Michigan-based Citizens Republic Bancorp (Citizens) is exploring several initiatives to shore up capital. The bank wants to develop and have ready multiple capital raising alternatives, so that it can continue to exceed the regulatory designation of well-capitalized.
Like many financial institutions across the US, Citizens has been impacted by deteriorating economic conditions. As a result, it believes that additional capital is necessary to withstand the effects of increased economic stress and uncertainty over the coming years.
However, Citizens currently has an insufficient number of authorized but un-issued shares available to proactively raise capital, if deemed necessary. Therefore, Citizens believes it is necessary to take steps now to authorize additional shares in order to have sufficient shares to meet future well-capitalized levels in a further stressed environment.
Citizens is considering capital raising initiatives like converting up to $125 million of outstanding debt to common stock, an offer to exchange shares of common stock for outstanding trust preferred securities traded on the NYSE. The bank also plans to take the US Treasury help to the tune of $290, million under the Capital Assistance Program.
Citizens Republic Bancorp is a diversified financial services company providing commercial, consumer, mortgage banking, trust and financial planning services.
