<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended March 31, 1999

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934


             For the transition period from __________ to __________

                        Commission file number 000-23277


                               CITIZENS BANCORP/OR
             (Exact name of registrant as specified in its charter)


         Oregon                                      91-1841688
(State of Incorporation)                 (I.R.S. Employer Identification Number)


                           275 Southwest Third Street
                             Corvallis, Oregon 97339
                    (Address of principal executive offices)


                                 (541) 752-5161
              (Registrant's telephone number, including area code)

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.


                                 YES [X] NO [ ]


    Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

    3,927,706 shares as of April 30, 1999, no par.



<PAGE>   2


                                CITIZENS BANCORP
                                    FORM 10-Q
                                  MARCH 31,1999
                                      INDEX


<TABLE>
<CAPTION>
PART I.                                                                                 Page
                                                                                      Reference
<S>                                                                                   <C>
  ITEM 1. - FINANCIAL INFORMATION - UNAUDITED

   Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998                1

   Consolidated Statements of Income and Comprehensive Income for the three              
       months ended March 31, 1999 and 1998                                              2

   Consolidated Statements of Changes in Shareholders' Equity                            3

   Consolidated Statements of Cash Flows                                                 4

   Notes to Consolidated Financial Statements                                            5

  ITEM 2. - Management's Discussion and Analysis of Financial Condition                
            and Results of Operations                                                  6 - 12              

  ITEM 3. - Quantitative and Qualitative Disclosure about Market Risk                    12

PART II. - OTHER INFORMATION

  ITEM 1. - Legal Proceedings                                                            13

  ITEM 2. - Changes in Securities                                                        13

  ITEM 3. - Defaults Upon Senior Securities                                              13

  ITEM 4. - Submission of Matters to a Vote of Security Holders                          13

  ITEM 5. - Other Information                                                            13

  ITEM 6. - Exhibits and Reports on Form 8-K                                             13

  SIGNATURES                                                                             14
</TABLE>



<PAGE>   3


                          PART I FINANCIAL INFORMATION

ITEM 1

CITIZENS BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                       MARCH 31,         DECEMBER 31,
                                                                         1999                 1998
                                                                       ---------          ---------
<S>                                                                    <C>                <C>      

Assets
     Cash and due from banks                                           $   9,554          $  12,771
     Interest bearing deposits in banks                                   19,129             23,406
     Federal funds sold                                                        0                  0
     Securities available for sale                                        51,156             50,855
     Securities held to maturity                                           9,993              9,733

     Loans, net of unearned discount and prepaid fees                    134,789            132,126
     Allowance for credit losses                                          (1,454)            (1,419)
                                                                       ---------          ---------
     NET LOANS                                                         $ 133,335          $ 130,707

     Premises and equipment                                                4,383              3,435
     Accrued interest receivable                                           1,937              1,853
     Other assets                                                          1,192              1,218

     TOTAL ASSETS                                                      $ 230,679          $ 233,978
                                                                       =========          =========

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
     Deposits:
       Demand                                                          $  38,229          $  42,025
       Savings and interest bearing demand                                83,786             81,015
       Time                                                               64,353             65,195
                                                                       ---------          ---------
     TOTAL DEPOSITS                                                    $ 186,368          $ 188,235

     Repurchase agreements                                                15,077             16,299
     Other borrowings                                                      4,536              4,556
     Accrued interest and other liabilities                                  903              2,303

     TOTAL LIABILITIES                                                 $ 206,884          $ 211,393
                                                                       ---------          ---------

SHAREHOLDERS' EQUITY
     Common stock (no par value); authorized 5,000,000 shares;
       issued and outstanding:  1999 - 3,927,706 shares;
       1998 - 3,891,136 shares                                            16,676             16,069
     Retained Earnings                                                     7,065              6,271
     Accumulated other comprehensive income                                   54                245
     TOTAL SHAREHOLDERS' EQUITY                                        $  23,795          $  22,585
                                                                       ---------          ---------

     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                        $ 230,679          $ 233,978
                                                                       =========          =========
</TABLE>


See accompanying notes



                                       1
<PAGE>   4


CITIZENS BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME 
(Unaudited) 
(Dollars in thousand, except per share amounts)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED
                                                                         MARCH 31,
                                                              --------------------------------
                                                                  1999                 1998
                                                              -----------          -----------
<S>                                                           <C>                  <C>        
INTEREST INCOME:
  Loans                                                       $     3,073          $     3,155
  Interest on deposits and federal funds sold                         240                  256
  Securities available for sale                                       691                  550
  Securities held to maturity                                          92                  119
                                                              -----------          -----------
  TOTAL INTEREST INCOME                                       $     4,096          $     4,080

INTEREST EXPENSE:
  Deposits                                                          1,296                1,224
  Borrowed funds                                                       72                   16
  Repurchase agreements                                               114                  140
                                                              -----------          -----------
  TOTAL INTEREST EXPENSE                                      $     1,482          $     1,380

  NET INTEREST INCOME                                         $     2,614          $     2,700

Provisions for credit losses                                          (66)                 (45)

  Net interest income after provision for credit losses       $     2,548          $     2,655

NON-INTEREST INCOME:
  Service charges on deposit accounts                                 273                  204
  Origination fees and gains on loans sold                              0                   17
  Gain(loss) on sales of securities available for sale                  0                   19
  Other                                                               297                  247
                                                              -----------          -----------
  TOTAL NON-INTEREST INCOME                                   $       570          $       487

NON-INTEREST EXPENSE:
  Salaries and employee benefits                                    1,055                  923
  Occupancy and equipment                                             248                  229
  Other                                                               596                  566
                                                              -----------          -----------
  TOTAL NON-INTEREST EXPENSE                                  $     1,899          $     1,718

  INCOME BEFORE INCOME TAXES                                  $     1,219          $     1,424
                                                              -----------          -----------

Income taxes                                                         (425)                (483)

  Net income                                                  $       794          $       941
                                                              ===========          ===========

OTHER COMPREHENSIVE INCOME, NET OF TAX:
  Unrealized gain (loss) on AFS securities, net                      (191)                   2
  Reclassification for gain included in net income                      0                  (10)

COMPREHENSIVE INCOME                                          $       603          $       933
                                                              ===========          ===========

Per share data:
Basic earnings per share                                      $      0.20          $      0.24
Weighted average number of common
 shares outstanding                                             3,922,830            3,889,608

</TABLE>




                                       2
<PAGE>   5


CITIZENS BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS
OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                     -----------------------------------------------------------------------------------
                                      NUMBER OF                                            ACCUMULATED
                                       COMMON            COMMON                              OTHER
                                       SHARES            STOCK            RETAINED        COMPREHENSIVE
                                     OUTSTANDING         AMOUNT           EARNINGS            INCOME             TOTAL
                                     -----------        ---------         ---------       -------------        ---------
<S>                                  <C>               <C>               <C>              <C>                  <C>      
Balance, at December 31, 1997         1,922,321          $15,517           $3,832            $  62             $19,411

Net Income                                   --               --              941               --                 941

Valuation adjustment, net                    --               --               --               (8)                 (8)

Issuance of common stock                 23,247              552               --               --                 552
                                      ---------          -------           ------            -----             -------

  BALANCE, AT MARCH 31, 1998          1,945,568          $16,069           $4,773            $  54             $20,896

Balance, at December 31, 1998         3,891,137          $16,069           $6,271            $ 245             $22,585

Net Income                                   --               --              794               --                 794

Valuation adjustment, net                    --               --               --             (191)               (191)

Issuance of common stock                 36,569              607               --               --                 607
                                      ---------          -------           ------            -----             -------

  BALANCE, AT MARCH 31, 1999          3,927,706          $16,676           $7,065             $ 54             $23,795
</TABLE>



                                       3
<PAGE>   6
CITIZENS BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                        THREE MONTHS ENDED
                                                                                              MARCH 31,
                                                                                     --------------------------
                                                                                       1999              1998
                                                                                     --------          --------
<S>                                                                                  <C>               <C>     
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                           $    794          $    941
Adjustments to reconcile net income to net
cash provided by operating activities:
  Provision for credit losses                                                              66                45
  Depreciation and amortization                                                           121               103
  Stock dividends received                                                                (13)              (12)
  (Increase) decrease in accrued interest receivable                                      (84)               46
  Increase (decrease)  in accrued interest payable                                          4                 5
  Other                                                                                   165               538
                                                                                     --------          --------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                            $  1,053          $  1,666

CASH FLOWS FROM INVESTING ACTIVITIES
  Net (increase) decrease in interest bearing deposits in banks                         4,277             3,981
  Net (increase) decrease in federal funds sold                                             0             2,600
  Proceeds from maturities of available for sale securities                             6,500             1,000
  Proceeds from sales of available for sale securities                                      0             9,519
  Proceeds from maturities of securities held to maturity                                   0             2,455
  Purchases of securities available for sale                                           (7,140)          (13,122)
  Purchases of securities held to maturity                                               (266)             (367)
  (Increase) decrease in loans made to customers, net of principal collections         (2,698)           (4,563)
  Purchases of premises and equipment and other                                        (1,040)              (22)
                                                                                     --------          --------
  NET CASH PROVIDED BY INVESTING ACTIVITIES                                          $   (367)         $  1,481

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in deposits                                                  (1,867)           (1,621)
  Net increase (decrease) in repurchase agreements and other borrowings                (1,242)           (1,021)
  Payment of dividends                                                                   (794)             (755)
                                                                                     --------          --------
  NET CASH USED IN FINANCING ACTIVITIES                                              $ (3,903)         $ (3,397)

  NET DECREASE IN CASH AND DUE FROM BANKS                                              (3,217)             (260)

CASH AND DUE FROM BANKS
  Beginning of year                                                                    12,771             9,268

  END OF YEAR                                                                        $  9,554          $  9,018
                                                                                     ========          ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Interest paid                                                                         1,478             1,375
  Income taxes paid                                                                       370                --
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
  Fair value adjustment of available for sale, net of tax                                (191)               (8)
  Issuance of common stock through dividend reinvestment plan                             607               552

</TABLE>




                                       4
<PAGE>   7



CITIZENS BANCORP
Notes to Consolidated Financial Statements (unaudited)

1.  BASIS OF PRESENTATION

    The interim condensed consolidated financial statements include the accounts
    of Citizens Bancorp ("Bancorp"), a bank holding company and its wholly owned
    subsidiary, Citizens Bank ("Bank") after elimination of intercompany
    transactions and balances. Substantially all activity of Citizens Bancorp is
    conducted through its subsidiary bank.

    The interim financial statements are unaudited but have been prepared in
    accordance with generally accepted accounting principles for interim
    condensed financial statements. Accordingly, the condensed interim financial
    statements do not include all of the information and footnotes required by
    generally accepted financial statements. In the opinion of management, all
    adjustments including operations for the interim periods included herein
    have been made.

    The interim condensed consolidated financial statements should be read in
    conjunction with the December 31, 1998 consolidated financial statements,
    including notes there to, included in Bancorp's 1998 Annual Report to
    shareholders.

2.  USE OF ESTIMATES IN THE PREPARATION OF FINANCIALS

    The preparation of financial statements, in conformity with general
    accounting principles, requires management to make estimates and assumptions
    that affect the reported amounts of assets and liabilities and disclosure of
    contingent assets and liabilities at the date of the financial statements
    and the reported amounts of revenues and expenses during the reporting
    period. Actual results could differ from those estimates.

3.  SHAREHOLDERS EQUITY AND NET INCOME PER COMMON SHARE

    The Board of Directors declared a $.36 per share dividend on December 15,
    1998, to Bancorp shareholders of record on that date payable on January 11,
    1999. Through the Dividend Reinvestment Plan (DRIP) 36,569 shares were
    purchased at a price of $16.60 per share. The DRIP resulted in an increase
    of shares outstanding from 3,891,137 to 3,927,706.

    All per share amounts have been restated to retroactively reflect stock
    dividends, stock purchased and stock splits previously reported.

4.  CONTINGENCIES

    Unfunded loan commitments totaled $21.1 million as of March 31, 1999 and
    $19.0 million as of December 31, 1998.

5.  ACCOUNTING CHANGES

    In the quarter ended March 31, 1998, the Company adopted Statement of
    Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS
    No. 130), which was effective for years beginning after December 15, 1997.
    SFAS No. 130 requires that an entity report and display comprehensive income
    with the same prominence as other financial statements. Comprehensive income
    is defined as the change in equity of a business enterprise during a period
    from transactions and other events and circumstances from non-owner sources.
    It includes all changes in equity during a period except those resulting
    from investments by owners and distributions to owners. With regard to the
    Company, currently the only items of comprehensive income are changes in the
    fair value of its available for sale securities portfolio. Accordingly,
    changes in the value of that portfolio during the period, net of tax, are
    reported as "Other Comprehensive Income" in the accompanying Consolidated
    Statement of Income and Comprehensive Income. Changes in the fair value of
    the available for sale securities portfolio for the three months ended March
    31, 1999, which were previously reported in the Consolidated Statement of
    Shareholders' Equity, have been reclassified and retroactively reported as
    Other Comprehensive Income. The cumulative adjustment, net of taxes, to
    record the available for sale securities portfolio at fair value at period
    end was previously reported as "Net unrealized gain (loss) on securities
    available for sale, net of tax" in the Company's consolidated balance
    sheets. That cumulative adjustment is now termed 'Accumulated other
    comprehensive income". There was no effect on previously reported net income
    as a result of this reporting change.


                                       5

<PAGE>   8


ITEM 2

                           MANAGEMENT'S DISCUSSION AND
                         ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

        Certain statements in this report may constitute forward-looking
statements within the definition of the "safe-harbor" provisions of the Private
Securities Reform Act of 1995. Such forward-looking statements are based on
reasonable assumptions by the Company's management within its current knowledge
of the Company's business and operations. These forward-looking statements are
subject to significant uncertainties which could cause actual results to differ
materially from those set forth in such statements. Forward-looking statements
can be identified by words such as "believe," "estimate," "anticipate,"
"expect," "intend," "will," may," "should," or other similar phrases or words.
Readers are cautioned not to place undue reliance on forward-looking statements.
The Company does not intend to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date of
the report or to reflect the occurrence of unanticipated events other than in
its periodic filings with the SEC.

OVERVIEW

Citizens Bancorp ("Bancorp"), an Oregon corporation, is the parent corporation
and holding company of Citizens Bank ("the Bank"), which is its sole subsidiary.
The Bank is an Oregon State-chartered banking corporation headquartered in
Corvallis, Oregon. The Bank was incorporated in 1957, Bancorp in 1996.

The Bank recently opened two new full service branches located in the
communities of Albany, Oregon and McMinnville, Oregon.

The new West Albany branch is the second branch in Albany for the Bank. The new
branch opened February 1999 in a newly constructed building of approximately
4,000 feet on leased land. The land lease is for a term of fifty years. The
manager for the new West Albany branch was the Bank's assistant manager at its
East Albany branch and has strong lending and management expertise.

The new McMinnville branch opened April 1999 in a temporary modular building
while a permanent facility is being constructed. The modular building is owned
by the Bank and will be used for future branch expansion projects or sold. The
McMinnville branch building is the same design as the new West Albany branch
with minor modifications to fit the property, saving the Bank costs relative to
plans and design. The Bank purchased the land for the branch which is in a prime
location in the downtown area. The McMinnville branch manager has over 25 years
experience in the banking industry with long term ties to the community.

Both Albany and McMinnville are fast growing markets for small to medium size
businesses. The Bank specializes in loans to small and medium sized businesses
and is well positioned to meet the needs for business loans in these
communities. The bank's strategic focus is relationship banking and anticipates
substantial opportunity for both deposit and loan growth for these new branches.

The Bank believes that expansion into these markets will enhance shareholder
value, contribute to its goal of strong financial performance, and provide
superior financial and customer service to these communities.

The Bank is in the final stages of installing a local and wide area network
("LAN/WAN") throughout its branch's and departments. Management believes that
the system will enhance productivity, efficiency, customer service, and
communication as well as its franchise value. The LAN/WAN will be the building
block for future technological enhancements and customer products.

Bancorp reported net income of $794,000, or $.20 per share for the three months
ending March 31, 1999, compared to net income of $941,000, or $.24 per share for
the same period in 1998. The net decrease is attributable to a decrease in
interest income from loans due to lower overall interest rates on loans and an


                                       6
<PAGE>   9
increase in expenses related to the opening of two new branches, improvements to
the technology infrastructure, and expenses related to Y2K readiness.

LOAN PORTFOLIO

The composition of the loan portfolio was as follows (in thousands):

<TABLE>
<CAPTION>
                                                 MARCH 31,         DECEMBER 31, 
                                                    1999               1998
                                                 ---------         ------------
<S>                                              <C>               <C>      
Commercial                                       $  27,190          $  26,234
Agriculture                                         12,074             12,402
Real Estate
  Construction                                       9,822          $   7,900
  1-4 Family                                        30,892             31,390
  Other                                             51,327             50,421
Consumer Loans                                       4,102              4,393

Less:  unearned income and deferred fees              (618)              (614)

TOTAL LOANS                                      $ 134,789          $ 132,126

Less:  allowance for credit losses                  (1,454)            (1,419)

                                                 ---------          ---------
NET LOANS                                        $ 133,335          $ 130,707
                                                 =========          =========
</TABLE>


Transactions in the reserve for credit losses were as follows for the three
months ended March 31, 1999:

<TABLE>
<CAPTION>
                                         1999           1998
                                        ------         ------
<S>                                     <C>            <C>   
Balance at beginning of period          $1,419         $1,201
Provision charged to operations             66             45
Loans recovered                              0              0
Loans charged off                           31              0
                                        ------         ------
                                        $1,454         $1,246
                                        ======         ======
</TABLE>

It is the policy of the Bank to place loans on nonaccrual after they become 90
days past due unless waived by management when collectability is deemed eminent.
The Bank may place loans that are not contractually past due or that are deemed
fully collateralized on nonaccrual status as a management tool to actively
oversee specific loans.

Loans on nonaccrual status as of March 31, 1999 and December 31, 1998 were
approximately $283,000 and $173,000 respectively. Loans past due 90 days or more
on which the Bank continued to accrue interest were approximately $305,000 at
March 31, 1999 and $447,000 at December 31, 1998. There were no loans with
modified terms as of March 31, 1999 and December 31, 1998.

INVESTMENT SECURITIES

The amortized cost and estimated book value of the investment securities held by
the Bank, including unrealized gains and losses, at March 31, 1999 and December
31, 1998, are as follows (in thousands):


<TABLE>
<CAPTION>
March 31, 1999                                    AMORTIZED      ESTIMATED     UNREALIZED 
                                                     COST        FAIR VALUE    GAINS, NET
                                                  ---------      ----------    -----------
<S>                                               <C>            <C>           <C>    
AVAILABLE FOR SALE
U.S. Treasury Securities
  (Including securities of government agencies
  and corporations)                                $50,372         $50,454         $82
Other                                                  702             702           0
                                                   -------         -------         ---
                                                   $51,074         $51,156         $82
</TABLE>



                                       7
<PAGE>   10
<TABLE>
<CAPTION>
March 31, 1999                                        AMORTIZED      ESTIMATED         UNREALIZED 
                                                         COST        FAIR VALUE        GAINS, NET
                                                      ---------      ----------        -----------
<S>                                                   <C>            <C>             <C>    

HELD TO MATURITY
U.S. Treasury Securities
  (Including securities of government agencies
  and corporations)                                     $ 2,010         $ 2,024         $    14
Obligations of State and Political Subdivisions           7,983           8,088             105
                                                        -------         -------         -------
                                                        $ 9,993         $10,112         $   119
</TABLE>


<TABLE>
<CAPTION>
December 31, 1999                                     AMORTIZED      ESTIMATED         UNREALIZED 
                                                         COST        FAIR VALUE        GAINS, NET
                                                      ---------      ----------        -----------
<S>                                                   <C>            <C>             <C>    

AVAILABLE FOR SALE
U.S. Treasury Securities
  (Including securities of government
  agencies and corporations)                            $49,816         $50,198         $   382
Other                                                       657             657               0
                                                        -------         -------         -------
                                                        $50,473         $50,855         $   382
HELD TO MATURITY
U.S. Treasury Securities
  (Including securities of government agencies
  and corporations)                                     $ 2,014         $ 2,036         $    22
Obligations of State and Political Subdivisions           7,719           7,821             102
                                                        -------         -------         -------
                                                        $ 9,733         $ 9,857         $   124
</TABLE>

MATERIAL CHANGES IN FINANCIAL CONDITION

Changes in the balance sheet for the three months ended March 31, 1999 include a
decrease in total assets. The decrease is primarily in cash and balances due
from depository institutions.

At March 31, 1999 total assets decreased 1.41% or approximately $3.3 million
over total assets at December 31, 1998. Major components of the change in total
assets were:

     -    $.9 million increase in premises and fixed assets

     -    $2.6 million increase in loans

     -    $.6 million increase in investments

     -    $7.2 million decrease in cash and cash equivalents

The increase in loans was primarily due to loan demand as a result of favorable
economic conditions, increased calling activity by the Bank's loan officers and
marketing of the Bank's personalized loan services. Loans increased from $130.7
million at December 31, 1998 to $133.3 million for the three month period ending
March 31, 1999. An increase of $2.6 million or 1.97 percent.

The increase in investments was a result of management's decision to place
excess funds into the investment portfolio. The timing of the maturities are
determined by using the Bank's asset/liability model. The Bank increased its
investments in tax-exempt municipal bonds, US Treasuries, and Government
Agencies.

At March 31, 1999 and December 31, 1998 the Bank kept its liquid funds in an
interest bearing account held at the Federal Home Loan Bank due to a more
favorable interest rate. The majority of the Banks liquid funds are held in its
interest bearing account at the Federal Home Loan Bank (FHLB). The balance at
the FHLB at March 31, 1999 was $14.1 million in an interest bearing demand
account. This account represents the Bank's surplus funds which can fluctuate
widely on a day to day basis.

The Bank experienced a net decrease in total deposits to $186.4 million at March
31, 1999 from $188.2 million at December 31, 1998 which represents a decrease of
$1.9 million or .99 percent. The net decrease in total deposits was the result
of an overall decrease in the balances in demand accounts and time deposits.
Demand deposits were approximately $38.2 million at March 31, 1999 and
approximately


                                       8
<PAGE>   11
$42.0 million at December 31, 1998. This fluctuation in demand account balances
is normal for the Bank. Average total deposits for three months ending March 31,
1999 was $184.1 million compared to $169.3 million for the year ending December
31, 1998.

Long-term borrowings from the Federal Home Loan Bank were utilized to fund and
match large long-term customer loans. Long term borrowings decreased by $.8
million for the quarter ending March 31, 1999 as compared to year end December
31, 1998. This reduction was a result of the monthly amortization of these
loans.

MATERIAL CHANGES IN RESULTS OF OPERATIONS

The Company reported net income of $794,000 or $.20 per share, for the three
months ended March 31, 1999, compared to net income of approximately $941,000,
or $.24 per share for the same period in 1998. This represents a decrease in net
income of $147,000 or 15.6 percent. The net decrease was attributable to a
decrease in interest income from loans, expenses relative to the opening of the
new West Albany Branch in a newly completed building in February 1999, the
opening of the new McMinnville Branch in April 1999 in a modular building while
the permanent building is constructed, the installation of a local and wide area
computer network and expenses related to Y2K readiness.

Total interest income increased approximately $16,000 for the three months ended
March 31, 1999 as compared to the same 1998 period. This increase was primarily
due to increases in interest income on security investments.

Net interest income decreased $86,000 or 3.2 percent for the three months ending
March 31, 1999. The net decrease during this period resulted from decreases in
interest income and an increase in interest expense on deposits from growth. The
decrease in interest income from loans is primarily due to declining rates on
prime based loans, refinancing of existing loans and repricing of maturing
loans.

Non-interest income increased approximately $83,000 for the three months ended
March 31, 1999 as compared to the same three month period in 1998. These
increases are attributable to an increase in service charge income as a result
of deposit growth, service charge increases, and increases in the volume of
bankcard services over last year for the same period.

Salaries and employee benefits increased approximately $132,000 for the three
month period ending March 31, 1999 compared to the same three month period in
1998. These increases were primarily due to routine adjustments in officer and
staff salaries, staff increases due to the new West Albany Branch and
McMinnville Branch, and technical support staff.

Other non-interest expense excluding salaries and employee benefits increased
approximately $49,000 for the three months ended March 31, 1999 as compared to
the same three month period in 1998. This increase was primarily due to
increases in expense relative to growth of the merchant bankcard and debit card
products, an increase in depreciation expense due to the continuous updating of
equipment relative to technology and computers.

CREDIT LOSS PROVISION

The Bank maintains an allowance for credit losses on loans that occur from time
to time as an incidental part of the business of banking. Loans are charged
against this allowance for credit losses which is adjusted periodically to
reflect changing loan volumes, risk potential in the portfolio and general
economic conditions. Additions to the allowance for credit losses are made
through a charge against income.

During the first three months ended March 31, 1999 the Bank funded the allowance
for credit losses $66,000 from operations and $45,000 for the same three month
period during 1998. The increase in the provision for credit losses was incurred
to match the increased loan growth. The Bank experienced $31,000 in credit
losses for the three months ended March 31, 1999 and no credit losses for the
same period ended March 31, 1998. The historical level of loan charge offs has
been very low for the Bank.


                                       9
<PAGE>   12


Management's assessment of the reserve for credit losses includes various
factors such as current delinquent and non-performing loans, historical analysis
of industry credit loss experience, knowledge of the present and anticipated
economic future of its market area and loan grades. The Bank is satisfied that
the allowance for credit losses at March 31, 1999 of $1,454,000 or 1.08% of
total loans is an appropriate amount.

YEAR 2000 ISSUES

Citizens Bancorp first became aware of the Year 2000 (Y2K) problem through a
combination of industry contacts and the Federal Financial Institutions
Examination Council (FFIEC) statement "The Effect of Year 2000 on Computer
Systems" issued in June 1996. The problem, as it is commonly defined, arose out
of a shortage of disk space in the early 1960's and 1970's. Instead of storing
dates as four digits (1997), they were shortened to two digits (97). However,
when the clock rolls over to 2000, many systems will think "00" is 1900, rather
than 2000. Hardware or software that runs on a time schedule or involves
calculations based on dates can be seriously affected. Without correction, the
expanded date formats of the new millennium will cause many operating systems to
produce incorrect data or cause them to fail completely.

At Citizens Bancorp we recognize this problem as one of more than just a
technological/mechanical risk. We see the Y2K problem representing a regulatory
and ongoing business operations challenge not only to our business but to those
that we interact with as well.

The Y2K challenge is a particular problem for financial institutions, since many
financial transactions, such as interest accruals and payments, are date
sensitive. It also may affect the operations of third parties with whom Citizens
Bancorp and its subsidiary Citizens Bank (collectively, the "Company") do
business, including the Company's vendors, suppliers, utility companies, and
customers.

The Company is committed to addressing these Y2K challenges in a prompt and
responsible manner. The Company's year 2000 compliance plan ("Y2K Plan") follows
the five-step approach outlined by the FFIEC of Awareness, Assessment,
Renovation, Validation, and Implementation in mitigating this risk on all
fronts. The Company has substantially completed the awareness and assessment
phases, although appropriate follow-up activities are continuing to occur. The
Company is currently involved in the testing phase of the Y2K Plan. Validation
will take place after each piece of testing is completed and renovation will
continue to be done on an "as needed" basis.

The Company has assigned primary responsibility for the Y2K project to its Chief
Operating Officer. The Company has also formed a Y2K committee, consisting of
appropriate representatives from its critical operational areas. In addition,
the Company provides periodic reports to its Board of Directors in order to
assist them in overseeing the Company's Y2K Readiness.

During the Assessment phase of our Y2K preparation, an individual analysis of
each hardware, software and time sensitive environmental application used by the
Company was completed. This assessment included a risk evaluation, which
measured the criticality of the application, a rating of confidence of the
Company to achieve a compliant status, and a determination of the level of
control the Company has in effecting change in the compliance process. The
designation "Mission Critical", meaning those systems that should they fail
would have a significant adverse impact on the Company's operations and
financial condition as well as those of its customers, and "Non Mission
Critical", meaning those system which are less essential to functionality of the
Company, were then assigned to each application.

The Company has also requested documentation of compliance from the vendor of
each application. In addition, a primary solution for on site compliance of each
application as used was selected and a testing approach was established. An
individual contingency plan was then written for each application should testing
fail or functionality be effected after the date change.

Well in advance of all federally mandated time frames, the Company has
internally established and is currently on track with the following tables:


                                       10
<PAGE>   13


<TABLE>
<S>                                                             <C>
     Mission Critical testing completed                         12/31/98 
     Mission Critical process validation completed               3/31/99 
     Mission Critical remediation as necessary completed         3/31/99 
     Non-Mission Critical testing complete                       5/31/99
     Non-Mission Critical process validation complete            6/30/99 
     Non-Mission Critical remediation as necessary complete      6/30/99
</TABLE>

The Company has established a budget for extraordinary expenses related to Y2K
of approximately $300,000. The budget includes an estimation of both real costs
and lost opportunities relative to investments and loans. Approximately
$38,000.00 of this amount has already been incurred.

The potential risk involved with issues brought about by the advent of Y2K are
extensive and could be serious in nature. The possible interruption of business
operations for the Company, its customers, and vendors has the potential to
impact financial condition, liquidity, and create a material loss of revenue.
Based on the Company's extensive investment of resources, both human and
financial, in preparing for the issues surrounding Y2K and the highly regulated
nature of the business, management anticipates that the Company will be well
prepared to avoid any significant detrimental effects. Since the Company has
drawn specific contingency plans for each application it uses that could be
impacted by Y2K, the worst case scenario is believed to stem from the potential
of environmental Y2K failures, such as power or telecommunications, the
preparation for which are generally out of the Company's control. The Company
continues to monitor the progress of these entities toward Y2K compliance and by
June of 1999 will more fully develop the contingency plans for environmental
failure as more specifics of readiness for these vendors are available. The
Company also anticipates the possible scenario of several borrowing customers
experiencing short term Y2K cash flow problems and a pre-Y2K increase in cash
demand by all customers. If the Company has borrowers that experience Y2K cash
flow problems, they will be dealt with in the same routine manner by which
normal cash flow interruptions experienced by borrowers are addressed. Any
increase in cash demand will be funded by the Company's normal currency ordering
procedures funded by deposits held at the Federal Reserve Bank and investments
maturing in 1999. The Company has sufficient liquidity to cover anticipated
withdrawals. In summary, the Company believes it will be Y2K compliant by its
internally established timelines which are well ahead of the actual century date
change and will have sufficient contingency plans in place to maintain a
satisfactory level of business operations.

LIQUIDITY AND CAPITAL RESOURCES

Bancorp's subsidiary, the Bank, has adopted policies to maintain a relatively
liquid position to enable it to respond to changes in the Bank's financial
environment. Generally, the Bank's major sources of liquidity are customer
deposits, sales and maturities of securities, the use of borrowing lines with
correspondent banks including Federal Home Loan bank borrowings, loan repayments
and net cash provided by operating activities.

The analysis of liquidity should also include a review of the changes that
appear in the consolidated statement of cash flows for the first three months of
1999. The statement of cash flows includes operating, investing and financing
categories. Operating activities include net income which is adjusted for
non-cash items and increases or decreases in cash due to certain changes in
assets and liabilities. Investing activities consisted primarily of both
proceeds from and purchases of securities, and the net growth in loans.
Financing activities present the cash flows associated with the Bank's deposit
accounts.

Management believes that the Bank's existing sources of liquidity will enable
the Bank to fund its requirements in the normal course of business.

As of March 31, 1999, shareholders' equity totaled $23,795,000 as compared to
$22,585,000 for the same three month period in 1998, an increase of 5.36%. This
increase in equity was primarily due to the Company's net income.



                                       11
<PAGE>   14
Capital ratios for the Company were as follows as of the dates indicated:

<TABLE>
<CAPTION>
                                                                     BANCORP
                                 ADEQUATELY       WELL       ------------------------
                                 CAPITALIZED   CAPITALIZED   MARCH 31,   DECEMBER 31, 
                                  STANDARDS     STANDARDS      1999        1998
                                 -----------   -----------   ---------   ------------
<S>                              <C>           <C>           <C>         <C>

Tier 1 Leverage Ratio                4%            5%        10.31%        9.79%
Tier 1 Risk Based Capital Ratio      4%            6%        16.44%       15.53%
Total Risk Based Capital Ratio       8%           10%        17.46%       16.53%
</TABLE>


ITEM 3.  QUANTITATIVE & QUALITATIVE ANALYSIS ABOUT MARKET RISK

No material changes have occurred in market risk since reported on December 31,
1998.



                                       12
<PAGE>   15



                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

             None

ITEM 2.  CHANGES IN SECURITIES

             None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

             None

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

             None

ITEM 5.  OTHER INFORMATION

             None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits

             The following exhibit is filed as part of this report.

             27.0 Financial Data Schedule for the three months ended March 31,
             1999.

         (b) Reports on Form 8-K

             None


                                       13
<PAGE>   16



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                 Date:  May 13, 1999          /s/ William V. Humphreys
                                              ----------------------------------
                                          By: William V. Humphreys
                                              President and
                                              Chief Executive Officer

                 Date:  May 13, 1999          /s/ Lark E. Wysham      
                                              ----------------------------------
                                          By: Lark E. Wysham
                                              Senior Vice President and
                                              Chief Financial Officer



                                       14