Citizens South Banking Corporation

1
Citizens South Banking Corporation

• KBW Community Bank
• Investor Conference
• New York, New York
• July 31, 2007

2
Forward Looking Statements

• Statements contained in this presentation,
  which are not historical facts, are forward
  looking statements. The Companys senior
  management or directors may from time to time
  make public forward looking statements concerning
  matters herein. Such forward looking statements
  are estimates reflecting the best judgment of
  senior management or the directors based on
  current information. A number of factors that
  could affect the accuracy of such forward looking
  statements are identified in the public filings
  made by the Company with the Securities and
  Exchange Commission on Forms 10-Q and 10-K. The
  Company undertakes no obligation to publicly
  revise any forward looking statements to reflect
  events and circumstances that may arise after the
  date hereof. There can be no assurance the such
  factors will not affect the accuracy of such
  forward looking statements.

3
Overview of Presentation

• Corporate Profile
• Our Market
• Vision and Business Strategy
• Historical Performance
• Recent Developments

4
Corporate Profile

• Founded as a Mutual SL - 1904
• Acquired Mount Holly Federal SL - 1982
• Converted to a MHC - 1998
• Acquired Innes Street Financial Corporation -
  2001

5
Corporate Profile

• 2nd Step Conversion - 2001
• Acquired Trinity Bank - 2005
• Currently operate 14 full-service offices and
  three loan production offices in the Charlotte,
  NC Region

6
Stock Information

Stock Price (06-30-07) 12.66 LTM EPS
Actual 0.72 2007 EPS Consensus 0.76 2008
EPS Consensus 0.85 Book Value
(06-30-07) 10.69 Tangible Book Value
6.71 Annual Cash Dividend 0.32
7
Stock Information

Price to LTM EPS Actual 17.6x Price to 2007 EPS
Estimate 16.7x Price to 2008 EPS Estimate
14.9x Price to Book Value 118.4 Price to
Tangible BV 188.7 Dividend Yield
2.5
8
Selected Financial Information
(Dollars in thousands)

• June 30, 2007
• Total Assets 755,486
• Loans Receivable 535,699
• Deposits 583,545
• Stockholders Equity 84,211

9
Selected Financial Information
(Dollars in thousands)

• June 30,
  2007
• Net Interest Margin 3.16
• Return on Assets 0.75
• Return on Tang. Assets 0.79
• Return on Equity 6.55
• Return on Tang. Equity 10.38
• Efficiency Ratio 66.28
• Avg. Eq. / Avg. Assets 11.51

10
The Citizens South Market Area

• Our Charlotte Regional Presence

11
The Charlotte Observer May 19, 2007
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In a Yearlong Housing Downslide, Charlotte Keeps
Getting Better People Are Flocking to Charlotte
Where They Get More Bang for Their Buck
For the past year, the housing markets in most
cities across the United States have been in a
downslide. Charlotte, N.C., is an exception,
enjoying a period of moderate but steady growth,
drawing new residents and attention to this
former "one-horse town."
(Thinkstock/Corbis) From Nightline
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15
Deposit Market Share

• Counties Where Citizens South has a Branch Office
  
  
  
• Gaston, Rowan, Iredell,
  Union
• As of June 30, 2006

Source FDIC
16
Deposit Market Share

• Charlotte Metropolitan Area
• As of June 30, 2006

Source FDIC
17
The Management Team

• Experience Prior Employer
• Kim S. Price 25 First National Bank/FHLB
• President CEO
• Gary F. Hoskins 20 FHLB - Atlanta/OTS
• Chief Financial Officer
• Daniel M. Boyd, IV 22 Wachovia/First Gaston
• Commercial Banking
• V. Burton Brinson, Jr, 30 Wachovia
• Retail Banking
• J. Stephen Huffstetler 27 First Community/FUNB
• Mortgage Banking
• Paul L. Teem, Jr. 24 Citizens South Bank
• Chief Administrative Officer
• Michael R. Maguire 27 First Union Natl Bank
• Chief Credit Officer
• Kimberly Goins Cooke 18 First Gaston Bank
• Chief Information Officer

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Vision and Business Strategy

• Create a Banklike Organization
• A. Management / Culture
• B. Restructure Balance Sheet
• C. Grow
• D. Generate Additional Noninterest Sources of
  Revenue
• E. Manage Interest Rate Risk
• F. Create Charlotte Regional Franchise /
  Footprint

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Vision and Business Strategy

• Enhance Shareholder Value
• A. Leverage Capital
• 1. Grow
  
• 2. Establish de novo offices
• 3. Investigate branch acquisitions
• 4. Invest in related businesses
• 5. Pursue whole bank acquisitions
• B. Manage Capital
• 1. Evaluate dividend policy
• 2. Execute stock repurchase plan

20
Total Assets
10.0 CAGR
21
Net Outstanding Loans
13.5 CAGR
22
Loan Portfolio Mix
December 31, 2002
June 30, 2007
23
Commercial RE Loan Portfolio
24
Nonperforming Assets
25
Total Deposits
12.7 CAGR
26
Total Core Deposits
17.1 CAGR
27
Deposit Mix
December 31, 2002
June 30, 2007
28
Net Interest Margin
29
Quarterly Operating EPS
30
Outstanding Shares
31
2006 Developments

• Realized a 42 increase in diluted operating EPS
  to 0.67
• Initiated a Performance Acceleration Program
• Realigned management team and incentive bonus
  plan
• Consolidated data processing and back-office
  functions from Trinity Bank

32
2006 Developments

• Opened a full-service office in Belmont, NC
• Opened a LPO in Rock Hill, SC
• Deposit growth of 8.7 to 562.8 million
• Organic loan growth of 8.9 to 515.4 million

33
2007 Developments

• Organic loan growth of 20.3 million, or 8
  annualized with 17.2 million of growth
  generated in the second quarter
• Solid asset quality with NPAs totaling 0.39 of
  total assets
• Core deposit growth of 12.5 million, or 11
  annualized
• Total deposit growth of 20.7 million, or 7
  annualized

34
2007 Developments

• Hired two commercial lenders with over 50 years
  of combined banking experience (April)
• Broke ground on full-service branch in Rock Hill,
  SC (May)
• Sold former Citizens Bank Operations Center
  (June)

35
Why Own CSBC?

• Dynamic Market
• Charlotte Regional Franchise
• Balance Sheet Transformation
• Attractive Price 16.5x 2007 est. and 118 of
  book value
• Experienced Management Team
• Proven Leverage Performance

36
We appreciate your interest in Citizens South
Banking Corporation.
Thank You