-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KqxHu2IZWaxVPhTHqBjqUk+DMtUsLG+eaPjmWDW9vJAbzxRGzYohRF9eyd16GbtM aSkGlrJenwC60BnzeOg4OA== 0000891092-04-004878.txt : 20041019 0000891092-04-004878.hdr.sgml : 20041019 20041019094836 ACCESSION NUMBER: 0000891092-04-004878 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041019 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041019 DATE AS OF CHANGE: 20041019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS SOUTH BANKING CORP CENTRAL INDEX KEY: 0001051871 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 542069979 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23971 FILM NUMBER: 041084363 BUSINESS ADDRESS: STREET 1: 245 WEST MAIN AVENUE CITY: GASTONIA STATE: NC ZIP: 28052-4140 BUSINESS PHONE: 7048685200 MAIL ADDRESS: STREET 1: P.O. BOX 2249 CITY: GASTONIA STATE: NC ZIP: 28053-2249 FORMER COMPANY: FORMER CONFORMED NAME: GASTON FEDERAL BANCORP INC DATE OF NAME CHANGE: 19971222 8-K 1 e19315_8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 Date of Report: October 19, 2004 Citizens South Banking Corporation -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-23971 54-2069979 - ---------------------------- ---------------- ------------------- (State or other jurisdiction (Commission File (I.R.S. Employer of incorporation) Number) Identification No.) 519 Soutn New Hope Road, Gastonia, North Carolina 28054-4040 - -------------------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 704-868-5200 9.01. Exhibits 99 Additional Exhibits: (a) Earnings Press Release of Citizens South Banking Corporation Item 2.02. Results of Operations and Financial Condition On October 18, 2004, Citizens South Banking Corporation issued a press release to announce its results of operations for the quarters and nine months ended September 30, 2004 and 2003. The text of the press release and related financial supplements are included as Exhibit 99 (a) to this report. The information included in the text and financial supplements of the press releases is considered to be "furnished" under the Securities Exchange Act of 1934. The Company will include final financial statements and additional analyses for the quarters ended September 30, 2004, and 2003, as part of its Form 10-Q covering that period. 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, hereunto duly authorized. CITIZENS SOUTH BANKING CORPORATION DATE: October 19, 2004 By: /s/ Kim S. Price ------------------------------------- Kim S. Price President and Chief Executive Officer By: /s/ Gary F. Hoskins ------------------------------------- Gary F. Hoskins Chief Financial Officer EX-99 2 e19315ex99.txt PRESS RELEASE Exhibit 99 Citizens South Banking Corporation Announces Earnings for the Quarter Ended September 30, 2004 GASTONIA, N.C., Oct. 18 /PRNewswire-FirstCall/ -- Citizens South Banking Corporation (Nasdaq: CSBC), the holding company for Citizens South Bank, announced earnings for the quarter ended September 30, 2004, of $770,000, or $0.11 per diluted share, compared to $94,000, or $0.01 per diluted share, for the quarter ended September 30, 2003. The Company's net interest income increased by $255,000, or 8.5%, from the third quarter 2003 to the third quarter 2004. As a result, the net interest margin increased to 2.58% for the third quarter 2004 from 2.43% for the same period a year ago, and from 2.47% in the second quarter 2004. This margin expansion was due in part to the three recent 0.25% increases in the prime lending rate. Also, during the third quarter, total loans increased by $11.2 million, or 14.8% annualized. Nonperforming assets increased from 0.26% of total assets at September 30, 2003, to 0.35% of total assets at September 30, 2004, and continues to compare favorably with industry peers. Deposits increased by $32.0 million, or 9.4%, from $339.6 million on September 30, 2003, to $371.6 million on September 30, 2004. The strongest area of growth came from core (non-time) deposit accounts, which increased by $21.4 million, or 17.0%, year-over-year. For the third quarter, noninterest expense decreased 21.3% from $4.1 million in 2003 to $3.3 million in 2004. This decrease was largely the result of a $1.3 million prepayment penalty on Federal Home Loan Bank advances that was paid during the third quarter 2003. Absent the expense associated with the prepayment penalty, noninterest expense increased by $404,000, or 14.2%, from the third quarter 2003 to the corresponding period 2004. This increase is the result of branch expansion, new and enhanced technological investments, and costs associated with the development of the Company's loan production office in Cornelius, North Carolina, and the development of the Company's Hispanic banking initiative. Noninterest income during the comparable quarters decreased 7.2% from $1.2 million to $1.1 million, primarily as a result of a $101,000 decrease in revenues from mortgage banking activities and a $95,000 reduction in the gain on sale of assets during the quarter. These decreases were partially offset by a $30,000 increase in fee income on deposits. Kim S. Price, President and CEO, commented, "We are quite pleased with the continued positive developments in our core franchise as demonstrated by renewed loan and deposit growth. We believe that the recent increase in the prime lending rate will continue to provide some benefit to our net interest margin and that our recently announced expansion in Cornelius, NC, will assist us in leveraging our strong capital base. We are also optimistic about the revenue possibilities from our Hispanic initiative announced earlier today." Citizens South Bank, headquartered in Gastonia, North Carolina, was founded in 1904 and is celebrating its 100th anniversary. The Bank had approximately $507 million in assets at September 30, 2004, and operates ten full-service offices located in three North Carolina counties -- Gaston, Rowan, and Iredell. This news release contains certain forward-looking statements, which are subject to risks and uncertainties. A number of factors could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's reports filed from time to time with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended December 31, 2003, describe some of these factors. Forward-looking statements speak only as of the date they are made and the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date of the forward-looking statements or to reflect the occurrence of unanticipated events. Citizens South Banking Corporation Selected Financial Information (dollars in thousands, except per share data) Quarter ended Quarter ended September 30, September 30, Year ended Year ended 2004 2003 December 31, December 31, 2003 2002 Income Statement Data: Interest income $5,318 $5,206 $21,969 $24,716 Interest expense 2,058 2,202 8,732 10,195 Net interest income 3,260 3,004 13,237 14,521 Provision for loan losses 60 15 60 225 Net int. income after provision for loan losses 3,200 2,989 13,177 14,296 Noninterest income 1,076 1,159 5,561 4,121 Noninterest expense 3,264 4,148 13,891 11,381 Income before income taxes 1,012 0 4,847 7,036 Income tax expense 242 (94) 1,456 2,528 Net income $770 $94 $3,391 $4,508 Per Share Data: Basic net income $0.11 $0.01 $0.39 $0.51 Diluted net income 0.11 0.01 0.39 0.51 Cash dividends declared 0.065 0.06 0.24 0.16 Period-end book value 9.75 10.42 10.11 10.64 Financial Ratios: Return on average stockholders' equity 4.29% 0.40% 3.61% 7.61% Return on average assets 0.61 0.08 0.68 0.98 Efficiency ratio 74.99 100.29 78.16 61.11 Net interest margin 2.58 2.43 2.67 3.17 Average equity to average assets 14.20 19.11 18.96 12.93 Asset Quality Data: Allowance for loan losses $2,916 $3,007 $2,969 $2,995 Nonperforming loans 1,569 1,102 529 516 Nonperforming assets 1,796 1,270 674 1,823 Allowance for loan losses to total loans 0.94% 1.01% 0.97% 0.97% Nonperforming loans to total loans 0.50 0.38 0.18 0.17 Nonperforming assets to total assets 0.35 0.26 0.14 0.37 Average Balances: Total assets $505,665 $493,732 $495,198 $458,316 Loans receivable, net of unearned income 300,163 294,980 297,517 320,505 Interest-earning assets 452,820 448,698 450,826 416,748 Deposits 374,464 337,595 328,722 337,422 Interest-bearing liabilities 409,363 377,824 379,960 381,664 Stockholders' equity 71,798 94,408 93,873 59,243 Common shares outstanding, basic 7,213,577 8,596,575 8,623,838 8,767,982 Common shares outstanding, diluted 7,323,021 8,752,979 8,762,545 8,870,054 At Period End: Total assets $506,786 $498,341 $495,751 $492,873 Loans receivable, net unearned income 311,380 288,699 297,995 302,900 Interest-earning assets 452,905 441,996 448,401 456,611 Deposits 371,604 339,619 342,446 340,862 Interest-bearing liabilities 408,630 379,967 388,434 377,234 Stockholders' equity 72,670 91,667 87,669 96,383 Other Data: Amortization of intangible assets $104 $91 $404 $963 Net gain / (loss) on sale of assets (10) 23 1,022 105 Vesting expense for recognition and retention plan 0 0 975 0 Prepayment penalty on FHLB advances 0 1,289 1,289 65 Citizens South Banking Corporation Consolidated Statements of Financial Condition (dollars in thousands) September 30, December 31, 2004 2003 (unaudited) ASSETS Cash and due from banks $6,097 $5,374 Interest-earning bank balances 850 2,840 Cash and cash equivalents 6,947 8,214 Investment securities available-for-sale, at fair value 55,983 56,233 Mortgage-backed securities available-for-sale, at fair value 86,485 89,168 Loans receivable, net unearned income 311,380 297,995 Allowance for loan losses (2,916) (2,969) Real estate acquired through foreclosure, net 227 145 Accrued interest receivable 1,614 1,943 Premises and equipment, net 17,689 14,939 Federal Home Loan Bank stock, at cost 2,900 2,915 Bank owned life insurance 12,779 12,317 Intangible assets 7,659 7,985 Other assets 6,039 6,866 Total assets $506,786 $495,751 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Demand deposit accounts $50,491 $43,686 Money market deposit accounts 67,410 48,189 Savings accounts 29,618 36,754 Time deposits 224,085 213,817 Total deposits 371,604 342,446 Borrowed money 55,819 58,981 Deferred compensation 5,751 6,165 Other liabilities 942 490 Total liabilities 434,116 408,082 Stockholders' Equity: Common stock issued and outstanding, $0.01 par value, 20,000,000 shares authorized, 9,062,727 issued and outstanding in 2004 and 2003 91 91 Additional paid-in-capital 68,280 68,280 Unallocated common stock held by Employee Stock Ownership Plan (1,842) (1,979) Unearned compensation related to Recognition and Retention Plan (1,712) (1,979) Retained earnings, substantially restricted 29,968 28,824 Accumulated unrealized gain on securities available-for-sale, net of tax (439) (40) Treasury stock of 1,610.683 shares at September 30, 2004, and 392,414 shares at December 31, 2003 (21,676) (5,528) Total stockholders' equity 72,670 87,669 Total liabilities and stockholders' equity $506,786 $495,751 Citizens South Banking Corporation Consolidated Statements of Operations (unaudited) (in thousands, except per share data) Three Months Nine Months Ended September 30, Ended September 30, 2004 2003 2004 2003 Interest income Loans $4,044 $4,077 $11,752 $ 12,910 Investment securities 490 311 1,447 1,000 Interest-bearing deposits 47 57 113 219 Mortgage-backed and related securities 737 761 2,156 2,625 Total interest income 5,318 5,206 15,468 16,754 Interest Expense Deposits 1,591 1,603 4,478 5,037 Borrowed funds 467 599 1,362 1,779 Total interest expense 2,058 2,202 5,840 6,816 Net interest income 3,260 3,004 9,628 9,938 Provision for loan losses 60 15 120 45 Net interest income after provision for loan losses 3,200 2,989 9,508 9,893 Noninterest Income Fee income on deposit accounts 644 614 1,801 1,791 Fee income on mortgage banking and lending activities 140 241 427 754 Dividends on FHLB stock 24 21 69 79 Gain on sale of assets 13 108 483 168 Fair value adjustment on deferred compensation assets 46 (8) 80 178 Other noninterest income 209 183 707 631 Total noninterest income 1,076 1,159 3,567 3,601 Noninterest Expense Compensation and benefits 1,504 1,511 4,507 4,498 Vesting expense for Recognition and Retention Plan 0 0 355 0 Fair value adjustment on deferred compensation obligation 46 (8) 80 179 Occupancy and equipment expense 510 349 1,286 993 Professional services 136 113 392 444 Amortization of intangible assets 104 91 320 323 Prepayment penalty on FHLB advances 0 1,289 0 1,289 Loss on sale of assets 23 85 23 99 Other noninterest expenses 941 718 2,361 2,217 Total noninterest expense 3,264 4,148 9,324 10,042 Income before income taxes 1,012 0 3,751 3,452 Provision for income taxes 242 (94) 1,072 1,028 Net income $770 $94 $2,679 $2,424 Basic earnings per share $0.11 $0.01 $0.35 $0.28 Diluted earnings per share $0.11 $0.01 $0.34 $0.28 Basic average common shares outstanding 7,213,577 8,596,575 7,755,483 8,670,591 Diluted average common shares outstanding 7,323,021 8,752,979 7,854,010 8,810,380 SOURCE Citizens South Banking Corporation -0- 10/18/2004 /CONTACT: Gary F. Hoskins, CFO of Citizens South Banking Corporation, +1-704-884-2263, or gary.hoskins@citizenssouth.com / /Web site: http://www.citizenssouth.com/ (CSBC) CO: Citizens South Banking Corporation ST: North Carolina IN: FIN SU: ERN -----END PRIVACY-ENHANCED MESSAGE-----