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Citizens South Banking Corp. Buys New Horizons from FDIC Receivership

New Horizons Bank was acquired from FDIC receivership last month; strategic acquirer Citizens South Banking Corp. was the buyer. The company assumed approximately $107.6 million in assets and $106.0 million in liabilities, including $101.9 million in current deposits from New Horizons Bank. Lately, private equity investors have increasingly sought to invest in minority stakes of banks being sold out of FDIC receivership. McColl Partners was an advisor on the deal.

PRESS RELEASE:

CHARLOTTE, NC – McColl Partners, LLC acted as financial advisor to Citizens South Banking Corporation (the “Company”) in Citizens South Bank’s (“Citizens South” or the “Bank”) acquisition of substantially all of the assets and operations of New Horizons Bank from FDIC receivership on April 15, 2011.

Under Citizens South’s agreement with the FDIC, Citizens South assumed approximately $107.6 million in assets and $106.0 million in liabilities, including $101.9 million in current deposits from New Horizons Bank, which is located in East Ellijay, Georgia. The assets include an approximate $76.1 million loan portfolio which will be subject to a loss-sharing arrangement with the FDIC. Under the arrangement, the FDIC will cover substantially all acquired loans.

“We are very pleased to welcome New Horizons Bank customers and associates to the Citizens South family. We respect the heritage of New Horizons Bank and pledge to continue their legacy of customer service and meeting the financial needs of the community. The FDIC continues to insure their deposits to the fullest extent permitted, reinforced by the security and strength of Citizens South,” said Kim S. Price, President & CEO of Citizens South.

“This acquisition will help to strengthen Citizens South’s presence in north Georgia, while providing a financially attractive investment to Citizens South’s shareholders,” said Charlie Welch, Managing Director of McColl Partners.

ABOUT CITIZENS SOUTH

Citizens South was founded in 1904 and is headquartered in Gastonia, NC. As of March 31, 2011, the Company had $1.0 billion in assets with 21 full-service offices in the Charlotte and north Georgia regions. The Bank is a wholly-owned subsidiary of Citizens South Banking Corporation, and shares of the Company’s common stock trade on the NASDAQ Global Market under the ticker symbol CSBC. The Company maintains a website at www.citizenssouth.com that includes information on the Company, along with a list of products and services, branch locations, current financial information, and links to the Company’s filings with the SEC.

ABOUT MCCOLL PARTNERS, LLC

McColl Partners, LLC is an independent investment banking firm specializing in the needs of management and owners of middle-market companies. With significant experience working with private equity groups, entrepreneurs, family-owned businesses, public companies, financial institutions, and divisions of large companies, the firm is dedicated to offering strategic advice and assistance to its clients regarding mergers and acquisitions and private capital raising assignments.

For more information about this transaction or our Financial Institutions Group, please contact Charlie Welch or Phil Colaco at (704) 333-0525. Additional information about McColl Partners can be found at www.mccollpartners.com .