Citizens Republic Bancorp to get $300 mln from US

The Flint, Mich.-based bank holding company said the U.S. Treasury gave preliminary approval to the investment, which will boost its Tier 1 capital ratio--a key measure of financial strength--to 13.85 percent from 10.88 percent on a pro forma basis.

"We believe this approval represents a strong vote of confidence in Citizens, as only safe and sound financial institutions are being approved," said William Hartman, chairman, president and chief executive, in a statement.

Citizens said it expects the U.S. Treasury to buy senior preferred shares that pay a 5 percent dividend for the first five years and 9 percent thereafter until the company redeems the securities. The preferred shares will be callable at par after three years.

The government also is expected to get 10-year warrants for common shares, with an exercise price based on the average of 20 trading days following the issuance of the preferred shares and warrants.

Citizens Republic has 233 offices and operates Citizens Bank and F&M Bank. Shares of Citizens rose by 35 cents, or 16 percent, to $2.56 in the regular session Friday. In after-hours trading, the stock gained another 29 cents to $2.85.