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

Quarterly Financial Data Supplement (Unaudited)

First Quarter 2008

	Page
Financial Summary	1
Consolidated Statements of Income (Loss)	2
Details for Noninterest Income and Noninterest Expenses	3
Consolidated Balance Sheets	4
Investment Securities Portfolio Analysis	5
Investment Securities Portfolio Credit Risk Profile	6
Loan Portfolio Composition Based on Loan Purpose and Loan Growth	7
Summary of Credit Quality and Allowance for Credit Losses	8
Commercial Real Estate Loans	9
Types of Customer Funding and 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

FIRST QUARTER 2008 FINANCIAL SUMMARY

Changes vs. prior quarter, unless indicated otherwise:
Quarterly EPS
•	Net loss of $201.3 million, or $(2.77) per diluted share
	— Non-cash, pre-tax goodwill impairment charge of $188.4 million for the Florida Banking Segment; does not impact tangible capital or regulatory capital
•	Operating loss of $14.5 million, or $(0.20) per diluted share
•	Average diluted shares of 72.6 million, down 0.4% versus prior quarter; down 3.5% versus prior year
Revenue
•	Total revenue, defined as net interest income plus noninterest income, of $123.6 million
	— Non-operating items: $1.9 million gain on Visa IPO share redemption, $396,000 net gain on other securities
•	Operating revenues of $122.8 million, down $3.7 million
•	Tax-equivalent net interest income of $94.2 million, down $2.3 million
	— Net interest margin of 3.07%, down 2 basis points from 3.09%
	— Average earning assets of $12.3 billion, down 3.3% linked-quarter annualized
•	Operating noninterest income of $28.6 million, down $1.4 million
	— Increase of $261,000 or 0.9% from prior year
Average Balance Sheet Growth
•	Average loans, up 1.9% linked-quarter annualized
•	Average securities, down $154.9 million since prior quarter; down $723.0 million since 1Q07
•	Average customer funding, defined as total deposits less brokered deposits plus customer sweep accounts, up 7.8% linked-quarter annualized
•	Average wholesale borrowings, including brokered deposits and excluding customer sweep accounts, down 21.1% linked-quarter annualized
Noninterest Expenses and Operating Efficiency
•	Noninterest expenses of $268.2 million
	— Non-operating items: $188.4 million goodwill impairment, $863,000 reversal of Visa-related litigation accrual, and $547,000 loss on early extinguishment of debt
•	Operating noninterest expenses of $80.1 million, up $963,000 from prior quarter; $347,000 from prior year
	— FDIC insurance premiums (included in regulatory assessments) up $613,000 from prior quarter; $1.6 million from prior year
	— Advertising and business development up $417,000 from prior quarter; $540,000 from prior year
•	Cash operating efficiency of 63.9%, an increase from 61.1% for the prior quarter
Credit Quality
•	Nonperforming assets of $232.0 million or 2.26% of loans held for investment and foreclosed property
•	Net loan charge-offs of $25.0 million, or 0.98% annualized as a % of average loans held for investment
•	Provision for credit losses of $73.3 million, up $41.4 million from prior quarter; $64.3 million from prior year
•	Provision for credit losses exceeded net loan charge-offs by $48.3 million, which increased the allowance for credit losses
•	Allowance for credit losses of $177.0 million or 1.72% of loans held for investment, an increase from 1.26% at December 31, 2007
Capital
•	Tangible equity to tangible asset ratio of 6.72%, up from 6.61% at December 31, 2007
•	Tangible equity per share of $12.26, up from $12.04 at December 31, 2007
•	After-tax unrealized loss on available for sale securities decreased $28.9 million from prior quarter
•	Tier 1 capital ratio of 9.33%, down from 9.49% at December 31, 2007

1

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(dollars in thousands, except share data) (unaudited)

	Three Months Ended
	3/31/08			12/31/07		9/30/07		6/30/07		3/31/07
Interest Income
Interest and fees on loans	$	171,228		$	190,846	$	195,393	$	191,961	$	186,628
Interest and dividends on securities:
Taxable		20,392			22,431		25,390		26,879		28,825
Exempt from federal income taxes		2,693			2,809		2,856		2,888		3,048
Total interest and dividends on securities		23,085			25,240		28,246		29,767		31,873
Interest on short-term investments		72			64		100		97		141
Total interest income		194,385			216,150		223,739		221,825		218,642
Interest Expense
Interest on deposits		77,106			93,253		94,497		92,066		88,479
Interest on borrowed funds		24,573			27,949		32,468		33,238		35,625
Total interest expense		101,679			121,202		126,965		125,304		124,104
Net Interest Income		92,706			94,948		96,774		96,521		94,538
Provision for Credit Losses		73,292			31,926		10,504		17,125		9,013
Net interest income after provision for credit losses		19,414			63,022		86,270		79,396		85,525
Noninterest Income		30,916			28,741		29,917		27,683		26,970
Noninterest Expenses		268,179			80,481		78,739		80,151		81,477
Income (loss) before income taxes		(217,849	)		11,282		37,448		26,928		31,018
Income tax expense (benefit)		(16,557	)		2,293		11,609		8,998		10,500
Net Income (Loss)	$	(201,292	)	$	8,989	$	25,839	$	17,930	$	20,518
Average common shares outstanding, basic		72,449,437			72,571,612		73,146,211		74,050,115		74,736,832
Average common shares outstanding, diluted		72,574,840			72,875,062		73,605,752		74,397,091		75,244,968
Net income (loss) per common share, basic	$	(2.78	)	$	0.12	$	0.35	$	0.24	$	0.27
Net income (loss) per common share, diluted		(2.77	)		0.12		0.35		0.24		0.27
Cash dividends declared per common share		0.19			0.19		0.18		0.18		0.18

2

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

	Three Months Ended
	3/31/08			12/31/07			9/30/07		6/30/07			3/31/07
Noninterest Income
Service charges on deposit accounts	$	10,429		$	11,470		$	11,213	$	11,223		$	10,613
Debit card income, net		1,876			1,938			1,838		1,839			1,567
Customer service fee income		1,331			1,422			1,533		1,402			1,291
Total customer fee income		13,636			14,830			14,584		14,464			13,471
Retail investment services, net		1,546			2,103			2,064		2,021			1,714
Insurance income		3,060			2,906			2,839		2,987			3,297
Trust and investment management income		1,666			1,625			1,642		1,734			1,594
Benefits administration fees		756			881			889		749			742
Total wealth management income		7,028			7,515			7,434		7,491			7,347
Mortgage banking income		1,485			1,273			834		1,877			2,069
Bank-owned life insurance		3,147			3,065			2,974		4,454			2,851
Merchant processing income, net		857			829			928		771			735
Gain (loss) on certain derivative activities		12			5			198		(1,497	)		97
Other		2,451			2,512			2,678		2,360			1,785
Operating noninterest income (noninterest income, excluding non-operating items)		28,616			30,029			29,630		29,920			28,355
Gain (loss) on securities		396			(1,288	)		287		(2,237	)		(1,385	)
Gain on Visa IPO share redemption		1,904			—			—		—			—
Non-operating noninterest (loss) income		2,300			(1,288	)		287		(2,237	)		(1,385	)
Total noninterest income	$	30,916		$	28,741		$	29,917	$	27,683		$	26,970
Noninterest Expenses
Salaries and wages	$	34,853		$	33,220		$	34,535	$	34,258		$	35,072
Employee benefits		9,298			9,232			8,862		9,245			9,759
Occupancy		8,623			8,783			8,723		8,545			8,608
Furniture and equipment		6,383			6,590			6,543		6,486			6,462
Professional services		3,527			3,767			4,278		4,914			4,103
Advertising and business development		2,471			2,054			1,443		1,973			1,931
Telecommunications		1,423			1,453			1,404		1,418			1,393
Amortization of intangibles		1,658			1,853			1,907		2,136			2,001
Regulatory assessments		2,077			1,464			300		436			428
Other		9,751			10,685			9,445		9,963			9,960
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		80,064			79,101			77,440		79,374			79,717
Goodwill impairment		188,431			—			—		—			—
Employment contract buyouts and severance		—			—			—		546			1,760
Loss on early extinguishment of debt		547			499			1,299		231			—
Visa-related litigation		(863	)		881			—		—			—
Non-operating noninterest expenses		188,115			1,380			1,299		777			1,760
Total noninterest expenses	$	268,179		$	80,481		$	78,739	$	80,151		$	81,477

3

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

	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Assets
Cash and due from banks	$	223,185		$	290,974		$	221,529		$	267,005		$	257,884
Interest-bearing bank balances		10,035			5,551			520			263			7,012
Federal funds sold and securities purchased to resell		—			—			—			—			50,000
Securities
Available for sale		2,069,898			1,986,212			2,323,241			2,433,341			2,546,047
Held to maturity		31,468			39,691			41,174			41,892			46,217
Total securities		2,101,366			2,025,903			2,364,415			2,475,233			2,592,264
Loans held for sale		16,119			17,867			19,572			35,718			33,519
Loans held for investment		10,275,653			10,213,420			10,173,237			10,029,228			9,898,134
Less: Allowance for loan losses		(174,420	)		(126,427	)		(118,861	)		(125,545	)		(113,736	)
Net loans held for investment		10,101,233			10,086,993			10,054,376			9,903,683			9,784,398
Premises and equipment, net		243,628			233,852			226,784			224,951			223,738
Accrued interest receivable		56,764			70,464			73,383			75,851			72,801
Goodwill		462,572			651,003			650,637			650,544			650,536
Other intangible assets, net		25,521			27,179			29,032			30,939			33,075
Other assets		491,297			467,798			459,973			475,488			452,920
	$	13,731,720		$	13,877,584		$	14,100,221		$	14,139,675		$	14,158,147
Liabilities and Shareholders’ Equity
Liabilities
Deposits
Noninterest-bearing	$	1,108,623		$	1,127,657		$	1,164,312		$	1,244,834		$	1,286,800
Interest-bearing customer deposits		6,466,940			6,402,503			6,353,852			6,547,479			6,686,919
Interest-bearing brokered deposits		1,875,969			2,258,408			1,983,505			2,293,493			1,977,489
Total deposits		9,451,532			9,788,568			9,501,669			10,085,806			9,951,208
Short-term borrowings		1,917,450			1,637,550			2,070,581			1,432,650			1,607,533
Long-term debt		799,217			698,340			732,203			857,248			809,290
Accrued interest payable		58,705			69,288			73,418			77,751			77,380
Other liabilities		126,495			133,530			174,098			168,033			151,126
Total liabilities		12,353,399			12,327,276			12,551,969			12,621,488			12,596,537
Shareholders’ equity
Preferred stock		—			—			—			—			—
Common stock		72,630			72,455			72,971			73,699			74,673
Surplus		1,110,356			1,107,601			1,116,361			1,129,499			1,150,288
Retained earnings		170,186			386,061			391,019			378,399			373,788
Guarantee of employee stock ownership plan debt		—			—			—			(39	)		(95	)
Accumulated other comprehensive income (loss), net of income tax		25,149			(15,809	)		(32,099	)		(63,371	)		(37,044	)
Total shareholders’ equity		1,378,321			1,550,308			1,548,252			1,518,187			1,561,610
	$	13,731,720		$	13,877,584		$	14,100,221		$	14,139,675		$	14,158,147

4

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

	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Investment Securities Portfolio
Available for sale (at fair value):
U.S. Treasury	$	28,798		$	27,592		$	168,614		$	167,195		$	167,295
U.S. Government agencies		337,775			503,571			659,681			650,581			657,708
Agency mortgage-backed securities		1,343,108			1,088,427			1,119,547			1,158,498			1,246,384
Private label mortgage-backed securities		16,209			—			—			—			—
State and municipal		279,788			302,586			303,388			308,070			315,372
Other investments (1)		64,220			64,036			72,011			148,997			159,288
Total available for sale securities		2,069,898			1,986,212			2,323,241			2,433,341			2,546,047
Held to maturity (at amortized cost)		31,468			39,691			41,174			41,892			46,217
Total securities	$	2,101,366		$	2,025,903		$	2,364,415		$	2,475,233		$	2,592,264
Total securities as a percentage of total assets		15.3	%		14.6	%		16.8	%		17.5	%		18.3	%

	March 31, 2008
	Amortized Cost		Percentage of Total			Duration		Book Yield
Debt Securities
U.S. Treasury	$	27,078		1.3	%		4.2		3.96	%
U.S. Government agencies		335,947		16.6			1.8		4.70
Mortgage-backed securities:
Collateralized mortgage obligations		872,999		43.1			4.7		4.56
Adjustable rate mortgages		202,863		10.0			2.4		4.83
Pass-through		293,777		14.5			3.2		4.66
State and municipal		275,463		13.6			3.0		4.96
Corporate bonds		19,082		0.9			2.4		5.69
Total available for sale debt securities	$	2,027,209		100.0	%		3.5		4.68	%
Fixed interest rate:
Mortgage-backed securities	$	1,159,098		57.2	%		4.3		4.58	%
Other		657,570		32.4			2.4		4.81
Variable interest rate:
Mortgage-backed securities		210,541		10.4			2.4		4.83
Total available for sale debt securities	$	2,027,209		100.0	%		3.5		4.68	%

Projected Interest Rate Shock for Debt Securities

Interest Rate Scenario		Estimated Impact on Fair Value		Duration
Up 2.00%			(8.2)%		4.9
Up 1.00%			(3.9)		4.4
Flat			—		3.5
Down 1.00%			2.8		1.8
Down 2.00%	(2)		3.6		0.7

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. Also, excludes certain other investments recorded in other assets totaling $18.0 million.
(2)	Due to the current low interest rate environment, certain modifications were made to the Down 2.00% shock scenario.

5

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
INVESTMENT SECURITIES PORTFOLIO CREDIT RISK PROFILE
(dollars in millions) (unaudited)

	March 31, 2008
	Balance		% of Total
Government and agency
U.S. Treasury	$	29		1	.4%
U.S. Government agencies		338		16	.1
Agency mortgage-backed securities (MBS) (1)		1,343		63	.9
Federal Home Loan Bank Stock		40		1	.9
Total government and agency		1,750		83	.3
State and municipal (2)
Pre-funded with collateral or AAA-rated backed by Texas Permanent School Fund		203		9	.7
AAA-rated		16		0	.7
AA or A-rated		82		3	.9
BBB-rated		4		0	.2
Non-rated		6		0	.3
Total state and municipal		311		14	.8
Corporate bonds
AA or A-rated		6		0	.3
BBB-rated		13		0	.6
Total corporate bonds		19		0	.9
Private label mortgage-backed securities (1)
AAA-rated		16		0	.8
Total private label mortgage-backed securities		16		0	.8
Community bank stocks and other		5		0	.2
Total securities	$	2,101		100	.0%
Percent of total securities:
Rated A or higher				98	.7%
Investment grade				99	.5%

(1)	Current policies restrict MBS/CMO purchases to agency-backed and a small percent of private-label securities and prohibit securities collateralized by sub-prime assets.
(2)	Includes $31.5 million of securities held to maturity at amortized cost.
Note:	Within each category, securities are ordered based on risk assessment from lowest to highest. TSFG holds no collateralized debt obligations.

6

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

	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Commercial Loans
Commercial and industrial	$	2,805,825		$	2,759,492		$	2,693,973		$	2,569,628		$	2,596,705
Owner - occupied real estate		1,107,069			1,070,376			1,042,131			961,806			883,738
Commercial real estate		4,156,522			4,158,384			4,178,653			4,258,837			4,209,149
		8,069,416			7,988,252			7,914,757			7,790,271			7,689,592
Consumer Loans
Indirect - sales finance		710,806			699,014			707,819			684,053			666,801
Consumer lot loans		291,378			311,386			334,971			350,539			353,694
Direct retail		87,064			94,228			97,289			96,768			97,786
Home equity		558,334			548,928			532,640			530,620			514,963
		1,647,582			1,653,556			1,672,719			1,661,980			1,633,244
Mortgage Loans		558,655			571,612			585,761			576,977			575,298
Total loans held for investment	$	10,275,653		$	10,213,420		$	10,173,237		$	10,029,228		$	9,898,134
Percentage of Loans Held for Investment
Commercial and industrial		27.3	%		27.0	%		26.5	%		25.6	%		26.2	%
Owner - occupied real estate		10.8			10.5			10.2			9.6			8.9
Commercial real estate		40.5			40.7			41.1			42.5			42.5
Consumer		16.0			16.2			16.4			16.6			16.5
Mortgage		5.4			5.6			5.8			5.7			5.9
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Growth in Loans Held for Investment (1)
Growth vs. prior quarter, annualized		2.5	%		1.6	%		5.7	%		5.3	%		8.2	%
Growth year-to-date, annualized		2.5			5.3			6.5			6.8			8.2

⁽¹⁾ At December 31, 2006, loans held for investment totaled $9,701,867.

7

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
	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Credit Quality
Loans held for investment	$	10,275,653		$	10,213,420		$	10,173,237		$	10,029,228		$	9,898,134
Allowance for loan losses		174,420			126,427			118,861			125,545			113,736
Allowance for credit losses		177,016			128,695			120,424			126,721			114,822
Nonperforming loans(1)		223,790			81,631			53,257			41,527			43,222
Foreclosed property (other real estate owned and personal property repossessions)		8,227			8,276			5,658			4,028			3,572
Nonperforming assets	$	232,017		$	89,907		$	58,915		$	45,555		$	46,794
Nonperforming loans as a % of loans held for investment		2.18	%		0.80	%		0.52	%		0.41	%		0.44	%
Nonperforming assets as a % of loans held for investment and foreclosed property		2.26			0.88			0.58			0.45			0.47
Allowance for loan losses as a % of loans held for investment		1.70			1.24			1.17			1.25			1.15
Allowance for credit losses as a % of loans held for investment		1.72			1.26			1.18			1.26			1.16
Allowance for loan losses to nonperforming loans		0.78	x		1.55	x		2.23	x		3.02	x		2.63	x
Impaired loans (1)	$	206,621		$	68,102		$	38,060		$	33,596		$	36,403
Specific allowance for impaired loans		32,070			11,340			11,010			9,414			7,716
Loans past due 90 days or more (mortgage and consumer with interest accruing)		9,588			5,349			2,629			2,503			193
Net loan charge-offs		24,971			23,655			16,801			5,226			6,879
Average loans held for investment		10,221,424			10,164,807			10,042,419			9,947,636			9,783,328
Net loan charge-offs as a % of average loans held for investment (annualized)		0.98	%		0.92	%		0.66	%		0.21	%		0.29	%
Allowance for Loan Losses
Balance at beginning of period	$	126,427		$	118,861		$	125,545		$	113,736		$	111,663
Provision for loan losses		72,964			31,221			10,117			17,035			8,952
Loans charged-off		(27,583	)		(25,249	)		(17,926	)		(7,622	)		(8,611	)
Recoveries of loans previously charged-off		2,612			1,594			1,125			2,396			1,732
Balance at end of period	$	174,420		$	126,427		$	118,861		$	125,545		$	113,736
Reserve for Unfunded Lending Commitments
Balance at beginning of period	$	2,268		$	1,563		$	1,176		$	1,086		$	1,025
Provision for unfunded lending commitments		328			705			387			90			61
Balance at end of period	$	2,596		$	2,268		$	1,563		$	1,176		$	1,086
Allowance for Credit Losses
Balance at beginning of period	$	128,695		$	120,424		$	126,721		$	114,822		$	112,688
Provision for credit losses		73,292			31,926			10,504			17,125			9,013
Loans charged-off		(27,583	)		(25,249	)		(17,926	)		(7,622	)		(8,611	)
Recoveries of loans previously charged-off		2,612			1,594			1,125			2,396			1,732	��
Balance at end of period	$	177,016		$	128,695		$	120,424		$	126,721		$	114,822

⁽¹⁾ At March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007, and March 31, 2007, these credit quality indicators (nonperforming loans and impaired loans) included $1.6 million, $1.7 million, $1.9 million, $1.9 million, and $1.9 million, respectively, in restructured loans.

8

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
COMMERCIAL REAL ESTATE LOANS
(dollars in millions) (unaudited)

	3/31/08 Commercial Real Estate ("CRE") Loans by Geography (1)
	SC, Excl Coastal			Coastal SC			Western NC			Central FL			North FL			South FL			Tampa Bay			Total CRE Loans			% of Loans HFI
CRE Loans by Product Type:
Completed income property	$	409		$	237		$	438		$	181		$	344		$	163		$	200		$	1,972			19	%
Residential A&D		105			80			163			81			103			5			103			640			6
Commercial A&D		54			32			51			23			22			12			64			258			2
Commercial construction		120			26			39			52			25			15			22			299			3
Residential construction		52			37			70			35			44			1			17			256			2
Residential condo		31			107			9			4			19			23			72			265			3
Undeveloped land		43			51			74			82			84			63			70			467			5
Total CRE Loans	$	814		$	570		$	844		$	458		$	641		$	282		$	548		$	4,157			40	%
% of Total Loans HFI		8	%		6	%		8	%		4	%		6	%		3	%		5	%		40	%

	3/31/08 CRE Nonaccrual Loans ("NAL") by Geography (1)
	SC, Excl Coastal			Coastal SC			Western NC			Central FL			North FL			South FL			Tampa Bay			Total CRE NAL			% of NAL (2)
CRE Nonaccrual Loans by Product Type:
Completed income property	$	1.1		$	1.1		$	6.0		$	9.3		$	0.7		$	—		$	0.1		$	18.3			8	%
Residential A&D		0.5			5.5			10.4			15.2			11.9			0.3			10.7			54.5			25
Commercial A&D		—			—			0.6			0.9			—			—			18.0			19.5			9
Commercial construction		—			—			—			—			—			—			—			—			—
Residential construction		1.7			2.2			4.8			4.1			0.8			—			—			13.6			6
Residential condo		—			3.7			—			2.1			—			9.2			32.5			47.5			21
Undeveloped land		—			—			2.1			1.7			6.0			8.5			0.1			18.4			8
Total CRE Nonaccrual Loans	$	3.3		$	12.5		$	23.9		$	33.3		$	19.4		$	18.0		$	61.4		$	171.8			77	%
CRE Nonaccrual Loans as % of Total Nonaccrual Loans (2)		1	%		5	%		11	%		15	%		9	%		8	%		28	%		77	%

	Three Months Ended 3/31/08 CRE Net Charge-offs ("NCO") by Geography
	SC, Excl Coastal			Coastal SC			Western NC			Central FL			North FL			South FL			Tampa Bay			Total CRE NCO			% of NCO
CRE Net Charge-offs by Product Type:
Completed income property	$	—		$	—		$	0.3		$	—		$	—		$	—		$	—		$	0.3			1	%
Residential A&D		0.2			—			0.2			—			4.9			—			—			5.3			22
Commercial A&D		—			—			0.3			—			—			—			1.0			1.3			5
Commercial construction		—			—			—			—			—			—			—			—			—
Residential construction		—			—			—			—			—			—			—			—			—
Residential condo		—			—			0.3			—			—			1.5			1.5			3.3			13
Undeveloped land		—			—			0.7			0.7			2.3			—			(1.1	)		2.6			10
Total CRE Net Charge-offs	$	0.2		$	—		$	1.8		$	0.7		$	7.2		$	1.5		$	1.4		$	12.8			51	%
CRE Net Charge-offs as % of Total Net Charge-offs		1	%		0	%		7	%		3	%		29	%		6	%		5	%		51	%

(1)	During first quarter 2008, TSFG reclassified certain loan balances in our commercial real estate categories into Residential Condo. Additionally, we shifted certain existing loan balances into our Undeveloped Land category and refined coding definitions for all products. Accordingly, amounts presented for prior periods are not comparable to the current March 31, 2008 presentation.
(2)	Calculated as a percent of nonaccrual loans, which totaled $222.4 million at March 31, 2008.

9

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

	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Noninterest-bearing	$	1,108,623		$	1,127,657		$	1,164,312		$	1,244,834		$	1,286,800
Interest-bearing checking		1,162,374			1,117,850			1,100,428			1,177,609			1,198,714
Money market accounts		2,182,709			2,188,261			2,184,822			2,245,466			2,374,242
Savings accounts		155,337			158,092			169,091			177,289			184,283
Time deposits under $100,000		1,408,593			1,442,030			1,384,094			1,363,462			1,320,108
Time deposits of $100,000 or more		1,557,927			1,496,270			1,515,417			1,583,653			1,609,572
Customer deposits (1)		7,575,563			7,530,160			7,518,164			7,792,313			7,973,719
Brokered deposits		1,875,969			2,258,408			1,983,505			2,293,493			1,977,489
Total deposits		9,451,532			9,788,568			9,501,669			10,085,806			9,951,208
Less: Brokered deposits		(1,875,969	)		(2,258,408	)		(1,983,505	)		(2,293,493	)		(1,977,489	)
Add: Customer sweep accounts		631,214			648,311			599,021			556,622			479,698
Customer funding (2)	$	8,206,777		$	8,178,471		$	8,117,185		$	8,348,935		$	8,453,417
Percentage of Deposits
Noninterest-bearing		11.7	%		11.5	%		12.2	%		12.3	%		12.9	%
Interest-bearing checking		12.3			11.4			11.6			11.7			12.0
Money market accounts		23.1			22.4			23.0			22.3			23.9
Savings accounts		1.6			1.6			1.8			1.8			1.8
Time deposits under $100,000		14.9			14.7			14.6			13.5			13.3
Time deposits of $100,000 or more		16.5			15.3			15.9			15.7			16.2
Customer deposits (1)		80.1			76.9			79.1			77.3			80.1
Brokered deposits		19.9			23.1			20.9			22.7			19.9
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Growth vs. Prior Quarter, Annualized (3)
Noninterest-bearing		(6.8	)%		(12.5	)%		(25.7	)%		(13.1	)%		1.9	%
Total deposits		(13.8	)		12.0			(23.0	)		5.4			18.5
Customer funding (2)		1.4			3.0			(11.0	)		(5.0	)		2.9
Growth Year-To-Date, Annualized (3)
Noninterest-bearing		(6.8	)%		(12.0	)%		(12.2	)%		(5.7	)%		1.9	%
Total deposits		(13.8	)		2.9			(0.2	)		12.1			18.5
Customer funding (2)		1.4			(2.6	)		(4.4	)		(1.0	)		2.9

(1)	Total deposits less brokered deposits.
(2)	Total deposits less brokered deposits plus customer sweep accounts.
(3)	At December 31, 2006, noninterest-bearing totaled $1,280,908, total deposits totaled $9,516,740, and customer funding totaled $8,392,597.

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)

	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Types of wholesale borrowings
Short-term borrowings
Federal funds purchased and repurchase agreements	$	541,022		$	206,216		$	595,272		$	654,299		$	1,016,470
Customer sweep accounts		631,214			648,311			599,021			556,622			479,698
Federal Reserve borrowings		200,000			—			—			—			—
FHLB advances		—			—			175,000			75,000			75,000
Commercial paper		29,582			30,828			32,601			32,687			35,584
Treasury, tax and loan note		515,632			752,195			668,687			114,042			781
Total short-term borrowings		1,917,450			1,637,550			2,070,581			1,432,650			1,607,533
Long-term borrowings
Repurchase agreements		200,000			200,000			200,000			200,000			200,000
FHLB advances		324,080			223,087			223,093			328,100			328,107
Subordinated notes		216,704			216,704			242,478			262,067			188,871
Mandatorily redeemable preferred stock of subsidiary		56,800			56,800			64,800			64,800			89,800
Note payable		775			786			797			808			818
Employee stock ownership plan note payable		—			—			—			50			125
Purchase accounting premiums, net of amortization		858			963			1,035			1,423			1,569
Total long-term borrowings		799,217			698,340			732,203			857,248			809,290
Total borrowings		2,716,667			2,335,890			2,802,784			2,289,898			2,416,823
Less: Customer sweep accounts		(631,214	)		(648,311	)		(599,021	)		(556,622	)		(479,698	)
Add: Brokered deposits		1,875,969			2,258,408			1,983,505			2,293,493			1,977,489
Total wholesale borrowings	$	3,961,422		$	3,945,987		$	4,187,268		$	4,026,769		$	3,914,614
Wholesale borrowings as a percentage of total assets		28.8	%		28.4	%		29.7	%		28.5	%		27.6	%
Regulatory Capital
Tier 1 capital	$	1,089,115		$	1,114,915		$	1,152,663		$	1,171,055		$	1,115,023
Tier 2 capital		180,711			163,095			161,224			167,521			177,236
Total risk-based capital		1,269,826			1,278,010			1,313,887			1,338,576			1,292,259
Total risk-weighted assets		11,674,210			11,743,799			11,650,676			11,575,533			11,424,481
Tangible Equity
Shareholders’ equity	$	1,378,321		$	1,550,308		$	1,548,252		$	1,518,187		$	1,561,610
Intangible assets		(488,093	)		(678,182	)		(679,669	)		(681,483	)		(683,611	)
Tangible equity		890,228			872,126			868,583			836,704			877,999
Capital Ratios
Total risk-based capital		10.88	%		10.88	%		11.28	%		11.56	%		11.31	%
Tier 1 risk-based capital		9.33			9.49			9.89			10.12			9.76
Leverage ratio		8.15			8.42			8.64			8.73			8.28
Tangible equity to tangible assets ratio		6.72			6.61			6.47			6.22			6.52
Impact of unrealized (gain) loss		0.02			0.21			0.27			0.41			0.26
Tangible equity to tangible assets ratio, excluding unrealized gain or loss		6.74			6.82			6.74			6.63			6.78
Unrealized Losses on AFS Securities
Gross (included in AFS securities)	$	(3,042	)	$	(48,841	)	$	(61,462	)	$	(94,586	)	$	(59,764	)
Net of income tax (included in equity)		(1,912	)		(30,765	)		(38,717	)		(59,565	)		(37,601	)
Market Rates for U.S. Treasury Notes
Three year		1.79	%		3.07	%		4.03	%		4.89	%		4.54	%
Five year		2.46			3.45			4.23			4.92			4.54

11

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

	Three Months Ended
	3/31/08							12/31/07							9/30/07
	Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense			Yield/ Rate
Assets
Earning assets
Commercial loans	$	7,983,464	$	128,741		6.49	%	$	7,919,926	$	149,001		7.46	%	$	7,799,177	$	154,655			7.87	%
Consumer loans		1,548,384		25,985		6.75			1,563,625		28,657		7.27			1,570,591		29,432			7.43
Indirect loans		703,670		12,680		7.25			702,721		12,565		7.09			695,686		12,188			6.95
Risk management derivatives tied to loans		—		3,822					—		623					—		(882	)
Total loans (1)		10,235,518		171,228		6.73			10,186,272		190,846		7.43			10,065,454		195,393			7.70
Investment securities (taxable) (2)		1,749,423		20,392		4.66			1,885,631		22,431		4.76			2,121,044		25,390			4.79
Investment securities (nontaxable) (3)		326,318		4,143		5.08			344,996		4,321		5.01			351,584		4,394			5.00
Total investment securities		2,075,741		24,535		4.73			2,230,627		26,752		4.80			2,472,628		29,784			4.82
Federal funds sold, interest-bearing bank balances, and other temp investments		8,716		72		3.32			4,833		64		5.25			6,574		100			6.03
Total earning assets		12,319,975		195,835		6.39			12,421,732		217,662		6.96			12,544,656		225,277			7.13
Non-earning assets		1,524,930							1,495,654							1,477,862
Total assets	$	13,844,905						$	13,917,386						$	14,022,518
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,155,418	$	4,653		1.62		$	1,078,194	$	4,606		1.69		$	1,122,793	$	5,571			1.97
Savings		156,848		427		1.09			164,365		617		1.49			172,110		697			1.61
Money market		2,193,504		16,633		3.05			2,195,506		20,883		3.77			2,236,493		22,390			3.97
Time deposits, excluding brokered deposits		2,953,364		33,651		4.58			2,891,656		35,717		4.90			2,905,426		36,594			5.00
Brokered deposits		1,934,922		21,742		4.52			2,426,483		31,430		5.14			2,208,381		29,245			5.25
Total interest-bearing deposits		8,394,056		77,106		3.69			8,756,204		93,253		4.23			8,645,203		94,497			4.34
Customer sweep accounts		684,752		5,472		3.21			590,682		5,977		4.01			559,906		6,237			4.42
Other borrowings (4)		1,922,959		19,101		4.00			1,645,122		21,972		5.30			1,858,800		26,231			5.60
Total interest-bearing liabilities		11,001,767		101,679		3.72			10,992,008		121,202		4.37			11,063,909		126,965			4.55
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,083,505							1,149,816							1,198,350
Other noninterest liabilities		194,655							218,796							240,771
Total liabilities		12,279,927							12,360,620							12,503,030
Shareholders’ equity		1,564,978							1,556,766							1,519,488
Total liabilities and shareholders’ equity	$	13,844,905						$	13,917,386						$	14,022,518
Net interest margin (tax-equivalent)			$	94,156		3.07	%			$	96,460		3.09	%			$	98,312			3.12	%
Less: tax-equivalent adjustment (3)				1,450							1,512							1,538
Net interest income			$	92,706						$	94,948						$	96,774
Supplemental data:
Customer funding (5)	$	8,227,391	$	60,836		2.97	%	$	8,070,219	$	67,800		3.33	%	$	8,195,078	$	71,489			3.46	%
Wholesale borrowings (6)		3,857,881		40,843		4.26			4,071,605		53,402		5.20			4,067,181		55,476			5.41
Total funding (7)	$	12,085,272	$	101,679		3.38	%	$	12,141,824	$	121,202		3.96	%	$	12,262,259	$	126,965			4.11	%

(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)	During the three months ended March 31, 2008, December 31, 2007 and September 30, 2007, TSFG capitalized $329,000, $317,000 and $188,000, respectively, of interest in conjunction with the construction of its expanded corporate facilities.
(5)	Customer funding includes total deposits less brokered deposits plus customer sweep accounts.
(6)	TSFG defines wholesale borrowings as borrowings less customer sweep accounts plus brokered deposits. For purposes of this table, wholesale borrowings equal the sum of other borrowings and brokered deposits, as customer sweep accounts are presented separately.
(7)	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
	6/30/07								3/31/07
	Average Balance		Income/ Expense			Yield/ Rate			Average Balance		Income/ Expense			Yield/ Rate
Assets
Earning assets
Commercial loans	$	7,724,530	$	152,338			7.91	%	$	7,579,574	$	148,078			7.92	%
Consumer loans		1,584,646		29,382			7.44			1,570,745		28,957			7.48
Indirect loans		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 sweep accounts		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 sweep accounts.
(5)	TSFG defines wholesale borrowings as borrowings less customer sweep accounts plus brokered deposits. For purposes of this table, wholesale borrowings equal the sum of other borrowings and brokered deposits, as customer sweep accounts 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
	3/31/08
					Diluted EPS
Net Loss, as Reported (GAAP)	$	(201,292	)	$	(2.77	)
Non-Operating Items
Gain on securities		(396	)
Gain on Visa IPO share redemption		(1,904	)
Goodwill impairment		188,431
Loss on early extinguishment of debt		547
Visa-related litigation		(863	)
Related income taxes		981
Operating Loss (Net Loss, Excluding
Non-Operating Items)		(14,496	)		(0.20	)
Amortization of intangibles		1,658
Related income taxes		(622	)
Cash Operating Loss (Net Loss,
Excluding Non-Operating Items and
Amortization of Intangibles)	$	(13,460	)	$	(0.19	)
Average Common Shares Outstanding, Diluted		72,574,840
Select Balance Sheet (Averages)
Total assets	$	13,844,905
Intangible assets		(675,250	)
Tangible assets		13,169,655
Shareholders’ equity		1,564,978
Intangible assets		(675,250	)
Tangible equity		889,728
Return on Average Assets
GAAP loss		(5.85	) %
Operating loss		(0.42	)
Cash operating loss on average tangible assets		(0.41	)
Return on Average Equity
GAAP loss		(51.73	)
Operating loss		(3.73	)
Cash operating loss on average tangible equity		(6.08	)

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
	12/31/07					9/30/07					6/30/07					3/31/07
				Diluted EPS					Diluted EPS					Diluted EPS					Diluted EPS
Net Income, as Reported (GAAP)	$	8,989		$	0.12	$	25,839		$	0.35	$	17,930		$	0.24	$	20,518		$	0.27
Non-Operating Items
(Gain) loss on securities		1,288					(287	)				2,237					1,385
Employment contract buyouts and severance		—					—					546					1,760
Loss on early extinguishment of debt		499					1,299					231					—
Visa-related litigation		881					—					—					—
Related income taxes		(800	)				(314	)				(1,008	)				(1,065	)
Operating Earnings (Net Income, Excluding Non-Operating Items)		10,857			0.15		26,537			0.36		19,936			0.27		22,598			0.30
Amortization of intangibles		1,853					1,907					2,136					2,001
Related income taxes		(377	)				(591	)				(714	)				(677	)
Cash Operating Earnings (Net Income, Excluding Non-Operating Items and Amortization of Intangibles)	$	12,333		$	0.17	$	27,853		$	0.38	$	21,358		$	0.29	$	23,922		$	0.32
Average Common Shares Outstanding, Diluted		72,875,062					73,605,752					74,397,091					75,244,968
Select Balance Sheet (Averages)
Total assets	$	13,917,386				$	14,022,518				$	14,093,079				$	14,148,054
Intangible assets		(678,851	)				(680,526	)				(682,584	)				(684,626	)
Tangible assets		13,238,535					13,341,992					13,410,495					13,463,428
Shareholders’ equity		1,556,766					1,519,488					1,546,392					1,551,769
Intangible assets		(678,851	)				(680,526	)				(682,584	)				(684,626	)
Tangible equity		877,915					838,962					863,808					867,143
Return on Average Assets
GAAP earnings		0.26	%				0.73	%				0.51	%				0.59	%
Operating earnings		0.31					0.75					0.57					0.65
Cash operating earnings on average tangible assets		0.37					0.83					0.64					0.72
Return on Average Equity
GAAP earnings		2.29					6.75					4.65					5.36
Operating earnings		2.77					6.93					5.17					5.91
Cash operating earnings on average tangible equity		5.57					13.17					9.92					11.19

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,
	2007					2006
				Diluted EPS					Diluted EPS
Net (Loss) Income, as Reported (GAAP)	$	73,276		$	0.99	$	112,866		$	1.49
Non-Operating Items
(Gain) loss on securities		4,623					(4,037	)
Gain on disposition of assets and liabilities		—					(2,498	)
Goodwill impairment		—					—
Loss on sale of indirect auto loans previously HFI		—					3,477
Employment contract buyouts and severance		2,306					5,588
Loss on early extinguishment of debt		2,029					821
Visa-related litigation		881					—
Related income taxes		(3,187	)				(1,116	)
Operating (Loss) Earnings (Net (Loss) Income, Excluding Non-Operating Items)		79,928			1.08		115,101			1.52
Amortization of intangibles		7,897					8,775
Related income taxes		(2,359	)				(2,474	)
Cash Operating (Loss) Earnings (Net (Loss) Income, Excluding Non-Operating Items and Amortization of Intangibles)	$	85,466		$	1.15	$	121,402		$	1.61
Average Common Shares Outstanding, Diluted		74,085,440					75,542,848
Select Balance Sheet (Averages)
Total assets	$	14,044,565				$	14,202,649
Intangible assets		(681,628	)				(689,116	)
Tangible assets		13,362,937					13,513,533
Shareholders’ equity		1,543,552					1,506,195
Intangible assets		(681,628	)				(689,116	)
Tangible equity		861,924					817,079
Return on Average Assets
GAAP (loss) earnings		0.52	%				0.79	%
Operating (loss) earnings		0.57					0.81
Cash operating (loss) earnings on average tangible assets		0.64					0.90
Return on Average Equity
GAAP (loss) earnings		4.75					7.49
Operating (loss) earnings		5.18					7.64
Cash operating (loss) earnings on average tangible equity		9.92					14.86

16

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

	Three Months Ended
	3/31/08
Select Financial Data Used in Ratios Calculated Below
Net interest income		$	92,706
Tax-equivalent adjustment			1,450
Net interest income (tax-equivalent)		$	94,156
Total noninterest income, as reported (GAAP)		$	30,916
Adjustments for non-operating items:
Gain on securities			(396	)
Gain on Visa IPO share redemption			(1,904	)
Operating noninterest income (noninterest income, excluding non-operating items)		$	28,616
Total noninterest expenses, as reported (GAAP)		$	268,179
Adjustments for non-operating items:
Goodwill impairment			(188,431	)
Loss on early extinguishment of debt			(547	)
Visa-related litigation			863
Operating noninterest expenses (noninterest expenses, excluding non-operating items)			80,064
Less: amortization of intangibles			(1,658	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items and amortization of intangibles)		$	78,406
Total Revenue (1)
GAAP		$	123,622
Operating (2)			122,772
Noninterest Income as a % Total Revenue (3)
GAAP			25.01	%
Operating (2)			23.31
Efficiency Ratios (4)
GAAP			216.93
Operating (2)			65.21
Cash operating (2)			63.86

(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
	12/31/07			9/30/07			6/30/07			3/31/07
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	94,948		$	96,774		$	96,521		$	94,538
Tax-equivalent adjustment		1,512			1,538			1,555			1,641
Net interest income (tax-equivalent)	$	96,460		$	98,312		$	98,076		$	96,179
Total noninterest income, as reported (GAAP)	$	28,741		$	29,917		$	27,683		$	26,970
Adjustments for non-operating items:
(Gain) loss on securities		1,288			(287	)		2,237			1,385
Operating noninterest income (noninterest income, excluding non-operating items)	$	30,029		$	29,630		$	29,920		$	28,355
Total noninterest expenses, as reported (GAAP)	$	80,481		$	78,739		$	80,151		$	81,477
Adjustments for non-operating items:
Employment contract buyouts and severance		—			—			(546	)		(1,760	)
Loss on early extinguishment of debt		(499	)		(1,299	)		(231	)		—
Visa-related litigation		(881	)		—			—			—
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		79,101			77,440			79,374			79,717
Less: amortization of intangibles		(1,853	)		(1,907	)		(2,136	)		(2,001	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items and amortization of intangibles)	$	77,248		$	75,533		$	77,238		$	77,716
Total Revenue (1)
GAAP	$	123,689		$	126,691		$	124,204		$	121,508
Operating (2)		126,489			127,942			127,996			124,534
Noninterest Income as a % of Total Revenue (3)
GAAP		23.24	%		23.61	%		22.29	%		22.20	%
Operating (2)		23.74			23.16			23.38			22.77
Efficiency Ratios (4)
GAAP		65.07			62.15			64.53			67.05
Operating (2)		62.54			60.53			62.01			64.01
Cash operating (2)		61.07			59.04			60.34			62.41

(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,
	2007			2006			2005			2004			2003
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	382,781		$	401,371		$	409,056		$	335,841		$	250,890
Tax-equivalent adjustment		6,246			6,903			6,054			4,356			2,681
Net interest income (tax-equivalent)		389,027			408,274			415,110			340,197			253,571
Net cash settlement of certain interest rate swaps included in noninterest income		—			—			10,360			27,560			19,486
Net interest income (tax-equivalent), including net cash settlement of certain interest rate swaps	$	389,027		$	408,274		$	425,470		$	367,757		$	273,057
Net interest margin (tax-equivalent)		3.10	%		3.22	%		3.12	%		3.06	%		3.01	%
Net interest margin (tax-equivalent), including net cash settlement of certain interest rate swaps		3.10			3.22			3.20			3.31			3.24
Total noninterest income, as reported (GAAP)	$	113,311		$	117,905		$	43,850		$	115,243		$	92,841
Adjustments for non-operating items:
Change in fair value of interest rate swaps		—			—			13,278			(2,550	)		14,237
(Gain) loss on securities		4,623			(4,037	)		52,139			(11,721	)		(16,456	)
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)		117,934			114,847			109,267			108,989			90,021
Net cash settlement of certain interest rate swaps included in noninterest income		—			—			10,360			27,560			19,486
Operating noninterest income, excluding net cash settlement of certain interest rate swaps	$	117,934		$	114,847		$	98,907		$	81,429		$	70,535
Total noninterest expenses, as reported (GAAP)	$	320,848		$	325,939		$	316,693		$	240,610		$	199,272
Adjustments for non-operating items:
Employment contract buyouts and severance		(2,306	)		(5,588	)		(10,327	)		(1,080	)		(512	)
Merger-related costs		—			—			(4,009	)		(7,866	)		(5,127	)
Impairment recovery (loss) from write-down of assets		—			—			(917	)		277			(268	)
Conservation grant of land		—			—			—			(3,350	)		—
Loss on early extinguishment of debt		(2,029	)		(821	)		(7,101	)		(1,429	)		(2,699	)
Visa-related litigation		(881	)		—			—			—			—
Charitable contribution to foundation		—			—			(683	)		—			—
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		315,632			319,530			293,656			227,162			190,666
Less: amortization of intangibles		(7,897	)		(8,775	)		(8,637	)		(6,043	)		(3,433	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items and amortization of intangibles)	$	307,735		$	310,755		$	285,019		$	221,119		$	187,233
Total Revenue (1)
GAAP	$	496,092		$	519,276		$	452,906		$	451,084		$	343,731	��
Operating (2)		506,961			523,121			524,377			449,186			343,592
Noninterest Income as a % of Total Revenue (3)
GAAP		22.84	%		22.71	%		9.68	%		25.55	%		27.01	%
Operating (2)		23.26			21.95			20.84			24.26			26.20
Operating, excluding net cash settlement of certain interest rate swaps (4)		23.26			21.95			18.86			18.13			20.53
Efficiency Ratios (5)
GAAP		64.68			62.77			69.92			53.34			57.97
Operating (2)		62.26			61.08			56.00			50.57			55.49
Cash operating (2)		60.70			59.40			54.35			49.23			54.49

(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