Citizens South Banking 8K Regulation FD Disclosure | SEC 7 Nov 05

Sterne, Agee & Leach, Inc.

2005 Southeast Bank Symposium

Renaissance Ross Bridge Golf Resort and Spa

Birmingham, Alabama

November 7, 2005

Citizens South Banking Corporation

Gastonia, North Carolina

Exhibit 99.1

This presentation contains forward looking statements with respect to the

financial condition and operations of Citizens South Banking Corporation

and its wholly-owned subsidiary, Citizens South Bank.

These forward looking statements involve risks and uncertainties. Factors

that may cause actual results to differ materially from those projected in

the forward looking statements include, among others, the following

possibilities:

general

economic

conditions

are

less

favorable

than

expected; 2) changes in market interest rates reduce interest margins; 3)

risks in the loan portfolio, including prepayments, are greater than

expected; 4) legislation or regulatory changes adversely affect the

businesses in which the company is engaged and; 5) competitive pressures

increase significantly. For further information and other factors that may

affect the accuracy of forward looking statements, please refer to reports

that

the

company

files

from

time

with

the

SEC,

including

annual

reports

Form

10-K,

quarterly

reports

Form

10-Q

and

current

reports on Form 8-K. Readers are cautioned not to place undue reliance on

these

forward

looking

statements,

which

reflect

management’s

judgements

only as of the date hereof. The company undertakes no obligation to

publicly revise these forward looking statements to reflect events and

circumstances that may arise after the date hereof.

Forward Looking Statements

•

History of Citizens South Banking Corporation

•

At a Glance

•

Management Team and Market Area

•

Historical Financial Information

•

Business Strategy

•

Trinity Bank Acquisition

•

Why Own CSBC

Overview of Presentation

•

1904 -

Chartered as a North Carolina Mutual Building and Loan

Association

•

1982 -

Acquired Mutual Building and Savings

Association of Mount Holly, NC

•

1998 -

Converted to a Mutual Holding Company

•

1998 -

Listed on Nasdaq National Market Under the Current

Ticker Symbol “CSBC”

•

2001 -

Acquired Innes Street Financial Corporation

•

2002 -

Converted to a Stock Holding Company

•

2005 –

Acquired Trinity Bank

History of Citizens South Banking Corporation

At a Glance

Citizens South Banking Corporation (CSBC)

Gastonia, NC

(dollars in thousands)

Proforma

Pre Citizens

Post

Trinity

Acquisition

Second Step

Acquisition

12-31-98

12-31-02

06-30-05

•

Assets

$ 220,918

$ 492,873

$ 700,128

•

Loans receivable

$ 156,222

$ 299,906

$ 441,047

•

Deposits

$ 148,992

$ 340,862

$ 501,664

•

Equity/Assets

$ 41,675

$ 96,383

$ 87,648

•

Shares Outstanding

4,496,500

9,062,727

8,544,764

•

Branches

Four

Nine

Fourteen

Total Years

Bank Exp.

Experience

•

Kim S. Price

First National Bank &

President and CEO

Federal Home Loan Bank

•

Paul L. Teem, Jr.

Citizens South Bank

EVP and Chief Admin. Officer

•

V. Burton Brinson, Jr.

Wachovia

EVP –

Group Pres. Rowan/Iredell

•

Daniel M. Boyd, IV

First Gaston Bank &

EVP –

Group Pres. Gaston

Wachovia

•

Gary F. Hoskins

Cherryville Federal &

EVP and CFO

Office of Thrift Sup.

•

Michael R. Maguire

First Union &

SVP and Chief Credit Officer

South Carolina Nat’l

•

J. Stephen Huffstetler

First Community Bank &

SVP –

Group Pres. Financial Services

First Union

The Citizens South Management Team

The Citizens South Market Area

•

I-485 opens –

presenting new opportunities for

Citizens South Bank

Growth of Charlotte Area

Deposit Market Share –

Gaston County

Source: 2005 Market Share Report published by the FDIC

9.59%

$166,244

$1,899,057

$1,732,813

Total Deposits

$19,669

1.04%

$19,669

0.00%

Alliance Bank and Trust

$25,947

1.37%

$25,947

0.00%

Carolina Commerce Bank

13.83%

$4,229

1.83%

$34,811

1.61%

$30,582

Fidelity Bank

-0.73%

($449)

3.22%

$61,210

3.25%

$61,659

Cherryville Federal S&LA

38.04%

$18,537

3.54%

$67,264

2.57%

$48,727

First National Bank of Shelby

-3.74%

($2,750)

3.73%

$70,767

3.87%

$73,517

Belmont Federal S&LA

2.94%

$2,433

4.49%

$85,225

4.36%

$82,792

RBC Centura Bank

7.70%

$6,847

5.04%

$95,788

4.68%

$88,941

SunTrust Bank

4.48%

$5,955

7.31%

$138,736

6.99%

$132,781

Bank of America

4.22%

$7,033

9.14%

$173,523

8.77%

$166,490

First Gaston Bank

1.35%

$2,521

9.93%

$188,592

9.80%

$186,071

Citizens South Bank

14.91%

$54,841

22.25%

$422,614

19.37%

$367,773

Wachovia Bank / Southrust

4.34%

$21,431

27.11%

$514,911

25.99%

$493,480

Branch Banking and Trust

Growth

Market %

Deposits

Market %

Deposits

Financial Institution

Percent of

Amount of

June 30, 2005

June 30, 2004

Deposit Market Share –

Rowan County

Source: 2005 Market Share Report published by the FDIC

4.65%

$55,923

100.00%

$1,258,071

95.55%

$1,202,148

Total Deposits -

Rowan County

$102

0.01%

$102

0.00%

Woodforest National Bank

$7,879

0.63%

$7,879

0.00%

Bank of NC

4.16%

$655

1.30%

$16,393

1.25%

$15,738

Fidelity Bank

-2.47%

($928)

2.92%

$36,686

2.99%

$37,614

First Charter Bank

24.68%

$8,597

3.45%

$43,427

2.77%

$34,830

First Bank

13.12%

$6,255

4.29%

$53,940

3.79%

$47,685

Bank of America

24.78%

$12,189

4.88%

$61,387

3.91%

$49,198

Bank of the Carolinas

-10.98%

($12,878)

8.30%

$104,393

9.32%

$117,271

First National Bank & Trust

-5.92%

($6,967)

8.80%

$110,721

9.35%

$117,688

Citizens South Bank

-4.14%

($9,358)

17.22%

$216,685

17.97%

$226,043

SunTrust Bank

9.10%

$23,150

22.07%

$277,595

20.23%

$254,445

Wachovia Bank / Southtrust

9.03%

$27,227

26.14%

$328,863

23.98%

$301,636

Farmers & Merchants Bank

Growth

Market %

Deposits

Market %

Deposits

Financial Institution

Percent of

Amount of

June 30, 2005

June 30, 2004

Deposit Market Share –

Iredell County

Source: 2005 Market Share Report published by the FDIC

11.33%

$177,515

100.00%

$1,744,130

89.82%

$1,566,615

Total Deposits -

Iredell County

$410

0.02%

$410

0.00%

Woodforest National Bank

1084.25%

$4,337

0.27%

$4,737

0.02%

$400

Mountain National Bank

$12,912

0.74%

$12,912

0.00%

Fidelity Bank

1023.94%

$13,301

0.84%

$14,600

0.07%

$1,299

First Trust Bank

0.73%

$146

1.15%

$20,047

1.14%

$19,901

First Bank

3.25%

$880

1.60%

$27,954

1.55%

$27,074

Southern Community Bank

61.23%

$14,821

2.24%

$39,027

1.39%

$24,206

Catawba Valley Bank

19.41%

$8,285

2.92%

$50,962

2.45%

$42,677

RBC Centura Bank

8.16%

$5,708

4.34%

$75,687

4.01%

$69,979

Citizens South Bank

12.76%

$10,156

5.14%

$89,728

4.56%

$79,572

First Citizens Bank and Trust

4.78%

$4,457

5.60%

$97,713

5.35%

$93,256

Mooresville Savings Bank, SSB

9.76%

$10,586

6.83%

$119,049

6.22%

$108,463

First Charter National Bank

10.28%

$18,370

11.30%

$197,030

10.24%

$178,660

Yadkin Valley Bank & Trust

4.57%

$12,632

16.56%

$288,852

15.84%

$276,220

Bank of America

2.66%

$8,418

18.62%

$324,831

18.14%

$316,413

Branch Banking and Trust Co.

15.86%

$52,096

21.82%

$380,591

18.83%

$328,495

Wachovia Bank

Growth

Market %

Deposits

Market %

Deposits

Financial Institution

Percent of

Amount of

June 30, 2005

June 30, 2004

Deposit Market Share –

Union County

Source: 2005 Market Share Report published by the FDIC

15.69%

$182,208

100.00%

$1,343,386

86.44%

$1,161,178

Total Deposits -

Union County

45.55%

$731

0.17%

$2,336

0.12%

$1,605

RBC Centura

15.43%

$9,270

5.16%

$69,343

4.47%

$60,073

Bank of America

37.86%

$25,574

6.93%

$93,122

5.03%

$67,548

Wachovia Bank

4.61%

$4,962

8.37%

$112,489

8.00%

$107,527

First Citizens B&T

12.14%

$13,993

9.62%

$129,270

8.58%

$115,277

Trinity Bank

-0.09%

($161)

12.83%

$172,324

12.84%

$172,485

First Charter National Bank

26.78%

$43,866

15.46%

$207,687

12.19%

$163,821

American Community Bank

63.12%

$85,167

16.38%

$220,086

10.04%

$134,919

SunTrust

-0.35%

($1,194)

25.07%

$336,729

25.15%

$337,923

Branch Banking and Trust Co.

Growth

Market %

Deposits

Market %

Deposits

Financial Institution

Percent of

Amount of

June 30, 2005

June 30, 2004

Total Assets

Modest Growth Due to Changing Asset Mix

$518,942

$508,961

$495,751

$492,873

$447,581

$400,000

$450,000

$500,000

$550,000

12/31/2001

12/31/2002

12/31/2003

12/31/2004

9/30/2005

At September 30, 2005 At December 31, 2001

Consumer

18.9%

Commercial

23.7%

Residential

57.3%

Changing Loan Portfolio Mix

Residential

26.7%

Commercial

55.0%

Consumer

18.3%

Commercial Loan Portfolio

$189,747

$164,218

$129,258

$100,262

$79,955

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

$225,000

12/31/2001

12/31/2002

12/31/2003

12/31/2004

9/30/2005

Citizens South Banking Corporation (CSBC)

Gastonia, NC

At September 30, 2005

(dollars in thousands)

Real Estate

C&I

Outstanding Balance

$173,053

$ 16,694

Largest Relationship

$ 7,989

$ 3,000

Largest Credit Exposure

$ 5,464

$ 3,000

Average Outstanding Balance

236

$ 50

Outstanding Loans

721

330

Commercial Loan Portfolio Mix

Nonperforming Assets to Total Assets

History of Solid Asset Quality

0.42%

0.34%

0.14%

0.37%

0.59%

0.00%

0.25%

0.50%

0.75%

1.00%

12/31/2001

12/31/2002

12/31/2003

12/31/2004

9/30/2005

Time Deposits

69.8%

Transaction

Accounts

30.2%

At September 30, 2005 At December 31, 2001

Changing Deposit Portfolio Mix

Time Deposits

59.1%

Transaction

Accounts

40.9%

Net Interest Margin

(calculated as a percentage of average interest-earning assets)

3.26%

2.98%

2.94%

3.48%

2.69%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

12/31/2001

12/31/2002

12/31/2003

12/31/2004

9/30/2005

•

Fund majority of commercial and consumer loan growth

over the next 24 months from MBS cash flows and

maturing investments ($50 to $75 million)

•

Grow DDA’s and other non-time deposits

•

Balance sheet positioned to benefit from moderate rate

increases (positive gap)

•

1-4 mortgage loan prepayments have slowed with rising

rates facilitating improved loan growth

Continuing Margin Improvement Plan

One Year Cumulative Gap to Total Assets

Bank-like Interest Sensitivity

13.71%

7.52%

7.72%

11.95%

-8.70%

-30.00%

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

12/31/2001

12/31/2002

12/31/2003

12/31/2004

6/30/2005

Noninterest Operating Income

Excludes gains on sale of assets

$3,113

$4,149

$4,539

$3,878

$3,006

$1,000

$2,000

$3,000

$4,000

$5,000

12/31/2001

12/31/2002

12/31/2003

12/31/2004

9 mos ended

09/30/05

Quarterly Diluted Operating EPS

Excludes non-operating items

$0.14

$0.13

$0.12

$0.10

$0.11

$0.05

$0.06

$0.07

$0.08

$0.09

$0.10

$0.11

$0.12

$0.13

$0.14

$0.15

Q4 03

Q1 04

Q2 04

Q3 04

Q4 04

Q1 05

Q2 05

Q3 05

Shares Outstanding

Reduced share count by 20%

7,223,715

7,432,144

8,670,313

9,062,727

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

12/31/2002

12/31/2003

12/31/2004

9/30/2005

Proven Record of Leverage

Capital to Assets Ratio

13.60%

14.20%

17.68%

19.56%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

12/31/2002

12/31/2003

12/31/2004

9/30/2005

Create a Bank-Like Organization

A. Management / Culture

B. Balance Sheet

II.

Develop Franchise

A. De novo

Branches

B. Loan Production Offices

C. Acquisitions

Business Strategy

III.

Leverage Capital

A. Organic Growth

B. Acquisitions

IV.

Manage Capital

A. Share Repurchase Plan

B. Attractive Dividend

Business Strategy

Trinity Bank

Monroe, NC

As of September 30, 2005

(dollars in thousands)

•

Location

Union County –

Charlotte Region

•

Branches

Three

•

Assets

$163,955

•

Loans

$114,745

•

Deposits

$133,758

•

Equity

$ 13,857

Trinity Bank Profile

Announcement Date –

May 25, 2005

Aggregate Transaction Value

$35.5 million

•

Implied Purchase Price

$18.25/share

•

Consideration

50% Stock / 50% Cash

•

Price to Stated Book Value

254.8

•

Price to 2005e earnings

29.5x

•

Accretion to EPS

2006

•

Closing Date

October 31, 2005

Trinity Bank Consideration

•

Creates Critical Mass in the Charlotte, NC Region

Eighth Largest Deposit Franchise in Region

Second Largest Community Bank Deposit Franchise in Region

•

Expedites Franchise Growth

•

Enhances Banklike Balance Sheet

•

Enhances Financial Performance

Stronger EPS Accretion than Share Repurchases

•

Advances the Deployment of Capital from “Second-Step”

Trinity Bank Rationale

•

Management Team (Bankers Converting Thrift)

•

Thrift to Bank Balance Sheet Transformation

•

Thrift to Bank Cultural Transformation

•

Dynamic Market –

Charlotte, NC Region

•

Proven Ability to Leverage Capital

•

Attractive Price

•

Margin Improvement Plan

Why Own CSBC

Total Return Performance

5,000

7,500

10,000

12,500

15,000

17,500

20,000

22,500

25,000

27,500

30,000

32,500

35,000

37,500

04/13/98

12/31/98

12/31/99

12/31/00

12/31/01

12/31/02

12/31/03

12/31/04

06/30/05

Citizens South Banking Corporation

Russell 2000

SNL Southeast Thrift Index

23,425

24,886

21,052

13,882

11,834

7,740

7,864

7,926

10,000

SNL Southeast Thrift Index

14,615

14,801

12,507

8,494

10,682

10,423

10,748

8,864

10,000

Russell 2000

31,127

34,654

33,225

23,843

16,120

11,517

11,648

13,094

10,000

Citizens South Banking Corporation

06/30/05

12/31/04

12/31/03

12/31/02

12/31/01

12/31/00

12/31/99

12/31/98

04/13/98

Index

Period Ending

Source: SNL Financial

Citizens South Bank

519 South New Hope Road

P.O. Box 2249

Gastonia, NC 28053-2249

(704) 868-5200

www.citizenssouth.com

Kim S. Price

President and Chief Executive Officer

(704) 884-2260

kim.price@citizenssouth.com

Gary F. Hoskins

Chief Financial Officer

(704) 884-2263

gary.hoskins@citizenssouth.com

Contact Information

We thank you for your interest in

“CSBC”

Citizens South Banking Inactive 8-KRegulation FD Disclosure