EXHIBIT 99.1

Citizens South Banking Corporation Announces Third Quarter 2011 Earnings

GASTONIA, N.C., Oct. 24, 2011 (GLOBE NEWSWIRE) -- Citizens South Banking Corporation (Nasdaq:CSBC), the holding company for Citizens South Bank (the "Bank"), released its unaudited results of operations and other financial information for the three-month and nine-month periods ended September 30, 2011. Highlights from the third quarter of 2011 are as follows:

• Net income available to shareholders increased from a net loss of $528,000, or $0.05 per diluted share, for the quarter ended September 30, 2010, to net income of $126,000, or $0.01 per diluted share, for the quarter ended September 30, 2011.
• The Company's pre-tax, pre-credit earnings of $3.5 million for the third quarter of 2011 were $522,000 higher than the Company's pre-tax, pre-credit earnings in the third quarter of 2010.
• The Company's net interest margin of 3.76% for the third quarter of 2011 increased by 34 basis points compared to the Company's net interest margin for the third quarter of 2010.
• Non-performing non-covered assets decreased by 14.0% on a linked-quarter basis to 2.61% of total assets at September 30, 2011.
• Non-covered past due loans 30 to 89 days delinquent and still accruing interest decreased by 21.2% on a linked quarter basis to 0.77% of total non-covered loans at September 30, 2011.
• The Company realized organic non-covered loan growth of $8.5 million, or 5.9% annualized, during the third quarter of 2011.
• The Company's non-time core deposits grew by $9.5 million, or 8.4% annualized, during the third quarter of 2011.
• The Company completed the computer conversion of New Horizons Bank, which was acquired in April 2011.
• The Company redeemed all of the preferred stock issued to the U.S. Treasury Department under the Capital Purchase Program, a part of the Troubled Asset Relief Program ('TARP").
• The Company was approved to participate in the U.S. Treasury Department's Small Business Lending Fund ("SBLF"). Participation in the SBLF helped to facilitate the TARP repayment.
• The Board of Directors approved a quarterly dividend of $0.01 per common share. The dividend will be payable to stockholders of record as of November 7, 2011, and will be distributed November 21, 2011.

President Kim S. Price stated, "We are encouraged by the positive trend in a number of different areas this quarter, including growth in operating earnings, non-covered loans, and non-time core deposits. Also, the decrease in our nonperforming non-covered assets and non-covered past due loans will be a factor in driving future earnings growth. We continue to focus on profitability, growing our franchise, and adding shareholder value as the community banking landscape evolves in this challenging economy."

Third Quarter Financial Results:

Improving Asset Quality

The Company continued to experience positive trends in important credit quality metrics on a linked-quarter basis. The Company's non-covered past due loans (loans not covered under FDIC loss-sharing agreements), which includes non-covered loans that are 30 to 89 days delinquent and still accruing interest, decreased by $1.2 million, or 21.2%, to $4.5 million, or 0.77% of total non-covered loans, during the third quarter. Also during the third quarter, nonperforming non-covered assets declined from $33.4 million, or 2.99% of total assets at June 30, 2011, to $28.7 million, or 2.61% of total assets at September 30, 2011. This represents a decrease of $4.7 million, or 14.0%, in nonperforming non-covered assets for the third quarter. Net charge-offs during the third quarter totaled $1.1 million, or 0.79% of average non-covered loans on an annualized basis. Due in part to the decline in nonperforming non-covered assets during the quarter, the Company reduced its loan loss provision from $1.7 million during the second quarter of 2011 to $1.4 million during the third quarter of 2011. However, despite this decrease in the loan loss provision, the Company's allowance for loan losses to total non-covered loans increased from 2.22% at June 30, 2011, to 2.23% at September 30, 2011.

As nonperforming loans move through the disposition process and become other real estate owned ("OREO"), the Company incurs expenses and valuation adjustments related to OREO. During the third quarter of 2011 these expenses totaled $1.6 million, compared to $2.0 million for the second quarter of 2011.

President Price commented, "The general economy and real estate environment continue to be challenging in most of our markets. However, we are encouraged by the positive trends of our credit quality this quarter and we are cautiously optimistic that these improving trends will continue."

Growth in Loans and Core Deposits

Despite some positive trends in local economic conditions, loan demand continues to be sparse, but improving. Total non-covered loans decreased by $12.3 million, or 2.1%, from September 30, 2010 to September 30, 2011. However, on a linked-quarter basis, non-covered loans increased by $8.5 million, or 5.9% annualized. This increase was largely due to management's continued focus on increasing business loans to the professional market, owner-occupied commercial real estate loans, and residential and personal loans. We have become more competitive in our pricing and have realigned our lending team to be more effective in developing quality business relationships.

The Company continues to experience strong non-time core deposit growth. From September 30, 2010 to September 30, 2011, non-time core deposits increased by $63.1 million, or 15.9%, to $460.5 million. A portion of this growth was due to the $21.9 million in non-time core deposits that were assumed in the New Horizons Bank acquisition. On a linked-quarter basis, non-time core deposits increased by $9.5 million, or 8.4% annualized. This growth in non-time core deposits was largely attributable to a continued focus on deposit gathering as part of our relationship banking model.

Strong Capital Position

The Company's capital position continues to be a source of strength and provides a competitive advantage during these uncertain economic times. At September 30, 2011, the Bank's total risk-based, Tier 1 risk-based, and Tier 1 leverage capital ratios were 17.3%, 16.1%, and 9.5%, respectively, compared to 16.8%,15.6%, and 9.6% respectively, at September 30, 2010. The Bank exceeded the regulatory minimum capital ratios to be considered well-capitalized by 172.8%, 267.1%, and 188.5% for total risk-based capital, Tier 1 risk-based capital, and Tier 1 leverage capital, respectively, at September 30, 2011.

Increasing Net Interest Income and Net Interest Margin

The Company's net interest income for the third quarter of 2011 increased by $886,000, or 11.35%, as compared to the third quarter of 2010. The primary reason for this growth was a 34 basis point increase in the Company's net interest margin from 3.42% for the three months ended September 30, 2010, to 3.76% for the three months ended September 30, 2011. The improvement in the net interest margin was due to a 55 basis point decrease in the Company's cost of funds which was partly offset by a seven basis point decrease in the Company's yield on assets. On a linked-quarter basis, the Company's net interest margin decreased by two basis points. Given the Company's high level of liquidity, coupled with strong core deposit growth, the Company has been able to repay maturing time deposits or reprice these time deposits at lower market rates at maturity. This time deposit repricing has contributed to the decline in the cost of funds.

Noninterest Income and Expense

Noninterest income decreased by $300,000 to $2.0 million for the quarter ended September 30, 2011, as compared to the quarter ended September 30, 2010. Excluding the effects of gains (losses) from acquisitions and gains (losses) on sale of investments and other assets, noninterest income decreased by $90,000, or 4.6%, for the third quarter of 2011 compared to the third quarter of 2010. This decrease was primarily due to an $111,000 reduction in mortgage banking income and a $47,000 reduction in service charges on deposit accounts.

Noninterest expense increased by $1.2 million during the third quarter of 2011 compared to the third quarter of 2010.  Excluding valuation adjustments and other expenses on other real estate owned and acquisition and integration expenses, noninterest expense increased by $257,000, or 3.7%, during the respective third quarter periods. This increase was partially due to the Company's acquisition of New Horizons Bank in April 2011. However, despite the acquisition, the Company realized reductions in compensation and benefits, professional services, amortization of intangible assets and other noninterest expenses during the comparable third quarter periods.

About Citizens South Banking Corporation and Citizens South Bank         

Citizens South Bank was founded in 1904 and is headquartered in Gastonia, North Carolina. Deposits are FDIC insured up to applicable regulatory limits. At September 30, 2011, the Company had $1.1 billion in assets with 21 full-service offices in the Charlotte and North Georgia regions, including Gaston, Iredell, Rowan, Mecklenburg, and Union counties in North Carolina, York County in South Carolina, and Towns, Union, Fannin, and Gilmer counties in Georgia. Citizens South Bank is an Equal Housing Lender and Member, FDIC. The Bank is a wholly-owned subsidiary of Citizens South Banking Corporation, and shares of the common stock of the Company 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.  

The Citizens South Banking Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7099

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures and should be read along with the accompanying tables which provide a reconciliation of non-GAAP measures to GAAP measures. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under accounting principles generally accepted in the United States ("GAAP"), and investors should consider the company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation, or as a substitute for analysis of the Company's results or financial condition as reported under GAAP.

Cautionary Statement Regarding Forward-looking Statements

This news release contains certain forward-looking statements which include, but are not limited to, statements of our earnings expectations, statements regarding our operating strategy, and estimates of our future costs and benefits. These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Forward-looking statements speak only as of the date they are made and the Company is under no duty to update these forward-looking statements to reflect circumstances or events that occur after the date of the forward-looking statements or to reflect the occurrence of unanticipated events. A number of factors could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Factors that could cause such a difference include, but are not limited to, changes in general economic conditions – either locally or nationally, competition among depository and financial institutions, the continuation of current revenue and expense trends, significant changes in interest rates, unforeseen changes in the Company's markets, and legal, regulatory, or accounting changes. The Company's reports filed from time to time with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended December 31, 2010, describe some of these factors. 

Important Tables Follow

CONTACT: Gary F. Hoskins, CFO
         (704) 884-2263
         gary.hoskins@citizenssouth.com