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Citizens South Banking Corp. (CSBC) filed Quarterly Report for the period ended 2011-09-30.
Citizens South Banking Corp. has a market cap of $47.63 million; its shares were traded at around $4.14 with and P/S ratio of 0.67. The dividend yield of Citizens South Banking Corp. stocks is 0.97%. Citizens South Banking Corp. had an annual average earning growth of 17.2% over the past 10 years. GuruFocus rated Citizens South Banking Corp. the business predictability rank of 1-star.
This is the annual revenues and earnings per share of CSBC over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CSBC.
Highlight of Business Operations:
Interest income decreased by $350,000, or 3.0%, to $11.2 million for the third quarter of 2011. This decrease was largely due to a seven basis points reduction in the Company s yield on assets from 4.91% for the quarter ended September 30, 2010, to 4.84% for the quarter ended September 30, 2011. The reduction in the yield on assets was partially offset by a $5.1 million, or 0.6%, increase in average interest-earning assets during the comparable third quarter periods to $920.9 million for the quarter ending September 30, 2011. During the comparable third quarter periods, average interest-earning deposits decreased by $21.9 million, or 21.8%, to $78.2 million for the 2011 third quarter, average investment securities increased by $54.6 million, or 59.7%, to $146.1 million for the 2011 third quarter ending September 30, 2011, and average accruing loans decreased by $27.7 million, or 3.8%, to $696.7 million for the 2011 third quarter. The decrease in average interest-bearing deposits was largely due to the purchase of higher-yielding investment securities during the past 12 months. Average loans decreased due to higher levels of repayments and higher average nonaccrual loans during the comparable periods.Noninterest income. Noninterest income decreased by $300,000 to $2.0 million for the three months ended September 30, 2011, as compared to $2.3 million for the three months ended September 30, 2010. The primary reason for the decrease was a $241,000 reduction in the gain from acquisition, a $195,000 decrease in the gain on sale of investments and an $111,000 decrease in mortgage banking income. These decreases were partly offset by a $53,000 increase in service charges on deposit accounts and a $17,000 increase in commissions on sales of financial products. The following table presents the detail for the three-month periods ending September 30, 2011 and September 30, 2010.
Service charges on deposit accounts were higher due to the increased number of demand deposit accounts, due in part to the acquisition of New Horizons Bank, which generate monthly service charges and non-sufficient fund fees on overdrafts. Mortgage banking income was lower in the third quarter of 2011 due to decreased origination activity and regulatory changes that were enacted in early 2011. Commissions on sales of financial products were slightly higher in 2011 due to increased transactions during the period. Income from bank-owned life insurance decreased slightly due to lower market rates. The loss from acquisition in the third quarter of 2011 was an adjustment to the initial $4.4 million gain that was booked at acquisition during the second quarter of 2011. The gain on sale of investments was lower during the third quarter of 2011, due to the fact that there were fewer investments sold at a gain as compared to the third quarter of 2010. The gain on sale of other assets was higher due to the recognition of some gains from the sale of other real estate owned during the third quarter of 2011. Other income decreased primarily due lower interchange fees and other miscellaneous items.
Interest income increased by $150,000, or 0.5%, to $33.1 million for the first nine months of 2011. This improvement was primarily due to a $47.9 million, or 5.5%, increase in average interest-earning assets during the comparable periods to $913.7 million for the first nine months of 2011. This increase was largely due to the acquisition of Bank of Hiawassee in March 2010, and the acquisition of New Horizons Bank in April 2011. During the nine months ended September 30, 2011, average interest-earning deposits decreased by $11.0 million, or 12.8%, average investment securities increased by $52.7 million, or 56.3%, and average accruing loans increased by $6.3 million, or 0.9%, as compared to the average balances during the nine month period ended September 30, 2010. The positive effect of the increase in interest-earning assets was partly offset by a 16 basis point decrease in the average yield on earning assets during the respective periods to 4.81% for the nine months ended September 30, 2011. The decrease in yield was largely due to lower market rates and higher levels of lower-yielding liquid assets held during the first nine months of 2011.
Service charges on deposit accounts were higher due to the increased number of demand deposit accounts which generate monthly service charges and non-sufficient fund (“NSF”) fees on overdrafts. Legislation limiting the assessment of NSF fees from overdrafts generated from debit cards in 2010 has had an adverse impact on fee income on deposit accounts. However, the Company has successfully worked to lessen the negative impact of this legislation by asking customers to “opt-in” to allow overdrafts on their debit cards. Mortgage banking income was lower in the first nine months of 2011 due to decreased origination activity arising in part from the expiration of tax incentives in 2010. Commissions on sales of financial products were lower in 2011 largely due to decreased activity and reduced staffing. Income from bank-owned life insurance decreased due to lower market rates. The $19.5 million gain on acquisition in the first nine months of 2010 was related to the Bank of Hiawassee acquisition. The $4.1 million gain on acquisition for the first nine months of 2011 represents the initial $4.4 million gain on acquisition of New Horizons Bank and a subsequent downward adjustment to the gain on acquisition of Bank of Hiawassee during the first quarter of 2011. The gain on sale of investments was lower during the first nine months of 2011, due to the fact that there were fewer investments sold at a gain as compared to the first nine months of 2010. The loss on sale of other assets was lower due to fewer losses from sale of other real estate owned recognized during the first nine months of 2011. Other income increased primarily due an increase in rental income on other real estate owned, increased safe deposit box rental income, and other miscellaneous items.
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