ITEM 7.01 Regulation FD Disclosure

Declaration and Reduction of Common Stock Dividend

On March 16, 2009, the Board of Directors of CFS Bancorp, Inc. (the "Company") declared a quarterly cash dividend of $0.01 per share on the common stock of the Company. The dividend is payable on April 24, 2009 to shareholders of record as of the close of business on April 3, 2009. The dividend is a reduction from the $0.04 per share dividend paid in the first quarter of 2009. The Board believes that the dividend reduction is appropriate given the continued uncertainty in the economy and is a prudent step to further enhance and preserve the Company's capital position and liquidity that are key components of its strategic plan. The Company intends to use the retained capital to continue to implement its current corporate strategy of reducing non-performing assets, modestly growing the loan portfolio, increasing its core deposits and improving earnings.

Informal Regulatory Agreements

In addition, the Company and its wholly owned subsidiary, Citizens Financial Bank (the "Bank"), have agreed to enter into informal agreements (the "Agreements") with the Office of Thrift Supervision (the "OTS") to address certain regulatory matters. Specifically, under the Agreements the Company and the Bank have submitted to the OTS its capital and business plans for their review and comment as well as their review of the Bank's efforts in monitoring and reducing its nonperforming loans. In addition, under the Agreements, both the Bank and the Company have agreed to seek the OTS' approval prior to the declaration of any future dividends. The Company has also agreed not to repurchase or redeem any shares of its common stock or incur or renew any debt without the OTS' approval. The Company does not currently have any debt outstanding. Compliance with the terms of the Agreements is not expected to have a material effect on the financial condition or results of operations of the Company or the Bank.

As of December 31, 2008, the Bank's Tier 1 capital ratio was 9.07%, its Tier 1 risk-based capital ratio was 11.96% and its total risk-based capital ratio was 13.21%, all in excess of the "well-capitalized" definitions of the OTS. The Company's tangible common equity at December 31, 2008 was $111.8 million, or 9.97% of tangible assets.

This disclosure may contain certain forward-looking statements and information relating to the Company that are 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 relate 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 that are subject to certain risks and uncertainties that may cause actual results to vary. The Company does not intend to update these forward-looking statements.

---