Citizens Financial Bank's parent company reported a $981,000 profit in the second quarter as it continues to focus on reducing nonperforming loans and its cost structure, the company said.

Munster-based CFS Bancorp Inc. said Tuesday in the three months that ended June 30, the bank earned $981,000, or 9 cents per share, up from a $670,000 profit, or 6 cents pare share, it made in the second quarter of 2009.

"Given the challenging economic environment in which we are operating, higher second quarter earnings represent another step in the right direction," Chairman and CEO Thomas Prisby said. "Reported earnings were bolstered by our ongoing attention to costs. We are also encouraged by a second consecutive quarterly moderate decline in the level of nonperforming loans, but remain cautious of a slowdown in the current regional recovery as we continue to focus on asset quality."

Net interest income for the bank in the second quarter was $9.3 million, which was down slightly compared to the first and second quarters of 2009. Citizens cut its loan loss provision by more than half in the second quarter to $817,000 from the previous quarter. However, the bank forecast that credit-quality costs – including the loan loss provision – will continue to challenge earnings as the overall economic outlook remains cloudy.

As of June 30, Citizens Financial Bank had $1.1 billion in assets, $899.5 million in deposits and 23 offices in Northwest Indiana and the south suburbs of Chicago.

The bank declared a 1 cent per share dividend in the second quarter, which was unchanged from the first quarter. CFS Bancorp shares fell 4 cents, or 0.87 percent, to $4.56 in Tuesday trading on the Nasdaq Global Market.