South Financial (TSFG) 8-K The South Financial Group Reports First Quarter 2007 Earnings

Quarterly Financial Data Supplement (Unaudited)
First Quarter 2007

	Page
Consolidated Statements of Income		1
Details for Noninterest Income 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 Credit Losses		6
Types of Customer Funding and Customer Funding Growth		7
Types of Organic Customer Funding Growth		8
Summary of Wholesale Borrowings, Capital and Capital Ratios		9
Comparative Average Balance Sheets - Yields and Costs		10-11
GAAP to Non-GAAP Reconciliation: Earnings, ROA and ROE		12-15
GAAP to Non-GAAP Reconciliation: Noninterest income as a %    of total revenue and efficiency ratios		16-19
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
(dollars in thousands, except share data) (unaudited)

	Three Months Ended
	3/31/07		12/31/06		9/30/06		6/30/06		3/31/06
Interest Income
Interest and fees on loans	$	186,628	$	187,385	$	184,476	$	179,971	$	169,188
Interest and dividends on securities:
Taxable		28,825		29,876		30,779		31,652		32,543
Exempt from federal income taxes		3,048		3,125		3,140		3,210		3,344
Total interest and dividends on securities		31,873		33,001		33,919		34,862		35,887
Interest on short-term investments		141		144		196		879		292
Total interest income		218,642		220,530		218,591		215,712		205,367
Interest Expense
Interest on deposits		88,479		82,716		77,393		68,704		62,479
Interest on borrowed funds		35,625		41,160		42,515		43,886		39,976
Total interest expense		124,104		123,876		119,908		112,590		102,455
Net Interest Income		94,538		96,654		98,683		103,122		102,912
Provision for Credit Losses		9,013		8,838		6,553		7,487		9,911
Net interest income after provision for credit losses		85,525		87,816		92,130		95,635		93,001
Noninterest Income		30,844		32,799		37,912		32,020		29,320
Noninterest Expenses		85,351		93,564		83,628		83,059		79,834
Income before income taxes		31,018		27,051		46,414		44,596		42,487
Income tax expense		10,500		3,500		14,249		15,253		14,680
Net Income	$	20,518	$	23,551	$	32,165	$	29,343	$	27,807
Average common shares outstanding, basic		74,736,832		75,161,032		75,003,605		74,864,648		74,685,192
Average common shares outstanding, diluted		75,244,968		75,701,120		75,590,748		75,504,683		75,339,283
Net income per common share, basic	$	0.27	$	0.31	$	0.43	$	0.39	$	0.37
Net income per common share, diluted		0.27		0.31		0.43		0.39		0.37
Cash dividends declared per common share		0.18		0.18		0.17		0.17		0.17

1

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
DETAILS FOR NONINTEREST INCOME AND NONINTEREST EXPENSES
(dollars in thousands) (unaudited)

	Three Months Ended
	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Noninterest Income
Service charges on deposit accounts	$	10,613		$	10,704		$	11,457		$	11,592		$	11,288
Debit card income		2,177			2,198			2,055			2,095			1,921
Customer service fee income		1,291			1,267			1,117			1,074			1,009
Total customer fee income		14,081			14,169			14,629			14,761			14,218
Retail investment services		1,958			1,671			1,689			2,249			2,023
Insurance income		3,297			3,411			2,831			2,806			2,977
Trust and investment management income		1,594			1,506			1,483			1,678			1,457
Benefits administration fees		742			722			795			749			667
Total wealth management income		7,591			7,310			6,798			7,482			7,124
Mortgage banking income		2,069			2,224			1,969			2,078			1,884
Bank-owned life insurance		2,851			2,932			2,916			2,969			2,819
Merchant processing income		3,755			3,069			3,449			3,318			2,686
Gain (loss) on certain derivative activities		97			596			3,924			(245	)		(1,125	)
Loss on indirect auto loans(1)		—			—			(667	)		(985	)		—
Other		1,785			2,738			2,396			2,518			1,039
Operating noninterest income (noninterest income,      excluding non-operating items)		32,229			33,038			35,414			31,896			28,645
Loss on sale of available for sale securities		(1,385	)		(113	)		—			(150	)		(183	)
Gain (loss) on equity investments		—			(126	)		—			3,751			858
Gain on disposition of assets and liabilities		—			—			2,498			—			—
Loss on sale of indirect auto loans previously HFI(1)		—			—			—			(3,477	)		—
Non-operating noninterest income (loss)		(1,385	)		(239	)		2,498			124			675
Total noninterest income	$	30,844		$	32,799		$	37,912		$	32,020		$	29,320
Noninterest Expenses
Salaries and wages	$	35,072		$	35,188		$	34,494		$	33,605		$	31,456
Employee benefits		9,759			8,927			9,080			8,703			9,029
Occupancy		8,608			8,856			7,949			7,684			7,313
Furniture and equipment		6,462			6,579			6,217			6,468			5,952
Professional services		4,103			5,637			4,549			5,497			5,779
Advertising and business development		1,931			2,937			2,264			2,187			2,506
Merchant processing expense		3,020			2,542			2,830			2,678			2,165
Telecommunications		1,393			1,384			1,407			1,421			1,418
Amortization of intangibles		2,001			2,156			2,204			2,208			2,207
Other		11,242			13,547			12,634			12,608			11,411
Operating noninterest expenses (noninterest      expenses, excluding non-operating items)		83,591			87,753			83,628			83,059			79,236
Employment contract buyouts and severance		1,760			4,990			—			—			598
Loss on early extinguishment of debt		—			821			—			—			—
Non-operating noninterest expenses		1,760			5,811			—			—			598
Total noninterest expenses	$	85,351		$	93,564		$	83,628		$	83,059		$	79,834

⁽¹⁾ 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)

	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Assets
Cash and due from banks	$	257,884		$	326,567		$	295,534		$	286,954		$	249,324
Interest-bearing bank balances		7,012			31,264			5,224			16,275			10,406
Federal funds sold and securities     purchased to resell		50,000			—			7,500			7,176			—
Securities
Available for sale		2,546,047			2,743,456			2,820,383			2,861,182			2,982,574
Held to maturity		46,217			52,308			52,790			53,617			57,508
Total securities		2,592,264			2,795,764			2,873,173			2,914,799			3,040,082
Loans held for sale		33,519			28,556			36,155			78,763			23,536
Loans held for investment		9,898,134			9,701,867			9,513,833			9,439,445			9,720,891
Less: Allowance for loan losses		(113,736	)		(111,663	)		(109,401	)		(108,995	)		(111,219	)
Net loans held for investment		9,784,398			9,590,204			9,404,432			9,330,450			9,609,672
Premises and equipment, net		223,738			219,163			213,820			207,393			203,953
Accrued interest receivable		72,801			77,523			72,459			71,905			69,739
Intangible assets		683,611			685,568			687,403			689,690			691,328
Other assets		452,920			455,907			452,002			473,678			463,885
	$	14,158,147		$	14,210,516		$	14,047,702		$	14,077,083		$	14,361,925
Liabilities and Shareholders’ Equity
Liabilities
Deposits
Noninterest-bearing	$	1,286,800		$	1,280,908		$	1,261,421		$	1,465,811		$	1,468,825
Interest-bearing		8,664,408			8,235,832			7,920,531			7,774,508			7,709,857
Total deposits		9,951,208			9,516,740			9,181,952			9,240,319			9,178,682
Federal funds purchased and repurchase       agreements		1,496,168			1,421,099			1,614,664			1,088,143			1,534,680
Other short-term borrowings		111,365			347,620			220,366			171,157			36,356
Long-term debt		809,290			1,130,475			1,261,306			1,846,062			1,911,929
Accrued interest payable		77,380			68,940			60,075			60,928			58,000
Other liabilities		151,126			163,610			162,519			188,897			161,585
Total liabilities		12,596,537			12,648,484			12,500,882			12,595,506			12,881,232
Shareholders’ equity
Preferred stock		—			—			—			—			—
Common stock		74,673			75,341			75,192			75,034			74,907
Surplus		1,150,288			1,167,685			1,162,889			1,158,758			1,153,056
Retained earnings		373,788			367,261			357,371			338,019			321,427
Guarantee of employee stock ownership plan debt		(95	)		(151	)		(210	)		(268	)		(327	)
Accumulated other comprehensive loss, net of       income tax		(37,044	)		(48,104	)		(48,422	)		(89,966	)		(68,370	)
Total shareholders’ equity		1,561,610			1,562,032			1,546,820			1,481,577			1,480,693
	$	14,158,147		$	14,210,516		$	14,047,702		$	14,077,083		$	14,361,925

3

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
INVESTMENT SECURITIES PORTFOLIO ANALYSIS
(dollars in thousands) (unaudited)

	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Investment Securities Portfolio
Available for sale (at fair value):
U.S. Treasury	$	167,295		$	166,719		$	174,739		$	173,049		$	178,864
U.S. Government agencies		657,708			653,034			655,447			641,315			648,264
Mortgage-backed securities		1,246,384			1,400,288			1,459,220			1,504,818			1,603,090
State and municipal		315,372			341,488			345,077			351,462			356,057
Other investments (1)		159,288			181,927			185,900			190,538			196,299
Total available for sale securities		2,546,047			2,743,456			2,820,383			2,861,182			2,982,574
Held to maturity (at amortized cost)		46,217			52,308			52,790			53,617			57,508
Total securities	$	2,592,264		$	2,795,764		$	2,873,173		$	2,914,799		$	3,040,082
Total securities as a percentage of    total assets		18.3	%		19.7	%		20.5	%		20.7	%		21.2	%

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

	March 31, 2007
	Amortized Cost		Percentage of Total			Duration		Book Yield
Debt Securities
U.S. Treasury	$	169,105		6.6	%		1.4		4.07	%
U.S. Government agencies		666,331		26.2			2.9		5.41
Mortgage-backed securities:
Collateralized mortgage obligations		919,654		36.1			5.5		4.55
Adjustable rate mortgages		250,648		9.9			2.0		4.75
Pass-through		122,093		4.8			3.3		4.79
State and municipal		319,645		12.5			3.5		4.80
Corporate bonds		100,002		3.9			3.8		4.86
Total available for sale debt securities	$	2,547,478		100.0	%		3.8		4.82	%
Fixed interest rate:
Mortgage-backed securities	$	1,040,009		40.8	%		5.2		4.58	%
Other		1,230,138		48.3			2.9		5.00
Variable interest rate:
Mortgage-backed securities		252,386		9.9			2.0		4.75
Other		24,945		1.0			2.6		6.61
Total available for sale debt securities	$	2,547,478		100.0	%		3.8		4.82	%

Projected Cash Flows for Debt Securities

			Projected Annual Cash Flows by Interest Rate Scenario
Year	Roll-Off Yield		Current		Up 1.00%		Down 1.00%
Remainder of 2007	4.94	%	$	500,884	$	278,859	$	1,181,936
2008	4.35			305,533		201,253		446,234

Projected Interest Rate Shock for Debt Securities

Interest Rate Scenario	Estimated Impact on Fair Value			Duration
Up 2.00%		(9.8	)%	5.2
Up 1.00%		(4.7	)	4.9
Flat		—		3.8
Down 1.00%		3.2		2.0
Down 2.00%		4.9		0.8

The estimated decrease in fair value for a five year U.S. Treasury Note when interest rates increase 100 basis points is 4.31%.

4

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

	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Commercial Loans
Commercial and industrial	$	2,596,705		$	2,491,210		$	2,378,533		$	2,393,706		$	2,371,946
Owner - occupied real estate		883,738			830,179			859,306			880,545			754,229
Commercial real estate		4,209,149			4,171,631			4,060,602			4,043,550			4,090,130
		7,689,592			7,493,020			7,298,441			7,317,801			7,216,305
Consumer Loans
Indirect - sales finance		666,801			660,401			651,419			555,678			928,633
Direct retail		283,461			292,993			291,555			304,934			333,773
Home equity		531,922			528,909			537,406			554,266			561,964
		1,482,184			1,482,303			1,480,380			1,414,878			1,824,370
Mortgage Loans		726,358			726,544			735,012			706,766			680,216
Total loans held for investment	$	9,898,134		$	9,701,867		$	9,513,833		$	9,439,445		$	9,720,891
Percentage of Loans Held for Investment
Commercial and industrial		26.2	%		25.7	%		25.0	%		25.4	%		24.4	%
Owner - occupied real estate		8.9			8.6			9.0			9.3			7.7
Commercial real estate		42.5			43.0			42.7			42.8			42.1
Consumer		15.0			15.2			15.6			15.0			18.8
Mortgage		7.4			7.5			7.7			7.5			7.0
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Non organic change in loans held for     investment related to:
Origination and transfer of indirect auto       loans originally held for sale to held for        investment	$	—		$	—		$	51,019		$	(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		8.2	%		7.8	%		3.1	%		(11.6	)%		12.1	%
Growth year-to-date, annualized		8.2			2.8			1.1			—			12.1
Growth in Loans Held for Investment,     Excluding Changes from Acquisitions     and Dispositions (2)
Organic growth vs. prior quarter, annualized		8.2	%		7.8	%		1.1	%		5.3	%		12.1	%
Organic growth year-to-date, annualized		8.2			6.6			6.2			8.8			12.1

(1)	Other acquisitions (dispositions) during the three months ended September 30, 2006 related to the sale of the Mullins branch.
(2)	At December 31, 2005, loans held for investment totaled $9,439,935.

5

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES
(dollars in thousands) (unaudited)

	At and for the Three Months Ended
	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Credit Quality
Loans held for investment	$	9,898,134		$	9,701,867		$	9,513,833		$	9,439,445		$	9,720,891
Allowance for loan losses		113,736			111,663			109,401			108,995			111,219
Allowance for credit losses		114,822			112,688			110,349			110,320			112,454
Nonperforming loans (1)		43,222			37,168			31,396			37,782			35,722
Foreclosed property (other real estate owned    and personal property repossessions)		3,572			4,341			4,851			10,187			9,323
Nonperforming assets	$	46,794		$	41,509		$	36,247		$	47,969		$	45,045
Nonperforming loans as a % of loans    held for investment		0.44	%		0.38	%		0.33	%		0.40	%		0.37	%
Nonperforming assets as a % of loans held    for investment and foreclosed property		0.47			0.43			0.38			0.51			0.46
Allowance for loan losses as a % of loans    held for investment		1.15			1.15			1.15			1.15			1.14
Allowance for credit losses as a % of loans    held for investment		1.16			1.16			1.16			1.17			1.16
Allowance for loan losses to nonperforming    loans		2.63	x		3.00	x		3.48	x		2.88	x		3.11	x
Impaired loans (1)(2)	$	36,403		$	28,733		$	24,604		$	30,860		$	22,055
Specific allowance for impaired loans		7,716			6,686			3,987			8,027			4,904
Loans past due 90 days or more (mortgage    and consumer with interest accruing) (3)		193			3,129			3,163			2,849			2,369
Net loan charge-offs		6,879			6,499			6,524			6,532			6,807
Average loans held for investment		9,783,328			9,589,732			9,467,123			9,664,441			9,606,556
Net loan charge-offs as a % of average    loans held for investment (annualized)		0.29	%		0.27	%		0.27	%		0.27	%		0.29	%
Allowance for Loan Losses
Balance at beginning of period	$	111,663		$	109,401		$	108,995		$	111,219		$	107,767
Allowance adjustment for loans sold		—			—			—			(3,089	)		—
Provision for loan losses		8,952			8,761			6,930			7,397			10,259
Loans charged-off		(8,611	)		(9,197	)		(9,768	)		(8,785	)		(8,873	)
Recoveries of loans previously charged-off		1,732			2,698			3,244			2,253			2,066
Balance at end of period	$	113,736		$	111,663		$	109,401		$	108,995		$	111,219
Reserve for Unfunded Lending Commitments
Balance at beginning of period	$	1,025		$	948		$	1,325		$	1,235		$	1,583
Provision for unfunded lending commitments		61			77			(377	)		90			(348	)
Balance at end of period	$	1,086		$	1,025		$	948		$	1,325		$	1,235
Allowance for Credit Losses
Balance at beginning of period	$	112,688		$	110,349		$	110,320		$	112,454		$	109,350
Allowance adjustment for loans sold		—			—			—			(3,089	)		—
Provision for credit losses		9,013			8,838			6,553			7,487			9,911
Loans charged-off		(8,611	)		(9,197	)		(9,768	)		(8,785	)		(8,873	)
Recoveries of loans previously charged-off		1,732			2,698			3,244			2,253			2,066
Balance at end of period	$	114,822		$	112,688		$	110,349		$	110,320		$	112,454

(1)	At March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006, and March 31, 2006, these credit quality indicators (nonperforming loans and impaired loans) included $1.9 million, $500,000, $661,000, $743,000, and $693,000, respectively, in restructured loans.
(2)	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.
(3)	In first quarter 2007, there were no mortgage loans past due 90 days or more still accruing interest, compared with $3.0 million for fourth quarter 2006.

6

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
TYPE OF CUSTOMER FUNDING AND CUSTOMER FUNDING GROWTH
(dollars in thousands) (unaudited)

	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Noninterest-bearing	$	1,286,800		$	1,280,908		$	1,261,421		$	1,465,811		$	1,468,825
Interest-bearing checking		1,198,714			1,208,125			1,245,167			1,220,949			1,188,449
Money market accounts		2,374,242			2,435,413			2,477,982			2,333,992			2,261,672
Savings accounts		184,283			181,192			188,629			181,871			191,449
Core deposits		5,044,039			5,105,638			5,173,199			5,202,623			5,110,395
Time deposits under $100,000		1,797,170			1,680,878			1,546,422			1,426,624			1,381,468
Time deposits of $100,000 or more		1,132,510			1,105,793			1,088,827			1,205,796			1,285,048
Customer deposits (1)		7,973,719			7,892,309			7,808,448			7,835,043			7,776,911
Brokered deposits		1,977,489			1,624,431			1,373,504			1,405,276			1,401,771
Total deposits		9,951,208			9,516,740			9,181,952			9,240,319			9,178,682
Less: Brokered deposits		(1,977,489	)		(1,624,431	)		(1,373,504	)		(1,405,276	)		(1,401,771	)
Add: Customer sweeps		479,698			500,288			378,116			349,471			311,992
Customer funding (2)	$	8,453,417		$	8,392,597		$	8,186,564		$	8,184,514		$	8,088,903
Percentage of Deposits
Noninterest-bearing		12.9	%		13.4	%		13.7	%		15.9	%		16.0	%
Interest-bearing checking		12.0			12.7			13.6			13.2			12.9
Money market accounts		23.9			25.6			27.0			25.3			24.6
Savings accounts		1.8			1.9			2.0			2.0			2.1
Core deposits		50.6			53.6			56.3			56.4			55.6
Time deposits under $100,000		18.1			17.7			16.8			15.4			15.1
Time deposits of $100,000 or more		11.4			11.6			11.9			13.0			14.0
Customer deposits (1)		80.1			82.9			85.0			84.8			84.7
Brokered deposits		19.9			17.1			15.0			15.2			15.3
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	3/31/07		12/31/06		9/30/06		6/30/06		3/31/06
Growth vs. Prior Quarter, Annualized (3)
Noninterest-bearing	1.9	%	6.1	%	(55.3	)%	(0.8	)%	2.8	%
Core deposits	(4.9	)	(5.2	)	(2.2	)	7.2		0.9
Total deposits	18.5		14.5		(2.5	)	2.7		(2.4	)
Customer funding (2)	2.9		10.0		0.1		4.7		(5.6	)
Growth Year-To-Date, Annualized (3)
Noninterest-bearing	1.9	%	(12.2	)%	(18.1	)%	1.0	%	2.8	%
Core deposits	(4.9	)	0.1		1.9		4.1		0.9
Total deposits	18.5		3.1		(0.8	)	0.1		(2.4	)
Customer funding (2)	2.9		2.3		(0.2	)	(0.4	)	(5.6	)

(1)	Total deposits less brokered deposits.
(2)	Total deposits less brokered deposits plus customer sweeps.
(3)	At December 31, 2005, noninterest-bearing totaled $1,458,914, core deposits totaled $5,099,040, total deposits totaled $9,234,437, and customer funding totaled $8,201,571.

7

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

TYPES OF ORGANIC CUSTOMER FUNDING GROWTH
(dollars in thousands) (unaudited)

	For The Period Ended
	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Noninterest-Bearing
Beginning balance	$	1,280,908		$	1,261,421		$	1,465,811		$	1,468,825		$	1,458,914
Increase (decrease) during the three    months ended related to:
Organic change		5,892			19,487			(202,167	)		(3,014	)		9,911
Bank acquisitions (dispositions) (1)		—			—			(2,223	)		—			—
Ending balance	$	1,286,800		$	1,280,908		$	1,261,421		$	1,465,811		$	1,468,825
Core Deposits
Beginning balance	$	5,105,638		$	5,173,199		$	5,202,623		$	5,110,395		$	5,099,040
Increase (decrease) during the three    months ended related to:
Organic change		(61,599	)		(67,561	)		(13,848	)		92,228			11,355
Bank acquisitions (dispositions) (1)		—			—			(15,576	)		—			—
Ending balance	$	5,044,039		$	5,105,638		$	5,173,199		$	5,202,623		$	5,110,395
Customer Funding(2)
Beginning balance	$	8,392,597		$	8,186,564		$	8,184,514		$	8,088,903		$	8,201,571
Increase (decrease) during the three    months ended related to:
Organic change		60,820			206,033			29,991			95,611			(112,668	)
Bank acquisitions (dispositions) (1)		—			—			(27,941	)		—			—
Ending balance	$	8,453,417		$	8,392,597		$	8,186,564		$	8,184,514		$	8,088,903
Organic Change vs. Prior Quarter,    Annualized (3)
Noninterest-bearing		1.9	%		6.1	%		(54.7	)%		(0.8	)%		2.8	%
Core deposits		(4.9	)		(5.2	)		(1.1	)		7.2			0.9
Customer funding (2)		2.9			10.0			1.5			4.7			(5.6	)
Organic Change Year-To-Date,     Annualized (3)
Noninterest-bearing		1.9	%		(12.0	)%		(17.9	)%		1.0	%		2.8	%
Core deposits		(4.9	)		0.4			2.4			4.1			0.9
Customer funding (2)		2.9			2.7			0.2			(0.4	)		(5.6	)

(1)	The non organic change in deposits relates to the September, 2006 disposition of the Mullins branch.
(2)	Total deposits less brokered deposits plus customer sweeps.
(3)	At December 31, 2005, noninterest-bearing totaled $1,458,914, core deposits totaled $5,099,040, and customer funding totaled $8,201,571.

8

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

SUMMARY OF WHOLESALE BORROWINGS, CAPITAL, CAPITAL RATIOS, UNREALIZED LOSSES
ON AVAILABLE FOR SALE SECURITIES, AND MARKET RATES FOR U.S. TREASURY NOTES

(dollars in thousands) (unaudited)

	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06
Types of wholesale borrowings
Short-term borrowings
Federal funds purchased and     repurchase agreements	$	1,016,470		$	920,811		$	1,236,548		$	738,672		$	1,222,688
Customer sweeps		479,698			500,288			378,116			349,471			311,992
FHLB advances		75,000			175,000			175,000			—			—
Commercial paper		35,584			32,631			36,032			30,336			35,210
Treasury, tax and loan note		781			139,989			9,334			140,821			1,146
Total short-term borrowings		1,607,533			1,768,719			1,835,030			1,259,300			1,571,036
Long-term borrowings
Repurchase agreements		200,000			521,000			596,000			771,000			821,000
FHLB advances		328,107			328,113			339,620			749,127			842,134
Subordinated notes		188,871			188,871			233,016			233,016			155,695
Manditorily redeemable preferred     stock of subsidiary		89,800			89,800			89,800			89,800			89,800
Note payable		818			828			838			847			856
Employee stock ownership plan note      payable		125			200			275			350			425
Purchase accounting premiums, net of     amortization		1,569			1,663			1,757			1,922			2,019
Total long-term borrowings		809,290			1,130,475			1,261,306			1,846,062			1,911,929
Total borrowings		2,416,823			2,899,194			3,096,336			3,105,362			3,482,965
Less: Customer sweeps		(479,698	)		(500,288	)		(378,116	)		(349,471	)		(311,992	)
Add: Brokered deposits		1,977,489			1,624,431			1,373,504			1,405,276			1,401,771
Total wholesale borrowings	$	3,914,614		$	4,023,337		$	4,091,724		$	4,161,167		$	4,572,744
Wholesale borrowings as a percentage     of total assets		27.6	%		28.3	%		29.1	%		29.6	%		31.8	%
Regulatory Capital
Tier 1 capital	$	1,115,023		$	1,123,448		$	1,143,708		$	1,117,710		$	1,018,558
Tier 2 capital		177,236			179,021			176,701			176,237			178,403
Total risk-based capital		1,292,259			1,302,469			1,320,409			1,293,947			1,196,961
Total risk-weighted assets		11,424,481			11,502,152			11,277,236			11,255,642			11,588,786
Tangible Equity
Shareholders’ equity	$	1,561,610		$	1,562,032		$	1,546,820		$	1,481,577		$	1,480,693
Intangible assets		(683,611	)		(685,568	)		(687,403	)		(689,690	)		(691,328	)
Tangible equity		877,999			876,464			859,417			791,887			789,365
Capital Ratios
Total risk-based capital		11.31	%		11.32	%		11.71	%		11.50	%		10.33	%
Tier 1 risk-based capital		9.76			9.77			10.14			9.93			8.79
Leverage ratio		8.28			8.34			8.60			8.18			7.45
Tangible equity to tangible assets ratio		6.52			6.48			6.43			5.92			5.77
Less: impact of unrealized gain or loss		(0.25	)		(0.31	)		(0.33	)		(0.56	)		(0.44	)
Tangible equity to tangible assets       ratio, excluding unrealized gain       or loss		6.77			6.79			6.76			6.48			6.21
Unrealized Losses on AFS Securities
Gross (included in AFS securities)	$	(59,764	)	$	(75,302	)	$	(77,224	)	$	(134,480	)	$	(105,060	)
Net of income tax (included in equity)		(37,601	)		(47,378	)		(48,599	)		(84,667	)		(66,137	)
Market Rates for U.S. Treasury     Notes
Three year		4.54	%		4.74	%		4.62	%		5.13	%		4.82	%
Five year		4.54			4.70			4.59			5.09			4.81

9

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

COMPARATIVE AVERAGE BALANCES - YIELDS AND COSTS

(dollars in thousands) (unaudited)

	Three Months Ended
	3/31/07						12/31/06						9/30/06
	Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate
Assets
Earning assets
Loans (1)	$	9,813,010	$	186,628	7.71	%	$	9,623,050	$	187,385	7.73	%	$	9,523,286	$	184,476	7.69	%
Investment securities (taxable) (2)		2,414,896		28,825	4.78			2,503,989		29,876	4.77			2,586,438		30,779	4.76
Investment securities (nontaxable) (3)		383,804		4,689	4.89			400,117		4,808	4.81			407,005		4,831	4.75
Total investment securities		2,798,700		33,514	4.79			2,904,106		34,684	4.78			2,993,443		35,610	4.76
Federal funds sold, interest-bearing     bank balances, and other temp     investments		8,331		141	6.86			11,521		144	4.96			13,479		196	5.77
Total earning assets		12,620,041		220,283	7.06			12,538,677		222,213	7.04			12,530,208		220,282	6.98
Non-earning assets		1,528,013						1,592,004						1,443,500
Total assets	$	14,148,054					$	14,130,681					$	13,973,708
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,187,239	$	5,935	2.03		$	1,106,819	$	5,770	2.07		$	1,132,556	$	5,869	2.06
Savings		178,940		706	1.60			184,733		687	1.48			187,089		577	1.22
Money market		2,377,771		23,537	4.01			2,445,437		24,109	3.91			2,420,756		22,771	3.73
Time deposits, excluding brokered       deposits (4)		2,893,638		35,581	4.99			2,687,712		32,635	4.82			2,620,505		29,653	4.49
Brokered deposits		1,771,081		22,720	5.20			1,478,336		19,515	5.24			1,344,521		18,523	5.47
Total interest-bearing deposits		8,408,669		88,479	4.27			7,903,037		82,716	4.15			7,705,427		77,393	3.98
Customer sweeps		453,928		4,981	4.45			414,742		4,695	4.49			369,697		4,274	4.59
Other borrowings		2,270,120		30,644	5.47			2,645,462		36,465	5.47			2,811,224		38,241	5.40
Total interest-bearing liabilities		11,132,717		124,104	4.52			10,963,241		123,876	4.48			10,886,348		119,908	4.37
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,230,320						1,302,329						1,369,032
Other noninterest liabilities		233,248						306,023						217,223
Total liabilities		12,596,285						12,571,593						12,472,603
Shareholders’ equity		1,551,769						1,559,088						1,501,105
Total liabilities and shareholders’       equity	$	14,148,054					$	14,130,681					$	13,973,708
Net interest margin (tax-equivalent)			$	96,179	3.08	%			$	98,337	3.12	%			$	100,374	3.19	%
Less: tax-equivalent adjustment (3)				1,641						1,683						1,691
Net interest income			$	94,538					$	96,654					$	98,683
Customer funding (5)	$	8,321,836	$	70,740	3.45	%	$	8,141,772	$	67,896	3.31	%	$	8,099,635	$	63,144	3.09	%
Wholesale borrowings (6)		4,041,201		53,364	5.36			4,123,798		55,980	5.39			4,155,745		56,764	5.42
Total funding (7)		12,363,037		124,104	4.07			12,265,570		123,876	4.01			12,255,380		119,908	3.88

(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 March 31, 2007, December 31, 2006, and September 30, 2006, this line includes time deposits greater than $100,000 of (in thousands) $1,130,609, $1,084,753, and $1,142,089, respectively.
(5)	Customer funding includes total deposits less brokered deposits plus customer sweeps.
(6)	TSFG defines wholesale borrowings as borrowings less customer sweeps plus brokered deposits. For purposes of this table, wholesale borrowings equal the sum of other borrowings and brokered deposits, as customer sweeps are presented separately.
(7)	Total funding includes customer funding and wholesale borrowings.

Note: Average balances are derived from daily balances.

10

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

COMPARATIVE AVERAGE BALANCES - YIELDS AND COSTS - CONTINUED

(dollars in thousands) (unaudited)

	Three Months Ended
	6/30/06						3/31/06
	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	%
Investment securities (taxable) (2)		2,676,211		31,652	4.73			2,752,345		32,543		4.73
Investment securities (nontaxable) (3)		416,117		4,938	4.75			434,980		5,145		4.73
Total investment securities		3,092,328		36,590	4.73			3,187,325		37,688		4.73
Federal funds sold and interest-      bearing bank balances		64,319		879	5.48			21,509		292		5.51
Total earning assets		12,868,288		217,440	6.77			12,839,407		207,168		6.53
Non-earning assets		1,476,147						1,527,849
Total assets	$	14,344,435					$	14,367,256
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,168,434	$	5,054	1.73		$	1,140,738	$	4,406		1.57
Savings		179,220		287	0.64			191,613		308		0.65
Money market		2,261,040		18,651	3.31			2,215,043		16,345	��	2.99
Time deposits, excluding brokered deposits (4)		2,641,817		26,984	4.10			2,778,587		26,031		3.80
Brokered deposits		1,408,889		17,728	5.05			1,373,199		15,389		4.54
Total interest-bearing deposits		7,659,400		68,704	3.60			7,699,180		62,479		3.29
Customer sweeps		314,040		3,383	4.32			299,894		2,889		3.91
Other borrowings		3,252,647		40,503	4.99			3,272,395		37,087		4.60
Total interest-bearing liabilities		11,226,087		112,590	4.02			11,271,469		102,455		3.69
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,446,115						1,431,304
Other noninterest liabilities		195,999						176,487
Total liabilities		12,868,201						12,879,260
Shareholders’ equity		1,476,234						1,487,996
Total liabilities and shareholders’ equity	$	14,344,435					$	14,367,256
Net interest margin (tax-equivalent)			$	104,850	3.27	%			$	104,713		3.29	%
Less: tax-equivalent adjustment (3)				1,728						1,801
Net interest income			$	103,122					$	102,912
Customer funding (5)	$	8,010,666	$	54,359	2.72	%	$	8,057,179	$	49,979		2.52	%
Wholesale borrowings (6)		4,661,536		58,231	5.01			4,645,594		52,476		4.58
Total funding (7)		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 June 30, 2006 and March 31, 2006, this line includes time deposits greater than $100,000 of (in thousands) $1,232,787 and $1,384,999, respectively.
(5)	Customer funding includes total deposits less brokered deposits plus customer sweeps.
(6)	TSFG defines wholesale borrowings as borrowings less customer sweeps plus brokered deposits. For purposes of this table, wholesale borrowings equal the sum of other borrowings and brokered deposits, as customer sweeps are presented separately.
(7)	Total funding includes customer funding and wholesale borrowings

Note: Average balances are derived from daily balances.

11

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(dollars in thousands, except share data) (unaudited)

	Three Months Ended
	3/31/07
				Diluted EPS
Net Income, as Reported (GAAP)	$	20,518		$	0.27
Non-Operating Items
Loss on sale of available for sale securities		1,385
Employment contract buyouts and severance		1,760
Related income taxes		(1,065	)
Operating Earnings (Net Income, Excluding       Non-Operating Items)		22,598			0.30
Amortization of intangibles		2,001
Related income taxes		(677	)
Cash Operating Earnings (Net Income,       Excluding Non-Operating Items and       Amortization of Intangibles)	$	23,922		$	0.32
Average Common Shares Outstanding, Diluted		75,244,968
Select Balance Sheet (Averages)
Total assets	$	14,148,054
Intangible assets		(684,626	)
Tangible assets		13,463,428
Shareholders’ equity		1,551,769
Intangible assets		(684,626	)
Tangible equity		867,143
Return on Average Assets
GAAP earnings		0.59	%
Operating earnings		0.65
Cash operating earnings on average tangible assets		0.72
Return on Average Equity
GAAP earnings		5.36
Operating earnings		5.91
Cash operating earnings on average tangible equity		11.19

12

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP MEASURES (dollars in thousands, except share data) (unaudited)
	Three Months Ended
	12/31/06					9/30/06					6/30/06					3/31/06
				Diluted EPS					Diluted EPS					Diluted EPS					Diluted EPS
Net Income, as Reported (GAAP)  (1)	$	23,551		$	0.31	$	32,165		$	0.43	$	29,343		$	0.39	$	27,807		$	0.37
Non-Operating Items
Loss on sale of available for sale securities		113					—					150					183
(Gain) loss on equity investments		126					—					(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		4,990					—					—					598
Loss on early extinguishment of debt		821					—					—					—
Related income taxes		(1,952	)				767					42					27
Operating Earnings (Net Income, Excluding    Non-Operating Items) (1)		27,649			0.37		30,434			0.40		29,261			0.39		27,757			0.37
Amortization of intangibles		2,156					2,204					2,208					2,207
Related income taxes		(279	)				(677	)				(755	)				(763	)
Cash Operating Earnings (Net Income,    Excluding Non-Operating Items and    Amortization of Intangibles)	$	29,526		$	0.39	$	31,961		$	0.42	$	30,714		$	0.41	$	29,201		$	0.39
Average Common Shares Outstanding, Diluted		75,701,120					75,590,748					75,504,683					75,339,283
Select Balance Sheet (Averages)
Total assets	$	14,130,681				$	13,973,708				$	14,344,435				$	14,367,256
Intangible assets		(686,393	)				(688,493	)				(690,375	)				(691,262	)
Tangible assets		13,444,288					13,285,215					13,654,060					13,675,994
Shareholders’ equity		1,559,088					1,501,105					1,476,234					1,487,996
Intangible assets		(686,393	)				(688,493	)				(690,375	)				(691,262	)
Tangible equity		872,695					812,612					785,859					796,734
Return on Average Assets
GAAP earnings		0.66	%				0.91	%				0.82	%				0.78	%
Operating earnings		0.78					0.86					0.82					0.78
Cash operating earnings on average tangible assets		0.87					0.95					0.90					0.87
Return on Average Equity
GAAP earnings		5.99					8.50					7.97					7.58
Operating earnings		7.04					8.04					7.95					7.57
Cash operating earnings on average tangible equity		13.42					15.60					15.68					14.86

⁽¹⁾ Net income and operating earnings for fourth quarter 2006 included a $5.2 million income tax benefit, or $0.07 per diluted share, related to favorable income tax settlements.

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
	12/31/05						9/30/05					6/30/05					3/31/05
				Diluted EPS						Diluted EPS					Diluted EPS					Diluted EPS
Net Income (Loss), 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
(Gain) loss 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
(Gain) loss 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 earnings (loss)		(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 earnings (loss)		(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

14

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,
	2006					2005
				Diluted EPS					Diluted EPS
Net Income, as Reported (GAAP)	$	112,866		$	1.49	$	69,821		$	0.94
Non-Operating Items
Change in fair value of interest rate swaps		—					13,278
Loss on sale of available for sale securities		446					54,978
Gain on equity investments		(4,483	)				(2,839	)
Gain on disposition of assets and liabilities		(2,498	)				—
Loss on sale of indirect auto loans previously HFI		3,477					—
Employment contract buyouts		5,588					10,327
Impairment loss from write-down of assets		—					917
Merger-related costs		—					4,009
Loss on early extinguishment of debt		821					7,101
Charitable contribution to foundation		—					683
Related income taxes		(1,116	)				(32,541	)
Discontinued operations, net of income tax		—					396
Operating Earnings (Net Income, Excluding    Non-Operating Items)		115,101			1.52		126,130			1.69
Amortization of intangibles		8,775					8,637
Related income taxes		(2,474	)				(2,698	)
Cash Operating Earnings (Net Income,    Excluding Non-Operating Items and    Amortization of Intangibles)	$	121,402		$	1.61	$	132,069		$	1.77
Average Common Shares Outstanding, Diluted		75,542,848					74,594,626
Select Balance Sheet (Averages)
Total assets	$	14,202,649				$	14,752,973
Intangible assets		(689,116	)				(663,274	)
Tangible assets		13,513,533					14,089,699
Shareholders’ equity		1,506,195					1,463,125
Intangible assets		(689,116	)				(663,274	)
Tangible equity		817,079					799,851
Return on Average Assets
GAAP earnings		0.79	%				0.47	%
Operating earnings		0.81					0.85
Cash operating earnings on average tangible assets		0.90					0.94
Return on Average Equity
GAAP earnings		7.49					4.77
Operating earnings		7.64					8.62
Cash operating earnings on average tangible equity		14.86					16.51

15

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(dollars in thousands) (unaudited)

	Three Months Ended
	3/31/07
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	94,538
Tax-equivalent adjustment		1,641
Net interest income (tax-equivalent)	$	96,179
Total noninterest income, as reported (GAAP)	$	30,844
Adjustments for non-operating items:
Loss on sale of available for sale securities		1,385
Operating noninterest income (noninterest income, excluding       non-operating items)	$	32,229
Total noninterest expenses, as reported (GAAP)	$	85,351
Adjustments for non-operating items:
Employment contract buyouts and severance		(1,760	)
Operating noninterest expenses (noninterest expenses, excluding       non-operating items)		83,591
Less: amortization of intangibles		(2,001	)
Cash operating noninterest expenses (noninterest expenses,       excluding non-operating items and amortization of       intangibles)	$	81,590
Total Revenue (1)
GAAP	$	125,382
Operating (2)		128,408
Noninterest Income as a % Total Revenue (3)
GAAP		24.60	%
Operating (2)		25.10
Efficiency Ratios (4)
GAAP		68.07
Operating (2)		65.10
Cash operating (2)		63.54

(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.

16

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(dollars in thousands) (unaudited)

	Three Months Ended
	12/31/06			9/30/06			6/30/06			3/31/06
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	96,654		$	98,683		$	103,122		$	102,912
Tax-equivalent adjustment		1,683			1,691			1,728			1,801
Net interest income (tax-equivalent)	$	98,337		$	100,374		$	104,850		$	104,713
Total noninterest income, as reported (GAAP)	$	32,799		$	37,912		$	32,020		$	29,320
Adjustments for non-operating items:
Loss on sale of available for sale securities		113			—			150			183
(Gain) loss on equity investments		126			—			(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)	$	33,038		$	35,414		$	31,896		$	28,645
Total noninterest expenses, as reported (GAAP)	$	93,564		$	83,628		$	83,059		$	79,834
Adjustments for non-operating items:
Employment contract buyouts		(4,990	)		—			—			(598	)
Loss on early extinguishment of debt		(821	)		—			—			—
Operating noninterest expenses (noninterest expenses, excluding      non-operating items)		87,753			83,628			83,059			79,236
Less: amortization of intangibles		(2,156	)		(2,204	)		(2,208	)		(2,207	)
Cash operating noninterest expenses (noninterest expenses,      excluding non-operating items and amortization of      intangibles)	$	85,597		$	81,424		$	80,851		$	77,029
Total Revenue (1)
GAAP	$	129,453		$	136,595		$	135,142		$	132,232
Operating (2)		131,375			135,788			136,746			133,358
Noninterest Income as a % Total Revenue (3)
GAAP		25.34	%		27.76	%		23.69	%		22.17	%
Operating (2)		25.15			26.08			23.32			21.48
Efficiency Ratios (4)
GAAP		72.28			61.22			61.46			60.37
Operating (2)		66.80			61.59			60.74			59.42
Cash operating (2)		65.15			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.

17

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 income (loss), 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
(Gain) loss 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	)
Gain (loss) 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 Income (Loss) 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.

18

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(dollars in thousands) (unaudited)

	Years Ended December 31,
	2006			2005			2004			2003			2002
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	401,371		$	409,056		$	335,841		$	250,890		$	210,143
Tax-equivalent adjustment		6,903			6,054			4,356			2,681			2,352
Net interest income (tax-equivalent)		408,274			415,110			340,197			253,571			212,495
Net cash settlement of certain interest rate swaps               included in noninterest income		—			10,360			27,560			19,486			7,396
Net interest income (tax-equivalent), including net cash           settlement of certain interest rate swaps	$	408,274		$	425,470		$	367,757		$	273,057		$	219,891
Net interest margin (tax-equivalent)		3.22	%		3.12	%		3.06	%		3.01	%		3.59	%
Net interest margin (tax-equivalent), including net cash      settlement of certain interest rate swaps		3.22			3.20			3.31			3.24			3.71
Total noninterest income, as reported (GAAP)	$	132,051		$	55,210		$	124,877		$	100,739		$	74,563
Adjustments for non-operating items:
Change in fair value of interest rate swaps		—			13,278			(2,550	)		14,237			(7,527	)
(Gain) loss on sale of available for sale securities		446			54,978			(6,998	)		(11,080	)		(2,985	)
Gain on equity investments		(4,483	)		(2,839	)		(4,723	)		(5,376	)		(3,135	)
Impairment of perpetual preferred stock		—			—			10,367			—			—
Gain on disposition of assets and liabilities		(2,498	)		—			(2,350	)		(601	)		—
Loss on sale of indirect auto loans previously HFI		3,477			—			—			—			—
Operating noninterest income (noninterest income,      excluding non-operating items)		128,993			120,627			118,623			97,919			60,916
Net cash settlement of certain interest rate swaps               included in noninterest income		—			10,360			27,560			19,486			7,396
Operating noninterest income, excluding net cash      settlement of certain interest rate swaps	$	128,993		$	110,267		$	91,063		$	78,433		$	53,520
Total noninterest expenses, as reported (GAAP)	$	340,085		$	328,053		$	250,244		$	207,170		$	162,840
Adjustments for non-operating items:
Employment contract buyouts		(5,588	)		(10,327	)		(1,080	)		(512	)		(1,846	)
Merger-related costs		—			(4,009	)		(7,866	)		(5,127	)		(6,664	)
Impairment recovery (loss) from write-down of assets		—			(917	)		277			(268	)		(1,449	)
Conservation grant of land		—			—			(3,350	)		—			—
Loss on early extinguishment of debt		(821	)		(7,101	)		(1,429	)		(2,699	)		(354	)
Charitable contribution to foundation		—			(683	)		—			—			—
Operating noninterest expenses (noninterest expenses,      excluding non-operating items)		333,676			305,016			236,796			198,564			152,527
Less: amortization of intangibles		(8,775	)		(8,637	)		(6,043	)		(3,433	)		(1,519	)
Cash operating noninterest expenses (noninterest      expenses, excluding non-operating items and      amortization of intangibles)	$	324,901		$	296,379		$	230,753		$	195,131		$	151,008
Total Revenue (1)
GAAP	$	533,422		$	464,266		$	460,718		$	351,629		$	284,706
Operating (2)		537,267			535,737			458,820			351,490			273,411
Noninterest Income as a % Total Revenue (3)
GAAP		24.76	%		11.89	%		27.10	%		28.65	%		26.19	%
Operating (2)		24.01			22.52			25.85			27.86			22.28
Operating, excluding net cash settlement of certain      interest rate swaps (4)		24.01			20.58			19.85			22.31			19.57
Efficiency Ratios (5)
GAAP		63.76			70.66			54.32			58.92			57.20
Operating (2)		62.11			56.93			51.61			56.49			55.79
Cash operating (2)		60.47			55.32			50.29			55.52			55.23

(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