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

Quarterly Financial Data Supplement (Unaudited)
Third 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
THIRD QUARTER 2008 FINANCIAL SUMMARY

Changes vs. prior quarter, unless indicated otherwise:
Quarterly EPS
•	Net loss of $25.0 million; operating loss of $22.6 million
•	Net loss per diluted share of $0.43; operating loss per diluted share of $0.40
•	Preferred stock dividends totaled $6.2 million, up from $5.8 million for previous quarter
•	Average diluted shares of 72.8 million, up 0.2% versus prior quarter; down 1.2% versus prior year
Revenue
•	Total revenue, defined as net interest income plus noninterest income, of $123.5 million
•	Operating revenues of $125.5 million, down $6.3 million
	— Non-operating items: $725,000 net loss on securities
•	Tax-equivalent net interest income of $96.9 million, down $4.6 million
	— Net interest margin of 3.08%, down 16 basis points from 3.24%
	— Average earning assets of $12.6 billion, down $23.3 million
•	Operating noninterest income of $28.6 million, down $1.7 million from prior quarter; $1.0 million from prior year
Average Balance Sheet Growth
•	Average loans were flat compared to prior quarter
•	Average securities, down $40.4 million since prior quarter; down $413.7 million since 3Q07
•	Average customer funding, defined as total deposits less brokered deposits plus customer sweep accounts, up $50.4 million or 0.6% linked-quarter
•	Average wholesale borrowings, including brokered deposits and excluding customer sweep accounts, down $132.3 million or 3.2% linked-quarter
Noninterest Expenses and Operating Efficiency
•	Noninterest expenses of $93.4 million
	— Non-operating items: $4.6 million employment contracts and severance, and $125,000 gain on early extinguishment of debt
•	Operating noninterest expenses of $88.9 million, up $4.2 million from prior quarter; $11.5 million from prior year
	— Loan collection and monitoring up $1.9 million from prior quarter; $3.4 million from prior year
	— FDIC insurance premiums (included in regulatory assessments) up $646,000 from prior quarter; $2.7 million from prior year
•	Operating noninterest expenses 2.56% of average assets (annualized), an increase from 2.46% prior quarter
Credit Quality
•	Nonperforming assets of $293.2 million or 2.83% of loans and foreclosed property
•	Nonperforming loans held for investment increased to $240.1 million from $220.2 million at June 30, 2008; sale of $25.9 million of problem loans moderated nonperforming loan levels; nonperforming loans held for sale totaled $22.6 million
•	Net loan charge-offs of $75.4 million, or 2.87% annualized as a % of average loans held for investment
•	Provision for credit losses exceeded net loan charge-offs by $9.2 million and increased allowance
•	Allowance for credit losses of $203.0 million or 1.97% of loans held for investment, an increase from 1.85% prior quarter
•	Allowance coverage of nonperforming loans held for investment of 0.84 times, comparable with 0.87 times at June 30, 2008
Capital
•	Tangible equity to tangible asset ratio of 7.94%, unchanged from June 30, 2008
•	Tangible book value per share assuming conversion of the preferred stock of $9.42, down from $9.63 at June 30, 2008
•	After-tax unrealized loss on available for sale securities decreased $4.0 million from prior quarter
•	Tier 1 capital ratio of 11.14%, up from 11.05% at June 30, 2008; capital ratios exceed all “well capitalized” regulatory requirements

1

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

	Three Months Ended
	9/30/08			6/30/08			3/31/08			12/31/07		9/30/07
Interest Income
Interest and fees on loans	$	155,433		$	158,016		$	171,228		$	190,846	$	195,393
Interest and dividends on securities:
Taxable		20,186			20,591			20,392			22,431		25,390
Exempt from federal income taxes		2,422			2,479			2,693			2,809		2,856
Total interest and dividends on securities		22,608			23,070			23,085			25,240		28,246
Interest on short-term investments		197			106			72			64		100
Total interest income		178,238			181,192			194,385			216,150		223,739
Interest Expense
Interest on deposits		69,071			63,180			77,106			93,253		94,497
Interest on borrowed funds		13,548			17,807			24,573			27,949		32,468
Total interest expense		82,619			80,987			101,679			121,202		126,965
Net Interest Income		95,619			100,205			92,706			94,948		96,774
Provision for Credit Losses		84,608			63,763			73,292			31,926		10,504
Net interest income after provision for credit losses		11,011			36,442			19,414			63,022		86,270
Noninterest Income		27,900			32,190			30,916			28,741		29,917
Noninterest Expenses		93,392			87,620			268,179			80,481		78,739
Income (loss) before income taxes		(54,481	)		(18,988	)		(217,849	)		11,282		37,448
Income tax expense (benefit)		(29,526	)		(8,056	)		(16,557	)		2,293		11,609
Net Income (Loss)		(24,955	)		(10,932	)		(201,292	)		8,989		25,839
Preferred stock dividends		6,250			5,833			—			—		—
Net Income (Loss) Available to Common Shareholders	$	(31,205	)	$	(16,765	)	$	(201,292	)	$	8,989	$	25,839
Average common shares outstanding, basic		72,755,480			72,611,024			72,449,437			72,571,612		73,146,211
Average common shares outstanding, diluted (1)		72,755,480			72,611,024			72,449,437			72,875,062		73,605,752
Earnings (loss) per common share, basic	$	(0.43	)	$	(0.23	)	$	(2.78	)	$	0.12	$	0.35
Earnings (loss) per common share, diluted		(0.43	)		(0.23	)		(2.78	)		0.12		0.35
Cash dividends declared per common share		0.01			0.01			0.19			0.19		0.18

⁽¹⁾ For the three months ended September 30, 2008, June 30, 2008, and March 31, 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
	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Noninterest Income
Service charges on deposit accounts	$	11,376		$	10,986		$	10,429		$	11,470		$	11,213
Debit card income, net		2,006			2,056			1,876			1,938			1,838
Customer service fee income		1,425			1,358			1,331			1,422			1,533
Total customer fee income		14,807			14,400			13,636			14,830			14,584
Retail investment services, net		2,294			2,120			1,546			2,103			2,064
Insurance income		2,368			2,388			3,060			2,906			2,839
Trust and investment management income		1,728			1,857			1,666			1,625			1,642
Benefits administration fees		813			734			756			881			889
Total wealth management income		7,203			7,099			7,028			7,515			7,434
Mortgage banking income		879			1,858			1,485			1,273			834
Bank-owned life insurance		2,881			2,910			3,147			3,065			2,974
Merchant processing income, net		916			809			857			829			928
Gain (loss) on certain derivative activities		(199	)		236			12			5			198
Other		2,138			3,002			2,451			2,512			2,678
Operating noninterest income (noninterest income, excluding non-operating items)		28,625			30,314			28,616			30,029			29,630
Gain (loss) on securities		(725	)		1,876			396			(1,288	)		287
Gain on Visa IPO share redemption		—			—			1,904			—			—
Non-operating noninterest (loss) income		(725	)		1,876			2,300			(1,288	)		287
Total noninterest income	$	27,900		$	32,190		$	30,916		$	28,741		$	29,917
Noninterest Expenses
Salaries and wages	$	37,700		$	36,136		$	34,853		$	33,220		$	34,535
Employee benefits		9,252			9,113			9,298			9,232			8,862
Occupancy		9,770			8,972			8,623			8,783			8,723
Furniture and equipment		6,991			6,733			6,383			6,590			6,543
Professional services		4,573			3,579			3,527			3,767			4,278
Advertising and business development		2,114			2,731			2,471			2,054			1,443
Telecommunications		1,628			1,476			1,423			1,453			1,404
Amortization of intangibles		1,474			1,589			1,658			1,853			1,907
Regulatory assessments		3,020			2,374			2,077			1,464			300
Loan collection and monitoring		4,112			2,167			970			1,313			710
Other		8,262			9,803			8,781			9,372			8,735
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		88,896			84,673			80,064			79,101			77,440
Goodwill impairment		—			—			188,431			—			—
Employment contracts and severance		4,621			2,299			—			—			—
Branch acquisition and conversion costs		—			731			—			—			—
Gain (loss) on early extinguishment of debt		(125	)		(83	)		547			499			1,299
Visa-related litigation		—			—			(863	)		881			—
Non-operating noninterest expenses		4,496			2,947			188,115			1,380			1,299
Total noninterest expenses	$	93,392		$	87,620		$	268,179		$	80,481		$	78,739

3

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

	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Assets
Cash and due from banks	$	176,293		$	224,991		$	223,185		$	290,974		$	221,529
Interest-bearing bank balances		35			55,713			10,035			5,551			520
Federal funds sold and securities purchased to resell		—			50,000			—			—			—
Securities
Available for sale		1,995,681			1,987,232			2,069,898			1,986,212			2,323,241
Held to maturity		24,518			26,677			31,468			39,691			41,174
Total securities		2,020,199			2,013,909			2,101,366			2,025,903			2,364,415
Loans held for sale		37,575			21,871			16,119			17,867			19,572
Loans held for investment		10,299,640			10,475,731			10,275,653			10,213,420			10,173,237
Less: Allowance for loan losses		(200,748	)		(191,727	)		(174,420	)		(126,427	)		(118,861	)
Net loans held for investment		10,098,892			10,284,004			10,101,233			10,086,993			10,054,376
Premises and equipment, net		274,258			265,853			243,628			233,852			226,784
Accrued interest receivable		51,207			56,118			56,764			70,464			73,383
Goodwill		461,458			463,300			462,572			651,003			650,637
Other intangible assets, net		23,112			24,586			25,521			27,179			29,032
Other assets		552,149			516,525			491,297			467,798			459,973
	$	13,695,178		$	13,976,870		$	13,731,720		$	13,877,584		$	14,100,221
Liabilities and Shareholders’ Equity
Liabilities
Deposits
Noninterest-bearing	$	1,022,632		$	1,107,115		$	1,108,623		$	1,127,657		$	1,164,312
Interest-bearing customer deposits		6,412,343			6,388,904			6,466,940			6,402,503			6,353,852
Interest-bearing brokered deposits		2,573,833			2,390,350			1,875,969			2,258,408			1,983,505
Total deposits		10,008,808			9,886,369			9,451,532			9,788,568			9,501,669
Short-term borrowings		1,188,929			1,581,601			1,917,450			1,637,550			2,070,581
Long-term debt		773,109			772,957			799,217			698,340			732,203
Accrued interest payable		61,463			55,880			58,705			69,288			73,418
Other liabilities		129,255			120,861			126,495			133,530			174,098
Total liabilities		12,161,564			12,417,668			12,353,399			12,327,276			12,551,969
Shareholders’ equity
Preferred stock		249,000			250,000			—			—			—
Common stock		73,006			72,796			72,630			72,455			72,971
Surplus		1,104,697			1,101,524			1,110,356			1,107,601			1,116,361
Retained earnings		120,578			152,567			170,186			386,061			391,019
Accumulated other comprehensive income (loss), net of income tax		(13,667	)		(17,685	)		25,149			(15,809	)		(32,099	)
Total shareholders’ equity		1,533,614			1,559,202			1,378,321			1,550,308			1,548,252
	$	13,695,178		$	13,976,870		$	13,731,720		$	13,877,584		$	14,100,221

4

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

	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Investment Securities Portfolio
Available for sale (at fair value):
U.S. Treasury	$	28,084		$	27,703		$	28,798		$	27,592		$	168,614
U.S. Government agencies		327,933			335,593			337,775			503,571			659,681
Agency mortgage-backed securities		1,312,116			1,276,145			1,343,108			1,088,427			1,119,547
Private label mortgage-backed securities		15,152			15,544			16,209			—			—
State and municipal		260,532			270,521			279,788			302,586			303,388
Other investments (1)		51,864			61,726			64,220			64,036			72,011
Total available for sale securities		1,995,681			1,987,232			2,069,898			1,986,212			2,323,241
Held to maturity (at amortized cost)		24,518			26,677			31,468			39,691			41,174
Total securities	$	2,020,199		$	2,013,909		$	2,101,366		$	2,025,903		$	2,364,415
Total securities as a percentage of total assets		14.8	%		14.4	%		15.3	%		14.6	%		16.8	%
				September 30, 2008
				Amortized Cost			Percentage of Total			Duration			Book Yield
Debt Securities
U.S. Treasury				$	27,070			1.4	%		3.8			3.96	%
U.S. Government agencies					332,237			16.6			3.1			4.63
Mortgage-backed securities:
Collateralized mortgage obligations					854,310			42.7			5.3			4.55
Adjustable rate mortgages					179,442			8.9			2.3			4.65
Pass-through					338,306			16.9			3.5			4.80
State and municipal					260,495			13.0			2.7			4.99
Corporate bonds					9,893			0.5			0.5			5.53
Total available for sale debt securities				$	2,001,753			100.0	%		4.0			4.67	%
Fixed interest rate:
Mortgage-backed securities				$	1,185,742			59.2	%		4.8			4.62	%
Other					629,695			31.5			2.9			4.76
Variable interest rate:
Mortgage-backed securities					186,316			9.3			2.3			4.65
Total available for sale debt securities				$	2,001,753			100.0	%		4.0			4.67	%

Projected Interest Rate Shock for Debt Securities

Interest Rate Scenario	Estimated Impact on Fair Value		Duration
Up 2.00%	(8.5	)%	4.9
Up 1.00%	(4.2	)	4.6
Flat	—		4.0
Down 1.00%	3.4		2.7
Down 2.00%(2)	5.3		1.0

The estimated decrease in fair value for a five year U.S. Treasury Note when interest rates increase 100 basis points is 4.55%.

(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 $16.9 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)

	September 30, 2008					December 31, 2007
	Balance		% of Total			Balance		% of Total
Government and agency
U.S. Treasury	$	28,084		1.4	%	$	27,592		1.4	%
U.S. Government agencies (1)		327,933		16.2			503,571		24.9
Agency mortgage-backed securities (MBS) (1)(2)		1,312,116		64.9			1,088,427		53.7
Federal Home Loan Bank Stock		38,478		1.9			35,333		1.7
Total government and agency		1,706,611		84.4			1,654,923		81.7
State and municipal (3)(4)(5)
Pre-funded with collateral or AAA-rated backed by Texas Permanent School Fund		187,635		9.3			214,675		10.6
Underlying issuer or collateral rated A or better (including South Carolina State Aid)		80,740		4.0			102,187		5.1
Underlying issuer or collateral rated BBB		7,331		0.4			12,930		0.6
Non-rated		9,244		0.4			12,245		0.6
Total state and municipal		284,950		14.1			342,037		16.9
Corporate bonds
AA or A-rated		9,855		0.5			17,068		0.8
BBB-rated		—		—			3,312		0.2
Total corporate bonds		9,855		0.5			20,380		1.0
Private label mortgage-backed securities (2)
AAA-rated		15,152		0.8			—		—
Total private label mortgage-backed securities		15,152		0.8			—		—
Community bank stocks and other		3,631		0.2			8,563		0.4
Total securities	$	2,020,199		100.0	%	$	2,025,903		100.0	%
Percent of total securities:
Rated A or higher				99.0	%				98.2	%
Investment grade				99.4	%				99.0	%

(1)	At September 30, 2008, these numbers include, in the aggregate, $169.7 million and $1.3 billion related to senior debt and MBS, respectively, issued by FNMA and FHLMC.
(2)	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.
(3)	At September 30, 2008 and December 31, 2007, state and municipal securities include $24.4 million and $39.5 million, respectively, of securities held to maturity at amortized cost.
(4)	Ratings shown above do not reflect the benefit of guarantees by bond insurers. At September 30, 2008, $34.5 million of municipal bonds are guaranteed by bond insurers. At December 31, 2007, $43.5 million of municipal bonds are guaranteed by bond insurers.
(5)	At September 30, 2008, the breakdown by current bond rating is as follows: $187.6 million pre-funded with collateral or AAA-rated backed Texas Permanent School Fund, $8.9 million AAA-rated, $83.5 million AA or A-rated, $0.6 million BBB-rated, and $4.3 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)

	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Commercial Loans
Commercial and industrial	$	2,824,117		$	2,891,007		$	2,788,980		$	2,742,863		$	2,693,973
Owner - occupied real estate		1,206,597			1,183,618			1,107,069			1,070,376			1,042,131
Commercial real estate		4,094,164			4,162,248			4,156,522			4,158,384			4,178,653
		8,124,878			8,236,873			8,052,571			7,971,623			7,914,757
Consumer Loans
Indirect - sales finance		680,413			728,433			710,806			699,014			707,819
Consumer lot loans		249,062			266,242			291,378			311,386			334,971
Direct retail		100,257			99,951			101,278			107,827			109,883
Home equity		784,357			781,120			754,344			754,158			746,253
		1,814,089			1,875,746			1,857,806			1,872,385			1,898,926
Mortgage Loans		360,673			363,112			365,276			369,412			359,554
Total loans held for investment	$	10,299,640		$	10,475,731		$	10,275,653		$	10,213,420		$	10,173,237
Percentage of Loans Held for Investment
Commercial and industrial		27.4	%		27.6	%		27.1	%		26.9	%		26.5	%
Owner - occupied real estate		11.7			11.3			10.8			10.5			10.2
Commercial real estate		39.8			39.7			40.5			40.7			41.1
Consumer		17.6			17.9			18.1			18.3			18.7
Mortgage		3.5			3.5			3.5			3.6			3.5
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Growth in Loans Held for Investment (1)
Growth vs. prior quarter, annualized		(6.7	)%		7.8	%		2.5	%		1.6	%		5.7	%
Growth year-to-date, annualized		1.1			5.2			2.5			5.3			6.5

⁽¹⁾ At June 30, 2007 and December 31, 2006, loans held for investment totaled $10,029,228 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
	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Credit Quality
Loans held for investment	$	10,299,640		$	10,475,731		$	10,275,653		$	10,213,420		$	10,173,237
Allowance for loan losses		200,748			191,727			174,420			126,427			118,861
Allowance for credit losses		203,000			193,825			177,016			128,695			120,424
Nonperforming loans(1)		240,091			220,151			223,790			81,631			53,257
Nonperforming loans held for sale		22,576			—			—			—			—
Foreclosed property (other real estate owned and personal property repossessions)		30,503			21,780			8,227			8,276			5,658
Nonperforming assets	$	293,170		$	241,931		$	232,017		$	89,907		$	58,915
Nonperforming loans as a % of loans held for investment		2.33	%		2.10	%		2.18	%		0.80	%		0.52	%
Nonperforming assets as a % of loans and foreclosed property (2)		2.83			2.30			2.25			0.88			0.58
Allowance for loan losses as a % of loans held for investment		1.95			1.83			1.70			1.24			1.17
Allowance for credit losses as a % of loans held for investment		1.97			1.85			1.72			1.26			1.18
Allowance for loan losses to nonperforming loans		0.84	x		0.87	x		0.78	x		1.55	x		2.23	x
Impaired loans (1)	$	198,018		$	195,774		$	206,621		$	68,102		$	38,060
Specific allowance for impaired loans		29,911			39,238			32,070			11,340			11,010
Loans past due 90 days or more (mortgage and consumer with interest accruing)		12,899			8,779			9,588			5,349			2,629
Net loan charge-offs		75,433			46,954			24,971			23,655			16,801
Average loans held for investment		10,441,580			10,435,248			10,221,424			10,164,807			10,042,419
Net loan charge-offs as a % of average loans held for investment (annualized)		2.87	%		1.81	%		0.98	%		0.92	%		0.66	%
Allowance for Loan Losses
Balance at beginning of period	$	191,727		$	174,420		$	126,427		$	118,861		$	125,545
Provision for loan losses		84,454			64,261			72,964			31,221			10,117
Loans charged-off		(76,558	)		(48,523	)		(27,583	)		(25,249	)		(17,926	)
Recoveries of loans previously charged-off		1,125			1,569			2,612			1,594			1,125
Balance at end of period	$	200,748		$	191,727		$	174,420		$	126,427		$	118,861
Reserve for Unfunded Lending Commitments
Balance at beginning of period	$	2,098		$	2,596		$	2,268		$	1,563		$	1,176
Provision for unfunded lending commitments		154			(498	)		328			705			387
Balance at end of period	$	2,252		$	2,098		$	2,596		$	2,268		$	1,563
Allowance for Credit Losses
Balance at beginning of period	$	193,825		$	177,016		$	128,695		$	120,424		$	126,721
Provision for credit losses		84,608			63,763			73,292			31,926			10,504
Loans charged-off		(76,558	)		(48,523	)		(27,583	)		(25,249	)		(17,926	)
Recoveries of loans previously charged-off		1,125			1,569			2,612			1,594			1,125
Balance at end of period	$	203,000		$	193,825		$	177,016		$	128,695		$	120,424

(1)	At September 30, 2008, June 30, 2008, March 31, 2008, December 31, 2007, and September 30, 2007, these credit quality indicators (nonperforming loans and impaired loans) included $2.4 million, $1.6 million, $1.6 million, $1.7 million, and $1.9 million, respectively, in restructured loans.
(2)	Excluding nonperforming loans held for sale, nonperforming assets as a % of loans held for investment and foreclosed property totaled 2.62% at September 30, 2008.

8

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

	9/30/08 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	$	428		$	286		$	457		$	195		$	359		$	153		$	206		$	2,084			20	%
Residential A&D		111			76			172			56			81			4			55			555			6
Commercial A&D		46			31			42			26			10			13			72			240			2
Commercial construction		162			48			27			36			48			11			29			361			4
Residential construction		49			32			54			29			34			11			16			225			2
Residential condo		24			110			10			9			18			18			20			209			2
Undeveloped land		35			47			70			81			68			40			79			420			4
Total CRE Loans	$	855		$	630		$	832		$	432		$	618		$	250		$	477		$	4,094			40	%
% of Total Loans HFI		8	%		6	%		8	%		4	%		6	%		3	%		5	%		40	%
	9/30/08 CRE Nonaccrual Loans HFI (“NAL”) by Geography
	SC, Excl Coastal			Coastal SC			Western NC			Central FL			North FL			South FL			Tampa Bay			Total CRE NAL			% of NAL (1)
CRE Nonaccrual Loans by Product Type:
Completed income property	$	1.8		$	1.8		$	6.0		$	6.8		$	1.8		$	3.0		$	0.6		$	21.8			9	%
Residential A&D		2.3			2.6			14.7			7.9			3.5			0.2			26.9			58.1			25
Commercial A&D		0.4			7.0			0.6			0.2			—			—			—			8.2			3
Commercial construction		—			—			1.4			—			—			1.7			—			3.1			1
Residential construction		1.3			1.9			5.6			9.5			1.5			—			—			19.8			8
Residential condo		—			2.3			—			1.7			—			8.8			7.0			19.8			8
Undeveloped land		0.1			—			0.9			0.4			3.8			15.9			8.5			29.6			13
Total CRE Nonaccrual Loans	$	5.9		$	15.6		$	29.2		$	26.5		$	10.6		$	29.6		$	43.0		$	160.4			67	%
CRE Nonaccrual Loans as % of Total Nonaccrual Loans (1)		3	%		7	%		12	%		11	%		4	%		12	%		18	%		67	%
	Three Months Ended 9/30/08 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	$	0.1		$	—		$	0.6		$	0.8		$	0.4		$	—		$	—		$	1.9			3	%
Residential A&D		0.1			0.2			1.5			8.9			1.4			—			5.9			18.0			24
Commercial A&D		0.2			—			(0.1	)		0.2			—			0.6			—			0.9			1
Commercial construction		—			—			—			—			—			1.6			—			1.6			2
Residential construction		0.5			0.7			0.4			1.2			(0.1	)		—			—			2.7			4
Residential condo		—			1.0			—			0.5			—			2.7			8.0			12.2			16
Undeveloped land		—			—			0.8			—			6.1			3.6			1.2			11.7			15
Total CRE Net Charge-offs	$	0.9		$	1.9		$	3.2		$	11.6		$	7.8		$	8.5		$	15.1		$	49.0			65	%
CRE Net Charge-offs as % of Total Net Charge-offs		1	%		3	%		4	%		16	%		10	%		11	%		20	%		65	%

⁽¹⁾ Calculated as a percent of nonaccrual loans held for investment, which totaled $237.8 million at September 30, 2008. Excludes nonaccrual loans held for sale, which totaled $22.6 million at September 30, 2008.

9

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

	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Noninterest-bearing	$	1,022,632		$	1,107,115		$	1,108,623		$	1,127,657		$	1,164,312
Interest-bearing checking		1,090,874			1,127,497			1,162,374			1,117,850			1,100,428
Money market accounts		1,806,143			2,162,599			2,182,709			2,188,261			2,184,822
Savings accounts		150,150			150,696			155,337			158,092			169,091
Time deposits under $100,000		1,840,363			1,468,372			1,408,593			1,442,030			1,384,094
Time deposits of $100,000 or more		1,524,813			1,479,740			1,557,927			1,496,270			1,515,417
Customer deposits (1)		7,434,975			7,496,019			7,575,563			7,530,160			7,518,164
Brokered deposits		2,573,833			2,390,350			1,875,969			2,258,408			1,983,505
Total deposits		10,008,808			9,886,369			9,451,532			9,788,568			9,501,669
Less: Brokered deposits		(2,573,833	)		(2,390,350	)		(1,875,969	)		(2,258,408	)		(1,983,505	)
Add: Customer sweep accounts		551,559			536,642			631,214			648,311			599,021
Customer funding (2)	$	7,986,534		$	8,032,661		$	8,206,777		$	8,178,471		$	8,117,185
Percentage of Deposits
Noninterest-bearing		10.2	%		11.2	%		11.7	%		11.5	%		12.2	%
Interest-bearing checking		10.9			11.4			12.3			11.4			11.6
Money market accounts		18.1			21.9			23.1			22.4			23.0
Savings accounts		1.5			1.5			1.6			1.6			1.8
Time deposits under $100,000		18.4			14.8			14.9			14.7			14.6
Time deposits of $100,000 or more		15.2			15.0			16.5			15.3			15.9
Customer deposits (1)		74.3			75.8			80.1			76.9			79.1
Brokered deposits		25.7			24.2			19.9			23.1			20.9
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
	For The Period Ended
	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Growth vs. Prior Quarter, Annualized (3)
Noninterest-bearing		(30.4	)%		(0.5	)%		(6.8	)%		(12.5	)%		(25.7	)%
Total deposits		4.9			18.5			(13.8	)		12.0			(23.0	)
Customer funding (2)		(2.3	)		(8.5	)		1.4			3.0			(11.0	)
Growth Year-To-Date, Annualized (4)
Noninterest-bearing		(12.4	)%		(3.7	)%		(6.8	)%		(12.0	)%		(12.2	)%
Total deposits		3.0			2.0			(13.8	)		2.9			(0.2	)
Customer funding (2)		(3.1	)		(3.6	)		1.4			(2.6	)		(4.4	)

(1)	Total deposits less brokered deposits.
(2)	Total deposits less brokered deposits plus customer sweep accounts.
(3)	At June 30, 2007, noninterest-bearing totaled $1,244,834, total deposits totaled $10,085,806, and customer funding totaled $8,348,935.
(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)

	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Types of wholesale borrowings
Short-term borrowings
Federal funds purchased and repurchase agreements	$	137,927		$	169,074		$	541,022		$	206,216		$	595,272
Customer sweep accounts		551,559			536,642			631,214			648,311			599,021
Federal Reserve borrowings		30,000			500,000			200,000			—			—
FHLB advances		—			—			—			—			175,000
Commercial paper		19,068			25,155			29,582			30,828			32,601
Treasury, tax and loan note		450,375			350,730			515,632			752,195			668,687
Total short-term borrowings		1,188,929			1,581,601			1,917,450			1,637,550			2,070,581
Long-term borrowings
Repurchase agreements		200,000			200,000			200,000			200,000			200,000
FHLB advances		298,119			297,873			324,080			223,087			223,093
Subordinated notes		216,704			216,704			216,704			216,704			242,478
Mandatorily redeemable preferred stock of subsidiary		56,800			56,800			56,800			56,800			64,800
Note payable		779			791			775			786			797
Purchase accounting premiums, net of amortization		707			789			858			963			1,035
Total long-term borrowings		773,109			772,957			799,217			698,340			732,203
Total borrowings		1,962,038			2,354,558			2,716,667			2,335,890			2,802,784
Less: Customer sweep accounts		(551,559	)		(536,642	)		(631,214	)		(648,311	)		(599,021	)
Add: Brokered deposits		2,573,833			2,390,350			1,875,969			2,258,408			1,983,505
Total wholesale borrowings	$	3,984,312		$	4,208,266		$	3,961,422		$	3,945,987		$	4,187,268
Wholesale borrowings as a percentage of total assets		29.1	%		30.1	%		28.8	%		28.4	%		29.7	%

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)

	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Regulatory Capital
Tier 1 capital	$	1,295,008		$	1,311,908		$	1,089,115		$	1,114,915		$	1,152,663
Tier 2 capital		174,282			177,271			180,711			163,095			161,224
Total risk-based capital		1,469,290			1,489,179			1,269,826			1,278,010			1,313,887
Total risk-weighted assets		11,621,557			11,872,790			11,674,210			11,743,799			11,650,676
Tangible Equity
Preferred stock	$	249,000		$	250,000		$	—		$	—		$	—
Common equity		1,284,614			1,309,202			1,378,321			1,550,308			1,548,252
Shareholders’ equity		1,533,614			1,559,202			1,378,321			1,550,308			1,548,252
Intangible assets		(484,570	)		(487,886	)		(488,093	)		(678,182	)		(679,669	)
Tangible equity		1,049,044			1,071,316			890,228			872,126			868,583
Capital Ratios
Tier 1 risk-based capital		11.14	%		11.05	%		9.33	%		9.49	%		9.89	%
Total risk-based capital		12.64			12.54			10.88			10.88			11.28
Leverage ratio		9.70			9.81			8.16			8.42			8.64
Tangible equity to tangible assets ratio		7.94			7.94			6.72			6.61			6.47
Impact of unrealized (gain) loss		0.21			0.24			0.02			0.21			0.27
Tangible equity to tangible assets ratio, excluding unrealized gain or loss		8.15			8.18			6.74			6.82			6.74
Unrealized Losses on AFS Securities
Gross (included in AFS securities)	$	(48,147	)	$	(54,391	)	$	(3,042	)	$	(48,841	)	$	(61,462	)
Net of income tax (included in equity)		(30,334	)		(34,287	)		(1,912	)		(30,765	)		(38,717	)
Per Share Data
Preferred shares outstanding		249,000			250,000			—			—			—
Common shares outstanding		73,005,766			72,795,797			72,629,724			72,455,205			72,971,394
Conversion of preferred stock into common (1)		38,307,692			38,461,538			—			—			—
Common shares outstanding, assuming conversion		111,313,458			111,257,335			72,629,724			72,455,205			72,971,394
Common book value per common share	$	17.60		$	17.98		$	18.98		$	21.40		$	21.22
Common tangible book value per common share		10.96			11.28			12.26			12.04			11.90
Book value per common share, assuming conversion (1)		13.78			14.01			18.98			21.40			21.22
Tangible book value per common share, assuming conversion (1)		9.42			9.63			12.26			12.04			11.90
Market Rates for U.S. Treasury Notes
Three year		2.28	%		2.91	%		1.79	%		3.07	%		4.03	%
Five year		2.98			3.34			2.46			3.45			4.23

⁽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
	9/30/08							6/30/08							3/31/08
	Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate
Assets
Earning assets
Commercial loans	$	8,233,343	$	113,423		5.48	%	$	8,193,599	$	114,935		5.64	%	$	7,983,464	$	128,741		6.49	%
Consumer loans		1,518,642		22,577		5.91			1,530,817		23,272		6.11			1,548,384		25,985		6.75
Indirect loans		706,780		12,621		7.10			734,155		13,152		7.21			703,670		12,680		7.25
Risk management derivatives tied to loans		—		6,812					—		6,657					—		3,822
Total loans (1)		10,458,765		155,433		5.91			10,458,571		158,016		6.08			10,235,518		171,228		6.73
Investment securities (taxable) (2)		1,768,461		20,186		4.57			1,799,907		20,591		4.58			1,749,423		20,392		4.66
Investment securities (nontaxable) (3)		290,431		3,726		5.13			299,350		3,814		5.10			326,318		4,143		5.08
Total investment securities		2,058,892		23,912		4.65			2,099,257		24,405		4.65			2,075,741		24,535		4.73
Federal funds sold, interest-bearing bank balances, and other temp investments		37,149		197		2.11			20,256		106		2.10			8,716		72		3.32
Total earning assets		12,554,806		179,542		5.69			12,578,084		182,527		5.83			12,319,975		195,835		6.39
Non-earning assets		1,281,130							1,290,065							1,524,930
Total assets	$	13,835,936						$	13,868,149						$	13,844,905
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,130,079	$	2,481		0.87		$	1,120,716	$	2,683		0.96		$	1,155,418	$	4,653		1.62
Savings		143,014		255		0.71			152,023		304		0.80			156,848		427		1.09
Money market		1,949,001		11,293		2.31			2,104,322		11,822		2.26			2,193,504		16,633		3.05
Time deposits, excluding brokered deposits		3,259,783		30,522		3.72			2,997,131		29,172		3.91			2,953,364		33,651		4.58
Brokered deposits		2,574,430		24,520		3.79			2,081,224		19,199		3.71			1,934,922		21,742		4.52
Total interest-bearing deposits		9,056,307		69,071		3.03			8,455,416		63,180		3.01			8,394,056		77,106		3.69
Customer sweep accounts		536,526		2,251		1.67			573,957		2,621		1.84			684,752		5,472		3.21
Other borrowings (4)		1,453,196		11,297		3.09			2,078,730		15,186		2.94			1,922,959		19,101		4.00
Total interest-bearing liabilities		11,046,029		82,619		2.98			11,108,103		80,987		2.93			11,001,767		101,679		3.72
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,059,565							1,079,390							1,083,505
Other noninterest liabilities		177,735							185,275							194,655
Total liabilities		12,283,329							12,372,768							12,279,927
Shareholders’ equity		1,552,607							1,495,381							1,564,978
Total liabilities and shareholders’ equity	$	13,835,936						$	13,868,149						$	13,844,905
Net interest margin (tax-equivalent)			$	96,923		3.08	%			$	101,540		3.24	%			$	94,156		3.07	%
Less: tax-equivalent adjustment (3)				1,304							1,335							1,450
Net interest income			$	95,619						$	100,205						$	92,706
Supplemental data:
Customer funding (5)	$	8,077,968	$	46,802		2.30	%	$	8,027,539	$	46,602		2.33	%	$	8,227,391	$	60,836		2.97	%
Wholesale borrowings (6)		4,027,626		35,817		3.54			4,159,954		34,385		3.32			3,857,881		40,843		4.26
Total funding (7)	$	12,105,594	$	82,619		2.72	%	$	12,187,493	$	80,987		2.67	%	$	12,085,272	$	101,679		3.38	%

(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, 2008, June 30, 2008, and March 31, 2008, TSFG capitalized $424,000, $332,000, and $329,000, 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
	12/31/07							9/30/07
	Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense			Yield/ Rate
Assets
Earning assets
Commercial loans	$	7,919,926	$	149,001		7.46	%	$	7,799,177	$	154,655			7.87	%
Consumer loans		1,563,625		28,657		7.27			1,570,591		29,432			7.43
Indirect loans		702,721		12,565		7.09			695,686		12,188			6.95
Risk management derivatives tied to loans		—		623					—		(882	)
Total loans (1)		10,186,272		190,846		7.43			10,065,454		195,393			7.70
Investment securities (taxable) (2)		1,885,631		22,431		4.76			2,121,044		25,390			4.79
Investment securities (nontaxable) (3)		344,996		4,321		5.01			351,584		4,394			5.00
Total investment securities		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		4,833		64		5.25			6,574		100			6.03
Total earning assets		12,421,732		217,662		6.96			12,544,656		225,277			7.13
Non-earning assets		1,495,654							1,477,862
Total assets	$	13,917,386						$	14,022,518
Liabilities and Shareholders’ Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,078,194	$	4,606		1.69		$	1,122,793	$	5,571			1.97
Savings		164,365		617		1.49			172,110		697			1.61
Money market		2,195,506		20,883		3.77			2,236,493		22,390			3.97
Time deposits, excluding brokered deposits		2,891,656		35,717		4.90			2,905,426		36,594			5.00
Brokered deposits		2,426,483		31,430		5.14			2,208,381		29,245			5.25
Total interest-bearing deposits		8,756,204		93,253		4.23			8,645,203		94,497			4.34
Customer sweep accounts		590,682		5,977		4.01			559,906		6,237			4.42
Other borrowings (4)		1,645,122		21,972		5.30			1,858,800		26,231			5.60
Total interest-bearing liabilities		10,992,008		121,202		4.37			11,063,909		126,965			4.55
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,149,816							1,198,350
Other noninterest liabilities		218,796							240,771
Total liabilities		12,360,620							12,503,030
Shareholders’ equity		1,556,766							1,519,488
Total liabilities and shareholders’ equity	$	13,917,386						$	14,022,518
Net interest margin (tax-equivalent)			$	96,460		3.09	%			$	98,312			3.12	%
Less: tax-equivalent adjustment (3)				1,512							1,538
Net interest income			$	94,948						$	96,774
Supplemental data:
Customer funding (5)	$	8,070,219	$	67,800		3.33	%	$	8,195,078	$	71,489			3.46	%
Wholesale borrowings (6)		4,071,605		53,402		5.20			4,067,181		55,476			5.41
Total funding (7)	$	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 December 31, 2007 and September 30, 2007, TSFG capitalized $317,000 and $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
	9/30/08						6/30/08						3/31/08
				Diluted EPS						Diluted EPS						Diluted EPS
Net Loss, as Reported (GAAP)	$	(24,955	)				$	(10,932	)				$	(201,292	)
Preferred stock dividends		(6,250	)					(5,833	)					—
Net Loss Available to Common Shareholders	$	(31,205	)	$	(0.43	)	$	(16,765	)	$	(0.23	)	$	(201,292	)	$	(2.78	)
Net Loss, as Reported (GAAP)	$	(24,955	)				$	(10,932	)				$	(201,292	)
Add: Income tax expense (benefit)		(29,526	)					(8,056	)					(16,557	)
Loss Before Income Taxes		(54,481	)					(18,988	)					(217,849	)
Non-Operating Items
(Gain) loss on securities		725						(1,876	)					(396	)
Gain on Visa IPO share redemption		—						—						(1,904	)
Goodwill impairment		—						—						188,431
Employment contracts and severance		4,621						2,299						—
Branch acquisition and conversion costs		—						731						—
(Gain) loss on early extinguishment of debt		(125	)					(83	)					547
Visa-related litigation		—						—						(863	)
Pre-tax Operating Loss (loss before taxes, excluding non-operating items)		(49,260	)					(17,917	)					(32,034	)
Add: Provision for credit losses		84,608						63,763						73,292
Pre-Tax, Pre-Provision Operating Earnings (income before taxes and provision, excluding non-operating items)		35,348						45,846						41,258
Less: Provision for credit losses		(84,608	)					(63,763	)					(73,292	)
Related income taxes		(26,696	)					(7,655	)					(17,538	)
Operating Loss (net loss, excluding non-operating items)		(22,564	)					(10,262	)					(14,496	)
Preferred stock dividends		(6,250	)					(5,833	)					—
Operating Loss Available to Common Shareholders (net loss available to common shareholders, excluding non-operating items)		(28,814	)		(0.40	)		(16,095	)		(0.22	)		(14,496	)		(0.20	)
Amortization of intangibles		1,474						1,589						1,658
Related income taxes		(552	)					(596	)					(622	)
Cash Operating Loss Available to Common Shareholders (net loss available to common shareholders, excluding non-operating items and amortization of intangibles)	$	(27,892	)	$	(0.38	)	$	(15,102	)	$	(0.21	)	$	(13,460	)	$	(0.19	)
Average Common Shares Outstanding, Diluted		72,755,480						72,611,024						72,449,437
Select Balance Sheet (Averages)
Total assets	$	13,835,936					$	13,868,149					$	13,844,905
Intangible assets		(487,061	)					(487,440	)					(675,250	)
Tangible assets		13,348,875						13,380,709						13,169,655
Preferred stock		249,717						137,783						—
Common equity		1,302,890						1,357,598						1,564,978
Shareholders’ equity		1,552,607						1,495,381						1,564,978
Intangible assets		(487,061	)					(487,440	)					(675,250	)
Tangible equity		1,065,546						1,007,941						889,728
Return on Average Assets (1)
GAAP loss		(0.72	)%					(0.32	)%					(5.85	)%
Return on Average Equity (1)
GAAP loss		(6.39	)					(2.94	)					(51.73	)
Return on Average Common Equity (2)
GAAP loss available to common shareholders		(9.53	)					(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
				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

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
	9/30/08			6/30/08			3/31/08
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	95,619		$	100,205		$	92,706
Tax-equivalent adjustment		1,304			1,335			1,450
Net interest income (tax-equivalent)	$	96,923		$	101,540		$	94,156
Total noninterest income, as reported (GAAP)	$	27,900		$	32,190		$	30,916
Adjustments for non-operating items:
(Gain) loss on securities		725			(1,876	)		(396	)
Gain on Visa IPO share redemption		—			—			(1,904	)
Operating noninterest income (noninterest income, excluding non-operating items)	$	28,625		$	30,314		$	28,616
Total noninterest expenses, as reported (GAAP)	$	93,392		$	87,620		$	268,179
Adjustments for non-operating items:
Goodwill impairment		—			—			(188,431	)
Employment contracts and severance		(4,621	)		(2,299	)		—
Branch acquisition and conversion costs		—			(731	)		—
Gain (loss) on early extinguishment of debt		125			83			(547	)
Visa-related litigation		—			—			863
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		88,896			84,673			80,064
Less: amortization of intangibles		(1,474	)		(1,589	)		(1,658	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items and amortization of intangibles)	$	87,422		$	83,084		$	78,406
Total Revenue (1)
GAAP	$	123,519		$	132,395		$	123,622
Operating (2)		125,548			131,854			122,772
Noninterest Income as a % Total Revenue (3)
GAAP		22.59	%		24.31	%		25.01
Operating (2)		22.80			22.99			23.31
Efficiency Ratios (4)
GAAP		75.61			66.18			216.93
Operating (2)		70.81			64.22			65.21
Cash operating (2)		69.63			63.01			63.86
Noninterest Expense as a % of Average Assets (Annualized)
GAAP		2.69			2.54			7.79
Operating (2)		2.56			2.46			2.33
Cash operating (2)		2.51			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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