CFS Bancorp, Inc. Announces Financial Results for the Second Quarter 2008

MUNSTER, IN, Jul 31 (MARKET WIRE) --
CFS Bancorp, Inc. (NASDAQ: CITZ) (the Company), the parent of Citizens
Financial Bank (the Bank), today reported a net loss of $2.3 million for
the second quarter of 2008, or $(0.22) per share, as a result of a $7.2
million provision for losses on loans and a $582,000 other-than-temporary
impairment charge related to FNMA (Fannie Mae) and FHLMC (Freddie Mac)
preferred stock which combined reduced net income by $4.9 million and
reduced diluted earnings per share by $0.46. Net income for the second
quarter of 2007 totaled $2.3 million with diluted earnings per share of
$0.21. For the six months ended June 30, 2008, the Company's net loss was
$516,000 resulting in a loss per share of $0.05 compared to net income of
$3.6 million and diluted earnings per share of $0.33 for the 2007 period.

The Company's second quarter of 2008 highlights included the following:

-- risk-based capital ratio improved to 14.48% from 14.06%;
-- ratio of allowance for losses on loans to total loans increased to
1.43% from 1.09%;
-- net interest margin benefited from lower interest rates and expanded
to 3.26% from 3.21%;
-- provision for the allowance for losses on loans increased to $7.2
million in response to deteriorating collateral values underlying non-
performing loans; and
-- impairments on other-than-temporarily impaired securities totaled
$582,000 related to investments in Fannie Mae and Freddie Mac preferred
stock.

Chairman's Comments

"We are pleased that our capital and liquidity remain strong, demand for
commercial and industrial loans is continuing to increase and our
branching expansion continues at a measured pace; however, our quarterly
results are reflective of the extraordinary market conditions created by
the lack of activity in housing and residential land development," said
Thomas F. Prisby, Chairman and CEO. "Like our peers, we are facing an
increase in non-performing loans and provisions for losses on loans
resulting from deteriorating real estate valuations. We have undertaken a
review of our non-performing construction and land development loan
portfolio which resulted in partial charge-offs of specific collateral
dependent loans due to lower collateral values. While we believe our
allowance for losses on loans and impairment write-downs are adequate at
this time, there can be no assurance that market conditions will not
further deteriorate requiring us to make additional loss provisions.
While some in the industry are raising capital to support the
deteriorating credit conditions in their loan portfolios, our capital
position remains strong as our total risk-based and Tier 1 capital ratios
were 14.48% and 10.32%, respectively, which are well above the regulatory
minimum requirements of 10% and 5% to be deemed 'well-capitalized.' We
anticipate that our strong capital ratios will allow us to continue to
pay dividends in the future at the current dividend level."

Mr. Prisby continued, "During the second quarter, we added eight new
Business Bankers led by recently hired Executive Vice President - Business
Banking, Dale Clapp, to accelerate the diversification of our loan
portfolio and to increase our business deposits. This group has 154 years
of combined banking experience in our existing markets and will focus on
building our market presence within the Business Banking segment. Since
joining our team, our commercial and industrial loan pipeline has
increased to $21.3 million at June 30, 2008. We look forward to future
growth throughout 2008 in business loans and deposits as a result of the
new additions."

Net Interest Income

The net interest margin increased 5 basis points to 3.26% for the second
quarter of 2008 compared to 3.21% for the first quarter of 2008 and
increased 25 basis points compared to 3.01% for the second quarter of
2007. The Company's net interest income increased to $8.7 million for the
second quarter of 2008 compared to $8.6 million for the first quarter of
2008 and $8.6 million for the second quarter of 2007. The increase was
primarily a result of a decrease in the Company's cost of funds.

Interest income decreased to $15.0 million for the second quarter of 2008
compared to $16.3 million for the first quarter of 2008 and $18.5 million
for the second quarter of 2007. Interest income during the second quarter
of 2008 was negatively impacted by the increase in non-performing loans
and the downward repricing of our adjustable rate loans. The decrease
from the first quarter of 2008 was primarily related to a decrease of 48
basis points in the weighted-average yield earned on interest-earning
assets. The decrease from the second quarter of 2007 was a combination of
a 7.0% decrease in the average balance of interest-earning assets and a
decrease of 80 basis points in the weighted-average yield earned on
interest-earning assets resulting from lower interest rates.

Interest expense decreased 18.2% to $6.3 million for the second quarter of
2008 from $7.7 million for the first quarter of 2008 and 35.7% from $9.8
million for the second quarter of 2007. The decrease from the first
quarter of 2008 was primarily related to a 59 basis point decrease in the
Company's weighted-average cost of interest-bearing liabilities. The
Company's deposits and short-term borrowings were positively impacted by
decreases in interest rates during 2008. The decrease from the second
quarter of 2007 was the result of a 7.1% decrease in the average balances
of interest-bearing liabilities and a 119 basis point decrease in the
Company's weighted-average cost of interest-bearing liabilities resulting
from lower interest rates and decreases in the amortization of the
deferred premium on the early extinguishment of Federal Home Loan Bank
(FHLB) debt.

The Company's cost of borrowings decreased to 4.88% for the second quarter
of 2008 compared to 5.25% for the first quarter of 2008 and 6.73% for the
second quarter of 2007. The decreases were primarily the result of
decreases in the amortization of the deferred premium on the early
extinguishment of FHLB debt which is included in total interest expense on
borrowings, and the lower average balances of FHLB debt. The premium
amortization adversely impacted the Company's net interest margin by 17
basis points, 20 basis points and 44 basis points, respectively, for the
second quarter of 2008, the first quarter of 2008 and the second quarter
of 2007. The Company's interest expense on borrowings is detailed in the
tables below for the periods indicated.

Change from
Three Months Ended June 30, 2007
-------------------------------- to June 30, 2008
June 30, March 31, June 30, -------------------
2008 2008 2007 $ %
---------- ---------- ---------- --------- --------
(Dollars in thousands)
Interest expense on
short-term
borrowings at
contractual rates $ 124 $ 114 $ 197 $ (73) (37.1)%
Interest expense on
FHLB borrowings at
contractual rates 1,208 1,420 1,754 (546) (31.1)
Amortization of
deferred premium 449 527 1,276 (827) (64.8)
---------- ---------- ---------- ---------
Total interest
expense on
borrowings $ 1,781 $ 2,061 $ 3,227 $ (1,446) (44.8)
---------- ---------- ---------- ---------

The interest expense related to the premium amortization on the early
extinguishment of debt continues to have a smaller impact on the Company's
weighted-average cost of interest-bearing liabilities and is expected to
be $270,000, $206,000, $72,000 and $61,000 before taxes in the quarters
ending September 30, and December 31, 2008 and March 31, and June 30,
2009, respectively.

Non-Interest Income and Non-Interest Expense

The Company's non-interest income for the first quarter of 2008 decreased
to $2.0 million from $2.5 million for the first quarter of 2008 and $2.7
million for the second quarter of 2007. The decrease during the second
quarter of 2008 was primarily the result of a $582,000
other-than-temporary impairment charge on investments in Fannie Mae and
Freddie Mac preferred stock. At June 30, 2008, the Company's book value
in these securities after the impairment charge was $3.7 million.

Non-interest expense for the second quarter of 2008 decreased to $7.7
million compared to $8.0 million for the first quarter of 2008 and $8.1
million for the second quarter of 2007. Compensation and employee benefits
expense for the second quarter included a $283,000 decrease in expense
related to the Company's deferred compensation plans resulting from a
decrease in the Company's stock price at June 30, 2008 compared to prior
periods. In addition, the Company's office and premises expense decreased
$125,000 from the first quarter of 2008 as a result of the reduced office
and premises maintenance including snow removal. Non-interest expense
decreased from the second quarter of 2007 primarily as a result of a
decrease in compensation and employee benefits expense including a
$226,000 decrease in deferred compensation as discussed above. In
addition, professional fees during the second quarter of 2008 decreased
by $178,000 as a result of the absence of consulting fees incurred during
the second quarter of 2007 related to the Company's customer-centric
relationship management program and legal fees associated with the
Company's modification of its benefit plans during 2007.

The Company's efficiency ratio for the second quarter of 2008 was 72.2%
compared to 72.5% for the first quarter of 2008 and 71.2% for the second
quarter of 2007. The Company's core efficiency ratios were 65.8%, 69.7%
and 64.0% for the same periods. The Company's core efficiency ratio for
the second quarter of 2008 was positively impacted by lower non-interest
expense. This positive impact was partially offset by the adjustment of
lower amortization of the deferred premium on the early extinguishment of
debt when compared to the prior periods. The efficiency ratio and the core
efficiency ratio calculations are presented in the last table of this
press release.

Management has historically used an efficiency ratio that is a non-GAAP
financial measure of operating expense control and operating efficiency.
The efficiency ratio is typically defined as the ratio of non-interest
expense to the sum of non-interest income and net interest income. Many
financial institutions, in calculating the efficiency ratio, adjust
non-interest income (as calculated under GAAP) to exclude certain
component elements, such as gains or losses on sales of securities and
assets. Management follows this practice to calculate our core efficiency
ratio and utilizes this non-GAAP measure in its analysis of the Company's
performance. The core efficiency ratio is different from the GAAP-based
efficiency ratio. The GAAP-based measure is calculated using non-interest
expense, net interest income and non-interest income as presented on the
consolidated statements of income.

The Company's core efficiency ratio is calculated as non-interest expense
divided by the sum of net interest income, excluding the deferred premium
amortization related to the early extinguishment of debt, and non-interest
income, adjusted for gains or losses on the sale of securities and other
assets. Management believes that the core efficiency ratio enhances
investors' understanding of the Company's business and performance. The
measure is also believed to be useful in understanding the Company's
performance trends and to facilitate comparisons with the performance of
others in the financial services industry. Management further believes the
presentation of the core efficiency ratio provides useful supplemental
information, a clearer understanding of the Company's financial
performance, and better reflects the Company's core operating activities.

The risks associated with utilizing operating measures (such as the
efficiency ratio) are that various persons might disagree as to the
appropriateness of items included or excluded in these measures and that
other companies might calculate these measures differently. Management of
the Company compensates for these limitations by providing detailed
reconciliations between GAAP information and its core efficiency ratio
within the last table of this press release; however, these disclosures
should not be considered as an alternative to GAAP.

Asset Quality

The Company's provision for losses on loans increased to $7.2 million for
the second quarter of 2008 compared to $742,000 for the first quarter of
2008 and $126,000 for the second quarter of 2007. The increased provision
for the second quarter reflects deteriorating market conditions and lack
of activity in housing and land development. Net charge-offs for the
second quarter of 2008 totaled $5.1 million which included partial
charge-offs of $2.7 million related to three construction and land
development loans that previously totaled $13.1 million in the aggregate
and $2.4 million on a multi-tenant commercial real estate loan that
previously totaled $3.1 million.

The Company's non-performing assets totaled $35.7 million at June 30,
2008, $30.8 million at December 31, 2007 and $29.8 million at June 30,
2007. Non-performing assets increased during the six months ended June
30, 2008 primarily due to the transfer to non-accrual status of three
impaired construction and land development loans totaling $9.9 million in
the aggregate. This increase was partially offset by the aforementioned
charge-offs. At June 30, 2008, the Company's non-performing construction
and land development loans represented 68.1% of its total non-performing
loans. The ratio of total non-performing assets to total assets was 3.24%,
2.67% and 2.48%, respectively at June 30, 2008, December 31, 2007 and June
30, 2007.

The Company's allowance for losses on loans was $10.4 million at June 30,
2008, $8.0 million at December 31, 2007 and $10.6 million at June 30,
2007. The allowance for losses on loans to total loans increased to 1.43%
at June 30, 2008 from 1.01% and 1.31%, respectively, at December 31, 2007
and June 30, 2007. The decrease in the allowance from June 30, 2007
related to the charge-off of $4.0 million of impairment reserves related
to $12.8 million of loans sold during the fourth quarter 2007 which was
partially offset by the increase in the provision during the second
quarter of 2008 as previously discussed. The Company maintains the
allowance for losses on loans at a level that management believes is
sufficient to absorb credit losses inherent in the loan portfolio. The
allowance for losses on loans represents management's estimate of
inherent losses existing in the loan portfolio that are both probable and
reasonable to estimate at each balance sheet date and is based on its
review of available and relevant information. Management believes that at
June 30, 2008 the allowance for losses on loans was adequate based on its
recent review of specific loans, historical loss experience, levels of
delinquencies, economic conditions and the review of other available and
relevant information.

Balance Sheet

At June 30, 2008, the Company's total assets were $1.10 billion compared
to $1.15 billion at December 31, 2007.

The Company's loans receivable decreased 8.3% to $726.9 million at June
30, 2008 from $793.1 million at December 31, 2007. During the second
quarter of 2008, the Company had total loan fundings of $50.0 million
which were offset by $88.1 million of loan repayments and sales. Of the
total loan repayments, over $47.4 million were paydowns of 13 large
commercial real estate loans and $15.6 million were paydowns of two loans
to local municipalities. The Company continues to shift its focus from
large dollar loans collateralized by commercial real estate and
commercial real estate participations to commercial and industrial loans
which are secured by business assets. In addition, the Company also
reduced loans receivable through $5.6 million of charge-offs for the six
months ended June 30, 2008.

Securities available-for-sale totaled $262.0 million at June 30, 2008
compared to $224.6 million at December 31, 2007. During the first quarter
of 2008, the Company took advantage of a steepening yield curve and market
imbalances by borrowing $30.0 million and investing the funds in higher
yielding securities.

Deposits decreased to $848.4 million at June 30, 2008 from $863.3 million
at December 31, 2007. The decrease was primarily a result of a $24.9
million decrease in certificates of deposit due to the managed run-off of
single-service high-rate certificates. Partially offsetting this decrease
was an increase of $19.8 million in money market deposits which was
primarily related to an increase in retail money market accounts.

The Company's borrowed money decreased to $113.1 million at June 30, 2008
from $135.5 million at December 31, 2007. During the second quarter of
2008, the Company repaid $40.0 million of maturing FHLB borrowings
utilizing its excess liquidity from loan repayments. The Company's
borrowed money consisted of the following as of the dates indicated:

June 30, December 31,
2008 2007
----------- -----------
(Dollars in thousands)
Short-term variable-rate borrowings and
repurchase Agreements $ 25,785 $ 24,014
Gross FHLB borrowings 87,995 113,072
Unamortized deferred premium (651) (1,627)
----------- -----------
Total borrowed money $ 113,129 $ 135,459
----------- -----------

Stockholders' equity at June 30, 2008 was $124.8 million compared to
$130.4 million at December 31, 2007. The decrease during the six months
ended June 30, 2008 was primarily due to:

-- repurchases of shares of the Company's common stock during 2008
totaling $3.0 million;
-- cash dividends declared during 2008 totaling $2.5 million;
-- a decrease in accumulated other comprehensive income of $803,000; and
-- a net loss of $516,000.

During the six months ended June 30, 2008, the Company repurchased
208,113 shares of its common stock at an average price of $14.40 per
share, of which 81,388 were purchased pursuant to the repurchase plan
approved in March 2008. At June 30, 2008, the Company had 448,612 shares
remaining to be repurchased under this plan. Since its initial public
offering, the Company has repurchased an aggregate of 14,054,160 shares
of its common stock at an average price of $12.23 per share.

The regulatory capital ratios of the Bank continued to exceed all
regulatory requirements. At June 30, 2008, the Bank remained
"well-capitalized" under the Office of Thrift Supervision's regulatory
capital guidelines with a total capital to risk-weighted assets equal to
14.48% compared to 13.93% at December 31, 2007.

CFS Bancorp, Inc. is the parent of Citizens Financial Bank, a $1.1 billion
asset federal savings bank. Citizens Financial Bank is an independent bank
that provides business and personal banking services and currently
operates 22 offices throughout adjoining markets in Chicago's Southland
and Northwest Indiana. The Company maintains a website at www.citz.com.

This press release contains certain forward-looking statements and
information relating to the Company that is based on the beliefs of
management as well as assumptions made by and information currently
available to management. These forward-looking statements include but are
not limited to statements regarding interest rate environment, credit
environment, earnings and per share data, dividends, efficiency ratio
levels, loan and deposit growth, diversifying the loan portfolio,
non-performing asset levels, interest on loans, asset yields and cost of
funds, net interest income, net interest margin, effect of the prime
lending rate, non-interest income, non-interest expense and the expected
effect of amortization of deferred premium on the FHLB debt. In addition,
the words "anticipate," "believe," "estimate," "expect," "indicate,"
"intend," "should," and similar expressions, or the negative thereof, as
they relate to the Company or the Company's management, are intended to
identify forward-looking statements. Such statements reflect the current
views of the Company with respect to future events and are subject to
certain risks, uncertainties and assumptions. One or more of these risks
may vary materially from those described herein as anticipated, believed,
estimated, expected or intended. The Company does not intend to update
these forward-looking statements.

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA FOLLOW

CFS BANCORP, INC.
Highlights (Unaudited)
(Dollars in thousands, except per share data)

EARNINGS HIGHLIGHTS AND
PERFORMANCE RATIOS (1) Three Months Ended
-------------------------------------------
June 30, 2008 March 31, 2008 June 30, 2007
------------- -------------- --------------
Net income/(loss) $ (2,295) $ 1,779 $ 2,281
Basic earnings/(loss) per
share (0.22) 0.17 0.22
Diluted earnings/(loss) per
share (0.22) 0.17 0.21
Cash dividends declared per
share 0.12 0.12 0.12
Return on average assets (0.80)% 0.62% 0.74%
Return on average equity (7.08) 5.41 7.05
Average yield on
interest-earning assets 5.64 6.12 6.44
Average cost on
interest-bearing liabilities 2.69 3.28 3.88
Interest rate spread 2.95 2.84 2.56
Net interest margin 3.26 3.21 3.01
Average equity to average
assets (2) 11.29 11.38 10.56
Average interest-earning
assets to average
interest-bearing
liabilities (2) 113.17 112.68 113.01
Non-interest expense to
average assets 2.68 2.78 2.63
Efficiency ratio (3) 72.17 72.53 71.21
Market price per share of
common stock for the period
ended: Closing $ 11.79 $ 14.37 $ 14.55
High 14.93 14.70 15.12
Low 11.42 13.33 14.53

STATEMENT OF CONDITION
HIGHLIGHTS June 30, March 31,
(at period end) 2008 2008
-------------- --------------
Total assets $ 1,102,773 $ 1,194,076
Loans receivable, net of
unearned fees 726,858 765,476
Total deposits 848,439 879,543
Total stockholders' equity 124,776 131,791
Book value per common share 11.70 12.34
Non-performing loans 34,670 30,259
Non-performing assets 35,742 31,297
Allowance for losses on loans 10,403 8,347
Non-performing loans to total
loans 4.77% 3.95%
Non-performing assets to total
assets 3.24 2.62
Allowance for losses on loans
to non-performing loans 30.01 27.59
Allowance for losses on loans
to total loans 1.43 1.09

Employees (FTE) 307 297
Branches and offices 22 22

Three Months Ended
-------------------------------------------
AVERAGE BALANCE DATA June 30, 2008 March 31, 2008 June 30, 2007
------------- -------------- --------------
Total assets $ 1,154,656 $ 1,161,900 $ 1,230,115
Loans receivable, net of
unearned fees 743,097 786,877 808,331
Total interest-earning assets 1,071,384 1,072,273 1,151,726
Total liabilities 1,024,238 1,029,654 1,100,252
Total deposits 863,865 858,460 894,184
Interest-bearing deposits 802,249 796,435 829,467
Non-interest bearing deposits 61,616 62,025 64,717
Total interest-bearing
liabilities 946,712 951,602 1,019,112
Stockholders' equity 130,418 132,246 129,863

EARNINGS HIGHLIGHTS AND
PERFORMANCE RATIOS (1) Six Months Ended
----------------------------
June 30, 2008 June 30, 2007
------------- --------------
Net income/(loss) $ (516) $ 3,594
Basic earnings/(loss) per
share (0.05) 0.34
Diluted earnings/(loss) per
share (0.05) 0.33
Cash dividends declared per
share 0.24 0.24
Return on average assets (0.09)% 0.58%
Return on average equity (0.79) 5.55
Average yield on
interest-earning assets 5.88 6.43
Average cost on
interest-bearing liabilities 2.98 3.89
Interest rate spread 2.90 2.54
Net interest margin 3.24 2.97
Average equity to average
assets (2) 11.34 10.50
Average interest-earning
assets
to average interest-bearing
liabilities (2) 112.92 112.66
Non-interest expense to
average assets 2.73 2.81
Efficiency ratio (3) 72.35 77.17
Market price per share of
common stock
for the period ended: Closing $ 11.79 $ 14.55
High 14.93 15.12
Low 11.42 14.48

STATEMENT OF CONDITION
HIGHLIGHTS December 31, June 30,
(at period end) 2007 2007
------------- --------------
Total assets $ 1,150,278 $ 1,202,892
Loans receivable, net of
unearned fees 793,136 808,132
Total deposits 863,272 887,814
Total stockholders' equity 130,414 128,290
Book value per common share 12.18 11.83
Non-performing loans 29,600 29,172
Non-performing assets 30,762 29,804
Allowance for losses on loans 8,026 10,624
Non-performing loans to total
loans 3.73 % 3.61%
Non-performing assets to total
assets 2.67 2.48
Allowance for losses on loans
to non-performing loans 27.11 36.42
Allowance for losses on loans
to total loans 1.01 1.31

Employees (FTE) 303 322
Branches and offices 22 22

Six Months Ended
----------------------------
AVERAGE BALANCE DATA June 30, 2008 June 30, 2007
------------- --------------
Total assets $ 1,158,015 $ 1,243,160
Loans receivable, net of
unearned fees 764,986 801,132
Total interest-earning assets 1,071,827 1,165,475
Total liabilities 1,026,683 1,112,681
Total deposits 861,163 899,572
Interest-bearing deposits 799,343 837,458
Non-interest bearing deposits 61,820 62,114
Total interest-bearing
liabilities 949,158 1,034,549
Stockholders' equity 131,332 130,479

(1) Ratios are annualized where appropriate.
(2) Ratios calculated on average balances for the periods presented.
(3) See calculations in the last table of this press release.

CFS BANCORP, INC.
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)

For the Six Months
For the Three Months Ended Ended
---------------------------------- ----------------------
June 30, March 31, June 30, June 30, June 30,
2008 2008 2007 2008 2007
---------- ----------- ---------- ---------- -----------
Interest
income:
Loans $ 11,296 $ 12,788 $ 14,404 $ 24,084 $ 28,456
Securities 3,172 3,079 3,475 6,251 6,998
Other 564 447 605 1,011 1,681
---------- ----------- ---------- ---------- -----------
Total
interest
income 15,032 16,314 18,484 31,346 37,135
Interest
expense:
Deposits 4,554 5,688 6,619 10,242 13,313
Borrowings 1,781 2,061 3,227 3,842 6,660
---------- ----------- ---------- ---------- -----------
Total
interest
expense 6,335 7,749 9,846 14,084 19,973
---------- ----------- ---------- ---------- -----------
Net interest
income 8,697 8,565 8,638 17,262 17,162
Provision for
losses on
loans 7,172 742 126 7,914 313
---------- ----------- ---------- ---------- -----------
Net interest
income after
provision for
losses on
loans 1,525 7,823 8,512 9,348 16,849

Non-interest
income:
Service
charges and
other fees 1,465 1,439 1,670 2,904 3,239
Card-based
fees 415 380 380 795 722
Commission
income 135 58 36 193 67
Security gains
(losses), net (582) 69 (1) (513) 10
Other assets
gains
(losses), net (3) - (1) (3) 10
Income from
bank-owned
life
insurance 371 409 403 780 808
Other income 149 172 206 321 446
---------- ----------- ---------- ---------- -----------
Total
non-
interest
income 1,950 2,527 2,693 4,477 5,302

Non-interest
expense:
Compensation
and employee
benefits 4,179 4,336 4,407 8,515 9,662
Net occupancy
expense 708 833 694 1,541 1,447
Furniture and
equipment
expense 543 551 566 1,094 1,100
Data
processing 484 458 566 942 1,129
Professional
fees 212 274 390 486 960
Marketing 178 208 190 386 401
Other general
and
administrative
expenses 1,380 1,385 1,256 2,765 2,637
---------- ----------- ---------- ---------- -----------
Total
non-
interest
expense 7,684 8,045 8,069 15,729 17,336
---------- ----------- ---------- ---------- -----------
Income/(loss)
before income
taxes (4,209) 2,305 3,136 (1,904) 4,815
Income tax
expense/
(benefit) (1,914) 526 855 (1,388) 1,221
---------- ----------- ---------- ---------- -----------
Net income/
(loss) $ (2,295) $ 1,779 $ 2,281 $ (516) $ 3,594
========== =========== ========== ========== ===========

Per share data:
Basic
earnings/
(loss) per
share $ (0.22) $ 0.17 $ 0.22 $ (0.05) $ 0.34
Diluted
earnings/
(loss) per
share $ (0.22) $ 0.17 $ 0.21 $ (0.05) $ 0.33
Cash
dividends
declared per
share $ 0.12 $ 0.12 $ 0.12 $ 0.24 $ 0.24
Weighted-
average
shares
outstanding 10,290,965 10,387,292 10,591,194 10,339,129 10,658,477
Weighted-
average
diluted
shares
outstanding 10,553,634 10,658,026 10,903,740 10,605,830 10,969,991

CFS BANCORP, INC.
Consolidated Statements of Condition (Unaudited)
(Dollars in thousands)

June 30, March 31, December 31, June 30,
2008 2008 2007 2007
----------- ----------- ----------- -----------
ASSETS
Cash and amounts due
from depository
institutions $ 15,824 $ 17,314 $ 25,825 $ 19,614
Interest-bearing
deposits 4,527 55,078 9,744 8,617
Federal funds sold 492 14,922 3,340 8,796
----------- ----------- ----------- -----------
Cash and cash
equivalents 20,843 87,314 38,909 37,027
Securities
available-for-sale, at
fair value 261,985 247,380 224,594 270,404
Securities
held-to-maturity, at
cost 3,500 3,940 3,940 -
Investment in Federal
Home Loan Bank stock,
at cost 23,944 23,944 23,944 23,944
Loans receivable, net
of unearned fees 726,858 765,476 793,136 808,132
Allowance for losses
on loans (10,403) (8,347) (8,026) (10,624)
----------- ----------- ----------- -----------
Net loans 716,455 757,129 785,110 797,508
Interest receivable 4,660 5,035 5,505 7,106
Other real estate owned 1,072 1,038 1,162 632
Office properties and
equipment 19,822 19,760 19,326 19,008
Investment in
bank-owned life
insurance 36,090 36,884 36,475 35,652
Prepaid expenses and
other assets 14,402 11,652 11,313 11,611
----------- ----------- ----------- -----------
Total assets $ 1,102,773 $ 1,194,076 $ 1,150,278 $ 1,202,892
=========== =========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $ 848,439 $ 879,543 $ 863,272 $ 887,814
Borrowed money 113,129 163,295 135,459 170,952
Advance payments by
borrowers for taxes
and insurance 5,763 4,335 3,341 6,619
Other liabilities 10,666 15,112 17,792 9,217
----------- ----------- ----------- -----------
Total liabilities 977,997 1,062,285 1,019,864 1,074,602
Stockholders' Equity:
Preferred stock,
$0.01 par value;
15,000,000 shares
authorized - - - -
Common stock, $0.01
par value;
85,000,000 shares
authorized;
23,423,306 shares
issued; 10,668,489,
10,679,611,
10,705,510 and
10,845,740 shares
outstanding 234 234 234 234
Additional paid-in
capital 190,093 191,242 191,162 191,054
Retained earnings 93,994 97,547 97,029 95,616
Treasury stock, at
cost; 12,625,785,
12,609,251,
12,583,856 and
12,450,364 shares (155,843) (155,357) (154,895) (152,752)
Treasury stock,
Rabbi Trust, at
cost; 129,032,
134,444, 133,940
and 127,202 shares (1,705) (1,773) (1,766) (1,672)
Unallocated common
stock held by
Employee Stock
Ownership Plan (2,970) (3,048) (3,126) (3,282)
Accumulated other
comprehensive
income/(loss), net
of tax 973 2,946 1,776 (908)
----------- ----------- ----------- -----------
Total
stockholders'
equity 124,776 131,791 130,414 128,290
----------- ----------- ----------- -----------
Total
liabilities and
stockholders'
equity $ 1,102,773 $ 1,194,076 $ 1,150,278 $ 1,202,892
=========== =========== =========== ===========

CFS BANCORP, INC.
Efficiency Ratio Calculations (Unaudited)
(Dollars in thousands)

Three Months Ended
-----------------------------------------
June 30, March 31, June 30,
2008 2008 2007
------------- ------------ ------------

Efficiency Ratio:
Non-interest expense $ 7,684 $ 8,045 $ 8,069
============ =========== ===========

Net interest income plus
non-interest income $ 10,647 $ 11,092 $ 11,331
============ =========== ===========

Efficiency ratio 72.17% 72.53% 71.21%

Core Efficiency Ratio:
Non-interest expense $ 7,684 $ 8,045 $ 8,069
============ =========== ===========

Net interest income plus
non-interest income $ 10,647 $ 11,092 $ 11,331
Adjustments:
Net realized (gains)/losses
on sales of securities
available-for-sale 582 (69) 1
Net realized losses on
sales of assets 3 - 1
Amortization of deferred
premium 449 527 1,276
------------ ----------- -----------

Net interest income plus
non-interest income - as
adjusted $ 11,681 $ 11,550 $ 12,609
============ =========== ===========

Core efficiency ratio 65.78% 69.65% 63.99%

Six Months Ended
--------------------------
June 30, June 30,
2008 2007
------------ ------------

Efficiency Ratio:
Non-interest expense $ 15,729 $ 17,336
=========== ===========

Net interest income plus
non-interest income $ 21,739 $ 22,464
=========== ===========

Efficiency ratio 72.35% 77.17%

Core Efficiency Ratio:
Non-interest expense $ 15,729 $ 17,336
=========== ===========

Net interest income plus
non-interest income $ 21,739 $ 22,464
Adjustments:
Net realized (gains)/losses
on sales of securities
available-for-sale 513 (10)
Net realized (gains)/losses
on sales of assets 3 (10)
Amortization of deferred
premium 976 2,627
----------- -----------

Net interest income plus
non-interest income - as
adjusted $ 23,231 $ 25,071
=========== ===========

Core efficiency ratio 67.71% 69.15%

CONTACT:
Thomas F. Prisby
Chairman of the Board and Chief Executive Officer
219-836-2960

Copyright 2008, Market Wire, All rights reserved.

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