restructuring of RBNC's balance sheet as prudent. The very modest cost savings assumption largely reflects RBNC's fairly efficient operations. Fitch notes other challenges the combined entity will face. Today's ratings actions reflect Fitch's belief that CBCF will be successful in its efforts to minimize attrition of RBNC customers. RBNC's balance sheet remains somewhat thrift-like with time deposits representing a large portion of its deposit base. Management of the net interest margin (NIM) will remain a key factor as CBCF's earnings will continue to be largely spread driven. Planned balance sheet restructuring steps are expected to lessen the influence of RBNC's more liability sensitive position on the combined company's NIM. CBCF's earnings performance has been steadily improving and the transaction is projected to be slightly accretive to earnings in the first year. Asset quality and the loan loss reserve will remain solid. Fitch expects CBCF to maintain strong reserves given its enduring geographic concentration in Michigan.

Post-closing projections reflect tolerable capital levels and a moderate increase in leverage. The mostly stock nature of the transaction and financing plans result in healthy regulatory capital ratios. Tangible common equity to tangible assets is estimated at 5.89% with capital rebuilding at a reasonable pace. Fitch anticipates CBCF will bring stronger parent company liquidity management to the combined organization and this is reflected in placing RBNC's short-term rating of 'F3' on Rating Watch Positive. This expectation is also incorporated in Fitch's plans to maintain RBNC's trust preferred rating and the rating for CBCF's planned trust preferred issuance at one notch lower than the IDR. Fitch will closely monitor parent company liquidity management and leverage and will confirm current projections prior to the closing of the transaction. Should parent company financials result in materially higher leverage, a short-term rating of 'F3' would likely be assigned to the combined organization, with the possibility of greater notching of trust preferred securities.

The following ratings are affirmed:

Citizens Banking Corporation

-- Issuer Default Rating (IDR) 'BBB';

-- Subordinated debt 'BBB-';

-- Short-term 'F2';

-- Individual 'B/C';

-- Support '5';

-- Rating Outlook Stable.

Citizens Bank

F&M Bank-Iowa

-- Long-term deposits 'BBB+';

-- Issuer default rating (IDR) 'BBB';

-- Short-term deposits 'F2';

-- Short-term 'F2';

-- Individual 'B/C';

-- Support '5';

-- Rating Outlook Stable.

CB Wealth Management, National Association

-- Issuer default rating (IDR) 'BBB';

-- Short-term 'F2';

-- Individual 'B/C';

-- Support '5';

-- Rating Outlook Stable.

Republic Bancorp Inc.

-- Issuer Default Rating (IDR) 'BBB';

-- Individual 'B/C';

-- Support '5';

-- Rating Outlook Stable.

Republic Bank

-- Long-term deposits 'BBB+';

-- Issuer default rating (IDR) 'BBB';

-- Short-term deposits 'F2';

-- Short-term 'F2';

-- Individual 'B/C';

-- Support '5';

-- Rating Outlook Stable.

Republic Capital Trust I

-- Preferred stock 'BBB-'.

The following rating is placed on Rating Watch Positive:

Republic Bancorp Inc.

-- Short-term 'F3'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.