Exhibit 99.1

For Immediate Release		CONTACT:		Charles D. Christy
				Chief Financial Officer
				(810) 237-4200
				Charlie.Christy@cbcf-net.com
		CONTACT:		Kathleen Miller
				Investor Relations
				(810) 257-2506
				Kathleen.Miller@cbcf-net.com
		TRADED:		NASDAQ
		SYMBOL:		CBCF

July 21, 2005

CITIZENS BANKING CORPORATION
ANNOUNCES SECOND QUARTER 2005 RESULTS

FLINT, MICHIGAN — Citizens Banking Corporation announced net income of $20.6 million for the three months ended June 30, 2005. This represents an increase of $0.5 million or 2.4% over the first quarter of 2005 net income of $20.1 million and an increase of $1.8 million or 9.8% over the second quarter of 2004 net income of $18.7 million. Diluted net income per share was $0.47, compared with $0.46 for the first quarter of 2005 and $0.43 for the same quarter of last year. Annualized returns on average assets and average equity during the second quarter of 2005 were 1.06% and 12.62%, respectively, compared with 1.05% and 12.54% for the first quarter of 2005 and 0.97% and 12.00% for the second quarter of 2004.

Net income for the first six months of 2005 totaled $40.6 million or $0.93 per diluted share, which represents an increase in net income of $4.5 million or 12.4% and $0.10 per diluted share over the same period of 2004.

“Our strong earnings for the second quarter of 2005 were driven by quality loan growth in all categories and our lowest quarter of net charge-offs in five years,” stated William R. Hartman, chairman, president and CEO. “The growth in loans helped to partially offset the increase in margin pressure as a result of rising rates, the flattened yield curve, and industry challenges in deposit generation” continued Hartman.

Key Highlights in the Quarter:

•		On an average basis, commercial and commercial real estate loans grew by $53.4 million or 1.8% from the first quarter of 2005 and $59.4 million or 2.0% from the second quarter of 2004 due to continued strong growth from our Southeast Michigan market, focus on the sales management process and several new relationships in key Michigan and Wisconsin markets.
•		The Consumer Banking line of business launched “Take the Challenge”, a year-long consultative selling initiative. Some of the second quarter highlights from this initiative include:

	o		A home equity campaign in April that significantly contributed to the $16.9 million in portfolio growth during the second quarter.
	o		An Investment Center sales initiative in May that helped increase brokerage revenue by $0.7 million or 42.8% over the first quarter.

•		Net charge-offs declined to $2.4 million or 0.17% of average portfolio loans in the second quarter of 2005 compared with $4.2 million or 0.32% of average portfolio loans in the first quarter of 2005 and $4.4 million or 0.34% of average portfolio loans in the second quarter of 2004. Due to the continued reduction of risk in the commercial loan portfolio, the second quarter of 2005 provision for loan losses of $1.4 million was $1.6 million or 53.5% less than the first quarter of 2005 and $3.1 million or 69.0% less than the second quarter of 2004.
•		Nonperforming assets increased $5.3 million or 12.1% from the first quarter to $49.0 million at June 30, 2005. A single commercial credit accounted for $3.4 million of the increase. The June 30, 2005 level represented a decrease of $9.2 million or 15.8% compared with June 30, 2004.

Balance Sheet

Citizens’ total assets at June 30, 2005 were $7.8 billion, an increase of $49.2 million or 0.6% compared with March 31, 2005 and an increase of $78.0 million or 1.0% from June 30, 2004. These increases were due to growth in total portfolio loans which were partially offset by declines in the investment portfolio. Portfolio loans increased $93.4 million or 1.7% compared with March 31, 2005 and $222.5 million or 4.2% compared with June 30, 2004 as growth in both consumer and commercial loans continued to more than offset the $78.5 million reduction in loans as a result of the third quarter 2004 Illinois Bank sale.

On a period-end basis, commercial and commercial real estate loans increased $28.7 million or 1.0% at June 30, 2005 compared with March 31, 2005 and increased $81.8 million or 2.8% from June 30, 2004. The increases were a result of continued strong growth in the Southeast Michigan market, increased focus on the sales management process and several new relationships in key Michigan and Wisconsin markets, which were partially offset by a continued reduction of exposure on credits not meeting Citizens’ risk parameters.

Residential mortgage loans were $524.7 million at June 30, 2005, an increase of $28.8 million or 5.8% compared with March 31, 2005 and an increase of $43.6 million or 9.1% from June 30, 2004. The increases in the mortgage portfolio were the result of enhanced, more competitive adjustable-rate mortgage (ARM) product offerings, which are desirable for the bank to hold in the portfolio. Citizens continues to sell most new fixed rate production into the secondary market while retaining most new ARM production.

Total consumer loans, which are comprised of direct and indirect loans, increased $35.9 million or 1.8% at June 30, 2005 compared with March 31, 2005 and increased $97.1 million or 5.0% over June 30, 2004. The consultative sales process, supported by the “Take the Challenge” campaign, has helped offset weak consumer loan demand in Citizens’ market areas. During the three month period ended June 30, 2005, direct consumer loans increased $13.4 million or 1.1% and indirect loans increased $22.5 million or 2.7%. Growth in indirect consumer loans was due to seasonality in marine and recreational vehicle volume as well as the bank’s continued emphasis on strong relationships with the dealer network.

Total deposits were $5.2 billion at June 30, 2005, a decrease of $88.8 million or 1.7% compared with March 31, 2005 and a decrease of $160.7 million or 3.0% from June 30, 2004. The decline from the first quarter of 2005 reflects the migration of low transaction interest-bearing checking and promotional rate savings products to alternate investment opportunities in the market. The change from June 30, 2004 was primarily a result of the third quarter 2004 Illinois Bank sale, which included $155.3 million in deposits on the sale date. Core deposits, which exclude all time deposits, totaled $3.4 billion at June 30, 2005, which represents a $165.6 million or 4.6% decrease from March 31, 2005 and a decrease of $212.1 million or 5.9% from June 30, 2004. The decrease in core deposits from the end of the first quarter of 2005 was largely the result of clients migrating their funds into time deposits with higher yields and to promotional rate products within the market. Time deposits totaled $1.8 billion at June 30, 2005, an increase of $76.8 million or 4.5% compared with March 31, 2005 and an increase of $51.4 million or 3.0% from June 30, 2004.

Other interest-bearing liabilities, which include federal funds purchased and securities sold under agreements to repurchase, other short-term borrowings, and long-term debt, were $1.9 billion at June 30, 2005, an increase of $123.0 million or 7.0% compared with March 31, 2005 and an increase of $205.7 million or 12.2% from June 30, 2004. These increases were the result of the aforementioned loan and deposit changes.

Nonperforming assets totaled $49.0 million at June 30, 2005, an increase of $5.3 million or 12.1% compared with March 31, 2005 and a decrease of $9.2 million or 15.8% compared with June 30, 2004. Nonperforming assets at June 30, 2005 represented 0.89% of total loans plus other repossessed assets acquired compared with 0.80% at March 31, 2005 and 1.10% at June 30, 2004. Loans added to the commercial nonperforming loan category increased to $21.1 million in the second quarter of 2005 compared with $11.2 million in the first quarter of 2005 and $17.3 million in the second quarter of 2004 while loans removed from that category totaled $17.5 million for the second quarter of 2005 compared with $15.4 million in the first quarter of 2005 and $23.2 million in the second quarter of 2004.

Net charge-offs decreased to $2.4 million or 0.17% of average portfolio loans in the second quarter of 2005 compared with $4.2 million or 0.32% of average portfolio loans in the first quarter of 2005 and $4.4 million or 0.34% of average portfolio loans in the second quarter of 2004. The 44.0% decrease in net charge-offs from the first quarter of 2005 was due to continued improvement in the overall risk of the commercial loan portfolio, as well as a

the reduction of an institutional relationship in the second quarter of 2005 partially offset by stronger financial markets at June 30, 2005. The decline in trust assets from June 30, 2004 was due to the reduction of two institutional relationships during the periods presented, and the exit of custody assets related to two relationships in the first quarter of 2005. The effect of these exits was partially offset by stronger financial markets at June 30, 2005 and continued growth in the bank’s core segments of personal trust and employee benefit plans.

Mortgage and other loan income for the second quarter of 2005 decreased $0.3 million or 12.1% to $2.1 million compared with the first quarter of 2005 and decreased $1.0 million or 31.9% from the second quarter of 2004. The decreases reflect stronger ARM production, which resulted in more mortgages being held in the portfolio rather than being sold in the secondary market. For the first six months of 2005, mortgage and other loan income totaled $4.4 million, a decrease of $0.9 million or 16.4% from the same period of the prior year. The decline was a result of retaining more mortgage production.

Brokerage and investment fees for the second quarter of 2005 increased $0.7 million or 42.9% to $2.3 million over the first quarter of 2005 and decreased by $0.4 million or 13.9% compared with the second quarter of 2004. The increase from the first quarter was due to an improvement in consultative selling efforts and a successful sales campaign coordinated between the Wealth Management and Consumer Banking lines of business. The decline from the second quarter of 2004 was due to lower annuity sales primarily related to a bonus annuity rate offered during the sales campaign in the second quarter of 2004. For the first six months of 2005, brokerage and investment fees totaled $3.9 million, a decrease of $0.6 million or 12.4% from the same period of 2004. The decline was the result of lower annuity sales in January and February 2005 due to competitive pressures from other interest-bearing products and the aforementioned bonus annuity rate offered during the second quarter of 2004.

For the second quarter of 2005, all other noninterest income categories, which include bankcard fees, other income, and investment securities gains (losses), decreased $0.3 million or 5.9% to $5.5 million over the first quarter of 2005 and increased $2.0 million or 55.8% over the second quarter of 2004. The decrease from the first quarter of 2005 was the result of a performance-related penalty of $0.3 million from a third party vendor and a preference payment of $0.3 million on Citizens’ membership interest in the PULSE ATM Network, which were both received in the first quarter of 2005. The increase from the second quarter of 2004 was primarily the result of the $2.1 million loss on the sale of securities which occurred during the second quarter of 2004. For the first six months of 2005, all other noninterest income categories totaled $11.3 million, an increase of $1.6 million or 17.0% from the same period of 2004. The increase was largely the result of the aforementioned second quarter 2004 loss on sale of securities and a first quarter 2005 bank-owned life insurance policy payout which were partially offset by gains recognized upon the sale of former branch and other bank premises in the first quarter 2004.

Citizens anticipates total noninterest income in the third quarter will be slightly lower than the second quarter of 2005 due to lower sold mortgage activity and fewer bank-owned life insurance payouts.

Noninterest Expense

Noninterest expense for the second quarter of 2005 was $61.0 million, an increase of $0.4 million or 0.6% compared to the first quarter of 2005 and a decrease of $1.2 million or 1.9% from the second quarter of 2004. Compared to the first quarter of 2005, decreases in salaries and employee benefits, professional services, stationery and supplies and other expenses were more than offset by increases in occupancy, equipment, data processing, and other loan expenses. The variance from the second quarter of 2004 was a result of decreases in salaries and benefits, professional services, advertising, postage and delivery, other loan expenses, stationery and supplies and other expense, partially offset by increases in occupancy, equipment and data processing costs. For the first six months of 2005, noninterest expenses totaled $121.6 million, a decrease of $1.1 million or 0.9% from the $122.7 million for the same period of 2004. This decrease reflects declines in professional services, advertising and public relations, other loan expense, and other expenses, partially offset by increases in salaries and employee benefits, occupancy, and equipment.

Salaries and employee benefits for the second quarter of 2005 decreased $1.0 million or 3.0% to $32.4 million compared with the first quarter of 2005 and decreased $0.8 million or 2.5% compared with the second quarter of 2004. Salary costs declined in the second quarter of 2005, despite recognizing $0.4 million in severance, as a result of reduced headcount, lower incentive compensation expense and lower payroll tax expense during the quarter. Citizens had 2,150 full time equivalent employees at June 30, 2005, down from 2,175 at March 31, 2005 and 2,325 at June 30, 2004. For the first six months of 2005, salaries and employee benefits totaled $65.7 million, which represents an increase of $0.6 million or 0.9% from the $65.1 million for the same period of 2004. The increase was largely a result of higher employee benefit costs related to pension and insurance expenses.

Occupancy costs for the second quarter of 2005 increased $0.1 million or 2.3% to $5.7 million in the second quarter of 2005 compared to the first quarter of 2005 and increased $0.8 million or 15.5% over the second quarter of 2004. For the first six months of 2005, occupancy costs totaled $11.2 million, which represents a $1.0 million increase or 9.6% over the $10.3 million for the same period of 2004. These increases were largely the result of rent related to the opening of new branches and regional hubs opened in Southeast Michigan throughout 2004, depreciation associated with new branch construction in Southeast Michigan and the Michigan re-branding project.

Professional services for the second quarter of 2005 decreased $0.5 million or 11.3% to $3.7 million compared with the first quarter of 2005 and decreased $0.6 million or 13.0% compared with the second quarter of 2004. Expenses related to the evaluation, documentation, and testing of internal controls and issuance of the related reports to comply with Sarbanes-Oxley Section 404 were significantly lower in the second quarter compared to the first quarter of 2005. In addition, technology and network support costs decreased compared to the second quarter of 2004. For the first six months of 2005, professional services totaled $7.9 million, a decrease of $0.3 million or 3.5% over the $8.2 million for the same period of 2004. The decrease was largely a result of lower technology and network support costs resulting from a change in service provider.

Equipment costs for the second quarter of 2005 increased $1.6 million or 49.6% to $4.9 million compared to the first quarter of 2005 and increased $1.3 million or 34.6% compared with the second quarter of 2004. For the first six months of 2005, equipment costs totaled $8.2 million, an increase of $0.9 million or 12.7% over the same period of 2004. These increases were mainly due to $1.5 million in asset write-downs as a result of aligning the service life for these items with the current capitalization policy.

Advertising and public relations expense for the second quarter of 2005 was relatively flat at $1.8 million compared to the first quarter of 2005 and decreased $0.2 million or 10.7% compared with the second quarter of 2004. The decrease was due to reduced advertising and marketing expenses for the Southeast Michigan initiative and the Wealth Management line of business. For the first six months of 2005, advertising and public relations totaled $3.6 million, a decrease of $0.6 million or 14.8% from the $4.2 million for the same period of 2004. The decrease was the result of lower corporate advertising expenses and the timing of promotion campaigns.

Other loan expenses for the second quarter of 2005 increased $0.5 million to $0.9 million compared to the first quarter of 2005 and decreased $0.8 million or 46.4% compared with the second quarter of 2004. The increase from the first quarter was the result of an increase in provisioning to fund the reserve for unused commitments compared to a reduction of the provision in the first quarter. The decrease from the same period of last year was largely due to lower consumer loan processing expenses resulting from process improvements and lower loan volumes. For the first six months of 2005, other loan expenses totaled $1.2 million, which represents a decrease of $1.5 million or 54.7% from the $2.8 million for the same period of 2004. The decrease was the result of lower consumer loan volumes and process improvements implemented in the consumer loan processing department during the third quarter of 2004.

For the second quarter of 2005, all other noninterest expense categories, which include data processing services, postage and delivery, telephone, stationery and supplies, intangible asset amortization, and other expense, decreased $0.5 million or 3.9% to $11.6 million from the first quarter of 2005 and decreased $0.8 million or 6.6% from the second quarter of 2004. The decreases were largely the result of a focused effort to reduce supply costs across the corporation through increased awareness and the utilization of a recently implemented online procurement system. For the first six months of 2005, all other noninterest expense categories decreased $1.2 million or 4.7% to $23.7 million compared to the same period of 2004. The decrease was the result of reduced supplies and travel expenses, and non-credit related losses that were incurred in the first six months of 2004.

Citizens anticipates that noninterest expenses for the third quarter will be lower than the second quarter of 2005 due to anticipated reductions in benefits, incentives, severance, equipment depreciation, and other expenses.

Income Tax Provision

Income tax provision for the second quarter of 2005 was $9.0 million, an increase of $2.0 million or 28.0% compared to the first quarter of 2005 and an increase of $2.3 million or 34.8% over the second quarter of 2004. For the first six months of 2005, income tax provision totaled $16.0 million, an increase of $3.5 million or 27.7% over the same period of 2004. The increases were attributable to higher pre-tax net income and a $1.3 million ($0.8 million after-tax) reduction in the deferred Wisconsin state income tax asset as a result of the April merger of the Michigan and Wisconsin bank charters

The effective tax rate was 30.38% for the second quarter of 2005 compared to 25.89% for the first quarter of 2005 and 26.23% for the second quarter of 2004. On a year-to-date basis, the effective tax rate was 28.23% and 25.71% for 2005 and 2004, respectively. The increases were a result of the Wisconsin deferred tax asset release.

Citizens anticipates income tax provision for the third quarter will be lower than the second quarter of 2005 but higher than the first quarter of 2005 due to the apportionment calculation now used for the consolidated Michigan and Wisconsin bank.

Other News

Citizens Transitions to a New Commercial Distribution and Delivery Model

Citizens began the market by market transition to its new commercial distribution and delivery model at the end of the first quarter of 2005, and expects to have it fully implemented during the fourth quarter of 2005. The model is comprised of three elements which provide market delivery, professional credit, and commercial client services. It focuses on better customer service with faster turnaround times through client/market segmentation and aligning the right resources with the right opportunities.

Wisconsin Re-branding Completed

On April 25, 2005 all F&M Bank-Wisconsin locations were re-branded as Citizens Bank. This initiative included new Citizens Bank signage at all of the company’s Wisconsin locations and the replacement of the F&M Bank trade name and brand image with Citizens Bank on all brochures and materials. This change has been positively received by clients and staff alike. The change creates a more efficient banking franchise by allowing the combined banks to operate as a single entity. It eliminates the need for separate regulatory reporting, accounting and financial tracking by the two banks and allows the company to make more efficient use of its capital.

Citizens Names Three New Executives

On May 20, 2005, Stephen Figliuolo was appointed executive vice president and corporate risk officer and Jeffrey Powell was appointed senior vice president, controller, and principal accounting officer. On July 21, 2005, Judi Klawinski was appointed senior vice president and head of retail delivery.

Citizens Named a ‘Preferred Lender’ with the Federal Farm Service Agency

On June 6, 2005, Citizens announced that it has been named a preferred lender with the Farm Service Agency (FSA) for the state of Wisconsin. By holding this designation, Citizens is able to significantly streamline underwriting and servicing operations for FSA program requests, which resulted in quicker responses for clients.

Citizens Offers Retail Lockbox Service

On June 7, 2005, Citizens announced that it is gaining a competitive edge with medium-size business clients in need of automated, high-volume check processing by offering retail lockbox services. This service employs high-speed processing and optical character-recognition technology to automate procedures, reduce errors and includes an option to image incoming items.

Stock Repurchase Program

During the second quarter of 2005, Citizens repurchased a total of 100,000 shares of its stock at an average price of $29.62. As of June 30, 2005 there are 2,664,200 shares remaining to be purchased under the program approved by the company’s Board of Directors on October 16, 2003.

Dividend Announcement

The Board of Directors of Citizens Banking Corporation declared a cash dividend of $0.285 per share of common stock. The dividend is payable on August 11, 2005, to shareholders of record on August 2, 2005.

Investor Conference Call

William R. Hartman, chairman, president and CEO, Charles D. Christy, CFO, John D. Schwab, chief credit officer, and Martin E. Grunst, treasurer, will review the quarter’s results in a conference call for investors and analysts beginning at 10:00am EDT on Friday, July 22, 2005.

A live audio web cast is available at http://www.vcall.com/CEPage.asp?ID=92586. To participate in the conference call, please call the number below approximately 10 minutes prior to the scheduled conference time: US/Canada Dial-In Number: (877) 407-9205 International Dial-In Number: (201) 689-8054 Conference ID: 159719 Conference Name: “Citizens Banking Corporation Second Quarter Earnings Conference Call” R.S.V.P. is not required.

A playback of the conference call will be available after 12:00 p.m. EDT through August 8, 2005, by dialing US/Canada Dial-In Number: (877) 660-6853 or International Dial-In Number: (201) 612-7415, Account Number:

286, Conference ID: 159719. Also, the call can be accessed via Citizens’ Web site, through the Investor Relations section at http://www.citizensonline.com

Corporate Profile

Citizens Banking Corporation is a diversified financial services company providing a full range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base. Citizens operates 181 branch, private banking, and financial center locations and 189 ATMs throughout Michigan, Wisconsin, and Iowa.

Safe Harbor Statement

Discussions in this release that are not statements of historical fact (including statements that include terms such as “will” “may,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” and “plan”) are forward-looking statements that involve risks and uncertainties, and Citizens’ actual future results could materially differ from those discussed. Factors that could cause or contribute to such differences include, without limitation, adverse changes in Citizens’ loan and lease portfolios and the resulting credit risk-related losses and expenses (including losses due to fraud and economic factors), Citizens’ future lending and collections experience and the potential inadequacy of Citizens’ loan loss reserves, interest rate fluctuations and the effects on net interest income of changes in Citizens’ interest rate risk position, the potential inability to hedge certain risks economically, other adverse changes in economic or financial market conditions, the effects of terrorist attacks and potential attacks, Citizens’ potential inability to continue to attract core deposits, Citizens’ potential inability to continue to obtain third party financing on favorable terms, adverse changes in competition and pricing environments, Citizens’ potential failure to maintain or improve loan quality levels and origination volume, unanticipated expenses and payments relating to litigation brought against Citizens from time to time, unanticipated technological changes that require major capital expenditures, adverse changes in applicable laws and regulatory requirements, the potential lack of market acceptance of Citizens’ products and services, adverse changes in Citizens’ relationship with major customers, changes in accounting rules that negatively impact results of operations or capital, the potential inadequacy of Citizens’ business continuity plans, the potential failure of Citizens’ external vendors to fulfill their contractual obligations to Citizens, Citizens’ potential inability to integrate acquired operations or complete its restructuring, unanticipated environmental liabilities or costs, impairment of the ability of the banking subsidiaries to pay dividends to the holding company parent, Citizens’ success in managing the risks involved in the foregoing, and other risks and uncertainties detailed from time to time in its filings with the Securities and Exchange Commission. Other factors not currently anticipated by management may also materially and adversely affect Citizens’ results of operations. There can be no assurance that the future results will meet expectations. While Citizens believes that its forward-looking statements are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. Citizens does not undertake, and expressly disclaims any obligation, to update or alter its statements whether as a result of new information, future events or otherwise, except as required by applicable law.

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(Financial highlights follow)

Visit our Web site at http://www.CitizensOnline.com

 

Consolidated Balance Sheets (Unaudited)
Citizens Banking Corporation and Subsidiaries

		June 30,				March 31,				June 30,
(in thousands)		2005				2005				2004
Assets
Cash and due from banks		$	163,461			$	145,707			$	173,117
Interest-bearing deposits with banks			1,128				1,596				2,169
Investment Securities:
Available-for-sale:
U.S. Treasury and federal agency securities			1,341,398				1,377,766				1,452,159
State and municipal securities			379,625				386,515				410,635
Other securities			56,118				68,983				70,763
Held-to-maturity:
State and municipal securities (fair value of $69,263, $58,622 and $41,232, respectively)			67,813				58,942				42,523
Total investment securities			1,844,954				1,892,206				1,976,080
Mortgage loans held for sale			29,751				34,627				26,323
Loans:
Commercial			1,634,924				1,626,541				1,632,726
Commercial real estate			1,334,169				1,313,825				1,254,588
Residential mortgage loans			524,735				495,953				481,132
Direct consumer			1,186,659				1,173,234				1,131,827
Indirect consumer			842,741				820,289				800,476
Total loans			5,523,228				5,429,842				5,300,749
Less: Allowance for loan losses			(119,967	)			(120,945	)			(123,805	)
Net loans			5,403,261				5,308,897				5,176,944
Premises and equipment			120,353				121,107				118,675
Goodwill			54,527				54,527				54,785
Other intangible assets			12,582				13,307				15,482
Bank owned life insurance			83,183				83,072				81,452
Other assets			112,737				121,690				122,880
Total assets		$	7,825,937			$	7,776,736			$	7,747,907
Liabilities
Noninterest-bearing deposits		$	927,270			$	891,849			$	919,924
Interest-bearing demand deposits			1,008,599				1,106,744				1,268,185
Savings deposits			1,475,220				1,578,058				1,435,088
Time deposits			1,789,649				1,712,883				1,738,237
Total deposits			5,200,738				5,289,534				5,361,434
Federal funds purchased and securities sold under agreements to repurchase			930,499				853,926				700,279
Other short-term borrowings			17,952				6,157				47,641
Other liabilities			78,072				79,656				79,415
Long-term debt			936,527				901,875				931,390
Total liabilities			7,163,788				7,131,148				7,120,159
Shareholders’ Equity
Preferred stock - no par value			—				—				—
Common stock - no par value			94,100				94,966				99,333
Retained earnings			555,017				546,882				523,581
Accumulated other comprehensive income			13,032				3,740				4,834
Total shareholders’ equity			662,149				645,588				627,748
Total liabilities and shareholders’ equity		$	7,825,937			$	7,776,736			$	7,747,907

 

Consolidated Statements of Income (Unaudited)
Citizens Banking Corporation and Subsidiaries

		Three Months Ended								Six Months Ended
		June 30 ,								June 30,
(in thousands, except per share amounts)		2005				2004				2005				2004
Interest Income
Interest and fees on loans		$	83,475			$	74,073			$	162,747			$	147,779
Interest and dividends on investment securities:
Taxable			14,979				16,021				29,667				31,463
Tax-exempt			5,147				5,279				10,344				10,523
Money market investments			18				2				27				4
Total interest income			103,619				95,375				202,785				189,769
Interest Expense
Deposits			19,122				15,892				37,193				32,343
Short-term borrowings			6,700				1,798				11,141				3,070
Long-term debt			9,018				8,467				17,439				16,810
Total interest expense			34,840				26,157				65,773				52,223
Net Interest Income			68,779				69,218				137,012				137,546
Provision for loan losses			1,396				4,500				4,396				11,500
Net interest income after provision for loan losses			67,383				64,718				132,616				126,046
Noninterest Income
Service charges on deposit accounts			8,822				9,069				17,109				17,111
Trust fees			4,503				4,528				8,915				8,838
Mortgage and other loan income			2,074				3,047				4,434				5,303
Brokerage and investment fees			2,284				2,651				3,883				4,433
Bankcard fees			961				911				1,801				1,694
Other			4,465				4,650				9,422				9,989
Total fees and other income			23,109				24,856				45,564				47,368
Investment securities gain			37				(2,053	)			43				(2,053	)
Total noninterest income			23,146				22,803				45,607				45,315
Noninterest Expense
Salaries and employee benefits			32,351				33,185				65,702				65,124
Occupancy			5,685				4,922				11,245				10,264
Professional services			3,726				4,281				7,925				8,209
Equipment			4,937				3,668				8,238				7,310
Data processing services			3,499				3,440				6,868				7,086
Advertising and public relations			1,820				2,038				3,566				4,183
Postage and delivery			1,520				1,862				3,110				3,418
Telephone			1,465				1,451				2,906				2,985
Other loan expenses			874				1,631				1,249				2,760
Stationery and supplies			602				916				1,521				1,758
Intangible asset amortization			724				724				1,449				1,449
Other			3,787				4,025				7,812				8,131
Total noninterest expense			60,990				62,143				121,591				122,677
Income Before Income Taxes			29,539				25,378				56,632				48,684
Income tax provision			8,974				6,656				15,987				12,519
Net Income		$	20,565			$	18,722			$	40,645			$	36,165
Net Income Per Share:
Basic		$	0.48			$	0.43			$	0.94			$	0.83
Diluted			0.47				0.43				0.93				0.83
Cash Dividends Declared Per Share			0.285				0.285				0.570				0.570
Average Shares Outstanding:
Basic			43,160				43,292				43,192				43,303
Diluted			43,424				43,752				43,534				43,806

 

Selected Quarterly Information
Citizens Banking Corporation and Subsidiaries

		2nd Qtr 2005				1st Qtr 2005				4th Qtr 2004				3rd Qtr 2004				2nd Qtr 2004
Summary of Operations (thousands)
Interest income		$	103,619			$	99,166			$	97,170			$	96,029			$	95,375
Interest expense			34,840				30,933				28,690				26,728				26,157
Net interest income			68,779				68,233				68,480				69,301				69,218
Provision for loan losses			1,396				3,000				4,609				4,985				4,500
Net interest income after provision for loan losses			67,383				65,233				63,871				64,316				64,718
Total fees and other income			23,109				22,455				23,644				34,548				24,856
Investment securities gains (losses)			37				6				10				534				(2,053	)
Noninterest expense			60,990				60,601				61,117				78,973				62,143
Income tax provision			8,974				7,013				6,122				779				6,656
Net income			20,565				20,080				20,286				19,646				18,722
Taxable equivalent adjustment			3,324				3,353				3,324				3,350				3,356
At Period End (millions)
Total assets		$	7,826			$	7,777			$	7,706			$	7,659			$	7,748
Total earning assets			7,399				7,358				7,292				7,233				7,305
Total loans including held for sale			5,553				5,464				5,421				5,319				5,327
Total deposits			5,201				5,290				5,300				5,267				5,361
Total shareholders’ equity			662				646				654				650				628
Average Balances (millions)
Total assets		$	7,807			$	7,728			$	7,661			$	7,669			$	7,769
Total earning assets			7,386				7,302				7,238				7,235				7,338
Total loans including held for sale			5,510				5,424				5,337				5,289				5,312
Total deposits			5,254				5,349				5,258				5,336				5,435
Total shareholders’ equity			654				649				649				637				628
Shareholders’ equity / assets			8.37	%			8.40	%			8.48	%			8.31	%			8.08	%
Credit Quality Statistics (thousands)
Nonaccrual loans		$	42,191			$	36,593			$	42,819			$	41,706			$	48,191
Loans 90 or more days past due and still accruing			2				11				40				324				298
Restructured loans			32				42				42				52				52
Total nonperforming loans			42,225				36,646				42,901				42,082				48,541
Other repossessed assets acquired (ORAA)			6,817				7,118				7,946				10,303				9,673
Total nonperforming assets		$	49,042			$	43,764			$	50,847			$	52,385			$	58,214
Allowance for loan losses		$	119,967			$	120,945			$	122,184			$	122,184			$	123,805
Allowance for loan losses as a percent of portfolio loans			2.17	%			2.23	%			2.27	%			2.30	%			2.34	%
Allowance for loan losses as a percent of nonperforming assets			244.62				276.36				240.30				233.24				212.67
Allowance for loan losses as a percent of nonperforming loans			284.11				330.04				284.80				290.35				255.05
Nonperforming assets as a percent of portfolio loans plus ORAA			0.89				0.80				0.94				0.99				1.10
Nonperforming assets as a percent of total assets			0.63				0.56				0.66				0.68				0.75
Net loans charged off as a percent of average portfolio loans (annualized)			0.17				0.32				0.35				0.38				0.34
Net loans charged off (000)		$	2,374			$	4,239			$	4,609			$	4,984			$	4,398
Per Common Share Data
Net Income:
Basic		$	0.48			$	0.46			$	0.47			$	0.46			$	0.43
Diluted			0.47				0.46				0.46				0.45				0.43
Dividends			0.285				0.285				0.285				0.285				0.285
Market Value:
High		$	30.98			$	34.81			$	35.43			$	33.36			$	33.99
Low			26.35				29.02				32.01				29.42				28.31
Close			30.22				29.36				34.35				32.57				31.05
Book value			15.31				14.95				15.13				15.03				14.51
Shares outstanding, end of period (000)			43,261				43,173				43,240				43,234				43,263
Performance Ratios (annualized)
Net interest margin (FTE) (1)			3.92	%			3.96	%			3.97	%			4.02	%			3.98	%
Return on average assets			1.06				1.05				1.05				1.02				0.97
Return on average shareholders’ equity			12.62				12.54				12.43				12.27				12.00
Efficiency ratio (2)			64.06				64.44				64.21				63.86				63.78

 

Financial Summary and Comparison
Citizens Banking Corporation and Subsidiaries

		For the six months ended
		June 30,
		2005				2004				% Change
Summary of Operations (thousands)
Interest income		$	202,785			$	189,769				6.9	%
Interest expense			65,773				52,223				25.9
Net interest income			137,012				137,546				(0.4	)
Provision for loan losses			4,396				11,500				(61.8	)
Net interest income after provision for loan losses			132,616				126,046				5.2
Total fees and other income			45,564				47,368				(3.8	)
Investment securities gains (losses)			43				(2,053	)			(102.1	)
Noninterest expense			121,591				122,677				(0.9	)
Income tax provision			15,987				12,519				27.7
Net income			40,645				36,165				12.4
At Period End (millions)
Total assets		$	7,826			$	7,748				1.0	%
Total earning assets			7,399				7,305				1.3
Total loans including held for sale			5,553				5,327				4.2
Total deposits			5,201				5,361				(3.0	)
Total shareholders’ equity			662				628				5.5
Average Balances (millions)
Total assets		$	7,768			$	7,705				0.8	%
Total earning assets			7,344				7,283				0.8
Total loans including held for sale			5,468				5,271				3.7
Total deposits			5,301				5,455				(2.8	)
Total shareholders’ equity			652				636				2.5
Shareholders’ equity / assets			8.39	%			8.25	%			1.6
Per Common Share Data
Net Income:
Basic		$	0.94			$	0.83				13.3	%
Diluted			0.93				0.83				12.0
Dividends			0.570				0.570				—
Market Value:
High		$	34.81			$	34.00				2.4
Low			26.35				28.31				(6.9	)
Close			30.22				31.50				(4.1	)
Book value			15.31				14.51				5.5
Tangible book value			13.75				12.89				6.7
Shares outstanding, end of period (000)			43,261				43,263				—
Performance Ratios (annualized)
Net interest margin (FTE) (1)			3.94	%			3.99	%			(1.3	)%
Return on average assets			1.06				0.94				12.8
Return on average shareholders’ equity			12.58				11.44				10.0
Net loans charged off as a percent of average portfolio loans			0.25				0.43				(41.9	)

 

Noninterest Income and Noninterest Expense (Unaudited)
Citizens Banking Corporation and Subsidiaries

		Quarter Ended
		Jun 30				Mar 31				Dec 31				Sep 30				Jun 30
(in thousands)		2005				2005				2004				2004				2004
NONINTEREST INCOME:
Service charges on deposit accounts		$	8,822			$	8,287			$	8,814			$	9,196			$	9,069
Trust fees			4,503				4,412				4,794				4,222				4,528
Mortgage and other loan income			2,074				2,360				2,562				1,750				3,047
Brokerage and investment fees			2,284				1,599				1,733				1,719				2,651
Bankcard fees			961				840				897				853				911
Gain on sale of Illinois bank subsidiary			—				—				—				11,650				—
Other income			4,465				4,957				4,844				5,158				4,650
Total fees and other income			23,109				22,455				23,644				34,548				24,856
Investment securities gains (losses)			37				6				10				534				(2,053	)
TOTAL NONINTEREST INCOME		$	23,146			$	22,461			$	23,654			$	35,082			$	22,803
NONINTEREST EXPENSE:
Salaries and employee benefits		$	32,351			$	33,351			$	31,320			$	32,649			$	33,185
Occupancy			5,685				5,560				5,077				4,859				4,922
Professional services			3,726				4,199				3,911				4,131				4,281
Equipment			4,937				3,301				3,575				3,486				3,668
Data processing services			3,499				3,369				3,074				3,192				3,440
Advertising and public relations			1,820				1,746				2,907				2,090				2,038
Postage and delivery			1,520				1,590				1,600				1,516				1,862
Telephone			1,465				1,441				1,502				1,543				1,451
Other loan expenses			874				375				840				384				1,631
Stationery and supplies			602				919				1,046				947				916
Intangible asset amortization			724				725				725				725				724
Prepayment penalty on FHLB advances			—				—				—				17,959				—
Other expense			3,787				4,025				5,540				5,492				4,025
TOTAL NONINTEREST EXPENSE		$	60,990			$	60,601			$	61,117			$	78,973			$	62,143

 

Average Balances, Yields and Rates

		Three Months Ended
		June 30, 2005								March 31, 2005								June 30, 2004
		Average				Average				Average				Average				Average				Average
(in thousands)		Balance				Rate(1)				Balance				Rate(1)				Balance(2)				Rate(1)(2)
Earning Assets
Money market investments		$	3,209				2.28	%		$	1,799				2.01	%		$	1,904				0.38	%
Investment securities(3):
Taxable			1,436,384				4.17				1,435,683				4.09				1,579,622				4.06
Tax-exempt			421,144				7.52				420,931				7.60				427,115				7.61
Mortgage loans held for sale			38,478				5.59				31,341				5.49				50,409				5.31
Loans(4):
Commercial			1,640,287				5.90				1,615,304				5.62				1,630,970				5.15
Commercial real estate			1,320,077				6.28				1,291,629				6.08				1,270,011				5.69
Residential mortgage loans			499,425				5.64				497,925				5.47				476,453				5.82
Direct consumer			1,181,656				6.15				1,167,894				6.03				1,114,664				5.51
Indirect consumer			830,330				6.53				820,291				6.66				769,978				6.73
Total portfolio loans			5,471,775				6.12				5,393,043				5.96				5,262,076				5.65
Total earning assets			7,370,990				5.81				7,282,797				5.68				7,321,126				5.41
Nonearning Assets
Cash and due from banks			152,838								158,195								161,584
Bank premises and equipment			121,863								120,902								118,846
Investment security fair value adjustment			15,326								18,974								17,220
Other nonearning assets			266,932								268,861								275,225
Allowance for loan losses			(120,560	)							(121,267	)							(125,200	)
Total assets		$	7,807,389							$	7,728,462							$	7,768,801
Interest-Bearing Liabilities
Deposits:
Interest-bearing demand		$	1,071,211				0.67			$	1,153,239				0.70			$	1,315,875				0.72
Savings deposits			1,512,212				1.28				1,626,232				1.27				1,383,164				0.64
Time deposits			1,742,621				2.88				1,662,673				2.68				1,818,784				2.50
Short-term borrowings			890,444				3.02				717,971				2.51				687,927				1.05
Long-term debt			925,817				3.91				927,497				3.67				935,479				3.64
Total interest-bearing liabilities			6,142,305				2.27				6,087,612				2.06				6,141,229				1.71
Noninterest-Bearing Liabilities and Shareholders’ Equity
Noninterest-bearing demand			927,566								906,615								917,203
Other liabilities			83,828								84,766								82,768
Shareholders’ equity			653,690								649,469								627,601
Total liabilities and shareholders’ equity		$	7,807,389							$	7,728,462							$	7,768,801
Interest Spread							3.54	%							3.62	%							3.70	%
Contribution of noninterest bearing sources of funds							0.38								0.34								0.28
Net Interest Income as a Percent of Earning Assets							3.92	%							3.96	%							3.98	%

 

Average Balances, Yields and Rates

		Six Months Ended June 30,
		2005								2004
		Average				Average				Average				Average
(in thousands)		Balance				Rate(1)				Balance(2)				Rate(1)(2)
Earning Assets
Money market investments		$	2,508				2.18	%		$	1,941				0.43	%
Investment securities(3):
Taxable			1,436,036				4.13				1,554,226				4.05
Tax-exempt			421,038				7.56				424,352				7.63
Mortgage loans held for sale			34,929				5.54				40,572				5.47
Loans(4):
Commercial			1,627,864				5.76				1,625,824				5.05
Commercial real estate			1,305,932				6.18				1,284,958				5.83
Residential mortgage loans			498,679				5.55				487,027				5.78
Direct consumer			1,174,813				6.09				1,077,603				5.60
Indirect consumer			825,338				6.59				754,594				6.81
Total portfolio loans			5,432,626				6.04				5,230,006				5.68
Total earning assets			7,327,137				5.75				7,251,097				5.44
Nonearning Assets
Cash and due from banks			155,502								161,174
Bank premises and equipment			121,385								116,495
Investment security fair value adjustment			17,140								32,131
Other nonearning assets			267,891								269,058
Allowance for loan losses			(120,912	)							(125,419	)
Total assets		$	7,768,143							$	7,704,536
Interest-Bearing Liabilities
Deposits:
Interest-bearing demand		$	1,111,998				0.69			$	1,337,216				0.73
Savings deposits			1,568,907				1.27				1,335,716				0.58
Time deposits			1,702,868				2.78				1,886,910				2.52
Short-term borrowings			804,684				2.79				598,090				1.03
Long-term debt			926,653				3.79				937,078				3.61
Total interest-bearing liabilities			6,115,110				2.17				6,095,010				1.72
Noninterest-Bearing Liabilities and Shareholders’ Equity
Noninterest-bearing demand			917,148								894,704
Other liabilities			84,294								78,939
Shareholders’ equity			651,591								635,883
Total liabilities and shareholders’ equity		$	7,768,143							$	7,704,536
Interest Spread							3.58	%							3.72	%
Contribution of noninterest bearing sources of funds							0.36								0.27
Net Interest Income as a Percent of Earning Assets							3.94	%							3.99	%