Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACTS
Charles D. Christy		Kristine D. Brenner
EVP & Chief Financial Officer		Director of Investor Relations
(810) 237-4200		(810) 257-2506
Charlie.Christy@citizensbanking.com		Kristine.Brenner@citizensbanking.com

CITIZENS REPUBLIC BANCORP ANNOUNCES THIRD QUARTER 2008 RESULTS

FLINT, MICHIGAN, October 16, 2008 — Citizens Republic Bancorp (NASDAQ: CRBC) announced today a net loss of $7.2 million for the three months ended September 30, 2008, compared with a net loss of $201.6 million for the second quarter of 2008 and net income of $31.8 million for the third quarter of 2007. Diluted net income (loss) per share was $(0.07), compared with $(2.53) for the second quarter of 2008 and $0.42 for the third quarter of 2007. Annualized returns on average assets and average equity during the third quarter of 2008 were (0.22)% and (1.84)%, respectively, compared with (6.10)% and (52.47)% for the second quarter of 2008 and 0.96% and 8.20% for the third quarter of 2007.

For the first nine months of 2008, Citizens recorded a net loss of $197.7 million, or $(2.36) per diluted share, compared with net income of $72.9 million or $0.96 per diluted share for the same period of 2007. The decrease was primarily the result of the goodwill impairment charge, credit writedown and fair-value adjustments in the second quarter of 2008 as well as a higher provision for loan losses.

Core operating earnings (loss), which exclude restructuring and merger-related expenses, amortization of core deposit intangibles and the goodwill impairment, were $(0.06) per diluted share for the third quarter of 2008, an increase of $0.22 over the second quarter of 2008 and a decrease of $0.51 from $0.45 in the third quarter of 2007. Annualized core operating earnings (loss) to average tangible assets and annualized core operating earnings (loss) to average tangible equity for the third quarter of 2008 were (0.18)% and (2.43)%, respectively, compared with (0.71)% and (10.87)% for the second quarter of 2008 and 1.10% and 18.55% for the third quarter of 2007. These non-GAAP financial measures are discussed in more detail under “Use of Non-GAAP Financial Measures” and are reconciled to the related GAAP measures in the tables on page 18.

“Our third quarter results clearly reflect the unprecedented market environment in which financial institutions are operating. The current recessionary conditions have caused more rapid than anticipated credit deterioration in our loan portfolio, particularly in commercial real estate,” stated William R. Hartman, chairman, president and chief executive officer. Citizens follows a consistent conservative methodology and discipline in calculating the allowance for loan losses,” and will continue to aggressively monitor and take action to mitigate credit losses. Our internal credit stress-test analyses, based on industry peak and worst-case scenarios, indicate that Citizens is solidly positioned with more than sufficient capital and liquidity to manage through this turbulent credit market,” continued Hartman.

Key Highlights in the Quarter:

•		Total deposits at September 30, 2008 increased $344.9 million or 4.0% over June 30, 2008 and increased $1.1 billion or 13.4% over September 30, 2007. Core deposits, which exclude time deposits, totaled $4.5 billion, a slight increase over June 30, 2008 and an increase of $495.8 million or 12.3% over September 30, 2007. This represents the fourth consecutive quarter of core deposit growth.
•		Citizens’ shareholders approved the charter amendment authorizing 50 million additional shares of common stock, triggering the conversion of $120.4 million of contingent convertible perpetual non-cumulative preferred stock to common stock. The preferred stock automatically converted to a total of 30.1 million shares of Citizens’ common stock on September 29, 2008.

•

Citizens maintained a strong capital position during the quarter, which supports current and long-term needs, potential credit issues due to the economic downturn, and provides a solid foundation for future expansion. The Corporation’s regulatory capital ratios are consistently above the “well-capitalized” standards and all of its bank subsidiaries have sufficient capital to maintain a “well-capitalized” designation. As of September 30, 2008, Citizens’ estimated key capital ratios are as follows:

	o		Tier I — 10.85%
	o		Total Capital — 13.10%
	o		Tangible Common Equity — 7.33%

•		Citizens held excess short-term (liquid) assets at September 30, 2008, an improvement from June 30, 2008, when it was a net purchaser of funds. Citizens’ parent company cash resources totaled $270.3 million at September 30, 2008 as compared with $277.9 million at June 30, 2008.
•		The allowance for loan losses at September 30, 2008 increased to $217.7 million or 2.32% of portfolio loans, compared with $181.7 million or 1.92% at June 30, 2008. The provision for loan losses for the third quarter of 2008 was $58.4 million, compared with $74.5 million for the second quarter of 2008. The provision for loan losses was higher than anticipated primarily due to the migration of two large commercial real estate loans to nonperforming status, which accounted for approximately $16 million of the increase. Net charge-offs for the third quarter of 2008 totaled $22.4 million, compared with $69.3 million for the second quarter of 2008.
•		Citizens continues to maintain strong pre-tax pre-provision operating earnings, with $41.0 million for the third quarter of 2008, compared with $38.8 million for the second quarter of 2008 and $48.1 million for the third quarter of 2007. These non-GAAP financial measures are reconciled to the related GAAP measures and discussed in more detail under “Reconciliation of Pre-Tax Pre-Provision Operating Earnings” on page 10.
•		The Small Business Administration (“SBA”) named Citizens Bank the #1 SBA lender in Michigan for their fiscal year ended September 30, 2008 with $28.2 million in SBA loan closings. Citizens was also named #1 for SBA Preferred Lender Program loans.

Balance Sheet

Total assets at September 30, 2008 were $13.1 billion, essentially unchanged from June 30, 2008 and September 30, 2007.

Investment securities at September 30, 2008 totaled $2.2 billion, essentially unchanged from June 30, 2008 and a decrease of $141.6 million or 6.2% from September 30, 2007. The decrease was primarily the result of using portfolio cash flow to fund commercial loan growth and to reduce short-term borrowings. Citizens does not have exposure to Freddie Mac or Fannie Mae common or preferred stock and did not have any other-than-temporary impairment charges during the third quarter of 2008.

Total commercial loans at September 30, 2008 were $5.8 billion, essentially unchanged from June 30, 2008 and an increase of $469.3 million or 8.8% over September 30, 2007. The increase over September 30, 2007 was primarily the result of new relationships in all of Citizens’ markets and growth from the Citizens Bank Business Finance division (the asset-based lending unit), partially offset by transferring $86.2 million of nonperforming commercial real estate loans to loans held for sale during the second quarter of 2008. The following table displays historical commercial loan portfolios by segment:

Commercial Loan Portfolio

		Sep 30				Jun 30				Mar 31				Dec 31				Sep 30
in millions		2008				2008				2008				2007				2007
Land Hold		$	48.3			$	49.8			$	61.6			$	63.8			$	78.9
Land Development			125.0				128.2				159.2				167.8				161.0
Construction			364.2				344.1				370.7				342.6				376.3
Income Producing			1,533.2				1,569.9				1,567.3				1,526.0				1,338.8
Owner-Occupied			999.6				1,009.3				1,015.6				997.0				1,113.5
Total Commercial Real Estate			3,070.3				3,101.3				3,174.4				3,097.2				3,068.5
Commercial and Industrial			2,703.7				2,703.8				2,653.8				2,557.1				2,236.2
Total Commercial Loans		$	5,774.0			$	5,805.1			$	5,828.2			$	5,654.3			$	5,304.7

The following definitions are provided to clarify the types of loans included in each of the commercial real estate segments identified in the above table. Land hold loans are secured by undeveloped land which has been acquired for future development. Land development loans are secured by land being developed in terms of infrastructure improvements to create finished marketable lots for commercial or residential construction. Construction loans are secured by commercial, retail and residential real estate in the construction phase with the intent to be sold or become an income producing property. Income producing loans are secured by non-owner occupied real estate leased to one or more tenants. Owner occupied loans are secured by real estate occupied by the owner for ongoing operations.

Residential mortgage loans at September 30, 2008 totaled $1.3 billion, essentially unchanged from June 30, 2008 and a decrease of $181.3 million or 12.4% from September 30, 2007. The decline was primarily the result of weak consumer demand in Citizens’ markets, the sale of more than 70% of new mortgage originations into the secondary market, and transferring $41.7 million of nonperforming residential mortgage loans to loans held for sale during the second quarter of 2008.

Direct consumer loans, which are primarily home equity loans, were $1.5 billion at September 30, 2008, essentially unchanged from June 30, 2008 and a decrease of $120.7 million or 7.5% from September 30, 2007. The decrease was due to weak consumer demand, which is being experienced throughout the industry.

Indirect consumer loans, which are primarily marine and recreational vehicle loans, at September 30, 2008 totaled $843.1 million, essentially unchanged from June 30, 2008 and September 30, 2007.

Loans held for sale at September 30, 2008 were $106.5 million, essentially unchanged from June 30, 2008 and an increase of $30.1 million or 39.5% over September 30, 2007. The increase was primarily the result of transferring $92.8 million (the aforementioned $127.9 million, net of the fair-value adjustment) in nonperforming commercial real estate and residential mortgage loans to loans held for sale, partially offset by a decrease in residential mortgage origination volume awaiting sale in the secondary market as a result of faster funding through Citizens’ alliance with PHH Mortgage, which began in the first quarter of 2008 and, to a lesser extent, a decline in commercial loans held for sale due to customer paydowns, adjustments to reflect current fair-market value, and transfers to ORE status.

Goodwill at September 30, 2008 was $597.2 million, unchanged from June 30, 2008 and a decrease of $181.3 million or 23.3% from September 30, 2007. The decline was due to a $178.1 million non-cash and non-taxable goodwill impairment charge recorded in the second quarter of 2008. During the third quarter, Citizens concluded its interim analyses of the assets and liabilities in the Regional Banking and Specialty Commercial lines of business with no additional impairment charges being recorded. As required by SFAS 142, “Goodwill and Other Intangible Assets,” Citizens is still required to perform its annual goodwill impairment test during the fourth quarter. There can be no assurance that such test will not result in additional material impairment charges due to further developments in the banking industry or Citizens’ markets.

Total deposits at September 30, 2008 increased $344.9 million or 4.0% over June 30, 2008 to $9.0 billion and increased $1.1 billion or 13.4% over September 30, 2007. Core deposits, which exclude all time

deposits, totaled $4.5 billion at September 30, 2008, a slight increase over June 30, 2008 and an increase of $495.8 million or 12.3% over September 30, 2007. The increase over June 30, 2008 was primarily due to clients holding higher transaction account balances, substantially offset by a shift from high-rate savings to certificates of deposit. The increase in core deposits over September 30, 2007 was primarily the result of a new on-balance sheet sweep product for Citizens’ commercial clients introduced in late 2007 and migration of funds from time deposits to savings, partially offset by the migration of funds from lower-cost deposits to time deposits with higher yields during 2007. Time deposits totaled $4.5 billion at September 30, 2008, an increase of $336.9 million or 8.1% over June 30, 2008 and an increase of $568.5 million or 14.6% over September 30, 2007. The increases were primarily the result of a shift in funding mix from short-term borrowings to longer-term brokered certificates of deposit.

Other interest-bearing liabilities, which include federal funds purchased and securities sold under agreements to repurchase, other short-term borrowings, and long-term debt, decreased $372.6 million or 13.1% from June 30, 2008 to $2.5 billion and decreased $1.1 billion or 31.3% from September 30, 2007. The decreases were primarily the result of a shift in the mix of funding to deposits and the proceeds from the issuance of equity securities in June 2008 being used to pay down debt.

Capital Adequacy and Liquidity

Shareholders’ equity was essentially unchanged from June 30, 2008 and September 30, 2007 at $1.5 billion. Shareholders’ equity at September 30, 2008 reflects the conversion of $120.4 million ($114.2 million net of issuance costs) of contingent convertible perpetual non-cumulative preferred stock (“preferred stock”) to common stock. The preferred stock converted to 30.1 million shares of Citizens’ common stock on September 29, 2008 after shareholders approved the required increase in authorized common stock on September 22, 2008. When compared with September 30, 2007, there were two offsetting actions which occurred during the second quarter of 2008: Citizens recorded the aforementioned goodwill impairment charge, credit writedown and fair-value adjustments that together reduced shareholders’ equity by $205.6 million (after-tax) and Citizens issued $200.0 million ($189.5 million net of issuance costs and the underwriting discount)of common stock and preferred stock.

Citizens initiated the following strategies in 2008 to enhance and preserve its capital position:

•		Implemented new incentive plans that promote a focus on profitability with targeted returns above Citizens’ cost of capital;
•		Suspended the dividend, saving $88 million annually;
•		Raised $200 million of additional capital; and
•		Increased discipline around loan pricing to enhance returns on risk-adjusted capital, emphasizing full-relationship banking and reducing capital intensive credit-only business.

As a result of these strategies, as evidenced by the following key capital ratios, Citizens continues to maintain a strong capital position, and its regulatory capital ratios are above “well-capitalized” standards.

		Regulatory
		Minimum for																Excess Capital
		“Well-																over Minimum
		Capitalized”				9/30/08				6/30/08				3/31/08				(in millions)
Tier 1 capital ratio*			6.00	%			10.85	%			10.80	%			9.04	%		$	491.5
Total capital ratio*			10.00	%			13.10	%			13.03	%			11.26	%		$	313.9
Tier 1 leverage ratio*			5.00	%			8.76	%			8.71	%			7.40	%		$	472.2
Tangible common equity to tangible assets							7.33	%			6.44	%			6.07	%
Tangible equity to tangible assets							7.33	%			7.35	%			6.07	%

Citizens believes it is well-positioned from a liquidity standpoint as well. Citizens continues to proactively manage its liquidity by leveraging a solid funding base comprised of approximately 68% deposits, 20% short-term and long-term debt, and 12% equity. During 2008, Citizens embarked on the following initiatives to strengthen the balance sheet and reduce reliance on short-term wholesale funding:

•		Added longer-term brokered certificates of deposit;
•		Increased focus on cross-sales through the retail delivery channel;
•		Conducted targeted marketing campaigns for deposits;
•		Increased available collateral for Federal Home Loan Bank (”FHLB”) funding; and

•

Increased discipline around loan funding and pricing to better align changes in loans outstanding with funding, liquidity, and profitability objectives.

As a result of these initiatives, Citizens has a solid core deposit base and currently maintains high levels of untapped liquidity in the form of collateral-based borrowing capacity. Citizens held excess short-term (liquid) assets at September 30, 2008, an improvement from June 30, 2008, when it was a net purchaser of funds.

Citizens’ parent company cash resources totaled $270.3 million at September 30, 2008. On October 7, 2008, Citizens paid off $50.0 million of senior debt, leaving $220.3 million of cash resources at the parent. After paying off the debt, the parent company’s interest and preferred dividend payment obligations are approximately $20 million annually and, therefore, Citizens believes its parent company has more than adequate long-term liquidity.

Net Interest Margin and Net Interest Income

Net interest margin was 3.09% for the third quarter of 2008 compared with 3.11% for the second quarter of 2008 and 3.39% for the third quarter of 2007. The decrease in net interest margin from the second quarter of 2008 was primarily the result of an increase in loan balances moved to nonperforming status, increased funding costs related to extending short-term borrowings, and an interest receivable write-down related to a derivatives contract. These factors were substantially offset by expanding commercial and consumer loan spreads, a shift in deposit mix towards a greater concentration of low cost deposits, retail time deposits repricing to a lower rate, and the full quarter impact of the capital raise that occurred in the second quarter of 2008.

The decrease in net interest margin from the third quarter of 2007 was primarily the result of deposit price competition, narrower commercial loan pricing spreads and the movement of loans to nonperforming status, partially offset by a shift in asset mix from investment securities to higher-yielding commercial loans. The shift in funding mix included funds migrating within the deposit portfolio from lower cost savings and transaction accounts to higher cost savings and time deposits. For the first nine months of 2008, net interest margin declined to 3.11% compared with 3.42% for the same period of 2007 as a result of the aforementioned factors.

Net interest income was $87.3 million for the third quarter of 2008 compared with $87.6 million for the second quarter of 2008 and $94.9 million for the third quarter of 2007. The slight decrease in net interest income compared with the second quarter of 2008 was due to the slightly lower net interest margin and a $27.8 million decrease in average earning assets. The decrease in average earning assets was the result of slightly lower investment, residential mortgage, and direct consumer loan portfolio balances, partially offset by minor increases to indirect consumer, loans held for sale, and money market investment balances. The decrease in investment portfolio balances is due to maturing balances not being fully reinvested, while the decreases in residential mortgage and direct consumer loan portfolio balances are due to lower demand in the current Midwest economic environment. The increase in indirect consumer loans was seasonal. Commercial loan balances were essentially unchanged in aggregate.

The decrease in net interest income compared with the third quarter of 2007 was due to the lower net interest margin, partially offset by a $149.6 million increase in average earning assets. The increase in average earning assets was the result of an increase in commercial loan balances, partially offset by decreases in investment, residential mortgage, and consumer loan portfolio balances.

For the first nine months of 2008, net interest margin totaled $263.2 million, a decrease of $26.7 million or 9.2% from the same period of 2007 as a result of the lower net interest margin, partially offset by a $37.1 million increase in average earning assets due to the aforementioned factors.

Credit Quality

The quality of Citizens’ loan portfolio is impacted by numerous factors, including the economic environment in the markets in which Citizens operates. Citizens carefully monitors its loans in an effort to identify and mitigate any potential credit quality issues and losses in a proactive manner. Citizens implemented the following initiatives during 2008 to manage credit quality challenges aggressively:

•		Centralized and upgraded the commercial real estate portfolio management team, which now reports directly to the Chief Credit Officer and is comprised of 22 FTE. The group’s focus is to monitor closely servicing performance of real estate loans in the commercial portfolio, including age of appraisals, adherence to lot release schedules, rent roll updates, construction costs within forecasts, and that guarantor liquidity is affirmed by current financial statements; in short, that all aspects of the transaction are current and performing according to terms;
•		Expanded the size of the special loans workout team by 4 FTE, bringing the total to 28, to support higher watchlist and nonperforming loan levels and improve oversight and monitoring of action plans to remediate the credits;
•		Transitioned mortgage servicing and collection activities to PHH Mortgage, a nationally recognized servicing agent; and
•		Tightened underwriting criteria for consumer loans to include:

	o		Home equity loans: lowered maximum LTV to 80% for primary residence and 70% for secondary residence and discontinued lending on rental properties;
	o		Indirect loans: increased credit score cutoffs to improve collateral positioning and reduce risk, increased pricing spreads, and reduced advance rates.

The following tables represent four qualitative aspects of the loan portfolio that illustrate the overall level of quality and risk inherent in the loan portfolio.

•		Table 1 — 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.
•		Table 2 — 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.
•		Table 3 — 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 Table 2.
•		Table 4 — Net Charge-Offs — This table illustrates the portion of loans that have been charged-off during each quarter.

Table 1 — Delinquency Rates By Loan Portfolio

30 to 89 days Past Due

		Sep 30, 2008								Jun 30, 2008								Mar 31, 2008								Dec 31, 2007								Sep 30, 2007
						% of								% of								% of								% of								% of
in millions		$				Portfolio				$				Portfolio				$				Portfolio				$				Portfolio				$				Portfolio
Land Hold		$	7.3				15.11	%		$	9.3				18.67	%		$	6.6				10.71	%		$	4.6				7.21	%		$	4.2				5.32	%
Land Development			10.3				8.24				1.1				0.86				16.3				10.24				28.7				17.10				18.4				11.43
Construction			26.1				7.17				11.9				3.46				10.5				2.83				31.7				9.25				17.6				4.68
Income Producing			50.1				3.27				48.5				3.09				29.3				1.87				54.0				3.54				31.2				2.33
Owner-Occupied			21.3				2.13				18.6				1.84				19.0				1.87				20.3				2.04				10.8				0.97
Total Commercial Real Estate			115.1				3.75				89.4				2.88				81.7				2.57				139.3				4.50				82.2				2.68
Commercial and Industrial			29.1				1.08				29.5				1.09				39.9				1.50				39.0				1.53				22.0				0.98
Total Commercial Loans			144.2				2.50				118.9				2.05				121.6				2.09				178.3				3.15				104.2				1.96
Residential Mortgage			37.7				2.95				38.5				2.94				33.5				2.40				46.4				3.21				37.7				2.58
Direct Consumer			19.5				1.32				18.4				1.22				21.7				1.42				24.3				1.55				21.5				1.34
Indirect Consumer			13.6				1.61				14.4				1.73				13.3				1.62				15.9				1.92				14.7				1.73
Total Delinquent Loans		$	215.0				2.29	%		$	190.2				2.01	%		$	190.1				1.99	%		$	264.9				2.79	%		$	178.1				1.93	%

Total delinquencies at September 30, 2008 increased $24.8 million or 13.0% over June 30, 2008, primarily as a result of higher commercial real estate delinquencies, while the other commercial and consumer delinquencies remained relatively flat. The increase in commercial real estate was primarily in the land development and construction segments due to the continued slowdown in these segments in Michigan and Ohio. While the majority of the increases are due to payment issues requiring proactive mitigation strategies, over 40% of the delinquency increases are attributable to administrative and renewal issues which are generally resolved through discussion with the borrowers.

As part of the overall credit underwriting and review process, Citizens carefully monitors commercial and commercial real estate credits that are current in terms of principal and interest payments but may

deteriorate in quality as economic conditions change. Commercial relationship officers monitor their clients’ financial condition and initiate changes in loan ratings based on their findings. Loans that have migrated within the loan rating system to a level that requires increased oversight are considered watchlist loans (generally consistent with the regulatory definition of special mention, substandard, and doubtful loans) and include loans that are in accruing (see Table 2) or nonperforming status (see Table 3). Citizens utilizes the watchlist process as a proactive credit risk management practice to help mitigate the migration of commercial loans to nonperforming status and potential loss. Once a loan is placed on the watchlist, it is reviewed quarterly by the chief credit officer, senior credit officers, senior market managers, and commercial relationship officers to assess cash flows, collateral valuations, guarantor liquidity, and other pertinent trends. During these reviews, action plans are affirmed to address emerging problem loans or to implement a specific plan for removing the loans from the portfolio. Additionally, loans viewed as substandard or doubtful are transferred to Citizens’ special loans or small business workout groups and are subjected to an even higher level of monitoring and workout activity.

Table 2 — Commercial Watchlist

Accruing loans only

		Sep 30, 2008								Jun 30, 2008								Mar 31, 2008								Dec 31, 2007								Sep 30, 2007
						% of								% of								% of								% of								% of
in millions		$				Portfolio				$				Portfolio				$				Portfolio				$				Portfolio				$				Portfolio
Land Hold		$	20.7				42.86	%		$	24.2				48.59	%		$	27.7				44.97	%		$	27.1				42.48	%		$	27.0				34.22	%
Land Development			51.8				41.44				47.5				37.05				55.9				35.11				72.7				43.33				52.3				32.48
Construction			104.8				28.78				86.3				25.08				66.7				17.99				90.1				26.30				91.7				24.37
Income Producing			290.3				18.93				239.3				15.24				221.3				14.12				225.5				14.78				173.8				12.98
Owner-Occupied			167.0				16.71				161.8				16.03				155.8				15.34				153.0				15.35				213.0				19.13
Total Commercial Real Estate			634.6				20.67				559.1				18.03				527.4				16.61				568.4				18.35				557.8				18.18
Commercial and Industrial			431.2				15.95				432.5				16.00				407.1				15.34				387.4				15.15				362.4				16.21
Total Watchlist Loans		$	1,065.8				18.46	%		$	991.6				17.08	%		$	934.5				16.03	%		$	955.8				16.90	%		$	920.2				17.35	%

Accruing watchlist loans at September 30, 2008 increased $74.2 million or 7.5% over June 30, 2008. The increase was primarily the result of $106.6 million of commercial real estate loans which were transitioned to watchlist status by the newly centralized commercial real estate portfolio management team.

Table 3 — Nonperforming Assets

		Sep 30, 2008								Jun 30, 2008								Mar 31, 2008								Dec 31, 2007								Sep 30, 2007
						% of								% of								% of								% of								% of
in millions		$				Portfolio				$				Portfolio				$				Portfolio				$				Portfolio				$				Portfolio
Land Hold		$	11.0				22.77	%		$	3.4				6.83	%		$	5.5				8.93	%		$	4.5				7.05	%		$	3.0				3.80	%
Land Development			20.6				16.48				22.8				17.78				46.4				29.15				35.6				21.22				40.4				25.09
Construction			25.7				7.06				12.6				3.66				51.9				14.00				28.8				8.41				18.6				4.94
Income Producing			57.6				3.76				23.1				1.47				40.5				2.58				21.5				1.41				26.5				1.98
Owner-Occupied			17.7				1.77				13.1				1.30				23.5				2.31				19.7				1.98				9.0				0.81
Total Commercial Real Estate			132.6				4.32				75.0				2.42				167.8				5.29				110.1				3.55				97.5				3.18
Commercial and Industrial			38.2				1.41				31.6				1.17				20.3				0.76				12.7				0.50				9.4				0.42
Total Nonperforming Commercial Loans			170.8				2.96				106.6				1.84				188.1				3.23				122.8				2.17				106.9				2.02
Residential Mortgage			40.2				3.14				12.4				0.95				45.8				3.29				46.9				3.25				32.8				2.25
Direct Consumer			16.3				1.10				16.3				1.09				13.5				0.88				13.7				0.87				10.9				0.68
Indirect Consumer			2.1				0.25				1.4				0.17				1.7				0.21				2.1				0.25				1.8				0.21
Loans 90+ days still accruing and restructured			1.9				0.02				2.5				0.03				4.4				0.05				3.9				0.04				2.4				0.03
Total Nonperforming Portfolio Loans			231.3				2.47	%			139.2				1.47	%			253.5				2.65	%			189.4				1.99	%			154.8				1.68	%
Nonperforming Held for Sale			86.6								92.6								22.8								21.6								5.8
Other Repossessed Assets Acquired			46.5								54.1								50.3								40.5								30.4
Total Nonperforming Assets		$	364.4							$	285.9							$	326.6							$	251.5							$	191.0

Nonperforming assets are comprised of nonaccrual loans, loans past due over 90 days and still accruing interest, restructured loans, nonperforming held for sale, and other repossessed assets acquired. Nonperforming assets totaled $364.4 million at September 30, 2008, an increase of $78.5 million over June 30, 2008 and an increase of $173.4 million over September 30, 2007. The increase over June 30, 2008 was primarily the result of a change in status of two income producing commercial real estate relationships and two residential mortgage relationships, which together totaled $43.2 million, as well as the effect of general economic deterioration in the Midwest, especially Michigan. As part of the conversion to the PHH servicing platform, Citizens has seen an expected near term increase in

nonperforming loans due to changes in collection practices on delinquent loans. PHH has a proven track record of long-term improvement in the performance of portfolios after conversion to their process, which Citizens believes will have a positive impact on Citizens’ long-term results. The increase over September 30, 2007 was primarily the result of significant deterioration in the real estate secured portfolios (particularly commercial) and general economic deterioration in the Midwest. Nonperforming assets at September 30, 2008 represented 3.87% of total loans plus other repossessed assets acquired compared with 3.01% at June 30, 2008 and 2.06% at September 30, 2007. Nonperforming commercial loan inflows were $102.6 million in the third quarter of 2008 compared with $54.5 million in the second quarter of 2008 and $60.0 million in the third quarter of 2007.

Nonperforming commercial loan outflows were $38.5 million in the third quarter of 2008 compared with $135.9 million in the second quarter of 2008 and $22.4 million in the third quarter of 2007. The third quarter of 2008 outflows included $8.5 million in loans that returned to accruing status, $11.7 million in loan payoffs and paydowns, $17.2 million in charged-off loans, and $1.1 million transferring to other repossessed assets acquired.

Table 4 — Net Charge-Offs

										Three Months Ended
		Sep 30, 2008								Jun 30, 2008								Mar 31, 2008								Dec 31, 2007								Sep 30, 2007
						% of								% of								% of								% of								% of
in millions		$				Portfolio**				$				Portfolio**				$				Portfolio**				$				Portfolio**				$				Portfolio**
Land Hold		$	1.7				14.08	%		$	0.7				5.62	%		$	0.5				3.25	%		$	0.4				2.51	%		$	—				—	%
Land Development			6.9				22.08				16.4				51.17				6.6				16.58				6.3				15.02				0.4				0.99
Construction			0.5				0.55				13.8				16.04				1.2				1.29				1.8				2.10				0.1				0.11
Income Producing			4.4				1.15				7.7				1.96				0.9				0.23				2.4				0.63				0.1				0.03
Owner-Occupied			1.3				0.52				3.4				1.35				(0.1	)			(0.04	)			(0.2	)			(0.08	)			0.6				0.22
Total Commercial Real Estate			14.8				1.93				42.0				5.42				9.1				1.15				10.7				1.38				1.2				0.16
Commercial and Industrial			0.4				0.06				0.6				0.09				0.9				0.14				1.4				0.22				0.6				0.11
Total Commercial Loans			15.2				1.05				42.6				2.94				10.0				0.69				12.1				0.86				1.8				0.14
Residential Mortgage			0.5				0.16				20.7				6.33				1.8				0.52				2.0				0.55				1.6				0.44
Direct Consumer			3.3				0.89				3.1				0.83				3.0				0.79				2.3				0.59				2.6				0.65
Indirect Consumer			3.4				1.61				2.9				1.39				2.6				1.27				3.3				1.59				1.9				0.88
Total Net Charge-offs		$	22.4				0.94	%		$	69.3				2.93	%		$	17.4				0.74	%		$	19.7				0.84	%		$	7.9				0.34	%

Net charge-offs totaled $22.4 million or 0.94% of average portfolio loans in the third quarter of 2008 compared with $69.3 million or 2.93% of average portfolio loans in the second quarter of 2008 (which included the $35.1 million fair-value adjustment) and $7.9 million or 0.34% of average portfolio loans in the third quarter of 2007. The decrease from the second quarter of 2008 was primarily the result of the aforementioned fair-value adjustment ($16.8 million on commercial real estate and $18.3 million on residential mortgage) and lower commercial real estate charge-offs. The increase over the third quarter of 2007 was primarily the result of higher charge-offs on commercial real estate due to declining real estate values and general economic deterioration in the Midwest.

After determining what Citizens believes is an adequate allowance for loan losses, the provision for loan losses is calculated as a result of the net effect of the quarterly change in the allowance for loan losses identified based on the risk in the portfolio and the quarterly net charge-offs. The provision for loan losses was $58.4 million in the third quarter of 2008, compared with $74.5 million in the second quarter of 2008 and $3.8 million in the third quarter of 2007. The decrease from the second quarter of 2008 was primarily the result of the aforementioned transfer of nonperforming commercial real estate and residential mortgage loans to loans held for sale during the second quarter of 2008 and lower commercial real estate charge-offs, partially offset by continued migration of commercial real estate watchlist loans to nonperforming status. This migration, and re-evaluation of the underlying collateral supporting these loans, caused an increase in the allowance for loan losses due to the higher likelihood that portions of these loans may eventually be charged-off. Two commercial real estate relationships accounted for approximately $16 million of the increase. For the first nine months of 2008, the provision for loan losses totaled $163.5 million compared with $39.1 million for the same period of 2007 due to the aforementioned factors.

The allowance for loan losses was $217.7 million or 2.32% of portfolio loans at September 30, 2008, compared with $181.7 million or 1.92% at June 30, 2008. The increase was primarily the result of anticipated loss on two income producing commercial real estate relationships, continued deterioration in commercial real estate loans and an increase in the historical loss migration rates and extended duration of residential mortgage and consumer loans. Based on current conditions and expectations, Citizens believes that the allowance for loan losses at September 30, 2008 is adequate to address the estimated loan losses inherent in the existing loan portfolio.

Noninterest Income

Noninterest income for the third quarter of 2008 was $28.0 million, an increase of $0.9 million or 3.5% over the second quarter of 2008 and a decrease of $2.6 million or 8.5% from the third quarter of 2007. For the first nine months of 2008, noninterest income totaled $86.0 million, a decrease of $7.3 million or 7.8% from the same period of 2007.

The increase in noninterest income over the second quarter of 2008 was primarily the result of a lower net loss on loans held for sale ($1.0 million) and a net increase from minor changes in several other categories, partially offset by lower brokerage and investment fees ($0.8 million). The lower net loss on loans held for sale was primarily due to the $2.3 million loss as a result of the aforementioned second quarter of 2008 fair-value adjustment on commercial real estate loans held for sale. The net loss on loans held for sale in the third quarter of 2008 was primarily the result of updated lower appraisal values on underlying collateral. The decrease in brokerage and investment fees was primarily the result of lower demand for investment products due to attractively-priced traditional certificates of deposit in Citizens’ markets.

The decrease in noninterest income from the third quarter of 2007 was primarily due to a net loss on loans held for sale ($1.3 million), lower brokerage and investment fees ($0.8 million), and a net decrease from minor changes in several other categories. The net loss on loans held for sale was primarily the result of updated lower appraisal values on underlying collateral. The decline in brokerage and investment fees was primarily the result of the lower demand for investment products as described above.

The decrease in noninterest income from the first nine months of 2007 was primarily due to lower mortgage and other loan income ($3.7 million), a net loss on loans held for sale ($3.5 million), and a net decrease from minor changes in several other categories as a result of the aforementioned factors, partially offset by higher bankcard fees ($1.2 million). While the other income category was essentially unchanged from the same period of 2007, Citizens realized a $2.1 million gain in the first quarter of 2008 due to Citizens’ receipt of proceeds from the partial redemption of its Visa shares. The effect of this item was substantially offset by lower revenue on bank owned life insurance policies due to lower market interest rates in 2008.

Noninterest Expense

Noninterest expense for the third quarter of 2008 was $74.3 million, a decrease of $186.9 million from the second quarter of 2008 and a decrease of $3.0 million from the third quarter of 2007. The second quarter of 2008 included a $178.1 million goodwill impairment charge and a $5.0 million net loss as a result of the fair-value adjustment on commercial and residential repossessed assets. For the first nine months of 2008, noninterest expense totaled $412.1 million, an increase of $163.5 million over the same period of 2007.

The decrease in noninterest expense from the second quarter of 2008 was primarily the result of the aforementioned goodwill impairment charge and fair-value adjustment on repossessed assets, and, to a lesser extent, lower other expense ($1.8 million), professional services ($1.3 million), and other loan expense ($0.7 million), partially offset by higher salaries and employee benefits ($0.7 million). The decrease in other expense was primarily the result of the following items recorded in the second quarter of 2008: $0.7 million related to exiting two third-party contracts, and higher losses related to mortgage indemnification payments to third party investors due to underwriting and documentation issues. The decrease in professional services was primarily the result of lower legal fees related to litigation that concluded in the second quarter of 2008. The decrease in other loan expense was primarily the result of lower provisioning to fund the reserve for unused loan commitments, which fluctuates with the amount of

unadvanced customer lines of credit. The increase in salaries and employee benefits was primarily the result of employee separation agreements.

The decrease in noninterest expense from the third quarter of 2007 was primarily the result of a general decline in all expenses due to cost savings and efficiencies implemented throughout 2007 following completion of the Republic merger as well as the effect of $1.0 million in restructuring and merger-related expenses incurred in the third quarter of 2007, partially offset by higher ORE expenses, profits, and losses, net ($1.5 million) and other loan expenses ($1.5 million). The increase in ORE expenses, profits, and losses, net was primarily the result of owning more repossessed properties than one year ago. The increase in other loan expense was primarily the result of higher other mortgage processing fees due to the alliance with PHH Mortgage entered into in the first quarter of 2008 and higher foreclosure expenses associated with repossessing collateral underlying commercial and residential real estate loans, partially offset by the decrease in provisioning to fund the reserve for unused loan commitments as described above.

Salary costs included severance expense of $2.0 million for the third quarter of 2008, less than $0.1 million for the second quarter of 2008, and $0.2 million for the third quarter of 2007. Citizens had 2,261 full-time equivalent employees at September 30, 2008 compared with 2,321 at June 30, 2008 and 2,469 at September 30, 2007.

The increase in noninterest expense over the first nine months of 2007 was primarily due to the aforementioned $178.1 million goodwill impairment charge and the $5.0 million fair-value adjustment on ORE, as well as higher other loan expenses ($4.8 million) and ORE expenses, profits, and losses, net ($4.1 million, excluding the aforementioned $5.0 million fair-value adjustment) in 2008 due to the factors discussed above, partially offset by the general decline in all other expense categories due to cost savings and efficiencies implemented during 2007 as well as the effect of $8.6 million in restructuring and merger-related expenses incurred in 2007.

Income Tax Provision

Income tax provision (benefit) for the third quarter of 2008 was $(10.2) million, an increase of $9.2 million from the second quarter of 2008 and a decrease of $22.8 million from the third quarter of 2007. For the first nine months of 2008, the income tax provision (benefit) totaled $(28.7) million, a decrease of $51.4 million from the same period of 2007. The decreases were primarily the result of lower pre-tax income, excluding the goodwill impairment charge which is not tax-deductible.

In August 2008, Citizens settled an outstanding tax issue with the State of Wisconsin, which resulted in a net benefit of $0.5 million.

The effective rate for the third quarter of 2008 was 58.68%. Pre-tax income included several items that were excluded from the tax calculation, such as tax-exempt interest. Citizens anticipates that the effective tax rate for 2008 will be approximately 12% -17%.

Reconciliation of Pre-Tax Pre-Provision Operating Earnings

Citizens is presenting pre-tax pre-provision operating earnings in this release for purposes of additional analysis of operating results. Pre-tax pre-provision operating earnings, as defined by management, represents net income (loss) excluding income tax provision (benefit), the provision for loan losses, and the goodwill impairment charge, credit writedown and fair-value adjustments in the second quarter of 2008.

The following table reconciles pre-tax pre-provision operating earnings to consolidated net income (loss) presented in accordance with US generally accepted accounting principles (“GAAP”), which is the principal and most useful measure of earnings and provides comparability of earnings with other companies. However, Citizens believes presenting pre-tax pre-provision operating earnings provides investors with the ability to better understand Citizens’ underlying core operating trends separate from the direct effects of the credit issues and challenges inherent in the real estate downturn and displays a consistent operating earnings trend before the impact of credit. The credit quality section of this earnings release already isolates all of the challenges and issues related to the credit quality of Citizens’ loan portfolio and its impact on Citizens earnings as reflected in the provision for loan losses.

		Three Months Ended
		Sep 30				Jun 30				Mar 31				Dec 31				Sep 30
(in thousands)		2008				2008				2008				2007				2007
Net Income (Loss)		$	(7,176	)		$	(201,634	)		$	11,127			$	27,967			$	31,764
Income tax provision (benefit)			(10,192	)			(19,401	)			929				8,582				12,605
Provision for loan losses			58,390				74,480				30,619				6,055				3,765
Goodwill impairment charge			—				178,089				—				—				—
Fair-value writedown on loans held for sale			—				2,349				—				—				—
Fair-value writedown on ORE			—				4,966				—				—				—
Pre-tax pre-provision operating earnings		$	41,022			$	38,849			$	42,675			$	42,604			$	48,134

Citizens is very focused on making the necessary changes to preserve capital, enhance liquidity, and generate solid operating earnings.

Forward-Looking Guidance

Citizens anticipates the following performance for the fourth quarter of 2008:

•		Net interest income will be slightly lower than in the third quarter of 2008 due to slightly lower earning asset levels and continued migration of certain loans to nonperforming status.
•		Noninterest income will be lower than the third quarter of 2008 primarily due to lower trust fees and brokerage and investment fees as a result of the recent dramatically negative investment market conditions, and due to lower mortgage and other loan income as a result of lower origination volume.
•		Noninterest expense for the fourth quarter of 2008 will be consistent with the third quarter of 2008 as increases in FDIC premiums are expected to offset current savings initiatives.

Given the uncertainties in the Midwest economy, continued downturn in real estate markets, and volatility in borrower capacities, Citizens has found it very difficult to give a narrow range of qualitative guidance on net charge-offs and provision expense at this time. Citizens anticipates net charge-offs and provision for loan losses for the fourth quarter will be equal to or higher than the third quarter, depending on the expected continued change in nonperforming loans and challenges in the economy.

Use of Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this release includes non-GAAP financial measures, including those presented on page 1, which are reconciled to GAAP financial measures on page 18. Citizens believes these non-GAAP financial measures provide information useful to investors in understanding the underlying operational performance of the company, its business, and performance trends and facilitates comparisons with the performance of others in the banking industry. Specifically, Citizens believes the exclusion of restructuring and merger-related expenses, intangible asset amortization, and the goodwill impairment to create “core operating earnings” as well as the exclusion of related goodwill and other intangible assets, net of applicable deferred tax amounts, to create “average tangible assets,” “average tangible equity” and core efficiency ratio facilitates evaluation of the effect of the Republic merger and related goodwill on business operations of the combined company and facilitates a comparison of results for ongoing business operations. Citizens’ management internally assesses the company’s performance based, in part, on these non-GAAP financial measures.

In accordance with industry standards, certain designated net interest income amounts are presented on a taxable equivalent basis, including the calculation of net interest margin and the efficiency ratio. Citizens believes the presentation of net interest margin on a taxable equivalent basis allows comparability of net interest margin with our industry peers by eliminating the effect of the differences in portfolios attributable to the proportion represented by both taxable and tax-exempt investments.

Although Citizens believes the above non-GAAP financial measures enhance investors’ understanding of its business and performance, these non-GAAP measures should not be considered a substitute for GAAP basis financial measures.

Other News

Stock Repurchase Program

During the third quarter of 2008, Citizens did not repurchase any shares of its stock under the stock repurchase program. As of September 30, 2008, there were 1,241,154 shares remaining to be purchased under the program approved by the Board of Directors on October 16, 2003.

Analyst 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 analysts and investors at 10:00 a.m. ET on Friday, October 17, 2008.

A live audio webcast is available at www.citizensbanking.com through the Investor Relations page or by calling (800) 895-0198 (conference ID: Citizens Republic). To participate in the conference call, please connect approximately 10 minutes prior to the scheduled conference time.

The call will be archived for 90 days at www.citizensbanking.com. In addition, a digital recording will be available approximately two hours after the completion of the conference call until October 24, 2008. To listen to the replay, please dial (800) 677-7320.

Corporate Profile

Citizens Republic Bancorp is a diversified financial services company providing a wide range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base. Citizens serves communities in Michigan, Ohio, Wisconsin, and Indiana as Citizens Bank and in Iowa as F&M Bank, with 233 offices and 264 ATMs. Citizens Republic Bancorp is the largest bank holding company headquartered in Michigan with roots dating back to 1871 and is the 43^rd largest bank holding company headquartered in the United States. More information about Citizens Republic Bancorp is available at www.citizensbanking.com.

Safe Harbor Statement

Discussions and statements in this release that are not statements of historical fact, including statements that include terms such as “will,” “may,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” and “plan,” including without limitation future financial and operating results, plans, objectives, expectations and intentions and other statements that are not historical facts, are forward-looking statements that involve risks and uncertainties. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking information.

Factors that could cause or contribute to such differences include, without limitation, the following:

•

Deteriorating economic conditions in Michigan and the other Upper Midwest states in which Citizens operates have adversely affected its business and may continue to adversely affect Citizens.

•

Declining real estate markets have adversely affected the value of Citizens’ loan portfolio and may lead to further losses.

•

Citizens may be required to record further impairment charges in respect of its goodwill and other intangible assets.

•

Loan losses, such as those due to changes in loan portfolios, fraud and economic factors, could exceed the amount of losses Citizens has anticipated, requiring additional increases in the allowance that would reduce Citizens’ net income and could have a negative impact on its capital and financial position.

•

A rapid or substantial increase or decrease in interest rates could adversely affect Citizens’ net interest income and results of operations.

•

The ability of Citizens’ holding company to pay dividends, repurchase its shares or to repay its indebtedness depends upon the results of operations of its subsidiaries and their legal ability to pay dividends to the holding company.

•

If Citizens is unable to continue to attract core deposits or continue to obtain third party financing on favorable terms, its cost of funds will increase, adversely affecting the ability to generate the funds necessary for lending operations, reducing net interest margin and negatively affecting results of operations.

•

Citizens’ ability to have access to interbank or other liquidity sources, caused by rating agency downgrades or other market factors.

•

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, and could cause Citizens to lend to customers who are less likely to pay in order to maintain historical origination levels.

•

Litigation to which Citizens is a party is subject to many uncertainties such that the expenses and ultimate exposure with respect to many of these matters cannot be ascertained.

•

If Citizens is unable to adequately invest in and implement new technology-driven products and services to respond to rapid technological changes in its industry, it may not be able to compete effectively, or the cost to provide products and services may increase significantly.

•

Changes in federal or state banking laws, regulations, and regulatory practices could affect Citizens’ ability to offer new products and services, obtain financing, pay dividends from the subsidiaries to its holding company, attract deposits, or make loans and leases at satisfactory spreads, and could also result in the imposition of additional costs.

•

A lack of market acceptance of Citizens’ new products and services, which are often costly to develop and market initially, would have a negative effect on financial condition and results of operations.

•

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 could face unanticipated environmental liabilities or costs related to real property owned or acquired through foreclosure, which could have a negative effect on 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’ holding company’s articles of incorporation and bylaws as well as certain banking laws may have an anti-takeover effect.

These factors also include any other risks and uncertainties detailed from time to time in Citizens’ filings with the SEC, which are available at the SEC’s web site www.sec.gov. Other factors not currently anticipated may also materially and adversely affect Citizens’ results of operations, cash flows and financial position. There can be no assurance that future results will meet expectations. While Citizens believes that the forward-looking statements in this release 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 any statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Consolidated Balance Sheets (Unaudited)
Citizens Republic Bancorp and Subsidiaries

		September 30,				June 30,				September 30,
(in thousands)		2008				2008				2007
Assets
Cash and due from banks		$	268,944			$	252,242			$	224,683
Money market investments			2,568				183				5,193
Investment Securities:
Securities available for sale, at fair value			2,018,958				1,986,166				2,177,516
Securities held to maturity, at amortized cost (fair value of $134,367, $136,423 and $122,186, respectively)			139,574				138,435				122,610
Total investment securities			2,158,532				2,124,601				2,300,126
FHLB and Federal Reserve stock			148,768				148,838				142,107
Portfolio loans:
Commercial and industrial			2,703,714				2,703,812				2,236,131
Commercial real estate			3,070,282				3,101,337				3,068,540
Total commercial			5,773,996				5,805,149				5,304,671
Residential mortgage			1,279,696				1,308,729				1,460,993
Direct consumer			1,481,380				1,502,302				1,602,126
Indirect consumer			843,126				832,836				851,436
Total portfolio loans			9,378,198				9,449,016				9,219,226
Less: Allowance for loan losses			(217,727	)			(181,718	)			(176,958	)
Net portfolio loans			9,160,471				9,267,298				9,042,268
Loans held for sale			106,531				111,542				76,384
Premises and equipment			123,805				125,073				130,148
Goodwill			597,218				597,218				778,516
Other intangible assets			23,540				25,766				33,206
Bank owned life insurance			219,125				218,084				212,243
Other assets			306,449				299,173				278,275
Total assets		$	13,115,951			$	13,170,018			$	13,223,149
Liabilities
Noninterest-bearing deposits		$	1,156,419			$	1,144,544			$	1,104,992
Interest-bearing demand deposits			768,466				763,983				795,950
Savings deposits			2,607,974				2,616,316				2,136,082
Time deposits			4,473,216				4,136,295				3,904,715
Total deposits			9,006,075				8,661,138				7,941,739
Federal funds purchased and securities sold under agreements to repurchase			59,781				299,646				764,527
Other short-term borrowings			63,281				45,398				33,274
Other liabilities			102,391				119,860				120,968
Long-term debt			2,347,644				2,498,290				2,800,768
Total liabilities			11,579,172				11,624,332				11,661,276
Shareholders’ Equity
Preferred stock — $50 par value			—				114,161				—
Common stock — no par value			1,179,661				1,052,738				973,619
Retained earnings			365,954				384,867				591,306
Accumulated other comprehensive loss			(8,836	)			(6,080	)			(3,052	)
Total shareholders’ equity			1,536,779				1,545,686				1,561,873
Total liabilities and shareholders’ equity		$	13,115,951			$	13,170,018			$	13,223,149

Consolidated Statements of Operations (Unaudited)
Citizens Republic Bancorp and Subsidiaries

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in thousands, except per share amounts)		2008				2007				2008				2007
Interest Income
Interest and fees on loans		$	144,099			$	171,650			$	447,279			$	514,814
Interest and dividends on investment securities:
Taxable			18,275				21,238				58,319				67,337
Tax-exempt			7,272				7,310				21,922				21,947
Dividends on FHLB and Federal Reserve stock			1,917				1,603				5,508				4,736
Money market investments			160				53				206				89
Total interest income			171,723				201,854				533,234				608,923
Interest Expense
Deposits			53,001				64,380				167,713				195,015
Short-term borrowings			1,060				5,439				7,867				25,504
Long-term debt			30,344				37,162				94,409				98,413
Total interest expense			84,405				106,981				269,989				318,932
Net Interest Income			87,318				94,873				263,245				289,991
Provision for loan losses			58,390				3,765				163,489				39,122
Net interest income after provision for loan losses			28,928				91,108				99,756				250,869
Noninterest Income
Service charges on deposit accounts			12,254				12,515				35,756				35,701
Trust fees			4,513				4,973				13,905				14,931
Mortgage and other loan income			3,269				2,939				9,636				13,334
Brokerage and investment fees			1,376				2,141				5,503				5,872
ATM network user fees			1,715				1,601				4,805				4,820
Bankcard fees			1,874				1,695				5,542				4,318
Gains (losses) on loans held for sale			(1,261	)			—				(3,508	)			—
Other income			4,265				4,732				14,349				14,321
Total fees and other income			28,005				30,596				85,988				93,297
Investment securities gains (losses)			—				8				—				(25	)
Total noninterest income			28,005				30,604				85,988				93,272
Noninterest Expense
Salaries and employee benefits			39,728				42,115				120,999				132,251
Occupancy			6,749				7,377				21,378				23,363
Professional services			3,246				5,096				11,540				13,599
Equipment			3,160				3,227				9,810				10,793
Data processing services			4,185				3,724				12,722				12,360
Advertising and public relations			1,297				1,003				4,593				6,070
Postage and delivery			1,626				1,777				5,411				5,937
Other loan expenses			2,755				1,245				8,014				3,237
ORE expenses, profits, and losses, net			1,825				360				9,461				394
Intangible asset amortization			2,226				2,803				7,006				8,875
Goodwill impairment			—				—				178,089				—
Restructuring and merger-related expenses			—				1,009				—				8,603
Other expense			7,504				7,607				23,068				23,061
Total noninterest expense			74,301				77,343				412,091				248,543
Income (Loss) Before Income Taxes			(17,368	)			44,369				(226,347	)			95,598
Income tax provision (benefit)			(10,192	)			12,605				(28,664	)			22,723
Net Income (Loss)		$	(7,176	)		$	31,764			$	(197,683	)		$	72,875
Net Income (Loss) Per Common Share:
Basic		$	(0.07	)		$	0.42			$	(2.36	)		$	0.97
Diluted			(0.07	)			0.42				(2.36	)			0.96
Cash Dividends Declared Per Common Share			—				0.290				0.290				0.870
Average Common Shares Outstanding:
Basic			95,937				75,353				83,670				75,391
Diluted			95,937				75,501				83,670				75,688

Selected Quarterly Information
Citizens Republic Bancorp and Subsidiaries

		3rd Qtr 2008				2nd Qtr 2008				1st Qtr 2008				4th Qtr 2007				3rd Qtr 2007
Summary of Operations (thousands)
Net interest income		$	87,318			$	87,615			$	88,312			$	92,188			$	94,873
Provision for loan losses			58,390				74,480				30,619				6,055				3,765
Total fees and other income			28,005				27,058				30,925				29,296				30,596
Investment securities gains (losses)			—				—				—				—				8
Noninterest expense (1)			74,301				261,228				76,562				78,880				77,343
Income tax provision (benefit)			(10,192	)			(19,401	)			929				8,582				12,605
Net income (loss)			(7,176	)			(201,634	)			11,127				27,967				31,764
Taxable equivalent adjustment			4,593				4,611				4,679				4,673				4,620
Cash dividends			—				—				21,958				21,941				21,934
Per Common Share Data
Net Income (loss):
Basic		$	(0.07	)		$	(2.53	)		$	0.15			$	0.37			$	0.42
Diluted			(0.07	)			(2.53	)			0.15				0.37				0.42
Dividends			—				—				0.290				0.290				0.290
Market Value:
High		$	11.00			$	13.97			$	14.74			$	17.37			$	20.38
Low			1.75				2.67				10.41				13.00				15.01
Close			3.08				2.82				12.43				14.51				16.11
Book value			12.20				16.12				20.82				20.84				20.65
Tangible book value			7.27				9.62				10.21				10.20				9.92
Shares outstanding, end of period (000)			126,017				95,899				75,748				75,722				75,634
At Period End (millions)
Assets		$	13,116			$	13,170			$	13,539			$	13,506			$	13,223
Portfolio loans			9,378				9,449				9,573				9,501				9,219
Deposits			9,006				8,661				8,487				8,302				7,942
Shareholders’ equity			1,537				1,546				1,577				1,578				1,562
Average Balances (millions)
Assets		$	13,157			$	13,296			$	13,442			$	13,305			$	13,165
Portfolio loans			9,456				9,514				9,499				9,335				9,163
Deposits			8,837				8,604				8,417				7,951				8,049
Shareholders’ equity			1,551				1,546				1,579				1,561				1,536
Credit Quality Statistics (thousands)
Nonaccrual loans		$	229,391			$	136,741			$	249,113			$	185,397			$	152,499
Loans 90 or more days past due and still accruing			1,635				2,179				4,077				3,650				1,923
Restructured loans			271				285				300				315				332
Total nonperforming portfolio loans			231,297				139,205				253,490				189,362				154,754
Nonperforming held for sale			86,645				92,658				22,754				21,676				5,846
Other repossessed assets acquired (ORAA)			46,459				54,066				50,350				40,502				30,395
Total nonperforming assets		$	364,401			$	285,929			$	326,594			$	251,540			$	190,995
Allowance for loan losses		$	217,727			$	181,718			$	176,528			$	163,353			$	176,958
Allowance for loan losses as a percent of portfolio loans			2.32	%			1.92	%			1.84	%			1.72	%			1.92	%
Allowance for loan losses as a percent of nonperforming assets			59.75				63.55				54.05				64.94				92.65
Allowance for loan losses as a percent of nonperforming loans			94.13				130.54				69.64				86.27				114.35
Nonperforming assets as a percent of portfolio loans plus ORAA			3.87				3.01				3.39				2.64				2.06
Nonperforming assets as a percent of total assets			2.78				2.17				2.41				1.86				1.44
Net loans charged off as a percent of average portfolio loans (annualized)			0.94				2.93				0.74				0.84				0.34
Net loans charged off (000)		$	22,381			$	69,290			$	17,444			$	19,660			$	7,925
Performance Ratios (annualized)
Return on average assets			(0.22	)%			(6.10	)%			0.33	%			0.83	%			0.96	%
Return on average shareholders’ equity			(1.84	)			(52.47	)			2.83				7.11				8.20
Average shareholders’ equity / average assets			11.79				11.62				11.74				11.73				11.67
Net interest margin (FTE) (2)			3.09				3.11				3.12				3.26				3.39
Efficiency ratio (3)			61.96				219.00				61.79				62.52				59.45