Citizens South Banking Corporation, formerly Gaston Federal Bancorp, Inc. is the holding company for Citizens South Bank (the Bank), and its principal business activities involve overseeing and directing the business of the Bank and investing the net stock offering proceeds it retains. The Bank offers Federal Deposit Insurance Corporation-insured deposit accounts to local customers through its nine branch offices and invests those deposits, together with funds generated from operations and borrowings, in non-residential mortgage loans, construction loans, commercial business loans, consumer loans, investment securities and mortgage-backed securities. The Bank considers its primary market area to be the North Carolina Counties of Gaston, Rowan, Iredell, Mecklenburg, Cabarrus, Lincoln and Cleveland, and the South Carolina County of York. As of December 31, 2002, the Company had consolidated assets of $492.6 million, deposits of $340.9 million and stockholders equity of $96.4 million.