Quarterly Financial Data Supplement (Unaudited)
Second Quarter 2006
| Page |
|---|
| Consolidated Statements of Income (Loss) | | 1 | |
| | |
| Details for Noninterest Income (Loss) and Noninterest Expenses | | 2 | |
| | |
| Consolidated Balance Sheets | | 3 | |
| | |
| Investment Securities Portfolio Analysis | | 4 | |
| | |
| Loan Portfolio Composition Based on Loan Purpose and Loan Growth | | 5 | |
| | |
| Summary of Credit Quality and Allowance for Loan Losses | | 6 | |
| | |
| Type of Deposits and Deposit Growth | | 7 | |
| | |
| Type of Organic Deposit Growth | | 8 | |
| | |
| Types of Wholesale Borrowings and Borrowing Costs | | 9 | |
| | |
| Summary of Capital and Capital Ratios | | 10 | |
| | |
| Comparative Average Balance Sheets - Yields and Costs | | 11 | -12 |
| | |
| Summary of Margin Excluding Net Cash Settlement of Swaps | | 13 | |
| | |
| GAAP to Non-GAAP Reconciliation: Earnings, ROA and ROE | | 14 | -17 |
| | |
| GAAP to Non-GAAP Reconciliation: Noninterest income as a % of total revenue and efficiency ratios | | 18 | -21 |
| | |
| | |
| See disclosure of explanation of TSFG's use of certain Non-GAAP financial measures in the earnings release. | |
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(dollars in thousands, except share data) (unaudited)
| Three Months Ended | | | | |
|---|
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Interest Income | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | | $ | 179,971 | | $ | 169,188 | | $ | 162,114 | | $ | 149,788 | | $ | 134,842 | |
| Interest and dividends on securities: | | |
| Taxable | | | | 31,652 | | | 32,543 | | | 38,548 | | | 41,657 | | | 47,304 | |
| Exempt from Federal income taxes | | | | 3,210 | | | 3,344 | | | 3,213 | | | 2,973 | | | 2,595 | |
| Total interest and dividends on securities | | | | 34,862 | | | 35,887 | | | 41,761 | | | 44,630 | | | 49,899 | |
| Interest on short-term investments | | | | 879 | | | 292 | | | 537 | | | 317 | | | 160 | |
| Total interest income | | | | 215,712 | | | 205,367 | | | 204,412 | | | 194,735 | | | 184,901 | |
| Interest Expense | | |
| Interest on deposits | | | | 68,704 | | | 62,479 | | | 58,806 | | | 52,333 | | | 45,573 | |
| Interest on borrowed funds | | | | 43,886 | | | 39,976 | | | 40,673 | | | 38,813 | | | 37,043 | |
| Total interest expense | | | | 112,590 | | | 102,455 | | | 99,479 | | | 91,146 | | | 82,616 | |
| Net Interest Income | | | | 103,122 | | | 102,912 | | | 104,933 | | | 103,589 | | | 102,285 | |
| Provision for Credit Losses | | | | 7,487 | | | 9,911 | | | 10,833 | | | 8,853 | | | 9,944 | |
| Net interest income after provision for | | |
| credit losses | | | | 95,635 | | | 93,001 | | | 94,100 | | | 94,736 | | | 92,341 | |
| Noninterest Income (Loss) | | | | 32,020 | | | 29,320 | | | (24,960 | ) | | 16,428 | | | 50,471 | |
| Noninterest Expenses | | | | 83,059 | | | 79,834 | | | 100,973 | | | 81,035 | | | 79,535 | |
| Income (loss) from continuing operations before | | |
| income taxes and discontinued operations | | | | 44,596 | | | 42,487 | | | (31,833 | ) | | 30,129 | | | 63,277 | |
| Income tax expense (benefit) | | | | 15,253 | | | 14,680 | | | (15,436 | ) | | 9,039 | | | 20,565 | |
| Income (loss) from continuing operations | | | | 29,343 | | | 27,807 | | | (16,397 | ) | | 21,090 | | | 42,712 | |
| Discontinued operations, net of income tax | | | | -- | | | -- | | | -- | | | -- | | | -- | |
| Net Income (Loss) | | | $ | 29,343 | | $ | 27,807 | | $ | (16,397 | ) | $ | 21,090 | | $ | 42,712 | |
| | | |
| Average Common Shares Outstanding, Basic | | | | 74,864,648 | | | 74,685,192 | | | 74,453,225 | | | 74,272,867 | | | 73,083,009 | |
| Average Common Shares Outstanding, Diluted | | | | 75,504,683 | | | 75,339,283 | | | 75,485,436 | | | 75,414,866 | | | 74,421,103 | |
| Per Common Share, Basic | | |
| Income (loss) from continuing operations | | | $ | 0.39 | | $ | 0.37 | | $ | (0.22 | ) | $ | 0.28 | | $ | 0.58 | |
| Discontinued operations | | | | -- | | | -- | | | -- | | | -- | | | -- | |
| Net income (loss) | | | $ | 0.39 | | $ | 0.37 | | $ | (0.22 | ) | $ | 0.28 | | $ | 0.58 | |
| Per Common Share, Diluted | | |
| Income (loss) from continuing operations | | | $ | 0.39 | | $ | 0.37 | | $ | (0.22 | ) | $ | 0.28 | | $ | 0.57 | |
| Discontinued operations | | | | -- | | | -- | | | -- | | | -- | | | -- | |
| Net income (loss) | | | $ | 0.39 | | $ | 0.37 | | $ | (0.22 | ) | $ | 0.28 | | $ | 0.57 | |
| Cash Dividends Declared Per Common Share | | | $ | 0.17 | | $ | 0.17 | | $ | 0.17 | | $ | 0.16 | | $ | 0.16 | |
1
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
DETAILS FOR NONINTEREST INCOME (LOSS) AND NONINTEREST EXPENSES
(dollars in thousands) (unaudited)
| Three Months Ended | | | | |
|---|
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Noninterest Income (Loss) | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | $ | 11,592 | | $ | 11,288 | | $ | 11,844 | | $ | 12,245 | | $ | 9,979 | |
| Debit card income | | | | 2,095 | | | 1,921 | | | 1,611 | | | 1,770 | | | 1,652 | |
| Customer service fee income | | | | 1,074 | | | 1,009 | | | 1,001 | | | 1,097 | | | 1,120 | |
| Total customer fee income | | | | 14,761 | | | 14,218 | | | 14,456 | | | 15,112 | | | 12,751 | |
| Retail investment services | | | | 2,249 | | | 2,023 | | | 2,091 | | | 2,054 | | | 1,467 | |
| Insurance income | | | | 2,806 | | | 2,977 | | | 2,702 | | | 2,010 | | | 1,449 | |
| Trust and investment management income | | | | 1,678 | | | 1,457 | | | 1,312 | | | 1,268 | | | 1,261 | |
| Benefits administration fees | | | | 749 | | | 667 | | | 638 | | | 818 | | | 650 | |
| Total wealth management income | | | | 7,482 | | | 7,124 | | | 6,743 | | | 6,150 | | | 4,827 | |
| Mortgage banking income | | | | 2,078 | | | 1,884 | | | 1,720 | | | 2,087 | | | 2,140 | |
| Bank-owned life insurance | | | | 2,969 | | | 2,819 | | | 3,253 | | | 2,835 | | | 2,759 | |
| Merchant processing income | | | | 3,318 | | | 2,686 | | | 2,202 | | | 2,864 | | | 2,713 | |
| (Loss) gain on trading and certain derivative | | |
| activities(1) | | | | (245 | ) | | (1,125 | ) | | (610 | ) | | 403 | | | (1,032 | ) |
| Net cash settlement of certain interest rate swaps(2) | | | | -- | | | -- | | | (288 | ) | | 2,377 | | | 3,534 | |
| Loss on indirect auto loans(3) | | | | (985 | ) | | -- | | | -- | | | -- | | | -- | |
| Other | | | | 2,518 | | | 1,039 | | | 2,123 | | | 1,618 | | | 1,355 | |
| Operating noninterest income (noninterest income, | | |
| excluding non-operating items) | | | | 31,896 | | | 28,645 | | | 29,599 | | | 33,446 | | | 29,047 | |
| Change in fair value of interest rate swaps(2) | | | | -- | | | -- | | | (2,106 | ) | | (16,240 | ) | | 22,277 | |
| (Loss) gain on sale of available for sale securities | | | | (150 | ) | | (183 | ) | | (52,677 | ) | | (1,032 | ) | | (1,503 | ) |
| Gain on equity investments | | | | 3,751 | | | 858 | | | 224 | | | 254 | | | 650 | |
| Loss on sale of indirect auto loans previously HFI(3) | | | | (3,477 | ) | | -- | | | -- | | | -- | | | -- | |
| Non-operating noninterest income (loss) | | | | 124 | | | 675 | | | (54,559 | ) | | (17,018 | ) | | 21,424 | |
| Total noninterest income (loss) | | | $ | 32,020 | | $ | 29,320 | | $ | (24,960 | ) | $ | 16,428 | | $ | 50,471 | |
| | | |
| Noninterest Expenses | | |
| Salaries and wages | | | $ | 33,605 | | $ | 31,456 | | $ | 34,628 | | $ | 31,350 | | $ | 27,258 | |
| Employee benefits | | | | 8,703 | | | 9,029 | | | 8,826 | | | 8,529 | | | 8,423 | |
| Occupancy | | | | 7,684 | | | 7,313 | | | 7,455 | | | 7,387 | | | 6,823 | |
| Furniture and equipment | | | | 6,468 | | | 5,952 | | | 5,966 | | | 5,779 | | | 6,023 | |
| Professional services | | | | 5,497 | | | 5,779 | | | 7,124 | | | 6,125 | | | 5,135 | |
| Advertising and business development | | | | 2,187 | | | 2,506 | | | 2,277 | | | 2,131 | | | 2,310 | |
| Merchant processing expense | | | | 2,678 | | | 2,165 | | | 1,773 | | | 2,327 | | | 2,211 | |
| Telecommunications | | | | 1,421 | | | 1,418 | | | 1,559 | | | 1,533 | | | 1,384 | |
| Amortization of intangibles | | | | 2,208 | | | 2,207 | | | 2,354 | | | 2,337 | | | 2,140 | |
| Other | | | | 12,608 | | | 11,411 | | | 13,398 | | | 11,950 | | | 11,514 | |
| Operating noninterest expenses | | |
| (noninterest expenses, excluding non-operating | | |
| items) | | | | 83,059 | | | 79,236 | | | 85,360 | | | 79,448 | | | 73,221 | |
| Employment contract buyouts (reversals) | | | | -- | | | 598 | | | 9,998 | | | 144 | | | 222 | |
| Merger-related costs | | | | -- | | | -- | | | 529 | | | 981 | | | 2,194 | |
| Impairment from write-down of assets | | | | -- | | | -- | | | -- | | | -- | | | 917 | |
| Charitable contribution to foundation | | | | -- | | | -- | | | -- | | | -- | | | -- | |
| Loss (gain) on early extinguishment of debt | | | | -- | | | -- | | | 5,086 | | | 462 | | | 2,981 | |
| Non-operating noninterest expenses | | | | -- | | | 598 | | | 15,613 | | | 1,587 | | | 6,314 | |
| Total noninterest expenses | | | $ | 83,059 | | $ | 79,834 | | $ | 100,973 | | $ | 81,035 | | $ | 79,535 | |
| (1) | Includes any ineffectiveness on derivatives qualifying for hedge accounting and the fair value adjustments and net cash settlements on all derivatives not qualifying for hedge accounting. |
| (2) | Relates to derivatives originally documented under the short-cut method. All of these derivatives were either terminated or redesignated as hedges under the long-haul method during fourth quarter 2005. |
| (3) | In June 2006, TSFG sold approximately $360 million of indirect auto loans originated from August 2005 through the end of May 2006 and classified the loss on sale of these loans previously held for investment as a non-operating item. TSFG classified its June production of indirect auto loans as held for sale and reported the loss from the lower of cost or market adjustment as an operating item. |
2
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands) (unaudited)
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Assets | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | $ | 286,954 | | $ | 249,324 | | $ | 341,195 | | $ | 264,979 | | $ | 269,996 | |
| Interest-bearing bank balances | | | | 16,275 | | | 10,406 | | | 21,510 | | | 14,165 | | | 21,643 | |
| Federal funds sold and securities | | |
| purchased to resell | | | | 7,176 | | | -- | | | -- | | | -- | | | -- | |
| Securities | | |
| Trading | | | | -- | | | -- | | | 1,402 | | | 1,402 | | | 20 | |
| Available for sale | | | | 2,861,182 | | | 2,982,574 | | | 3,095,567 | | | 3,968,618 | | | 4,260,671 | |
| Held to maturity | | | | 53,617 | | | 57,508 | | | 62,648 | | | 63,577 | | | 65,276 | |
| Total securities | | | | 2,914,799 | | | 3,040,082 | | | 3,159,617 | | | 4,033,597 | | | 4,325,967 | |
| Loans held for sale | | | | 78,763 | | | 23,536 | | | 37,171 | | | 59,135 | | | 41,427 | |
| Loans held for investment | | | | 9,439,445 | | | 9,720,891 | | | 9,439,395 | | | 9,293,031 | | | 8,966,337 | |
| Allowance for loan losses | | | | (108,995 | ) | | (111,219 | ) | | (107,767 | ) | | (106,224 | ) | | (104,853 | ) |
| Net loans held for investment | | | | 9,330,450 | | | 9,609,672 | | | 9,331,628 | | | 9,186,807 | | | 8,861,484 | |
| Premises and equipment, net | | | | 207,393 | | | 203,953 | | | 193,574 | | | 186,970 | | | 183,189 | |
| Accrued interest receivable | | | | 71,905 | | | 69,739 | | | 70,838 | | | 63,517 | | | 69,714 | |
| Intangible assets | | | | 689,690 | | | 691,328 | | | 691,758 | | | 692,796 | | | 693,541 | |
| Other assets | | | | 473,678 | | | 463,885 | | | 471,994 | | | 445,243 | | | 420,944 | |
| | | | $ | 14,077,083 | | $ | 14,361,925 | | $ | 14,319,285 | | $ | 14,947,209 | | $ | 14,887,905 | |
| | | |
| Liabilities and Shareholders' Equity | | |
| Liabilities | | |
| Deposits | | |
| Noninterest-bearing | | | $ | 1,579,852 | | $ | 1,536,796 | | $ | 1,512,508 | | $ | 1,508,370 | | $ | 1,466,803 | |
| Interest-bearing | | | | 7,660,467 | | | 7,641,886 | | | 7,721,929 | | | 7,617,649 | | | 7,406,999 | |
| Total deposits | | | | 9,240,319 | | | 9,178,682 | | | 9,234,437 | | | 9,126,019 | | | 8,873,802 | |
| Federal funds purchased and repurchase | | |
| agreements | | | | 1,088,143 | | | 1,534,680 | | | 1,421,301 | | | 1,336,114 | | | 1,328,931 | |
| Other short-term borrowings | | | | 171,157 | | | 36,356 | | | 53,064 | | | 44,649 | | | 113,798 | |
| Long-term debt | | | | 1,846,062 | | | 1,911,929 | | | 1,922,151 | | | 2,751,268 | | | 2,901,532 | |
| Accrued interest payable | | | | 60,928 | | | 58,000 | | | 54,401 | | | 46,202 | | | 39,922 | |
| Other liabilities | | | | 185,485 | | | 158,173 | | | 147,024 | | | 138,510 | | | 112,848 | |
| Total liabilities | | | | 12,592,094 | | | 12,877,820 | | | 12,832,378 | | | 13,442,762 | | | 13,370,833 | |
| | | |
| Shareholders' equity | | |
| Preferred stock | | | | -- | | | -- | | | -- | | | -- | | | -- | |
| Common stock | | | | 75,034 | | | 74,907 | | | 74,721 | | | 74,575 | | | 74,348 | |
| Surplus | | | | 1,158,758 | | | 1,153,056 | | | 1,151,005 | | | 1,148,311 | | | 1,143,654 | |
| Retained earnings | | | | 341,431 | | | 324,839 | | | 309,768 | | | 338,880 | | | 329,743 | |
| Guarantee of employee stock ownership | | |
| plan debt and nonvested restricted | | |
| stock(1) | | | | (268 | ) | | (327 | ) | | (2,687 | ) | | (3,192 | ) | | (3,611 | ) |
| Common stock held in Rabbi Trust for | | |
| deferred compensation | | | | (1,266 | ) | | (1,279 | ) | | (1,404 | ) | | (1,396 | ) | | (1,388 | ) |
| Deferred compensation payable in common stock | | | | 1,266 | | | 1,279 | | | 1,404 | | | 1,396 | | | 1,388 | |
| Accumulated other comprehensive loss, net of | | |
| income tax | | | | (89,966 | ) | | (68,370 | ) | | (45,900 | ) | | (54,127 | ) | | (27,062 | ) |
| Total shareholders' equity | | | | 1,484,989 | | | 1,484,105 | | | 1,486,907 | | | 1,504,447 | | | 1,517,072 | |
| | | | $ | 14,077,083 | | $ | 14,361,925 | | $ | 14,319,285 | | $ | 14,947,209 | | $ | 14,887,905 | |
| | | |
| (1) Effective January 1, 2006, nonvested restricted stock has been netted against surplus. | | |
3
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
INVESTMENT SECURITIES PORTFOLIO ANALYSIS
(dollars in thousands) (unaudited)
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 | |
|---|
| Investment Securities Portfolio | | | | | | | | | | | | | | | | | | | | |
| Trading (at fair value) | | | $ | -- | | $ | -- | | $ | 1,402 | | $ | 1,402 | | $ | 20 | |
| Available for sale (at fair value): | | |
| U.S. Treasury | | | | 173,049 | | | 178,864 | | | 182,468 | | | 171,623 | | | 183,938 | |
| U.S. Government agencies | | | | 641,315 | | | 648,264 | | | 656,442 | | | 740,888 | | | 856,308 | |
| Mortgage-backed securities | | | | 1,504,818 | | | 1,603,090 | | | 1,688,862 | | | 2,494,747 | | | 2,696,421 | |
| State and municipal | | | | 351,462 | | | 356,057 | | | 373,892 | | | 351,732 | | | 318,018 | |
| Other investments(1) | | | | 190,538 | | | 196,299 | | | 193,903 | | | 209,628 | | | 205,986 | |
| Total available for sale securities | | | | 2,861,182 | | | 2,982,574 | | | 3,095,567 | | | 3,968,618 | | | 4,260,671 | |
| Held to maturity (at amortized cost) | | | | 53,617 | | | 57,508 | | | 62,648 | | | 63,577 | | | 65,276 | |
| Total securities | | | $ | 2,914,799 | | $ | 3,040,082 | | $ | 3,159,617 | | $ | 4,033,597 | | $ | 4,325,967 | |
| Total securities as a percentage of total assets | | | | 20.7 | % | | 21.2 | % | | 22.1 | % | | 27.0 | % | | 29.1 | % |
| (1) | Other investments in available for sale securities includes corporate bonds, FHLB stock, community bank stocks, and other equity securities. |
| June 30, 2006 | | | |
|---|
| Amortized
Cost | Percentage
of Total | Duration | Book
Yield |
|---|
| Debt Securities | | | | | | | | | | | | | | |
| U.S. Treasury | | | $ | 177,140 | | | 6.1 | % | | 1.9 | | | 4.05 | % |
| U.S. Government agencies | | | | 666,261 | | | 22.8 | | | 4.5 | | | 5.41 | |
| Mortgage-backed securities: | | |
| Collateralized mortgage obligations | | | | 1,149,294 | | | 39.4 | | | 5.8 | | | 4.64 | |
| Adjustable rate mortgages | | | | 309,943 | | | 10.6 | | | 2.2 | | | 4.62 | |
| Pass-through | | | | 138,914 | | | 4.7 | | | 3.9 | | | 4.79 | |
| State and municipal | | | | 361,225 | | | 12.4 | | | 3.7 | | | 4.62 | |
| Corporate bonds | | | | 116,355 | | | 4.0 | | | 4.1 | | | 4.35 | |
| Total available for sale debt securities | | | $ | 2,919,132 | | | 100.0 | % | | 4.5 | | | 4.77 | % |
| | | |
| Fixed interest rate: | | |
| Mortgage-backed securities | | | $ | 1,286,194 | | | 44.1 | % | | 5.6 | | | 4.65 | % |
| Other | | | | 1,286,039 | | | 44.0 | | | 3.9 | | | 4.92 | |
| Variable interest rate: | | |
| Mortgage-backed securities | | | | 311,957 | | | 10.7 | | | 2.2 | | | 4.62 | |
| Other | | | | 34,942 | | | 1.2 | | | 3.1 | | | 4.63 | |
| Total available for sale debt securities | | | $ | 2,919,132 | | | 100.0 | % | | 4.5 | | | 4.77 | % |
Projected Cash Flows for Debt Securities
| Roll-Off | Projected Annual Cash Flows By Interest Rate Scenario | | | |
|---|
| Year | Yield | Based on (2) | Current | Up 1.00% | Down 1.00% |
|---|
| 2006 | | | 4.15 | % | | $ | 155,677 | | $ | 128,956 | | $ | 118,114 | | $ | 343,634 | |
| 2007 | | | 4.36 | | | | 440,966 | | | 404,794 | | | 330,752 | | | 574,953 | |
(2) Cash flow for month of June 2006.
Projected Interest Rate Shock for Debt Securities
Interest
Rate
Scenario | Estimated
Impact on
Market
Value | Duration |
|---|
| Up 2.00% | | | | (10 | .5)% | | 5 | .3 |
| Up 1.00% | | | | (5 | .2) | | 5 | .1 |
| Flat | | | | - | - | | 4 | .5 |
| Down 1.00% | | | | 4 | .4 | | 3 | .1 |
| Down 2.00% | | | | 7 | .3 | | 1 | .5 |
The estimated decrease in market value for a five year U.S. Treasury Note when interest rates increase 100 basis points is negative 4.23%.
4
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
LOAN PORTFOLIO COMPOSITION BASED ON LOAN PURPOSE AND LOAN GROWTH
(dollars in thousands) (unaudited)
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Commercial Loans | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | | $ | 2,328,925 | | $ | 2,303,909 | | | $ | 2,271,605 | | $ | 2,329,544 | | $ | 2,314,125 |
| Owner - occupied real estate | | | | 935,170 | | | 806,256 | | | | 801,953 | | | 821,426 | | | 806,692 |
| Commercial real estate | | | | 4,064,137 | | | 4,116,217 | | | | 3,933,927 | | | 3,803,047 | | | 3,669,440 |
| | | | | 7,328,232 | | | 7,226,382 | | | | 7,007,485 | | | 6,954,017 | | | 6,790,257 |
| | | |
| Consumer Loans | | |
| Indirect - sales finance | | | | 555,678 | | | 928,633 | | | | 916,318 | | | 891,127 | | | 856,564 |
| Other consumer loans | | | | 1,011,700 | | | 1,013,987 | | | | 956,668 | | | 882,646 | | | 754,753 |
| Home equity | | | | 543,835 | | | 551,889 | | | | 558,924 | | | 565,241 | | | 564,763 |
| | | | | 2,111,213 | | | 2,494,509 | | | | 2,431,910 | | | 2,339,014 | | | 2,176,080 |
| | | |
| Total loans held for investment | | | $ | 9,439,445 | | $ | 9,720,891 | | | $ | 9,439,395 | | $ | 9,293,031 | | $ | 8,966,337 |
| | | |
| Percentage of Loans Held for Investment | | |
| Commercial and industrial | | | | 24.7 | % | | 23.7 | % | | | 24.1 | % | | 25.1 | % | | 25.8 | % |
| Owner - occupied real estate | | | | 9.9 | | | 8.3 | | | | 8.5 | | | 8.8 | | | 9.0 |
| Commercial real estate | | | | 43.0 | | | 42.3 | | | | 41.7 | | | 40.9 | | | 40.9 |
| Indirect - sales finance | | | | 5.9 | | | 9.6 | | | | 9.7 | | | 9.6 | | | 9.6 |
| Other consumer loans | | | | 10.7 | | | 10.4 | | | | 10.1 | | | 9.5 | | | 8.4 |
| Home equity | | | | 5.8 | | | 5.7 | | | | 5.9 | | | 6.1 | | | 6.3 |
| Total | | | | 100.0 | % | | 100.0 | % | | | 100.0 | % | | 100.0 | % | | 100.00 | % |
| | | |
| | | | For The Period Ended |
| | | | 6/30/06 | | | 3/31/06 | | | | 12/31/05 | | | 9/30/05 | | | 6/30/05 |
| Change in loans held for investment related to | | |
| acquisitions (dispositions) during the | | |
| three months ended(1) | | | $ | (359,158 | ) | $ | -- | | | $ | -- | | $ | -- | | $ | 311,607 |
| | | |
| Growth in Loans Held for Investment(2) | | |
| Growth vs. prior quarter, annualized | | | | (11.6 | )% | | 12.1 | % | | | 6.2 | % | | 14.5 | % | | 27.1 | % |
| Growth year-to-date, annualized | | | | -- | | | 12.1 | | | | 16.4 | | | 19.5 | | | 21.4 |
| | | |
| Growth in Loans Held for Investment, Excluding | | |
| Changes from Acquisitions and Dispositions(2) | | |
| Organic growth vs. prior quarter, annualized | | | | 3.2 | % | | 12.1 | % | | | 6.2 | % | | 14.5 | % | | 12.2 | % |
| Organic growth year-to-date, annualized | | | | 7.7 | | | 12.1 | | | | 12.6 | | | 14.4 | | | 13.6 |
| | | |
| Growth in Loans Held for Investment, Excluding | | |
| All Indirect Loans and Changes from | | |
| Acquisitions(2)(3) | | |
| Growth vs. prior quarter, annualized (excluding all | | |
| indirect loans and changes from acquisitions) | | | | 4.2 | % | | 12.8 | % | | | 5.7 | % | | 14.3 | % | | 29.0 | % |
| Growth year-to-date, annualized (excluding all | | |
| indirect loans and changes from acquistions) | | | | 8.5 | | | 12.8 | | | | 16.5 | | | 19.8 | | | 21.8 |
| |
| (1) | The change during the three months ended June 30, 2006 related to the sale of indirect auto loans. The change during the three months ended June 30, 2005 related to the acqusition of Pointe. The bank acquisition amounts include fair value adjustments recorded in accordance with the purchase method of accounting. |
| (2) | At December 31, 2004, loans held for investment totaled $8,107,757. |
| (3) | At March 31, 2005 and December 31, 2004, indirect loans totaled $835,629 and $790,371, respectively. |
5
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY AND ALLOWANCE FOR LOAN LOSSES
(dollars in thousands) (unaudited)
| At and for the Three Months Ended | | | | |
|---|
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Credit Quality | | | | | | | | | | | | | | | | | |
| Loans held for investment | | | $ | 9,439,445 | | $ | 9,720,891 | | $ | 9,439,395 | | $ | 9,293,031 | | $ | 8,966,337 | |
| Allowance for loan losses | | | | 108,995 | | | 111,219 | | | 107,767 | | | 106,224 | | | 104,853 | |
| Allowance for credit losses(1) | | | | 110,320 | | | 112,454 | | | 109,350 | | | 107,381 | | | 105,552 | |
| Nonperforming loans(2) | | | | 37,782 | | | 35,722 | | | 33,255 | | | 33,708 | | | 42,457 | |
| Foreclosed property (other real estate owned and | | |
| personal property repossessions) | | | | 10,187 | | | 9,323 | | | 10,722 | | | 11,839 | | | 12,618 | |
| Nonperforming assets | | | $ | 47,969 | | $ | 45,045 | | $ | 43,977 | | $ | 45,547 | | $ | 55,075 | |
| | |
| Nonperforming loans as a % of loans held for investment | | | | 0.40 | % | | 0.37 | % | | 0.35 | % | | 0.36 | % | | 0.47 | % |
| Nonperforming assets as a % of loans held | | |
| for investment and foreclosed property | | | | 0.51 | | | 0.46 | | | 0.47 | | | 0.49 | | | 0.61 | |
| Allowance for loan losses as a % of loans | | |
| held for investment | | | | 1.15 | | | 1.14 | | | 1.14 | | | 1.14 | | | 1.17 | |
| Allowance for credit losses as a % of loans | | |
| held for investment | | | | 1.17 | | | 1.16 | | | 1.16 | | | 1.16 | | | 1.18 | |
| Allowance for loan losses to nonperforming | | |
| loans | | | | 2.88x | | | 3.11x | | | 3.24x | | | 3.15x | | | 2.47x | |
| Impaired loans(2) (3) | | | $ | 30,860 | | $ | 22,055 | | $ | 16,911 | | $ | 20,674 | | $ | 28,266 | |
| Specific allowance for impaired loans | | | | 8,027 | | | 4,904 | | | 4,336 | | | 4,238 | | | 4,956 | |
| Loans past due 90 days or more (mortgage | | |
| and consumer with interest accruing) | | | | 2,849 | | | 2,369 | | | 4,548 | | | 1,598 | | | 2,035 | |
| Net loan charge-offs | | | | 6,532 | | | 6,807 | | | 8,864 | | | 7,024 | | | 6,823 | |
| Average loans held for investment | | | | 9,664,441 | | | 9,606,556 | | | 9,342,761 | | | 9,093,257 | | | 8,679,316 | |
| Net loan charge-offs as a % of average | | |
| loans held for investment (annualized) | | | | 0.27 | % | | 0.29 | % | | 0.38 | % | | 0.31 | % | | 0.32 | % |
| |
| Allowance for Loan Losses | | |
| Balance at beginning of period | | | $ | 111,219 | | $ | 107,767 | | $ | 106,224 | | $ | 104,853 | | $ | 97,989 | |
| Purchase accounting acquisitions: | | |
| Pointe Financial Corporation | | | | -- | | | -- | | | -- | | | -- | | | 3,741 | |
| Allowance adjustment for loans sold | | | | (3,089 | ) | | -- | | | -- | | | -- | | | -- | |
| Provision for loan losses | | | | 7,397 | | | 10,259 | | | 10,407 | | | 8,395 | | | 9,946 | |
| Loans charged-off | | | | (8,785 | ) | | (8,873 | ) | | (10,715 | ) | | (8,708 | ) | | (8,817 | ) |
| Recoveries of loans previously charged-off | | | | 2,253 | | | 2,066 | | | 1,851 | | | 1,684 | | | 1,994 | |
| Balance at end of period | | | $ | 108,995 | | $ | 111,219 | | $ | 107,767 | | $ | 106,224 | | $ | 104,853 | |
| |
| Reserve for Unfunded Lending Commitments (1) | | |
| Balance at beginning of period | | | $ | 1,235 | | $ | 1,583 | | $ | 1,157 | | $ | 699 | | $ | 701 | |
| Provision for unfunded lending commitments | | | | 90 | | | (348 | ) | | 426 | | | 458 | | | (2 | ) |
| Balance at end of period | | | $ | 1,325 | | $ | 1,235 | | $ | 1,583 | | $ | 1,157 | | $ | 699 | |
| |
| Allowance for Credit Losses(1) | | |
| Balance at beginning of period | | | $ | 112,454 | | $ | 109,350 | | $ | 107,381 | | $ | 105,552 | | $ | 98,690 | |
| Purchase accounting acquisitions: | | |
| Pointe Financial Corporation | | | | -- | | | -- | | | -- | | | -- | | | 3,741 | |
| Allowance adjustment for loans sold | | | | (3,089 | ) | | -- | | | -- | | | -- | | | -- | |
| Provision for credit losses | | | | 7,487 | | | 9,911 | | | 10,833 | | | 8,853 | | | 9,944 | |
| Loans charged-off | | | | (8,785 | ) | | (8,873 | ) | | (10,715 | ) | | (8,708 | ) | | (8,817 | ) |
| Recoveries of loans previously charged-off | | | | 2,253 | | | 2,066 | | | 1,851 | | | 1,684 | | | 1,994 | |
| Balance at end of period | | | $ | 110,320 | | $ | 112,454 | | $ | 109,350 | | $ | 107,381 | | $ | 105,552 | |
| (1) | As of December 31, 2005, the reserve for unfunded lending commitments has been reclassified from the allowance for loan losses to other liabilities. The allowance for credit losses is the sum of the allowance for loan losses and the reserve for unfunded lending commitments. The provision for credit losses is the sum of the provision for loan losses and the provision for unfunded lending commitments. Amounts presented for prior periods have been reclassified to conform to the current presentation. |
| |
| (2) | At June 30, 2006, March 31, 2006, December 31, 2005, September 30, 2005, and June 30, 2005, these credit quality indicators (nonperforming loans and impaired loans) included $743,000, $693,000, $1.9 million, $1.9 million, and $5.5 million, respectively, in restructured loans. |
| |
| (3) | In second quarter 2006, TSFG changed its policy to include nonaccruing loans that are fully protected by collateral as impaired loans. This change added $7.5 million to impaired loans at June 30, 2006. |
6
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
TYPE OF DEPOSITS AND DEPOSIT GROWTH
(dollars in thousands) (unaudited)
| | 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Noninterest-bearing | | | | $ | 1,579,852 | | $ | 1,536,796 | | $ | 1,512,508 | | $ | 1,508,370 | | $ | 1,466,803 |
| Interest-bearing checking | | | | | 1,102,916 | | | 1,116,579 | | | 1,109,297 | | | 1,062,531 | | | 971,750 |
| Money market accounts | | | | | 2,337,984 | | | 2,265,571 | | | 2,290,134 | | | 2,559,559 | | | 2,754,418 |
| Savings accounts | | | | | 181,871 | | | 191,449 | | | 187,101 | | | 190,832 | | | 200,903 |
| Core deposits | | | | | 5,202,623 | | | 5,110,395 | | | 5,099,040 | | | 5,321,292 | | | 5,393,874 |
| Time deposits under $100,000 | | | | | 1,426,624 | | | 1,381,468 | | | 1,401,469 | | | 1,211,875 | | | 1,077,281 |
| Time deposits of $100,000 or more | | | | | 1,205,796 | | | 1,285,048 | | | 1,395,247 | | | 1,237,049 | | | 1,047,466 |
| Customer deposits(3) | | | | | 7,835,043 | | | 7,776,911 | | | 7,895,756 | | | 7,770,216 | | | 7,518,621 |
| Brokered deposits | | | | | 1,405,276 | | | 1,401,771 | | | 1,338,681 | | | 1,355,803 | | | 1,355,181 |
| Total deposits | | | | $ | 9,240,319 | | $ | 9,178,682 | | $ | 9,234,437 | | $ | 9,126,019 | | $ | 8,873,802 |
| | | |
| Percentage of Deposits | | |
| Noninterest-bearing | | | | | 17.1 | % | | 16.7 | % | | 16.4 | % | | 16.5 | % | | 16.5 | % |
| Interest-bearing checking | | | | | 11.9 | | | 12.2 | | | 12.0 | | | 11.6 | | | 11.0 |
| Money market accounts | | | | | 25.3 | | | 24.7 | | | 24.8 | | | 28.0 | | | 31.0 |
| Savings accounts | | | | | 2.0 | | | 2.1 | | | 2.0 | | | 2.1 | | | 2.3 |
| Core deposits | | | | | 56.3 | | | 55.7 | | | 55.2 | | | 58.2 | | | 60.8 |
| Time deposits under $100,000 | | | | | 15.4 | | | 15.0 | | | 15.2 | | | 13.3 | | | 12.1 |
| Time deposits of $100,000 or more | | | | | 13.0 | | | 14.0 | | | 15.1 | | | 13.6 | | | 11.8 |
| Customer deposits(3) | | | | | 84.8 | | | 84.7 | | | 85.5 | | | 85.1 | | | 84.7 |
| Brokered deposits | | | | | 15.2 | | | 15.3 | | | 14.5 | | | 14.9 | | | 15.3 |
| Total deposits | | | | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
| | | |
| | For The Period Ended | | |
| | | | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | | | 9/30/05 | | | 6/30/05 |
| Growth vs. Prior Quarter, Annualized(1) | | |
| Noninterest-bearing | | | | | 11.2 | % | | 6.5 | % | | 1.1 | % | | 11.2 | % | | 54.8 | % |
| Core deposits | | | | | 7.2 | | | 0.9 | | | (16.6 | ) | | (5.3 | ) | | 28.0 |
| Customer deposits(3) | | | | | 3.0 | | | (6.1 | ) | | 6.4 | | | 13.3 | | | 40.9 |
| Total deposits | | | | | 2.7 | | | (2.4 | ) | | 4.7 | | | 11.3 | | | 34.3 |
| | | |
| Growth Year-To-Date, Annualized(2) | | |
| Noninterest-bearing | | | | | 9.0 | % | | 6.5 | % | | 22.2 | % | | 29.2 | % | | 37.3 | % |
| Core deposits | | | | | 4.1 | | | 0.9 | | | 3.0 | | | 10.0 | | | 18.0 |
| Customer deposits(3) | | | | | (1.6 | ) | | (6.1 | ) | | 22.3 | | | 27.3 | | | 33.3 |
| Total deposits | | | | | 0.1 | | | (2.4 | ) | | 20.4 | | | 25.4 | | | 31.6 |
| (1) | At March 31, 2005, noninterest-bearing totaled $1,290,427, core deposits totaled $5,041,804, customer deposits totaled $6,822,455, and total deposits totaled $8,174,970. |
| (2) | At December 31, 2004, noninterest-bearing totaled $1,237,877, core deposits totaled $4,951,866, customer deposits totaled $6,454,072, and total deposits totaled $7,670,944. |
| (3) | Total deposits less brokered deposits. |
7
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
TYPE OF ORGANIC DEPOSIT GROWTH
(dollars in thousands) (unaudited)
| For The Period Ended | | | | |
|---|
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Noninterest-Bearing | | | | | | | | | | | | | | | | | |
| Beginning balance | | | $ | 1,536,796 | | $ | 1,512,508 | | $ | 1,508,370 | | $ | 1,466,803 | | $ | 1,290,427 | |
| Increase (decrease) during the three | | |
| months ended related to: | | |
| Organic change | | | | 43,056 | | | 24,288 | | | 4,138 | | | 41,567 | | | 62,617 | |
| Bank acquisitions (dispositions)(1) | | | | -- | | | -- | | | -- | | | -- | | | 113,759 | |
| Ending balance | | | $ | 1,579,852 | | $ | 1,536,796 | | $ | 1,512,508 | | $ | 1,508,370 | | $ | 1,466,803 | |
| | | |
| Core Deposits | | |
| Beginning balance | | | $ | 5,110,395 | | $ | 5,099,040 | | $ | 5,321,292 | | $ | 5,393,874 | | $ | 5,041,804 | |
| Increase (decrease) during the three | | |
| months ended related to: | | |
| Organic change | | | | 92,228 | | | 11,355 | | | (222,252 | ) | | (72,582 | ) | | 99,461 | |
| Bank acquisitions (dispositions)(1) | | | | -- | | | -- | | | -- | | | -- | | | 252,609 | |
| Ending balance | | | $ | 5,202,623 | | $ | 5,110,395 | | $ | 5,099,040 | | $ | 5,321,292 | | $ | 5,393,874 | |
| | | |
| Customer Deposits (excludes brokered deposits) | | |
| Beginning balance | | | $ | 7,776,911 | | $ | 7,895,756 | | $ | 7,770,216 | | $ | 7,518,621 | | $ | 6,822,455 | |
| Increase (decrease) during the three | | |
| months ended related to: | | |
| Organic change | | | | 58,132 | | | (118,845 | ) | | 125,540 | | | 251,595 | | | 367,605 | |
| Bank acquisitions (dispositions)(1) | | | | -- | | | -- | | | -- | | | -- | | | 328,561 | |
| Ending balance | | | $ | 7,835,043 | | $ | 7,776,911 | | $ | 7,895,756 | | $ | 7,770,216 | | $ | 7,518,621 | |
| | | |
| Total Deposits | | |
| Beginning balance | | | $ | 9,178,682 | | $ | 9,234,437 | | $ | 9,126,019 | | $ | 8,873,802 | | $ | 8,174,970 | |
| Increase (decrease) during the three | | |
| months ended related to: | | |
| Organic change | | | | 61,637 | | | (55,755 | ) | | 108,418 | | | 252,217 | | | 370,271 | |
| Bank acquisitions (dispositions)(1) | | | | -- | | | -- | | | -- | | | -- | | | 328,561 | |
| Ending balance | | | $ | 9,240,319 | | $ | 9,178,682 | | $ | 9,234,437 | | $ | 9,126,019 | | $ | 8,873,802 | |
| | | |
| Organic Change vs. Prior Quarter, Annualized(2) | | |
| Noninterest-bearing | | | | 11.2 | % | | 6.5 | % | | 1.1 | % | | 11.2 | % | | 19.5 | % |
| Core deposits | | | | 7.2 | | | 0.9 | | | (16.6 | ) | | (5.3 | ) | | 7.9 | |
| Customer deposits(4) | | | | 3.0 | | | (6.1 | ) | | 6.4 | | | 13.3 | | | 21.6 | |
| Total deposits | | | | 2.7 | | | (2.4 | ) | | 4.7 | | | 11.3 | | | 18.2 | |
| | | |
| Organic Change Year-To-Date, Annualized(3) | | |
| Noninterest-bearing | | | | 9.0 | % | | 6.5 | % | | 13.0 | % | | 16.9 | % | | 18.8 | % |
| Core deposits | | | | 4.1 | | | 0.9 | | | (2.1 | ) | | 3.2 | | | 7.7 | |
| Customer deposits(4) | | | | (1.6 | ) | | (6.1 | ) | | 17.2 | | | 20.5 | | | 23.0 | |
| Total deposits | | | | 0.1 | | | (2.4 | ) | | 16.1 | | | 19.6 | | | 23.0 | |
| (1) | The non organic changes in deposits relate to the May 6, 2005 acquisition of Pointe Financial Corporation. These bank acquisition amounts include fair value adjustments recorded in accordance with the purchase method of accounting. |
| (2) | At March 31, 2005, noninterest-bearing totaled $1,290,427, core deposits totaled $5,041,804, customer deposits totaled $6,822,455, and total deposits totaled $8,174,970. |
| (3) | At December 31, 2004, noninterest-bearing totaled $1,237,877, core deposits totaled $4,951,866, customer deposits totaled $6,454,072, and total deposits totaled $7,670,944. |
| (4) | Total deposits less brokered deposits. |
8
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
TYPES OF WHOLESALE FUNDING
(dollars in thousands) (unaudited)
| At and for the Three Months Ended | | | | |
|---|
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Types of wholesale funding | | | | | | | | | | | | | | | | | |
| Short-term borrowings | | |
| Federal funds purchased and repurchase | | |
| agreements | | | $ | 1,088,143 | | $ | 1,534,680 | | $ | 1,421,301 | | $ | 1,336,114 | | $ | 1,328,931 | |
| Commercial paper | | | | 30,336 | | | 35,210 | | | 32,933 | | | 33,579 | | | 28,734 | |
| Treasury, tax and loan note | | | | 140,821 | | | 1,146 | | | 20,131 | | | 11,070 | | | 85,064 | |
| Total short-term borrowings | | | | 1,259,300 | | | 1,571,036 | | | 1,474,365 | | | 1,380,763 | | | 1,442,729 | |
| Long-term borrowings | | |
| Repurchase agreements | | | | 771,000 | | | 821,000 | | | 821,000 | | | 1,619,893 | | | 1,769,893 | |
| FHLB advances | | | | 749,127 | | | 842,134 | | | 852,140 | | | 882,147 | | | 882,153 | |
| Subordinated notes | | | | 233,016 | | | 155,695 | | | 155,695 | | | 155,695 | | | 155,695 | |
| Manditorily redeemable preferred stock of | | |
| subsidiary | | | | 89,800 | | | 89,800 | | | 89,800 | | | 89,800 | | | 89,800 | |
| Note payable | | | | 847 | | | 856 | | | 865 | | | 873 | | | 882 | |
| Employee stock ownership plan note payable | | | | 350 | | | 425 | | | 500 | | | 575 | | | 650 | |
| Purchase accounting premiums, net of | | |
| amortization | | | | 1,922 | | | 2,019 | | | 2,151 | | | 2,285 | | | 2,459 | |
| Total long-term borrowings | | | | 1,846,062 | | | 1,911,929 | | | 1,922,151 | | | 2,751,268 | | | 2,901,532 | |
| Total borrowings | | | | 3,105,362 | | | 3,482,965 | | | 3,396,516 | | | 4,132,031 | | | 4,344,261 | |
| Brokered deposits | | | | 1,405,276 | | | 1,401,771 | | | 1,338,681 | | | 1,355,803 | | | 1,355,181 | |
| Total wholesale borrowings | | | $ | 4,510,638 | | $ | 4,884,736 | | $ | 4,735,197 | | $ | 5,487,834 | | $ | 5,699,442 | |
| | | |
| | | |
| Wholesale borrowings as a percentage | | |
| of total assets | | | | 32.0 | % | | 34.0 | % | | 33.1 | % | | 36.7 | % | | 38.3 | % |
| | | |
| | | |
| Impact of the Net Cash Settlement of Certain Interest Rate Swaps on the Cost of Wholesale Funding(1) | | |
| | | |
| Interest expense - brokered deposits | | | | 17,728 | | | 15,389 | | | 14,329 | | | 14,967 | | | 15,470 | |
| Interest expense - borrowings | | | | 43,886 | | | 39,976 | | | 40,673 | | | 38,813 | | | 37,043 | |
| Total interest expense - wholesale borrowings | | | | 61,614 | | | 55,365 | | | 55,002 | | | 53,780 | | | 52,513 | |
| Net cash settlement of certain interest | | |
| rate swaps included in noninterest income | | | | -- | | | -- | | | 288 | | | (2,377 | ) | | (3,534 | ) |
| Interest expense on wholesale borrowings, | | |
| including net cash settlement of certain | | |
| interest rate swaps | | | $ | 61,614 | | $ | 55,365 | | $ | 55,290 | | $ | 51,403 | | $ | 48,979 | |
| | | |
| Average wholesale borrowings, including | | |
| brokered CDs | | | $ | 4,975,576 | | $ | 4,945,488 | | $ | 5,399,810 | | $ | 5,725,658 | | $ | 6,197,520 | |
| | | |
| Cost of wholesale borrowings | | | | 4.97 | % | | 4.54 | % | | 4.04 | % | | 3.73 | % | | 3.40 | % |
| Cost of wholesale borrowings, including | | |
| net cash settlement of certain interest rate | | |
| swaps(2) | | | | 4.97 | % | | 4.54 | % | | 4.06 | % | | 3.56 | % | | 3.17 | % |
| (1) | The costs of wholesale borrowings reflect the net cash settlement of certain interest rate swaps as if it were included as a component of interest expense rather than included in operating noninterest income. With the redesignation of the CD swap derivatives as hedges effective October 2005, TSFG expects the net cash settlement of the CD swaps to be included in interest expense for future periods rather than included in noninterest income. |
| (2) | Calculated as interest expense on wholesale borrowings, net of the net cash settlement on swaps, as a % of average outstanding wholesale borrowings (annualized). |
9
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF CAPITAL, CAPITAL RATIOS, UNREALIZED LOSSES
ON AVAILABLE FOR SALE SECURITIES, AND MARKET RATES FOR U.S. TREASURY NOTES
(dollars in thousands) (unaudited)
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Regulatory Capital | | | | | | | | | | | | | | | | | |
| Tier 1 capital | | | $ | 1,121,122 | | $ | 1,021,970 | | $ | 1,001,841 | | $ | 1,026,543 | | $ | 1,011,327 | |
| Tier 2 capital | | | | 176,237 | | | 178,403 | | | 179,831 | | | 179,427 | | | 177,995 | |
| Total risk-based capital | | | | 1,297,359 | | | 1,200,373 | | | 1,181,672 | | | 1,205,970 | | | 1,189,322 | |
| Total risk-weighted assets | | | | 11,255,642 | | | 11,588,786 | | | 11,308,017 | | | 11,589,370 | | | 11,145,953 | |
| | | |
| Tangible Equity | | |
| Shareholders' equity | | | $ | 1,484,989 | | $ | 1,484,105 | | $ | 1,486,907 | | $ | 1,504,447 | | $ | 1,517,072 | |
| Intangible assets | | | | (689,690 | ) | | (691,328 | ) | | (691,758 | ) | | (692,796 | ) | | (693,541 | ) |
| Tangible equity | | | | 795,299 | | | 792,777 | | | 795,149 | | | 811,651 | | | 823,531 | |
| | | |
| | | |
| Capital Ratios | | |
| Total risk-based capital | | | | 11.53 | % | | 10.36 | % | | 10.45 | % | | 10.41 | % | | 10.67 | % |
| Tier 1 risk-based capital | | | | 9.96 | | | 8.82 | | | 8.86 | | | 8.86 | | | 9.07 | |
| Leverage ratio | | | | 8.21 | | | 7.47 | | | 7.07 | | | 7.20 | | | 7.12 | |
| | | |
| Tangible equity to tangible assets ratio | | | | 5.94 | | | 5.80 | | | 5.83 | | | 5.69 | | | 5.80 | |
| Less: impact of unrealized gain or loss | | | | (0.57 | ) | | (0.44 | ) | | (0.31 | ) | | (0.35 | ) | | (0.17 | ) |
| Tangible equity to tangible assets ratio, | | |
| excluding unrealized gain or loss | | | | 6.51 | | | 6.24 | | | 6.14 | | | 6.04 | | | 5.97 | |
| | | |
| | | |
| | | |
| Unrealized Losses on AFS Securities | | |
| Gross (included in AFS securities) | | | $ | (134,480 | ) | $ | (105,060 | ) | $ | (73,635 | ) | $ | (87,834 | ) | $ | (42,914 | ) |
| Net of income tax (included in equity) | | | | (84,667 | ) | | (66,137 | ) | | (46,350 | ) | | (55,291 | ) | | (27,029 | ) |
| | | |
| | | |
| | | |
| Market Rates for U.S. Treasury Notes | | |
| Three year | | | | 5.13 | % | | 4.82 | % | | 4.36 | % | | 4.17 | % | | 3.64 | % |
| Five year | | | | 5.09 | | | 4.81 | | | 4.35 | | | 4.19 | | | 3.70 | |
10
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
COMPARATIVE AVERAGE BALANCES - YIELDS AND COSTS
(dollars in thousands) (unaudited)
| Three Months Ended | | | | | | | | |
|---|
| 6/30/06 | | 3/31/06 | | 12/31/05 | | | | | |
|---|
| Average
Balance | Income/
Expense | Yield/
Rate | Average
Balance | Income/
Expense | Yield/
Rate | Average
Balance | Income/
Expense | Yield/
Rate |
|---|
| Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earning assets | | |
| Loans(1) | | | $ | 9,711,641 | | $ | 179,971 | | | 7.43 | % | $ | 9,630,573 | | $ | 169,188 | | | 7.12 | % | $ | 9,392,454 | | $ 162,114 | | 6.85 | % |
| Investment securities (taxable)(2) | | | | 2,676,211 | | | 31,652 | | | 4.74 | | | 2,752,345 | | | 32,543 | | | 4.80 | | | 3,517,591 | | 38,548 | | 4.35 | |
| Investment securities (nontaxable)(3) | | | | 416,117 | | | 4,938 | | | 4.76 | | | 434,980 | | | 5,145 | | | 4.80 | | | 429,508 | | 4,943 | | 4.57 | |
| Total investment securities | | | | 3,092,328 | | | 36,590 | | | 4.75 | | | 3,187,325 | | | 37,688 | | | 4.80 | | | 3,947,099 | | 43,491 | | 4.37 | |
| Federal funds sold, interest-bearing | | |
| bank balances, and other temp investments | | | | 64,319 | | | 879 | | | 5.48 | | | 21,509 | | | 292 | | | 5.51 | | | 55,933 | | 537 | | 3.81 | |
| Total earning assets | | | | 12,868,288 | | | 217,440 | | | 6.78 | | | 12,839,407 | | | 207,168 | | | 6.54 | | | 13,395,486 | | 206,142 | | 6.11 | |
| Non-earning assets | | | | 1,476,147 | | | | | | | | | 1,527,849 | | | | | | | | | 1,458,974 | |
| Total assets | | | $ | 14,344,435 | | | | | | | | $ | 14,367,256 | | | | | | | | $ | 14,854,460 |
| | | |
| Liabilities and Shareholders' Equity | | |
| Liabilities | | |
| Interest-bearing liabilities | | |
| Interest-bearing deposits | | |
| Interest checking | | | $ | 1,074,420 | | $ | 5,054 | | | 1.89 | | $ | 1,065,190 | | $ | 4,406 | | | 1.68 | | $ | 1,027,699 | | $ 3,321 | | 1.28 |
| Savings | | | | 179,220 | | | 287 | | | 0.64 | | | 191,613 | | | 308 | | | 0.65 | | | 186,666 | | 228 | | 0.48 |
| Money market | | | | 2,265,029 | | | 18,651 | | | 3.30 | | | 2,218,937 | | | 16,345 | | | 2.99 | | | 2,453,893 | | 17,255 | | 2.79 |
| Time deposits, excluding brokered | | |
| deposits(4) | | | | 2,641,817 | | | 26,984 | | | 4.10 | | | 2,778,587 | | | 26,031 | | | 3.80 | | | 2,639,057 | | 23,673 | | 3.56 |
| Total interest-bearing customer | | |
| deposit(5) | | | | 6,160,486 | | | 50,976 | | | 3.32 | | | 6,254,327 | | | 47,090 | | | 3.05 | | | 6,307,315 | | 44,477 | | 2.80 |
| Brokered deposits | | | | 1,408,889 | | | 17,728 | | | 5.05 | | | 1,373,199 | | | 15,389 | | | 4.54 | | | 1,343,222 | | 14,329 | | 4.23 |
| Total interest-bearing deposits | | | | 7,569,375 | | | 68,704 | | | 3.64 | | | 7,627,526 | | | 62,479 | | | 3.32 | | | 7,650,537 | | 58,806 | | 3.05 |
| Borrowings | | | | 3,566,687 | | | 43,886 | | | 4.94 | | | 3,572,289 | | | 39,976 | | | 4.54 | | | 4,056,588 | | 40,673 | | 3.98 |
| Total interest-bearing liabilities | | | | 11,136,062 | | | 112,590 | | | 4.06 | | | 11,199,815 | | | 102,455 | | | 3.71 | | | 11,707,125 | | 99,479 | | 3.37 |
| Noninterest-bearing liabilities | | |
| Noninterest-bearing deposits | | | | 1,536,140 | | | | | | | | | 1,502,958 | | | | | | | | | 1,513,062 |
| Other noninterest liabilities | | | | 192,587 | | | | | | | | | 173,075 | | | | | | | | | 137,042 |
| Total liabilities | | | | 12,864,789 | | | | | | | | | 12,875,848 | | | | | | | | | 13,357,229 |
| Shareholders' equity | | | | 1,479,646 | | | | | | | | | 1,491,408 | | | | | | | | | 1,497,231 |
| Total liabilities and shareholders' | | |
| equity | | | $ | 14,344,435 | | | | | | | | $ | 14,367,256 | | | | | | | | $ | 14,854,460 |
| Net interest margin (tax-equivalent) | | | | | | $ | 104,850 | | | 3.27 | % | | | | $ | 104,713 | | | 3.31 | % | | | $ | 106,663 | | 3.16 | % |
| Less: tax-equivalent adjustment(3) | | | | | | | 1,728 | | | | | | | | | 1,801 | | | | | | | | 1,730 |
| Net interest income | | | | | | $ | 103,122 | | | | | | | | $ | 102,912 | | | | | | | $ | 104,933 |
| | | |
| | | |
| Customer deposits(6) | | | | 7,696,626 | | | 50,976 | | | 2.66 | | | 7,757,285 | | | 47,090 | | | 2.46 | | | 7,820,377 | | 44,477 | | 2.26 |
| Wholesale borrowings(7) | | | | 4,975,576 | | | 61,614 | | | 4.97 | | | 4,945,488 | | | 55,365 | | | 4.54 | | | 5,399,810 | | 55,002 | | 4.04 |
| Total funding(8) | | | | 12,672,202 | | | 112,590 | | | 3.56 | | | 12,702,773 | | | 102,455 | | | 3.27 | | | 13,220,187 | | 99,479 | | 2.99 |
| (1) | Nonaccrual loans are included in average balances for yield computations. |
| (2) | The average balances for investment securities exclude the unrealized gain or loss recorded for available for sale securities. |
| (3) | The tax-equivalent adjustment to net interest income adjusts the yield for assets earning tax-exempt income to a comparable yield on a taxable basis. |
| (4) | At June 30, 2006, March 31, 2006, and December 31, 2005, this line includes time deposits greater than $100,000 of (in thousands) $1,232,787, $1,384,999, and $1,327,869, respectively. |
| (5) | Interest bearing customer deposits include total deposits less brokered deposits and noninterest-bearing deposits. |
| (6) | Customer deposits include total deposits less brokered deposits. |
| (7) | Wholesale borrowings include borrowings and brokered deposits. |
| (8) | Total funding includes customer deposits and wholesale borrowings. |
| Note: | Average balances are derived from daily balances. |
11
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
COMPARATIVE AVERAGE BALANCES - YIELDS AND COSTS - CONTINUED
(dollars in thousands) (unaudited)
| Three Month Ended | | | | | |
|---|
| 9/30/05 | | 6/30/05 | | | |
|---|
| Average
Balance | Income/
Expense | Yield/
Rate | Average
Balance | Income/
Expense | Yield/
Rate |
|---|
| Assets | | | | | | | | | | | | | | | | | | | | |
| Earning assets | | |
| Loans(1) | | | $ | 9,138,137 | | $ | 149,788 | | | 6.50 | % | $ | 8,706,276 | | $ | 134,842 | | | 6.21 | % |
| Investment securities (taxable)(2) | | | | 3,883,705 | | | 41,657 | | | 4.26 | | | 4,366,761 | | | 47,304 | | | 4.35 | |
| Investment securities (nontaxable)(3) | | | | 406,767 | | | 4,574 | | | 4.46 | | | 364,360 | | | 3,992 | | | 4.39 | |
| Total investment securities | | | | 4,290,472 | | | 46,231 | | | 4.27 | | | 4,731,121 | | | 51,296 | | | 4.35 | |
| Federal funds sold and interest- | | |
| bearing bank balances | | | | 34,146 | | | 317 | | | 3.68 | | | 22,698 | | | 160 | | | 2.83 | |
| Total earning assets | | | | 13,462,755 | | | 196,336 | | | 5.79 | | | 13,460,095 | | | 186,298 | | | 5.55 | |
| Non-earning assets | | | | 1,482,396 | | | | | | | | | 1,441,975 | |
| Total assets | | | $ | 14,945,151 | | | | | | | | $ | 14,902,070 | | | | |
| | | |
| Liabilities and Shareholders' Equity | | |
| Liabilities | | |
| Interest-bearing liabilities | | |
| Interest-bearing deposits | | |
| Interest checking | | | $ | 979,487 | | $ | 2,533 | | | 1.03 | | $ | 928,672 | | $ | 1,725 | | | 0.75 | |
| Savings | | | | 193,518 | | | 151 | | | 0.31 | | | 195,851 | | | 152 | | | 0.31 | |
| Money market | | | | 2,690,104 | | | 16,819 | | | 2.48 | | | 2,704,178 | | | 15,185 | | | 2.25 | |
| Time deposits, excluding brokered deposits(4) | | | | 2,254,868 | | | 17,863 | | | 3.14 | | | 1,917,124 | | | 13,041 | | | 2.73 | |
| Total interest-bearing customer deposits(5) | | | | 6,117,977 | | | 37,366 | | | 2.42 | | | 5,745,825 | | | 30,103 | | | 2.10 | |
| Brokered deposits | | | | 1,353,364 | | | 14,967 | | | 4.39 | | | 1,365,262 | | | 15,470 | | | 4.54 | |
| Total interest-bearing deposits | | | | 7,471,341 | | | 52,333 | | | 2.78 | | | 7,111,087 | | | 45,573 | | | 2.57 | |
| Borrowings | | | | 4,372,294 | | | 38,813 | | | 3.52 | | | 4,832,258 | | | 37,043 | | | 3.07 | |
| Total interest-bearing liabilities | | | | 11,843,635 | | | 91,146 | | | 3.05 | | | 11,943,345 | | | 82,616 | | | 2.77 | |
| Noninterest-bearing liabilities | | |
| Noninterest-bearing deposits | | | | 1,446,396 | | | | | | | | | 1,349,746 | |
| Other noninterest liabilities | | | | 146,980 | | | | | | | | | 158,305 | |
| Total liabilities | | | | 13,437,011 | | | | | | | | | 13,451,396 | |
| Shareholders' equity | | | | 1,508,140 | | | | | | | | | 1,450,674 | |
| Total liabilities and shareholders' equity | | | $ | 14,945,151 | | | | | | | | $ | 14,902,070 | | | | |
| Net interest margin (tax-equivalent) | | | | | | $ | 105,190 | | | 3.10 | % | | | | $ | 103,682 | | | 3.09 | % |
| Less: tax-equivalent adjustment(3) | | | | | | | 1,601 | | | | | | | | | 1,397 | |
| Net interest income | | | | | | $ | 103,589 | | | | | | | | $ | 102,285 | | | | |
| | | |
| | | |
| Customer deposits(6) | | | | 7,564,373 | | | 37,366 | | | 1.96 | | | 7,095,571 | | | 30,103 | | | 1.70 | |
| Wholesale borrowings(7) | | | | 5,725,658 | | | 53,780 | | | 3.73 | | | 6,197,520 | | | 52,513 | | | 3.40 | |
| Total funding(8) | | | | 13,290,031 | | | 91,146 | | | 2.72 | | | 13,293,091 | | | 82,616 | | | 2.49 | |
| (1) | Nonaccrual loans are included in average balances for yield computations. |
| (2) | The average balances for investment securities exclude the unrealized gain or loss recorded for available for sale securities. |
| (3) | The tax-equivalent adjustment to net interest income adjusts the yield for assets earning tax-exempt income to a comparable yield on a taxable basis. |
| (4) | At September 30, 2005 and June 30, 2005, this line includes time deposits greater than $100,000 of (in thousands) $1,130,798 and $926,308, respectively. |
| (5) | Interest bearing customer deposits include total deposits less brokered deposits and noninterest-bearing deposits. |
| (6) | Customer deposits include total deposits less brokered deposits. |
| (7) | Wholesale borrowings include borrowings and brokered deposits. |
| (8) | Total funding includes customer deposits and wholesale borowings. |
| Note: | Average balances are derived from daily balances. |
12
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF FINANCIAL RESULTS AS RESTATED FOR ACCOUNTING TREATMENT OF DERIVATIVES
(dollars in thousands) (unaudited)
| |
| Impact of the Net Cash Settlement of Certain Interest Rate Swaps on the Net Interest Margin(1) |
| Three Months Ended | | | | |
|---|
| 6/30/06 | 3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 |
|---|
| Net interest income | | | $ | 103,122 | | $ | 102,912 | | $ | 104,933 | | $ | 103,589 | | $ | 102,285 | |
| Tax-equivalent adjustment | | | | 1,728 | | | 1,801 | | | 1,730 | | | 1,601 | | | 1,397 | |
| Net interest income (tax equivalent) | | | | 104,850 | | | 104,713 | | | 106,663 | | | 105,190 | | | 103,682 | |
| Plus net cash settlement of certain interest | | |
| rate swaps included in noninterest income | | | | -- | | | -- | | | (288 | ) | | 2,377 | | | 3,534 | |
| Net interest income (tax equivalent), including | | |
| net cash settlement of certain interest | | |
| rate swaps | | | $ | 104,850 | | $ | 104,713 | | $ | 106,375 | | $ | 107,567 | | $ | 107,216 | |
| | | |
| Average loans | | | $ | 9,711,641 | | $ | 9,630,573 | | $ | 9,392,454 | | $ | 9,138,137 | | $ | 8,706,276 | |
| Average earning assets | | | | 12,868,288 | | | 12,839,407 | | | 13,395,486 | | | 13,462,755 | | | 13,460,095 | |
| | | |
| Net interest margin (tax equivalent) | | | | 3.27 | % | | 3.31 | % | | 3.16 | % | | 3.10 | % | | 3.09 | % |
| Net interest margin, including net cash settlement | | |
| of certain interest rate swaps(2) | | | | 3.27 | | | 3.31 | | | 3.15 | | | 3.17 | | | 3.19 | |
| | | |
| Average loan growth vs. prior quarter (annualized) | | | | 3.4 | | | 10.3 | | | 11.0 | | | 19.7 | | | 20.5 | |
| Average earning asset growth vs. prior quarter | | |
| (annualized) | | | | 0.9 | | | (16.8 | ) | | (2.0 | ) | | 0.1 | | | 17.2 | |
| (1) | These operating net interest margin ratios reflect the net cash settlement of certain interest rate swaps as if it were included in net interest income (tax-equivalent) rather than in noninterest income. |
| (2) | Calculated as net interest income, including the net cash settlement of certain interest rate swaps, as a % of average earning assets (annualized). |
13
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands, except share data) (unaudited)
| Three Months Ended | | | |
|---|
| 6/30/06 | | 3/31/06 | |
|---|
| | Diluted
EPS | | Diluted
EPS |
|---|
| Net Income, as Reported (GAAP) | | | $ | 29,343 | | $ | 0.39 | | $ | 27,807 | | $ | 0 | .37 |
| Non-Operating Items | | |
| Loss on sale of available for sale securities | | | | 150 | | | | | | 183 | |
| Gain on equity investments | | | | (3,751 | ) | | | | | (858 | ) |
| Loss on sale of indirect auto loans previously HFI | | | | 3,477 | | | | | | -- | |
| Employment contract buyouts | | | | -- | | | | | | 598 | |
| Related income taxes | | | | 42 | | | | | | 27 | |
| Operating Earnings (Net Income, Excluding | | |
| Non-Operating Items) | | | | 29,261 | | | 0.39 | | | 27,757 | | | 0 | .37 |
| Amortization of intangibles | | | | 2,208 | | | | | | 2,207 | |
| Related income taxes | | | | (755 | ) | | | | | (763 | ) |
| Cash Operating Earnings (Net Income, | | |
| Excluding Non-Operating Items and | | |
| Amortization of Intangibles) | | | $ | 30,714 | | $ | 0.41 | | $ | 29,201 | | $ | 0 | .39 |
| | | |
| Average Common Shares Outstanding, Diluted | | | | 75,504,683 | | | | | | 75,339,283 | |
| | | |
| Select Balance Sheet (Averages) | | |
| Total assets | | | $ | 14,344,435 | | | | | $ | 14,367,256 | |
| Intangible assets | | | | (690,375 | ) | | | | | (691,262 | ) |
| Tangible assets | | | | 13,654,060 | | | | | | 13,675,994 | |
| | | |
| Shareholders' equity | | | | 1,479,646 | | | | | | 1,491,408 | |
| Intangible assets | | | | (690,375 | ) | | | | | (691,262 | ) |
| Tangible equity | | | | 789,271 | | | | | | 800,146 | |
| | | |
| Return on Average Assets | | |
| GAAP earnings | | | | 0.82 | % | | | | | 0.78 | % | |
| Operating earnings | | | | 0.82 | | | | | | 0.78 | |
| Cash operating earnings on average tangible assets | | | | 0.90 | | | | | | 0.87 | |
| | | |
| Return on Average Equity | | |
| GAAP earnings | | | | 7.95 | | | | | | 7.56 | |
| Operating earnings | | | | 7.93 | | | | | | 7.55 | |
| Cash operating earnings on average tangible equity | | | | 15.61 | | | | | | 14.80 | |
14
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands, except share data) (unaudited)
| Three Months Ended | | | | | | | |
|---|
| 12/31/05 | | 9/30/05 | | 6/30/05 | | 3/31/05 | |
|---|
| | Diluted
EPS | | Diluted
EPS | | Diluted
EPS | | Diluted
EPS |
|---|
| Net (Loss) Income, as Reported (GAAP) | | | $ | (16,397 | ) | $ | (0.22 | ) | $ | 21,090 | | $ | 0.28 | | $ | 42,712 | | $ | 0.57 | | $ | 22,416 | | $ | 0.31 | |
| Non-Operating Items | | |
| Change in fair value of interest rate swaps | | | | 2,106 | | | | | | 16,240 | | | | | | (22,277 | ) | | | | | 17,209 | |
| Loss (gain) on sale of available for sale | | |
| securities | | | | 52,677 | | | | | | 1,032 | | | | | | 1,503 | | | | | | (234 | ) |
| Gain on equity investments | | | | (224 | ) | | | | | (254 | ) | | | | | (650 | ) | | | | | (1,711 | ) |
| Employment contract buyouts (reversals) | | | | 9,998 | | | | | | 144 | | | | | | 222 | | | | | | (37 | ) |
| Impairment from write-down of assets | | | | -- | | | | | | -- | | | | | | 917 | | | | | | -- | |
| Merger-related costs | | | | 529 | | | | | | 981 | | | | | | 2,194 | | | | | | 305 | |
| Charitable contribution to foundation | | | | -- | | | | | | -- | | | | | | -- | | | | | | 683 | |
| Loss (gain) on early extinguishment of debt | | | | 5,086 | | | | | | 462 | | | | | | 2,981 | | | | | | (1,428 | ) |
| Related income taxes | | | | (26,938 | ) | | | | | (5,582 | ) | | | | | 4,911 | | | | | | (4,932 | ) |
| Discontinued operations, net of income tax | | | | -- | | | | | | -- | | | | | | -- | | | | | | 396 | |
| Operating Earnings (Net Income, Excluding | | |
| Non-Operating Items) | | | | 26,837 | | | 0.36 | | | 34,113 | | | 0.45 | | | 32,513 | | | 0.44 | | | 32,667 | | | 0.45 | |
| Amortization of intangibles | | | | 2,354 | | | | | | 2,337 | | | | | | 2,140 | | | | | | 1,806 | |
| Related income taxes | | | | (706 | ) | | | | | (701 | ) | | | | | (695 | ) | | | | | (596 | ) |
| Cash Operating Earnings (Net Income, | | |
| Excluding Non-Operating Items and | | |
| Amortization of Intangibles) | | | $ | 28,485 | | $ | 0.38 | | $ | 35,749 | | $ | 0.47 | | $ | 33,958 | | $ | 0.46 | | $ | 33,877 | | $ | 0.46 | |
| | | |
| Average Common Shares Outstanding, Diluted | | | | 75,485,436 | | | | | | 75,414,866 | | | | | | 74,421,103 | | | | | | 73,021,005 | |
| | | |
| Select Balance Sheet (Averages) | | |
| Total assets | | | $ | 14,854,460 | | | | | $ | 14,945,151 | | | | | $ | 14,902,070 | | | | | | $14,302,030 |
| Intangible assets | | | | (693,016 | ) | | | | | (691,881 | ) | | | | | (656,066 | ) | | | | | (610,914 | ) |
| Tangible assets | | | | 14,161,444 | | | | | | 14,253,270 | | | | | | 14,246,004 | | | | | | 13,691,116 | |
| | | |
| Shareholders' equity | | | | 1,497,231 | | | | | | 1,508,140 | | | | | | 1,450,674 | | | | | | 1,394,839 | |
| Intangible assets | | | | (693,016 | ) | | | | | (691,881 | ) | | | | | (656,066 | ) | | | | | (610,914 | ) |
| Tangible equity | | | | 804,215 | | | | | | 816,259 | | | | | | 794,608 | | | | | | 783,925 | |
| | | |
| Return on Average Assets | | |
| GAAP (loss) earnings | | | | (0.44 | )% | | | | | 0.56 | % | | | | | 1.15 | % | | | | | 0.64 | % |
| Operating earnings | | | | 0.72 | | | | | | 0.91 | | | | | | 0.88 | | | | | | 0.93 | |
| Cash operating earnings on average tangible assets | | | | 0.80 | | | | | | 1.00 | | | | | | 0.96 | | | | | | 1.00 | |
| | | |
| Return on Average Equity | | |
| GAAP (loss) earnings | | | | (4.34 | ) | | | | | 5.55 | | | | | | 11.81 | | | | | | 6.52 | |
| Operating earnings | | | | 7.11 | | | | | | 8.97 | | | | | | 8.99 | | | | | | 9.50 | |
| Cash operating earnings on average tangible | | |
| equity | | | | 14.05 | | | | | | 17.38 | | | | | | 17.14 | | | | | | 17.53 | |
15
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands, except share data) (unaudited)
| Three Months Ended | | | | | | | |
|---|
| 12/31/04 | | 9/30/04 | | 6/30/04 | | 3/31/04 | |
|---|
| | Diluted
EPS | | Diluted
EPS | | Diluted
EPS | | Diluted
EPS |
|---|
| Net Income, as Reported (GAAP) | | | $ | 23,394 | | $ | 0.32 | | $ | 42,571 | | $ | 0.61 | | $ | 14,407 | | $ | 0.24 | | $ | 39,136 | | $ | 0.64 | |
| Non-Operating Items | | |
| Change in fair value of interest rate swaps | | | | 2,383 | | | | | | (16,924 | ) | | | | | 23,067 | | | | | | (11,076 | ) |
| Gain on sale of available for sale | | |
| securities | | | | (499 | ) | | | | | (678 | ) | | | | | (607 | ) | | | | | (5,214 | ) |
| (Gain) loss on equity investments | | | | (1,267 | ) | | | | | 367 | | | | | | (1,013 | ) | | | | | (2,810 | ) |
| Gain on disposition of assets and liabilities | | | | -- | | | | | | -- | | | | | | -- | | | | | | (2,350 | ) |
| Employment contract buyouts (reversals) | | | | 965 | | | | | | 174 | | | | | | -- | | | | | | (59 | ) |
| Impairment recovery from write-down of assets | | | | -- | | | | | | -- | | | | | | (277 | ) | | | | | -- | |
| Merger-related costs | | | | 1,627 | | | | | | 5,487 | | | | | | 575 | | | | | | 177 | |
| Conservation grant of land | | | | -- | | | | | | -- | | | | | | -- | | | | | | 3,350 | |
| Loss on early extinguishment of debt | | | | -- | | | | | | -- | | | | | | -- | | | | | | 1,429 | |
| Related income taxes | | | | (1,136 | ) | | | | | 3,472 | | | | | | (7,230 | ) | | | | | 5,010 | |
| Impairment of perpetual preferred stock | | | | 10,367 | | | | | | -- | | | | | | -- | | | | | | -- | |
| Discontinued operations, net of income tax | | | | 325 | | | | | | 165 | | | | | | -- | | | | | | -- | |
| Operating Earnings (Net Income, Excluding | | |
| Non-Operating Items) | | | | 36,159 | | | 0.50 | | | 36,634 | | | 0.49 | | | 28,922 | | | 0.48 | | | 27,593 | | | 0.45 | |
| Amortization of intangibles | | | | 1,814 | | | | | | 1,839 | | | | | | 1,195 | | | | | | 1,195 | |
| Related income taxes | | | | (643 | ) | | | | | (552 | ) | | | | | (397 | ) | | | | | (362 | ) |
| Cash Operating Earnings (Net Income, | | |
| Excluding Non-Operating Items and | | |
| Amortization of Intangibles) | | | $ | 37,330 | | $ | 0.51 | | $ | 35,921 | | $ | 0.51 | | $ | 29,720 | | $ | 0.49 | | $ | 28,426 | | $ | 0.47 | |
| | | |
| Average Common Shares Outstanding, Diluted | | | | 72,832,859 | | | | | | 70,342,922 | | | | | | 60,837,792 | | | | | | 60,809,470 | |
| | | |
| Select Balance Sheet (Averages) | | |
| Total assets | | | $ | 13,701,884 | | | | | $ | 13,173,844 | | | | | $ | 11,100,782 | | | | | | $10,828,734 |
| Intangible assets | | | | (614,507 | ) | | | | | (551,625 | ) | | | | | (351,133 | ) | | | | | (352,449 | ) |
| Tangible assets | | | | 13,087,377 | | | | | | 12,622,219 | | | | | | 10,749,649 | | | | | | 10,476,285 | |
| | | |
| Shareholders' equity | | | | 1,384,294 | | | | | | 1,281,463 | | | | | | 993,685 | | | | | | 992,864 | |
| Intangible assets | | | | (614,507 | ) | | | | | (551,625 | ) | | | | | (351,133 | ) | | | | | (352,449 | ) |
| Tangible equity | | | | 769,787 | | | | | | 729,838 | | | | | | 642,552 | | | | | | 640,415 | |
| | | |
| Return on Average Assets | | |
| GAAP earnings | | | | 0.68 | % | | | | | 1.29 | % | | | | | 0.52 | % | | | | | 1.45 | % |
| Operating earnings | | | | 1.05 | | | | | | 1.05 | | | | | | 1.05 | | | | | | 1.02 | |
| Cash operating earnings on average tangible assets | | | | 1.13 | | | | | | 1.13 | | | | | | 1.11 | | | | | | 1.09 | |
| | | |
| Return on Average Equity | | |
| GAAP earnings | | | | 6.72 | | | | | | 13.22 | | | | | | 5.83 | | | | | | 15.85 | |
| Operating earnings | | | | 10.39 | | | | | | 10.75 | | | | | | 11.71 | | | | | | 11.18 | |
| Cash operating earnings on average tangible | | |
| equity | | | | 19.29 | | | | | | 19.58 | | | | | | 18.60 | | | | | | 17.85 | |
16
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands, except share data) (unaudited)
| Years Ended December 31, | | | |
|---|
| 2005 | | 2004 | |
|---|
| | Diluted
EPS | | Diluted
EPS |
|---|
| Net Income, as Reported (GAAP) | | | $ | 69,821 | | $ | 0.94 | | $ | 119,508 | | $ | 1 | .80 |
| Non-Operating Items | | |
| Change in fair value of interest rate swaps | | | | 13,278 | | | | | | (2,550 | ) |
| Loss (gain) on sale of available for sale securities | | | | 54,978 | | | | | | (6,998 | ) |
| Gain on equity investments | | | | (2,839 | ) | | | | | (4,723 | ) |
| Gain on disposition of assets and liabilities | | | | -- | | | | | | (2,350 | ) |
| Employment contract buyouts | | | | 10,327 | | | | | | 1,080 | |
| Impairment (recovery) loss from write-down of assets | | | | 917 | | | | | | (277 | ) |
| Merger-related costs | | | | 4,009 | | | | | | 7,866 | |
| Conservation grant of land | | | | -- | | | | | | 3,350 | |
| Loss on early extinguishment of debt | | | | 7,101 | | | | | | 1,429 | |
| Charitable contribution to foundation | | | | 683 | | | | | | -- | |
| Related income taxes | | | | (32,541 | ) | | | | | 116 | |
| Impairment of perpetual preferred stock | | | | -- | | | | | | 10,367 | |
| Discontinued operations, net of income tax | | | | 396 | | | | | | 490 | |
| Operating Earnings (Net Income, Excluding | | |
| Non-Operating Items) | | | | 126,130 | | | 1.69 | | | 127,308 | | | 1 | .92 |
| Amortization of intangibles | | | | 8,637 | | | | | | 6,043 | |
| Related income taxes | | | | (2,698 | ) | | | | | (1,954 | ) |
| Cash Operating Earnings (Net Income, | | |
| Excluding Non-Operating Items and | | |
| Amortization of Intangibles) | | | $ | 132,069 | | $ | 1.77 | | $ | 131,397 | | $ | 1 | .98 |
| | | |
| Average Common Shares Outstanding, Diluted | | | | 74,594,626 | | | | | | 66,235,171 | |
| | | |
| Select Balance Sheet (Averages) | | |
| Total assets | | | $ | 14,752,973 | | | | | $ | 12,208,069 | |
| Intangible assets | | | | (663,274 | ) | | | | | (468,060 | ) |
| Tangible assets | | | | 14,089,699 | | | | | | 11,740,009 | |
| | | |
| Shareholders' equity | | | | 1,463,125 | | | | | | 1,164,004 | |
| Intangible assets | | | | (663,274 | ) | | | | | (468,060 | ) |
| Tangible equity | | | | 799,851 | | | | | | 695,944 | |
| | | |
| Return on Average Assets | | |
| GAAP earnings | | | | 0.47 | % | | | | | 0.98 | % |
| Operating earnings | | | | 0.85 | | | | | | 1.04 | |
| Cash operating earnings on average tangible assets | | | | 0.94 | | | | | | 1.12 | |
| | | |
| Return on Average Equity | | |
| GAAP earnings | | | | 4.77 | | | | | | 10.27 | |
| Operating earnings | | | | 8.62 | | | | | | 10.94 | |
| Cash operating earnings on average tangible equity | | | | 16.51 | | | | | | 18.88 | |
17
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands) (unaudited)
| Three Months Ended | |
|---|
| 6/30/06 | | 3/31/06 |
|---|
| Select Financial Data Used in Ratios Calculated Below | | | | | | | | |
| Net interest income | | | $ | 103,122 | | $ | 102,912 | |
| Tax-equivalent adjustment | | | | 1,728 | | | 1,801 | |
| Net interest income (tax-equivalent) | | | $ | 104,850 | | $ | 104,713 | |
| | | |
| Total noninterest income, as reported (GAAP) | | | $ | 32,020 | | $ | 29,320 | |
| Adjustments for non-operating items: | | |
| Loss on sale of available for sale securities | | | | 150 | | | 183 | |
| Gain on equity investments | | | | (3,751 | ) | | (858 | ) |
| Loss on sale of indirect auto loans previoysly HFI | | | | 3,477 | | | -- | |
| Operating noninterest income (noninterest income, excluding | | |
| non-operating items) | | | $ | 31,896 | | $ | 28,645 | |
| | | |
| | | |
| Total noninterest expenses, as reported (GAAP) | | | $ | 83,059 | | $ | 79,834 | |
| Adjustments for non-operating items: | | |
| Employment contract buyouts | | | | -- | | | (598 | ) |
| Operating noninterest expenses (noninterest expenses, excluding | | |
| non-operating items) | | | | 83,059 | | | 79,236 | |
| Less: amortization of intangibles | | | | (2,208 | ) | | (2,207 | ) |
| Cash operating noninterest expenses (noninterest expenses, | | |
| excluding non-operating items and amortization of | | |
| intangibles) | | | $ | 80,851 | | $ | 77,029 | |
| | | |
| Total Revenue(1) | | |
| GAAP | | | $ | 135,142 | | $ | 132,232 | |
| Operating(2) | | | | 136,746 | | | 133,358 | |
| | | |
| Noninterest Income as a % Total Revenue(3) | | |
| GAAP | | | | 23.69 | % | | 22.17 | % |
| Operating(2) | | | | 23.32 | | | 21.48 | |
| | | |
| Efficiency Ratios(4) | | |
| GAAP | | | | 61.46 | | | 60.37 | |
| Operating(2) | | | | 60.74 | | | 59.42 | |
| Cash operating(2) | | | | 59.12 | | | 57.76 | |
| (1) | The sum of net interest income and noninterest income. |
| (2) | Total revenue, noninterest income as a % of total revenue, and the efficiency ratio, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items. The cash operating efficiency ratio also excludes amortization of intangibles. |
| (3) | Calculated as noninterest income, divided by the sum of net interest income and noninterest income. |
| (4) | Calculated as noninterest expenses, divided by the sum of net interest income and noninterest income. |
18
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands) (unaudited)
| Three Months Ended | | | |
|---|
| 12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 |
|---|
| Select Financial Data Used in Ratios Calculated Below | | | | | | | | | | | | | | |
| Net interest income | | | $ | 104,933 | | $ | 103,589 | | $ | 102,285 | | $ | 98,249 | |
| Tax-equivalent adjustment | | | | 1,730 | | | 1,601 | | | 1,397 | | | 1,326 | |
| Net interest income (tax-equivalent) | | | $ | 106,663 | | $ | 105,190 | | $ | 103,682 | | $ | 99,575 | |
| | | |
| Total noninterest (loss) income, as reported (GAAP) | | | $ | (24,960 | ) | $ | 16,428 | | $ | 50,471 | | $ | 13,271 | |
| Adjustments for non-operating items: | | |
| Change in fair value of interest rate swaps | | | | 2,106 | | | 16,240 | | | (22,277 | ) | | 17,209 | |
| Loss (gain) on sale of available for sale securities | | | | 52,677 | | | 1,032 | | | 1,503 | | | (234 | ) |
| Gain on equity investments | | | | (224 | ) | | (254 | ) | | (650 | ) | | (1,711 | ) |
| Operating noninterest income (noninterest income, excluding | | |
| non-operating items) | | | | 29,599 | | | 33,446 | | | 29,047 | | | 28,535 | |
| | | |
| Net cash settlement of certain interest rate swaps | | |
| included in noninterest income | | | | (288 | ) | | 2,377 | | | 3,534 | | | 4,737 | |
| Operating noninterest income, excluding net cash settlement | | |
| of certain interest rate swaps | | | $ | 29,887 | | $ | 31,069 | | $ | 25,513 | | $ | 23,798 | |
| | | |
| Total noninterest expenses, as reported (GAAP) | | | $ | 100,973 | | $ | 81,035 | | $ | 79,535 | | $ | 66,510 | |
| Adjustments for non-operating items: | | |
| Employment contract (buyouts) reversals | | | | (9,998 | ) | | (144 | ) | | (222 | ) | | 37 | |
| Merger-related costs | | | | (529 | ) | | (981 | ) | | (2,194 | ) | | (305 | ) |
| Impairment from write-down of assets | | | | -- | | | -- | | | (917 | ) | | -- | |
| Charitable contribution to foundation | | | | -- | | | -- | | | -- | | | (683 | ) |
| (Loss) gain on early extinguishment of debt | | | | (5,086 | ) | | (462 | ) | | (2,981 | ) | | 1,428 | |
| Operating noninterest expenses (noninterest expenses, | | |
| excluding non-operating items) | | | | 85,360 | | | 79,448 | | | 73,221 | | | 66,987 | |
| Less: amortization of intangibles | | | | (2,354 | ) | | (2,337 | ) | | (2,140 | ) | | (1,806 | ) |
| Cash operating noninterest expenses (noninterest expenses, | | |
| excluding non-operating items and amortization of | | |
| intangibles) | | | $ | 83,006 | | $ | 77,111 | | $ | 71,081 | | $ | 65,181 | |
| | | |
| Total Revenue(1) | | |
| GAAP | | | $ | 79,973 | | $ | 120,017 | | $ | 152,756 | | $ | 111,520 | |
| Operating(2) | | | | 136,262 | | | 138,636 | | | 132,729 | | | 128,110 | |
| | | |
| Noninterest (Loss) Income as a % Total Revenue(3) | | |
| GAAP | | | | (31.21 | )% | | 13.69 | % | | 33.04 | % | | 11.90 | % |
| Operating(2) | | | | 21.72 | | | 24.13 | | | 21.88 | | | 22.27 | |
| Operating, excluding net cash settlement of certain | | |
| interest rate swaps(4) | | | | 21.93 | | | 22.41 | | | 19.22 | | | 18.58 | |
| | | |
| Efficiency Ratios(5) | | |
| GAAP | | | | 126.26 | | | 67.52 | | | 52.07 | | | 59.64 | |
| Operating(2) | | | | 62.64 | | | 57.31 | | | 55.17 | | | 52.29 | |
| Cash operating(2) | | | | 60.92 | | | 55.62 | | | 53.55 | | | 50.88 | |
| (1) | The sum of net interest income and noninterest income. |
| (2) | Total revenue, noninterest income as a % of total revenue, and the efficiency ratio, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items. The cash operating efficiency ratio also excludes amortization of intangibles. |
| (3) | Calculated as noninterest income, divided by the sum of net interest income and noninterest income. |
| (4) | Calculated excluding the net cash settlement of certain interest rate swaps. |
| (5) | Calculated as noninterest expenses, divided by the sum of net interest income and noninterest income. |
19
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands) (unaudited)
| Three Months Ended | | | |
|---|
| 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 |
|---|
| Select Financial Data Used in Ratios Calculated Below | | | | | | | | | | | | | | |
| Net interest income | | | $ | 97,124 | | $ | 92,084 | | $ | 72,881 | | $ | 73,752 | |
| Tax-equivalent adjustment | | | | 1,230 | | | 1,153 | | | 1,026 | | | 947 | |
| Net interest income (tax-equivalent) | | | $ | 98,354 | | $ | 93,237 | | $ | 73,907 | | $ | 74,699 | |
| | | |
| Total noninterest income, as reported (GAAP) | | | $ | 19,082 | | $ | 48,266 | | $ | 10,163 | | $ | 47,366 | |
| Adjustments for non-operating items: | | |
| Change in fair value of interest rate swaps | | | | 2,383 | | | (16,924 | ) | | 23,067 | | | (11,076 | ) |
| Gain on sale of available for sale securities | | | | (499 | ) | | (678 | ) | | (607 | ) | | (5,214 | ) |
| (Gain) loss on equity investments | | | | (1,267 | ) | | 367 | | | (1,013 | ) | | (2,810 | ) |
| Impairment of perpetual preferred stock | | | | 10,367 | | | -- | | | -- | | | -- | |
| Gain on disposition of assets and liabilities | | | | -- | | | -- | | | -- | | | (2,350 | ) |
| Operating noninterest income (noninterest income, excluding | | |
| non-operating items) | | | | 30,066 | | | 31,031 | | | 31,610 | | | 25,916 | |
| | | |
| Net cash settlement on certain interest rate swaps | | |
| included in noninterest income | | | | 6,064 | | | 7,259 | | | 7,235 | | | 7,002 | |
| Operating noninterest income, excluding net cash settlement | | |
| on certain interest rate swaps | | | $ | 24,002 | | $ | 23,772 | | $ | 24,375 | | $ | 18,914 | |
| | | |
| Total noninterest expenses, as reported (GAAP) | | | $ | 68,649 | | $ | 69,858 | | $ | 54,466 | | $ | 57,271 | |
| Adjustments for non-operating items: | | |
| Employment contract (buyouts) reversals | | | | (965 | ) | | (174 | ) | | -- | | | 59 | |
| Merger-related costs | | | | (1,627 | ) | | (5,487 | ) | | (575 | ) | | (177 | ) |
| Impairment recovery from write-down of assets | | | | -- | | | -- | | | 277 | | | -- | |
| Conservation grant of land | | | | -- | | | -- | | | -- | | | (3,350 | ) |
| Loss on early extinguishment of debt | | | | -- | | | -- | | | -- | | | (1,429 | ) |
| Operating noninterest expenses (noninterest expenses, excluding | | |
| non-operating items) | | | | 66,057 | | | 64,197 | | | 54,168 | | | 52,374 | |
| Less: amortization of intangibles | | | | (1,814 | ) | | (1,839 | ) | | (1,195 | ) | | (1,195 | ) |
| Cash operating noninterest expenses (noninterest expenses, | | |
| excluding non-operating items and amortization of | | |
| intangibles) | | | $ | 64,243 | | $ | 62,358 | | $ | 52,973 | | $ | 51,179 | |
| | | |
| Total Revenue(1) | | |
| GAAP | | | $ | 116,206 | | $ | 140,350 | | $ | 83,044 | | $ | 121,118 | |
| Operating(2) | | | | 128,420 | | | 124,268 | | | 105,517 | | | 100,615 | |
| | | |
| Noninterest Income as a % Total Revenue(3) | | |
| GAAP | | | | 16.42 | % | | 34.39 | % | | 12.24 | % | | 39.11 | % |
| Operating(2) | | | | 23.41 | | | 24.97 | | | 29.96 | | | 25.76 | |
| Operating, excluding net cash settlement of certain | | |
| interest rate swaps(4) | | | | 18.69 | | | 19.13 | | | 23.10 | | | 18.80 | |
| | | |
| Efficiency Ratios(5) | | |
| GAAP | | | | 59.08 | | | 49.77 | | | 65.59 | | | 47.29 | |
| Operating(2) | | | | 51.44 | | | 51.66 | | | 51.34 | | | 52.05 | |
| Cash operating(2) | | | | 50.03 | | | 50.18 | | | 50.20 | | | 50.87 | |
| (1) | The sum of net interest income and noninterest income. |
| (2) | Total revenue, noninterest income as a % of total revenue, and the efficiency ratio, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items. The cash operating efficiency ratio also excludes amortization of intangibles. |
| (3) | Calculated as noninterest income, divided by the sum of net interest income and noninterest income. |
| (4) | Calculated excluding the net cash settlement of certain interest rate swaps. |
| (5) | Calculated as noninterest expenses, divided by the sum of net interest income and noninterest income. |
20
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands) (unaudited)
| Years Ended December 31, | |
|---|
| 2005 | 2004 |
|---|
| Select Financial Data Used in Ratios Calculated Below | | | | | | | | |
| Net interest income | | | $ | 409,056 | | $ | 335,841 | |
| Tax-equivalent adjustment | | | | 6,054 | | | 4,356 | |
| Net interest income (tax-equivalent) | | | $ | 415,110 | | $ | 340,197 | |
| | | |
| Total noninterest income, as reported (GAAP) | | | $ | 55,210 | | $ | 124,877 | |
| Adjustments for non-operating items: | | |
| Change in fair value of interest rate swaps | | | | 13,278 | | | (2,550 | ) |
| Loss (gain) on sale of available for sale securities | | | | 54,978 | | | (6,998 | ) |
| Gain on equity investments | | | | (2,839 | ) | | (4,723 | ) |
| Impairment of perpetual preferred stock | | | | -- | | | 10,367 | |
| Gain on disposition of assets and liabilities | | | | -- | | | (2,350 | ) |
| Operating noninterest income (noninterest income, excluding | | |
| non-operating items) | | | | 120,627 | | | 118,623 | |
| | | |
| Net cash settlement on certain interest rate swaps | | |
| included in noninterest income | | | | 10,360 | | | 27,560 | |
| Operating noninterest income, excluding net cash settlement | | |
| on certain interest rate swaps | | | $ | 110,267 | | $ | 91,063 | |
| | | |
| Total noninterest expenses, as reported (GAAP) | | | $ | 328,053 | | $ | 250,244 | |
| Adjustments for non-operating items: | | |
| Employment contract buyouts | | | | (10,327 | ) | | (1,080 | ) |
| Merger-related costs | | | | (4,009 | ) | | (7,866 | ) |
| Impairment recovery (loss) from write-down of assets | | | | (917 | ) | | 277 | |
| Conservation grant of land | | | | -- | | | (3,350 | ) |
| Loss on early extinguishment of debt | | | | (7,101 | ) | | (1,429 | ) |
| Charitable contribution to foundation | | | | (683 | ) | | -- | |
| Operating noninterest expenses (noninterest expenses, excluding | | |
| non-operating items) | | | | 305,016 | | | 236,796 | |
| Less: amortization of intangibles | | | | (8,637 | ) | | (6,043 | ) |
| Cash operating noninterest expenses (noninterest expenses, | | |
| excluding non-operating items and amortization of | | |
| intangibles) | | | $ | 296,379 | | $ | 230,753 | |
| | | |
| Total Revenue(1) | | |
| GAAP | | | $ | 464,266 | | $ | 460,718 | |
| Operating(2) | | | | 535,737 | | | 458,820 | |
| | | |
| Noninterest Income as a % Total Revenue(3) | | |
| GAAP | | | | 11.89 | % | | 27.10 | % |
| Operating(2) | | | | 22.52 | | | 25.85 | |
| Operating, excluding net cash settlement of certain interest rate swaps(4) | | | | 20.58 | | | 19.85 | |
| | | |
| Efficiency Ratios(5) | | |
| GAAP | | | | 70.66 | | | 54.32 | |
| Operating(2) | | | | 56.93 | | | 51.61 | |
| Cash operating(2) | | | | 55.32 | | | 50.29 | |
| (1) | The sum of net interest income and noninterest income. |
| (2) | Total revenue, noninterest income as a % of total revenue, and the efficiency ratio, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items. The cash operating efficiency ratio also excludes amortization of intangibles. |
| (3) | Calculated as noninterest income, divided by the sum of net interest income and noninterest income. |
| (4) | Calculated excluding the net cash settlement of certain interest rate swaps. |
| (5) | Calculated as noninterest expenses, divided by the sum of net interest income and noninterest income. |
21
