Citizens South Banking Corporation (Nasdaq:CSBC), the holding
company for Citizens South Bank (the "Bank"), reported net income
available to common shareholders of $2.0 million, or $0.18 per
diluted share, for the quarter ended June 30, 2011, compared to net
income available to common shareholders of $98,000, or $0.01 per
diluted share, for the quarter ended June 30, 2010. The financial
results for the quarter ended June 30, 2011, included a $4.4
million pre-tax gain related to the acquisition of New Horizons
Bank and $566,000 in related acquisition and integration expenses.
President Kim S. Price stated, "We are encouraged by a number of
indicators in this quarter's results, including healthy expansion
of our net interest margin, continued growth in our core deposits,
and a decrease in our level of nonperforming assets. We
continue to focus on profitability, growing our franchise, and
adding shareholder value as the community banking landscape evolves
in this challenging economy."
Second Quarter 2011
Highlights:
FDIC-Assisted Acquisition – New Horizons
Bank
On April 15, 2011, Citizens South Bank acquired certain assets
and assumed certain liabilities of New Horizons Bank in East
Ellijay, Georgia, in an FDIC-assisted transaction. The
acquisition was made pursuant to the terms of a purchase and
assumption agreement entered into by the Bank and the
FDIC. Under the terms of this agreement, the Bank acquired
certain assets of New Horizons Bank with a fair value of
approximately $105.4 million, which includes $11.0 million in cash
paid by the FDIC in order to consummate the transaction. The
fair value of the acquired assets included $49.3 million of loans,
$9.7 million of investment securities, $7.9 million of cash and
cash equivalents, $6.4 million of other real estate owned ("OREO"),
$19.9 million related to the FDIC's indemnification of the Bank
against certain losses described below, and $970,000 of other
assets. Liabilities with a fair value of approximately $102.5
million were also assumed, including $96.7 million of deposits,
$4.2 million of borrowed money, and $1.6 million of other
liabilities. Also, as a part of the acquisition, the Bank
recorded a $221,000 core deposit intangible asset and realized a
pre-tax gain on acquisition of $4.4 million, or $2.9 million
after-tax.
In connection with the acquisition, the Bank entered into
loss-sharing agreements with the FDIC that covered approximately
$69.3 million of the $71.2 million of loans that were acquired from
the FDIC (the "covered loans") and all of the $11.6 million of OREO
that was acquired from the FDIC (collectively referred to as
"covered assets"). Pursuant to the terms of the loss-sharing
agreements, the FDIC is obligated to reimburse the Bank for 80% of
all eligible losses and certain collection and disposition expenses
with respect to covered assets. The Bank has a corresponding
obligation to reimburse the FDIC for 80% of eligible recoveries
with respect to covered assets.
Asset Quality
The linked-quarter trend of the Company's credit quality metrics
was positive. For the second quarter of 2011 the Company
continued to build reserves even though it reported lower net
charge-offs, a stable level of past due loans, and a declining
level of nonperforming non-covered assets (assets not covered under
FDIC loss-sharing agreements). Net charge-offs declined from $2.9
million, or 1.99% of average non-covered loans, for the first
quarter of 2011 to $1.0 million, or 0.66% of average non-covered
loans for the second quarter of 2011. This quarterly decrease
was largely due to the stable level of past due loans and the
declining level of nonperforming non-covered loans during the
second quarter. Non-covered past due loans, which includes
non-covered loans that are 30 to 89 days delinquent and still
accruing interest, remained flat at $5.7 million, or 0.99% of total
non-covered loans, for the second quarter. Also during the
second quarter, nonperforming non-covered assets declined from
$32.8 million, or 3.15% of total assets at March 31, 2011, to $30.6
million, or 2.74% of total assets at June 30, 2011. This
represents a decrease of $2.2 million, or 6.7%, in nonperforming
non-covered assets for the second quarter. Due in part to the
decline in net charge-offs and nonperforming non-covered assets
during the quarter, the Company reduced its loan loss provision
from $3.0 million during the first quarter of 2011 to $1.7 million
during the second quarter of 2011. However, despite this
decrease in the loan loss provision, the Company's allowance for
loan losses to total non-covered loans increased from 2.05% at
March 31, 2011, to 2.22% at June 30, 2011.
As nonperforming loans move through the disposition process and
become OREO, the Company's expenses and valuation adjustments
related to OREO also increases. During the second quarter of
2011 these expenses totaled $2.0 million, compared to $509,000 for
the first quarter of 2011.
President Price commented, "While the general economy and real
estate markets continue to be choppy in most of our markets, we are
encouraged with the positive trend of our credit quality this
quarter and we are cautiously optimistic that these improving
trends will continue, although not necessarily in a purely linear
fashion."
Loans and Deposits
Despite some improving trends in local economic conditions, loan
demand continues to be soft. Total non-covered loans decreased
by $29.1 million, or 4.8%, from June 30, 2010 to June 30,
2011. On a linked-quarter basis, non-covered loans decreased
by $13.3 million. This decrease was largely due to a $6.1 million
reduction in the Company's commercial land and residential
acquisition and development loan portfolios. Management is
continuing to focus on increasing business loans to the
professional market, owner-occupied commercial real estate loans,
and residential and personal loans to qualified consumers through
competitive pricing and an active marketing campaign.
The Company continues to experience strong core deposit growth.
From June 30, 2010, to June 30, 2011, non-time core deposits
increased by $62.3 million, or 16.0%, to $451.0 million. On a
linked-quarter basis, non-core time deposits increased by $43.4
million. A portion of this growth was due to the $21.9 million
in non-time core deposits that were assumed in the New Horizons
Bank acquisition. However, the remaining growth in core
deposits was attributable to a continued focus on deposit gathering
and increased market share due to local branch closures, mergers,
and a general "flight to quality" among community bank
depositors.
Capital Position
At June 30, 2011, the Bank's total risk-based, Tier 1
risk-based, and Tier 1 leverage capital ratios were 17.3%, 16.0%,
and 9.4%, respectively, compared to 16.8%, 15.5%, and 9.7%
respectively, at June 30, 2010. The Bank exceeded the
regulatory minimum capital ratios to be considered well-capitalized
by 172.9%, 267.1%, and 188.5% for total risk-based capital, Tier 1
risk-based capital, and Tier 1 leverage capital, respectively, at
June 30, 2011. The Company's capital position continues to be a
source of strength and provides a competitive advantage during
these uncertain economic times. The Company's tangible common
equity ratio remains strong at 6.5% at June 30, 2011. Also,
the Company's tangible book value per share increased on a
linked-quarter basis from $6.09 at March 31, 2011, to $6.29 at June
30, 2011.
Net Interest Income and Margin
The Company's net interest income for the second quarter of 2010
increased by $482,000, or 5.94%, as compared to the second quarter
of 2010. Contributing to this increase was a 48 basis point
increase in the Company's net interest margin from 3.24% at June
30, 2010, to 3.72% at June 30, 2011. On a linked-quarter
basis, the Company's net interest margin improved by 36 basis
points. The improvement on a linked-quarter basis was due to a
33 basis point increase in the Company's yield on assets coupled
with a nine basis point decrease in the Company's cost of
funds. The increase in the yield on assets was largely due to
the New Horizons Bank acquisition which added $71.2 million of
loans, which were adjusted to a fair value of $49.2
million. The accretion of the discount on these loans during
the second quarter was $200,000. Also, given the Company's
high level of liquidity, coupled with strong core deposit growth,
the Company has been able to repay maturing time deposits or
reprice these time deposits at lower market rates at
maturity. This time deposit repricing has contributed to the
decline in the cost of funds.
Noninterest Income and Expense
Noninterest income increased by $3.4 million to $5.9 million for
the quarter ended June 30, 2011, as compared to $2.4 million of the
quarter ended June 30, 2010. This increase was due to a $3.8
million increase in gain on acquisition and a $75,000 increase in
service charges on deposit accounts. These increases were
partly offset by decreases in the gain on sale of other assets,
mortgage banking income, and commissions on the sale of non-deposit
financial products.
Noninterest expense increased by $2.0 million, or 27.3%, during
the second quarter of 2011 compared to the second quarter of 2010.
This increase was primarily related to the $472,000 increase in
acquisition and integration expenses and a $1.3 million increase in
valuation adjustments on other real estate owned. These increases
were partly offset by decreases in office occupancy expense,
amortization of intangible assets and other noninterest
expenses.
About Citizens South Banking Corporation and Citizens
South
Bank
Citizens South Bank was founded in 1904 and is headquartered in
Gastonia, North Carolina. Deposits are FDIC insured up to
applicable regulatory limits. At June 30, 2011, the Company
had $1.1 billion in assets with 21 full-service offices in the
Charlotte and North Georgia regions, including Gaston, Iredell,
Rowan, Mecklenburg, and Union counties in North Carolina, York
County in South Carolina, and Towns, Union, Fannin, and Gilmer
counties in Georgia. Citizens South Bank is an Equal Housing
Lender and Member, FDIC. The Bank is a wholly-owned subsidiary
of Citizens South Banking Corporation, and shares of the common
stock of the Company trade on the NASDAQ Global Market under the
ticker symbol "CSBC." The Company maintains a website at
www.citizenssouth.com that includes information on the Company,
along with a list of products and services, branch locations,
current financial information, and links to the Company's filings
with the SEC.
The Citizens South Banking Corporation logo is available
at http://www.globenewswire.com/newsroom/prs/?pkgid=7099
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures and
should be read along with the accompanying tables which provide a
reconciliation of non-GAAP measures to GAAP measures.
Management believes that these non-GAAP measures provide a greater
understanding of ongoing operations and enhance comparability of
results with prior periods. Non-GAAP measures should not be
considered as an alternative to any measure of performance or
financial condition as promulgated under accounting principles
generally accepted in the United States ("GAAP"), and investors
should consider the company's performance and financial condition
as reported under GAAP and all other relevant information when
assessing the performance or financial condition of the
company. Non-GAAP measures have limitations as analytical
tools, and investors should not consider them in isolation, or as a
substitute for analysis of the Company's results or financial
condition as reported under GAAP.
Cautionary Statement Regarding Forward-looking Statements
This news release contains certain forward-looking statements
which include, but are not limited to, statements of our earnings
expectations, statements regarding our operating strategy, and
estimates of our future costs and benefits. These
forward-looking statements are based on our current beliefs and
expectations and are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of
which are beyond our control. In addition, these
forward-looking statements are subject to assumptions with respect
to future business strategies and decisions that are subject to
change. Forward-looking statements speak only as of the date they
are made and the Company is under no duty to update these
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. A number of factors
could cause actual conditions, events or results to differ
significantly from those described in the forward-looking
statements. Factors that could cause such a difference
include, but are not limited to, changes in general economic
conditions – either locally or nationally, competition among
depository and financial institutions, the continuation of current
revenue and expense trends, significant changes in interest rates,
unforeseen changes in the Company's markets, and legal, regulatory,
or accounting changes. 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, 2010, describe
some of these factors.
Important Tables Follow
Quarterly Financial Highlights
(unaudited) |
At and For the
Quarters Ended |
|
2011 |
2010 |
|
June 30 |
March 31 |
December 31 |
September 30 |
June 30 |
(Dollars in thousands, except per
share data) |
|
|
|
|
|
|
|
|
|
|
|
Summary of Operations: |
|
|
|
|
|
Interest income - taxable equivalent |
$ 11,488 |
$ 10,457 |
$ 11,055 |
$ 11,675 |
$ 12,308 |
Interest expense |
2,826 |
2,855 |
3,411 |
3,790 |
4,083 |
Net interest income - taxable
equivalent |
8,662 |
7,602 |
7,644 |
7,885 |
8,225 |
Less: Taxable-equivalent adjustment |
69 |
70 |
70 |
79 |
114 |
Net interest income |
8,593 |
7,532 |
7,574 |
7,806 |
8,111 |
Provision for loan losses |
1,700 |
3,000 |
5,000 |
3,000 |
3,000 |
Net interest income after loan loss
provision |
6,893 |
4,532 |
2,574 |
4,806 |
5,111 |
Noninterest income |
5,886 |
1,478 |
2,274 |
2,290 |
2,415 |
Noninterest expense |
9,270 |
7,672 |
7,918 |
7,781 |
7,279 |
Net income (loss) before income
taxes |
3,509 |
(1,662) |
(3,070) |
(685) |
247 |
Income tax expense (benefit) |
1,213 |
(771) |
(1,331) |
(413) |
(108) |
Net income (loss) |
2,296 |
(891) |
(1,739) |
(272) |
355 |
Dividends on preferred stock |
256 |
256 |
256 |
256 |
257 |
Net income (loss) available to common
shareholders |
$ 2,040 |
$ (1,147) |
$ (1,995) |
$ (528) |
$ 98 |
|
|
|
|
|
|
Per Common Share Data: |
|
|
|
|
|
Net income (loss): |
|
|
|
|
|
Basic |
$ 0.18 |
$ (0.10) |
$ (0.18) |
$ (0.05) |
$ 0.01 |
Diluted |
0.18 |
(0.10) |
(0.18) |
(0.05) |
0.01 |
Weighted average shares outstanding: |
|
|
|
|
|
Basic |
11,455,642 |
11,491,734 |
11,173,174 |
10,844,386 |
9,077,042 |
Diluted |
11,455,642 |
11,491,734 |
11,173,174 |
10,844,386 |
9,077,042 |
End of period shares outstanding |
11,506,324 |
11,508,750 |
11,508,750 |
10,964,146 |
10,965,941 |
|
|
|
|
|
|
Cash dividends declared |
$ 0.01 |
$ 0.01 |
$ 0.01 |
$ 0.04 |
$ 0.04 |
Book value |
6.44 |
6.22 |
6.32 |
6.86 |
6.91 |
Tangible book value |
6.29 |
6.09 |
6.17 |
6.70 |
6.73 |
|
|
|
|
|
|
Selected Financial Performance
Ratios (annualized): |
|
|
|
|
|
Return on average assets |
0.73% |
-0.44% |
-0.74% |
-0.20% |
0.04% |
Return on average common equity |
11.00% |
-6.39% |
-10.68% |
-2.77% |
0.56% |
Noninterest income to average total
assets |
2.12% |
0.56% |
0.85% |
0.85% |
0.87% |
Noninterest expense to average total
assets |
3.34% |
2.91% |
2.95% |
2.88% |
2.63% |
|
|
|
|
|
|
Operating Earnings
(Non-GAAP): |
|
|
|
|
|
Net income (loss) available to common
shareholders |
$ 2,040 |
$ (1,147) |
$ (1,995) |
$ (528) |
$ 98 |
(Gain) loss on acquisition, net of
tax |
(2,695) |
155 |
(90) |
(118) |
(368) |
(Gain) loss on sale of investments, net
of tax |
-- |
-- |
-- |
(186) |
(6) |
Other-than-temporary impairment on
securities, net of tax |
-- |
-- |
365 |
-- |
-- |
Acquisition and integration expenses, net
of tax |
345 |
27 |
26 |
86 |
57 |
Net operating loss |
$ (310) |
$ (965) |
$ (1,694) |
$ (746) |
$ (219) |
|
|
|
|
|
|
Operating net loss per common share: |
|
|
|
|
|
Basic |
$ (0.03) |
$ (0.08) |
$ (0.15) |
$ (0.07) |
$ (0.02) |
Diluted |
(0.03) |
(0.08) |
(0.15) |
(0.07) |
(0.02) |
|
|
|
|
|
|
Net Interest Margin
(annualized): |
|
|
|
|
|
Yield on earning assets |
4.95% |
4.62% |
4.68% |
4.91% |
4.96% |
Cost of funds |
1.23% |
1.32% |
1.51% |
1.66% |
1.72% |
Net interest rate spread |
3.72% |
3.30% |
3.17% |
3.25% |
3.24% |
Net interest margin (taxable
equivalent) |
3.78% |
3.42% |
3.25% |
3.42% |
3.48% |
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Financial Highlights
(unaudited) |
At and For the
Quarters Ended |
|
2011 |
2010 |
|
June 30 |
March 31 |
December 31 |
September 30 |
June 30 |
(Dollars in thousands, except per
share data) |
|
|
|
|
|
|
|
|
|
|
|
Selected End of Period
Balances: |
|
|
|
|
|
Loans, net |
$ 750,650 |
$ 724,655 |
$ 736,510 |
$ 754,740 |
$ 776,234 |
Investment securities |
156,328 |
154,006 |
111,586 |
87,255 |
97,678 |
Total interest-earning assets |
931,156 |
886,872 |
914,456 |
937,278 |
927,757 |
Total assets |
1,117,993 |
1,041,444 |
1,064,487 |
1,087,558 |
1,077,431 |
Deposits |
904,578 |
832,803 |
850,456 |
865,786 |
853,526 |
Shareholders' equity |
94,771 |
92,276 |
93,443 |
95,682 |
96,410 |
|
|
|
|
|
|
Selected Quarterly Average
Balances: |
|
|
|
|
|
Loans, net |
$ 753,874 |
$ 726,346 |
$ 747,054 |
$ 767,381 |
$ 780,209 |
Investment securities |
157,513 |
135,645 |
100,691 |
91,361 |
100,501 |
Total interest-earning assets |
918,118 |
902,141 |
928,756 |
915,882 |
949,130 |
Total assets |
1,110,740 |
1,053,747 |
1,075,338 |
1,080,680 |
1,105,788 |
Deposits |
896,353 |
841,387 |
853,185 |
853,902 |
859,408 |
Shareholders' equity |
95,116 |
93,533 |
94,761 |
96,258 |
96,282 |
|
|
|
|
|
|
Credit Quality Information and
Ratios: |
|
|
|
|
|
Allowance for loan losses - beginning of
period |
$ 12,006 |
$ 11,924 |
$ 10,752 |
$ 9,796 |
$ 9,230 |
Add: Provision for loan losses |
1,700 |
3,000 |
5,000 |
3,000 |
3,000 |
Less: Net charge-offs |
964 |
2,918 |
3,828 |
2,044 |
2,433 |
Allowance for loan losses - end of
period |
12,742 |
12,006 |
11,924 |
10,752 |
9,797 |
|
|
|
|
|
|
Assets not covered by
FDIC loss-share agreements: |
|
|
|
|
|
Past due loans (30-89 days) accruing |
5,687 |
5,692 |
13,787 |
6,602 |
10,145 |
Past due loans to total non-covered
loans |
0.99% |
0.97% |
2.34% |
1.11% |
1.68% |
|
|
|
|
|
|
Nonperforming non-covered loans: |
|
|
|
|
|
One-to-four family residential |
1,406 |
2,373 |
1,864 |
2,068 |
1,646 |
Construction |
-- |
72 |
14 |
163 |
896 |
Acquisition and development |
4,244 |
4,675 |
2,560 |
340 |
691 |
Commercial land |
3,071 |
4,653 |
4,360 |
5,034 |
3,252 |
Other commercial real estate |
8,473 |
9,636 |
4,800 |
9,566 |
4,127 |
Commercial business |
228 |
309 |
287 |
720 |
742 |
Consumer |
2,483 |
2,639 |
2,529 |
1,930 |
1,652 |
Total nonperforming non-covered
loans |
19,905 |
24,357 |
16,414 |
19,821 |
13,006 |
Other nonperforming non-covered
assets |
10,723 |
8,463 |
7,650 |
8,557 |
8,239 |
Total nonperforming non-covered
assets |
30,628 |
32,820 |
24,064 |
28,378 |
21,245 |
|
|
|
|
|
|
Allowance for loan losses to total
non-covered loans |
2.22% |
2.05% |
2.02% |
1.81% |
1.62% |
Net charge-offs to average non-covered
loans (annualized) |
0.66% |
1.99% |
2.59% |
1.36% |
3.22% |
Nonperforming non-covered loans to
non-covered loans |
3.47% |
4.15% |
2.79% |
3.33% |
2.15% |
Nonperforming non-covered assets to total
assets |
2.74% |
3.15% |
2.26% |
2.61% |
1.97% |
Nonperforming non-covered assets to total
non-covered loans and other real estate owned |
5.24% |
5.51% |
4.03% |
4.71% |
3.46% |
|
|
|
|
|
|
Assets covered by FDIC
loss-share agreements: |
|
|
|
|
|
Past due loans (30-89 days) accruing |
12,987 |
7,006 |
5,767 |
8,701 |
5,257 |
Past due loans to total covered
loans |
7.34% |
5.09% |
3.91% |
5.43% |
3.07% |
|
|
|
|
|
|
Total covered nonperforming
loans |
34,623 |
24,791 |
25,541 |
22,416 |
24,924 |
Other covered nonperforming
assets |
14,120 |
8,225 |
7,108 |
3,183 |
2,343 |
Total covered nonperforming assets |
48,743 |
33,016 |
32,649 |
25,599 |
27,267 |
|
|
|
|
|
|
Capital Ratios: |
|
|
|
|
|
Tangible common equity |
6.49% |
6.73% |
6.69% |
6.74% |
6.86% |
Total Risk-Based Capital (Bank only) |
17.29% |
16.70% |
16.80% |
16.83% |
16.78% |
Tier 1 Risk-Based Capital (Bank
only) |
16.03% |
15.44% |
15.54% |
15.58% |
15.52% |
Tier 1 Leverage Capital (Bank only) |
9.42% |
9.89% |
9.74% |
9.58% |
9.74% |
|
|
CITIZENS SOUTH BANKING
CORPORATION |
CONSOLIDATED STATEMENTS
OF FINANCIAL CONDITION (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
June
30, |
Amount |
Percent |
|
2011 |
2010 |
Change |
Change |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
89,337 |
109,946 |
(20,609) |
-18.74% |
Investment securities available for sale, at
fair value |
76,930 |
71,802 |
5,128 |
7.14% |
Investment securities held to maturity, at
amortized cost |
79,398 |
25,876 |
53,522 |
206.84% |
Federal Home Loan Bank stock, at cost |
5,635 |
6,397 |
(762) |
-11.91% |
Presold loans in process of settlement |
2,109 |
2,529 |
(420) |
-16.61% |
Loans: |
|
|
|
|
Covered by FDIC loss-share
agreements |
177,047 |
171,002 |
6,045 |
3.54% |
Not covered by FDIC loss-share
agreements |
573,603 |
602,703 |
(29,100) |
-4.83% |
Allowance for loan losses |
(12,742) |
(9,796) |
(2,946) |
30.07% |
Net loans |
737,908 |
763,909 |
(26,001) |
-3.40% |
Other real estate owned |
24,803 |
10,582 |
14,221 |
134.39% |
Premises and equipment, net |
25,233 |
15,458 |
9,775 |
63.24% |
FDIC loss share receivable |
43,424 |
36,470 |
6,954 |
19.07% |
Accrued interest receivable |
3,076 |
3,405 |
(329) |
-9.66% |
Bank-owned life insurance |
18,654 |
17,930 |
724 |
4.04% |
Intangible assets |
1,636 |
1,988 |
(352) |
-17.71% |
Other assets |
9,850 |
11,139 |
(1,289) |
-11.57% |
Total assets |
$ 1,117,993 |
$ 1,077,431 |
$ 40,562 |
3.76% |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
Deposits: |
|
|
|
|
Noninterest-bearing demand deposits |
$ 82,304 |
$ 69,272 |
$ 13,032 |
18.81% |
Interest-bearing demand and savings |
368,766 |
319,472 |
49,294 |
15.43% |
Time deposits |
453,508 |
464,782 |
(11,274) |
-2.43% |
Total deposits |
904,578 |
853,526 |
51,052 |
5.98% |
Securities sold under repurchase
agreements |
11,890 |
9,432 |
2,458 |
26.06% |
Borrowed money |
96,121 |
105,183 |
(9,062) |
-8.62% |
Other liabilities |
10,633 |
12,879 |
(2,246) |
-17.44% |
Total liabilities |
1,023,222 |
981,020 |
42,202 |
4.30% |
Shareholders' Equity |
|
|
|
|
Preferred stock |
20,713 |
20,630 |
83 |
0.40% |
Common stock |
124 |
124 |
-- |
0.00% |
Additional paid-in-capital |
63,125 |
62,857 |
268 |
0.43% |
Retained earnings, substantially
restricted |
10,287 |
12,774 |
(2,487) |
-19.47% |
Accumulated other comprehensive income |
522 |
26 |
496 |
1907.69% |
Total shareholders' equity |
94,771 |
96,411 |
(1,640) |
-1.70% |
Total liabilities and
shareholders' equity |
$ 1,117,993 |
$ 1,077,431 |
$ 40,562 |
3.76% |
|
|
CITIZENS SOUTH BANKING
CORPORATION |
CONSOLIDATED STATEMENTS
OF OPERATIONS (unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Amount |
Percent |
|
June 30, 2011 |
June 30, 2010 |
Change |
Change |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Interest Income: |
|
|
|
|
Interest and fees on loans |
$ 10,329 |
$ 11,231 |
$ (902) |
-8.03% |
Investment securities: |
|
|
|
|
Taxable interest income |
983 |
676 |
307 |
45.41% |
Tax-exempt interest income |
69 |
188 |
(119) |
-63.30% |
Other interest income |
38 |
99 |
(61) |
-61.62% |
Total interest income |
11,419 |
12,194 |
(775) |
-6.36% |
Interest Expense: |
|
|
|
|
Deposits |
1,981 |
2,904 |
(923) |
-31.78% |
Borrowed money |
1,652 |
2,300 |
(648) |
-28.17% |
Total interest expense |
2,826 |
4,083 |
(1,257) |
-30.79% |
|
|
|
|
|
Net interest income |
8,593 |
8,111 |
482 |
5.94% |
Provision for loan losses |
1,700 |
3,000 |
(1,300) |
-43.33% |
Net interest income after provision for
loan losses |
6,893 |
5,111 |
1,782 |
34.87% |
Noninterest Income: |
|
|
|
|
Service charges on deposit accounts |
1,046 |
971 |
75 |
7.72% |
Mortgage banking income |
254 |
357 |
(103) |
-28.85% |
Commissions on sales of financial
products |
69 |
188 |
(119) |
-63.30% |
Income from bank-owned life
insurance |
214 |
243 |
(29) |
-11.93% |
Gain (loss) from acquisition |
4,418 |
605 |
3,813 |
630.25% |
Gain on sale of investments, available
for sale |
1 |
10 |
(9) |
-90.00% |
Gain (loss) on sale of other assets |
(338) |
(203) |
(135) |
66.50% |
Other income |
222 |
244 |
(22) |
-9.02% |
Total noninterest income |
5,886 |
2,415 |
3,471 |
143.73% |
Noninterest Expense: |
|
|
|
|
Compensation and benefits |
3,806 |
3,652 |
154 |
4.22% |
Occupancy and equipment |
873 |
1,039 |
(166) |
-15.98% |
Loan collection and other expenses |
204 |
165 |
39 |
23.64% |
Professional services |
249 |
233 |
16 |
6.87% |
Data processing |
282 |
190 |
92 |
48.42% |
Deposit insurance |
361 |
354 |
7 |
1.98% |
Amortization of intangible assets |
136 |
154 |
(18) |
-11.69% |
Valuation adjustment on OREO |
1,476 |
210 |
1,266 |
602.86% |
OREO expense |
596 |
202 |
394 |
195.05% |
Acquisition and integration expenses |
566 |
94 |
472 |
502.13% |
Other expenses |
721 |
986 |
(265) |
-26.88% |
Total noninterest expense |
9,270 |
7,279 |
1,991 |
27.35% |
|
|
|
|
|
Income before income tax expense
(benefit) |
3,509 |
247 |
3,262 |
1320.65% |
Income tax expense (benefit) |
1,213 |
(108) |
1,321 |
-1223.15% |
Net income |
2,296 |
355 |
1,941 |
546.76% |
Dividends on preferred stock |
256 |
257 |
(1) |
-0.39% |
|
|
|
|
|
Net income available to common
shareholders |
$ 2,040 |
$ 98 |
$ 1,942 |
1981.63% |
|
|
CITIZENS SOUTH BANKING
CORPORATION |
CONSOLIDATED STATEMENTS
OF OPERATIONS (unaudited) |
|
|
|
|
|
|
Six Months
Ended |
Amount |
Percent |
|
June 30, 2011 |
June 30, 2010 |
Change |
Change |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Interest Income: |
|
|
|
|
Interest and fees on loans |
$ 19,790 |
$ 19,485 |
$ 305 |
1.57% |
Investment securities: |
|
|
|
|
Taxable interest income |
1,776 |
1,294 |
482 |
37.25% |
Tax-exempt interest income |
137 |
378 |
(241) |
-63.76% |
Other interest income |
103 |
149 |
(46) |
-30.87% |
Total interest income |
21,806 |
21,306 |
500 |
2.35% |
Interest Expense: |
|
|
|
|
Deposits |
3,982 |
5,169 |
(1,187) |
-22.96% |
Borrowed money |
1,698 |
2,308 |
(610) |
-26.43% |
Total interest expense |
5,680 |
7,477 |
(1,797) |
-24.03% |
|
|
|
|
|
Net interest income |
16,126 |
13,829 |
2,297 |
16.61% |
Provision for loan losses |
4,700 |
6,050 |
(1,350) |
-22.31% |
Net interest income after provision for
loan losses |
11,426 |
7,779 |
3,647 |
46.88% |
Noninterest Income: |
|
|
|
|
Service charges on deposit accounts |
2,004 |
1,761 |
243 |
13.80% |
Mortgage banking income |
491 |
567 |
(76) |
-13.40% |
Commissions on sales of financial
products |
136 |
306 |
(170) |
-55.56% |
Income from bank-owned life
insurance |
397 |
432 |
(35) |
-8.10% |
Gain (loss) from acquisition |
4,163 |
19,338 |
(15,175) |
-78.47% |
Gain on sale of investments, available
for sale |
1 |
44 |
(43) |
-97.73% |
Gain (loss) on sale of other assets |
(326) |
(266) |
(60) |
22.56% |
Other income |
500 |
418 |
82 |
19.62% |
Total noninterest income |
7,366 |
22,600 |
(15,234) |
-67.41% |
Noninterest Expense: |
|
|
|
|
Compensation and benefits |
7,454 |
6,295 |
1,159 |
18.41% |
Occupancy and equipment |
1,701 |
1,722 |
(21) |
-1.22% |
Loan collection and other expenses |
494 |
291 |
203 |
69.76% |
Professional services |
502 |
467 |
35 |
7.49% |
Data processing |
522 |
331 |
191 |
57.70% |
Deposit insurance |
695 |
614 |
81 |
13.19% |
Amortization of intangible assets |
275 |
218 |
57 |
26.15% |
Valuation adjustment on OREO |
1,984 |
694 |
1,290 |
185.88% |
OREO expenses |
597 |
352 |
245 |
69.60% |
Acquisition and integration expenses |
611 |
882 |
(271) |
-30.73% |
Other expenses |
2,110 |
1,769 |
341 |
19.28% |
Total noninterest expense |
16,945 |
13,635 |
3,310 |
24.28% |
|
|
|
|
|
Income before income tax expense |
1,847 |
16,744 |
(14,897) |
-88.97% |
Income tax expense |
442 |
6,093 |
(5,651) |
-92.75% |
Net income |
1,405 |
10,651 |
(9,246) |
-86.81% |
Dividends on preferred stock |
512 |
513 |
(1) |
-0.19% |
|
|
|
|
|
Net income available to common
shareholders |
$ 893 |
$ 10,138 |
$ (9,245) |
-91.19% |
CONTACT: Gary F. Hoskins, CFO
(704) 884-2263
gary.hoskins@citizenssouth.com
Grafico Azioni Citizens South Banking Corp. (MM) (NASDAQ:CSBC)
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