EX-99.A 3 d59321_ex99-a.txt EARNINGS PRESS RELEASE EXHIBIT 99 (a) EARNINGS PRESS RELEASE OF CITIZENS SOUTH BANKING CORPORATION CITIZENS SOUTH BANKING CORPORATION ANNOUNCES EARNINGS FOR THE QUARTER ENDED MARCH 31, 2004 GASTONIA, NC, April 19, 2004 --- Citizens South Banking Corporation (Nasdaq: CSBC), the holding company for Citizens South Bank, announced earnings for the quarter ended March 31, 2004, of $971,000, or $0.12 per diluted share, compared to $1,207,000, or $0.14 per diluted share, for the quarter ended March 31, 2003. The reduction in earnings from our record first quarter earnings of 2003 was primarily the result of a lower level of net interest income resulting, in part, from a decrease in the prime interest rate and from a lower level of outstanding residential mortgage loans. The Company experienced positive growth in its other loan portfolios. Commercial mortgage, business, and consumer loans increased by $14.2 million, or 18.4%, from March 31, 2003, to March 31, 2004. In addition, nonperforming assets improved from 0.16% of total assets as of March 31, 2003, to 0.10% of total assets as of March 31, 2004, and nonperforming loans remain well below industry peers at 0.17% of total loans at the end of the first quarter of 2004. Deposits also continued to grow from the previous year with the strongest growth coming in core (non-time) deposit accounts which increased by $8.7 million, or 6.9%, year over year. Total deposits increased by $6.7 million, or 1.9%, from March 31, 2003, to March 31, 2004. Noninterest income during the comparable quarters increased 19.3% from $1.1 million to $1.3 million, and noninterest expense increased 14.5% from $2.8 million to $3.2 million. These increases were largely the result of expenses associated with implementing a recognition and retention plan and a corresponding gain on the sale of investments utilized as funding for this plan. Kim S. Price, President and CEO, commented, "We are delighted to be able to continue to report very positive commercial loan, deposit, and asset quality trends. The recent positive economic news, we believe, will provide additional stimulus to increase outstanding commercial and consumer loans and curb residential mortgage prepayments, both of which are positive developments for our Company." Citizens South Bank was founded in Gastonia, North Carolina, in 1904 and is celebrating its 100th anniversary. The Bank has almost $500 million in assets and 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. (Tables Follow) # # # Citizens South Banking Corporation Selected Financial Information (dollars in thousands, except per share data)
---------------------------------------------------------------------------------------------------------------------------------- Quarter ended Quarter ended Year ended Year ended March 31, 2004 March 31, 2003 December 31, 2003 December 31, 2002 ---------------------------------------------------------------------------------------------------------------------------------- Income Statement Data: Interest income ..................................... $ 5,155 $ 5,903 $ 21,969 $ 24,716 Interest expense .................................... 1,871 2,328 8,732 10,195 ---------- ---------- ---------- ---------- Net interest income ................................. 3,284 3,575 13,237 14,521 Provision for loan losses ........................... 30 15 60 225 ---------- ---------- ---------- ---------- Net int. income after provision for loan losses ..... 3,254 3,560 13,177 14,296 Noninterest income .................................. 1,293 1,084 5,561 4,121 Noninterest expense ................................. 3,164 2,763 13,891 11,381 ---------- ---------- ---------- ---------- Income before income taxes .......................... 1,383 1,881 4,847 7,036 Income tax expense .................................. 412 674 1,456 2,528 ---------- ---------- ---------- ---------- Net income .......................................... $ 971 $ 1,207 $ 3,391 $ 4,508 Per Share Data: Basic net income .................................... $ 0.12 $ 0.14 $ 0.39 $ 0.51 Diluted net income .................................. 0.12 0.14 0.39 0.51 Cash dividends declared ............................. 0.065 0.06 0.24 0.16 Period-end book value ............................... 10.13 10.68 10.11 10.64 Financial Ratios: Return on average stockholders' equity .............. 4.48% 5.00% 3.61% 7.61% Return on average assets ............................ 0.79 0.97 0.68 0.98 Efficiency ratio .................................... 73.82 59.26 78.16 61.11 Net interest margin ................................. 2.68 2.88 2.67 3.17 Average equity to average assets .................... 17.72 19.41 18.96 12.93 Asset Quality Data: Allowance for loan losses ........................... $ 2,998 $ 3,000 $ 2,969 $ 2,995 Nonperforming loans ................................. 513 570 529 516 Nonperforming assets ................................ 537 810 674 1,823 Allowance for loan losses to total loans ............ 0.99% 0.98% 0.97% 0.97% Nonperforming loans to total loans .................. 0.17 0.19 0.18 0.17 Nonperforming assets to total assets ................ 0.10 0.16 0.14 0.37 Average Balances: Total assets ....................................... $ 489,638 $ 496,746 $ 495,198 $ 458,316 Loans receivable, gross ............................ 296,075 299,144 297,517 320,505 Interest-earning assets ............................ 439,679 453,110 450,826 416,748 Deposits ........................................... 342,912 337,799 328,722 337,422 Interest-bearing liabilities ....................... 382,963 374,869 379,960 381,664 Stockholders' equity ............................... 86,777 96,648 93,873 59,243 Common shares outstanding, basic ................... 8,268,233 8,757,664 8,623,838 8,767,982 Common shares outstanding, diluted ................. 8,314,285 8,920,531 8,762,545 8,870,054 At Period End: Total assets ....................................... $ 494,680 $ 501,216 $ 495,751 $ 492,873 Loans receivable, gross ............................ 301,898 306,340 304,615 308,408 Interest-earning assets ............................ 438,513 457,433 448,401 456,611 Deposits ........................................... 350,520 343,865 342,446 340,862 Interest-bearing liabilities ....................... 389,616 383,287 388,434 377,234 Stockholders' equity ............................... 85,434 96,795 87,669 96,383 Other Data: Amortization of core deposit intangible ............. $ 78 $ 126 $ 404 $ 963 Net gain / (loss) on sale of assets ................. 290 4 1,022 105 ----------------------------------------------------------------------------------------------------------------------------------
Citizens South Banking Corporation Consolidated Statements of Financial Condition (dollars in thousands)
March 31, December 31, 2004 2003 --------- ------------ (unaudited) ASSETS Cash and due from banks ..................................................... $ 6,273 $ 5,374 Interest-earning bank balances .............................................. 20,499 2,840 --------- --------- Cash and cash equivalents ................................................ 26,772 8,214 Investment securities available-for-sale, at fair value ..................... 49,248 56,233 Mortgage-backed securities available-for-sale, at fair value ................ 78,998 89,168 Loans receivable, net unearned income ....................................... 296,238 297,995 Allowance for loan losses ................................................... (2,998) (2,969) Real estate acquired through foreclosure, net ............................... 24 145 Accrued interest receivable ................................................. 1,742 1,943 Premises and equipment, net ................................................. 16,019 14,939 Federal Home Loan Bank stock, at cost ....................................... 2,550 2,915 Bank owned life insurance ................................................... 12,452 12,317 Intangible assets ........................................................... 7,874 7,985 Other assets ................................................................ 5,761 6,866 --------- --------- Total assets ............................................................. $ 494,680 $ 495,751 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Noninterest-bearing demand accounts ......................................... $ 12,062 $ 12,906 Checking accounts ........................................................... 35,369 30,780 Money market deposit accounts ............................................... 51,725 48,189 Savings accounts ............................................................ 35,182 36,754 Time deposits ............................................................... 216,182 213,817 --------- --------- Total deposits ........................................................... 350,520 342,446 Borrowed money .............................................................. 52,119 58,981 Deferred compensation ....................................................... 5,629 6,165 Other liabilities ........................................................... 978 490 --------- --------- Total liabilities ........................................................ 409,246 408,082 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 .............. (1,933) (1,979) Unearned compensation related to Recognition and Retention Plan ............. (1,793) (1,979) Retained earnings, substantially restricted ................................. 29,280 28,824 Accumulated unrealized gain on securities available-for-sale, net of tax .... 337 (40) Treasury stock of 631,343 shares at March 31, 2004, and 392,414 shares at December 31, 2003 .............................................. (8,828) (5,528) --------- --------- Total stockholders' equity .................................................. 85,434 87,669 --------- --------- Total liabilities and stockholders' equity .................................. $ 494,680 $ 495,751 ========= =========
Citizens South Banking Corporation Consolidated Statements of Operations (in thousands, except per share data)
Three Months Ended March 31, --------------------------- 2004 2003 ---------- ---------- (unaudited) (unaudited) Interest Income Loans receivable ........................................ $ 3,872 $ 4,469 Investment securities ................................... 485 418 Interest-bearing deposits ............................... 20 88 Mortgage-backed and related securities .................. 778 928 ---------- ---------- Total interest income ................................. 5,155 5,903 Interest Expense Deposits ................................................ 1,426 1,741 Borrowed funds .......................................... 445 587 ---------- ---------- Total interest expense .................................. 1,871 2,328 ---------- ---------- Net interest income ..................................... 3,284 3,575 Provision for loan losses ............................... 30 15 ---------- ---------- Net interest income after provision for loan losses ... 3,254 3,560 Noninterest Income Fee income on deposit accounts .......................... 603 557 Fee income on mortgage banking activities ............... 69 247 Dividends on Federal Home Loan Bank stock ............... 23 31 Commissions on sale of financial products ............... 27 31 Gain on sale of assets .................................. 290 14 Other noninterest income ................................ 281 204 ---------- ---------- Total noninterest income .............................. 1,293 1,084 Noninterest Expense Compensation and benefits ............................... 1,810 1,519 Occupancy and equipment expense ......................... 376 325 Federal deposit insurance premiums ...................... 14 16 Professional services ................................... 131 121 Data processing expense ................................. 20 21 Advertising and promotions .............................. 130 72 Amortization of core deposit intangible ................. 78 126 Loss on sale of assets .................................. 0 10 Other noninterest expenses .............................. 605 553 ---------- ---------- Total noninterest expense ............................. 3,164 2,763 Income before income taxes .............................. 1,383 1,881 Provision for income taxes .............................. 412 674 ---------- ---------- Net income .............................................. $ 971 $ 1,207 ========== ========== Basic earnings per share ................................ $ 0.12 $ 0.14 Diluted earnings per share .............................. $ 0.12 $ 0.14 Basic average common shares outstanding ................. 8,268,233 8,757,664 Diluted average common shares outstanding ............... 8,314,285 8,920,531