Citizens Bancorp Announces Year-End and 4th Quarter 2007 Earnings

NEVADA CITY, Calif.--(Business Wire)--
Citizens Bancorp (the "Company") (OTCBB:CZNB), the holding company
of Citizens Bank of Northern California (the "Bank"), announced
financial results for the twelve month period ended December 31, 2007.
Net income was $2,585,000, down 15% from $3,034,000 in the same period
in 2006. The Company earned $1.39 and $1.65 per diluted share for the
twelve months ended December 31, 2007 and 2006, respectively. Earnings
per share for 2006 have been adjusted to reflect the 5% stock dividend
declared in May 2007.

For the three months ended December 31, 2007, net income totaled
$508,000, a 41% decrease compared to $858,000 for the same period in
2006. Diluted earnings per share were $0.27 and $0.46 respectively,
for the quarter ended December 31, 2007 and 2006.

Total assets for the Company, as a result of on-going growth
initiatives, grew to $328 million at December 31, 2007, an increase of
$48 million, or 17% from $280 million as of December 31, 2006. Total
loans for the Company as of December 31, 2007 were $305 million, an
increase of $46 million, or 18% compared to $259 million as of
December 31, 2006. Total deposits grew $31 million, or 13% to $274
million at December 31, 2007 compared to $243 million at December 31,
2006.

In commenting about the year's results, President/Chief Executive
Officer, Judy Hess said, "As anticipated, earnings this year were down
due primarily to the squeeze in the Bank's net interest margin caused
by increased funding costs and our continued branch expansion. In
addition, and to a lesser extent, earnings during 2007 were impacted
by interest foregone on non-accrual loans." She added, "While the Bank
does not have any loans in its portfolio that would be considered
sub-prime, a few of the Bank's borrowers who have obtained
construction financing from the Bank for the purpose of constructing
single family residences are experiencing a reduction in sales volume
and pricing due to the current real estate environment. The Bank's
credit quality has historically reflected our strong credit discipline
and as a result the Bank's loan losses to date have been low. In
addition to our continued monitoring of these loans, management has
established reserves that it believes will cover any potential losses
in the portfolio."

Hess continued, "We believe that the short-term impact of expenses
related to our two newest branches in Truckee and Auburn, are
supportive of the long-term strategic goals of the Company which
include building shareholder value. The management and employees of
the Bank will continue to monitor the financial needs of its customers
and deliver value added products and services beneficial to making
their banking experience easy and convenient."

Net interest income for the twelve months ended December 31, 2007,
was $14,294,000, an increase of $712,000, or 5% as compared to
$13,582,000 for the same period in 2006. The Company's net interest
margin dropped from 5.62% in the twelve month period ended December
31, 2006 to 5.05% for the twelve month period ended December 31, 2007.
The Company's net interest income and net interest margin were
impacted by higher costs of funds in the deposit base both from the
Bank's core interest-bearing deposits and from wholesale funding
sources. The Company had brokered deposits totaling $22 million as of
December 31, 2007 compared to $14 million at December 31, 2006.
Brokered deposits were utilized to fund loan growth. Also affecting
the change in net interest income year over year was the $6.2 million
increase in junior subordinated debentures during September of 2006
which increased the total of these debentures to $15.5 million. The
Company's use of Trust Preferred Securities, which help to increase
regulatory capital, has allowed for continued growth and expansion.

Founded in February 1995, Citizens Bank, headquartered in Nevada
City, became a wholly owned subsidiary of the Company in 2003. In
addition to the new 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 opening of the Auburn branch represents the Bank's first
physical entry into neighboring Placer County. 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.

www.citizensbanknc.com

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Citizens Bancorp
Selected Financial Highlights
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(In thousands, except share 3 months 3 months Change
and per share data) ended ended %
(Unaudited) 12/31/07 12/31/06
----------------------------------------------------------------------
Net interest income $ 3,643 $ 3,579 1.8%
Provision for loan loss 675 110 513.6%
Total non-interest income 571 470 21.5%
Total non-interest expense 2,776 2,507 10.7%
Net Income $ 508 $ 858 (40.8%)

Weighted average shares
outstanding: (1)
Basic 1,821,490 1,817,880
Diluted 1,848,950 1,863,839
Earnings Per Share: (1)
Basic $ 0.28 $ 0.47
Diluted $ 0.27 $ 0.46

RATIOS & OTHER INFORMATION:

FINANCIAL PERFORMANCE RATIOS:
Annualized return on average
assets 0.63% 1.23%
Annualized return on average
equity 9.02% 18.49%
Net interest margin 4.78% 5.48%
Efficiency ratio 65.87% 61.92%
Net charge-offs as % of total
loans

SELECTED AVERAGE BALANCES:
Avg. non-performing assets as
% of total assets 3.00% 0.00%
Avg. earning assets $ 302,467 $ 258,992
Avg. loans 299,804 255,298
Avg. assets 321,328 277,324
Avg. interest-bearing
liabilities 227,536 191,083
Avg. deposits 267,285 239,165
Avg. equity 22,341 18,424

(In thousands, except share 12 months 12 months Change
and per share data) ended ended %
(Unaudited) 12/31/07 12/31/06
----------------------------------------------------------------------
Net interest income $ 14,294 $ 13,582 5.2%
Provision for loan loss 945 560 68.8%
Total non-interest income 2,206 1,668 32.3%
Total non-interest expense 11,243 9,632 16.7%
Net Income $ 2,585 $ 3,034 (14.8%)

Weighted average shares
outstanding: (1)
Basic 1,820,854 1,805,285
Diluted 1,863,424 1,858,369
Earnings Per Share: (1)
Basic $ 1.42 $ 1.68
Diluted $ 1.39 $ 1.65

RATIOS & OTHER INFORMATION:

FINANCIAL PERFORMANCE RATIOS:
Annualized return on average
assets 0.86% 1.18%
Annualized return on average
equity 12.61% 17.67%
Net interest margin 5.05% 5.62%
Efficiency ratio 68.14% 63.16%
Net charge-offs as % of total
loans

SELECTED AVERAGE BALANCES:
Avg. non-performing assets as
% of total assets 1.08% 0.00%
Avg. earning assets $ 282,820 $ 241,566
Avg. loans 279,221 236,034
Avg. assets 301,885 258,175
Avg. interest-bearing
liabilities 212,620 173,297
Avg. deposits 257,403 221,794
Avg. equity 20,493 17,174

As of As of Change
12/31/07 12/31/06 %
-----------------------------------------------------------------
Shareholders' equity $ 21,572 $ 18,864 14.4%
Shares Outstanding (end of
period) (1) 1,822,106 1,819,841
Tangible book value per
share (1) $ 11.84 $ 10.37
Tier 1 leverage capital
ratio 9.0 % 9.0 %
Tangible equity/tangible
assets 6.6 % 6.7 %
Total risk based capital
ratio 12.0 % 12.6 %

Other selected non-
financial data:
Number of full service
banking offices 7 6
Number of full-time
equivalent employees 90 92

(1) Share and per share
information has been
retroactively adjusted
for 5% stock dividend
declared in May 2007.
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CITIZENS BANCORP
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CONDITION
At December 31, 2007 and 2006
----------------------------------------------------------------------
(In thousands, except share data)
----------------------------------------------------------------------
December December
31, 2007 31, 2006
--------------------
Assets
Cash and due from banks $ 9,035 $ 9,232
Federal funds sold 2,350 720
----------------------------------------------------------------------
Total cash and cash equivalents 11,385 9,952

Interest-bearing deposits in other banks 213 156
Investment securities 1,296 975
Loans 305,135 259,381
Allowance for loan losses (3,919) (3,374)
----------------------------------------------------------------------
Net loans 301,216 256,007
Premises and equipment, net 2,577 2,649
Cash surrender value of bank-owned life
insurance 5,700 5,405
Interest receivable and other assets 6,046 5,249

----------------------------------------------------------------------
Total Assets $328,433 $280,393
======================================================================

Liabilities and Shareholders' Equity
----------------------------------------------------------------------

Liabilities
Deposits
Non-interest bearing $ 67,201 $ 68,073
Interest bearing 207,054 175,164
----------------------------------------------------------------------
Total deposits 274,255 243,237
Short term borrowings 13,500
Junior subordinated debentures 15,465 15,465
Interest payable and other liabilities 3,641 2,827
----------------------------------------------------------------------
Total Liabilities 306,861 261,529
----------------------------------------------------------------------

Shareholders' Equity
Common, stock, no par value 12,956 10,700
Authorized - 5,000,000 shares
Issued and outstanding - 1,822,106 shares at
December 31, 2007 and 1,819,841 shares (1) at
December 31, 2006
Retained earnings 8,618 8,179
Accumulated other comprehensive loss, net (2) (15)
----------------------------------------------------------------------
Total Shareholders' Equity 21,572 18,864
----------------------------------------------------------------------

----------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $328,433 $280,393
======================================================================
(1) Adjusted for the 5% stock dividend declared in May 2007
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CITIZENS BANCORP
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the three and twelve month periods ended December 31, 2007 and
2006
----------------------------------------------------------------------
(In thousands, except per share data)
----------------------------------------------------------------------
Three Three Twelve Twelve
months months months months
ended ended ended ended
December December December December
31, 31, 31, 31,
2007 2006 2007 2006
-----------------------------------
Interest Income
Interest and fees on loans $5,816 $5,324 $22,428 $19,154
Interest on investment
securities 12 8 55 31
Interest on federal funds sold 24 36 66 112
Interest on deposits in banks 2 2 8 9
----------------------------------------------------------------------
Total Interest Income 5,854 5,370 22,557 19,306
---------------------------------- -------- -------- -----------------

Interest Expense
Interest on interest-bearing
deposits 1,748 1,478 6,690 4,562
Interest on short-term
borrowings 177 26 398 213
Interest on junior subordinated
debentures 286 287 1,175 949
----------------------------------------------------------------------
Total Interest Expense 2,211 1,791 8,263 5,724
----------------------------------------------------------------------

Net Interest Income 3,643 3,579 14,294 13,582

Provision for loan losses 675 110 945 560
----------------------------------------------------------------------
Net Interest Income After
Provision for Loan Losses 2,968 3,469 13,349 13,022
----------------------------------------------------------------------

Non-Interest Income
Service charges on deposit
accounts 277 239 1,031 882
Mortgage brokerage fees 204 152 798 516
Other income 89 79 377 270
----------------------------------------------------------------------
Total Non-Interest Income 570 470 2,206 1,668
----------------------------------------------------------------------

Non-Interest Expense
Salaries and employee benefits 1,447 1,351 6,051 4,999
Occupancy and equipment 452 398 1,793 1,478
Other expense 876 759 3,398 3,155
----------------------------------------------------------------------
Total Non-Interest Expense 2,775 2,508 11,242 9,632
----------------------------------------------------------------------

Income before provision for
income taxes 763 1,431 4,313 5,058

Provision for income taxes 255 573 1,728 2,024

----------------------------------------------------------------------
Net Income $508 $858 $2,585 $3,034
----------------------------------------------------------------------

Net income per common share
(1)
Basic $0.28 $0.47 $1.42 $1.68
Diluted $0.27 $0.46 $1.39 $1.65

(1) Restated for the 5% stock dividend declared in May 2007.
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Citizens Bancorp
Judy Hess, 530-470-2804
President/CEO

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