Citizens First Bancorp, Inc. Announces Earnings for Fiscal Year Ended March 31, 2002

Business Wire, May 16, 2002

Business Editors

PORT HURON, Mich.--(BUSINESS WIRE)--May 16, 2002

Citizens First Bancorp, Inc. (the "Company")(Nasdaq:CTZN), the holding company for Citizens First Savings Bank (the "Bank"), today announced that it earned $.32 per share, or $2,675,000, for the fourth fiscal quarter ended March 31, 2002, as compared to a net loss of $3,355,000 for the same period in 2001.

Net income for the fiscal year ended March 31, 2002 was $10,548,000, an increase of $7,362,000, or 231.1%, from the prior period, resulting in net earnings of $1.23 per share. The increase in net income for the fiscal year was primarily due to the $7.1 million contribution expense and an accompanying reduction to the tax provision of $2.4 million in the prior period due to the formation of Citizens First Foundation approved by shareholders at the time of the conversion from a mutual savings bank to a stock savings bank. Excluding the contribution, net income for the fiscal year would have increased $2.7 million, or 34.5%, from $7,844,000 to $10,548,000. The increase in the fourth quarter and twelve-month period was primarily due to increased net interest income, which was offset in part by increased compensation and benefit costs primarily due to additional staff and to ESOP expense, increased costs associated with becoming a public company, other public reporting expenses and additional costs related to compliance with recent regulatory changes. The Company's book value per share at March 31, 2002, and March 31, 2001, was $16.73 and $15.72 respectively. Prior period per share comparisons are not applicable due to the Company's initial issuance of stock on March 7, 2001, in connection with the mutual to stock conversion of the Bank, which raised $85.1 million in net proceeds.

Stock Repurchase

On March 28, 2002, the Company announced that its Board of Directors had authorized the repurchase 476,338 shares of its common stock. As of March 31, 2002, the Company had 9,050,373 shares outstanding. As of this date, the Company has repurchased 27,500 shares under the current repurchase program.

Dividends

On April 25, 2002 the Company's Board of Directors declared a quarterly cash dividend of $0.08 per share for a total cost of $667,100. The dividend is expected to be payable on May 20, 2002, to stockholders of record on May 6, 2002.

New Branch Location

To better serve its customers, the Bank purchased a bank branch office previously owned by Standard Federal Bank in Lexington, Michigan. No other assets or deposits were acquired in the transaction. The grand opening for the office was April 8, 2002.

Financial Condition

Total assets increased $90.5 million, or 10.6%, from $855.9 million at March 31, 2001 to $946.4 million at March 31, 2002. Net loans increased $63.2 million, or 9.4%, to $735.6 million from $672.4 million at March 31, 2001. Combined net growth of $73.0 million in Commercial, Commercial Real Estate, Residential Construction loans, Home Equity Lines of Credit, and automobile and other consumer loans were offset by a $9.7 million decline in residential one- to four-family loans due to sales to third parties. Investment securities increased $22.5 million from $96.1 million at March 31, 2001 to $118.5 million at March 31, 2002. The increase in investment securities was primarily due to the investment of excess deposits and FHLB borrowings in taxable municipal and corporate bonds.

Total liabilities increased $88.8 million to $794.9 million. Total deposits increased $52.7 million from $581.3 million at March 31, 2001 to $634.0 million at March 31, 2002, primarily due to growth in Money Market Deposit accounts offset by a decrease in certificates of deposit due to lower rates. Over the twelve months, FHLB borrowings increased $36.5 million, or 31.7%, to $151.4 million to take advantage of the low rates being offered. Such funds were primarily invested in loans and investment securities.

Non-accrual loans increased $177,000, or 9.8%, to $2.0 million at March 31, 2002 from $1.8 million at March 31, 2001. This was primarily due to an increase in non-accruing real estate loans as a result of the slow economy. Non-performing assets increased $700,000 to $2.9 million, or .21% of total assets, at March 31, 2002, as compared to $2.1 million, or .24%, at March 31, 2001, due to the increase in non-accruing loans and an increase in other real estate owned. The allowance for loan losses was $11.0 million at March 31, 2002, or 1.47% of total loans and 554.6% of non-performing loans as compared to 1.58% of total loans and 598.4% of non-performing loans at March 31, 2001.

Stockholders' equity increased $1.6 million from $149.72 million at March 31, 2001, to $151.4 million due to net income accompanied by an increase in accumulated other comprehensive income from the unrealized gain on securities and offset by the effect of the 5% stock buyback.

Results of Operations

Net interest income, after provision for loan losses, increased $8.2 million, or 32.0%, to $33.8 million for the twelve months ended March 31, 2002, from $25.6 million for the twelve months ended March 31, 2001. Net interest income, after provision for loan losses, increased $1.5 million, or 22.1%, for the quarter to $8.5 million for the three months ended March 31, 2002.