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

Quarterly Financial Data Supplement
First Quarter 2010
	Page
Financial Summary	1
Consolidated Statements of Operations	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, Core vs. Non-Core	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 Gains (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

FIRST QUARTER 2010 FINANCIAL SUMMARY

Changes vs. prior quarter, unless indicated otherwise:

Quarterly EPS

• Net loss available to common shareholders of $85.8 million

• Net loss per diluted share of $0.40

• Average diluted shares of 215.5 million, up 0.1% versus prior quarter; up 162.1% versus prior year

• Period-end common shares outstanding of 215.6 million, comparable to 215.5 million at December 31, 2009

Revenue

• Total revenue, defined as net interest income plus noninterest income, of $94.7 million

• Operating revenues of $95.2 million, down $8.1 million

--  Non-operating items:  $0.4 million net loss on securities

• Tax-equivalent net interest income of $73.7 million, down $7.7 million

--  Net interest margin of 2.75%, down 12 basis points from 2.87%

--  Average earning assets of $10.8 billion, down from $11.3 billion

• Operating noninterest income of $21.5 million, down $0.3 million from prior quarter

Balance Sheet

• Period-end loans held for investment decreased $383.4 million or 4.6% compared to prior quarter

• Period-end securities, up $97.1 million since prior quarter

• Period-end core deposits, defined as noninterest-bearing, interest checking, money market, and savings, down $20.3 million, or 0.4% linked quarter

• Period-end customer funding, defined as total deposits less brokered deposits plus customer sweep accounts, up $428.3 million, or 5.6% linked-quarter

• Period-end wholesale borrowings, including brokered deposits and excluding customer sweep accounts, up $16.7 million, or 0.5% linked-quarter

Noninterest Expenses and Operating Efficiency

• Noninterest expenses of $83.7 million

--  Non-operating items:  $0.9 million severance charges for staff reductions

• Operating noninterest expenses of $82.8 million, down $16.9 million from prior quarter

--  Loan collection and foreclosed asset expense of $4.7 million, down $3.4 million

--  Loss on other real estate owned of $5.5 million, down $9.5 million

• Operating noninterest expenses, excluding credit-related expenses and FDIC insurance premiums, down $4.3 million from prior quarter and $18.7 million from fourth quarter 2008

--  Project NOW and other expense initiatives showing progress

--  Full-time equivalent employees totaled 2,144, down 3.2% from prior quarter; down 14.4% from December 31, 2008

Credit Quality

• Nonperforming assets of $518.3 million or 6.35% of loans and foreclosed property and 4.17% of total assets

• Nonperforming loans held for investment decreased to $374.2 million from $399.0 million at December 31, 2009

• Net loan charge-offs of $87.8 million, or 4.32% annualized as a % of average loans held for investment

• Provision for credit losses exceeded net loan charge-offs by $7.4 million

• Allowance for credit losses of $380.5 million or 4.75% of loans held for investment, up from 4.45% for prior quarter

• Allowance coverage of nonperforming loans held for investment of 1.00 times, an increase from 0.92 times at December 31, 2009

Capital

• Tangible common equity to tangible asset ratio of 2.90%

• Common tangible book value per share of $1.64, compared to $1.98 at December 31, 2009

• After-tax unrealized gain on available for sale securities increased $8.7 million from prior quarter

• Tier 1 capital ratio of 9.52%, down from 9.93% at December 31, 2009; capital ratios exceed all "well-capitalized" regulatory requirements

1

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data) (unaudited)
	Three Months Ended
	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Interest Income
Interest and fees on loans	$	98,860		$	107,878		$	112,673		$	121,823		$	124,119
Interest and dividends on securities:
Taxable		17,486			18,097			16,742			18,140			20,548
Exempt from federal income taxes		232			1,573			2,006			2,072			2,234
Total interest and dividends on securities		17,718			19,670			18,748			20,212			22,782
Interest on interest-bearing bank balances and short-term investments (1)		284			-			-			-			1
Total interest income		116,862			127,548			131,421			142,035			146,902
Interest Expense
Interest on deposits		37,684			41,046			45,156			49,541			54,843
Interest on borrowed funds		5,653			5,956			6,227			6,564			7,041
Total interest expense		43,337			47,002			51,383			56,105			61,884
Net Interest Income		73,525			80,546			80,038			85,930			85,018
Provision for Credit Losses		95,123			170,761			224,179			131,337			142,627
Net interest income after provision for credit losses		(21,598	)		(90,215	)		(144,141	)		(45,407	)		(57,609	)
Noninterest Income		21,132			28,550			33,470			32,272			23,741
Noninterest Expenses		83,653			103,163			89,529			136,188			90,241
Income (loss) before income taxes		(84,119	)		(164,828	)		(200,200	)		(149,323	)		(124,109	)
Income tax expense (benefit)		(3,525	)		23,843			123,304			(59,647	)		(49,706	)
Net Income (Loss)		(80,594	)		(188,671	)		(323,504	)		(89,676	)		(74,403	)
Preferred stock dividends and other (2)		(5,235	)		(5,221	)		(17,251	)		(21,809	)		(16,408	)
Net Income (Loss) Available to
Common Shareholders	$	(85,829	)	$	(193,892	)	$	(340,755	)	$	(111,485	)	$	(90,811	)
Average common shares outstanding, basic		215,522,634			215,365,464			174,426,381			90,986,862			82,223,190
Average common shares outstanding, diluted (3)		215,522,634			215,365,464			174,426,381			90,986,862			82,223,190
Earnings (loss) per common share, basic	$	(0.40	)	$	(0.90	)	$	(1.95	)	$	(1.23	)	$	(1.10	)
Earnings (loss) per common share, diluted		(0.40	)		(0.90	)		(1.95	)		(1.23	)		(1.10	)
Cash dividends declared per common share		-			-			-			0.01			0.01

(1) Prior to January 1, 2010, interest income on cash balances held at the Federal Reserve in excess of reserve requirements was utilized to offset certain Federal Reserve account charges. Beginning January 1, 2010, such amounts of interest income are prospectively included in net interest income.

(2) For the quarters ended September 30, 2009, June 30, 2009 and March 31, 2009, includes $11.9 million, $14.0 million, and $6.5 million, respectively, for the value of common shares recorded as an inducement for early conversion of mandatorily convertible preferred stock.

(3) Average diluted shares exclude convertible preferred stock, warrants, and outstanding equity awards since either their effect would be antidilutive or the exercise price was greater than the average market price of the common shares.

2

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

DETAILS FOR NONINTEREST INCOME AND NONINTEREST EXPENSES
(dollars in thousands) (unaudited)
	Three Months Ended
	3/31/10			12/31/09		9/30/09			6/30/09			3/31/09
Noninterest Income
Service charges on deposit accounts	$	9,223		$	10,102	$	10,754		$	9,535		$	9,268
Debit card income, net		2,216			2,073		2,139			2,168			1,925
Customer service fee income		1,126			1,115		1,251			1,264			1,209
Total customer fee income		12,565			13,290		14,144			12,967			12,402
Retail investment services, net		1,587			1,890		2,157			1,646			2,010
Insurance income		1,876			1,667		1,911			1,765			2,457
Trust and investment management income		1,102			924		1,251			1,495			1,465
Benefits administration fees		-			-		-			571			642
Total wealth management income		4,565			4,481		5,319			5,477			6,574
Mortgage banking income		1,289			1,302		1,137			2,050			1,205
Bank-owned life insurance		2,444			1,656		2,797			2,560			2,502
Merchant processing income, net		-			-		591			817			610
Gain (loss) on certain derivative activities		59			32		1,597			1,085			1,135
Other		599			1,095		937			2,736			2,267
Operating noninterest income (noninterest income, excluding non-operating items)		21,521			21,856		26,522			27,692			26,695
Gain on sale of ancillary businesses		-			-		7,234			-			-
Gain (loss) on securities		(389	)		6,694		(286	)		4,580			(2,954	)
Non-operating noninterest income (loss)		(389	)		6,694		6,948			4,580			(2,954	)
Total noninterest income	$	21,132		$	28,550	$	33,470		$	32,272		$	23,741
Noninterest Expenses
Salaries and wages	$	29,836		$	31,059	$	32,559		$	34,739		$	35,191
Employee benefits		4,512			7,321		7,724			8,925			8,923
Occupancy		9,700			9,600		9,658			9,506			9,436
Furniture and equipment		6,606			7,062		6,950			6,801			6,945
Professional services		5,329			3,876		4,034			4,351			4,507
Project NOW expense		-			-		114			281			1,298
Advertising and business development		1,169			1,293		1,264			2,109			1,281
Telecommunications		1,536			1,548		1,572			1,551			1,526
Amortization of intangibles		1,009			1,102		1,238			1,286			1,291
Regulatory assessments		7,150			6,278		6,181			6,479			4,655
Loan collection and foreclosed asset expense		4,692			8,117		6,835			7,247			4,891
(Gain) loss on nonmortgage loans held for sale		-			518		(41	)		9,461			1,838
(Gain) loss on OREO		5,492			15,032		4,406			12,873			124
Other		5,744			6,879		6,289			7,154			7,711
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		82,775			99,685		88,783			112,763			89,617
Goodwill impairment		-			-		-			2,511			-
Severance related benefits		878			-		-			829			-
Impairment of long lived assets		-			3,478		746			17,376			-
FDIC special assessment		-			-		-			5,700			-
(Gain) loss on early extinguishment of debt		-			-		-			(2,991	)		(52	)
Loss on repurchase of auction rate securities		-			-		-			-			676
Non-operating noninterest expenses		878			3,478		746			23,425			624
Total noninterest expenses	$	83,653		$	103,163	$	89,529		$	136,188		$	90,241

3

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(dollars in thousands) (unaudited)
	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Assets
Cash and due from banks	$	156,568		$	190,346		$	138,912		$	151,272		$	147,297
Interest-bearing bank balances (1)		1,059,598			192,962			279,797			152,187			5,429
Securities
Available for sale		2,220,551			2,095,401			2,020,569			1,744,633			2,060,448
Held to maturity		99,452			127,516			138,277			146,469			18,039
Total securities		2,320,003			2,222,917			2,158,846			1,891,102			2,078,487
Loans held for sale		13,296			15,758			8,071			40,290			29,726
Loans held for investment		8,002,694			8,386,127			8,874,234			9,306,009			9,986,681
Less:  Allowance for loan losses		(373,146	)		(365,642	)		(339,536	)		(285,290	)		(280,156	)
Net loans held for investment		7,629,548			8,020,485			8,534,698			9,020,719			9,706,525
Bank-owned life insurance		301,498			302,830			301,448			298,946			295,855
Premises and equipment, net		257,499			261,523			272,732			273,365			285,580
Accrued interest receivable		37,538			37,304			37,549			40,517			42,927
Goodwill		214,118			214,118			213,797			221,650			224,161
Other intangible assets, net		14,698			15,707			16,809			19,282			20,568
Deferred tax asset, net		-			-			3,568			131,670			65,314
Other assets		423,788			421,032			334,565			347,231			383,378
	$	12,428,152		$	11,894,982		$	12,300,792		$	12,588,231		$	13,285,247
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	1,109,153		$	1,124,404		$	1,091,439		$	1,099,743		$	1,067,953
Interest-bearing customer deposits		6,696,069			6,225,707			6,298,309			6,233,137			6,316,548
Interest-bearing brokered deposits		1,958,948			1,946,101			2,099,040			2,055,772			1,842,577
Total deposits		9,764,170			9,296,212			9,488,788			9,388,652			9,227,078
Short-term borrowings		300,647			322,702			288,751			343,154			1,342,088
Long-term debt		1,115,984			1,116,869			1,126,393			1,126,435			931,977
Accrued interest payable		44,942			36,658			45,803			72,699			74,032
Other liabilities		282,759			129,367			152,356			148,038			157,889
Total liabilities		11,508,502			10,901,808			11,102,091			11,078,978			11,733,064
Shareholders' equity
Mandatorily convertible preferred stock		4,650			4,650			4,650			190,026			190,026
Perpetual preferred stock		332,031			331,133			330,250			329,380			328,523
Common stock		215,625			215,456			215,372			160,248			84,781
Surplus		1,345,397			1,344,984			1,343,987			1,191,170			1,182,423
Retained earnings (deficit)		(1,016,090	)		(934,598	)		(745,043	)		(403,296	)		(291,199	)
Accumulated other comprehensive income, net of income tax		37,426			30,938			48,875			41,115			57,018
Other, net		611			611			610			610			611
Total shareholders' equity		919,650			993,174			1,198,701			1,509,253			1,552,183
	$	12,428,152		$	11,894,982		$	12,300,792		$	12,588,231		$	13,285,247

(1) Beginning first quarter 2010, TSFG began including cash balances held at the Federal Reserve in excess of reserve requirements in interest-bearing bank balances. Amounts for prior periods have been reclassified from cash and due from banks to conform to the current presentation.

4

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

INVESTMENT SECURITIES PORTFOLIO ANALYSIS

(dollars in thousands) (unaudited)

	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Investment Securities Portfolio
Available for sale (at fair value):
U.S. Treasury	$	2,055		$	2,045		$	2,058		$	4,051		$	2,042
U.S. Government agencies		286,352			79,707			95,224			44,220			313,159
Agency mortgage-backed securities		1,918,914			1,980,305			1,688,201			1,449,961			1,489,583
Private label mortgage-backed securities		7,628			8,504			9,112			11,600			12,462
State and municipal		3,657			23,158			223,948			232,916			241,478
Other investments (1)		1,945			1,682			2,026			1,885			1,724
Total available for sale securities		2,220,551			2,095,401			2,020,569			1,744,633			2,060,448
Held to maturity (at amortized cost):
Agency mortgage-backed securities		85,698			111,199			121,956			129,534			-
State and municipal and other		13,754			16,317			16,321			16,935			18,039
Total held to maturity securities		99,452			127,516			138,277			146,469			18,039
Total securities	$	2,320,003		$	2,222,917		$	2,158,846		$	1,891,102		$	2,078,487
Total securities as a percentage of total assets		18.7	%		18.7	%		17.6	%		15.0	%		15.6	%

	March 31, 2010
	Amortized		Percentage						Tax-Equivalent
	Cost		of Total			Duration			Yield
Debt Securities
Available for sale:
U.S. Treasury	$	2,064		0.1	%		3.0			1.40	%
U.S. Government agencies		284,233		12.5			1.9			1.30
Mortgage-backed securities:
Agency collateralized mortgage obligations		1,201,671		52.8			2.8			3.43
Agency mortgage-backed securities		677,390		29.8			3.4			4.33
Private label mortgage-backed securities		7,802		0.3			1.7			4.69
State and municipal		3,654		0.1			1.3			4.96
Total available for sale debt securities		2,176,814		95.6			2.9			3.44
Held to maturity:
Agency mortgage-backed securities		85,698		3.8			3.4			3.89
State and municipal and other		13,754		0.6			1.3			5.44
Total held to maturity debt securities		99,452		4.4			3.1			4.11
Total debt securities	$	2,276,266		100.0	%		2.9	(2)		3.44	%
Fixed interest rate:
Mortgage-backed securities available for sale	$	1,671,558		73.4	%		3.1			3.72	%
Mortgage-backed securities held to maturity		59,405		2.6			3.1			3.64
Other available for sale		289,951		12.7			1.9			1.32
Other held to maturity		13,754		0.6			1.3			5.44
Variable interest rate:
Mortgage-backed securities available for sale		215,305		9.5			2.2			3.88
Mortgage-backed securities held to maturity		26,293		1.2			2.2			4.46
Total debt securities	$	2,276,266		100.0	%		2.9	(2)		3.44	%

(1) Other investments in available for sale securities include community bank stocks and other equity securities.  Excludes FHLB stock and certain other investments recorded in other assets totaling $58.8 million and $19.4 million, respectively, at March 31, 2010.

(2) Compared to 3.2 years duration at December 31, 2009 due to overall lower interest rates.

5

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

INVESTMENT SECURITIES PORTFOLIO CREDIT RISK PROFILE

(dollars in thousands) (unaudited)

	March 31, 2010					December 31, 2009
	Balance		% of Total			Balance		% of Total
Government and agency
U.S. Treasury	$	2,055		0.1	%	$	2,045		0.1	%
U.S. Government agencies (1)		286,352		12.3			79,707		3.6
Agency mortgage-backed securities (MBS) (1)(2)(3)		2,004,612		86.4			2,091,504		94.0
Total government and agency		2,293,019		98.8			2,173,256		97.7
State and municipal (3)(4)(5)
Pre-funded with collateral or AAA-rated backed by Texas Permanent School Fund or AAA-rated		4,076		0.2			19,392		0.9
Underlying issuer or collateral rated AA or A (including South Carolina State Aid)		8,909		0.4			15,127		0.7
Underlying issuer or collateral rated BBB		1,987		0.1			2,337		0.1
Non-rated		2,339		0.1			2,519		0.1
Total state and municipal		17,311		0.8			39,375		1.8
Private label mortgage-backed securities AAA-rated (2)		7,628		0.3			8,504		0.4
Community bank stocks and other		2,045		0.1			1,782		0.1
Total securities	$	2,320,003		100.0	%	$	2,222,917		100.0	%
Percent of total securities:
Rated A or higher				99.7	%				99.7	%
Investment grade				99.8	%				99.8	%

(1) At March 31, 2010, these numbers include, in the aggregate, $206 million and $1.7 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 March 31, 2010 and December 31, 2009, agency mortgage-backed securities include $85.7 million and $111.2 million, respectively, of securities held to maturity at amortized cost. At March 31, 2010 and December 31, 2009, state and municipal securities include $13.7 million and $16.2 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 March 31, 2010, $4.1 million of municipal bonds are guaranteed by bond insurers.  At December 31, 2009, $4.9 million of municipal bonds are guaranteed by bond insurers.

(5) At March 31, 2010, the breakdown by current bond rating is as follows: $0.2 million pre-funded with collateral or AAA-rated backed by Texas Permanent School Fund, $3.9 million AAA-rated, $10.9 million AA or A-rated, and $2.3 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, CORE VS. NON-CORE

(dollars in thousands) (unaudited)

	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Commercial Loans
Commercial and industrial	$	1,924,014		$	2,080,329		$	2,249,929		$	2,428,511		$	2,645,871
Owner - occupied real estate		1,280,010			1,271,525			1,270,015			1,315,442			1,285,530
Commercial real estate		3,321,544			3,501,809			3,741,662			3,873,199			4,042,871
		6,525,568			6,853,663			7,261,606			7,617,152			7,974,272
Consumer Loans
Indirect - sales finance		202,504			230,426			259,296			285,658			573,653
Consumer lot loans		132,307			144,315			161,206			178,212			198,032
Direct retail		79,617			83,460			86,474			87,326			90,999
Home equity		783,868			787,645			803,295			811,057			813,015
		1,198,296			1,245,846			1,310,271			1,362,253			1,675,699
Mortgage Loans		278,830			286,618			302,357			326,604			336,710
Total loans held for investment	$	8,002,694		$	8,386,127		$	8,874,234		$	9,306,009		$	9,986,681
Percentage of Loans Held for Investment
Commercial and industrial		24.0	%		24.8	%		25.3	%		26.1	%		26.4	%
Owner - occupied real estate		16.0			15.2			14.3			14.2			12.9
Commercial real estate		41.5			41.8			42.2			41.6			40.5
Consumer		15.0			14.8			14.8			14.6			16.8
Mortgage		3.5			3.4			3.4			3.5			3.4
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Growth in Loans Held for Investment (1)
Growth vs. prior quarter, annualized		(18.5	) %		(21.8	) %		(18.4	) %		(27.3	) %		(8.2	) %
Growth year-to-date, annualized		(18.5	)		(17.7	)		(17.3	)		(17.5	)		(8.2	)

LOAN PORTFOLIO COMPOSITION -- CORE AND NON-CORE LOANS
(BASED ON ABILITY TO BUILD/EXPAND BANKING RELATIONSHIP)
	3/31/10		12/31/09		9/30/09		6/30/09		3/31/09
Core Relationship Loans
Commercial	$	5,699,438	$	5,898,306	$	6,088,129	$	6,210,451	$	6,353,401
Consumer and mortgage		1,128,851		1,140,626		1,161,711		1,175,883		1,178,809
Total Core		6,828,289		7,038,932		7,249,840		7,386,334		7,532,210
Non-Core Loans
Commercial		826,130		955,357		1,173,477		1,406,701		1,620,871
Indirect - sales finance		178,458		208,572		240,638		276,179		569,124
Consumer lot loans		123,722		135,342		153,255		171,725		192,903
Other consumer and mortgage		46,095	��	47,924		57,024		65,070		71,573
Total Non-Core		1,174,405		1,347,195		1,624,394		1,919,675		2,454,471
Total loans held for investment	$	8,002,694	$	8,386,127	$	8,874,234	$	9,306,009	$	9,986,681

(1) At December 31, 2008, loans held for investment totaled $10,192,072.

7

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

SUMMARY OF CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES

(dollars in thousands) (unaudited)

	At and for the Three Months Ended
	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Credit Quality
Loans held for investment	$	8,002,694		$	8,386,127		$	8,874,234		$	9,306,009		$	9,986,681
Allowance for loan losses		373,146			365,642			339,536			285,290			280,156
Allowance for credit losses		380,493			373,126			345,256			289,680			283,425
Nonperforming loans held for investment		374,156			399,046			431,791			464,565			422,950
Nonperforming loans held for sale		-			-			-			376			12,766
Foreclosed property (other real estate owned and personal property repossessions)		144,128			123,314			112,771			95,752			77,210
Nonperforming assets	$	518,284		$	522,360		$	544,562		$	560,693		$	512,926
Restructured loans not included in nonperforming assets	$	45,051		$	26,128		$	17,236		$	17,291		$	11,073
Nonperforming loans as a % of loans held for investment		4.68	%		4.76	%		4.87	%		4.99	%		4.24	%
Nonperforming assets as a % of loans and foreclosed property		6.35			6.13			6.05			5.94			5.08
Nonperforming assets as a % of total assets		4.17			4.39			4.43			4.45			3.86
Allowance for loan losses as a % of loans held for investment		4.66			4.36			3.83			3.07			2.81
Allowance for credit losses as a % of loans held for investment		4.75			4.45			3.89			3.11			2.84
Allowance for loan losses to nonperforming loans held for investment		1.00	x		0.92	x		0.79	x		0.61	x		0.66	x
Impaired loans	$	386,716		$	392,339		$	403,478		$	432,366		$	369,339
Specific allowance for impaired loans		38,099			37,656			48,929			70,006			66,988
Loans past due 90 days or more (interest accruing)		3,442			10,465			7,467			11,107			6,444
Net loan charge-offs		87,756			142,891			168,603			120,611			109,076
Average loans held for investment		8,240,922			8,697,056			9,146,694			9,847,366			10,154,853
Net loan charge-offs as a % of average loans held for investment (annualized)		4.32	%		6.52	%		7.31	%		4.91	%		4.36	%
Allowance for Loan Losses
Balance at beginning of period	$	365,642		$	339,536		$	285,290		$	280,156		$	247,086
Allowance adjustment for loans sold		-			-			-			(4,471	)		-
Provision for loan losses		95,260			168,997			222,849			130,216			142,146
Loans charged-off		(93,619	)		(149,910	)		(172,110	)		(124,122	)		(110,443	)
Recoveries of loans previously charged-off		5,863			7,019			3,507			3,511			1,367
Balance at end of period	$	373,146		$	365,642		$	339,536		$	285,290		$	280,156
Reserve for Unfunded Lending Commitments
Balance at beginning of period	$	7,484		$	5,720		$	4,390		$	3,269		$	2,788
Provision for unfunded lending commitments		(137	)		1,764			1,330			1,121			481
Balance at end of period	$	7,347		$	7,484		$	5,720		$	4,390		$	3,269
Allowance for Credit Losses
Balance at beginning of period	$	373,126		$	345,256		$	289,680		$	283,425		$	249,874
Allowance adjustment for loans sold		-			-			-			(4,471	)		-
Provision for credit losses		95,123			170,761			224,179			131,337			142,627
Loans charged-off		(93,619	)		(149,910	)		(172,110	)		(124,122	)		(110,443	)
Recoveries of loans previously charged-off		5,863			7,019			3,507			3,511			1,367
Balance at end of period	$	380,493		$	373,126		$	345,256		$	289,680		$	283,425

8

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

COMMERCIAL REAL ESTATE LOANS

(dollars in millions) (unaudited)

	3/31/10 Commercial Real Estate ("CRE") Loans by Geography
	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	$	564		$	414		$	373		$	205		$	345		$	130		$	107		$	2,138			27	%
Residential A&D		45			48			120			16			37			12			30			308			4
Commercial A&D		31			32			26			22			7			15			13			146			2
Commercial construction		158			10			21			33			16			9			28			275			3
Residential construction		35			5			7			9			17			20			1			94			1
Residential condo		11			32			7			14			14			2			10			90			1
Undeveloped land		40			56			50			51			36			6			32			271			3
Total CRE Loans	$	884		$	597		$	604		$	350		$	472		$	194		$	221		$	3,322			41	%
% of Total Loans HFI		11	%		7	%		8	%		4	%		6	%		2	%		3	%		41	%

	3/31/10 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
CRE Nonaccrual Loans by Product Type:
Completed income property	$	13.9		$	10.1		$	20.4		$	2.8		$	6.4		$	3.2		$	12.7		$	69.5			19	%
Residential A&D		5.5			5.7			18.7			6.6			5.4			1.1			3.3			46.3			12
Commercial A&D		1.8			5.9			3.7			1.0			-			-			6.4			18.8			5
Commercial construction		14.8			-			2.9			-			1.5			-			5.2			24.4			6
Residential construction		0.5			-			0.9			6.4			2.2			-			-			10.0			3
Residential condo		1.1			13.2			0.1			-			-			1.1			0.2			15.7			4
Undeveloped land		3.2			3.1			1.3			5.1			11.3			1.4			7.4			32.8			9
Total CRE Nonaccrual
Loans	$	40.8		$	38.0		$	48.0		$	21.9		$	26.8		$	6.8		$	35.2		$	217.5			58	%
CRE Nonaccrual Loans as % of Total Nonaccrual Loans		11	%		10	%		13	%		6	%		7	%		2	%		9	%		58	%

	Three Months Ended 3/31/10 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	$	2.2		$	1.1		$	4.7		$	2.1		$	1.0		$	0.8		$	5.3		$	17.2			20	%
Residential A&D		3.3			3.3			1.3			1.3			1.5			-			0.1			10.8			12
Commercial A&D		0.1			-			-			-			0.1			0.4			3.9			4.5			5
Commercial construction		-			0.1			1.3			-			-			-			-			1.4			2
Residential construction		-			0.9			1.2			-			8.6			(1.0	)		(1.6	)		8.1			9
Residential condo		-			-			-			-			-			-			-			-			-
Undeveloped land		(0.2	)		0.2			0.2			-			1.1			-			(0.2	)		1.1			1
Total CRE Net Charge-offs	$	5.4		$	5.6		$	8.7		$	3.4		$	12.3		$	0.2		$	7.5		$	43.1			49	%
CRE Net Charge-offs as % of Total Net Charge-offs		6	%		6	%		10	%		4	%		14	%		0	%		9	%		49	%

9

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

TYPES OF CUSTOMER FUNDING AND CUSTOMER FUNDING GROWTH

(dollars in thousands) (unaudited)

	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Noninterest-bearing	$	1,109,153		$	1,124,404		$	1,091,439		$	1,099,743		$	1,067,953
Interest-bearing checking		1,030,056			1,060,470			1,011,370			1,061,400			1,098,585
Money market accounts		2,053,388			2,072,664			2,174,627			1,978,114			1,889,041
Savings accounts		367,573			322,924			262,764			222,044			203,106
Core deposits		4,560,170			4,580,462			4,540,200			4,361,301			4,258,685
Time deposits under $100,000		1,843,184			1,632,582			1,651,560			1,710,870			1,742,177
Time deposits of $100,000 or more		1,401,868			1,137,067			1,197,988			1,260,709			1,383,639
Customer deposits (1)		7,805,222			7,350,111			7,389,748			7,332,880			7,384,501
Brokered deposits		1,958,948			1,946,101			2,099,040			2,055,772			1,842,577
Total deposits		9,764,170			9,296,212			9,488,788			9,388,652			9,227,078
Less:  Brokered deposits		(1,958,948	)		(1,946,101	)		(2,099,040	)		(2,055,772	)		(1,842,577	)
Add:  Customer sweep accounts		289,888			316,690			281,235			330,765			387,106
Customer funding (2)	$	8,095,110		$	7,666,801		$	7,670,983		$	7,663,645		$	7,771,607
Percentage of Deposits
Noninterest-bearing		11.4	%		12.1	%		11.5	%		11.7	%		11.6	%
Interest-bearing checking		10.5			11.4			10.7			11.3			11.9
Money market accounts		21.0			22.3			22.9			21.1			20.4
Savings accounts		3.8			3.5			2.8			2.4			2.2
Core deposits		46.7			49.3			47.9			46.5			46.1
Time deposits under $100,000		18.9			17.6			17.4			18.2			18.9
Time deposits of $100,000 or more		14.3			12.2			12.6			13.4			15.0
Customer deposits (1)		79.9			79.1			77.9			78.1			80.0
Brokered deposits		20.1			20.9			22.1			21.9			20.0
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	For The Period Ended
	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Growth vs. Prior Quarter, Annualized (3)
Noninterest-bearing		(5.5	) %		12.0	%		(3.0	) %		11.9	%		10.4	%
Total deposits		20.4			(8.1	)		4.2			7.0			(7.7	)
Customer funding (2)		22.7			(0.2	)		0.4			(5.6	)		(11.1	)
Growth Year-To-Date, Annualized (3)
Noninterest-bearing		(5.5	) %		8.0	%		6.5	%		11.4	%		10.4	%
Total deposits		20.4			(1.2	)		1.2			(0.4	)		(7.7	)
Customer funding (2)		22.7			(4.0	)		(5.3	)		(8.2	)		(11.1	)

(1) Total deposits less brokered deposits.

(2) Total deposits less brokered deposits plus customer sweep accounts.

(3) At December 31, 2008, noninterest-bearing totaled $1,041,140, total deposits totaled $9,405,717, and customer funding totaled $7,989,962.

10

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

WHOLESALE BORROWINGS

(dollars in thousands) (unaudited)

	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Types of wholesale borrowings
Short-term borrowings
Federal funds purchased and repurchase agreements	$	25		$	25		$	25		$	25		$	197,309
Customer sweep accounts		289,888			316,690			281,235			330,765			387,106
Federal Reserve borrowings		-			-			-			-			750,000
Secured borrowings		1,769			-			-			-			-
Treasury, tax and loan note		8,965			5,987			7,491			12,364			7,673
Total short-term borrowings		300,647			322,702			288,751			343,154			1,342,088
Long-term borrowings
Repurchase agreements		125,000			125,000			125,000			125,000			200,000
FHLB advances, net of discount		751,776			752,646			762,158			762,188			467,717
Subordinated notes		206,704			206,704			206,704			206,704			206,704
Mandatorily redeemable preferred stock of subsidiary		31,800			31,800			31,800			31,800			56,800
Note payable		704			719			731			743			756
Total long-term borrowings		1,115,984			1,116,869			1,126,393			1,126,435			931,977
Total borrowings		1,416,631			1,439,571			1,415,144			1,469,589			2,274,065
Less:  Customer sweep accounts		(289,888	)		(316,690	)		(281,235	)		(330,765	)		(387,106	)
Add:  Brokered deposits		1,958,948			1,946,101			2,099,040			2,055,772			1,842,577
Total wholesale borrowings	$	3,085,691		$	3,068,982		$	3,232,949		$	3,194,596		$	3,729,536
Wholesale borrowings as a percentage of total assets		24.8	%		25.8	%		26.3	%		25.4	%		28.1	%

11

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

SUMMARY OF CAPITAL, CAPITAL RATIOS, UNREALIZED GAINS (LOSSES) ON

 AVAILABLE FOR SALE SECURITIES, AND MARKET RATES FOR U.S. TREASURY NOTES

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

	3/31/10			12/31/09			9/30/09			6/30/09			3/31/09
Regulatory Capital
Tier 1 capital	$	865,439		$	948,762		$	1,122,738		$	1,308,678		$	1,395,469
Tier 2 capital		119,127			124,710			130,294			136,453			164,973
Total risk-based capital		984,566			1,073,472			1,253,032			1,445,131			1,560,442
Total risk-weighted assets		9,090,529			9,550,193			10,030,335			10,584,755			11,532,895
Tangible Equity
Mandatorily convertible preferred stock	$	4,650		$	4,650		$	4,650		$	190,026		$	190,026
Perpetual preferred stock		332,031			331,133			330,250			329,380			328,523
Common equity		582,969			657,391			863,801			989,847			1,033,634
Shareholders' equity		919,650			993,174			1,198,701			1,509,253			1,552,183
Intangible assets		(228,816	)		(229,825	)		(230,606	)		(240,932	)		(244,729	)
Tangible equity		690,834			763,349			968,095			1,268,321			1,307,454
Capital Ratios
Tier 1 risk-based capital (preliminary)		9.52	%		9.93	%		11.19	%		12.36	%		12.10	%
Total risk-based capital (preliminary)		10.83			11.24			12.49			13.65			13.53
Leverage ratio (preliminary)		7.41			7.91			9.22			10.30			10.55
Tier 1 common capital (preliminary)		3.32			4.04			5.59			5.31			5.64
Tangible equity to tangible assets ratio		5.66			6.54			8.02			10.27			10.03
Impact of unrealized gain on securities		(0.20	)		(0.14	)		(0.23	)		(0.14	)		(0.19	)
Tangible equity to tangible assets ratio, excluding unrealized gain on securities		5.46			6.40			7.79			10.13			9.84
Tangible common equity to tangible assets ratio		2.90			3.67			5.25			6.07			6.05
Accumulated Other Comprehensive Income (AOCI)
Gross	$	57,578		$	47,597		$	76,751		$	64,192		$	89,078
Net of income tax (included in equity)		37,426			30,938			48,875			41,115			57,018
Unrealized Gains on AFS Securities (included in AOCI)
Gross (included in AFS securities)	$	41,774		$	28,442		$	50,524		$	30,189		$	43,255
Net of income tax (included in equity)		27,153			18,487			31,827			19,013			27,233
Per Share Data
Mandatorily convertible preferred shares outstanding:
- Series 2008		4,650			4,650			4,650			95,526			190,026
- Series 2009		-			-			-			94,500			-
Total		4,650			4,650			4,650			190,026			190,026
Common shares outstanding		215,624,517			215,455,541			215,371,687			160,248,170			84,781,160
Common book value per common share	$	2.70		$	3.05		$	4.01		$	6.18		$	12.19
Common tangible book value per common share		1.64			1.98			2.94			4.67			9.31
Market Rates for U.S. Treasury Notes
Three year		1.60	%		1.70	%		1.45	%		1.64	%		1.15	%
Five year		2.55			2.69			2.31			2.54			1.67

12

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

COMPARATIVE AVERAGE BALANCES - YIELDS AND COSTS

(dollars in thousands) (unaudited)

Three Months Ended

	3/31/10							12/31/09							9/30/09
	Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/
	Balance		Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate
Assets
Earning assets
Commercial loans	$	6,733,445	$	75,019		4.52	%	$	7,123,480	$	79,160		4.41	%	$	7,504,007	$	81,465		4.31	%
Consumer loans		1,300,110		14,886		4.64			1,338,530		15,796		4.68			1,387,242		16,103		4.61
Indirect loans		216,604		4,074		7.63			244,836		4,767		7.72			272,155		5,180		7.55
Risk management derivatives tied to loans		-		4,881					-		8,155					-		9,925
Total loans (1)		8,250,159		98,860		4.86			8,706,846		107,878		4.92			9,163,404		112,673		4.88
Investment securities (taxable) (2)		2,098,373		17,486		3.33			2,000,755		18,097		3.62			1,610,244		16,742		4.16
Investment securities (nontaxable) (2)(3)		28,496		357		5.01			180,914		2,420		5.35			237,040		3,086		5.21
Total investment securities		2,126,869		17,843		3.36			2,181,669		20,517		3.76			1,847,284		19,828		4.29
Federal funds sold, interest-bearing bank balances, and other temp investments (4)		450,754		284		0.26			393,583		-		-			111,891		-		-
Total earning assets		10,827,782		116,987		4.37			11,282,098		128,395		4.52			11,122,579		132,501		4.73
Non-earning assets		1,097,164							945,037							1,306,128
Total assets	$	11,924,946						$	12,227,135						$	12,428,707
Liabilities and Shareholders' Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,061,576	$	698		0.27		$	1,039,799	$	724		0.28		$	1,011,374	$	699		0.27
Savings		345,349		845		0.99			294,704		763		1.03			243,787		599		0.97
Money market		2,056,328		5,465		1.08			2,118,805		6,498		1.22			2,092,634		7,030		1.33
Time deposits, excluding brokered deposits		2,946,198		18,557		2.55			2,771,704		18,471		2.64			2,909,664		22,241		3.03
Brokered deposits		1,862,855		12,119		2.64			2,117,888		14,590		2.73			1,911,837		14,587		3.03
Total interest-bearing deposits		8,272,306		37,684		1.85			8,342,900		41,046		1.95			8,169,296		45,156		2.19
Customer sweep accounts		284,498		225		0.32			289,930		238		0.33			309,577		230		0.29
Other borrowings		1,126,509		5,428		1.95			1,132,533		5,718		2.00			1,134,993		5,997		2.10
Total interest-bearing liabilities		9,683,313		43,337		1.82			9,765,363		47,002		1.91			9,613,866		51,383		2.12
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,088,131							1,115,349							1,109,176
Other noninterest liabilities		174,009							184,397							203,380
Total liabilities		10,945,453							11,065,109							10,926,422
Shareholders' equity		979,493							1,162,026							1,502,285
Total liabilities and shareholders' equity	$	11,924,946						$	12,227,135						$	12,428,707
Net interest margin (tax-equivalent)			$	73,650		2.75		%		$	81,393		2.87	%			$	81,118		2.90	%
Less: tax-equivalent adjustment (3)				125							847							1,080
Net interest income			$	73,525						$	80,546						$	80,038
Supplemental data:
Customer funding (5)	$	7,782,080	$	25,790		1.34	%	$	7,630,291	$	26,694		1.39	%	$	7,676,212	$	30,799		1.59	%
Wholesale borrowings (6)		2,989,364		17,547		2.38			3,250,421		20,308		2.48			3,046,830		20,584		2.68
Total funding (7)	$	10,771,444	$	43,337		1.63	%	$	10,880,712	$	47,002		1.71	%	$	10,723,042	$	51,383		1.90	%

(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) Prior to first quarter 2010, cash balances held at the Federal Reserve in excess of reserve requirements were included in non-earning assets, and the related interest income was utilized to offset certain Federal Reserve account charges. Beginning first quarter 2010, these cash balances were included in interest-bearing bank balances, with amounts from prior periods reclassified to conform to the current presentation. The related amounts of interest income are prospectively included in net interest income beginning in first quarter 2010.

(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
	6/30/09							3/31/09
	Average		Income/		Yield/			Average		Income/		Yield/
	Balance		Expense		Rate			Balance		Expense		Rate
Assets
Earning assets
Commercial loans	$	7,900,570	$	83,970		4.26	%	$	8,086,559	$	83,794		4.20	%
Consumer loans		1,443,823		17,282		4.80			1,494,261		17,566		4.77
Indirect loans		530,875		9,544		7.21		��	607,548		10,845		7.24
Risk management derivatives tied to loans		-		11,027					-		11,914
Total loans (1)		9,875,268		121,823		4.95			10,188,368		124,119		4.94
Investment securities (taxable) (2)		1,680,893		18,140		4.32			1,854,149		20,548		4.43
Investment securities (nontaxable) (2)(3)		246,001		3,188		5.18			266,600		3,437		5.16
Total investment securities		1,926,894		21,328		4.43			2,120,749		23,985		4.52
Federal funds sold, interest-bearing bank balances, and other temp investments (4)		73,170		-		-			124,394		1		-
Total earning assets		11,875,332		143,151		4.83			12,433,511		148,105		4.82
Non-earning assets		1,210,224							1,122,617
Total assets	$	13,085,556						$	13,556,128
Liabilities and Shareholders' Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking	$	1,036,339	$	724		0.28		$	1,131,456	$	865		0.31
Savings		208,856		472		0.91			196,974		529		1.09
Money market		1,924,037		6,726		1.40			1,913,927		7,779		1.65
Time deposits, excluding brokered deposits		3,067,471		26,581		3.48			3,199,427		28,867		3.66
Brokered deposits		1,954,201		15,038		3.09			1,905,805		16,803		3.58
Total interest-bearing deposits		8,190,904		49,541		2.43			8,347,589		54,843		2.66
Customer sweep accounts		362,342		245		0.27			455,781		298		0.27
Other borrowings (5)		1,682,118		6,319		1.51			1,899,771		6,743		1.44
Total interest-bearing liabilities		10,235,364		56,105		2.20			10,703,141		61,884		2.34
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,074,739							1,021,400
Other noninterest liabilities		235,432							230,741
Total liabilities		11,545,535							11,955,282
Shareholders' equity		1,540,021							1,600,846
Total liabilities and shareholders' equity	$	13,085,556						$	13,556,128
Net interest margin (tax-equivalent)			$	87,046		2.94		%		$	86,221		2.80	%
Less: tax-equivalent adjustment (3)				1,116							1,203
Net interest income			$	85,930						$	85,018
Supplemental data:
Customer funding (6)	$	7,673,784	$	34,748		1.82	%	$	7,918,965	$	38,338		1.96	%
Wholesale borrowings (7)		3,636,319		21,357		2.36			3,805,576		23,546		2.51
Total funding (8)	$	11,310,103	$	56,105		1.99	%	$	11,724,541	$	61,884		2.14	%

(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) Prior to first quarter 2010, cash balances held at the Federal Reserve in excess of reserve requirements were included in non-earning assets, and the related interest income was utilized to offset certain Federal Reserve account charges. Beginning first quarter 2010, these cash balances were included in interest-bearing bank balances, with amounts from prior periods reclassified to conform to the current presentation. The related amounts of interest income are prospectively included in net interest income beginning in first quarter 2010.

(5) During the three months ended June 30, 2009 and March 31, 2009, TSFG capitalized $288,000 and $450,000, respectively, of interest in conjunction with the construction of its expanded corporate facilities.

(6) Customer funding includes total deposits less brokered deposits plus customer sweep accounts.

(7) 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.

(8) 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
	3/31/10
				Diluted
				EPS
Net Loss, as Reported (GAAP)	$	(80,594	)
Preferred stock dividends and other		(5,235	)
Net Loss Available to Common
Shareholders	$	(85,829	)	$	(0.40	)
Net Loss, as Reported (GAAP)		(80,594	)
Add:  Income tax expense (benefit)		(3,525	)
Loss Before Income Taxes		(84,119	)
Non-Operating Items
(Gain) loss on securities		389
Severance related benefits		878
Pre-tax Operating Loss (loss before taxes, excluding non-operating items)		(82,852	)
Add:  Provision for credit losses		95,123
Pre-tax, Pre-Provision Operating Earnings		12,271
Add:  Loss on OREO		5,492
Pre-tax, Pre-Credit Operating Earnings	$	17,763
Average Common Shares Outstanding,
Diluted		215,522,634
Select Balance Sheet (Averages)
Total assets	$	11,924,946
Intangible assets		(229,299	)
Tangible assets		11,695,647
Preferred stock		336,168
Common equity		643,325
Shareholders' equity		979,493
Intangible assets		(229,299	)
Tangible equity		750,194
Return on Average Assets (1)
GAAP loss		(2.74	)	%
Return on Average Equity (1)
GAAP loss		(33.37	)
Return on Average Common Equity (2)
GAAP loss available to common shareholders		(54.11	)

(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
	12/31/09						9/30/09						6/30/09						3/31/09
				Diluted						Diluted						Diluted						Diluted
				EPS						EPS						EPS						EPS
Net Loss, as Reported (GAAP)	$	(188,671	)				$	(323,504	)				$	(89,676	)				$	(74,403	)
Preferred stock dividends and other (1)		(5,221	)					(17,251	)					(21,809	)					(16,408	)
Net Loss Available to Common Shareholders	$	(193,892	)	$	(0.90	)	$	(340,755	)	$	(1.95	)	$	(111,485	)	$	(1.23	)	$	(90,811	)	$	(1.10	)
Net Loss, as Reported (GAAP)		(188,671	)					(323,504	)					(89,676	)					(74,403	)
Add:  Income tax expense (benefit)		23,843						123,304						(59,647	)					(49,706	)
Loss Before Income Taxes		(164,828	)					(200,200	)					(149,323	)					(124,109	)
Non-Operating Items
(Gain) loss on securities		(6,694	)					286						(4,580	)					2,954
Gain on sale of ancillary businesses		-						(7,234	)					-						-
Goodwill impairment		-						-						2,511						-
Employment contracts and severance		-						-						829						-
Impairment of long lived assets		3,478						746						17,376						-
FDIC special assessment		-						-						5,700						-
Gain on early extinguishment of debt		-						-						(2,991	)					(52	)
Loss on repurchase of auction rate securities		-						-						-						676
Pre-tax Operating Loss (loss before taxes, excluding non-operating items)		(168,044	)					(206,402	)					(130,478	)					(120,531	)
Add:  Provision for credit losses		170,761						224,179						131,337						142,627
Pre-tax, Pre-Provision Operating Earnings		2,717						17,777						859						22,096
Add:  (Gain) loss on nonmortgage loans held for sale		518						(41	)					9,461						1,838
Add:  Loss on OREO		15,032						4,406						12,873						124
Pre-tax, Pre-Credit Operating Earnings	$	18,267					$	22,142					$	23,193					$	24,058
Average Common Shares Outstanding,
Diluted		215,365,464						174,426,381						90,986,862						82,223,190
Select Balance Sheet (Averages)
Total assets	$	12,227,135					$	12,428,707					$	13,085,556					$	13,556,128
Intangible assets		(230,129	)					(235,986	)					(244,040	)					(245,341	)
Tangible assets		11,997,006						12,192,721						12,841,516						13,310,787
Preferred stock		335,302						491,365						518,968						532,430
Common equity		826,724						1,010,920						1,021,053						1,068,416
Shareholders' equity		1,162,026						1,502,285						1,540,021						1,600,846
Intangible assets		(230,129	)					(235,986	)					(244,040	)					(245,341	)
Tangible equity		931,897						1,266,299						1,295,981						1,355,505
Return on Average Assets (2)
GAAP loss		(6.12	)%					(10.33	)%					(2.75	)%					(2.23	)%
Return on Average Equity (2)
GAAP loss		(64.42	)					(85.43	)					(23.36	)					(18.85	)
Return on Average Common Equity (3)
GAAP loss available to common shareholders		(93.05	)					(133.73	)					(43.79	)					(34.47	)

(1) For the quarters ended September 30, 2009, June 30, 2009 and March 31, 2009, includes $11.9 million, $14.0 million and $6.5 million, respectively, for the value of common shares recorded as an inducement for early conversion of mandatorily convertible preferred stock.

(2) Return on average assets and return on average equity are calculated as net income divided by average assets or average total equity.

(3) Return on average common equity is calculated as net income available to common shareholders divided by average common equity.

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,
	2009						2008
				Diluted						Diluted
				EPS						EPS
Net Income (Loss), as Reported (GAAP)	$	(676,254	)				$	(547,118	)
Preferred stock dividends and other		(60,689	)					(21,658	)
Net Income (Loss) Available to Common Shareholders	$	(736,943	)	$	(5.22	)	$	(568,776	)	$	(7.78	)
Net Income (Loss), as Reported (GAAP)	$	(676,254	)				$	(547,118	)
Add:  Income tax expense (benefit)		37,794						(87,574	)
Income (Loss) Before Income Taxes		(638,460	)					(634,692	)
Non-Operating Items
(Gain) loss on securities		(8,034	)					(3,108	)
Gain on sale of ancillary businesses		(7,234	)					-
Gain on VISA IPO share redemption		-						(1,904	)
Goodwill impairment		2,511						426,049
Employment contracts and severance		829						16,519
Impairment of long lived assets		21,600						-
FDIC special assessment		5,700						-
(Gain) loss on early extinguishment of debt		(3,043	)					2,086
Loss on repurchase of auction rate securities		676						-
Loss on derivative collateral		-						1,061
Branch acquisition and conversion costs		-						731
Visa-related litigation		-						(863	)
Pre-tax Operating Income (Loss) (income (loss) before taxes, excluding non-operating items)		(625,455	)					(194,121	)
Add: Provision for credit losses		668,904						344,589
Pre-tax, Pre-Provision Operating Earnings		43,449						150,468
Add: Loss on nonmortgage loans held for sale		11,776						283
Add: Loss on OREO		32,435						633
Pre-tax, Pre-Credit Operating Earnings	$	87,660					$	151,384
Average Common Shares Outstanding, Diluted		141,207,510						73,136,936
Select Balance Sheet (Averages)
Total assets	$	12,819,697					$	13,833,355
Intangible assets		(238,825	)					(532,517	)
Tangible assets		12,580,872						13,300,838
Preferred stock		469,036						181,849
Common equity		981,237						1,376,232
Shareholders' equity		1,450,273						1,558,081
Intangible assets		(238,825	)					(532,517	)
Tangible equity		1,211,448						1,025,564
Return on Average Assets (1)
GAAP earnings (loss)		(5.28	)%					(3.96	)%
Return on Average Equity (1)
GAAP earnings (loss)		(46.63	)					(35.11	)
Return on Average Common Equity (2)
GAAP earnings (loss) available to common shareholders		(75.10	)					(41.33	)

(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.

17

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(dollars in thousands) (unaudited)

	Three Months Ended
		3/31/10
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	73,525
Tax-equivalent adjustment		125
Net interest income (tax-equivalent)	$	73,650
Total noninterest income, as reported (GAAP)	$	21,132
Adjustments for non-operating items:
(Gain) loss on securities		389
Operating noninterest income (noninterest income, excluding non-operating items)	$	21,521
Total noninterest expenses, as reported (GAAP)	$	83,653
Adjustments for non-operating items:
Severance related benefits		(878)
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		82,775
Less: loss on OREO		(5,492)
Less: amortization of intangibles		(1,009)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items, loss on OREO, gain/loss on nonmortgage loans held for sale, and amortization of intangibles)	$	76,274
Total Revenue (1)
GAAP	$	94,657
Operating (2)		95,171
Noninterest Income as a % Total Revenue (3)
GAAP		22.32	%
Operating (2)		22.61
Cash Operating Efficiency Ratio (4)		80.14

(1) The sum of net interest income and noninterest income.

(2) Total revenue and noninterest income as a % of total revenue, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items.

(3) Calculated as noninterest income, divided by the sum of net interest income and noninterest income.

(4) Calculated as operating noninterest expenses before loss on OREO, gain/loss on nonmortgage loans held for sale, and amortization of intangibles, divided by the sum of tax-equivalent net interest income and operating noninterest income.

18

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(dollars in thousands) (unaudited)

				Three Months Ended
	12/31/09			9/30/09			6/30/09			3/31/09
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	80,546		$	80,038		$	85,930		$	85,018
Tax-equivalent adjustment		847			1,080			1,116			1,203
Net interest income (tax-equivalent)	$	81,393		$	81,118		$	87,046		$	86,221
Total noninterest income, as reported (GAAP)	$	28,550		$	33,470		$	32,272		$	23,741
Adjustments for non-operating items:
(Gain) loss on securities		(6,694	)		286			(4,580	)		2,954
Gain on sale of ancillary businesses		-			(7,234	)		-			-
Operating noninterest income (noninterest income, excluding non-operating items)	$	21,856		$	26,522		$	27,692		$	26,695
Total noninterest expenses, as reported (GAAP)	$	103,163		$	89,529		$	136,188		$	90,241
Adjustments for non-operating items:
Goodwill impairment		-			-			(2,511	)		-
Employment contracts and severance		-			-			(829	)		-
Impairment of long lived assets		(3,478	)		(746	)		(17,376	)		-
FDIC special assessment		-			-			(5,700	)		-
Gain on early extinguishment of debt		-			-			2,991			52
Loss on repurchase of auction rate securities		-			-			-			(676	)
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		99,685			88,783			112,763			89,617
Less: loss on OREO		(15,032	)		(4,406	)		(12,873	)		(124	)
Less: gain (loss) on nonmortgage loans held for sale		(518	)		41			(9,461	)		(1,838	)
Less: amortization of intangibles		(1,102	)		(1,238	)		(1,286	)		(1,291	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items, loss on OREO, gain/loss on nonmortgage loans held for sale, and amortization of intangibles)	$	83,033		$	83,180		$	89,143		$	86,364
Total Revenue (1)
GAAP	$	109,096		$	113,508		$	118,202		$	108,759
Operating (2)		103,249			107,640			114,738			112,916
Noninterest Income as a % Total Revenue (3)
GAAP		26.17			29.49			27.30			21.83	%
Operating (2)		21.17			24.64			24.13			23.64
Cash Operating Efficiency Ratio (4)		80.42			77.28			77.69			76.49

(1) The sum of net interest income and noninterest income.

(2) Total revenue and noninterest income as a % of total revenue, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items.

(3) Calculated as noninterest income, divided by the sum of net interest income and noninterest income.

(4) Calculated as operating noninterest expenses before loss on OREO, gain/loss on nonmortgage loans held for sale, and amortization of intangibles, divided by the sum of tax-equivalent net interest income and operating 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,
	2009			2008
Select Financial Data Used in Ratios Calculated Below
Net interest income	$	331,532		$	380,163
Tax-equivalent adjustment		4,246			5,354
Net interest income (tax-equivalent)	$	335,778		$	385,517
Total noninterest income, as reported (GAAP)	$	118,033		$	121,967
Adjustments for non-operating items:
(Gain) loss on securities		(8,034	)		(3,108	)
Gain on Visa IPO share redemption		-			(1,904	)
Gain on sale of ancillary businesses		(7,234	)		-
Operating noninterest income (noninterest income, excluding non-operating items)	$	102,765		$	116,955
Total noninterest expenses, as reported (GAAP)	$	419,121		$	792,233
Adjustments for non-operating items:
Goodwill impairment		(2,511	)		(426,049	)
Employment contracts and severance		(829	)		(16,519	)
Impairment of long lived assets		(21,600	)		-
FDIC special assessment		(5,700	)		-
Branch acquisition and conversion costs		-			(731	)
Gain (loss) on early extinguishment of debt		3,043			(2,086	)
Loss on repurchase of auction rate securities		(676	)		-
Visa-related litigation		-			863
Loss on derivative collateral		-			(1,061	)
Operating noninterest expenses (noninterest expenses, excluding non-operating items)		390,848			346,650
Less: loss on OREO		(32,435	)		(633	)
Less: loss on nonmortgage loans held for sale		(11,776	)		(283	)
Less: amortization of intangibles		(4,917	)		(6,138	)
Cash operating noninterest expenses (noninterest expenses, excluding non-operating items, gain/loss on OREO, loss on nonmortgage loans held for sale, and amortization of intangibles)	$	341,720		$	339,596
Total Revenue (1)
GAAP	$	449,565		$	502,130
Operating (2)		438,543			502,472
Noninterest Income as a % of Total Revenue (3)
GAAP		26.25	%		24.29	%
Operating (2)		23.43			23.28
Cash Operating Efficiency Ratio (4)		77.92			67.59

(1) The sum of net interest income and noninterest income.

(2) Total revenue and noninterest income as a % of total revenue, on an operating basis, are calculated using tax-equivalent net interest income and exclude non-operating items.

(3) Calculated as noninterest income, divided by the sum of net interest income and noninterest income.

(4) Calculated as operating noninterest expenses before gain/loss on OREO, loss on nonmortgage loans held for sale, and amortization of intangibles, divided by the sum of tax-equivalent net interest income and operating noninterest income.

20