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

Quarterly Financial Data Supplement (Unaudited)
Second 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
Wholesale Borrowings	11
Summary of Capital, Capital Ratios, Unrealized Losses on Available for Sale Securities and Market Rates on Treasury Notes	12
Comparative Average Balance Sheets - Yields and Costs	13-14
GAAP to Non-GAAP Reconciliation: Earnings, ROA and ROE	15-17
GAAP to Non-GAAP Reconciliation: Noninterest income as a % of total revenue and efficiency ratios	18-20

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 2008 FINANCIAL SUMMARY

Changes vs. prior quarter, unless indicated otherwise:

Quarterly EPS
•	Net loss available to common shareholders of $16.8 million, or $0.23 per diluted share
•	Operating loss available to common shareholders of $16.1 million, or $0.22 per diluted share
•	Average diluted shares of 72.6 million, up 0.2% versus prior quarter; down 2.4% versus prior year
Revenue
•	Total revenue, defined as net interest income plus noninterest income, of $132.4 million
•	Operating revenues of $131.9 million, up $9.1 million
	— Non-operating items: $1.9 million net gain on securities
•	Tax-equivalent net interest income of $101.5 million, up $7.4 million
	— Net interest margin of 3.24%, up 17 basis points from 3.07%
	— Average earning assets of $12.6 billion, up $258.1 million
•	Operating noninterest income of $30.3 million, up $1.7 million from prior quarter; $394,000 from prior year
Average Balance Sheet Growth
•	Average loans, up $223.1 million or 2.2% linked-quarter
•	Average securities, up $23.5 million since prior quarter; down $506.9 million since 2Q07
•	Average customer funding, defined as total deposits less brokered deposits plus customer sweep accounts, down $199.9 or 2.4% linked-quarter
•	Average wholesale borrowings, including brokered deposits and excluding customer sweep accounts, up $302.1 or 7.8% linked-quarter
Noninterest Expenses and Operating Efficiency
•	Noninterest expenses of $87.6 million
	— Non-operating items: $2.3 million employment contract buyouts and severance, $731,000 branch acquisition and conversion costs, and $83,000 gain on early extinguishment of debt
•	Operating noninterest expenses of $84.7 million, up $4.6 million from prior quarter; $5.3 million from prior year
	— Loan collection and monitoring up $1.2 million from prior quarter; $1.7 million from prior year
	— FDIC insurance premiums (included in regulatory assessments) up $297,000 from prior quarter; $1.9 million from prior year
•	Operating noninterest expenses 2.46% of average assets (annualized), an increase from 2.33% prior quarter
Credit Quality
•	Nonperforming assets of $241.9 million or 2.30% of loans held for investment and foreclosed property
•	Nonperforming loans decreased slightly to $220.2 million from $223.8 million at March 31, 2008; sale of approximately $40 million of problem loans moderated nonperforming loan levels
•	Net loan charge-offs of $47.0 million, or 1.81% annualized as a % of average loans held for investment
•	Provision for credit losses exceeded net loan charge-offs by $16.8 million and increased allowance
•	Allowance for credit losses of $193.8 million or 1.85% of loans held for investment, an increase from 1.72% prior quarter
•	Allowance coverage of nonperforming loans improved to 0.87 times from 0.78 times at March 31, 2008
Capital
•	Tangible equity to tangible asset ratio of 7.94%, up from 6.72% at March 31, 2008
•	Common tangible equity per common share of $11.28, down from $12.26 at March 31, 2008
•	After-tax unrealized loss on available for sale securities increased $32.4 million from prior quarter
•	Tier 1 capital ratio of 11.05%, up from 9.33% at March 31, 2008; capital ratios exceed all “well capitalized” regulatory requirements
•	Issued $250.0 million of preferred stock during the quarter; declared first quarterly dividend on the preferred shares, which totaled $5.8 million

1

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

	Three Months Ended
	6/30/08			3/31/08			12/31/07		9/30/07		6/30/07
Interest Income
Interest and fees on loans	$	158,016		$	171,228		$	190,846	$	195,393	$	191,961
Interest and dividends on securities:
Taxable		20,591			20,392			22,431		25,390		26,879
Exempt from federal income taxes		2,479			2,693			2,809		2,856		2,888
Total interest and dividends on securities		23,070			23,085			25,240		28,246		29,767
Interest on short-term investments		106			72			64		100		97
Total interest income		181,192			194,385			216,150		223,739		221,825
Interest Expense
Interest on deposits		63,180			77,106			93,253		94,497		92,066
Interest on borrowed funds		17,807			24,573			27,949		32,468		33,238
Total interest expense		80,987			101,679			121,202		126,965		125,304
Net Interest Income		100,205			92,706			94,948		96,774		96,521
Provision for Credit Losses		63,763			73,292			31,926		10,504		17,125
Net interest income after provision for credit losses		36,442			19,414			63,022		86,270		79,396
Noninterest Income		32,190			30,916			28,741		29,917		27,683
Noninterest Expenses		87,620			268,179			80,481		78,739		80,151
Income (loss) before income taxes		(18,988	)		(217,849	)		11,282		37,448		26,928
Income tax expense (benefit)		(8,056	)		(16,557	)		2,293		11,609		8,998
Net Income (Loss)		(10,932	)		(201,292	)		8,989		25,839		17,930
Preferred stock dividends(1)		5,833			—			—		—		—
Net Income (Loss) Available to Common Shareholders	$	(16,765	)	$	(201,292	)	$	8,989	$	25,839	$	17,930
Average common shares outstanding, basic		72,611,024			72,449,437			72,571,612		73,146,211		74,050,115
Average common shares outstanding, diluted(2)		72,611,024			72,449,437			72,875,062		73,605,752		74,397,091
Earnings (loss) per common share, basic	$	(0.23	)	$	(2.78	)	$	0.12	$	0.35	$	0.24
Earnings (loss) per common share, diluted		(0.23	)		(2.78	)		0.12		0.35		0.24
Cash dividends declared per common share		0.01			0.19			0.19		0.18		0.18

(1)	This amount, which is based on a rate per annum of 10%, is prorated over the initial dividend period from the May 8, 2008 issuance date through July 31, 2008 using 30-day months.
(2)	For the three months ended June 30, 2008, average diluted shares exclude preferred stock and outstanding equity awards since their effect would be antidilutive.

2

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

	Three Months Ended
	6/30/08			3/31/08			12/31/07			9/30/07		6/30/07
Noninterest Income
Service charges on deposit accounts	$	10,986		$	10,429		$	11,470		$	11,213	$	11,223
Debit card income, net		2,056			1,876			1,938			1,838		1,839
Customer service fee income		1,358			1,331			1,422			1,533		1,402
Total customer fee income		14,400			13,636			14,830			14,584		14,464
Retail investment services, net		2,120			1,546			2,103			2,064		2,021
Insurance income		2,388			3,060			2,906			2,839		2,987
Trust and investment management income		1,857			1,666			1,625			1,642		1,734
Benefits administration fees		734			756			881			889		749
Total wealth management income		7,099			7,028			7,515			7,434		7,491
Mortgage banking income		1,858			1,485			1,273			834		1,877
Bank-owned life insurance		2,910			3,147			3,065			2,974		4,454
Merchant processing income, net		809			857			829			928		771
Gain (loss) on certain derivative activities		236			12			5			198		(1,497	)
Other		3,002			2,451			2,512			2,678		2,360
Operating noninterest income (noninterest income, excluding non-operating items)		30,314			28,616			30,029			29,630		29,920
Gain (loss) on securities		1,876			396			(1,288	)		287		(2,237	)
Gain on Visa IPO share redemption		—			1,904			—			—		—
Non-operating noninterest (loss) income		1,876			2,300			(1,288	)		287		(2,237	)
Total noninterest income	$	32,190		$	30,916		$	28,741		$	29,917	$	27,683
Noninterest Expenses
Salaries and wages	$	36,136		$	34,853		$	33,220		$	34,535	$	34,258
Employee benefits		9,113			9,298			9,232			8,862		9,245
Occupancy		8,972			8,623			8,783			8,723		8,545
Furniture and equipment		6,733			6,383			6,590			6,543		6,486
Professional services		3,579			3,527			3,767			4,278		4,914
Advertising and business development		2,731			2,471			2,054			1,443		1,973
Telecommunications		1,476			1,423			1,453			1,404		1,418
Amortization of intangibles		1,589			1,658			1,853			1,907		2,136
Regulatory assessments		2,374			2,077			1,464			300		436
Loan collection and monitoring		2,167			970			1,313			710		460
Other		9,803			8,781			9,372			8,735		9,503
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		84,673			80,064			79,101			77,440		79,374
Goodwill impairment		—			188,431			—			—		—
Employment contract buyouts and severance		2,299			—			—			—		546
Branch acquisition and conversion costs		731			—			—			—		—
Gain (loss) on early extinguishment of debt		(83	)		547			499			1,299		231
Visa-related litigation		—			(863	)		881			—		—
Non-operating noninterest expenses		2,947			188,115			1,380			1,299		777
Total noninterest expenses	$	87,620		$	268,179		$	80,481		$	78,739	$	80,151

3

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

	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Assets
Cash and due from banks	$	224,991		$	223,185		$	290,974		$	221,529		$	267,005
Interest-bearing bank balances		55,713			10,035			5,551			520			263
Federal funds sold and securities purchased to resell		50,000			—			—			—			—
Securities
Available for sale		1,987,232			2,069,898			1,986,212			2,323,241			2,433,341
Held to maturity		26,677			31,468			39,691			41,174			41,892
Total securities		2,013,909			2,101,366			2,025,903			2,364,415			2,475,233
Loans held for sale		21,871			16,119			17,867			19,572			35,718
Loans held for investment		10,475,731			10,275,653			10,213,420			10,173,237			10,029,228
Less: Allowance for loan losses		(191,727	)		(174,420	)		(126,427	)		(118,861	)		(125,545	)
Net loans held for investment		10,284,004			10,101,233			10,086,993			10,054,376			9,903,683
Premises and equipment, net		265,853			243,628			233,852			226,784			224,951
Accrued interest receivable		56,118			56,764			70,464			73,383			75,851
Goodwill		463,300			462,572			651,003			650,637			650,544
Other intangible assets, net		24,586			25,521			27,179			29,032			30,939
Other assets		516,525			491,297			467,798			459,973			475,488
	$	13,976,870		$	13,731,720		$	13,877,584		$	14,100,221		$	14,139,675
Liabilities and Shareholders’ Equity
Liabilities
Deposits
Noninterest-bearing	$	1,107,115		$	1,108,623		$	1,127,657		$	1,164,312		$	1,244,834
Interest-bearing customer deposits		6,388,904			6,466,940			6,402,503			6,353,852			6,547,479
Interest-bearing brokered deposits		2,390,350			1,875,969			2,258,408			1,983,505			2,293,493
Total deposits		9,886,369			9,451,532			9,788,568			9,501,669			10,085,806
Short-term borrowings		1,581,601			1,917,450			1,637,550			2,070,581			1,432,650
Long-term debt		772,957			799,217			698,340			732,203			857,248
Accrued interest payable		55,880			58,705			69,288			73,418			77,751
Other liabilities		120,861			126,495			133,530			174,098			168,033
Total liabilities		12,417,668			12,353,399			12,327,276			12,551,969			12,621,488
Shareholders’ equity
Preferred stock		250,000			—			—			—			—
Common stock		72,796			72,630			72,455			72,971			73,699
Surplus		1,101,524			1,110,356			1,107,601			1,116,361			1,129,499
Retained earnings		152,567			170,186			386,061			391,019			378,399
Guarantee of employee stock ownership plan debt		—			—			—			—			(39	)
Accumulated other comprehensive income (loss), net of income tax		(17,685	)		25,149			(15,809	)		(32,099	)		(63,371	)
Total shareholders’ equity		1,559,202			1,378,321			1,550,308			1,548,252			1,518,187
	$	13,976,870		$	13,731,720		$	13,877,584		$	14,100,221		$	14,139,675

4

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

	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Investment Securities Portfolio
Available for sale (at fair value):
U.S. Treasury	$	27,703		$	28,798		$	27,592		$	168,614		$	167,195
U.S. Government agencies		335,593			337,775			503,571			659,681			650,581
Agency mortgage-backed securities		1,276,145			1,343,108			1,088,427			1,119,547			1,158,498
Private label mortgage-backed securities		15,544			16,209			—			—			—
State and municipal		270,521			279,788			302,586			303,388			308,070
Other investments(1)		61,726			64,220			64,036			72,011			148,997
Total available for sale securities		1,987,232			2,069,898			1,986,212			2,323,241			2,433,341
Held to maturity (at amortized cost)		26,677			31,468			39,691			41,174			41,892
Total securities	$	2,013,909		$	2,101,366		$	2,025,903		$	2,364,415		$	2,475,233
Total securities as a percentage of total assets		14.4	%		15.3	%		14.6	%		16.8	%		17.5	%

	June 30, 2008
	Amortized Cost		Percentage of Total			Duration		Book Yield
Debt Securities
U.S. Treasury	$	27,074		1.4	%		3.9		3.96	%
U.S. Government agencies		338,877		17.0			2.5		4.62
Mortgage-backed securities:
Collateralized mortgage obligations		850,146		42.6			5.5		4.56
Adjustable rate mortgages		189,988		9.5			2.5		4.75
Pass-through		302,609		15.1			3.7		4.66
State and municipal		270,168		13.5			2.9		4.97
Corporate bonds		18,211		0.9			2.0		5.68
Total available for sale debt securities	$	1,997,073		100.0	%		4.0		4.66	%
Fixed interest rate:
Mortgage-backed securities	$	1,145,508		57.3	%		5.1		4.58	%
Other		654,330		32.8			2.7		4.77
Variable interest rate:
Mortgage-backed securities		197,235		9.9			2.5		4.76
Total available for sale debt securities	$	1,997,073		100.0	%		4.0		4.66	%

Projected Interest Rate Shock for Debt Securities

Interest Rate Scenario	Estimated Impact on Fair Value			Duration
Up 2.00%		(8.8	)%		5.0
Up 1.00%		(4.3	)		4.7
Flat		—			4.0
Down 1.00%		3.6			3.0
Down 2.00%(2)		6.0			1.4

The estimated decrease in fair value for a five year U.S. Treasury Note when interest rates increase 100 basis points is 4.50%.
(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 $17.4 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 thousands) (unaudited)

	June 30, 2008					December 31, 2007
	Balance		% of Total			Balance		% of Total
Government and agency
U.S. Treasury	$	27,703		1.4	%	$	27,592		1.4	%
U.S. Government agencies		335,593		16.7			503,571		24.9
Agency mortgage-backed securities (MBS)(1)		1,276,145		63.3			1,088,427		53.7
Federal Home Loan Bank Stock		38,614		1.9			35,333		1.7
Total government and agency		1,678,055		83.3			1,654,923		81.7
State and municipal(2)(3)(4)
Pre-funded with collateral or AAA-rated backed by Texas Permanent School Fund		195,662		9.7			214,675		10.6
Underlying issuer or collateral rated A or better (including South Carolina State Aid)		82,290		4.1			102,187		5.1
Underlying issuer or collateral rated BBB		7,338		0.4			12,930		0.6
Non-rated		11,808		0.6			12,245		0.6
Total state and municipal		297,098		14.8			342,037		16.9
Corporate bonds
AA or A-rated		13,243		0.7			17,068		0.8
BBB-rated		4,968		0.2			3,312		0.2
Total corporate bonds		18,211		0.9			20,380		1.0
Private label mortgage-backed securities(1)
AAA-rated		15,544		0.8			—		—
Total private label mortgage-backed securities		15,544		0.8			—		—
Community bank stocks and other		5,001		0.2			8,563		0.4
Total securities	$	2,013,909		100.0	%	$	2,025,903		100.0	%
Percent of total securities:
Rated A or higher				98.6	%				98.2	%
Investment grade				99.2	%				99.0	%

(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)	At June 30, 2008 and December 31, 2007, state and municipal securities include $26.6 million and $39.5 million, respectively, of securities held to maturity at amortized cost.
(3)	Ratings shown above do not reflect the benefit of guarantees by bond insurers. At June 30, 2008, $36.5 million of municipal bonds are guaranteed by bond insurers. At December 31, 2007, $43.5 million of municipal bonds are guaranteed by bond insurers.
(4)	At June 30, 2008, the breakdown by current bond rating is as follows: $195.7 million pre-funded with collateral or AAA-rated backed Texas Permanent School Fund, $9.4 million AAA-rated, $85.5 million AA or A-rated, $860,000 BBB-rated, and $5.6 million non-rated.

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)

	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Commercial Loans
Commercial and industrial	$	2,891,007		$	2,788,980		$	2,742,863		$	2,693,973		$	2,569,628
Owner - occupied real estate		1,183,618			1,107,069			1,070,376			1,042,131			961,806
Commercial real estate		4,162,248			4,156,522			4,158,384			4,178,653			4,258,837
		8,236,873			8,052,571			7,971,623			7,914,757			7,790,271
Consumer Loans
Indirect - sales finance		728,433			710,806			699,014			707,819			684,053
Consumer lot loans		266,242			291,378			311,386			334,971			350,539
Direct retail(1)		99,951			101,278			107,827			109,883			108,876
Home equity(1)		781,120			754,344			754,158			746,253			742,430
		1,875,746			1,857,806			1,872,385			1,898,926			1,885,898
Mortgage Loans(1)		363,112			365,276			369,412			359,554			353,059
Total loans held for investment	$	10,475,731		$	10,275,653		$	10,213,420		$	10,173,237		$	10,029,228
Percentage of Loans Held for Investment
Commercial and industrial		27.6	%		27.1	%		26.9	%		26.5	%		25.6	%
Owner - occupied real estate		11.3			10.8			10.5			10.2			9.6
Commercial real estate		39.7			40.5			40.7			41.1			42.5
Consumer		17.9			18.1			18.3			18.7			18.8
Mortgage		3.5			3.5			3.6			3.5			3.5
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Non organic change in loans held for investment related to:
Branch acquisition	$	6,399		$	—		$	—		$	—		$	—
Growth in Loans Held for Investment(2)
Growth vs. prior quarter, annualized		7.8	%		2.5	%		1.6	%		5.7	%		5.3	%
Growth year-to-date, annualized		5.2			2.5			5.3			6.5			6.8
Growth in Loans Held for Investment, Excluding Changes from Acquisitions(2)
Organic growth vs. prior quarter, annualized		7.6	%		2.5	%		1.6	%		5.7	%		5.3	%
Organic growth year-to-date, annualized		5.0			2.5			5.3			6.5			6.8

(1)	In second quarter 2008, TSFG reclassified certain loan balances from mortgage loans to direct retail and home equity loans. Amounts presented for prior periods have been reclassified to conform to the current presentation.
(2)	At March 31, 2007 and December 31, 2006, loans held for investment totaled $9,898,134 and $9,701,867, respectively.

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
	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Credit Quality
Loans held for investment	$	10,475,731		$	10,275,653		$	10,213,420		$	10,173,237		$	10,029,228
Allowance for loan losses		191,727			174,420			126,427			118,861			125,545
Allowance for credit losses		193,825			177,016			128,695			120,424			126,721
Nonperforming loans (1)		220,151			223,790			81,631			53,257			41,527
Foreclosed property (other real estate owned and personal property repossessions)		21,780			8,227			8,276			5,658			4,028
Nonperforming assets	$	241,931		$	232,017		$	89,907		$	58,915		$	45,555
Nonperforming loans as a % of loans held for investment		2.10	%		2.18	%		0.80	%		0.52	%		0.41	%
Nonperforming assets as a % of loans held for investment and foreclosed property		2.30			2.26			0.88			0.58			0.45
Allowance for loan losses as a % of loans held for investment		1.83			1.70			1.24			1.17			1.25
Allowance for credit losses as a % of loans held for investment		1.85			1.72			1.26			1.18			1.26
Allowance for loan losses to nonperforming loans		0.87	x		0.78	x		1.55	x		2.23	x		3.02	x
Impaired loans(1)	$	195,774		$	206,621		$	68,102		$	38,060		$	33,596
Specific allowance for impaired loans		39,238			32,070			11,340			11,010			9,414
Loans past due 90 days or more (mortgage and consumer with interest accruing)		8,779			9,588			5,349			2,629			2,503
Net loan charge-offs		46,954			24,971			23,655			16,801			5,226
Average loans held for investment		10,435,248			10,221,424			10,164,807			10,042,419			9,947,636
Net loan charge-offs as a % of average loans held for investment (annualized)		1.81	%		0.98	%		0.92	%		0.66	%		0.21	%
Allowance for Loan Losses
Balance at beginning of period	$	174,420		$	126,427		$	118,861		$	125,545		$	113,736
Provision for loan losses		64,261			72,964			31,221			10,117			17,035
Loans charged-off		(48,523	)		(27,583	)		(25,249	)		(17,926	)		(7,622	)
Recoveries of loans previously charged-off		1,569			2,612			1,594			1,125			2,396
Balance at end of period	$	191,727		$	174,420		$	126,427		$	118,861		$	125,545
Reserve for Unfunded Lending Commitments
Balance at beginning of period	$	2,596		$	2,268		$	1,563		$	1,176		$	1,086
Provision for unfunded lending commitments		(498	)		328			705			387			90
Balance at end of period	$	2,098		$	2,596		$	2,268		$	1,563		$	1,176
Allowance for Credit Losses
Balance at beginning of period	$	177,016		$	128,695		$	120,424		$	126,721		$	114,822
Provision for credit losses		63,763			73,292			31,926			10,504			17,125
Loans charged-off		(48,523	)		(27,583	)		(25,249	)		(17,926	)		(7,622	)
Recoveries of loans previously charged-off		1,569			2,612			1,594			1,125			2,396
Balance at end of period	$	193,825		$	177,016		$	128,695		$	120,424		$	126,721

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

	6/30/08 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	$	416		$	277		$	448		$	195		$	352		$	150		$	199		$	2,037			20	%
Residential A&D		109			79			174			78			88			5			88			621			6
Commercial A&D		47			26			45			26			12			13			47			216			2
Commercial construction		147			48			37			43			42			15			27			359			3
Residential construction		54			39			66			33			42			12			16			262			3
Residential condo		24			109			10			11			6			22			41			223			2
Undeveloped land		38			47			72			79			76			49			83			444			4
Total CRE Loans	$	835		$	625		$	852		$	465		$	618		$	266		$	501		$	4,162			40	%
% of Total Loans HFI		8	%		6	%		8	%		4	%		6	%		3	%		5	%		40	%
	6/30/08 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	$	1.2		$	0.3		$	5.7		$	9.0		$	0.7		$	—		$	0.1		$	17.0			8	%
Residential A&D		1.4			5.5			12.1			24.0			5.0			0.3			14.4			62.7			28
Commercial A&D		—			—			0.6			0.9			—			—			—			1.5			1
Commercial construction		—			—			—			—			—			1.8			—			1.8			1
Residential construction		1.5			2.6			7.1			3.1			2.9			—			—			17.2			8
Residential condo		—			3.4			—			2.2			—			9.7			14.7			30.0			13
Undeveloped land		0.2			—			1.5			0.6			4.5			12.0			2.6			21.4			10
Total CRE Nonaccrual Loans	$	4.3		$	11.8		$	27.0		$	39.8		$	13.1		$	23.8		$	31.8		$	151.6			69	%
CRE Nonaccrual Loans as % of Total Nonaccrual Loans(2)		2	%		5	%		12	%		18	%		6	%		11	%		15	%		69	%
	Three Months Ended 6/30/08 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	$	0.5		$	0.2		$	1.2		$	0.2		$	—		$	—		$	0.5		$	2.6			6	%
Residential A&D		0.2			—			0.1			1.5			4.8			—			0.2			6.8			14
Commercial A&D		—			—			—			—			—			—			7.4			7.4			16
Commercial construction		—			—			—			—			—			1.3			—			1.3			3
Residential construction		0.4			—			0.6			—			2.3			—			—			3.3			7
Residential condo		—			—			(0.1	)		—			0.2			—			7.5			7.6			16
Undeveloped land		0.2			—			—			(0.2	)		1.8			2.2			0.6			4.6			10
Total CRE Net Charge-offs	$	1.3		$	0.2		$	1.8		$	1.5		$	9.1		$	3.5		$	16.2		$	33.6			72	%
CRE Net Charge-offs as % of Total Net Charge-offs		3	%		0	%		4	%		3	%		19	%		8	%		35	%		72	%

(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 periods prior to March 31, 2008 are not comparable to the current presentation.
(2)	Calculated as a percent of nonaccrual loans, which totaled $218.7 million at June 30, 2008.

9

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

	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Noninterest-bearing	$	1,107,115		$	1,108,623		$	1,127,657		$	1,164,312		$	1,244,834
Interest-bearing checking		1,127,497			1,162,374			1,117,850			1,100,428			1,177,609
Money market accounts		2,162,599			2,182,709			2,188,261			2,184,822			2,245,466
Savings accounts		150,696			155,337			158,092			169,091			177,289
Time deposits under $100,000		1,468,372			1,408,593			1,442,030			1,384,094			1,363,462
Time deposits of $100,000 or more		1,479,740			1,557,927			1,496,270			1,515,417			1,583,653
Customer deposits(1)		7,496,019			7,575,563			7,530,160			7,518,164			7,792,313
Brokered deposits		2,390,350			1,875,969			2,258,408			1,983,505			2,293,493
Total deposits		9,886,369			9,451,532			9,788,568			9,501,669			10,085,806
Less: Brokered deposits		(2,390,350	)		(1,875,969	)		(2,258,408	)		(1,983,505	)		(2,293,493	)
Add: Customer sweep accounts		536,642			631,214			648,311			599,021			556,622
Customer funding(2)	$	8,032,661		$	8,206,777		$	8,178,471		$	8,117,185		$	8,348,935
Percentage of Deposits
Noninterest-bearing		11.2	%		11.7	%		11.5	%		12.2	%		12.3	%
Interest-bearing checking		11.4			12.3			11.4			11.6			11.7
Money market accounts		21.9			23.1			22.4			23.0			22.3
Savings accounts		1.5			1.6			1.6			1.8			1.8
Time deposits under $100,000		14.8			14.9			14.7			14.6			13.5
Time deposits of $100,000 or more		15.0			16.5			15.3			15.9			15.7
Customer deposits(1)		75.8			80.1			76.9			79.1			77.3
Brokered deposits		24.2			19.9			23.1			20.9			22.7
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
	For The Period Ended
	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Growth vs. Prior Quarter, Annualized(3)
Noninterest-bearing		(0.5	)%		(6.8	)%		(12.5	)%		(25.7	)%		(13.1	)%
Total deposits		18.5			(13.8	)		12.0			(23.0	)		5.4
Customer funding(2)		(8.5	)		1.4			3.0			(11.0	)		(5.0	)
Growth Year-To-Date, Annualized(4)
Noninterest-bearing		(3.7	)%		(6.8	)%		(12.0	)%		(12.2	)%		(5.7	)%
Total deposits		2.0			(13.8	)		2.9			(0.2	)		12.1
Customer funding(2)		(3.6	)		1.4			(2.6	)		(4.4	)		(1.0	)
Non organic change related to branch acquisition
Noninterest-bearing	$	3,901		$	—		$	—		$	—		$	—
Total deposits		24,477			—			—			—			—
Customer funding		24,477			—			—			—			—
Organic Growth vs. Prior Quarter, Annualized(3)
Noninterest-bearing		(2.0	)%		(6.8	)%		(12.5	)%		(25.7	)%		(13.1	)%
Total deposits		17.5			(13.8	)		12.0			(23.0	)		5.4
Customer funding(2)		(9.7	)		1.4			3.0			(11.0	)		(5.0	)
Organic Growth Year-To-Date, Annualized(4)
Noninterest-bearing		(4.4	)%		(6.8	)%		(12.0	)%		(12.2	)%		(5.7	)%
Total deposits		1.5			(13.8	)		2.9			(0.2	)		12.1
Customer funding(2)		(4.2	)		1.4			(2.6	)		(4.4	)		(1.0	)

(1)	Total deposits less brokered deposits.
(2)	Total deposits less brokered deposits plus customer sweep accounts.
(3)	At March 31, 2007, noninterest-bearing totaled $1,286,800, total deposits totaled $9,951,208, and customer funding totaled $8,453,417.
(4)	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
WHOLESALE BORROWINGS
(dollars in thousands) (unaudited)

	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Types of wholesale borrowings
Short-term borrowings
Federal funds purchased and repurchase agreements	$	169,074		$	541,022		$	206,216		$	595,272		$	654,299
Customer sweep accounts		536,642			631,214			648,311			599,021			556,622
Term auction facility		500,000			200,000			—			—			—
FHLB advances		—			—			—			175,000			75,000
Commercial paper		25,155			29,582			30,828			32,601			32,687
Treasury, tax and loan note		350,730			515,632			752,195			668,687			114,042
Total short-term borrowings		1,581,601			1,917,450			1,637,550			2,070,581			1,432,650
Long-term borrowings
Repurchase agreements		200,000			200,000			200,000			200,000			200,000
FHLB advances		297,873			324,080			223,087			223,093			328,100
Subordinated notes		216,704			216,704			216,704			242,478			262,067
Mandatorily redeemable preferred stock of subsidiary		56,800			56,800			56,800			64,800			64,800
Note payable		791			775			786			797			808
Employee stock ownership plan note payable		—			—			—			—			50
Purchase accounting premiums, net of amortization		789			858			963			1,035			1,423
Total long-term borrowings		772,957			799,217			698,340			732,203			857,248
Total borrowings		2,354,558			2,716,667			2,335,890			2,802,784			2,289,898
Less: Customer sweep accounts		(536,642	)		(631,214	)		(648,311	)		(599,021	)		(556,622	)
Add: Brokered deposits		2,390,350			1,875,969			2,258,408			1,983,505			2,293,493
Total wholesale borrowings	$	4,208,266		$	3,961,422		$	3,945,987		$	4,187,268		$	4,026,769
Wholesale borrowings as a percentage of total assets		30.1	%		28.8	%		28.4	%		29.7	%		28.5	%

11

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF CAPITAL, CAPITAL RATIOS, UNREALIZED LOSSES ON
AVAILABLE FOR SALE SECURITIES, AND MARKET RATES FOR U.S. TREASURY NOTES
(dollars in thousands, except per share data) (unaudited)

	6/30/08			3/31/08			12/31/07			9/30/07			6/30/07
Regulatory Capital
Tier 1 capital	$	1,311,908		$	1,089,115		$	1,114,915		$	1,152,663		$	1,171,055
Tier 2 capital		183,371			180,711			163,095			161,224			167,521
Total risk-based capital		1,495,279			1,269,826			1,278,010			1,313,887			1,338,576
Total risk-weighted assets		11,872,790			11,674,210			11,743,799			11,650,676			11,575,533
Tangible Equity
Preferred stock	$	250,000		$	—		$	—		$	—		$	—
Common equity		1,309,202			1,378,321			1,550,308			1,548,252			1,518,187
Shareholders’ equity		1,559,202			1,378,321			1,550,308			1,548,252			1,518,187
Intangible assets		(487,886	)		(488,093	)		(678,182	)		(679,669	)		(681,483	)
Tangible equity		1,071,316			890,228			872,126			868,583			836,704
Capital Ratios
Tier 1 risk-based capital		11.05	%		9.33	%		9.49	%		9.89	%		10.12	%
Total risk-based capital		12.59			10.88			10.88			11.28			11.56
Leverage ratio		9.81			8.16			8.42			8.64			8.73
Tangible equity to tangible assets ratio		7.94			6.72			6.61			6.47			6.22
Impact of unrealized (gain) loss		0.24			0.02			0.21			0.27			0.41
Tangible equity to tangible assets ratio, excluding unrealized gain or loss		8.18			6.74			6.82			6.74			6.63
Unrealized Losses on AFS Securities
Gross (included in AFS securities)	$	(54,391	)	$	(3,042	)	$	(48,841	)	$	(61,462	)	$	(94,586	)
Net of income tax (included in equity)		(34,287	)		(1,912	)		(30,765	)		(38,717	)		(59,565	)
Per Share Data
Preferred shares outstanding		250,000			—			—			—			—
Common shares outstanding		72,795,797			72,629,724			72,455,205			72,971,394			73,698,807
Conversion of preferred stock into common(1)		38,461,538			—			—			—			—
Common shares outstanding, assuming conversion		111,257,335			72,629,724			72,455,205			72,971,394			73,698,807
Common book value per common share	$	17.98		$	18.98		$	21.40		$	21.22		$	20.60
Common tangible book value per common share		11.28			12.26			12.04			11.90			11.35
Book value per common share, assuming conversion(1)		14.01			18.98			21.40			21.22			20.60
Tangible book value per common share, assuming conversion(1)		9.63			12.26			12.04			11.90			11.35
Market Rates for U.S. Treasury Notes
Three year		2.91	%		1.79	%		3.07	%		4.03	%		4.89	%
Five year		3.34			2.46			3.45			4.23			4.92

⁽¹⁾ Using a $6.50 conversion price.

12

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

	Three Months Ended
	6/30/08							3/31/08							12/31/07
	Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate
Assets
Earning assets
Commercial loans	$	8,193,599	$	114,935		5.64	%	$	7,983,464	$	128,741		6.49	%	$	7,919,926	$	149,001		7.46	%
Consumer loans		1,530,817		23,272		6.11			1,548,384		25,985		6.75			1,563,625		28,657		7.27
Indirect loans		734,155		13,152		7.21			703,670		12,680		7.25			702,721		12,565		7.09
Risk management derivatives tied to loans		—		6,657					—		3,822					—		623
Total loans(1)		10,458,571		158,016		6.08			10,235,518		171,228		6.73			10,186,272		190,846		7.43
Investment securities (taxable)(2)		1,799,907		20,591		4.58			1,749,423		20,392		4.66			1,885,631		22,431		4.76
Investment securities (nontaxable)(3)		299,350		3,814		5.10			326,318		4,143		5.08			344,996		4,321		5.01
Total investment securities		2,099,257		24,405		4.65			2,075,741		24,535		4.73			2,230,627		26,752		4.80
Federal funds sold, interest-bearing bank balances, and other temp investments		20,256		106		2.10			8,716		72		3.32			4,833		64		5.25
Total earning assets		12,578,084		182,527		5.83			12,319,975		195,835		6.39			12,421,732		217,662		6.96
Non-earning assets		1,290,065							1,524,930							1,495,654
Total assets	$	13,868,149						$	13,844,905						$	13,917,386
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,120,716	$	2,683		0.96		$	1,155,418	$	4,653		1.62		$	1,078,194	$	4,606		1.69
Savings		152,023		304		0.80			156,848		427		1.09			164,365		617		1.49
Money market		2,104,322		11,822		2.26			2,193,504		16,633		3.05			2,195,506		20,883		3.77
Time deposits, excluding brokered deposits		2,997,131		29,172		3.91			2,953,364		33,651		4.58			2,891,656		35,717		4.90
Brokered deposits		2,081,224		19,199		3.71			1,934,922		21,742		4.52			2,426,483		31,430		5.14
Total interest-bearing deposits		8,455,416		63,180		3.01			8,394,056		77,106		3.69			8,756,204		93,253		4.23
Customer sweep accounts		573,957		2,621		1.84			684,752		5,472		3.21			590,682		5,977		4.01
Other borrowings(4)		2,078,730		15,186		2.94			1,922,959		19,101		4.00			1,645,122		21,972		5.30
Total interest-bearing liabilities		11,108,103		80,987		2.93			11,001,767		101,679		3.72			10,992,008		121,202		4.37
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,079,390							1,083,505							1,149,816
Other noninterest liabilities		185,275							194,655							218,796
Total liabilities		12,372,768							12,279,927							12,360,620
Shareholders’ equity		1,495,381							1,564,978							1,556,766
Total liabilities and shareholders’ equity	$	13,868,149						$	13,844,905						$	13,917,386
Net interest margin (tax-equivalent)			$	101,540		3.24	%			$	94,156		3.07	%			$	96,460		3.09	%
Less: tax-equivalent adjustment(3)				1,335							1,450							1,512
Net interest income			$	100,205						$	92,706						$	94,948
Supplemental data:
Customer funding(5)	$	8,027,539	$	46,602		2.33	%	$	8,227,391	$	60,836		2.97	%	$	8,070,219	$	67,800		3.33	%
Wholesale borrowings(6)		4,159,954		34,385		3.32			3,857,881		40,843		4.26			4,071,605		53,402		5.20
Total funding(7)	$	12,187,493	$	80,987		2.67	%	$	12,085,272	$	101,679		3.38	%	$	12,141,824	$	121,202		3.96	%

(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 June 30, 2008, March 31, 2008, and December 31, 2007, TSFG capitalized $332,000, $329,000, and $317,000, 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.

13

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

	Three Months Ended
	9/30/07								6/30/07
	Average Balance		Income/ Expense			Yield/ Rate			Average Balance		Income/ Expense			Yield/ Rate
Assets
Earning assets
Commercial loans	$	7,799,177	$	154,655			7.87	%	$	7,724,530	$	152,338			7.91	%
Consumer loans		1,570,591		29,432			7.43			1,584,646		29,382			7.44
Indirect loans		695,686		12,188			6.95			674,961		11,271			6.70
Risk management derivatives tied to loans		—		(882	)					—		(1,030	)
Total loans(1)		10,065,454		195,393			7.70			9,984,137		191,961			7.71
Investment securities (taxable)(2)		2,121,044		25,390			4.79			2,247,092		26,879			4.79
Investment securities (nontaxable)(3)		351,584		4,394			5.00			359,043		4,443			4.95
Total investment securities		2,472,628		29,784			4.82			2,606,135		31,322			4.81
Federal funds sold, interest-bearing bank balances, and other temp investments		6,574		100			6.03			6,376		97			6.10
Total earning assets		12,544,656		225,277			7.13			12,596,648		223,380			7.11
Non-earning assets		1,477,862								1,496,431
Total assets	$	14,022,518							$	14,093,079
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,122,793	$	5,571			1.97		$	1,176,182	$	6,029			2.06
Savings		172,110		697			1.61			181,166		736			1.63
Money market		2,236,493		22,390			3.97			2,294,181		22,528			3.94
Time deposits, excluding brokered deposits		2,905,426		36,594			5.00			2,910,284		36,407			5.02
Brokered deposits		2,208,381		29,245			5.25			2,042,664		26,366			5.18
Total interest-bearing deposits		8,645,203		94,497			4.34			8,604,477		92,066			4.29
Customer sweep accounts		559,906		6,237			4.42			496,030		5,528			4.47
Other borrowings(4)		1,858,800		26,231			5.60			1,989,109		27,710			5.59
Total interest-bearing liabilities		11,063,909		126,965			4.55			11,089,616		125,304			4.53
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,198,350								1,225,075
Other noninterest liabilities		240,771								231,996
Total liabilities		12,503,030								12,546,687
Shareholders’ equity		1,519,488								1,546,392
Total liabilities and shareholders’ equity	$	14,022,518							$	14,093,079
Net interest margin (tax-equivalent)			$	98,312			3.12	%			$	98,076			3.12	%
Less: tax-equivalent adjustment(3)				1,538								1,555
Net interest income			$	96,774							$	96,521
Supplemental data:
Customer funding(5)	$	8,195,078	$	71,489			3.46	%	$	8,282,918	$	71,228			3.45	%
Wholesale borrowings(6)		4,067,181		55,476			5.41			4,031,773		54,076			5.38
Total funding(7)	$	12,262,259	$	126,965			4.11	%	$	12,314,691	$	125,304			4.08	%

(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 September 30, 2007, TSFG capitalized $188,000 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.

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
	6/30/08						3/31/08
				Diluted EPS						Diluted EPS
Net Loss, as Reported (GAAP)	$	(10,932	)				$	(201,292	)
Preferred stock dividends		(5,833	)					—
Net Loss Available to Common Shareholders	$	(16,765	)	$	(0.23	)	$	(201,292	)	$	(2.78	)
Net Loss, as Reported (GAAP)	$	(10,932	)				$	(201,292	)
Add: Income tax expense (benefit)		(8,056	)					(16,557	)
Loss Before Income taxes		(18,988	)					(217,849	)
Non-Operating Items
Gain on securities		(1,876	)					(396	)
Gain on Visa IPO share redemption		—						(1,904	)
Goodwill impairment		—						188,431
Employment contract buyouts and severance		2,299						—
Branch acquisition and conversion costs		731						—
(Gain) loss on early extinguishment of debt		(83	)					547
Visa-related litigation		—						(863	)
Pre-tax Operating Loss (loss before taxes, excluding non-operating items)		(17,917	)					(32,034	)
Add: Provision for credit losses		63,763						73,292
Pre-Tax, Pre-Provision Operating Earnings (Income before taxes and provision, excluding non-operating items)		45,846						41,258
Less: Provision for credit losses		(63,763	)					(73,292	)
Related income taxes		(7,655	)					(17,538	)
Operating Loss (Net Loss, Excluding Non-Operating Items)		(10,262	)					(14,496	)
Preferred stock dividends		(5,833	)					—
Operating Loss Available to Common Shareholders (Net Loss Available to Common Shareholders, Excluding Non-Operating Items)		(16,095	)		(0.22	)		(14,496	)		(0.20	)
Amortization of intangibles		1,589						1,658
Related income taxes		(596	)					(622	)
Cash Operating Loss Available to Common Shareholders (Net Loss Available to Common Shareholders, Excluding Non-Operating Items and Amortization of Intangibles)	$	(15,102	)	$	(0.21	)	$	(13,460	)	$	(0.19	)
Average Common Shares Outstanding, Diluted		72,611,024						72,449,437
Select Balance Sheet (Averages)
Total assets	$	13,868,149					$	13,844,905
Intangible assets		(487,440	)					(675,250	)
Tangible assets		13,380,709						13,169,655
Preferred stock		137,783						—
Common equity		1,357,598						1,564,978
Shareholders’ equity		1,495,381						1,564,978
Intangible assets		(487,440	)					(675,250	)
Tangible equity		1,007,941						889,728
Return on Average Assets(1)
GAAP loss		(0.32	)%					(5.85	)%
Return on Average Equity(1)
GAAP loss		(2.94	)					(51.73	)
Return on Average Common Equity(2)
GAAP loss available to common shareholders		(4.97	)					(51.73	)

(1)	Return on average assets and return on average equity are calculated as net income divided by average assets or average total equity.
(2)	Return on average common equity is calculated as net income available to common shareholders divided by average common equity.

15

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

	Three Months Ended
	12/31/07					9/30/07					6/30/07					3/31/07
				DilutedEPS					DilutedEPS					DilutedEPS					DilutedEPS
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

16

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

	Years Ended December 31,
	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

17

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

	Three Months Ended
	6/30/08			3/31/08
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	100,205		$	92,706
Tax-equivalent adjustment		1,335			1,450
Net interest income (tax-equivalent)	$	101,540		$	94,156
Total noninterest income, as reported (GAAP)	$	32,190		$	30,916
Adjustments for non-operating items:
Gain on securities		(1,876	)		(396	)
Gain on Visa IPO share redemption		—			(1,904	)
Operating noninterest income (noninterest income, excluding non-operating items)	$	30,314		$	28,616
Total noninterest expenses, as reported (GAAP)	$	87,620		$	268,179
Adjustments for non-operating items:
Goodwill impairment		—			(188,431	)
Employment contract buyouts and severance		(2,299	)		—
Branch acquisition and conversion costs		(731	)		—
Gain (loss) on early extinguishment of debt		83			(547	)
Visa-related litigation		—			863
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		84,673			80,064
Less: amortization of intangibles		(1,589	)		(1,658	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items and amortization of intangibles)	$	83,084		$	78,406
Total Revenue(1)
GAAP	$	132,395		$	123,622
Operating(2)		131,854			122,772
Noninterest Income as a % Total Revenue(3)
GAAP		24.31	%		25.01
Operating(2)		22.99			23.31
Efficiency Ratios(4)
GAAP		66.18			216.93
Operating(2)		64.22			65.21
Cash operating(2)		63.01			63.86
Noninterest Expense as a % of Average Assets (Annualized)
GAAP		2.54			7.79
Operating(2)		2.46			2.33
Cash operating(2)		2.41			2.28

(1)	The sum of net interest income and noninterest income.
(2)	Total revenue, noninterest income as a % of total revenue, the efficiency ratio, and noninterest expense as a % of average assets, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items. The cash operating ratios also exclude amortization of intangibles.
(3)	Calculated as noninterest income, divided by the sum of net interest income and noninterest income.
(4)	Calculated as noninterest expenses, divided by the sum of net interest income and noninterest income.

18

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

	Three Months Ended
	12/31/07			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
Noninterest Expense as a % of Average Assets (Annualized)
GAAP		2.29			2.23			2.28			2.34
Operating(2)		2.25			2.19			2.26			2.29
Cash operating(2)		2.20			2.14			2.20			2.23

(1)	The sum of net interest income and noninterest income.
(2)	Total revenue, noninterest income as a % of total revenue, the efficiency ratio, and noninterest expense as a % of average assets, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items. The cash operating ratios also exclude 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.

19

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.

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