CFS Bancorp investors seek answers, demand investigation into alleged financial misstatements

By Angela McDaniels

Tacoma, Wash., March 27 - CFS Bancorp, Inc. investors led by PL Capital, LLC plan to ask management what their operating and strategic plans are for maximizing the value of the company's common stock, according to a schedule 13D/A filed with the Securities and Exchange Commission.

The investors are also interested in the company's plans for managing its holdings of loan participations and syndications and other credit risks in the current economic downturn.

The group beneficially owns 991,065 shares, or 9.36%, of the company's stock and said it acquired the shares because it believes the common stock is undervalued.

The reporting persons purchased 82,760 shares between Jan. 27 and March 23 for $1.75 to $3.55 each.

In addition, the PL Capital group sent a notice of shareholder derivative demand to the company's board of directors on Wednesday.

The notice claims that the company understated its loan loss allowances and provisions for loan losses in fiscal years 2005, 2006 and 2007, allowing it to overstate its reported net income during these periods.

The notice further demands that an investigation be held and that action be brought for breach of fiduciary duty and corporate waste against the appropriate persons to recover losses incurred as a result of the misstatements.

CFS Bancorp is the holding company for Citizens Financial Bank and is based in Munster, Ind.

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