-----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, SKEJYlp3+t7tBBmF31r+pPn2Q0etLjlvb0Dc13cqfXLBMmZZWwHFi88bnzTFy9n6 OxUNtiSSRPhDTV03v2R7MQ== 0001169232-04-003730.txt : 20040727 0001169232-04-003730.hdr.sgml : 20040727 20040723115948 ACCESSION NUMBER: 0001169232-04-003730 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040723 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040723 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: 04928253 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 d60159_8-k.txt CURRENT REPORT 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: July 23, 2004 Citizens South Banking Corporation (Exact Name of Registrant as Specified in Charter) Delaware 0-23971 54-2069979 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 245 West Main Avenue, Gastonia, North Carolina 28052 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 704-868-5200 Item 7. Exhibits 99 Additional Exhibits: (a) Earnings Press Release of Citizens South Banking Corporation Item 12. Results of Operations and Financial Condition On July 19, 2004, Citizens South Banking Corporation issued a press release to announce its results of operations for the quarters ended June 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 June 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: July 23, 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.(A) 2 d60159_ex99a.txt EARNINGS PRESS RELEASE EXHIBIT 99 (a) CITIZENS SOUTH BANKING CORPORATION ANNOUNCES EARNINGS FOR THE QUARTER ENDED JUNE 30, 2004 GASTONIA, NC, July 19, 2004 --- Citizens South Banking Corporation (Nasdaq: CSBC), the holding company for Citizens South Bank, announced earnings for the quarter ended June 30, 2004, of $948,000, or $0.12 per diluted share, compared to $1,124,000, or $0.13 per diluted share, for the quarter ended June 30, 2003. The reduction in earnings from our second quarter earnings of 2003 was primarily the result of a lower level of net interest income resulting, in part, from a historically low prime interest rate during the first half of 2004 and from a lower level of outstanding residential mortgage loans. Both of these factors have had a negative impact on the Company's net interest margin. The Company experienced strong growth in its commercial and consumer loan portfolios. Commercial mortgage, business, and consumer loans increased by $31.4 million, or 18.2%, from June 30, 2003, to June 30, 2004. In addition, our level of nonperforming assets and nonperforming loans remained well below industry peers at 0.20% of total assets and 0.31% of total loans, respectively at the end of the second quarter of 2004. Deposit growth continued to be strong during the second quarter of 2004, with the strongest growth in core (non-time) deposit accounts, which increased by $16.4 million, or 13.2%, year over year. Total deposits increased by $25.7 million, or 7.4%, from $345.0 million on June 30, 2003, to $370.7 million on June 30, 2004. Noninterest expense decreased 6.3% from $3.1 million to $2.9 million. This decrease was largely the result of decreased expenses associated with the fair value adjustment on our deferred compensation plans, professional services, and advertising. Noninterest income during the comparable quarters decreased 9.1% from $1.3 million to $1.2 million, primarily as a result of a $102,000 decrease in revenues from lending and mortgage banking activities and a $193,000 reduction in the fair value adjustment on our deferred compensation plans which corresponded to a $193,000 reduction in compensation expense. The Company also realized $180,000 in gains from the sales of investments during the second quarter of 2004. These gains partly offset an $81,000 expense relating to the vesting of stock issued to a director who retired during the quarter. Kim S. Price, President and CEO, commented, "We are pleased that we continue to experience growth in our core franchise as demonstrated by positive commercial loan and deposit growth, as well as continued high asset quality ratios. We believe that the recent increase in the prime lending rate will provide some benefit to our net interest margin and curb residential mortgage prepayments, both of which are positive developments for our Company." Citizens South Bank, headquartered in Gastonia, North Carolina, was founded in 1904 and is celebrating its 100th anniversary. The Bank had approximately $500 million in assets at June 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. (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, 2004 June 30, 2003 December 31, 2003 December 31, 2002 ---------------------------------------------------------------------------- Income Statement Data: Interest income .................................... $ 4,995 $ 5,645 $ 21,969 $ 24,716 Interest expense ................................... 1,911 2,286 8,732 10,195 ---------- ---------- ---------- ---------- Net interest income ................................ 3,084 3,359 13,237 14,521 Provision for loan losses .......................... 30 15 60 225 ---------- ---------- ---------- ---------- Net int. income after provision for loan losses ........................................... 3,054 3,344 13,177 14,296 Noninterest income ................................. 1,165 1,282 5,561 4,121 Noninterest expense ................................ 2,862 3,055 13,891 11,381 ---------- ---------- ---------- ---------- Income before income taxes ......................... 1,357 1,571 4,847 7,036 Income tax expense ................................. 409 447 1,456 2,528 ---------- ---------- ---------- ---------- Net income ......................................... $ 948 $ 1,124 $ 3,391 $ 4,508 Per Share Data: Basic net income ................................... $ 0.12 $ 0.13 $ 0.39 $ 0.51 Diluted net income ................................. 0.12 0.13 0.39 0.51 Cash dividends declared ............................ 0.065 0.06 0.24 0.16 Period-end book value .............................. 9.54 10.67 10.11 10.64 Financial Ratios: Return on average stockholders' equity ............. 4.72% 4.72% 3.61% 7.61% Return on average assets ........................... 0.76 0.90 0.68 0.98 Efficiency ratio ................................... 70.34 66.96 78.16 61.11 Net interest margin ................................ 2.47 2.69 2.67 3.17 Average equity to average assets ................... 16.13 19.10 18.96 12.93 Asset Quality Data: Allowance for loan losses .......................... $ 2,902 $ 3,002 $ 2,969 $ 2,995 Nonperforming loans ................................ 928 802 529 516 Nonperforming assets ............................... 1,007 948 674 1,823 Allowance for loan losses to total loans ........... 0.97% 0.98% 0.97% 0.97% Nonperforming loans to total loans ................. 0.31 0.26 0.18 0.17 Nonperforming assets to total assets ............... 0.20 0.19 0.14 0.37 Average Balances: Total assets ...................................... $ 498,562 $ 498,901 $ 495,198 $ 458,316 Loans receivable, net of unearned income .......... 293,802 304,980 297,517 320,505 Interest-earning assets ........................... 445,970 454,675 450,826 416,748 Deposits .......................................... 362,858 342,817 328,722 337,422 Interest-bearing liabilities ...................... 395,593 383,355 379,960 381,664 Stockholders' equity .............................. 80,401 95,268 93,873 59,243 Common shares outstanding, basic .................. 7,780,751 8,660,195 8,623,838 8,767,982 Common shares outstanding, diluted ................ 7,891,635 8,808,915 8,762,545 8,870,054 At Period End: Total assets ...................................... $ 500,586 $ 501,217 $ 495,751 $ 492,873 Loans receivable, net unearned income ............. 300,247 301,759 297,995 302,900 Interest-earning assets ........................... 447,457 454,746 448,401 456,611 Deposits .......................................... 370,700 345,014 342,446 340,862 Interest-bearing liabilities ...................... 401,867 384,239 388,434 377,234 Stockholders' equity .............................. 71,727 95,253 87,669 96,383 Other Data: Amortization of intangible assets .................. $ 104 $ 126 $ 404 $ 963 Net gain / (loss) on sale of assets ................ 180 42 1,022 105 Vesting expense for recognition and retention plan ................................... 81 0 975 0
Citizens South Banking Corporation Consolidated Statements of Financial Condition (dollars in thousands)
June 30, December 31, 2004 2003 --------- ------------ (unaudited) ASSETS Cash and due from banks ................................................................ $ 6,455 $ 5,374 Interest-earning bank balances ......................................................... 19,675 2,840 --------- --------- Cash and cash equivalents ........................................................... 26,130 8,214 Investment securities available-for-sale, at fair value ................................ 54,646 56,233 Mortgage-backed securities available-for-sale, at fair value ........................... 73,524 89,168 Loans receivable, net unearned income .................................................. 300,247 297,995 Allowance for loan losses .............................................................. (2,902) (2,969) Real estate acquired through foreclosure, net .......................................... 79 145 Accrued interest receivable ............................................................ 1,557 1,943 Premises and equipment, net ............................................................ 17,390 14,939 Federal Home Loan Bank stock, at cost .................................................. 2,550 2,915 Bank owned life insurance .............................................................. 12,639 12,317 Intangible assets ...................................................................... 7,763 7,985 Other assets ........................................................................... 6,963 6,866 --------- --------- Total assets ........................................................................ $ 500,586 $ 495,751 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Demand deposit accounts ................................................................ $ 48,027 $ 43,686 Money market deposit accounts .......................................................... 60,112 48,189 Savings accounts ....................................................................... 32,420 36,754 Time deposits .......................................................................... 230,141 213,817 --------- --------- Total deposits ...................................................................... 370,700 342,446 Borrowed money ......................................................................... 51,772 58,981 Deferred compensation .................................................................. 5,651 6,165 Other liabilities ...................................................................... 736 490 --------- --------- Total liabilities ................................................................... 428,859 408,082 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 ......................... (1,887) (1,979) Unearned compensation related to Recognition and Retention Plan ........................ (1,712) (1,979) Retained earnings, substantially restricted ............................................ 29,679 28,824 Accumulated unrealized gain on securities available-for-sale, net of tax ............... (1,955) (40) Treasury stock of 1,540,683 shares at June 30, 2004, and 392,414 shares at December 31, 2003 ......................................................... (20,769) (5,528) --------- --------- Total stockholders' equity ............................................................. 71,727 87,669 --------- --------- Total liabilities and stockholders' equity ............................................. $ 500,586 $ 495,751 ========= =========
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, -------------- -------------- 2004 2003 2004 2003 ---- ---- ---- ---- Interest income Loans ........................................................ $ 3,836 $ 4,364 $ 7,722 $ 8,833 Investment securities ........................................ 472 272 957 689 Interest-bearing deposits .................................... 46 73 66 162 Mortgage-backed and related securities ....................... 641 936 1,419 1,864 ----------- ---------- ---------- ---------- Total interest income ...................................... 4,995 5,645 10,164 11,548 Interest Expense Deposits ..................................................... 1,461 1,693 2,887 3,434 Borrowed funds ............................................... 450 593 895 1,180 ----------- ---------- ---------- ---------- Total interest expense ....................................... 1,911 2,286 3,782 4,614 ----------- ---------- ---------- ---------- Net interest income .......................................... 3,084 3,359 6,382 6,934 Provision for loan losses .................................... 30 15 60 30 ----------- ---------- ---------- ---------- Net interest income after provision for loan losses ........ 3,054 3,344 6,322 6,904 Noninterest Income Fee income on deposit accounts ............................... 553 525 1,183 1,008 Fee income on mortgage banking and lending activities ........ 185 287 279 553 Dividends on FHLB stock ...................................... 22 27 46 58 Gain on sale of assets ....................................... 180 45 470 60 Fair value adjustment on deferred compensation assets ........ (37) 156 35 187 Other noninterest income ..................................... 262 242 498 447 ----------- ---------- ---------- ---------- Total noninterest income ................................... 1,165 1,282 2,511 2,313 Noninterest Expense Compensation and benefits .................................... 1,539 1,498 3,008 2,986 Vesting expense for Recognition and Retention Plan ........... 81 0 355 0 Fair value adjustment on deferred compensation assets ........ (37) 156 35 187 Occupancy and equipment expense .............................. 400 318 782 643 Professional services ........................................ 125 211 236 332 Amortization of intangible assets ............................ 104 126 221 272 Loss on sale of assets ....................................... 0 3 0 13 Other noninterest expenses ................................... 650 743 1,456 1,331 ----------- ---------- ---------- ---------- Total noninterest expense .................................. 2,862 3,055 6,093 5,764 Income before income taxes ................................... 1,357 1,571 2,740 3,453 Provision for income taxes ................................... 409 447 831 1,122 ----------- ---------- ---------- ---------- Net income ................................................... $ 948 $ 1,124 $ 1,909 $ 2,331 =========== ========== ========== ========== Basic earnings per share ..................................... $ 0.12 $ 0.13 $ 0.24 $ 0.27 Diluted earnings per share ................................... $ 0.12 $ 0.13 $ 0.24 $ 0.26 Basic average common shares outstanding ...................... 7,780,751 8,660,195 8,024,668 8,708,740 Diluted average common shares outstanding .................... 7,891,635 8,808,915 8,117,736 8,804,222
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