SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2008
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
For the transition period from to
--------------- ---------------
Commission File Number 000-23971
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A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Citizens South Bank Employees' Savings & Profit Sharing Plan and Trust
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Citizens South Banking Corporation
519 South New Hope Road
Gastonia, North Carolina 28054-4040
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Financial Statements
As of December 31, 2008
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Table of Contents
Page
Report of Independent Registered Public Accounting Firm...................... 1
Statements of Net Assets Available for Benefits.............................. 2
Statement of Changes in Net Assets Available for Benefits.................... 3
Notes to Financial Statements................................................ 4
Supplemental Schedules:
Form 5500 Schedule H, Line 4i - Schedule of Assets Held
at End of Year December 31, 2008...................................... 11
NOTE: All other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because they are not
applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- -------------------------------------------------------
The Participants and Administrator of the
Citizens South Bank Employees' Savings & Profit Sharing Plan
Gastonia, North Carolina
We have audited the accompanying statements of Net Assets Available for Benefits
of the Citizens South Bank Employees' Savings & Profit Sharing Plan (the Plan)
as of December 31, 2008 and 2007 and the related Statement of Changes in Net
Assets Available for Benefits for the year ended December 31, 2008. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on the financial statements of the Plan
based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Plan is not required
to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Plan's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements of the Plan, referred to above, present
fairly, in all material respects, the net assets available for benefits of the
Plan as of December 31, 2008 and 2007, and changes in net assets available for
benefits for the year ended December 31, 2008 in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets (Held
at End of Year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Cherry Bekaert & Holland
Gastonia, North Carolina
June 26, 2009
Citizens South Bank
Employees' Savings and Profit Sharing
Plan and Trust
Statements of Net Assets Available for Benefits
December 31, 2008 and 2007
2008 2007
------------------- --------------------
Assets
Investments:
Investments, at fair value $ 5,451,281 $ 6,899,406
Participant loans 124,421 160,884
------------------- --------------------
Total investments, at fair value 5,575,702 7,060,290
------------------- --------------------
Cash (1,643) -
Receivables:
Participants' contributions 20,397 18,432
Employer contributions 6,750 6,657
Securities sold 2,143 9,430
Other receivables 84 825
------------------- --------------------
Total receivables
29,374 35,344
------------------- --------------------
Total Assets 5,603,433 7,095,634
------------------- --------------------
Liabilities
Securities purchased and adminstrative expenses 16,963 10,299
------------------- --------------------
Total Liabilities 16,963 10,299
------------------- --------------------
Net assets available for benefits $ 5,586,470 $ 7,085,335
=================== ====================
See notes to financial statements
-2-
Citizens South Bank
Employees' Savings and Profit Sharing
Plan and Trust
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2008
2008
------------------------
Receipts:
Contributions:
Employer contributions $ 184,926
Participant contributions 514,348
------------------------
Total contributions 699,274
------------------------
Investment activity:
Interest and dividends 120,696
Net depreciation in fair value of investments (2,050,756)
Miscellaneous 1,300
------------------------
Total investment loss (1,928,760)
------------------------
Disbursements:
Benefits paid directly to participants 207,844
Administrative expenses 36,442
Miscellaneous 25,093
------------------------
Total disbursements 269,379
------------------------
Net decrease in net assets available for benefits (1,498,865)
Net assets available for benefits - beginning of year 7,085,335
------------------------
Net assets available for benefits - end of year $ 5,586,470
========================
See notes to financial statements
-3-
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Notes to Financial Statements
December 31, 2008
Note 1 - Description of Plan
The following description of the Citizens South Bank Employees' Savings & Profit
Sharing Plan and Trust (the "Plan") provides only general information.
Participants should refer to the Plan Agreement for a more complete description
of the Plan's provisions.
General - The Plan is a defined contribution plan that covers all full-time
employees of Citizens South Bank (the "Company") who have completed three months
of service and have attained the age of 18 years. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions - Each year participants may contribute any percentage of pretax
annual compensation to the Plan, not to exceed the lesser of 75% of Plan Salary
(defined as the employee's basic salary rate, plus overtime, bonus, and
commissions) or the annual maximum contribution as defined by United States
Treasury Regulations. Participants who have attained age 50 before the end of
the Plan year are eligible to make catch-up contributions in accordance with,
and subject to the limitations of, Section 414(v) of the Internal Revenue Code.
Participants may also contribute amounts representing distributions from other
qualified defined benefit or contribution plans. Participants direct the
investment of their contributions into various investment options offered by the
Plan. The Company may make matching contributions equal to a discretionary
percentage determined by the Company. For the year ended December 31, 2008, the
Company contributed 50% of the first 6% of Plan Salary that a participant
contributed to the Plan. The Company may also make profit-sharing contributions
to the Plan at the discretion of the Company's Board of Directors.
Profit-sharing contributions are allocated to participants in the same ratio as
a participant's compensation, as defined, bears to the total compensation of all
participants. Profit sharing contributions were not made for 2008. All
contributions are subject to certain limitations.
Participant accounts - Individual accounts are maintained for each Plan
participant. Each participant's account is credited with the participant's
contributions, and allocations of (a) the Company's contributions and (b) plan
earnings, and charged with an allocation of administrative expenses. Allocations
are based on participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's vested account.
Investments - Participants direct the investment of their contributions into up
to 21 various investment options offered by the Plan. Company contributions are
automatically invested in the same investment options directed for the
investment of the employee contributions. If no investment direction is given,
all contributions from participants and the Company are invested in the Short
Term Investment Fund (Money Market Fund), which is one of the Plan's bond/fixed
income funds. The Plan currently offers four target retirement funds, eight
stock funds, five bond/fixed income funds, three asset allocation funds, and the
Citizens South Banking Corporation (CSBC) Employer Stock Fund as investment
options for participants. The CSBC Employer Stock Fund is managed by The Bank of
New York, as Trustee. State Street Global Advisors is the investment manager for
all other funds and is the provider of benchmark index returns. Participants may
change or transfer their investment options at any time via telephone or the
internet or by written request via fax or mail.
-4-
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Notes to Financial Statements
December 31, 2008
Vesting - Participants are immediately vested in their voluntary contributions
to the Plan, plus investment earnings thereon. Vesting in the Company matching
and discretionary profit sharing contributions of their accounts is based on
years of continuous service. A participant is fully vested after three years of
service (cliff vesting) or upon death, approved disability, or attainment of age
65 while employed with the Company. Any years of employment prior to attaining
the age of 18 are excluded for vesting purposes. Employment with previously
acquired companies is included for the purpose of vesting.
Participant loans - Participants may borrow from their fund accounts a minimum
of $1,000 up to the lesser of a maximum of $50,000 or 50 percent of their vested
account balance, reduced by the highest outstanding loan balance(s) from the
Plan during the preceding 12 months. The loans are secured by the balances in
the participant's accounts and bear interest at the Barron's Prime Rate plus 1%,
fixed on the date of the disbursement of the loan, which is deemed to be based
upon prevailing interest rates charged by persons in the business of lending
money for loans which would be made under similar circumstances. Pentegra
Retirement Services, Inc. collects from the participant a $50.00 origination fee
and a $40.00 annual administration fee that are subtracted from the
participant's account. Principal and interest are paid ratably through
semi-monthly payroll deductions and credited to the loan account monthly.
Payment of benefits - Upon termination of service and upon application, a
participant will receive a lump-sum distribution equal to the value of the
participant's vested interest in his or her account. If no such request is made,
distribution is made at normal retirement age.
Forfeitures - At December 31, 2008 and 2007, forfeited non-vested accounts
derived from employer contributions were $9,980 and $20,612, respectively.
Forfeited non-vested accounts derived from employer matching contributions
accounts may be used to reduce future employer matching contributions or may be
allocated to participants as profit sharing contributions. Forfeited non-vested
accounts derived from the Company's profit sharing contributions may be added to
any Company profit-sharing contributions or allocated to participants as
additional profit sharing contributions. Forfeited contributions are allocated
to participants in the same ratio as a participant's compensation bears to the
total compensation of all participants. During 2008, $6,326 of forfeited
non-vested accounts derived from employer contributions were allocated to
participants.
-5-
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Notes to Financial Statements
December 31, 2008
Note 2 - Summary of significant accounting policies and activities
Basis of accounting - The Plan's financial statements are prepared using the
accrual method of accounting except for the payment of participant benefits
which are recorded when paid.
Use of estimates - The preparation of financial statements in conformity with
the accounting principles generally accepted in the United States of America
requires the plan administrator and plan sponsor to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Investment valuation and income recognition - The Plan's investments are stated
at fair value in accordance with Statement of Financial Accounting Standards No.
157, Fair Value Measurements as detailed in Note 3 - Fair Value of Financial
Instruments.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Management fees and operating expenses charged to the Plan for investments in
the mutual funds are deducted from income earned on a daily basis and are not
separately reflected. Consequently, management fees and operating expenses are
reflected as a reduction of investment return for such investments.
Risks and Uncertainties - The Plan utilizes various investment securities
including, mutual funds and corporate stocks. Investment securities, in general,
are exposed to various risks, such as interest rate risk, credit risk, and
overall market volatility. Due to the level of risk associated with certain
investment securities, it is reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could
materially affect the amounts reported in the financial statements.
Administrative expenses - Except for third party administration fees, which are
paid by the Company, all other administrative expenses are paid by the Plan.
Benefit payments - Benefit payments to participants are recorded upon
distribution.
Excess contributions payable - The Plan is required to return contributions to
certain active participants in order to satisfy the relevant nondiscrimination
provisions of the Plan.
Adoption of New Accounting Standard - In September 2006, the Financial
Accounting Standards Board ("FASB") issued Statement of Financial Accounting
Standards No. 157, Fair Value Measurements ("SFAS No. 157") which defines fair
value, establishes a framework for measuring fair value under current accounting
pronouncements that require or permit fair value measurement and enhances
disclosures about fair value measurements. Effective January 1, 2008, the Plan
adopted SFAS No. 157. This Standard defines fair value as the exchange price
that would be received for an asset or paid to transfer a liability (an exit
price) in the principal or most advantageous market for the asset or liability
in an orderly transaction value hierarchy which requires an entity to maximize
the use of observable inputs when measuring fair value. Adoption of SFAS No. 157
did not have a material impact on the Plan's financial statements.
-6-
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Notes to Financial Statements
December 31, 2008
The Standard describes three levels of inputs that may be used to measure fair
value:
Level 1 - Inputs to the valuation methodology are quoted prices available in
active markets for identical investments as of the reporting date;
Level 2 - Inputs to the valuation methodology are other than quoted prices in
active markets, which are either directly or indirectly observable as of the
reporting date, and fair value can be determined through the use of models or
other valuation methodologies; and
Level 3 - Inputs to the valuation methodology are unobservable inputs in
situations where there is little or no market activity for the asset or
liability and the reporting entity makes estimates and assumptions related to
the pricing of the asset or liability including assumptions regarding risk.
A financial instrument's level within the fair value hierarchy is based on the
lowest level of any input that is significant to the fair value measurement. The
following is a description of the valuation methodologies used for instruments
measured at fair value, including the general classification of such instruments
pursuant to the valuation hierarchy.
Mutual Funds - These investments are public investment vehicles valued using the
Net Asset Value ("NAV") provided by the administrator of the fund. The NAV is
based on the value of the underlying assets owned by the fund, minus its
liabilities, and then divided by the number of shares outstanding. The NAV is
generally a quoted price in an active market and classified within level 1 of
the valuation hierarchy.
Collective Investment Trusts - These investments are public investment vehicles
valued using the NAV provided by the administrator of the fund. The NAV is based
on the value of the underlying assets owned by the fund, minus its liabilities,
and then divided by the number of shares outstanding. The NAV is generally
classified within level 2 of the valuation hierarchy because the NAV's unit
price is quoted on a private market that is not active; however, the unit price
is based on underlying investments which are traded on an active market.
Citizens South Banking Corporation Common Stock - Citizens South Banking
Corporation common stock is valued at the closing price reported on the NASDAQ
Global Market and is classified within level 1 of the valuation hierarchy.
Money Market Funds - These investments are public investment vehicles valued
using $1 for the NAV. The money market funds are classified within level 2 of
the valuation hierarchy.
Loans to Participants - Loans to plan participants are valued at remaining
principal plus accrued interest, which approximates fair value and are
classified within level 3 of the valuation hierarchy.
-7-
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Notes to Financial Statements
December 31, 2008
Note 3 - Fair Value of Financial Investments
See "Adoption of New Accounting Standard" in Note 2 above for discussions of the
methodologies and assumptions used to determine the fair value of the Plan's
investments.
Below are the Plan's financial instruments carried at fair value on a recurring
basis by the FAS 157 fair value hierarchy levels described in Note 2.
As of December 31, 2008
-----------------------------------------------------------------
Quoted Prices
in Active Significant Significant
Markets for Observable Unobservable
Identical Assets Inputs Inputs Total
(Level 1) (Level 2) (Level 3) Fair Value
------------------- -------------- --------------- -------------
Assets:
- -------
Mutual funds $ 16,304 $ - $ - $ 16,304
Collective investment trusts - 3,172,621 - 3,172,621
Common stock - Citizens South Banking Corporation 2,107,935 - - 2,107,935
Money market funds - 154,421 - 154,421
Loans to participants - - 124,421 124,421
------------------- -------------- --------------- -------------
Total assets $ 2,124,239 $ 3,327,042 $ 124,421 $ 5,575,702
=================== ============== =============== =============
The table below sets forth a summary of changes in the fair value of the Plan's
level 3 investment assets and liabilities for the year ended December 31, 2008:
As of December 31, 2008
--------------------------------------------------------------------------------
Sales,
Items Issuances, Transfers
Included Gains Maturities, In or Out Ending
Beginning in Net (Losses) Settlements, of Level Fair
Fair Value Income in OCI Calls, Net 3, Net Value
----------- ------------ ------------ ------------ ------------ ------------
Loans to participants 160,884 - - (30,463) - 124,421
----------- ------------ ------------ ------------ ------------ ------------
Total $ 160,884 $ - $ - $ (30,463) $ - $ 124,421
=========== ============ ============ ============ ============ ============
-8-
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Notes to Financial Statements
December 31, 2008
Note 4 - Investments
The Plan's investments that represented five percent or more of the Plan's net
assets available for benefits as of December 31, 2008 and 2007, are as follows:
2008 2007
-------------- ---------------
Citizens South Banking Corporation Common Stock, 351,909
and 268,612 shares, respectively $ 2,107,935 $ 2,721,040
Pentegra Retirement Services Stable Value Fund, 49,157 and
42,993 units, respectively 559,551 473,044
State Street Global Advisors S&P 500 Stock Fund, 1,699 and
2,087 units, respectively 304,019 592,124
State Street Global Advisors Midcap Stock Fund, 14,991 and
15,642 units, respectively 291,331 476,025
State Street Global Advisors Money Market Fund, 646,138 and
645,354 units, respectively 646,138 645,354
State Street Government Bond Fund, 31,803 and 23,341 units,
respectively 461,309 *
* Asset does not represent 5% or more of the assets available for benefits at
December 31, 2007.
During the year ended December 31, 2008, the Plan's investments (including gains
and losses on investments bought and sold, as well as held during the year)
depreciated in value as follows:
Common stock $ (1,304,932)
Other investments (mutual funds, collective investment trusts,
money market funds) (745,824)
----------------
Net depreciation in fair value of investments $ (2,050,756)
================
Note 5 - Exempt party-in-interest transactions
Certain Plan investments are shares of mutual funds, collective investment
trusts, and company stock managed by The Bank of New York. The Bank of New York
is the trustee as defined by the Plan and, therefore, these transactions qualify
as exempt party-in-interest transactions. Fees paid by the Plan for investment
management services were included as a reduction of the return earned on each
fund.
At December 31, 2008 and 2007, the Plan held 351,909 and 268,612 units,
respectively, of common stock of Citizens South Banking Corporation, the parent
company of the sponsoring employer, with a cost basis of $2,886,114 and
$2,194,286, respectively. During the year ended December 31, 2008, the Plan
recorded dividend income of $101,372.
-9-
CITIZENS SOUTH BANK
EMPLOYEES' SAVINGS & PROFIT SHARING
PLAN AND TRUST
Notes to Financial Statements
December 31, 2008
Note 6 - Plan Termination
Although it has not expressed any intention to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions set forth in ERISA. In the event that the Plan is
terminated, participants would become 100 percent vested in their accounts.
Note 7 - Federal Income Tax status
Effective January 1, 1998, the Company has adopted, and from time to time has
amended, a non-standardized form for a prototype profit sharing plan sponsored
by Pentegra Services, Inc. The prototype plan has received an opinion letter
from the Internal Revenue Service dated March 7, 2002, as to the prototype
plan's qualified status. The prototype plan opinion letter has been relied on by
this Plan. The Plan Administrator believes the Plan is designed and is being
operated in compliance with the applicable provisions of the Internal Revenue
Code.
Note 8 - Reconciliation to Forms 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Forms 5500 for the years ended December 31, 2008 and
2007:
2008 2007
--------------- ---------------
Net assets available for benefits per the financial statements $ 5,586,470 $ 7,085,335
Less: Contribution receivable not reflected on the Form 5500 27,147 25,089
Less: Adjustment for rounding 0 3
--------------- ---------------
Net assets available for benefits per the Form 5500 $ 5,559,323 $ 7,060,243
=============== ===============
The following is a reconciliation of changes in net assets available for
benefits per the financial statements to net income per the Form 5500 for the
year ended December 31, 2008:
Net change in net assets available for benefits per the financial statements $ (1,498,865)
Plus: 2007 Contributions receivable 25,089
Less: 2008 Contributions receivable (27,147)
Plus: Adjustment for rounding 3
---------------
Net change in net assets available for benefits per the Form 5500 $ (1,500,920)
===============
Note 9 - Subsequent Events
On February 23, 2009, the Board of Directors of Citizens South Bank suspended
the employer match to the employee's 401(k) Plan effective March 1, 2009. For
the year ended December 31, 2008, the Company contributed 50% of the first 6% of
Plan Salary that a participant contributed to the Plan.
Also on February 23, 2009, the Company's Board of Directors approved changing
the Trustee of the Citizens South Bank Employees' Savings and Profit Sharing
Plan and Trust from Bank of New York / Mellon to Reliance Trust Company
effective April 1, 2009.
******
-10-
Citizens South Bank
Employees' Savings and Profit Sharing
Plan and Trust
EIN: 56-0233080
Plan Number: 004
Form 5500 Schedule H, Line 4i
Schedule of Assets Held At End of Year - December 31, 2008
Identity of Issuer, Borrower, Description of Investment Including Maturity Date, Rate of
Lessor or Similar Party Interest, Collateral, Par or Maturity Value Cost Current Value
- ------------------------------------------------------------------------------------------------------------------------------------
* Citizens South Bank Common Stock - 351,909 shares, par value of $0.01 ** $ 2,107,935
* Pentegra Retirement Services Stable Value Fund - 49,157 units ** 559,551
* State Street Global Advisors Moderate Strategic Balanced Fund - 14,469 units ** 168,437
* State Street Global Advisors Conservative Strategic Balanced Fund - 5,920 units ** 87,036
* State Street Global Advisors Aggressive Stratigic Balanced Fund - 10,150 units ** 90,429
* State Street Global Advisors Russell 2000 Stock Fund - 7,157 units ** 120,255
* State Street Global Advisors S&P 500 Stock Fund - 1,699 units ** 304,019
* State Street Global Advisors S&P 500 Growth Stock Fund - 16,036 units ** 130,901
* State Street Global Advisors S&P 500 Value Stock Fund - 17,862 units ** 137,212
* State Street Global Advisors Midcap Stock Fund - 14,991 units ** 291,331
* State Street Global Advisors Nasdaq 100 Stock Fund - 4,523 units ** 34,025
* State Street Global Advisors US REIT Index Fund - 2,826 units ** 46,589
* State Street Global Advisors International Stock Fund- 7,071 units ** 94,917
* State Street Global Advisors Money Market Fund - 646,138 units ** 646,138
* State Street Global Advisors Government Bond Fund - 31,803 units ** 461,309
* State Street Global Advisors Target Retirement 2015 - 1 unit ** 1
* State Street Global Advisors Target Retirement 2025 - 1 unit ** 3
* State Street Global Advisors Target Retirement 2035 - 2 units ** 16
* State Street Global Advisors Target Retirement 2045 - 56 units ** 452
* State Street Global Advisors Passive Bond Mutual Fund - 838 units ** 16,304
* State Street Global Advisors Money Market Fund - 154,421 units ** 154,421
* Participant loans Loans, ranging 0-5 years maturity - 124,421
-------------------------
Total assets held at end of year $ - $ 5,575,702
=========================
* A party-in-interest transaction as defined by ERISA
** Cost omitted for participant directed investments
- -11-
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CITIZENS SOUTH BANK EMPLOYEES'
SAVINGS & PROFIT SHARING PLAN AND
TRUST
Date: June 26, 2009 By: /s/ Paul L. Teem, Jr.
----------------------------------
Name: Paul L. Teem, Jr.
Title: Executive Vice President, Secretary
and Chief Administrative Officer,
Citizens South Bank
[Cherry Bekaert & Holland, L.L.P. Letterhead]
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
Citizens South Banking Corporation
Gastonia, North Carolina
We consent to the incorporation by reference in the Registration Statements on
Form S-8 (Nos. 333-103218, 333-77657 and 333-111228) of Citizens South Banking
Corporation of our report dated June 26, 2009, related to the statements of net
assets available for benefits of as of December 31, 2008 and 2007 and the
related statement of changes in net assets available for benefits for the year
ended December 31, 2008 which are included in the December 31, 2008 Annual
Report on Form 11-K of Citizens South Bank Employees' Savings & Profit Sharing
Plan.
/s/ Cherry Bekaert & Holland, L.L.P.
Gastonia, North Carolina
June 26, 2009