Citizens Republic Bancorp Inc., which has a strong market presence in Wisconsin, has signed a definitive agreement to be acquired by FirstMerit Corp. of Akron, Ohio.
The stock-for –stock transaction has an estimated value of $912 million.
Citizens Bank operates 47 branches in Wisconsin.
Upon completion of the transaction, the combined company will have approximately $24 billion in total assets, $15 billion in loans, $19 billion in deposits, 415 branches, 452 ATMs and more than 5,000 employees across the states of Pennsylvania, Ohio, Michigan, Illinois and Wisconsin.
Flint, Mich.-based Citizens will be rebranded to the FirstMerit name.
Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Citizens’ shareholders will receive a fixed 1.37 shares of FirstMerit common stock in exchange for each share of Citizens’ common stock.
“We are excited to bring FirstMerit to new customers and communities throughout Michigan and Wisconsin. These two states offer a strong cultural fit for our proven super community bank model of providing world-class products and services through local delivery by bankers our customers know and trust,” said Paul Greig, chairman, president and chief executive officer of FirstMerit. “With a five-state reach that will extend from western Pennsylvania to Wisconsin, FirstMerit looks to become the bank of choice among businesses and individuals across the upper Midwest. As we have successfully demonstrated with our new customers in Chicago, we will provide a seamless transition of existing Citizens Republic relationships.”
Greig, who will continue as chairman, president and CEO of the combined company, has extensive experience in Wisconsin, where he was president and CEO of the Wisconsin market for Bank One and Chase, from 1999 to 2005.
“Wisconsin and Michigan are both great geographic and demographic additions to our strong and successful franchise. This transaction also strengthens our position in northeast Ohio. Our business model, our customers and the communities both banks serve all create opportunities that will have an immediate positive effect on FirstMerit and its ability to serve clients and grow shareholder value,” Greig said.
“Citizens Republic has made a strong comeback in recent years under Cathy Nash’s leadership. Combining Citizens’ organization, operating philosophy and talented employees with those of FirstMerit will make for an even stronger company,” said Greig.
Subject to the receipt of requisite approvals, FirstMerit also expects to repay Citizens’ approximately $345 million of Troubled Asset Relief Program (TARP) preferred stock, which includes $45 million of estimated deferred dividends, held by the U.S. Treasury at closing.
FirstMerit also will appoint two Citizens board members to its board of directors.
The acquisition is subject to customary closing conditions, including receipt of regulatory approvals and approval by both companies’ shareholders. The transaction is expected to close in the second quarter of 2013.