Citizens Banking to Buy Republic

Citizens Banking Corp., Flint, Mich., has agreed to purchase Republic Bancorp Inc., Ann Arbor, Mich., in a deal valued at $1.05 billion.While Republic is chartered as a commercial bank, analysts have noted that its primary line of business is mortgage banking. In 2004, Republic was the nation's 130th-largest mortgage lender, with volume of under $2 billion. As part of the transaction, the parties will sell $1 billion in mortgage loans and securities, along with liquidating $1 billion in wholesale funding and recording $20 million in credit-related adjustments. The moves are being done to improve the interest rate risk and credit risk positions at Citizens Republic, as the combination will be known.