10/5/2005 - CapitalSouth Bancorp Announces Initial Public Offering

Birmingham, AL- October 5, 2005 - CapitalSouth Bancorp announced today that it has filed a registration statement with the United States Securities and Exchange Commission for a proposed initial public offering of its common stock.  All shares of the common stock to be sold in the offering will be offered by CapitalSouth.  Sterne Agee & Leach, Inc. is the sole manager for the offering.

CapitalSouth Bancorp was known until recently as Financial Investors of the South, Inc., a bank holding company that controls Bank of Alabama and Capital Bank.  In September, stockholders of Financial Investors of the South, Inc. approved the name change to CapitalSouth Bancorp and Bank of Alabama also changed its name to CapitalSouth Bank.

In the offering, which is anticipated to take place later this year, CapitalSouth will seek to raise up to $13.8 million, inclusive of amounts which the underwriter has an option to purchase to cover over-allotments, if any.

This offering is made only by means of a prospectus.  When available, a copy of the prospectus may be obtained from Sterne Agee & Leach, Inc., 800 Shades Creek Parkway, Suite 750, Birmingham, AL  35209.

CapitalSouth Bancorp is a bank holding company.  CapitalSouth, through its two bank subsidiaries, currently operates eight full-service banking offices in Birmingham, Huntsville and Montgomery, Alabama and Jacksonville, Florida under the names Bank of Alabama, CapitalSouth Bank, Banco Hispano and Capital Bank. Headquartered in Birmingham, Alabama, CapitalSouth offers a wide range of commercial banking services, including loans to small and medium sized businesses and individuals, and deposit services for businesses and individuals in its market areas. 

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. This release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.