8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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) March 11, 2005

CFS Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-24611	35-2042093
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

707 Ridge Road, Munster, Indiana		46321
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (219) 836-5500

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 2.02 Results of Operations and Financial Condition

     On March 11, 2005, CFS Bancorp, Inc. (the “Company”) reported revised results of operations for the quarter and year ended December 31, 2004.

     For additional information, reference is made to the Company’s press release dated March 11, 2005, which is included as Exhibit 99.1 hereto and is incorporated herein by reference thereto. The press release attached hereto is being furnished to the SEC and shall not be deemed to be “filed” for any purpose except otherwise provided herein.

ITEM 9.01 Financial Statements and Exhibits

(a) Not applicable.

(b) Not applicable.

(c) Exhibits

The following exhibit is filed herewith.

Exhibit Number	Description
99.1	Press release dated March 11, 2005

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 thereunto duly authorized.

		CFS BANCORP, INC.
Date: March 16, 2005	By:	/s/ Brian L. Goins
		Brian L. Goins
		Vice President — Corporate Counsel

EX-99.1

Exhibit 99.1

THOMAS F. PRISBY, chairman

March 11, 2005

FOR IMMEDIATE RELEASE

CONTACT:	Thomas F. Prisby, Chairman of the Board and Chief Executive Officer
	(219) 836-5500

CFS BANCORP, INC. ANNOUNCES REVISED FOURTH QUARTER AND
YEAR END 2004 RESULTS

     MUNSTER, IN — MARCH 11, 2005. — CFS BANCORP, INC. (NASDAQ: CITZ) (the “Company”) announced today a revision of its accounting with respect to the Company’s previously announced restructuring of $400.0 million of borrowings. The revision in accounting results from a different interpretation and application of the accounting guidance of Emerging Issues Task Force No. 96-19, “Debtor’s Accounting for a Modification or Exchange of Debt Instruments” (“EITF 96-19”). As a result of the revision, the Company’s net losses for the quarter and year ended December 31, 2004 are $4.7 million and $6.6 million, respectively, rather than the net losses of $23.1 million and $25.0 million previously reported in the Company’s press release dated January 27, 2005. As revised, losses per share for the quarter and year ended December 31, 2004 are $0.40 and $0.57, respectively, rather than $1.97 and $2.16, respectively, as previously reported.

     As previously announced, the Company’s wholly-owned subsidiary, Citizens Financial Services, FSB (the “Bank”), restructured $400.0 million of its fixed-rate Federal Home Loan Bank (“FHLB”) advances (the “Existing Borrowings”) by repaying $75.0 million of such Existing Borrowings and replacing $325.0 million of the Existing Borrowings with new, lower costing, FHLB advances (the “New Borrowings”). This transaction resulted in $42.0 million of prepayment penalties. As previously described, the Existing Borrowings were callable fixed-rate advances with an average cost of 5.92% and an average remaining term of 64.2 months. The New Borrowings include $271.0 million of non-callable, fixed-rate FHLB advances with an average cost of 3.64% and an average term of 34.3 months in a laddered portfolio with maturities ranging from 12 to 60 months. The New Borrowings also include $54.0 million of short-term variable-rate borrowings with a current cost of 2.79%. On December 31, 2004, the Company repaid $20 million of these variable-rate borrowings.

     As previously disclosed, the Company, based on its internal analysis, communication with and the concurrence received from its independent registered public accounting firm, recognized a $42.0 million charge to non-interest expense during the fourth quarter of 2004 as a result of the prepayment penalties. On February 25, 2005, in conjunction with finalizing its audit of the Company’s financial statements at and for the year ended December 31, 2004, representatives from the Company’s independent registered public accounting firm notified the Company that, upon further review, such firm believed the application of EITF 96-19 required a revision of the accounting treatment previously communicated by the Company with respect to the fourth quarter debt restructuring. Thereafter, management continued to research the appropriate application of EITF 96-19. On March 7, 2005, the Company’s Audit Committee and Board of Directors along with representatives of the Company’s independent registered public accounting firm met to discuss the application of EITF 96-19. On March

CFS Bancorp, Inc. — Page 2 of 5

10, 2005, management notified the Audit Committee that it would revise the accounting treatment for the fourth quarter debt restructuring and, contrary to its initial presentation, would not recognize the entire $42.0 million in prepayment penalties in the quarter ended December 31, 2004. The Audit Committee agreed with management’s decision.

     As a result of the revised accounting treatment, the Company will recognize $9.8 million of prepayment penalties as a charge to non-interest expense in the fourth quarter of 2004 and $2.1 million of increased interest expense on borrowings in such period. As revised, the Company’s net interest margin is 2.06% for the fourth quarter of 2004. The remaining $30.1 million of prepayment penalties resulting from the debt restructuring are deferred and will be recognized in interest expense as an adjustment to the cost of the Company’s New Borrowings in future periods. The interest expense related to the amortization of the remaining prepayment penalties is expected to be $14.4 million, $9.6 million, $4.5 million, $1.5 million, and $200,000 in the years ended December 31, 2005, 2006, 2007, 2008, and 2009, respectively.

     Thomas F. Prisby, Chairman and Chief Executive Officer of the Company, said “We are disappointed that we have had to revise our treatment of the expenses related to this transaction, yet we believe that the business reasons for undertaking this restructuring remain sound. We have shortened the duration of our liabilities significantly and have eliminated the callable feature of the Existing Borrowings which will improve our long-term interest rate risk profile. In addition, we have greatly reduced our repricing risk given the laddered structure of the fixed-rate portion of the New Borrowings compared to the maturity of the Existing Borrowings which would have occurred over a five month period in 2010. While not having the immediate impact on our interest costs that we had originally anticipated, the economic rationale for the restructuring is unchanged and we still expect the restructuring to have a positive overall effect in future periods.”

     CFS Bancorp, Inc. is the parent of Citizens Financial Services, FSB, a $1.3 billion asset federal savings bank.

     Citizens Financial Services provides community banking services and operates 24 offices throughout Chicago’s Southland and Northwest Indiana. The Company’s stock trades on the NASDAQ National Stock Market under the symbol “CITZ.”

     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. The words “anticipate”, “believe,” “estimate,” “expect,” “indicate, “ “intend, “ “should, “ and similar expressions, or the negative thereof, as they related 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 FOLLOWS.

CFS Bancorp, Inc. — Page 3 of 5

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

EARNINGS HIGHLIGHTS AND		Three Months Ended						Year Ended
PERFORMANCE RATIOS (1)		December 31, 2004			December 31, 2003			December 31, 2004			December 31,2003
Net income (loss)		$	(4,683	)	$	1,219		$	(6,577	)	$	3,538
Basic earnings (loss) per share			(0.40	)		0.11			(0.57	)		0.31
Diluted earnings (loss) per share			(0.40	)		0.10			(0.57	)		0.30
Cash dividends declared per share			0.11			0.11			0.44			0.44
Return on average assets			(1.32	)%		0.32	%		(0.44	)%		0.23	%
Return on average equity			(11.95	)		3.13			(4.19	)		2.28
Average yield on interest-earning assets			5.10			4.90			4.89			4.81
Average cost on interest-bearing liabilities			3.42			3.09			3.08			3.25
Interest rate spread			1.68			1.81			1.81			1.56
Net interest margin			2.06			2.10			2.13			1.87
Non-interest expense to average assets			5.11			2.62			3.14			2.19
Efficiency ratio			182.28			97.08			111.54			87.99
Market price per share of common stock for the period ended:	Closing	$	14.27		$	14.80		$	14.27		$	14.80
	High		14.85			15.00			15.16			15.00
	Low		13.54			13.90			12.90			13.51

STATEMENT OF CONDITION HIGHLIGHTS AND	December 31,			September 30,			December 31,
PERFORMANCE RATIOS (1)	2004			2004			2003
Total assets	$	1,314,714		$	1,429,921		$	1,569,270
Loans receivable, net of unearned fees		988,085			1,000,424			982,579
Total deposits		863,178			847,353			978,440
Total stockholders’ equity		147,911			152,402			155,953
Book value per common share		11.94			12.38			12.78
Non-performing loans		27,675			32,976			22,720
Non-performing assets		28,200			33,566			22,926
Allowance for losses on loans		13,353			16,506			10,453
Non-performing loans to total loans		2.80	%		3.30	%		2.31	%
Non-performing assets to total assets		2.14			2.35			1.46
Allowance for losses on loans to non-performing loans		48.25			50.05			46.01
Allowance for losses on loans to total loans		1.35			1.65			1.06
Average equity to average assets		11.05			10.72			10.08
Average interest-earning assets to average interest-bearing liabilities		112.34			112.12			110.27
Employees (FTE)		327			338			330
Branches and offices		24			24			22

	Three Months Ended				Year Ended
AVERAGE BALANCE DATA	December 31, 2004		December 31, 2003		December 31, 2004		December 31, 2003
Total assets	$	1,410,000	$	1,534,457	$	1,483,224	$	1,552,750
Loans receivable, net of unearned fees		1,005,232		986,022		998,706		965,373
Total interest-earning assets		1,333,616		1,460,961		1,409,578		1,482,715
Total liabilities		1,254,134		1,379,853		1,326,277		1,397,353
Total deposits		854,455		945,470		898,154		937,770
Interest-bearing deposits		806,715		906,394		853,789		901,203
Total interest-bearing liabilities		1,187,090		1,324,890		1,263,136		1,342,478
Stockholders’ equity		155,866		154,604		156,947		155,397

(1) Ratios are annualized where appropriate.

CFS Bancorp, Inc. — Page 4 of 5

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

	For the Three Months Ended						For the Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Interest income:
Loans	$	14,522		$	14,590		$	56,910		$	59,408
Securities		2,046			2,793			10,029			8,637
Federal Home Loan Bank dividends		290			330			1,199			1,348
Other		243			331			848			1,996
Total interest income		17,101			18,044			68,986			71,389
Interest expense:
Deposits		3,002			3,909			12,841			17,276
Borrowings		7,193			6,400			26,059			26,402
Total interest expense		10,195			10,309			38,900			43,678
Net interest income before provision for losses on loans		6,906			7,735			30,086			27,711
Provision for losses on loans		56			837			8,885			2,326
Net interest income after provision for losses on loans		6,850			6,898			21,201			25,385
Non-interest income:
Service charges and other fees		2,049			1,701			7,523			6,908
Commission income		139			131			666			651
Net realized gains (losses) on sales of securities		(380	)		1,455			(299	)		1,780
Net gain (loss) on sale of assets		226			11			225			39
Income from Bank-owned life insurance		361			345			1,439			1,437
Other income		473			524			2,056			1,973
Total non-interest income		2,868			4,167			11,610			12,788
Non-interest expense:
Compensation and employee benefits		4,599			6,337			19,834			19,804
Net occupancy expense		681			452			2,440			2,216
Professional fees		377			453			2,797			1,806
Data processing		617			582			2,713			2,236
Furniture and equipment expense		436			355			1,612			1,771
Marketing		248			470			1,060			1,196
Prepayment penalties		9,813			—			10,298			—
Other general and administrative expenses		1,326			1,482			5,838			5,005
Total non-interest expense		18,097			10,131			46,592			34,034
Income (loss) before income taxes		(8,379	)		934			(13,781	)		4,139
Income tax expense (benefit)		(3,696	)		(285	)		(7,204	)		601
Net income (loss)	$	(4,683	)	$	1,219		$	(6,577	)	$	3,538
Per share data:
Basic earnings (loss) per share	$	(0.40	)	$	0.11		$	(0.57	)	$	0.31
Diluted earnings (loss) per share	$	(0.40	)	$	0.10		$	(0.57	)	$	0.30
Cash dividends declared per share	$	0.11		$	0.11		$	0.44		$	0.44
Weighted-average shares outstanding		11,731,618			11,300,550			11,599,996			11,289,254
Weighted-average diluted shares outstanding		11,990,902			11,692,643			11,897,494			11,702,635

CFS Bancorp, Inc. — Page 5 of 5

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

	December 31,			December 31,
	2004			2003
ASSETS
Cash and amounts due from depository institutions	$	16,878		$	18,213
Interest-bearing deposits		11,217			149,577
Federal funds sold		9,999			9,961
Cash and cash equivalents		38,094			177,751
Securities, available-for-sale		202,219			326,304
Investment in Federal Home Loan Bank stock, at cost		27,665			26,766
Loans receivable, net of unearned fees		988,085			982,579
Allowance for losses on loans		(13,353	)		(10,453	)
Net loans		974,732			972,126
Accrued interest receivable		5,456			6,624
Real estate owned		525			206
Office properties and equipment		15,511			13,738
Investment in Bank-owned life insurance		33,362			31,926
Prepaid expenses and other assets		17,150			13,829
Total assets	$	1,314,714		$	1,569,270
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	863,178		$	978,440
Borrowed money		286,611			418,490
Advance payments by borrowers for taxes and insurance		8,177			5,595
Other liabilities		8,837			10,792
Total liabilities		1,166,803			1,413,317
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 as of December 31, 2004 and December 31, 2003; 12,385,322 and 12,200,015 shares outstanding as of December 31, 2004 and December 31, 2003, respectively		234			234
Additional paid-in capital		189,991			189,879
Retained earnings, substantially restricted		94,904			106,354
Treasury stock, at cost; 11,037,984 and 11,223,291 shares as of December 31, 2004 and December 31, 2003, respectively		(130,689	)		(132,741	)
Unallocated common stock held by ESOP		(5,959	)		(7,158	)
Unearned common stock acquired by RRP		(148	)		(1,523	)
Accumulated other comprehensive (loss) income, net of tax		(422	)		908
Total stockholders’ equity		147,911			155,953
Total liabilities and stockholders’ equity	$	1,314,714		$	1,569,270