Citizens South Banking Corporation Announces Commencement of $30 Million Common Stock Offering

Citizens South Banking Corporation Announces Commencement of $30 Million
Common Stock Offering

GASTONIA, N.C., Oct. 26 /PRNewswire-FirstCall/ -- Citizens South Banking
Corporation (Nasdaq: CSBC), today announced that it has commenced a public
offering of approximately $30 million in common stock. Keefe, Bruyette & Woods
will act as lead book-running manager, with Sandler O'Neill + Partners, L.P.
and Howe Barnes Hoefer & Arnett, Inc. acting as co-managers. Citizens South
Banking Corporation intends to grant the underwriters an option to purchase up
to an additional 15% of the shares sold to cover over-allotments, if any.

Citizens South intends to use the net proceeds for general corporate purposes
and may contribute some portion of the net proceeds in the form of capital to
Citizens South Bank, which will use any such amount for its general corporate
purposes and for anticipated balance sheet growth, both organically (including
by establishing new branches) or by acquiring branches or other financial
institutions, including failed institutions placed into receivership by the
FDIC. Citizens South also intends to use a portion of the net proceeds of the
stock offering to redeem the Series A Preferred Stock and related warrant
Citizens South issued to the U.S. Department of the Treasury under the TARP
Capital Purchase Program.

This announcement shall not constitute an offer to sell or the solicitation of
an offer to buy these securities, nor shall there be any offer or sale of
these securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful. A registration statement relating to these securities has
been filed with the Securities and Exchange Commission but has not yet become
effective. These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. The offering
will be made only by means of a prospectus, copies of which may be obtained
from the investor relations section of Citizens South Banking Corporation's
website at: www.citizenssouth.com or from the SEC's Web site at: www.sec.gov.
Alternatively, you may obtain a copy of the prospectus by contacting the
underwriters at: Keefe, Bruyette & Woods, Inc., Equity Capital Markets, 787
Seventh Avenue, 4th Floor, New York, NY 10019 or by calling toll-free (800)
966-1559. Information on Citizens South Banking Corporation's website does not
constitute part of nor is any such information incorporated by reference in
the prospectus supplement or accompanying prospectus.

About Citizens South Banking Corporation

Citizens South is the holding company for Citizens South Bank, which is
headquartered in Gastonia, North Carolina. At June 30, 2009, Citizens South
had approximately $836.3 million in assets with 16 full-service offices in the
Charlotte region, including Gaston, Iredell, Rowan, Mecklenburg, and Union
counties in North Carolina, and York County, South Carolina. For more
information, visit www.citizenssouth.com.

Forward-Looking Statements

This press release contains forward-looking statements with respect to the
proposed offering of common stock by Citizens South Banking Corporation.
Forward-looking statements are generally identified by the use of words
"believe," "expect," "intend," "anticipate," "estimate," and other similar
expressions. These forward-looking statements involve certain risks and
uncertainties. You should not place undue reliance on such statements. Factors
that may cause actual results to differ materially from those contemplated by
such forward-looking statements include, among others, (1) adverse
developments in the capital markets in general or in the markets for financial
institutions stock in particular; (2) changes in legislation or regulatory
requirements affecting financial institutions, including the current debate in
Congress as to restructuring the financial services industry; (3) changes in
the interest rate environment; and (4) adverse changes in general economic
conditions.

SOURCE Citizens South Banking Corporation

Gary Hoskins, Citizens South Banking Corporation, +1-704-884-2263,
gary.hoskins@citizenssouth.com