-----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, Vsth/sntru0a7cpxYZfxtMPEiymLMwdjFTnH9DlocPq5Yqfu6YDvY+l3xro7Jn/D iHArU2fUUbc8itGcFgcXzg== 0001169232-03-004682.txt : 20030723 0001169232-03-004682.hdr.sgml : 20030723 20030723151753 ACCESSION NUMBER: 0001169232-03-004682 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030721 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030723 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: 03798223 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 d56335_8-k.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 Exchange Act of 1934 Date of Report (Date of earliest event reported): July 21, 2003 Citizens South Banking Corporation (Exact name of registrant as specified in its charter) Delaware 0-23971 54-2069979 (State or other jurisdiction (Commission File No.) (I.R.S. Employer of incorporation) Identification No.) Registrant's telephone number, including area code: (704) 868-5200 Not Applicable (Former name or former address, if changed since last report) Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits The Index of Exhibits immediately precedes the attached exhibits. Item 9. Regulation FD Disclosure - Item 12 Information On July 21, 2003, the Company issued two press releases regarding 1) earnings for the quarter ended June 30, 2003, and 2) the declaration of dividends. The press releases are included as Exhibit 99 to this report. 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: July 23, 2003 By: /s/ Kim S. Price ------------------------------------- Kim S. Price President and Chief Executive Officer By: /s/ Gary F. Hoskins ------------------------------------- Gary F. Hoskins Chief Financial Officer EXHIBIT INDEX The following Exhibits are filed as part of this report: Exhibit 99.1 Earnings Press Release of Citizens South Banking Corporation Exhibit 99.2 Dividend Press Release of Citizens South Banking Corporation EX-99.1 3 d56335_ex99-1.txt EARNINGS PRESS RELEASE EXHIBIT 99.1 EARNINGS PRESS RELEASE OF CITIZENS SOUTH BANKING CORPORATION CITIZENS SOUTH BANKING CORPORATION ANNOUNCES EARNINGS FOR THE QUARTER ENDED JUNE 30, 2003 GASTONIA, NC, July 21, 2003 --- Citizens South Banking Corporation (Nasdaq: CSBC), the holding company for Citizens South Bank, announced earnings for the quarter ended June 30, 2003, of $1.1 million, or $0.13 per share. Earnings for the same quarter in 2002 were also $1.1 million, or $0.13 per share. Net income for the six months ended June 30, 2003, was $2.3 million, or $0.26 per share, as compared to $2.1 million, or $0.24 per share, for the six months ended June 30, 2002. This represents an increase of $209,000, or 9.8%, in net income and a $0.02, or 8.3%, increase in earnings per share compared to the prior six-month period. Second quarter earnings remained flat from 2002 to 2003, primarily due to continued compression of our net interest margin from 3.3% to 2.7%, resulting from continued decreases in market interest rates. As a result, net interest income decreased by $294,000, or 8.0%, from the quarter ended June 30, 2002, to the comparable period in 2003. Historically low interest rates have spurred an unprecedented level of loan refinancing as well as decreases in interest rates on variable rate loans and yields on investments, resulting in a $548,000, or 8.8%, decrease in interest income. The decrease in interest income was partially offset by a $253,000, or 10.0%, decrease in interest expense, primarily due to lower interest rates paid on deposits. Quarterly noninterest income increased by $454,000, or 50.2%, due in part to a $96,000 increase in loan fee income resulting from increased mortgage banking activity and a $50,000 increase in fees on transaction accounts. During the comparable quarters, noninterest expense increased by $421,000, or 15.5%. This change was largely attributable to a $187,000 increase in compensation resulting mainly from the increased staffing associated with the opening of the Bank's tenth full-service office, located in Mooresville, North Carolina. Also, there was a $111,000 increase in professional services arising in part from measures to ensure compliance with the Sarbanes-Oxley Act and additional expenses associated with operation as fully converted Delaware stock corporation. These increases in noninterest expense were partly offset by a $146,000 decrease in the amortization of the core deposit intangible during the second quarter of 2003. The provision for income taxes decreased by $200,000, or 30.9%, due to slightly lower pretax earnings and a higher percentage of income derived from tax-advantaged assets such as bank owned life insurance. The Company's asset quality remains strong despite the continued weakness in the local and national economies. The Company's ratio of nonperforming assets to total assets was 0.19% as of June 30, 2003, compared to 0.65% as of June 30, 2002, and our ratio of nonperforming loans to total loans was 0.26% as of June 30, 2003, compared to 0.40% as of June 30, 2002. Continued weakness in the local and national economies may result in some increase of nonperforming loans in the future. President and CEO Kim Price commented, "During this period of industry-wide margin compression, we remain focused on the successful deployment of the additional capital raised during 2002, improving our net interest margin, enhancing existing customer relationships and attracting new customers, while maintaining a high level of asset quality. We are committed to the enhancement of long-term shareholder value and have resisted opportunities to elevate quarterly earnings at the expense of long-term value. We have kept our investment portfolio short in duration and we will maintain our stringent credit quality standards. Management believes that these actions will serve us and our shareholders well in the longer term." Citizens South Bank was founded in 1904 and has ten offices in three North Carolina counties - Gaston, Rowan, and Iredell, including eight cities - three in Gastonia and one each in Dallas, Mount Holly, Stanley, Salisbury, Rockwell, Statesville, and Mooresville. 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, 2002, 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. (Tables Follow) # # # Citizens South Banking Corporation Selected Financial Information (dollars in thousands, except per share data)
Quarter ended Quarter ended Year ended Year ended June 30, 2003 March 31, 2003 December 31, 2002 December 31, 2001 ------------- -------------- ----------------- ----------------- (unaudited) (unaudited) Income Statement Data: Interest income ......................... $ 5,645 $ 5,903 $ 24,716 $ 16,382 Interest expense ........................ 2,286 2,328 10,195 9,770 ---------- ---------- ---------- ----------- Net interest income ..................... 3,359 3,575 14,521 6,612 Provision for loan losses ............... 15 15 225 120 ---------- ---------- ---------- ----------- Net int. income after provision for loan losses ................................ 3,344 3,560 14,296 6,492 Noninterest income ...................... 1,358 1,084 4,121 3,006 Noninterest expense ..................... 3,131 2,763 11,381 7,092 ---------- ---------- ---------- ----------- Income before income taxes .............. 1,571 1,881 7,036 2,406 Income tax expense ...................... 447 674 2,528 702 ---------- ---------- ---------- ----------- Net income .............................. $ 1,124 $ 1,207 $ 4,508 $ 1,704 Per Share Data (1): Basic net income ........................ $ 0.13 $ 0.14 $ 0.51 $ 0.20 Diluted net income ...................... 0.13 0.14 0.51 0.20 Cash dividends declared ................. 0.06 0.06 0.16 0.14 Period-end book value ................... 10.67 10.68 10.64 4.62 Financial Ratios: Return on average stockholders' equity .. 4.72% 5.00% 7.61% 4.17% Return on average assets ................ 0.90 0.97 0.98 0.65 Efficiency ratio ........................ 66.96 59.26 61.11 73.64 Net interest margin ..................... 2.69 2.88 3.17 2.52 Average equity to average assets ........ 19.10 19.41 12.93 15.55 Asset Quality Data: Allowance for loan losses ............... $ 3,002 $ 3,000 $ 2,995 $ 3,136 Nonperforming loans ..................... 802 570 516 846 Nonperforming assets .................... 948 810 1,823 2,306 Allowance for loan losses to total loans 0.98% 0.98% 0.97% 0.91% Nonperforming loans to total loans ...... 0.26 0.19 0.17 0.35 Nonperforming assets to total assets .... 0.19 0.16 0.37 0.59 Average Balances: Total assets ........................... $ 498,901 $ 496,746 $ 458,316 $ 262,800 Loans receivable, gross ................ 304,980 299,144 320,505 166,574 Interest-earning assets ................ 454,675 453,110 416,748 245,652 Deposits ............................... 342,817 338,799 337,422 169,000 Interest-bearing liabilities ........... 383,355 374,869 381,664 211,620 Stockholders' equity ................... 95,268 96,648 59,243 40,876 Common shares outstanding, basic (1) ... 8,660,195 8,757,664 8,767,982 8,745,626 Common shares outstanding, diluted (1) 8,808,915 8,920,531 8,870,054 8,786,263 At Period End: Total assets ........................... $ 501,217 $ 501,216 $ 492,567 $ 447,581 Loans receivable, gross ................ 306,537 306,340 308,408 342,841 Interest-earning assets ................ 454,746 457,433 456,611 408,475 Deposits ............................... 345,014 343,865 340,862 353,692 Interest-bearing liabilities ........... 384,239 383,287 377,234 387,796 Stockholders' equity ................... 95,253 96,795 96,383 41,630 Other Data: Amortization of core deposit intangible . $ 106 $ 126 $ 963 $ 0 Net gain / (loss) on sale of assets ..... 42 4 105 (10)
Footnotes: (1) All share and per share data have been restated to reflect the 2.1408 conversion ratio of existing shares of common stock used in the second-step stock offering that was completed on September 30, 2002. Common shares outstanding exclude unallocated shares held by the ESOP. Citizens South Banking Corporation Consolidated Statements of Financial Condition (dollars in thousands)
June 30, December 31, 2003 2002 ----------- ------------ (unaudited) ASSETS Cash and due from banks ................................................ $ 7,796 $ 7,607 Interest-earning bank balances ......................................... 28,062 39,392 --------- --------- Cash and cash equivalents ........................................... 35,858 46,999 Investment securities available-for-sale, at fair value ................ 29,089 39,594 Mortgage-backed securities available-for-sale, at fair value ........... 96,219 70,409 Loans receivable, net unearned income .................................. 301,759 302,901 Allowance for loan losses .............................................. (3,002) (2,995) Real estate acquired through foreclosure, net .......................... 146 1,307 Accrued interest receivable ............................................ 1,829 1,913 Premises and equipment, net ............................................ 12,890 8,807 Federal Home Loan Bank stock, at cost .................................. 2,575 2,639 Cash value of life insurance policies .................................. 10,098 6,834 Core deposit intangible ................................................ 1,252 1,484 Goodwill ............................................................... 6,671 6,670 Other assets ........................................................... 5,833 6,005 --------- --------- Total assets ........................................................ $ 501,217 $ 492,567 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Noninterest-bearing demand accounts .................................... $ 13,053 $ 11,203 Checking accounts ...................................................... 28,774 25,773 Money market deposit accounts .......................................... 42,939 35,811 Savings accounts ....................................................... 39,284 43,670 Time deposits .......................................................... 220,964 224,405 --------- --------- Total deposits ...................................................... 345,014 340,862 Borrowed money ......................................................... 52,671 47,575 Advances from borrowers for property taxes and insurance ............... 911 440 Accrued interest payable ............................................... 315 382 Other liabilities ...................................................... 7,053 6,925 --------- --------- Total liabilities ................................................... 405,964 396,184 --------- --------- Stockholders' Equity: Common stock issued and outstanding, $0.01 par value, 20,000,000 shares authorized, 9,062,727 issued and outstanding December 31, 2002, 8,926,908 issued and outstanding June 30, 2003 ...................... 88 91 Additional paid-in-capital ............................................. 65,581 68,176 Unallocated common stock held by Employee Stock Ownership Plan ......... (2,070) (2,162) Retained earnings, substantially restricted ............................ 29,991 28,739 Accumulated unrealized gain on securities available-for-sale, net of tax 1,663 1,539 --------- --------- Total stockholders' equity .......................................... 95,253 96,383 --------- --------- Total liabilities and stockholders' equity ............................. $ 501,217 $ 492,567 ========= =========
Citizens South Banking Corporation Consolidated Statements of Operations (unaudited) (in thousands, except per share data)
Three Months Six Months Ended June 30, Ended June 30, -------------- -------------- 2003 2002 2003 2002 ---- ---- ---- ---- Interest income Loans ............................................... $ 4,364 $ 5,425 $ 8,833 $ 11,013 Investment securities ............................... 272 357 689 679 Interest-bearing deposits ........................... 73 113 162 215 Mortgage-backed and related securities .............. 936 297 1,864 585 ---------- ----------- ---------- ----------- Total interest income ............................. 5,645 6,192 11,548 12,492 Interest Expense Deposits ............................................ 1,693 1,992 3,434 4,118 Borrowed funds ...................................... 593 547 1,180 1,098 ---------- ----------- ---------- ----------- Total interest expense .............................. 2,286 2,539 4,614 5,216 ---------- ----------- ---------- ----------- Net interest income ................................. 3,359 3,653 6,934 7,276 Provision for loan losses ........................... 15 70 30 135 ---------- ----------- ---------- ----------- Net interest income after provision for loan losses 3,344 3,583 6,904 7,141 Noninterest Income Fee income on deposit accounts ...................... 621 571 1,178 1,093 Fee income on loan accounts ......................... 267 171 513 314 Dividends on FHLB stock ............................. 27 44 58 99 Gain on sale of assets .............................. 45 21 60 109 Fair value adjustment on deferred compensation ...... 156 (70) 187 (51) Other noninterest income ............................ 242 167 447 358 ---------- ----------- ---------- ----------- Total noninterest income .......................... 1,358 904 2,443 1,922 Noninterest Expense Compensation and benefits ........................... 1,498 1,311 2,986 2,698 Fair value adjustment on deferred compensation ...... 156 (70) 187 (51) Occupancy and equipment expense ..................... 318 349 643 710 Professional services ............................... 211 99 332 178 Amortization of intangible assets ................... 106 252 232 608 Loss on sale of assets .............................. 3 17 13 16 Other noninterest expenses .......................... 839 752 1,501 1,585 ---------- ----------- ---------- ----------- Total noninterest expense ......................... 3,131 2,710 5,894 5,744 Income before income taxes .......................... 1,571 1,777 3,453 3,319 Provision for income taxes .......................... 447 647 1,122 1,197 ---------- ----------- ---------- ----------- Net income .......................................... $ 1,124 $ 1,130 $ 2,331 $ 2,122 ========== =========== ========== =========== Basic earnings per share ............................ $ 0.13 $ 0.13 $ 0.27 $ 0.24 Diluted earnings per share .......................... $ 0.13 $ 0.13 $ 0.26 $ 0.24 Basic average common shares outstanding ............. 8,660,195 8,776,726 8,708,740 8,731,925 Diluted average common shares outstanding ........... 8,808,915 8,923,672 8,840,222 8,735,209
EX-99.2 4 d56335_ex99-2.txt DIVIDEND PRESS RELEASE EXHIBIT 99.2 DIVIDEND PRESS RELEASE OF CITIZENS SOUTH BANKING CORPORATION CITIZENS SOUTH BANKING CORPORATION DECLARES QUARTERLY DIVIDEND GASTONIA, NC, July 21, 2003 --- Kim S. Price, President and Chief Executive Officer of Citizens South Banking Corporation (Nasdaq: CSBC), announced today that the Company's Board of Directors has declared a cash dividend of six cents per share of common stock. The dividend will be payable to stockholders of record as of August 1, 2003, and will be paid on August 15, 2003. Citizens South Banking Corporation is the parent corporation for Citizens South Bank, which was established in 1904 and is headquartered in Gastonia, North Carolina. The Bank has ten full-service banking offices located in the Central Piedmont region of North Carolina. At June 30, 2003, the Company had assets of $501.2 million, loans of $301.7 million, deposits of $345.0 million, and stockholders' equity of $95.3 million. # # # -----END PRIVACY-ENHANCED MESSAGE-----