South Financial (TSFG) 8-K The South Financial Group Reports Third Quarter 2006 Earnings

Quarterly Financial Data Supplement (Unaudited)
Third 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
Types 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
	9/30/06		6/30/06		3/31/06		12/31/05			9/30/05
Interest Income
Interest and fees on loans	$	184,476	$	179,971	$	169,188	$	162,114		$	149,788
Interest and dividends on securities:
Taxable		30,779		31,652		32,543		38,548			41,657
Exempt from Federal income taxes		3,140		3,210		3,344		3,213			2,973
Total interest and dividends on securities		33,919		34,862		35,887		41,761			44,630
Interest on short-term investments		196		879		292		537			317
Total interest income		218,591		215,712		205,367		204,412			194,735
Interest Expense
Interest on deposits		77,393		68,704		62,479		58,806			52,333
Interest on borrowed funds		42,515		43,886		39,976		40,673			38,813
Total interest expense		119,908		112,590		102,455		99,479			91,146
Net Interest Income		98,683		103,122		102,912		104,933			103,589
Provision for Credit Losses		6,553		7,487		9,911		10,833			8,853
Net interest income after provision for credit losses		92,130		95,635		93,001		94,100			94,736
Noninterest Income (Loss)		37,912		32,020		29,320		(24,960	)		16,428
Noninterest Expenses		83,628		83,059		79,834		100,973			81,035
Income (loss) before income taxes		46,414		44,596		42,487		(31,833	)		30,129
Income tax expense (benefit)		14,249		15,253		14,680		(15,436	)		9,039
Net Income (Loss)	$	32,165	$	29,343	$	27,807	$	(16,397	)	$	21,090
Average common shares outstanding, basic		75,003,605		74,864,648		74,685,192		74,453,225			74,272,867
Average common shares outstanding, diluted		75,590,748		75,504,683		75,339,283		75,485,436			75,414,866
Net income (loss) per common share, basic	$	0.43	$	0.39	$	0.37	$	(0.22	)	$	0.28
Net income (loss) per common share, diluted	$	0.43	$	0.39	$	0.37	$	(0.22	)	$	0.28
Cash dividends declared per common share	$	0.17	$	0.17	$	0.17	$	0.17		$	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
	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Noninterest Income (Loss)
Service charges on deposit accounts	$	11,457		$	11,592		$	11,288		$	11,844		$	12,245
Debit card income		2,055			2,095			1,921			1,611			1,770
Customer service fee income		1,117			1,074			1,009			1,001			1,097
Total customer fee income		14,629			14,761			14,218			14,456			15,112
Retail investment services		1,689			2,249			2,023			2,091			2,054
Insurance income		2,831			2,806			2,977			2,702			2,010
Trust and investment management income		1,483			1,678			1,457			1,312			1,268
Benefits administration fees		795			749			667			638			818
Total wealth management income		6,798			7,482			7,124			6,743			6,150
Mortgage banking income		1,969			2,078			1,884			1,720			2,087
Bank-owned life insurance		2,916			2,969			2,819			3,253			2,835
Merchant processing income		3,449			3,318			2,686			2,202			2,864
Gain (loss) on trading and certain derivative activities(1)		3,924			(245	)		(1,125	)		(610	)		403
Net cash settlement of certain interest rate swaps(2)		—			—			—			(288	)		2,377
Loss on indirect auto loans(3)		(667	)		(985	)		—			—			—
Other		2,396			2,518			1,039			2,123			1,618
Operating noninterest income (noninterest income, excluding non-operating items)		35,414			31,896			28,645			29,599			33,446
Change in fair value of interest rate swaps(2)		—			—			—			(2,106	)		(16,240	)
Loss on sale of available for sale securities		—			(150	)		(183	)		(52,677	)		(1,032	)
Gain on equity investments		—			3,751			858			224			254
Gain on disposition of assets and liabilities		2,498			—			—			—			—
Loss on sale of indirect auto loans previously HFI(3)		—			(3,477	)		—			—			—
Non-operating noninterest income (loss)		2,498			124			675			(54,559	)		(17,018	)
Total noninterest income (loss)	$	37,912		$	32,020		$	29,320		$	(24,960	)	$	16,428
Noninterest Expenses
Salaries and wages	$	34,494		$	33,605		$	31,456		$	34,628		$	31,350
Employee benefits		9,080			8,703			9,029			8,826			8,529
Occupancy		7,949			7,684			7,313			7,455			7,387
Furniture and equipment		6,217			6,468			5,952			5,966			5,779
Professional services		4,549			5,497			5,779			7,124			6,125
Advertising and business development		2,264			2,187			2,506			2,277			2,131
Merchant processing expense		2,830			2,678			2,165			1,773			2,327
Telecommunications		1,407			1,421			1,418			1,559			1,533
Amortization of intangibles		2,204			2,208			2,207			2,354			2,337
Other		12,634			12,608			11,411			13,398			11,950
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		83,628			83,059			79,236			85,360			79,448
Employment contract buyouts		—			—			598			9,998			144
Merger-related costs		—			—			—			529			981
Impairment from write-down of assets		—			—			—			—			—
Charitable contribution to foundation		—			—			—			—			—
Loss on early extinguishment of debt		—			—			—			5,086			462
Non-operating noninterest expenses		—			—			598			15,613			1,587
Total noninterest expenses	$	83,628		$	83,059		$	79,834		$	100,973		$	81,035

(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 and July 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. As of July 31, 2006, TSFG transferred these loans, originally classified as held for sale, to held for investment.

2

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands) (unaudited)

	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Assets
Cash and due from banks	$	295,534		$	286,954		$	249,324		$	341,195		$	264,979
Interest-bearing bank balances		5,224			16,275			10,406			21,510			14,165
Federal funds sold and securities purchased to resell		7,500			7,176			—			—			—
Securities
Trading		—			—			—			1,402			1,402
Available for sale		2,820,383			2,861,182			2,982,574			3,095,567			3,968,618
Held to maturity		52,790			53,617			57,508			62,648			63,577
Total securities		2,873,173			2,914,799			3,040,082			3,159,617			4,033,597
Loans held for sale		36,155			78,763			23,536			37,171			59,135
Loans held for investment		9,513,833			9,439,445			9,720,891			9,439,395			9,293,031
Allowance for loan losses		(109,401	)		(108,995	)		(111,219	)		(107,767	)		(106,224	)
Net loans held for investment		9,404,432			9,330,450			9,609,672			9,331,628			9,186,807
Premises and equipment, net		213,820			207,393			203,953			193,574			186,970
Accrued interest receivable		72,459			71,905			69,739			70,838			63,517
Intangible assets		687,403			689,690			691,328			691,758			692,796
Other assets		452,002			473,678			463,885			471,994			445,243
	$	14,047,702		$	14,077,083		$	14,361,925		$	14,319,285		$	14,947,209
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	1,368,713		$	1,579,852		$	1,536,796		$	1,512,508		$	1,508,370
Interest-bearing		7,813,239			7,660,467			7,641,886			7,721,929			7,617,649
Total deposits		9,181,952			9,240,319			9,178,682			9,234,437			9,126,019
Federal funds purchased and repurchase agreements		1,614,664			1,088,143			1,534,680			1,421,301			1,336,114
Other short-term borrowings		220,366			171,157			36,356			53,064			44,649
Long-term debt		1,261,306			1,846,062			1,911,929			1,922,151			2,751,268
Accrued interest payable		60,075			60,928			58,000			54,401			46,202
Other liabilities		159,107			185,485			158,173			147,024			138,510
Total liabilities		12,497,470			12,592,094			12,877,820			12,832,378			13,442,762
Shareholders' equity
Preferred stock		—			—			—			—			—
Common stock		75,191			75,034			74,907			74,721			74,575
Surplus		1,162,890			1,158,758			1,153,056			1,151,005			1,148,311
Retained earnings		360,783			341,431			324,839			309,768			338,880
Guarantee of employee stock ownership plan debt and nonvested restricted stock(1)		(210	)		(268	)		(327	)		(2,687	)		(3,192	)
Common stock held in Rabbi Trust for deferred compensation		(1,107	)		(1,266	)		(1,279	)		(1,404	)		(1,396	)
Deferred compensation payable in common stock		1,107			1,266			1,279			1,404			1,396
Accumulated other comprehensive loss, net of income tax		(48,422	)		(89,966	)		(68,370	)		(45,900	)		(54,127	)
Total shareholders' equity		1,550,232			1,484,989			1,484,105			1,486,907			1,504,447
	$	14,047,702		$	14,077,083		$	14,361,925		$	14,319,285		$	14,947,209

⁽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)

	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Investment Securities Portfolio
Trading (at fair value)	$	—		$	—		$	—		$	1,402		$	1,402
Available for sale (at fair value):
U.S. Treasury		174,739			173,049			178,864			182,468			171,623
U.S. Government agencies		655,447			641,315			648,264			656,442			740,888
Mortgage-backed securities		1,459,220			1,504,818			1,603,090			1,688,862			2,494,747
State and municipal		345,077			351,462			356,057			373,892			351,732
Other investments(1)		185,900			190,538			196,299			193,903			209,628
Total available for sale securities		2,820,383			2,861,182			2,982,574			3,095,567			3,968,618
Held to maturity (at amortized cost)		52,790			53,617			57,508			62,648			63,577
Total securities	$	2,873,173		$	2,914,799		$	3,040,082		$	3,159,617		$	4,033,597
Total securities as a percentage of total assets		20.5	%		20.7	%		21.2	%		22.1	%		27.0	%

⁽¹⁾ Other investments in available for sale securities includes corporate bonds, FHLB stock, community bank stocks, and other equity securities.

	September 30, 2006
	Amortized Cost		Percentage of Total			Duration		Book Yield
Debt Securities
U.S. Treasury	$	177,094		6.3	%		1.7		4.05	%
U.S. Government agencies		666,284		23.5			3.1		5.41
Mortgage-backed securities:
Collateralized mortgage obligations		1,099,382		38.8			5.1		4.64
Adjustable rate mortgages		286,828		10.1			2.2		4.64
Pass-through		133,137		4.7			3.6		4.80
State and municipal		348,983		12.3			3.6		4.67
Corporate bonds		119,923		4.3			4.0		4.41
Total available for sale debt securities	$	2,831,631		100.0	%		3.8		4.79	%
Fixed interest rate:
Mortgage-backed securities	$	1,230,600		43.5	%		4.9		4.66	%
Other		1,277,341		45.1			3.1		4.95
Variable interest rate:
Mortgage-backed securities		288,747		10.2			2.2		4.65
Other		34,943		1.2			2.2		4.61
Total available for sale debt securities	$	2,831,631		100.0	%		3.8		4.79	%
Projected Cash Flows for Debt Securities

				Projected Annual Cash Flows by Interest Rate Scenario
		Roll-Off
Year	Yield			Current		Up 1.00%		Down 1.00%
Remainder of 2006		5.68	%	$	188,281	$	39,250	$	586,940
2007		4.32			366,238		277,405		647,680

Projected Interest Rate Shock for Debt Securities

Interest Rate Scenario	Estimated Impact on Market Value		Duration
Up 2.00%	(10.0	)%	5.1
Up 1.00%	(4.8	)	4.8
Flat	—		3.8
Down 1.00%	3.6		2.2
Down 2.00%	5.7		1.0

The estimated decrease in market value for a five year U.S. Treasury Note when interest rates increase 100 basis points is 4.30%.

4

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
LOAN PORTFOLIO COMPOSITION BASED ON LOAN PURPOSE AND LOAN GROWTH
(dollars in thousands) (unaudited)

	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Commercial Loans
Commercial and industrial	$	2,281,352		$	2,328,925		$	2,303,909		$	2,271,605		$	2,329,544
Owner - occupied real estate		909,075			935,170			806,256			801,953			821,426
Commercial real estate		4,117,022			4,064,137			4,116,217			3,933,927			3,803,047
		7,307,449			7,328,232			7,226,382			7,007,485			6,954,017
Consumer Loans
Indirect - sales finance		651,419			555,678			928,633			916,318			891,127
Other consumer loans		1,026,567			1,011,700			1,013,987			956,668			882,646
Home equity		528,398			543,835			551,889			558,924			565,241
		2,206,384			2,111,213			2,494,509			2,431,910			2,339,014
Total loans held for investment	$	9,513,833		$	9,439,445		$	9,720,891		$	9,439,395		$	9,293,031
Percentage of Loans Held for Investment
Commercial and industrial		24.0	%		24.7	%		23.7	%		24.1	%		25.1	%
Owner - occupied real estate		9.6			9.9			8.3			8.5			8.8
Commercial real estate		43.3			43.0			42.3			41.7			40.9
Indirect - sales finance		6.8			5.9			9.6			9.7			9.6
Other consumer loans		10.8			10.7			10.4			10.1			9.5
Home equity		5.5			5.8			5.7			5.9			6.1
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
	For The Period Ended
	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Non organic change in loans held for investment related to:
Transfer of indirect auto loans originally held for sale to held for investment	$	51,019		$	—		$	—		$	—		$	—
Sale of indirect auto loans		—			(359,609	)		—			—			—
Other acquisitions (dispositions)(1)		(2,629	)		—			—			—			—
Growth in Loans Held for Investment(2)
Growth vs. prior quarter, annualized		3.1	%		(11.6	)%		12.1	%		6.2	%		14.5	%
Growth year-to-date, annualized		1.1			—			12.1			16.4			19.5
Growth in Loans Held for Investment, Excluding Changes from Acquisitions and Dispositions(2)
Organic growth vs. prior quarter, annualized		1.1	%		3.2	%		12.1	%		6.2	%		14.5	%
Organic growth year-to-date, annualized		5.5			7.7			12.1			12.6			14.4
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)		(0.8	)%		4.2	%		12.8	%		5.7	%		14.3	%
Growth year-to-date, annualized (excluding all indirect loans and changes from acquisitions)		5.4			8.5			12.8			12.2			14.1

(1)	Other acquisitions (dispositions) during the three months ended September 30, 2006 related to the sale of the Mullins branch.
(2)	At June 30, 2005 and December 31, 2004, loans held for investment totaled $8,966,337 and $8,107,757, respectively. Non organic change of $311,607 in the first six months of 2005 related to the acquisition of Pointe.
(3)	At June 30, 2005 and December 31, 2004, indirect loans totaled $856,564 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
	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Credit Quality
Loans held for investment	$	9,513,833		$	9,439,445		$	9,720,891		$	9,439,395		$	9,293,031
Allowance for loan losses		109,401			108,995			111,219			107,767			106,224
Allowance for credit losses(1)		110,349			110,320			112,454			109,350			107,381
Nonperforming loans(2)		31,396			37,782			35,722			33,255			33,708
Foreclosed property (other real estate owned and personal property repossessions)		4,851			10,187			9,323			10,722			11,839
Nonperforming assets	$	36,247		$	47,969		$	45,045		$	43,977		$	45,547
Nonperforming loans as a % of loans held for investment		0.33	%		0.40	%		0.37	%		0.35	%		0.36	%
Nonperforming assets as a % of loans held for investment and foreclosed property		0.38			0.51			0.46			0.47			0.49
Allowance for loan losses as a % of loans held for investment		1.15			1.15			1.14			1.14			1.14
Allowance for credit losses as a % of loans held for investment		1.16			1.17			1.16			1.16			1.16
Allowance for loan losses to nonperforming loans		3.48	x		2.88	x		3.11	x		3.24	x		3.15	x
Impaired loans(2)(3)	$	24,604		$	30,860		$	22,055		$	16,911		$	20,674
Specific allowance for impaired loans		3,987			8,027			4,904			4,336			4,238
Loans past due 90 days or more (mortgage and consumer with interest accruing)		3,163			2,849			2,369			4,548			1,598
Net loan charge-offs		6,523			6,532			6,807			8,864			7,024
Average loans held for investment		9,467,123			9,664,441			9,606,556			9,342,761			9,093,257
Net loan charge-offs as a % of average loans held for investment (annualized)		0.27	%		0.27	%		0.29	%		0.38	%		0.31	%
Allowance for Loan Losses
Balance at beginning of period	$	108,995		$	111,219		$	107,767		$	106,224		$	104,853
Allowance adjustment for loans sold		—			(3,089	)		—			—			—
Provision for loan losses		6,930			7,397			10,259			10,407			8,395
Loans charged-off		(9,768	)		(8,785	)		(8,873	)		(10,715	)		(8,708	)
Recoveries of loans previously charged-off		3,244			2,253			2,066			1,851			1,684
Balance at end of period	$	109,401		$	108,995		$	111,219		$	107,767		$	106,224
Reserve for Unfunded Lending Commitments(1)
Balance at beginning of period	$	1,325		$	1,235		$	1,583		$	1,157		$	699
Provision for unfunded lending commitments		(377	)		90			(348	)		426			458
Balance at end of period	$	948		$	1,325		$	1,235		$	1,583		$	1,157
Allowance for Credit Losses(1)
Balance at beginning of period	$	110,320		$	112,454		$	109,350		$	107,381		$	105,552
Allowance adjustment for loans sold		—			(3,089	)		—			—			—
Provision for credit losses		6,553			7,487			9,911			10,833			8,853
Loans charged-off		(9,768	)		(8,785	)		(8,873	)		(10,715	)		(8,708	)
Recoveries of loans previously charged-off		3,244			2,253			2,066			1,851			1,684
Balance at end of period	$	110,349		$	110,320		$	112,454		$	109,350		$	107,381

(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 September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005, and September 30, 2005, these credit quality indicators (nonperforming loans and impaired loans) included $661,000, $743,000, $693,000, $1.9 million, and $1.9 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)

	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Noninterest-bearing	$	1,368,713		$	1,579,852		$	1,536,796		$	1,512,508		$	1,508,370
Interest-bearing checking		1,137,739			1,102,916			1,116,579			1,109,297			1,062,531
Money market accounts		2,478,118			2,337,984			2,265,571			2,290,134			2,559,559
Savings accounts		188,629			181,871			191,449			187,101			190,832
Core deposits		5,173,199			5,202,623			5,110,395			5,099,040			5,321,292
Time deposits under $100,000		1,546,422			1,426,624			1,381,468			1,401,469			1,211,875
Time deposits of $100,000 or more		1,088,827			1,205,796			1,285,048			1,395,247			1,237,049
Customer deposits (3)		7,808,448			7,835,043			7,776,911			7,895,756			7,770,216
Brokered deposits		1,373,504			1,405,276			1,401,771			1,338,681			1,355,803
Total deposits	$	9,181,952		$	9,240,319		$	9,178,682		$	9,234,437		$	9,126,019
Percentage of Deposits
Noninterest-bearing		14.9	%		17.1	%		16.7	%		16.4	%		16.5	%
Interest-bearing checking		12.4			11.9			12.2			12.0			11.6
Money market accounts		27.0			25.3			24.7			24.8			28.0
Savings accounts		2.0			2.0			2.1			2.0			2.1
Core deposits		56.3			56.3			55.7			55.2			58.2
Time deposits under $100,000		16.8			15.4			15.0			15.2			13.3
Time deposits of $100,000 or more		11.9			13.1			14.0			15.1			13.6
Customer deposits(3)		85.0			84.8			84.7			85.5			85.1
Brokered deposits		15.0			15.2			15.3			14.5			14.9
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Growth vs. Prior Quarter, Annualized(1)
Noninterest-bearing		(53.0	)%		11.2	%		6.5	%		1.1	%		11.2	%
Core deposits		(2.2	)		7.2			0.9			(16.6	)		(5.3	)
Customer deposits(3)		(1.3	)		3.0			(6.1	)		6.4			13.3
Total deposits		(2.5	)		2.7			(2.4	)		4.7			11.3
Growth Year-To-Date, Annualized(2)
Noninterest-bearing		(12.7	)%		9.0	%		6.5	%		22.2	%		29.2	%
Core deposits		1.9			4.1			0.9			3.0			10.0
Customer deposits(3)		(1.5	)		(1.6	)		(6.1	)		22.3			27.3
Total deposits		(0.8	)		0.1			(2.4	)		20.4			25.4

(1)	At June 30, 2005, noninterest-bearing totaled $1,466,803, core deposits totaled $5,393,874, customer deposits totaled $7,518,621, and total deposits totaled $8,873,802.
(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
	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Noninterest-Bearing
Beginning balance	$	1,579,852		$	1,536,796		$	1,512,508		$	1,508,370		$	1,466,803
Increase (decrease) during the three months ended related to:
Organic change		(208,916	)		43,056			24,288			4,138			41,567
Bank acquisitions (dispositions)(1)		(2,223	)		—			—			—			—
Ending balance	$	1,368,713		$	1,579,852		$	1,536,796		$	1,512,508		$	1,508,370
Core Deposits
Beginning balance	$	5,202,623		$	5,110,395		$	5,099,040		$	5,321,292		$	5,393,874
Increase (decrease) during the three months ended related to:
Organic change		(13,848	)		92,228			11,355			(222,252	)		(72,582	)
Bank acquisitions (dispositions)(1)		(15,576	)		—			—			—			—
Ending balance	$	5,173,199		$	5,202,623		$	5,110,395		$	5,099,040		$	5,321,292
Customer Deposits (excludes brokered deposits)
Beginning balance	$	7,835,043		$	7,776,911		$	7,895,756		$	7,770,216		$	7,518,621
Increase (decrease) during the three months ended related to:
Organic change		1,346			58,132			(118,845	)		125,540			251,595
Bank acquisitions (dispositions)(1)		(27,941	)		—			—			—			—
Ending balance	$	7,808,448		$	7,835,043		$	7,776,911		$	7,895,756		$	7,770,216
Total Deposits
Beginning balance	$	9,240,319		$	9,178,682		$	9,234,437		$	9,126,019		$	8,873,802
Increase (decrease) during the three months ended related to:
Organic change		(30,426	)		61,637			(55,755	)		108,418			252,217
Bank acquisitions (dispositions)(1)		(27,941	)		—			—			—			—
Ending balance	$	9,181,952		$	9,240,319		$	9,178,682		$	9,234,437		$	9,126,019
Organic Change vs. Prior Quarter, Annualized(2)
Noninterest-bearing		(52.5	)%		11.2	%		6.5	%		1.1	%		11.2	%
Core deposits		(1.1	)		7.2			0.9			(16.6	)		(5.3	)
Customer deposits(4)		0.1			3.0			(6.1	)		6.4			13.3
Total deposits		(1.3	)		2.7			(2.4	)		4.7			11.3
Organic Change Year-To-Date, Annualized(3)
Noninterest-bearing		(12.5	)%		9.0	%		6.5	%		13.0	%		16.9	%
Core deposits		2.4			4.1			0.9			(2.1	)		3.2
Customer deposits(4)		(1.0	)		(1.6	)		(6.1	)		17.2			20.5
Total deposits		(0.4	)		0.1			(2.4	)		16.1			19.6

(1)	The non organic change in deposits relates to the September, 2006 disposition of the Mullins branch.
(2)	At June 30, 2005, noninterest-bearing totaled $1,466,803, core deposits totaled $5,393,874, customer deposits totaled $7,518,621, and total deposits totaled $8,873,802.
(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. For the six months ended June 30, 2005, the non organic change in noninterest-bearing totaled $113,759, core deposits totaled $252,609, customer deposits totaled $328,561, and total deposits totaled $328,561. These non organic changes related to the acquisition of Pointe.
(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
	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Types of wholesale funding
Short-term borrowings
Federal funds purchased and repurchase agreements	$	1,614,664		$	1,088,143		$	1,534,680		$	1,421,301		$	1,336,114
FHLB advances		175,000			—			—			—			—
Commercial paper		36,032			30,336			35,210			32,933			33,579
Treasury, tax and loan note		9,334			140,821			1,146			20,131			11,070
Total short-term borrowings		1,835,030			1,259,300			1,571,036			1,474,365			1,380,763
Long-term borrowings
Repurchase agreements		596,000			771,000			821,000			821,000			1,619,893
FHLB advances		339,620			749,127			842,134			852,140			882,147
Subordinated notes		233,016			233,016			155,695			155,695			155,695
Manditorily redeemable preferred stock of subsidiary		89,800			89,800			89,800			89,800			89,800
Note payable		838			847			856			865			873
Employee stock ownership plan note payable		275			350			425			500			575
Purchase accounting premiums, net of amortization		1,757			1,922			2,019			2,151			2,285
Total long-term borrowings		1,261,306			1,846,062			1,911,929			1,922,151			2,751,268
Total borrowings		3,096,336			3,105,362			3,482,965			3,396,516			4,132,031
Brokered deposits		1,373,504			1,405,276			1,401,771			1,338,681			1,355,803
Total wholesale borrowings	$	4,469,840		$	4,510,638		$	4,884,736		$	4,735,197		$	5,487,834
Wholesale borrowings as a percentage of total assets		31.8	%		32.0	%		34.0	%		33.1	%		36.7	%
Impact of the Net Cash Settlement of Certain Interest Rate Swaps on the Cost of Wholesale Funding(1)
Interest expense - brokered deposits		18,523			17,728			15,389			14,329			14,967
Interest expense - borrowings		42,515			43,886			39,976			40,673			38,813
Total interest expense - wholesale borrowings		61,038			61,614			55,365			55,002			53,780
Net cash settlement of certain interest rate swaps included in noninterest income		—			—			—			288			(2,377	)
Interest expense on wholesale borrowings, including net cash settlement of certain interest rate swaps	$	61,038		$	61,614		$	55,365		$	55,290		$	51,403
Average wholesale borrowings, including brokered CDs	$	4,525,442		$	4,975,576		$	4,945,488		$	5,399,810		$	5,725,658
Cost of wholesale borrowings		5.35	%		4.97	%		4.54	%		4.04	%		3.73	%
Cost of wholesale borrowings, including net cash settlement of certain interest rate swaps(2)		5.35	%		4.97	%		4.54	%		4.06	%		3.56	%

(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)

	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Regulatory Capital
Tier 1 capital	$	1,147,120		$	1,121,122		$	1,021,970		$	1,001,841		$	1,026,543
Tier 2 capital		176,701			176,237			178,403			179,831			179,427
Total risk-based capital		1,323,821			1,297,359			1,200,373			1,181,672			1,205,970
Total risk-weighted assets		11,277,236			11,255,642			11,588,786			11,308,017			11,589,370
Tangible Equity
Shareholders' equity	$	1,550,232		$	1,484,989		$	1,484,105		$	1,486,907		$	1,504,447
Intangible assets		(687,403	)		(689,690	)		(691,328	)		(691,758	)		(692,796	)
Tangible equity		862,829			795,299			792,777			795,149			811,651
Capital Ratios
Total risk-based capital		11.74	%		11.53	%		10.36	%		10.45	%		10.41	%
Tier 1 risk-based capital		10.17			9.96			8.82			8.86			8.86
Leverage ratio		8.62			8.21			7.47			7.07			7.20
Tangible equity to tangible assets ratio		6.46			5.94			5.80			5.83			5.69
Less: impact of unrealized gain or loss		(0.32	)		(0.57	)		(0.44	)		(0.31	)		(0.35	)
Tangible equity to tangible assets ratio, excluding unrealized gain or loss		6.78			6.51			6.24			6.14			6.04
Unrealized Losses on AFS Securities
Gross (included in AFS securities)	$	(77,224	)	$	(134,480	)	$	(105,060	)	$	(73,635	)	$	(87,834	)
Net of income tax (included in equity)		(48,599	)		(84,667	)		(66,137	)		(46,350	)		(55,291	)
Market Rates for U.S. Treasury Notes
Three year		4.62	%		5.13	%		4.82	%		4.36	%		4.17	%
Five year		4.59			5.09			4.81			4.35			4.19

10

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
COMPARATIVE AVERAGE BALANCES - YIELDS AND COSTS
(dollars in thousands) (unaudited)

	Three Months Ended
	9/30/06							6/30/06							3/31/06
	Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/
	Balance		Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate
Assets
Earning assets
Loans(1)	$	9,523,286	$	184,476		7.69	%	$	9,711,641	$	179,971		7.43	%	$	9,630,573	$	169,188		7.12	%
Investment securities (taxable)(2)		2,586,438		30,779		4.72			2,676,211		31,652		4.74			2,752,345		32,543		4.80
Investment securities (nontaxable)(3)		407,005		4,831		4.71			416,117		4,938		4.76			434,980		5,145		4.80
Total investment securities		2,993,443		35,610		4.72			3,092,328		36,590		4.75			3,187,325		37,688		4.80
Federal funds sold, interest-bearing bank balances, and other temp investments		13,479		196		5.77			64,319		879		5.48			21,509		292		5.51
Total earning assets		12,530,208		220,282		6.97			12,868,288		217,440		6.78			12,839,407		207,168		6.54
Non-earning assets		1,443,500							1,476,147							1,527,849
Total assets	$	13,973,708						$	14,344,435						$	14,367,256
Liabilities and Shareholders' Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,020,421	$	5,869		2.28		$	1,074,420	$	5,054		1.89		$	1,065,190	$	4,406		1.68
Savings		187,089		577		1.22			179,220		287		0.64			191,613		308		0.65
Money market		2,420,898		22,771		3.73			2,265,029		18,651		3.30			2,218,937		16,345		2.99
Time deposits, excluding brokered deposits (4)		2,620,505		29,653		4.49			2,641,817		26,984		4.10			2,778,587		26,031		3.80
Total interest-bearing customer deposits(5)		6,248,913		58,870		3.74			6,160,486		50,976		3.32			6,254,327		47,090		3.05
Brokered deposits		1,344,521		18,523		5.47			1,408,889		17,728		5.05			1,373,199		15,389		4.54
Total interest-bearing deposits		7,593,434		77,393		4.04			7,569,375		68,704		3.64			7,627,526		62,479		3.32
Borrowings		3,180,921		42,515		5.30			3,566,687		43,886		4.94			3,572,289		39,976		4.54
Total interest-bearing liabilities		10,774,355		119,908		4.42			11,136,062		112,590		4.06			11,199,815		102,455		3.71
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,481,025							1,536,140							1,502,958
Other noninterest liabilities		213,811							192,587							173,075
Total liabilities		12,469,191							12,864,789							12,875,848
Shareholders' equity		1,504,517							1,479,646							1,491,408
Total liabilities and shareholders' equity	$	13,973,708						$	14,344,435						$	14,367,256
Net interest margin (tax-equivalent)			$	100,374		3.18	%			$	104,850		3.27	%			$	104,713		3.31	%
Less: tax-equivalent adjustment(3)				1,691							1,728							1,801
Net interest income			$	98,683						$	103,122						$	102,912
Customer deposits(6)		7,729,938		58,870		3.02			7,696,626		50,976		2.66			7,757,285		47,090		2.46
Wholesale borrowings(7)		4,525,442		61,038		5.35			4,975,576		61,614		4.97			4,945,488		55,365		4.54
Total funding(8)		12,255,380		119,908		3.88			12,672,202		112,590		3.56			12,702,773		102,455		3.27

(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, 2006, June 30, 2006, and March 31, 2006, this line includes time deposits greater than $100,000 of (in thousands) $1,142,089, $1,232,787, and $1,384,999, 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 Months Ended
	12/31/05							9/30/05
	Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate
Assets
Earning assets
Loans(1)	$	9,392,454	$	162,114		6.85	%	$	9,138,137	$	149,788		6.50	%
Investment securities (taxable)(2)		3,517,591		38,548		4.35			3,883,705		41,657		4.26
Investment securities (nontaxable)(3)		429,508		4,943		4.57			406,767		4,574		4.46
Total investment securities		3,947,099		43,491		4.37			4,290,472		46,231		4.27
Federal funds sold and interest-bearing bank balances		55,933		537		3.81			34,146		317		3.68
Total earning assets		13,395,486		206,142		6.11			13,462,755		196,336		5.79
Non-earning assets		1,458,974							1,482,396
Total assets	$	14,854,460						$	14,945,151
Liabilities and Shareholders' Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,027,699	$	3,321		1.28		$	979,487	$	2,533		1.03
Savings		186,666		228		0.48			193,518		151		0.31
Money market		2,453,893		17,255		2.79			2,690,104		16,819		2.48
Time deposits, excluding brokered deposits (4)		2,639,057		23,673		3.56			2,254,868		17,863		3.14
Total interest-bearing customer deposits(5)		6,307,315		44,477		2.80			6,117,977		37,366		2.42
Brokered deposits		1,343,222		14,329		4.23			1,353,364		14,967		4.39
Total interest-bearing deposits		7,650,537		58,806		3.05			7,471,341		52,333		2.78
Borrowings		4,056,588		40,673		3.98			4,372,294		38,813		3.52
Total interest-bearing liabilities		11,707,125		99,479		3.37			11,843,635		91,146		3.05
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,513,062							1,446,396
Other noninterest liabilities		137,042							146,980
Total liabilities		13,357,229							13,437,011
Shareholders' equity		1,497,231							1,508,140
Total liabilities and shareholders' equity	$	14,854,460						$	14,945,151
Net interest margin (tax-equivalent)			$	106,663		3.16	%			$	105,190		3.10	%
Less: tax-equivalent adjustment(3)				1,730							1,601
Net interest income			$	104,933						$	103,589
Customer deposits(6)		7,820,377		44,477		2.26			7,564,373		37,366		1.96
Wholesale borrowings(7)		5,399,810		55,002		4.04			5,725,658		53,780		3.73
Total funding(8)		13,220,187		99,479		2.99			13,290,031		91,146		2.72

(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 December 31, 2005 and September 30, 2005, this line includes time deposits greater than $100,000 of (in thousands) $1,327,869 and $1,130,798, 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.

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
	9/30/06			6/30/06			3/31/06			12/31/05			9/30/05
Net interest income	$	98,683		$	103,122		$	102,912		$	104,933		$	103,589
Tax-equivalent adjustment		1,691			1,728			1,801			1,730			1,601
Net interest income (tax equivalent)		100,374			104,850			104,713			106,663			105,190
Plus net cash settlement of certain interest rate swaps included in noninterest income		—			—			—			(288	)		2,377
Net interest income (tax equivalent), including net cash settlement of certain interest rate swaps	$	100,374		$	104,850		$	104,713		$	106,375		$	107,567
Average loans	$	9,523,286		$	9,711,641		$	9,630,573		$	9,392,454		$	9,138,137
Average earning assets		12,530,208			12,868,288			12,839,407			13,395,486			13,462,755
Net interest margin (tax equivalent)		3.18	%		3.27	%		3.31	%		3.16	%		3.10	%
Net interest margin, including net cash settlement of certain interest rate swaps(2)		3.18			3.27			3.31			3.15			3.17
Average loan growth vs. prior quarter (annualized)		(7.7	)		3.4			10.3			11.0			19.7
Average earning asset growth vs. prior quarter (annualized)		(10.4	)		0.9			(16.8	)		(2.0	)		0.1

(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
	9/30/06					6/30/06					3/31/06
				Diluted EPS					Diluted EPS					Diluted EPS
Net Income, as Reported (GAAP)	$	32,165		$	0.43	$	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	)
Gain on disposition of assets and liabilities		(2,498	)				—					—
Loss on sale of indirect auto loans previously HFI		—					3,477					—
Employment contract buyouts		—					—					598
Related income taxes		767					42					27
Operating Earnings (Net Income, Excluding Non-Operating Items)		30,434			0.40		29,261			0.39		27,757			0.37
Amortization of intangibles		2,204					2,208					2,207
Related income taxes		(677	)				(755	)				(763	)
Cash Operating Earnings (Net Income, Excluding Non-Operating Items and Amortization of Intangibles)	$	31,961		$	0.42	$	30,714		$	0.41	$	29,201		$	0.39
Average Common Shares Outstanding, Diluted		75,590,748					75,504,683					75,339,283
Select Balance Sheet (Averages)
Total assets	$	13,973,708				$	14,344,435				$	14,367,256
Intangible assets		(688,493	)				(690,375	)				(691,262	)
Tangible assets		13,285,215					13,654,060					13,675,994
Shareholders' equity		1,504,517					1,479,646					1,491,408
Intangible assets		(688,493	)				(690,375	)				(691,262	)
Tangible equity		816,024					789,271					800,146
Return on Average Assets
GAAP earnings		0.91	%				0.82	%				0.78	%
Operating earnings		0.86					0.82					0.78
Cash operating earnings on average tangible assets		0.95					0.90					0.87
Return on Average Equity
GAAP earnings		8.48					7.95					7.56
Operating earnings		8.03					7.93					7.55
Cash operating earnings on average tangible equity		15.54					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					Diluted					Diluted					Diluted
				EPS					EPS					EPS					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		34,634			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					Diluted
				EPS					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
	9/30/06			6/30/06			3/31/06
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	98,683		$	103,122		$	102,912
Tax-equivalent adjustment		1,691			1,728			1,801
Net interest income (tax-equivalent)	$	100,374		$	104,850		$	104,713
Total noninterest income, as reported (GAAP)	$	37,912		$	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	)
Gain on disposition of assets and liabilities		(2,498	)		—			—
Loss on sale of indirect auto loans previously HFI		—			3,477			—
Operating noninterest income (noninterest income, excluding non-operating items)	$	35,414		$	31,896		$	28,645
Total noninterest expenses, as reported (GAAP)	$	83,628		$	83,059		$	79,834
Adjustments for non-operating items:
Employment contract buyouts		—			—			(598	)
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		83,628			83,059			79,236
Less: amortization of intangibles		(2,204	)		(2,208	)		(2,207	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items and amortization of intangibles)	$	81,424		$	80,851		$	77,029
Total Revenue(1)
GAAP	$	136,595		$	135,142		$	132,232
Operating(2)		135,788			136,746			133,358
Noninterest Income as a % Total Revenue(3)
GAAP		27.76	%		23.69	%		22.17	%
Operating(2)		26.08			23.32			21.48
Efficiency Ratios(4)
GAAP		61.22			61.46			60.37
Operating(2)		61.59			60.74			59.42
Cash operating(2)		59.96			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 of 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