Citizens First Bancorp, Inc. Announces First Quarter 2008 Earnings.

PORT HURON, Mich. -- Citizens First Bancorp, Inc. (the "Company") (NASDAQ: CTZN), the holding company for Citizens First Savings Bank , today announced that it earned $1.6 million, or $.21 per basic share, for the quarter ended March 31, 2008, as compared to net income of $2.4 million, or $0.29 per basic share, for the quarter ended March 31, 2007. The Company's book value per share at March 31, 2008 and December 31, 2007 was $20.49 and $20.70, respectively.

Financial Condition

Total assets increased $292.3 million, or 16.2%, to $2.097 billion at March 31, 2008 from $1.804 billion at December 31, 2007, primarily due to an increase of $293.8 million, from zero, in the securities held to maturity portfolio, and an increase of $19.6 million in commercial loan balances. The increase in total assets was partially offset by a decrease in real estate mortgage loans and consumer loans of $24.0 million and $6.0 million, respectively. These decreases are related to management's decision to reduce residential real estate secured and vehicle indirect lending due to the ongoing economic downturn in the State of Michigan. Additionally, securities available for sale decreased $8.4 million, primarily due to principal repayments in the mortgage-backed and whole loan collateralized mortgage obligation portfolios.

Total liabilities increased $294.0 million, or 18.0%, to $1.928 billion at March 31, 2008 from $1.634 billion at December 31, 2007. The primary reason for the increase was to fund the growth in the securities held to maturity portfolio through wholesale funding sources. Specifically, the Company funded this growth with an increase of $222.1 million in FHLB advances and an increase of $120.1 million in bank callable brokered certificates of deposit, offset by a decrease in federal funds purchased of $39.3 million. Total retail deposits decreased $9.0 million (discussed below). Based on our forecasted loan growth versus the expected growth in the competitive retail deposit market, management expects that FHLB advances, federal funds purchased and/or callable brokered deposits will increase in subsequent periods, depending on which borrowing opportunity makes the most economic sense after analyzing maturity and repricing data and balancing interest rate risk.

Nonperforming loans totaled $57.2 million at March 31, 2008 compared to $54.1 million at December 31, 2007, an increase of $3.1 million, or 5.7%. In spite of the increase in nonperforming loan balances, total nonperforming assets as a percentage of total assets decreased to 3.28% at March 31, 2008 compared to 3.62% at December 31, 2007, a result of an increase in total assets of $292.3 million. A majority of the increase in total nonperforming assets resulted from the increase in nonperforming loans secured by real estate. The increase in this nonperforming loan category is primarily due to a rise in foreclosures reflecting both weak economic conditions and soft residential real estate values in many parts of Michigan. The Company does not hold any sub-prime loans in its loan portfolio.

Results of Operations

Net income for the three months ended March 31, 2008 decreased $0.8 million, or 32.4%, to $1.6 million from net income of $2.4 million in the same period in 2007. The decrease was primarily due to a decrease in net interest income of $1.5 million or 10.8%, for the three months ended March 31, 2008 compared to the same period in 2007. Further negatively impacting net income for this period was an increase in noninterest expense of $0.3 million, or 3.0%, compared to the same period in 2007. However, this increase was largely offset by an increase in noninterest income of $0.2 million, or 13.7% compared to the same period in 2007.

The provision for loan losses decreased by $0.13 million for the three months ended March 31, 2008 compared to the same period last year. The allowance for loan loss analysis includes potential losses in the loan portfolio which could be realized depending on future changes in market conditions. Based on our analysis, we believe that the allowance for loan losses is sufficient to cover potential losses at March 31, 2008.

The provision for loan losses decreased by $0.13 million for the three months ended March 31, 2008 compared to the same period last year. During the three month period ended March 31, 2008, the Company recorded loan charge-offs against the allowance for loan losses of $4.4 million, as specifically reserved for through the increased provision recorded during the third and fourth quarters of 2007. Based upon our detailed analysis of the allowance for loan losses performed at March 31, 2008, the allowance for potential loan losses decreased to 1.19% of total loans from 1.39% of total loans at December 31, 2007. As a result of the increase in nonperforming loans versus the decrease in the allowance for loan losses, due to the aforementioned first quarter 2008 loan charge-offs taken, the allowance for loan losses as a percentage of nonperforming loans decreased from 39.6% at December 31, 2007 to 31.9% at March 31, 2008.

Noninterest income for the three months ended March 31, 2008 increased 13.7% to $1.99 million, compared to $1.75 million for the same period in the prior year. The increase was mainly attributable to an increase in mortgage banking service income of $275,000, or 45.9%, for the three months ended March 31, 2008 over the same period in the prior year. The increase in mortgage banking service income is a result of our efforts to sell the overwhelming majority of newly originated secondary marketable residential mortgage loans, thereby limiting additional loan loss exposure to the struggling real estate market in Michigan. Sales of mortgage loans for the three months ended March 31, 2008, increased by 78.0% in terms of principal balance compared to the three months ended March 31, 2007.

Noninterest expense for the three months ended March 31, 2008 increased 3.0% to $11.1 million compared to $10.8 million for the same period in the prior year. The increase was primarily due to an increase in occupancy expense of nearly $442,000 resulting from an increase in maintenance costs, an increase in servicing agreement costs for furniture, fixtures and equipment, the cost of leasing additional office space and an increase in depreciation expense. The increased costs for leasing additional office space will be offset for the next two years by Brownfield Tax Credits applicable to the Michigan Business Tax. The Company also experienced a $296,000 increase in Federal Insurance Premiums resulting from the depletion of a one-time assessment credit from the Federal Deposit Insurance Act of 2005. The Company also encountered an increase of approximately $228,000 in the carrying cost of other real estate owned related to real estate taxes and maintenance. These increases were offset by a decrease of close to $357,000 in salary and benefits, a reduction of approximately $120,000 in printing and advertising, and a decline of about $85,000 in professional fees for the three months ended March 31, 2008 compared to the same period in the prior year.

Citizens First Bancorp, Inc., through its subsidiary Citizens First Savings Bank, currently serves its customers from 24 full service-banking centers in St. Clair, Sanilac, Huron, Lapeer, Macomb and Oakland counties and a loan production office located in Southwestern Florida.

Statements contained in this news release may be forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of such words as "intend," "believe," "expect," "anticipate," "should," "planned," "estimated," and "potential." Such forward-looking statements are based on current expectations, but may differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time, which are incorporated into this press release by reference. Other factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Bank's market area, changes in relevant accounting principles and guidelines and other factors over which management has no control. The forward-looking statements are made as of the date of this release, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

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