Citizens Bancorp Announces First Quarter 2009 Financial Results

NEVADA CITY, Calif.--(Business Wire)--
Today, Citizens Bancorp (the "Company") (OTCBB: CZNB), the holding company of
Citizens Bank of Northern California (the "Bank"), announced financial results
for the three month period ended March 31, 2009.

Total assets for the Company as of March 31, 2009 were $376.2 million, an
increase of $32.7 million, or 10% from $343.6 million as of March 31, 2008.
Total loans for the Company as of March 31, 2009 were $319.4 million, no change
over March 31, 2008. Over the same period, deposits grew $38.6 million, or 14.6%
to $303.5 million at March 31, 2009 compared to $264.9 million at March 31,
2008.

The net loss for the quarter ended March 31, 2009 was $5.4 million, compared to
net income of $393 thousand for the same period in 2008. (Loss) or earnings per
diluted share for the three months ended March 31, 2009 and 2008, respectively,
were ($2.81) and $0.20, respectively. Earnings per share for 2008 have been
adjusted to reflect the 5% stock dividend declared in June 2008. The decrease in
net income in first quarter 2009 compared to first quarter 2008 was attributed
primarily to an increase in the provision for loan losses and a write-down in
the carrying value of the Bank`s real estate owned property. President/Chief
Executive Officer, Judy Hess said, "The increase in the provision for loan
losses and the write-down in the estimated value of the Bank`s real estate owned
property recognizes current real estate market conditions, and our commitment to
actively monitor the loan portfolio and maintain adequate reserves for probable
losses, and recognize loan losses when necessary." During the three months ended
March 31, 2009 the Company recorded a provision for loan losses of $8.5 million
compared to $650 thousand during the same period in the prior year. Hess
continued, "Senior lending personnel are proactively working with our borrowers
in an effort to reduce the current level of non-accrual loans." At March 31,
2009, December 31, 2008, and March 31, 2008, the allowance for loan losses as a
percent of non-accrual loans totaled 74%, 58% and 34%, respectively.

Net interest income was $3.69 million for the three month period ended March 31,
2009, an increase of $27,000, or 1% as compared to $3.66 million for the same
period in 2008. The Bank`s net interest margin dropped from 4.65% in the three
month period ended March 31, 2008 to 4.40% in the three month period ended March
31, 2009. The compressed net interest margin, caused primarily by lower interest
rates and forgone interest on non-accrual and restructured loans, was partially
mitigated by growth in earning assets and improved cost of funds during the
period. Forgone interest on non-accrual and restructured loans negatively
affected the net interest margin by 0.66%. That was mitigated by 0.95%
improvement in the cost of funds. Average earning assets for the three months
ended March 31, 2009 grew by $23.1 million to $339.7 million compared to $316.6
million for the same period in 2008.

The increase in non-interest expense of $1,671,000, was primarily the result of
a $1,538,000 write-down of the carrying value of other real estate owned,
$116,000 in other costs associated with the holding and disposition of other
real estate owned, increased FDIC insurance premiums of $131,000, and a net
increase in other expenses of $53,000, partially offset by lower personnel and
occupancy costs of $149,000 and $18,000, respectively.

Founded in February 1995, Citizens Bank, headquartered in Nevada City, became a
wholly owned subsidiary of the Company in 2003. In addition to the Auburn branch
in Placer County, the Bank has six other branches in communities throughout
Nevada County, including Nevada City, Grass Valley, Penn Valley, Lake of the
Pines, and Truckee. The Bank offers community banking services, including a wide
variety of deposit products, commercial, residential and consumer loans, and
other traditional banking products and services, designed to meet the needs of
small and middle market businesses and individuals.

This release may contain certain forward-looking statements that are based on
management`s current expectations regarding economic, legislative, and
regulatory issues that may impact the Company`s earnings in future
periods.Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts.They often include the words
"believe", "expect", "intend", "estimate" or words of similar meaning, or future
or conditional verbs such as "will", "would", "should", "could" or "may".Factors
that could cause future results to vary materially from current management
expectations include, but are not limited to, general economic conditions,
changes in interest rates, deposit flows, real estate values, and competition;
changes in accounting principles, policies or guidelines; changes in legislation
or regulation; and other economic, competitive, governmental, regulatory and
technological factors affecting the Bank`s operations, pricing, products and
services.These and other important factors are detailed in various Federal
Deposit Insurance Corporation filings made periodically by the Bank, copies of
which are available from the Bank without charge.The Company or the Bank
undertakes no obligation to release publicly the result of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date of this press release or to reflect the occurrence
of unanticipated events.

Citizens Bancorp
Selected Financial Highlights

(In thousands, except per share data) 3 months 3 months Change
(Unaudited) ended ended %
3/31/09 3/31/08
Net interest income $3,689 $3,662 1%
Provision for loan losses 8,500 650 1,208%
Total non-interest income 544 568 (4%)
Total non-interest expense 4,593 2,921 57%
Net (loss) income (5,281) 393 (1,444%)
Dividends and discount accretion on preferred stock (108) 0
Net (loss) income available to common shareholders ($5,389) $393 (1,471%)

Weighted average shares outstanding: (1)
Basic 1,916 1,913
Diluted 1,916 1,927
(Loss) Earnings Per Share: (1)
Basic ($2.81) $0.21
Diluted ($2.81) $0.20

RATIOS & OTHER INFORMATION:
Annualized return on average assets (5.72%) 0.47%
Annualized return on average equity (75.97%) 7.27%
Net interest margin 4.40% 4.64%
Efficiency ratio 108.51% 69.06%
Net charge-offs as % of total loans 2.37% 0.61%
Non-performing assets as % of total avg. assets 5.03% 2.40%
Avg. earning assets $339,678 $316,614

As of As of Change
3/31/09 3/31/08 %
Shareholders` equity $25,510 $21,889 17%
Shares outstanding (end of period) (1) 1,916 1,822
Book and tangible book value per common share (1) $13.31 $12.01
Tier 1 leverage capital ratio 9.05% 8.65%
Tangible equity/tangible assets 9.00% 6.37%
Total risk based capital ratio 12.83% 11.18%

Number of full service banking offices 7 7
Number of full-time equivalent employees 85 85

(1) Share and per share information has been retroactively adjusted for 5% stock dividend in June 2008.

CITIZENS BANCORP
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CONDITION
At March 31, 2009 and 2008 and December 31, 2008
(In thousands, except share data)
March 31, 2009 March 31, 2008 December 31, 2008
Assets
Cash and due from banks $27,188 $6,716 $7,049
Federal funds sold 7,285 3,350 25,260
Total cash and cash equivalents 34,473 10,066 32,309

Interest-bearing deposits in other banks 410 150 519
Investment securities 2,185 1,302 1,161
Loans 319,366 319,432 323,170
Allowance for loan losses (8,068) (2,654) (7,177)
Net loans 311,298 316,778 315,993
Premises and equipment, net 1,938 2,509 2,073
Cash surrender value of bank-owned life insurance 5,959 5,752 5,907
Other real estate owned 7,929 280 6,195
Interest receivable and other assets 12,057 6,746 8,694
Total Assets $376,249 $343,583 $372,851

Liabilities and Shareholders` Equity

Liabilities
Deposits
Non-interest bearing $66,131 $61,744 $65,218
Interest bearing 237,338 203,129 234,540
Total deposits 303,469 264,873 299,758
Federal funds purchased and Federal Home Loan Bank borrowings 28,000 37,800 23,000
Junior subordinated debentures 15,465 15,465 15,465
Interest payable and other liabilities 3,805 3,556 3,755
Total Liabilities 350,739 321,694 341,978

Shareholders` Equity
Preferred stock 10,395 0 10,369
Common stock, no par value 14,379 12,975 14,374
Retained earnings 734 8,913 6,123
Accumulated other comprehensive loss, net 2 1 7
Total Shareholders` Equity 25,510 21,889 30,873

Total Liabilities and Shareholders` Equity $376,249 $343,583 $372,851

CITIZENS BANCORP
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended March 31, 2009 and 2008
(In thousands, except share data)
Three months ended Three months ended
March 31, 2009 March 31, 2008
Interest Income
Interest and fees on loans $4,955 $5,576
Interest on investment securities 13 2
Interest on federal funds sold 5 33
Interest on deposits in banks 0 1
Total Interest Income 4,973 5,612

Interest Expense
Interest on interest-bearing deposits 1,043 1,503
Interest on borrowings 106 183
Interest on junior subordinated debentures 135 264
Total Interest Expense 1,284 1,950

Net Interest Income 3,689 3,662

Provision for loan losses 8,500 650
Net Interest (Loss) Income After Provision for Loan Losses (4,811) 3,012

Non-Interest Income
Service charges on deposit accounts 285 284
Mortgage brokerage fees 123 197
Other income 136 87
Total Non-Interest Income 544 568

Non-Interest Expense
Salaries and employee benefits 1,332 1,481
Occupancy and equipment 443 461
Other expense 2,818 979
Total Non-Interest Expense 4,593 2,921

(Loss) Income Before Provision for Income Tax (8,860) 659

(Benefit from) provision for income taxes (3,579) 266
Net (Loss) Income ($5,281) $ 393
Dividends and discount accretion on preferred stock (108) 0
Net (Loss) Income Available to Common Shareholders ($5,389) $ 393

Net (loss) income per common share (1)
Basic ($2.81) $0.21
Diluted ($2.81) $0.20
(1) Restated for the 5% stock dividend in June 2008.

Citizens Bancorp
Judy Hess, 530-470-2804
President/CEO

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