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

Quarterly Financial Data Supplement (Unaudited)
Second Quarter 2007

	Page
Financial Summary	1
Consolidated Statements of Income	2
Details for Noninterest Income and Noninterest Expenses	3
Consolidated Balance Sheets	4
Investment Securities Portfolio Analysis	5
Loan Portfolio Composition Based on Loan Purpose and Loan Growth	6
Summary of Credit Quality and Allowance for Credit Losses	7
Summary of Loans in NC Development under Investigation	8
Types of Customer Funding and Customer Funding Growth	9
Types of Organic Customer Funding Growth	10
Summary of Wholesale Borrowings, Capital and Capital Ratios	11
Comparative Average Balance Sheets - Yields and Costs	12-13
GAAP to Non-GAAP Reconciliation: Earnings, ROA and ROE	14-16
GAAP to Non-GAAP Reconciliation: Noninterest income as a % of total revenue and efficiency ratios	17-19

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
SECOND QUARTER 2007 FINANCIAL SUMMARY

Quarterly EPS
•	Net income of $17.9 million, or $0.24 per diluted share
•	Operating earnings of $19.9 million, or $0.27 per diluted share, which include an additional provision for credit losses of $10.5 million pre-tax, or $0.09 after-tax per diluted share, related to loans in a NC development under investigation
•	Operating earnings excluding the additional provision totaled $26.9 million, or $0.36 per diluted share
Revenue
•	Total revenue, defined as net interest income plus noninterest income, of $125.0 million
	— Non-operating items: $2.2 million net loss on securities
•	Operating revenues of $128.8 million, up $3.4 million or 11.0% linked-quarter annualized
•	Growth in both net interest income and noninterest income
•	Tax-equivalent net interest income of $98.1 million, up $1.9 million or 7.9% linked-quarter annualized
	— Net interest margin of 3.12%, an improvement of 4 bps linked-quarter
	— Average earning assets of $12.6 billion, down 0.7% linked-quarter annualized
•	Operating noninterest income of $30.7 million, up $1.5 million or 21.1% linked-quarter annualized
Average Balance Sheet Growth
•	Average loans, up 7.0% linked-quarter annualized
•	Average securities, down $192.6, including March sale of $116 million
•	Average customer funding, defined as total deposits less brokered deposits plus customer sweeps, down 1.9% linked-quarter annualized
•	Average wholesale borrowings, including brokered deposits and excluding customer sweeps, down 0.9% linked-quarter annualized
Noninterest Expenses and Operating Efficiency
•	Noninterest expenses of $81.0 million
	— Non-operating items: $546,000 severance payments and $231,000 loss on early extinguishment of debt
•	Operating noninterest expenses of $80.2 million, down $372,000 or 1.9% linked-quarter annualized
•	Achieved planned $20 million annualized reduction of operating noninterest expenses from 4Q06 run rate
•	Cash operating efficiency ratio of 60.6%, an improvement from 62.7% for the prior quarter
•	Positive operating leverage (11.0% linked-quarter annualized operating revenue growth and 1.9% linked-quarter annualized decline in operating noninterest expenses)
Credit Quality
•	Provision for credit losses of $17.1 million, which included $10.5 million additional provision for NC development loans
•	Net charge-offs of $5.2 million, or 0.21% annualized as a % of average loans, an improvement of 8 bps linked-quarter
•	Excluding NC development loans, net charge-offs of $3.7 million, or 0.15% annualized as a % of average loans, an improvement of 14 bps linked-quarter
•	Nonperforming assets of $45.6 million, or 0.45% of loans held for investment and foreclosed property, an improvement of 2 bps linked-quarter
Capital
•	Tangible equity to tangible asset ratio of 6.22%, down from 6.52% at March 31, 2007
•	Tangible equity per share of $11.32, down from $11.76 at March 31, 2007
•	Repurchased 1.15 million shares 2Q07 and 2.15 million shares for 2007 YTD
•	Tier 1 capital ratio of 10.12%, up from 9.76% at March 31, 2007

1

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data) (unaudited)

	Three Months Ended
	6/30/07		3/31/07		12/31/06		9/30/06		6/30/06
Interest Income
Interest and fees on loans	$	191,961	$	186,628	$	187,385	$	184,476	$	179,971
Interest and dividends on securities:
Taxable		26,879		28,825		29,876		30,779		31,652
Exempt from federal income taxes		2,888		3,048		3,125		3,140		3,210
Total interest and dividends on securities		29,767		31,873		33,001		33,919		34,862
Interest on short-term investments		97		141		144		196		879
Total interest income		221,825		218,642		220,530		218,591		215,712
Interest Expense
Interest on deposits		92,066		88,479		82,716		77,393		68,704
Interest on borrowed funds		33,238		35,625		41,160		42,515		43,886
Total interest expense		125,304		124,104		123,876		119,908		112,590
Net Interest Income		96,521		94,538		96,654		98,683		103,122
Provision for Credit Losses		17,125		9,013		8,838		6,553		7,487
Net interest income after provision for credit losses		79,396		85,525		87,816		92,130		95,635
Noninterest Income		28,508		27,824		30,257		35,082		29,342
Noninterest Expenses		80,976		82,331		91,022		80,798		80,381
Income before income taxes		26,928		31,018		27,051		46,414		44,596
Income tax expense		8,998		10,500		3,500		14,249		15,253
Net Income	$	17,930	$	20,518	$	23,551	$	32,165	$	29,343
Average common shares outstanding, basic		74,050,115		74,736,832		75,161,032		75,003,605		74,864,648
Average common shares outstanding, diluted		74,397,091		75,244,968		75,701,120		75,590,748		75,504,683
Net income per common share, basic	$	0.24	$	0.27	$	0.31	$	0.43	$	0.39
Net income per common share, diluted		0.24		0.27		0.31		0.43		0.39
Cash dividends declared per common share		0.18		0.18		0.18		0.17		0.17

2

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

	Three Months Ended
	6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Noninterest Income
Service charges on deposit accounts	$	11,223		$	10,613		$	10,704		$	11,457		$	11,592
Debit card income		2,403			2,177			2,198			2,055			2,095
Customer service fee income		1,402			1,291			1,267			1,117			1,074
Total customer fee income		15,028			14,081			14,169			14,629			14,761
Retail investment services		2,282			1,958			1,671			1,689			2,249
Insurance income		2,987			3,297			3,411			2,831			2,806
Trust and investment management income		1,734			1,594			1,506			1,483			1,678
Benefits administration fees		749			742			722			795			749
Total wealth management income		7,752			7,591			7,310			6,798			7,482
Mortgage banking income		1,877			2,069			2,224			1,969			2,078
Bank-owned life insurance		4,454			2,851			2,932			2,916			2,969
Merchant processing income, net(1)		771			735			527			619			640
Gain (loss) on certain derivative activities		(1,497	)		97			596			3,924			(245	)
Loss on indirect auto loans(2)		—			—			—			(667	)		(985	)
Other		2,360			1,785			2,738			2,396			2,518
Operating noninterest income (noninterest income, excluding non-operating items)		30,745			29,209			30,496			32,584			29,218
Gain (loss) on securities		(2,237	)		(1,385	)		(239	)		—			3,601
Gain on disposition of assets and liabilities		—			—			—			2,498			—
Loss on sale of indirect auto loans previously HFI (2)		—			—			—			—			(3,477	)
Non-operating noninterest income (loss)		(2,237	)		(1,385	)		(239	)		2,498			124
Total noninterest income	$	28,508		$	27,824		$	30,257		$	35,082		$	29,342
Noninterest Expenses
Salaries and wages	$	34,258		$	35,072		$	35,188		$	34,494		$	33,605
Employee benefits		9,245			9,759			8,927			9,080			8,703
Occupancy		8,545			8,608			8,856			7,949			7,684
Furniture and equipment		6,486			6,462			6,579			6,217			6,468
Professional services		4,914			4,103			5,637			4,549			5,497
Advertising and business development		1,973			1,931			2,937			2,264			2,187
Telecommunications		1,418			1,393			1,384			1,407			1,421
Amortization of intangibles		2,136			2,001			2,156			2,204			2,208
Other		11,224			11,242			13,547			12,634			12,608
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		80,199			80,571			85,211			80,798			80,381
Employment contract buyouts and severance		546			1,760			4,990			—			—
Loss on early extinguishment of debt		231			—			821			—			—
Non-operating noninterest expenses		777			1,760			5,811			—			—
Total noninterest expenses	$	80,976		$	82,331		$	91,022		$	80,798		$	80,381

(1)

In second quarter 2007, TSFG began presenting its merchant income net of direct processing costs. Direct merchant processing costs totaled (in thousands) $3,930 for second quarter 2007, $3,020 for first quarter 2007, $2,542 for fourth quarter 2006, $2,830 for third quarter 2006, and $2,678 for second quarter 2006. Amounts presented for prior periods have been reclassified to conform to current presentation.

(2)

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.

3

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

	6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Assets
Cash and due from banks	$	267,005		$	257,884		$	326,567		$	295,534		$	286,954
Interest-bearing bank balances		263			7,012			31,264			5,224			16,275
Federal funds sold and securities purchased to resell		—			50,000			—			7,500			7,176
Securities
Available for sale		2,433,341			2,546,047			2,743,456			2,820,383			2,861,182
Held to maturity		41,892			46,217			52,308			52,790			53,617
Total securities		2,475,233			2,592,264			2,795,764			2,873,173			2,914,799
Loans held for sale		35,718			33,519			28,556			36,155			78,763
Loans held for investment		10,029,228			9,898,134			9,701,867			9,513,833			9,439,445
Less: Allowance for loan losses		(125,545	)		(113,736	)		(111,663	)		(109,401	)		(108,995	)
Net loans held for investment		9,903,683			9,784,398			9,590,204			9,404,432			9,330,450
Premises and equipment, net		224,951			223,738			219,163			213,820			207,393
Accrued interest receivable		75,851			72,801			77,523			72,459			71,905
Intangible assets		681,483			683,611			685,568			687,403			689,690
Other assets		475,488			452,920			455,907			452,002			473,678
	$	14,139,675		$	14,158,147		$	14,210,516		$	14,047,702		$	14,077,083
Liabilities and Shareholders’ Equity
Liabilities
Deposits
Noninterest-bearing	$	1,244,834		$	1,286,800		$	1,280,908		$	1,261,421		$	1,465,811
Interest-bearing		8,840,972			8,664,408			8,235,832			7,920,531			7,774,508
Total deposits		10,085,806			9,951,208			9,516,740			9,181,952			9,240,319
Federal funds purchased and repurchase agreements		1,210,921			1,496,168			1,421,099			1,614,664			1,088,143
Other short-term borrowings		221,729			111,365			347,620			220,366			171,157
Long-term debt		857,248			809,290			1,130,475			1,261,306			1,846,062
Accrued interest payable		77,751			77,380			68,940			60,075			60,928
Other liabilities		168,033			151,126			163,610			162,519			188,897
Total liabilities		12,621,488			12,596,537			12,648,484			12,500,882			12,595,506
Shareholders’ equity
Preferred stock		—			—			—			—			—
Common stock		73,926			74,673			75,341			75,192			75,034
Surplus		1,129,272			1,150,288			1,167,685			1,162,889			1,158,758
Retained earnings		378,399			373,788			367,261			357,371			338,019
Guarantee of employee stock ownership plan debt		(39	)		(95	)		(151	)		(210	)		(268	)
Accumulated other comprehensive loss, net of income tax		(63,371	)		(37,044	)		(48,104	)		(48,422	)		(89,966	)
Total shareholders’ equity		1,518,187			1,561,610			1,562,032			1,546,820			1,481,577
	$	14,139,675		$	14,158,147		$	14,210,516		$	14,047,702		$	14,077,083

4

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

	6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Investment Securities Portfolio
Available for sale (at fair value):
U.S. Treasury	$	167,195		$	167,295		$	166,719		$	174,739		$	173,049
U.S. Government agencies		650,581			657,708			653,034			655,447			641,315
Mortgage-backed securities		1,158,498			1,246,384			1,400,288			1,459,220			1,504,818
State and municipal		308,070			315,372			341,488			345,077			351,462
Other investments(1)		148,997			159,288			181,927			185,900			190,538
Total available for sale securities		2,433,341			2,546,047			2,743,456			2,820,383			2,861,182
Held to maturity (at amortized cost)		41,892			46,217			52,308			52,790			53,617
Total securities	$	2,475,233		$	2,592,264		$	2,795,764		$	2,873,173		$	2,914,799
Total securities as a percentage of total     assets		17.5	%		18.3	%		19.7	%		20.5	%		20.7	%

	June 30, 2007
	Amortized Cost		Percentage of Total			Duration		Book Yield
Debt Securities
U.S. Treasury	$	169,085		6.8	%		1.1		4.07	%
U.S. Government agencies		666,355		27.0			3.8		5.42
Mortgage-backed securities:
Collateralized mortgage obligations		879,352		35.6			6.2		4.55
Adjustable rate mortgages		233,199		9.4			2.2		4.76
Pass-through		117,235		4.7			3.8		4.79
State and municipal		314,977		12.7			3.3		4.82
Corporate bonds (2)		93,147		3.8			3.8		5.06
Total available for sale debt securities	$	2,473,350		100.0	%		4.3		4.84	%
Fixed interest rate:
Mortgage-backed securities	$	994,926		40.2	%		5.9		4.58	%
Other		1,218,619		49.3			3.3		5.03
Variable interest rate:
Mortgage-backed securities		234,860		9.5			2.2		4.76
Other		24,945		1.0			3.1		6.66
Total available for sale debt securities	$	2,473,350		100.0	%		4.3		4.84	%

Projected Cash Flows for Debt Securities

	Roll-Off Yield		Projected Annual Cash Flows by Interest Rate Scenario
Year			Current		Up 1.00%		Down 1.00%
Remainder of 2007	4.48	%	$	256,802	$	237,413		$586,302
2008	4.19			226,992		176,585		477,671

Projected Interest Rate Shock for Debt Securities

Interest Rate Scenario	Estimated Impact on Fair Value		Duration
Up 2.00%	(8.7	) %	5.1
Up 1.00%	(4.2	)	4.7
Flat	—		3.7
Down 1.00%	2.9		1.9
Down 2.00%	4.0		0.1

The estimated decrease in fair value for a five year U.S. Treasury Note when interest rates increase 100 basis points is 4.26%.

(1)	Other investments in available for sale securities includes corporate bonds, FHLB stock, community bank stocks, and other equity securities.
(2)	TSFG recorded a pre-tax loss of $2.9 million for the quarter ended June 30, 2007 related to the subsequent partial liquidation and resulting impairment of its corporate bond portfolio.

5

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

	6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Commercial Loans
Commercial and industrial	$	2,650,050		$	2,596,705		$	2,491,210		$	2,378,533		$	2,393,706
Owner - occupied real estate		973,105			883,738			830,179			859,306			880,545
Commercial real estate		4,167,117			4,209,149			4,171,631			4,060,602			4,043,550
		7,790,272			7,689,592			7,493,020			7,298,441			7,317,801
Consumer Loans
Indirect - sales finance		684,053			666,801			660,401			651,419			555,678
Direct retail(1)		430,759			434,521			439,478			432,254			428,702
Home equity		547,167			531,922			528,909			537,406			554,266
		1,661,979			1,633,244			1,628,788			1,621,079			1,538,646
Mortgage Loans(1)		576,977			575,298			580,059			594,313			582,998
Total loans held for investment	$	10,029,228		$	9,898,134		$	9,701,867		$	9,513,833		$	9,439,445
Percentage of Loans Held for Investment
Commercial and industrial		26.4	%		26.2	%		25.7	%		25.0	%		25.4	%
Owner - occupied real estate		9.7			8.9			8.6			9.0			9.3
Commercial real estate		41.5			42.5			43.0			42.7			42.8
Consumer		16.6			16.5			16.7			17.0			16.3
Mortgage		5.8			5.9			6.0			6.3			6.2
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
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)(2)		—			—			—			(2,629	)		—
Growth in Loans Held for Investment(3)
Growth vs. prior quarter, annualized		5.3	%		8.2	%		7.8	%		3.1	%		(11.6	)%
Growth year-to-date, annualized		6.8			8.2			2.8			1.1			—
Growth in Loans Held for Investment, Excluding Changes from Acquisitions and Dispositions(3)
Organic growth vs. prior quarter, annualized		5.3	%		8.2	%		7.8	%		1.1	%		5.3	%
Organic growth year-to-date, annualized		6.8			8.2			6.6			6.2			8.8

(1)	In second quarter 2007, TSFG reclassified certain loan balances from mortgage loans to consumer direct retail. Amounts for prior periods have been reclassified to conform to the current presentation.
(2)	Other acquisitions (dispositions) during the three months ended September 30, 2006 related to the sale of the Mullins branch.
(3)	At March 31, 2006 and December 31, 2005, loans held for investment totaled $9,720,891 and $9,439,935, respectively.

6

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
	6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Credit Quality
Loans held for investment	$	10,029,228		$	9,898,134		$	9,701,867		$	9,513,833		$	9,439,445
Allowance for loan losses		125,545			113,736			111,663			109,401			108,995
Allowance for credit losses		126,721			114,822			112,688			110,349			110,320
Nonperforming loans(1)		41,527			43,222			37,168			31,396			37,782
Foreclosed property (other real estate owned and personal property repossessions)		4,028			3,572			4,341			4,851			10,187
Nonperforming assets	$	45,555		$	46,794		$	41,509		$	36,247		$	47,969
Nonperforming loans as a % of loans held for investment		0.41	%		0.44	%		0.38	%		0.33	%		0.40	%
Nonperforming assets as a % of loans held for investment and foreclosed property		0.45			0.47			0.43			0.38			0.51
Allowance for loan losses as a % of loans held for investment		1.25			1.15			1.15			1.15			1.15
Allowance for credit losses as a % of loans held for investment		1.26			1.16			1.16			1.16			1.17
Allowance for loan losses to nonperforming loans		3.02	x		2.63	x		3.00	x		3.48	x		2.88	x
Impaired loans(1)	$	33,596		$	36,403		$	28,733		$	24,604		$	30,860
Specific allowance for impaired loans		9,414			7,716			6,686			3,987			8,027
Loans past due 90 days or more (mortgage and consumer with interest accruing)		2,503			193			3,129			3,163			2,849
Net loan charge-offs		5,226			6,879			6,499			6,524			6,532
Average loans held for investment		9,947,636			9,783,328			9,589,732			9,467,123			9,664,441
Net loan charge-offs as a % of average loans held for investment (annualized)		0.21	%		0.29	%		0.27	%		0.27	%		0.27	%
Allowance for Loan Losses
Balance at beginning of period	$	113,736		$	111,663		$	109,401		$	108,995		$	111,219
Allowance adjustment for loans sold		—			—			—			—			(3,089	)
Provision for loan losses		17,035			8,952			8,761			6,930			7,397
Loans charged-off		(7,622	)		(8,611	)		(9,197	)		(9,768	)		(8,785	)
Recoveries of loans previously charged-off		2,396			1,732			2,698			3,244			2,253
Balance at end of period	$	125,545		$	113,736		$	111,663		$	109,401		$	108,995
Reserve for Unfunded Lending Commitments
Balance at beginning of period	$	1,086		$	1,025		$	948		$	1,325		$	1,235
Provision for unfunded lending commitments		90			61			77			(377	)		90
Balance at end of period	$	1,176		$	1,086		$	1,025		$	948		$	1,325
Allowance for Credit Losses
Balance at beginning of period	$	114,822		$	112,688		$	110,349		$	110,320		$	112,454
Allowance adjustment for loans sold		—			—			—			—			(3,089	)
Provision for credit losses		17,125			9,013			8,838			6,553			7,487
Loans charged-off		(7,622	)		(8,611	)		(9,197	)		(9,768	)		(8,785	)
Recoveries of loans previously charged-off		2,396			1,732			2,698			3,244			2,253
Balance at end of period	$	126,721		$	114,822		$	112,688		$	110,349		$	110,320

⁽¹⁾ At June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006, and June 30, 2006, these credit quality indicators (nonperforming loans and impaired loans) included $1.9 million, $1.9 million, $500,000, $661,000, and $743,000, respectively, in restructured loans.

7

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF LOANS IN NC DEVELOPMENT UNDER INVESTIGATION
(dollars in thousands) (unaudited)

	At and for the Three Months Ended June 30, 2007
	# of Loans			Balance		Classified as Nonaccrual			Allocated Allowance			Accrued Interest			Charge-offs
Individual lot loans		93		$	17,422		$	1,592		$	9,000		$	161		$	—
Development loans		2			1,507			1,507			—			—			1,500
Total		95		$	18,929		$	3,099		$	9,000		$	161		$	1,500
Weighted-Average Rate(1)		7.42	%

	Payment status as of June 30, 2007
	Balance		Percent			# of Loans		Accrued Interest
Current	$	3,561		18.8	%		20		$	12
1-29 days		5,744		30.4			32			53
30-59 days		6,425		33.9			36			94
60-89 days		100		0.5			1			2
Nonaccrual		3,099		16.4			6			—
	$	18,929		100.0	%		95		$	161

CREDIT QUALITY - Excluding the Loans in the NC Development under Investigation

	At and for the Three Months Ended June 30, 2007
	As reported (GAAP)			Adjustment for NC loans			Excluding NC loans (Non-GAAP)
Loans held for investment	$	10,029,228		$	(18,929	)	$	10,010,299
Allowance for loan losses		(125,545	)		9,000			(116,545	)
Allowance for credit losses		(126,721	)		9,000			(117,721	)
Nonperforming loans	$	41,527		$	(3,099	)	$	38,428
Foreclosed property (other real estate owned and personal property repossessions)		4,028			—			4,028
Nonperforming assets	$	45,555		$	(3,099	)	$	42,456
Nonperforming loans as a % of loans held for investment		0.41	%					0.38	%
Nonperforming assets as a % of loans held for investment and foreclosed property		0.45						0.42
Allowance for loan losses as a % of loans HFI		1.25						1.16
Allowance for credit losses as a % of loans HFI		1.26						1.18
Allowance for loan losses to nonperforming loans		3.02	x					3.03	x
Loans past due 90 days or more (mortgage and consumer with interest accruing)	$	2,503		$	—		$	2,503
Net loan charge-offs:
Three months ended		5,226			(1,500	)		3,726
Net loan charge-offs as a % of average loans held for investment (annualized):
Three months ended		0.21	%					0.15	%

⁽¹⁾ Based on stated loan rates with no adjustment for loans on nonaccrual status.

8

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

		6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Noninterest-bearing	$	1,244,834		$	1,286,800		$	1,280,908		$	1,261,421		$	1,465,811
Interest-bearing checking		1,177,609			1,198,714			1,208,125			1,245,167			1,220,949
Money market accounts		2,245,466			2,374,242			2,435,413			2,477,982			2,333,992
Savings accounts		177,289			184,283			181,192			188,629			181,871
Core deposits		4,845,198			5,044,039			5,105,638			5,173,199			5,202,623
Time deposits under $100,000(1)		1,363,462			1,320,108			1,272,056			1,231,553			1,204,609
Time deposits of $100,000 or more(1)		1,583,653			1,609,572			1,514,615			1,403,696			1,427,811
Customer deposits (2)		7,792,313			7,973,719			7,892,309			7,808,448			7,835,043
Brokered deposits		2,293,493			1,977,489			1,624,431			1,373,504			1,405,276
Total deposits		10,085,806			9,951,208			9,516,740			9,181,952			9,240,319
Less: Brokered deposits		(2,293,493	)		(1,977,489	)		(1,624,431	)		(1,373,504	)		(1,405,276	)
Add: Customer sweeps		556,622			479,698			500,288			378,116			349,471
Customer funding(3)	$	8,348,935		$	8,453,417		$	8,392,597		$	8,186,564		$	8,184,514
Percentage of Deposits
Noninterest-bearing		12.3	%		12.9	%		13.4	%		13.7	%		15.9	%
Interest-bearing checking		11.7			12.0			12.7			13.6			13.2
Money market accounts		22.3			23.9			25.6			27.0			25.3
Savings accounts		1.8			1.8			1.9			2.0			2.0
Core deposits		48.1			50.6			53.6			56.3			56.4
Time deposits under $100,000		13.5			13.3			13.4			13.4			13.0
Time deposits of $100,000 or more		15.7			16.2			15.9			15.3			15.4
Customer deposits (2)		77.3			80.1			82.9			85.0			84.8
Brokered deposits		22.7			19.9			17.1			15.0			15.2
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
	For The Period Ended
	6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Growth vs. Prior Quarter, Annualized(4)
Noninterest-bearing		(13.1	)%		1.9	%		6.1	%		(55.3	)%		(0.8	)%
Core deposits		(15.8	)		(4.9	)		(5.2	)		(2.2	)		7.2
Total deposits		5.4			18.5			14.5			(2.5	)		2.7
Customer funding(3)		(5.0	)		2.9			10.0			0.1			4.7
Growth Year-To-Date, Annualized(5)
Noninterest-bearing		(5.7	)%		1.9	%		(12.2	)%		(18.1	)%		1.0	%
Core deposits		(10.3	)		(4.9	)		0.1			1.9			4.1
Total deposits		12.1			18.5			3.1			(0.8	)		0.1
Customer funding(3)		(1.0	)		2.9			2.3			(0.2	)		(0.4	)

(1)	In second quarter 2007, TSFG reclassified certain deposit balances from time deposits under $100,000 to time deposits of $100,000 or more. Amounts for prior periods have been reclassified to conform to the current presentation.
(2)	Total deposits less brokered deposits.
(3)	Total deposits less brokered deposits plus customer sweeps.
(4)	At March 31, 2006, noninterest-bearing totaled $1,468,825, core deposits totaled $5,110,395, total deposits totaled $9,178,682, and customer funding totaled $8,088,903.
(5)	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.

9

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

	For The Period Ended
		6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Noninterest-Bearing
Beginning balance	$	1,286,800		$	1,280,908		$	1,261,421		$	1,465,811		$	1,468,825
Increase (decrease) during the three months ended related to:
Organic change		(41,966	)		5,892			19,487			(202,167	)		(3,014	)
Bank acquisitions (dispositions)(1)		—			—			—			(2,223	)		—
Ending balance	$	1,244,834		$	1,286,800		$	1,280,908		$	1,261,421		$	1,465,811
Core Deposits
Beginning balance	$	5,044,039		$	5,105,638		$	5,173,199		$	5,202,623		$	5,110,395
Increase (decrease) during the three months ended related to:
Organic change		(198,841	)		(61,599	)		(67,561	)		(13,848	)		92,228
Bank acquisitions (dispositions)(1)		—			—			—			(15,576	)		—
Ending balance	$	4,845,198		$	5,044,039		$	5,105,638		$	5,173,199		$	5,202,623
Customer Funding (2)
Beginning balance	$	8,453,417		$	8,392,597		$	8,186,564		$	8,184,514		$	8,088,903
Increase (decrease) during the three months ended related to:
Organic change		(104,482	)		60,820			206,033			29,991			95,611
Bank acquisitions (dispositions)(1)		—			—			—			(27,941	)		—
Ending balance	$	8,348,935		$	8,453,417		$	8,392,597		$	8,186,564		$	8,184,514
Organic Change vs. Prior Quarter, Annualized(3)
Noninterest-bearing		(13.1	)%		1.9	%		6.1	%		(54.7	)%		(0.8	)%
Core deposits		(15.8	)		(4.9	)		(5.2	)		(1.1	)		7.2
Customer funding(2)		(5.0	)		2.9			10.0			1.5			4.7
Organic Change Year-To-Date, Annualized(4)
Noninterest-bearing		(5.7	)%		1.9	%		(12.0	)%		(17.9	)%		1.0	%
Core deposits		(10.3	)		(4.9	)		0.4			2.4			4.1
Customer funding(2)		(1.0	)		2.9			2.7			0.2			(0.4	)

(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 March 31, 2006, noninterest-bearing totaled $1,468,825, core deposits totaled $5,110,395, and customer funding totaled $8,088,903.
(4)	At December 31, 2005, noninterest-bearing totaled $1,458,914, core deposits totaled $5,099,040, and customer funding totaled $8,201,571.

10

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)

	6/30/07			3/31/07			12/31/06			9/30/06			6/30/06
Types of wholesale borrowings
Short-term borrowings
Federal funds purchased and repurchase agreements	$	654,299		$	1,016,470		$	920,811		$	1,236,548		$	738,672
Customer sweeps		556,622			479,698			500,288			378,116			349,471
FHLB advances		75,000			75,000			175,000			175,000			—
Commercial paper		32,687			35,584			32,631			36,032			30,336
Treasury, tax and loan note		114,042			781			139,989			9,334			140,821
Total short-term borrowings		1,432,650			1,607,533			1,768,719			1,835,030			1,259,300
Long-term borrowings
Repurchase agreements		200,000			200,000			521,000			596,000			771,000
FHLB advances		328,100			328,107			328,113			339,620			749,127
Subordinated notes		262,067			188,871			188,871			233,016			233,016
Manditorily redeemable preferred stock of subsidiary		64,800			89,800			89,800			89,800			89,800
Note payable		808			818			828			838			847
Employee stock ownership plan note payable		50			125			200			275			350
Purchase accounting premiums, net of amortization		1,423			1,569			1,663			1,757			1,922
Total long-term borrowings		857,248			809,290			1,130,475			1,261,306			1,846,062
Total borrowings		2,289,898			2,416,823			2,899,194			3,096,336			3,105,362
Less: Customer sweeps		(556,622	)		(479,698	)		(500,288	)		(378,116	)		(349,471	)
Add: Brokered deposits		2,293,493			1,977,489			1,624,431			1,373,504			1,405,276
Total wholesale borrowings	$	4,026,769		$	3,914,614		$	4,023,337		$	4,091,724		$	4,161,167
Wholesale borrowings as a percentage of total assets		28.5	%		27.6	%		28.3	%		29.1	%		29.6	%
Regulatory Capital
Tier 1 capital	$	1,171,055		$	1,115,023		$	1,123,448		$	1,143,708		$	1,117,710
Tier 2 capital		167,521			177,236			179,021			176,701			176,237
Total risk-based capital		1,338,576			1,292,259			1,302,469			1,320,409			1,293,947
Total risk-weighted assets		11,575,533			11,424,481			11,502,152			11,277,236			11,255,642
Tangible Equity
Shareholders’ equity	$	1,518,187		$	1,561,610		$	1,562,032		$	1,546,820		$	1,481,577
Intangible assets		(681,483	)		(683,611	)		(685,568	)		(687,403	)		(689,690	)
Tangible equity		836,704			877,999			876,464			859,417			791,887
Capital Ratios
Total risk-based capital		11.56	%		11.31	%		11.32	%		11.71	%		11.50	%
Tier 1 risk-based capital		10.12			9.76			9.77			10.14			9.93
Leverage ratio		8.73			8.28			8.34			8.60			8.18
Tangible equity to tangible assets ratio		6.22			6.52			6.48			6.43			5.92
Impact of unrealized (gain) loss		0.41			0.26			0.33			0.34			0.59
Tangible equity to tangible assets ratio, excluding unrealized gain or loss		6.63			6.78			6.81			6.77			6.51
Unrealized Losses on AFS Securities
Gross (included in AFS securities)	$	(94,586	)	$	(59,764	)	$	(75,302	)	$	(77,224	)	$	(134,480	)
Net of income tax (included in equity)		(59,565	)		(37,601	)		(47,378	)		(48,599	)		(84,667	)
Market Rates for U.S. Treasury Notes
Three year		4.89	%		4.54	%		4.74	%		4.62	%		5.13	%
Five year		4.92			4.54			4.70			4.59			5.09

11

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

	Three Months Ended
	6/30/07								3/31/07
	Average Balance		Income/ Expense			Yield/ Rate			Average Balance		Income/ Expense			Yield/ Rate
Assets
Earning assets
Commercial	$	7,724,530	$	152,338			7.91	%	$	7,579,574	$	148,078			7.92	%
Consumer		1,584,646		29,382			7.44			1,570,745		28,957			7.48
Indirect		674,961		11,271			6.70			662,691		10,646			6.52
Risk management derivatives tied to loans		—		(1,030	)					—		(1,053	)
Total loans(1)		9,984,137		191,961			7.71			9,813,010		186,628			7.71
Investment securities (taxable)(2)		2,247,092		26,879			4.79			2,414,896		28,825			4.78
Investment securities (nontaxable)(3)		359,043		4,443			4.95			383,804		4,689			4.89
Total investment securities		2,606,135		31,322			4.81			2,798,700		33,514			4.79
Federal funds sold, interest-bearing bank balances, and other temp investments		6,376		97			6.10			8,331		141			6.86
Total earning assets		12,596,648		223,380			7.11			12,620,041		220,283			7.06
Non-earning assets		1,496,431								1,528,013
Total assets	$	14,093,079							$	14,148,054
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,176,182	$	6,029			2.06		$	1,187,239	$	5,935			2.03
Savings		181,166		736			1.63			178,940		706			1.60
Money market		2,294,181		22,528			3.94			2,377,771		23,537			4.01
Time deposits, excluding brokered deposits		2,910,284		36,407			5.02			2,893,638		35,581			4.99
Brokered deposits		2,042,664		26,366			5.18			1,771,081		22,720			5.20
Total interest-bearing deposits		8,604,477		92,066			4.29			8,408,669		88,479			4.27
Customer sweeps		496,030		5,528			4.47			453,928		4,981			4.45
Other borrowings		1,989,109		27,710			5.59			2,270,120		30,644			5.47
Total interest-bearing liabilities		11,089,616		125,304			4.53			11,132,717		124,104			4.52
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,225,075								1,230,320
Other noninterest liabilities		231,996								233,248
Total liabilities		12,546,687								12,596,285
Shareholders’ equity		1,546,392								1,551,769
Total liabilities and shareholders’ equity	$	14,093,079							$	14,148,054
Net interest margin (tax-equivalent)			$	98,076			3.12	%			$	96,179			3.08	%
Less: tax-equivalent adjustment(3)				1,555								1,641
Net interest income			$	96,521							$	94,538
Supplemental data:
Customer funding(4)	$	8,282,918	$	71,228			3.45	%	$	8,321,836	$	70,740			3.45	%
Wholesale borrowings(5)		4,031,773		54,076			5.38			4,041,201		53,364			5.36
Total funding(6)	$	12,314,691	$	125,304			4.08		$	12,363,037	$	124,104			4.07

(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)	Customer funding includes total deposits less brokered deposits plus customer sweeps.
(5)	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.
(6)	Total funding includes customer funding and wholesale borrowings.
Note: Average balances are derived from daily balances.

12

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

	Three Months Ended
	12/31/06							9/30/06							6/30/06
	Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate
Assets
Earning assets
Loans(1)	$	9,623,050	$	187,385		7.73	%	$	9,523,286	$	184,476		7.69	%	$	9,711,641	$	179,971		7.43	%
Investment securities (taxable)(2)		2,503,989		29,876		4.77			2,586,438		30,779		4.76			2,676,211		31,652		4.73
Investment securities (nontaxable)(3)		400,117		4,808		4.81			407,005		4,831		4.75			416,117		4,938		4.75
Total investment securities		2,904,106		34,684		4.78			2,993,443		35,610		4.76			3,092,328		36,590		4.73
Federal funds sold, interest-bearing bank balances, and other temp investments		11,521		144		4.96			13,479		196		5.77			64,319		879		5.48
Total earning assets		12,538,677		222,213		7.04			12,530,208		220,282		6.98			12,868,288		217,440		6.77
Non-earning assets		1,592,004							1,443,500							1,476,147
Total assets	$	14,130,681						$	13,973,708						$	14,344,435
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,106,819	$	5,770		2.07		$	1,132,556	$	5,869		2.06		$	1,168,434	$	5,054		1.73
Savings		184,733		687		1.48			187,089		577		1.22			179,220		287		0.64
Money market		2,445,437		24,109		3.91			2,420,756		22,771		3.73			2,261,040		18,651		3.31
Time deposits, excluding brokered deposits		2,687,712		32,635		4.82			2,620,505		29,653		4.49			2,641,817		26,984		4.10
Brokered deposits		1,478,336		19,515		5.24			1,344,521		18,523		5.47			1,408,889		17,728		5.05
Total interest-bearing deposits		7,903,037		82,716		4.15			7,705,427		77,393		3.98			7,659,400		68,704		3.60
Customer sweeps		414,742		4,695		4.49			369,697		4,274		4.59			314,040		3,383		4.32
Other borrowings		2,645,462		36,465		5.47			2,811,224		38,241		5.40			3,252,647		40,503		4.99
Total interest-bearing liabilities		10,963,241		123,876		4.48			10,886,348		119,908		4.37			11,226,087		112,590		4.02
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,302,329							1,369,032							1,446,115
Other noninterest liabilities		306,023							217,223							195,999
Total liabilities		12,571,593							12,472,603							12,868,201
Shareholders’ equity		1,559,088							1,501,105							1,476,234
Total liabilities and shareholders’ equity	$	14,130,681						$	13,973,708						$	14,344,435
Net interest margin (tax-equivalent)			$	98,337		3.12	%			$	100,374		3.19	%			$	104,850		3.27	%
Less: tax-equivalent adjustment(3)				1,683							1,691							1,728
Net interest income			$	96,654						$	98,683						$	103,122
Supplemental data:
Customer funding(4)	$	8,141,772	$	67,896		3.31	%	$	8,099,635	$	63,144		3.09	%	$	8,010,666	$	54,359		2.72	%
Wholesale borrowings(5)		4,123,798		55,980		5.39			4,155,745		56,764		5.42			4,661,536		58,231		5.01
Total funding(6)	$	12,265,570	$	123,876		4.01		$	12,255,380	$	119,908		3.88		$	12,672,202	$	112,590		3.56

(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)	Customer funding includes total deposits less brokered deposits plus customer sweeps.
(5)	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.
(6)	Total funding includes customer funding and wholesale borrowings
Note: Average balances are derived from daily balances.

13

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

	Three Months Ended
	6/30/07					3/31/07
				Diluted EPS					Diluted EPS
Net Income, as Reported (GAAP)	$	17,930		$	0.24	$	20,518		$	0.27
Non-Operating Items
Loss on securities		2,237					1,385
Employment contract buyouts and severance		546					1,760
Loss on early extinguishment of debt		231					—
Related income taxes		(1,008	)				(1,065	)
Operating Earnings (Net Income, Excluding Non-Operating Items)(1)		19,936			0.27		22,598			0.30
Amortization of intangibles		2,136					2,001
Related income taxes		(714	)				(677	)
Cash Operating Earnings (Net Income, Excluding Non-Operating Items and Amortization of Intangibles)	$	21,358		$	0.29	$	23,922		$	0.32
Average Common Shares Outstanding, Diluted		74,397,091					75,244,968
Select Balance Sheet (Averages)
Total assets	$	14,093,079				$	14,148,054
Intangible assets		(682,584	)				(684,626	)
Tangible assets		13,410,495					13,463,428
Shareholders’ equity		1,546,392					1,551,769
Intangible assets		(682,584	)				(684,626	)
Tangible equity		863,808					867,143
Return on Average Assets
GAAP earnings		0.51	%				0.59	%
Operating earnings(1)		0.57					0.65
Cash operating earnings on average tangible assets		0.64					0.72
Return on Average Equity
GAAP earnings		4.65					5.36
Operating earnings(1)		5.17					5.91
Cash operating earnings on average tangible equity		9.92					11.19

⁽¹⁾ Excluding the $10.5 million pre-tax additional provision for credit losses ($7.0 million after-tax), or $0.09 per diluted share, related to the loans in the NC development under investigation, second quarter 2007 operating earnings totaled $0.36 per diluted share, operating return on average assets totaled 0.77% and operating return on average equity totaled 6.98%.

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
	12/31/06					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 (gain) on securities		239					—					(3,601	)				(675	)
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.

15

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
(Gain) loss on securities		(4,037	)				52,139
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

16

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

	Three Months Ended
	6/30/07			3/31/07
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	96,521		$	94,538
Tax-equivalent adjustment		1,555			1,641
Net interest income (tax-equivalent)	$	98,076		$	96,179
Total noninterest income, as reported (GAAP)	$	28,508		$	27,824
Adjustments for non-operating items:
Loss on securities		2,237			1,385
Operating noninterest income (noninterest income, excluding non-operating items)	$	30,745		$	29,209
Total noninterest expenses, as reported (GAAP)	$	80,976		$	82,331
Adjustments for non-operating items:
Employment contract buyouts and severance		(546	)		(1,760	)
Loss on early extinguishment of debt		(231	)		—
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		80,199			80,571
Less: amortization of intangibles		(2,136	)		(2,001	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items and amortization of intangibles)	$	78,063		$	78,570
Total Revenue(1)
GAAP	$	125,029		$	122,362
Operating(2)		128,821			125,388
Noninterest Income as a % Total Revenue(3)
GAAP		22.80	%		22.74	%
Operating(2)		23.87			23.29
Efficiency Ratios(4)
GAAP		64.77			67.28
Operating(2)		62.26			64.26
Cash operating(2)		60.60			62.66

(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
	12/31/06			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)	$	30,257		$	35,082		$	29,342		$	27,155
Adjustments for non-operating items:
Loss (gain) on securities		239			—			(3,601	)		(675	)
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)	$	30,496		$	32,584		$	29,218		$	26,480
Total noninterest expenses, as reported (GAAP)	$	91,022		$	80,798		$	80,381		$	77,669
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)		85,211			80,798			80,381			77,071
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)	$	83,055		$	78,594		$	78,173		$	74,864
Total Revenue(1)
GAAP	$	126,911		$	133,765		$	132,464		$	130,067
Operating(2)		128,833			132,958			134,068			131,193
Noninterest Income as a % Total Revenue(3)
GAAP		23.84	%		26.23	%		22.15	%		20.88	%
Operating(2)		23.67			24.51			21.79			20.18
Efficiency Ratios(4)
GAAP		71.72			60.40			60.68			59.71
Operating(2)		66.14			60.77			59.96			58.75
Cash operating(2)		64.47			59.11			58.31			57.06

(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)

	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)	$	121,836		$	47,267		$	118,066		$	95,117		$	69,796
Adjustments for non-operating items:
Change in fair value of interest rate swaps		—			13,278			(2,550	)		14,237			(7,527	)
(Gain) loss on securities		(4,037	)		52,139			(11,721	)		(16,456	)		(6,120	)
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)		118,778			112,684			111,812			92,297			56,149
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	$	118,778		$	102,324		$	84,252		$	72,811		$	48,753
Total noninterest expenses, as reported (GAAP)	$	329,870		$	320,110		$	243,433		$	201,548		$	158,073
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)		323,461			297,073			229,985			192,942			147,760
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)	$	314,686		$	288,436		$	223,942		$	189,509		$	146,241
Total Revenue(1)
GAAP	$	523,207		$	456,323		$	453,907		$	346,007		$	279,939
Operating(2)		527,052			527,794			452,009			345,868			268,644
Noninterest Income as a % Total Revenue(3)
GAAP		23.29	%		10.36	%		26.01	%		27.49	%		24.93	%
Operating(2)		22.54			21.35			24.74			26.69			20.90
Operating, excluding net cash settlement of certain interest rate swaps(4)		22.54			19.39			18.64			21.05			18.15
Efficiency Ratios(5)
GAAP		63.05			70.15			53.63			58.25			56.47
Operating(2)		61.37			56.29			50.88			55.78			55.00
Cash operating(2)		59.71			54.65			49.54			54.79			54.44

(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