Citizens Bancorp, the holding company that operates 123 Citizens Bank branches in Maryland, Virginia and the District, reported a 10 percent decline in its second-quarter profit and a 9 percent drop in the first half.

Citizens attributed the declines to increased spending in such areas as data processing, training and employee salaries, and said its loan portfolio was strong.

The Laurel-based bank firm earned $7.8 million (54 cents a share) in the second quarter, compared with $8.7 million (60 cents) in the same period a year earlier.

Citizens reported a $15.3 million ($1.06) profit in the first half, compared with $16.9 million ($1.17) in the year-ago first half.

The company's assets stood at $2.5 billion as of June 30, up 18 percent over last year.

Trustbank Savings F.S.B., the federally chartered savings bank that operates 38 retail branches in the Washington area, said its earnings fell 1 percent in the fiscal first quarter ended June 30, despite a $2.2 million gain on the sale of loan servicing rights.

McLean-based Trustbank said it earned $2 million (39 cents) in the quarter, compared with $2.2 million (43 cents) in the year-ago quarter.

Trustbank said total assets stood at $1.88 billion as of June 30, compared with $2.24 billion at the same point a year ago. The asset reduction funded the payoff of $357 million of borrowings while deposits remained level with a year ago, it said.

"The recent slump in real estate sales and values in the Washington metropolitan area provides our greatest concern for future short-term operating results," a bank statement said.

"The uncertainty caused by this slowdown may continue to depress earnings."

James Madison Ltd., the District-based bank company whose holdings include Madison National Bank, Madison National Bank of Virginia and Madison Bank of Maryland, said its profit fell 14 percent in the second quarter and 1.4 percent in the first half.

The bank company attributed the decline to growth in its reserve that covers potential losses in commercial real estate loans, offsetting a $2.1 million pretax gain from the sale of loan servicing rights.

James Madison said its second-quarter earnings totaled $786,000 (7 cents), compared with $910,000 (10 cents) in the 1989 second quarter.

First-half profits totaled $1.44 million (14 cents), compared with $1.46 million (15 cents) in the same period a year ago.

Total assets stood at $895.7 million as of June 30, up 14 percent from $786.8 million at the same point a year earlier.

Mid-Atlantic Medical Services Inc., the Rockville-based company that operates health maintenance organizations in the area, said its profit soared 238 percent in the first half on the strength of membership growth for its HMOs.

Mid-Atlantic reported first-half earnings of $3.18 million (46 cents a share), compared with $941,000 (14 cents) in the year-ago first half.

Revenue rose 75 percent in the first half, to $93.8 million from $53.5 million in the 1989 first half.

Mid-Atlantic did not release second-quarter earnings figures.

The company said membership in its health plans, including preferred provider organizations, grew 40 percent in the past six months. The growth has led Mid-Atlantic to increase its year-end earnings forecast to $1.10 a share from 88 cents.

Its board also approved a two-for-one stock split for all shareholders of record as of July 31.