8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported)  August 9, 2011       

CFS BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)
INDIANA
(State or Other Jurisdiction of Incorporation)
000-24611	35-2042093
(Commission File Number)	(IRS Employer Identification No.)
707 Ridge Road, Munster, Indiana	46321
(Address of Principal Executive Offices)	(Zip Code)
(219) 836-5500
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01      Regulation FD Disclosure

            Daryl D. Pomranke, President and Chief Operating Officer, and Jerry A. Weberling, Executive Vice President and Chief Financial Officer, of CFS Bancorp, Inc. (the “Company”) are presenting the materials attached to this Current Report as Exhibit 99.1 in meetings with certain investors at the 2011 Raymond James Bank Conference in Chicago on August 10, 2011.

            Pursuant to Regulation FD, the Company is furnishing the information in this report (including the exhibit) pursuant to Item 7.01 of Form 8-K.  This information is being “furnished” to the Securities and Exchange Commission and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.  This report will not be deemed a determination or an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.

ITEM 9.01      Financial Statements and Exhibits

                        (d)        Exhibits

                        The following exhibit is filed herewith.

Exhibit Number	Description
99.1	Investor Presentation, August 2011

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

		CFS BANCORP, INC.
Date: August 9, 2011	By:	/s/ Joyce M. Fabisiak
		Joyce M. Fabisiak
		Vice President

INDEX TO EXHIBITS

Exhibit	Description
99.1	Investor Presentation, August 2011

EX-99.1

EXHIBIT 99.1

Investor Presentation
August 2011

FORWARD LOOKING STATEMENTS

2

This presentation contains certain forward-looking statements, as that term is defined in U.S.
federal securities laws.Generally, these statements relate to our business plans or strategies,
projections involving anticipated revenues, earnings, profitability, or other aspects of
operating results, or other future developments in our affairs or the industry in which we
conduct business.Forward-looking statements may be identified by reference to a future
period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,”
“expect,” “intend,” “plan,” “estimate,” “would be,” “will,” “intend to,” “project,”or
similar expressions or the negative thereof, as well as statements that include future events,
tense or dates, or are not historical or current facts. These forward-looking statements include
but are not limited to statements regarding our ability to successfully execute our strategy and
Strategic Growth and Diversification Plan, the level and sufficiency of our current regulatory
capital and equity ratios, our ability to continue to diversify the loan portfolio, our efforts at
deepening client relationships, increasing our levels of core deposits, lowering our non-
performing asset levels, managing and reducing our credit-related costs, increasing our
revenue growth and levels of earning assets, the effects of general economic and competitive
conditions nationally and within our core market area, the sufficiency of the levels of provision
for the allowance for loan losses and amounts of charge-offs, loan and deposit growth, interest
on loans, asset yields and cost of funds, net interest income, net interest margin, non-interest
income, non-interest expense, interest rate environment, and other factors including those set
forth in “Part I. Item 1A.Risk Factors” of our Annual Report on Form 10-K for the year ended
December 31, 2010.Such forward-looking statements are not guarantees of future
performance.The Company does not intend to update these forward-looking statements to
reflect occurrences or unanticipated events or circumstances unless required to do so under
the federal securities laws.

Agenda

§CFS Bancorp Overview

§Strategic Growth & Diversification Plan

§Outlook

3

CFS Bancorp Overview

CFS Bancorp Overview

§Headquartered in Munster, IN

—22 full service branch locations in Northwest
IN and South Suburban Chicago

—CFS Bancorp formed in 1998

—Citizens Financial Bank founded in 1934

§$1.1B Total Assets at June 30, 2011

§$738m Total Loans

§$965m Total Deposits

—96% Deposit Funded

—59% Core Deposits

—No Brokered Deposits

§$116m Tangible Common Equity

—10.3% TCE Ratio

—No Holding Company debt

—No TruPS

—No TARP

§NASDAQ: CITZ

5

CFS Bancorp Overview

§Ongoing

—NPA remediation efforts

—Sales culture with regional partnerships

—Comprehensive performance & incentive programs

—Focus on C&I, CRE-Owner Occupied, Multifamily
offerings

—Deposit acquisition and deleveraging

—Capital management

§Discontinued / Deemphasized

—Commercial participations

—Commercial construction & land development loans

6

Strategic Growth
& Diversification Plan

Strategic Growth & Diversification Plan

§Board approved in late 2007

—Implementation commenced in 2008

§Four key long-term objectives

—Reduce non-performing assets

—Grow while diversifying by targeting small and mid-
sized business owners for relationship banking
opportunities

—Expand and deepen the Company’s relationships with
its clients

—Align costs with anticipated future asset base

8

Investing in Talent to Drive Business Results

§40 new senior and middle managers installed since 2007

§4 of 5 Named Executive Officers new since 2007

9

Strategic Growth & Diversification Plan

§Execution Status

—We continue to execute the plan

—Progress made on reducing non-performing assets

—Loan portfolio diversification continues

—Strong core deposit growth results achieved

—Major investments in people and infrastructure
complete

—Performance management system fully
implemented in the sales business units

—Investor presentations conducted with current
and prospective shareholders, and all employees

10

Goal = Top Quartile
Peer Group Financial Performance

11

Source: SNL Financial and CFS Bancorp, Inc.

Peer Group includes nationwide banks & thrifts with total assets between $1B and $3B.

MOST RECENT QUARTER PERFORMANCE RANKINGS

Strategic Growth & Diversification Plan

§Reduce non-performing assets

§Grow & diversify loan portfolio

§Expand and deepen client relationships

§Manage expenses

12

Reduce Non-Performing
Assets

Commercial Participations Drag

§Commercial participations have created significant problems

—Represent only 3% of gross loan portfolio

—Account for 14% of all NPLs and 61% of OREO

—39% of participations are non-performing

—Breakdown at 6/30/11 = $5.3 million CRE-NOO, $2.9 million Commercial CL&D

§New purchases ceased in 2Q07 but impact lingers

14

Non-Performing Assets

15

Non-Performing Loans and OREO

16

Non-Performing Loans

§Retail & Commercial direct originations have held up well

§Never originated Subprime, Alt-A, or Option ARMs

17

Commercial Participation Loans

18

Commercial Construction and Land Loans

Reserve Position

§Have conservatively applied ASC 310-10 (FAS 114) on NPLs

§ALLL/NPL depressed due to written-down impaired loans in NPLs

—$7.4 million of partial charge-offs on impaired collateral dependent loans

—$8.0 of specific reserves on other NPLs in ALLL

§OREO is carried at 53.5% of original loan value

19

Ongoing NPA Remediation

§Proactive problem asset management

—Weekly review of delinquencies by Asset Management
Committee

—Action plan review for all loans graded watch or worse

—Impairment analysis prepared quarterly on all substandard
loans > $750,000

—Loan grade review for all loans 30-days+ past due

—All performing past due loans reviewed

—Monthly management reports prepared for Board of
Directors

20

Ongoing NPA Remediation

§Upgraded underwriting process & criteria

—Hired new SVP-Senior Credit Officer in December 2007

—Hired new VP-Credit Manager in July 2008

—4 new credit analysts added since December 2007

—New Credit Policy implemented in early 2008

—Developed new loan grading matrix utilizing objective
attribute analysis in mid-2009

21

NPAs for Loans Originated Prior to 1/1/08

22

NPAs for Loans Originated After 1/1/08

Origination Volume for the period = $514.6 million

Grow While Diversifying

Growth Results in Targeted Segments

§46% increase in targeted growth segments since 12/31/07

—C&I increased 39%

—CRE-Owner Occupied increased 24%

—Multifamily increased 102%

§7.2% annualized loan growth in 2nd quarter of 2011

24

Strategic Shift in Portfolio

§29% reduction in targeted shrinkage segments since 12/31/07

—Commercial participation loans reduced 74%

—Commercial construction & development loans (CLD) decreased 60%

25

Results of Commercial Loan Portfolio
Diversification Plan

§Targeted aggressive growth segments (C&I, CRE
Owner Occupied, and Multifamily) are up from 36% at
12/31/07 to 53% of the portfolio at 6/30/11

§Targeted shrinkage segments are down from 28% at
12/31/07 to 9% of the portfolio at 6/30/11

§Targeted moderate growth segment (CRE Non-Owner
Occupied) has remained stable at approximately 37%
of the portfolio

26

Expand and Deepen Relationships

Focus on Business Relationships

§Business Banking Group reorganized to drive growth

—New EVP Sales Management hired in 2008

—14 new Relationship Managers hired

—Average banking industry experience of 20+ years

—Expertise in C&I and Multifamily lending

§Regional partnerships formed between Retail and
Business Banking teams with shared goals and
incentives

28

Performance Management Program

§Power of Personal Performance (PoPP)

§Primary focus on sales activities and behaviors

§Utilization of balanced scorecards to track activities

§Coaching sessions, check-ins, skill builders, and skip
coaching

§Improved outcomes, and client and employee
satisfaction

—Chicago Tribune Top Workplace - 2010

—Northwest Indiana Times Best Workplace - 2010

—Northwest Indiana Times Best Client Service by a
Financial Institution - 2010

29

Focus on Business Relationships

§Focus on small and medium-sized businesses

—Aggressively grow C&I, multifamily, and owner
occupied CRE relationships as a share of commercial
loans

§Increase business deposits to generate relationships
and fund growth

§IT platform provides competitive advantage in Cash
Management opportunities

30

Focus on Business Relationships

§Proactive prospecting

—Feet on the street - experienced teams now in their
markets

—Trusted Advisor approach vs. transactional lending

—Incentives are equally weighted between deposit
gathering and loan production

31

Non-Municipal Business Deposits

32

Total Deposits

33

Total Borrowed Funds

34

Deposit Growth Reduces Reliance on
Wholesale Funding

35

Deposit Growth Reduces Reliance on
Wholesale Funding

36

Expanding & Deepening Client Relationships
Drive Improved NIM

§NIM expansion driven by client relationships and deleveraging

—Increase in core deposits

—Increase in non-interest bearing deposits

—Disciplined deposit and CD pricing

—Reduced FHLB borrowings

37

Manage Expenses

Improve Efficiency Ratio

§Overall FTE headcount reduced from 360 in 2006 to
314 currently

§Salary freeze throughout 2010, lifted in 2011

§Reduce drag from NPAs ($50M x 5% = $2.5M), credit
related costs ($1.75M), and too large investment
portfolio ($50M x 2% = $1M)

§Capacity for balance sheet growth based on current
infrastructure, expense base, and capital

§Construction of three new branches postponed

§Ongoing efficiency review and initiatives

§Review opportunities for additional ancillary fee
income sources (e.g. mortgage banking, wealth
management)

39

Non-Interest Expense Drivers

40

Non-Interest Expense Drivers (cont.)

41

Non-Interest Expense Drivers (cont.)

42

Non-Interest Expense Drivers (cont.)

43

($ in thousands)
		For the year ended
		2007		2010		Change
Total Non-Interest Expense		33,459		37,775		4,316
Less-Controllable Expenses:
	Total Credit Related Costs	(507	)	(2,121	)	(1,614	)
	Professional Fees	(1,284	)	(2,283	)	(999	)
	FDIC Premiums & OTS Fees	(373	)	(2,551	)	(2,178	)
Total Less-Controllable Expenses		(2,164	)	(6,955	)	(4,791	)
Adjusted Non-Interest Expense		31,295		30,820		(475	)

Path Forward

§Continue execution of Strategic Growth &
Diversification Plan

—Focus on Northwest Indiana and South Suburban
Chicago markets

§Experienced senior management, sales, and credit
teams in place

§Improving reputation in our markets as Business
Bankers

§Ongoing banking consolidation provides growth
opportunities

44

Investment Highlights

§Business transformation well underway

—New management team in place

—Executing on Strategic Growth & Diversification Plan

—Asset quality stabilizing

—Improved net interest margin

§Significant insider ownership aligned with shareholders

—NEOs & Directors: 16.2%, including PL Capital (9.7%)

—401(k) Plan: 8.8%

§Valuation opportunity

—Substantial discount to tangible book value

45

Appendix

Financial Highlights

47

($ in millions)				2007			2008			2009			2010			3/31/11			6/30/11
Balance Sheet
	Total Assets		$	1,150		$	1,122		$	1,082		$	1,122		$	1,144		$	1,128
	Total Loans			793			750			762			733			724			738
	Deposits			863			824			850			946			981			965
	Loans / Deposits			92	%		91	%		90	%		77	%		74	%		76	%
	Total Equity		$	130		$	112		$	110		$	113		$	114		$	116
	Tangible Equity			129			112			110			113			114			116
Capital
	Equity / Assets			11.2	%		10.0	%		10.2	%		10.2	%		9.9	%		10.3	%
	Tier 1 Capital Ratio			13.1			12.0			11.2			12.3			12.2			12.2
	Total Capital Ratio			13.9			13.2			12.4			13.3			13.2			13.3
Asset Quality
	NPLs / Total Loans			3.7	%		7.3	%		7.7	%		7.4	%		8.2	%		7.8	%
	NPAs / total Assets			2.7			5.2			6.3			6.9			7.3			7.0
	NCOs / Average Gross Loans (4)			0.7			2.5			1.2			0.8			0.6			0.6
	ALL / Total Gross Loans			1.0			2.1			2.6			2.3			2.4			2.3
	ALL / NPLs			27.1			28.4			33.0			31.5			28.7			29.8
	Provision / Average Gross Loans (4)			0.3			3.5			1.7			0.5			0.5			0.5
	Provision / NCOs			42.4			140.1			144.9			62.9			91.5			94.7
	Texas Ratio (NPAs / (Equity + ALL))			22.2			45.5			52.6			59.0			63.6			58.8
Profitability
	Net Interest Margin			3.0	%		3.3	%		3.7	%		3.7	%		3.6	%		3.6	%
	Non-Interest Income / Total Revenue (1)			25.2			13.9			23.4			20.1			21.7			33.1
	Efficiency Ratio (2)			74.2			76.4			81.9			83.7			92.4			81.7
	Reported Net Income		$	7.5		$	(11.3	)	$	(0.5	)	$	3.5		$	0.5		$	1.2
	Earnings from Core Operations (PTPP) (3)			12.7	%		12.7	%		13.3	%		10.2	%		1.5	%		2.5	%
	PTPP ROAE		$	9.8		$	10.0		$	11.8		$	9.0		$	5.5		$	8.6
	PTPP ROAA			1.1			1.1			1.2			0.9			0.6			0.9
	(1)	Total Revenue defined as Net Interest Income plus Non-Interest Income.
	(2)	Defined as Non-Interest Expense divided by the sum of Net Interest Income plus Non-Interest Income, excluding net gain
		on sales of investment securities and impairment of investment securities.
	(3)	See Non-GAAP financial information on the following page.
	(4)	Annualized, If applicable.

Reconciliation to Non-GAAP Metrics

48

($ in thousands)
					Three months ended		Six months ended
	2007	2008	2009	2010	6/30/10	6/30/11	6/30/10	6/30/11
Income (loss) before taxes	9,835	(19,968)	(2,805)	4,167	1,159	1,658	1,966	2,096
Provision for loan losses	2,328	26,296	12,588	3,877	817	996	2,527	1,899
Pre-tax, pre-provision earnings	12,163	6,328	9,783	8,044	1,976	2,654	4,493	3,995
Adjustments:
Net gain on sale of investments	(536)	(69)	(1,092)	(689)	-	(173)	(456)	(692)
Net (gain) loss on sale of OREO	(22)	(30)	9	154	(11)	(2,238)	(12)	(2,233)
OREO related expenses	343	261	2,976	1,483	255	2,011	886	2,603
Loan collection expenses	164	655	1,077	638	153	233	322	353
Severance and early retirement expense	643	-	37	545	437	-	440	-
FDIC - special assessment	-	-	495	-	-	-	-	-
Impairment on investment securities	-	4,334	-	-	-	-	-	-
Goodwill impairment	-	1,185	-	-	-	-	-	-
Total Adjustments:	592	6,336	3,502	2,131	834	(167)	1,180	31
Pre-tax, pre-provision earnings from core operations	12,755	12,664	13,285	10,175	2,810	2,487	5,673	4,026