CORRESP 1 filename1.htm corresp_082511.htm


August 25, 2011
 
Via Edgar
 
Mr. Mark Webb
Legal Branch Chief
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
 
Re:          Citizens South Banking Corporation
Form 10-K for the Fiscal Year Ended December 31, 2011
Filed March 15, 2011
File No. 0-22971
 
Dear Mr. Webb:
 
The following are responses to the staff’s comment letter dated August 4, 2011, to Citizens South Banking Corporation (the “Company”).  For ease of reference the comments have been reproduced below.
 
Form 10-K for the Fiscal Year Ended December 31, 2010
 
Item 8.  Financial Statements and Supplementary Data
Notes to Consolidated Financial Statements
Note 17-Fair Value Measurements, page 80

1.
We note your response to Comment 12 to our letter dated May 13, 2011.  Please tell us and revise future filings to disclose how old an appraisal for an impaired collateral dependent loan has to be before you obtain an updated appraisal.  Please be specific (i.e. six months or nine months, etc.).
 
Management response:  Generally 12 months or less.  However, if market conditions changed significantly since the most recent appraisal, an updated appraisal is obtained, regardless of the age of the most recent appraisal.
 
 
 
 
Mr. Mark Webb
Securities and Exchange Commission
June 3, 2011
Page 2
 
Part I.  Financial Information
 
Notes to Consolidated Financial Statements
Note 6 – Loans, page 11

2.
Please revise future filings to include disclosures required by ASC Subtopic 310-30-50-2.  Please provide the information at March 31, 2011 in your response.
 
 Management Response: See attached disclosure for March 31, 2011.  This information will be included in future responses.
 
Note 7 – Allowance for Loan Losses, page 17
 
3.
Please revise future filings to present the roll forward of the allowance for loan losses by loan segment as required by ASC Subtopic 310-10-50-11(B)c.  Please provide the roll forward at March 31, 2011 in your response.
 
Management response:  A roll forward of the allowance for loan losses by segment for March 31, 2011 is attached.  This information will be included in future filings.
 
 
*           *           *
 
The Company acknowledges that:

 
·
the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

 
·
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

 
·
the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 
 
 
Mr. Mark Webb
Securities and Exchange Commission
June 3, 2011
Page 3
 
We trust that the above information is responsive to the staff’s comments.  Please direct any additional comments or questions to the undersigned at (704) 884-2263, or to our attorney, Ned Quint, at (202) 274-2007.
 
Sincerely,



/s/ Gary F. Hoskins
 
Gary F. Hoskins
Executive Vice President and
   Chief Financial Officer
 
Enclosures
cc:           Kim S. Price, President and Chief Executive Officer
Ned Quint, Esq.

 
 
 
 
Citizens South Banking Corporation
            
March 31, 2011
            
             
             
Accretable Yield:
            
             
   
Three Months
  
   
Ended March 31,
  
   
Accretable
Yield
  
Carrying
Amount
  
   
(in thousands)
  
             
Balance - December 31, 2010
   $ (18,707 )   $ 147,576  
Reductions from payments and foreclosures, net
     -       (10,107 )
Accretion
     289       289  
Balance - March 31, 2011
   $ (18,418 )   $ 137,758  
 
 
Citizens South Banking Corporation
                                                  
March 31, 2011
                                                      
                                                       
                                                       
Allowance for loan losses by loan segment:
                                            
                                                       
   
 
                                                  
   
 
                                                  
(Dollars in thousands)
  
One-to-four
family
residential
  
Multifamily
residential
  
Construction
  
Land and
development
  
Other
commercial
real estate
  
Consumer
real estate
  
Commercial
business
  
Other
consumer
  
Total
  
                                                       
Balance - December 31, 2010
   $ 500     $ 200     $ 1,000     $ 3,500     $ 2,224     $ 1,500     $ 2,500     $ 500     $ 11,924  
Loan charge-offs
     (825 )     -       (36 )     (1,953 )     (16 )     (56 )     (153 )     (13 )     (3,052 )
Loan recoveries
     3       -       50       -       -       7       3       71       134  
Provision for loan losses
     825       -       -       2,000       25       25       125       -       3,000  
Balance - March 31, 2011
   $ 503     $ 200     $ 1,014     $ 3,547     $ 2,233     $ 1,476     $ 2,475     $ 558     $ 12,006