Exhibit 99.1
The South Financial Group's Second Quarter 2004 Net Income Rises 32%
to $30 Million
GREENVILLE, S.C., July 20 /PRNewswire-FirstCall/ -- The South Financial
Group, Inc. (Nasdaq: TSFG) today reported second quarter 2004 net income of
$30.0 million, an increase of 32% compared with $22.7 million for the second
quarter 2003. For the second quarter 2004, net income per diluted share
totaled $0.49, compared with $0.48 per diluted share for the second quarter
2003. Average diluted shares outstanding increased 27% for the same period,
principally as a result of the acquisition of MountainBank Financial
Corporation and a common equity offering, both of which occurred in the fourth
quarter of 2003.
"We are pleased with our progress this quarter, highlighted by 20%
annualized organic loan growth, an 8% decline in nonperforming assets from
first quarter 2004, the achievement of a 51.2% efficiency ratio, and continued
expansion in superior banking markets," said Mack I. Whittle, Jr., President
and Chief Executive Officer of The South Financial Group. "We remain committed
to achieving our goals through focus, discipline, and execution. We've put in
place the people, market presence, products and services, system
infrastructure, credit process, and sales culture. Now we are executing our
plans and building our revenue and earnings momentum each quarter."
Whittle continued, "During the second quarter, we achieved strong loan and
deposit growth, both in double-digits, by taking advantage of the
opportunities in our attractive banking markets. On July 16, 2004, our
presence in these markets got even better with the completion of our mergers
with CNB Florida and Florida Banks. We've completed the system conversions and
are well on our way to continuing our track record of successfully integrating
mergers. Strategically, these mergers put us firmly in place in some of the
most dynamic areas in Florida and build on our existing foundation."
For the first six months of 2004, net income totaled $62.3 million, up 46%
from $42.7 million for the first six months of 2003. Net income per diluted
share for the first six months of 2004 was $1.02, an increase of 15% from
$0.89 per diluted share for same period in 2003.
Revenue Growth and Efficiency Focus
For second quarter 2004, total revenues increased 18% to $106.4 million,
compared with revenues of $90.1 million for second quarter 2003. This strong
revenue growth resulted from both increased net interest income and higher
noninterest income.
Net interest income increased from $66.2 million in the second quarter
2003 to $80.4 million in the second quarter 2004, an increase of 21%, due to
strong loan growth, higher average investment securities outstanding, and the
MountainBank acquisition. Average earning assets during the second quarter
2004 totaled $10.1 billion, compared with $8.1 billion for the second quarter
2003, an increase of 26%. The tax equivalent net interest margin for the
second quarter 2004 was 3.23%, down from 3.39% for the first quarter 2004, due
primarily to lower rates on new loans, increased LIBOR funding costs, and
higher prepayment speeds on mortgage-backed securities.
Noninterest income increased to $26.0 million for second quarter 2004, up
8% from $24.0 million for second quarter 2003. Second quarter 2004
noninterest income excluding gains on sales of securities and deposits
increased to $24.4 million, up 21% from $20.2 million for second quarter 2003.
Mortgage banking income lagged behind prior year levels due to lower
refinancing activity, although it has shown some recent improvement. Other
areas of noninterest income exhibited strong growth, including service charges
on deposit accounts, customer service fee income and debit card income.
Together these fees totaled $10.5 million during second quarter 2004, compared
with $8.7 million for second quarter 2003, an increase of 21%.
TSFG's efficiency ratio (noninterest expenses divided by total revenue)
improved to 51.2% for the second quarter 2004 from 55.6% for the second
quarter 2003. This improvement resulted from revenue growth, expense control
and effective merger integration, and demonstrates management's disciplined
approach to controlling costs while also focusing on increasing its
noninterest income.
Strong Loan and Deposit Growth
TSFG's strong organic loan growth accelerated to 20% annualized during the
second quarter 2004, up from 18% annualized during the first quarter 2004 and
15% annualized for the second quarter of 2003. TSFG's loan growth continues
to be well diversified throughout its markets. The composite mix of TSFG's
loan portfolio has remained consistent, with commercial loans comprising
approximately 75%. Within the commercial loan portfolio, TSFG continues to
maintain a well-diversified array of industries and collateral types.
Whittle commented, "We are extremely pleased with our outstanding loan
origination activities. Our Elevate sales process is helping us achieve loan
production milestones. This success also confirms the strength of our markets
and the dedication and commitment of our employees."
TSFG's Mountain Region, primarily the former MountainBank locations, led
the loan origination growth with a $126 million increase in loans outstanding
for the first six months of this year, representing a 39% annualized growth
rate. The South Carolina coastal areas and North Florida Region also
performed exceptionally well. "The performance of our Mountain Region
demonstrates our ability to achieve outstanding organic growth following an
acquisition, while still meeting our cost savings goals. With the recent
closing of our mergers in Florida, we are excited about the market potential
and look forward to executing our plans," Whittle added.
For the second quarter of 2004, TSFG exhibited strong organic deposit
growth of 30% annualized over the prior quarter. Total deposits at June 30,
2004 were $6.4 billion compared with $6.0 billion at March 31, 2004. The
deposit growth resulted primarily from increases in noninterest-bearing demand
deposits, money market accounts, brokered CDs and large time deposits. TSFG's
noninterest-bearing deposits grew from $924.8 million at March 31, 2004 to
$971.5 million at June 30, 2004, an annualized increase of 20%.
Favorable Credit Quality Trends
TSFG's key credit quality indicators showed continued improvement during
the second quarter 2004. Nonperforming assets declined 8% to $57.6 million at
June 30, 2004 from $62.9 million at March 31, 2004. Nonperforming assets as a
percentage of loans held for investment and other real estate owned totaled
0.92% at June 30, 2004, down from 1.05% at March 31, 2004 and 1.39% at June
30, 2003. Annualized net loan charge-offs as a percentage of average loans
held for investment were 0.36% for the second quarter 2004, down from 0.42%
for the first quarter 2004 and 0.63% for the second quarter 2003.
Each quarter since its October 2002 asset purchase transaction with Rock
Hill Bank & Trust, TSFG's nonperforming assets and charge-off levels have
improved. At June 30, 2004, the Rock Hill Workout Loans totaled
$24.2 million. Excluding the remaining Rock Hill Workout Loans, TSFG's
nonperforming assets as a percentage of loans held for investment and other
real estate owned at June 30, 2004 was 0.64%, down from 0.71% at March 31,
2004.
"We are pleased with our progress. During the second quarter, we reduced
not only the percentage of nonperforming assets, but also the dollar amount of
loans on nonaccrual status," commented Michael W. Sperry, Executive Vice
President and Chief Credit Officer.
Enhanced High-Growth Florida Franchise
On July 16, 2004, TSFG consummated its pending acquisitions of CNB Florida
Bancshares, Inc. and Florida Banks, Inc. The conversions associated with these
acquisitions have been successfully completed. CNB Florida Bancshares, Inc.,
headquartered in Jacksonville, operated through 16 branch offices in 8
counties and had approximately $846.4 million in assets at June 30, 2004.
Florida Banks, Inc., also headquartered in Jacksonville, operated through 7
banking centers and had approximately $1.0 billion in assets at June 30, 2004.
Both of these banks operated in some of Florida's largest and most dynamic
markets.
With these mergers completed, TSFG's Florida banking subsidiary,
Mercantile Bank, now has 56 branches, $4.9 billion in assets, the #9 deposit
market share in the Florida markets in which TSFG operates, and the #18
deposit market share in the entire state of Florida. With the completion of
these mergers, approximately 41% of TSFG's total deposits are in Florida.
On a pro forma combined basis at June 30, 2004, after considering the
impact of the mergers, TSFG has approximately $13.6 billion in total assets,
$7.7 billion of loans held for investment, and $8.1 billion of deposits. TSFG
issued approximately 10.6 million shares in connection with these
acquisitions.
General Information
The South Financial Group is a financial services company headquartered in
Greenville, South Carolina with approximately $13.6 billion in total assets.
TSFG operates two subsidiary banks, Carolina First Bank and Mercantile Bank,
which conduct operations through approximately 155 branch offices in South
Carolina, Florida and North Carolina. Carolina First Bank, the largest South
Carolina-based commercial bank, operates in South Carolina and North Carolina
and on the Internet under the brand name, Bank CaroLine. Mercantile Bank
operates in Florida, principally in the Jacksonville, Orlando, Tampa Bay and
Gainesville markets. The South Financial Group's common stock trades on the
Nasdaq National Market under the symbol TSFG. Press releases along with
additional information may also be found at The South Financial Group's
website: http://www.thesouthgroup.com.
Conference Call/Webcast Information
The South Financial Group will host a conference call today at 10:00 a.m.
(ET) to discuss the second quarter 2004 results. Additional material
information, including forward-looking statements such as trends and
projections, may be discussed during the presentation. TSFG will also provide
supplemental financial information in the Investor Relations section of its
website under the financial information button. To participate in the
conference call or webcast, please follow the instructions listed below.
Conference Call: Please call 1-888-405-5393 or 1-484-630-4135 using the
access code "The South." A 7-day rebroadcast of the call will be available
via 1-800-294-9493 or 1-402-220-3767.
Webcast: To gain access to the webcast, which will be "listen-only,"
please go to http://www.thesouthgroup.com under the Investor Relations tab and
click on the link "Webcast/The South Financial Group 2nd Quarter Earnings
Conference Call." For those unable to participate during the live webcast, it
will be archived on The South Financial Group website until August 3, 2004.
Explanation of TSFG's Use of Certain Non-GAAP Financial Measures and
Forward-Looking Statements
This press release contains financial information determined by methods
other than in accordance with Generally Accepted Accounting Principles
("GAAP"). The attached financial highlights provide reconciliations between
GAAP net income and net income excluding merger-related costs. As has been
TSFG's practice, TSFG also identified certain other non-operating items (such
as gain or losses on asset sales, loss on early extinguishment of debt, and
non-operating expenses). In addition, TSFG provides data eliminating
intangibles and related amortization in order to present data on a "cash
basis." The economic substance of non-operating and "cash basis" items is
clearly defined.
TSFG's management uses these non-GAAP measures in its analysis of TSFG's
performance and believes presentations of financial measures excluding merger-
related costs and these non-operating items provide useful supplemental
information, a clearer understanding of TSFG's financial performance, and
better reflect TSFG's core operating activities. Management uses operating
earnings in the calculation of certain of TSFG's ratios, in particular, to
analyze on a consistent basis and over a longer period of time the performance
of which it considers to be its core operating activities. TSFG believes the
non-GAAP measures enhance investors' understanding of the company's business
and performance. These measures are also useful in understanding performance
trends and facilitate comparisons with the performance of others in the
financial services industry.
The limitations associated with utilizing operating measures and cash
basis information are the risk that persons might disagree as to the
appropriateness of items comprising these measures and that different
companies might calculate these measures differently. Management compensates
for these limitations by providing detailed reconciliations between GAAP
information and operating measures. These disclosures should not be
considered an alternative to GAAP.
Certain matters set forth in this news release may contain forward-looking
statements that are provided to assist in the understanding of anticipated
future financial performance. These statements, as well as other statements
that may be made by management in the conference call, include, but are not
limited to, factors which may affect earnings, return goals, expected
financial results for mergers, estimates of merger synergies and merger-
related charges, mortgage banking activities and credit quality assessment.
However, such performance involves risks and uncertainties, such as market
deterioration, that may cause actual results to differ materially from those
in such statements. For a discussion of certain factors that may cause such
forward-looking statements to differ materially from TSFG's actual results,
see TSFG's Annual Report on Form 10-K for the year ended December 31, 2003.
The South Financial Group undertakes no obligation to release revisions to
these forward-looking statements or reflect events or circumstances after the
date of this release.
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
Three Months Ended %
6/30/04 6/30/03 Change
INCOME STATEMENT
Interest income (tax-equivalent) $118,987 $101,174 17.6 %
Interest expense 37,572 34,407 9.2
Net interest income (tax-equivalent) 81,415 66,767 21.9
Less: Tax-equivalent adjustment 1,026 595 72.4
Net interest income 80,389 66,172 21.5
Provision for loan losses 6,996 5,200 34.5
Net interest income after provision
for loan losses 73,393 60,972 20.4
NONINTEREST INCOME:
Service charges on deposit accounts 8,718 7,581 15.0
Fees for investment services 2,342 2,142 9.3
Mortgage banking income, excluding
impairment 1,498 2,795 (46.4)
Impairment recovery (loss) on
mortgage servicing rights 127 (234) (154.3)
Other 11,690 7,893 48.1
Noninterest income, excluding non-
operating gains on asset sales 24,375 20,177 20.8
Gain on sale of available for sale
securities 607 3,197 n/m
Gain on equity investments 1,013 - n/m
Gain on disposition of assets and
liabilities - 601 n/m
Gains on non-operating asset sales,
net 1,620 3,798 n/m
Total noninterest income 25,995 23,975 8.4
NONINTEREST EXPENSES:
Personnel expense 26,951 25,738 4.7
Occupancy 5,185 4,668 11.1
Furniture and equipment 4,890 4,211 16.1
Amortization of intangibles 1,195 724 65.1
Other 15,947 14,104 13.1
Noninterest expenses, excluding non-
operating items 54,168 49,445 9.6
Merger-related costs 575 382 n/m
Impairment (recovery) loss from
write-down of assets (277) 268 n/m
Non-operating noninterest expenses 298 650 n/m
Total noninterest expenses 54,466 50,095 8.7
Income before income taxes and
minority interest 44,922 34,852 28.9
Income tax expense 14,935 11,153 33.9
Minority interest in consolidated
subsidiary, net of tax - (1,000) (100.0)
Net income $29,987 $22,699 32.1 %
SHARE DATA:
Net income per common share, basic $0.50 $0.49 2.0 %
Net income per common share, diluted 0.49 0.48 2.1
Cash dividends declared per common
share 0.15 0.14 7.1
Average common shares outstanding,
basic 59,494,363 46,629,666 27.6
Average common shares outstanding,
diluted 60,837,792 47,760,781 27.4
Supplemental financial information, including results for the last five
quarters, may be found in the Investor Relations section of
TSFG's web site: http://www.thesouthgroup.com.
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
Six Months Ended %
6/30/04 6/30/03 Change
INCOME STATEMENT
Interest income (tax-equivalent) $236,948 $200,802 18.0 %
Interest expense 72,570 67,907 6.9
Net interest income (tax-equivalent) 164,378 132,895 23.7
Less: Tax-equivalent adjustment 1,973 1,252 57.6
Net interest income 162,405 131,643 23.4
Provision for loan losses 14,718 10,700 37.6
Net interest income after provision
for loan losses 147,687 120,943 22.1
NONINTEREST INCOME:
Service charges on deposit accounts 16,831 14,541 15.7
Fees for investment services 4,465 4,633 (3.6)
Mortgage banking income, excluding
impairment 3,059 5,229 (41.5)
Impairment recovery (loss) on
mortgage servicing rights 121 (496) (124.4)
Other 18,813 13,295 41.5
Noninterest income, excluding non-
operating gains on asset sales 43,289 37,202 16.4
Gain on sale of available for sale
securities 5,821 4,183 n/m
Gain on equity investments 3,823 1,875 n/m
Gain on disposition of assets and
liabilities 2,350 601 n/m
Gains on non-operating asset sales,
net 11,994 6,659 n/m
Total noninterest income 55,283 43,861 26.0
NONINTEREST EXPENSES:
Personnel expense 52,784 50,332 4.9
Occupancy 10,257 9,282 10.5
Furniture and equipment 9,505 8,805 8.0
Amortization of intangibles 2,390 1,429 67.2
Other 31,606 26,990 17.1
Noninterest expenses, excluding non-
operating items 106,542 96,838 10.0
Employment contract reversals (59) - n/m
Merger-related costs 752 1,879 n/m
Impairment (recovery) loss from
write-down of assets (277) 268 n/m
Conservation grant of land 3,350 - n/m
Loss on early extinguishment of debt 1,429 - n/m
Non-operating noninterest expenses 5,195 2,147 n/m
Total noninterest expenses 111,737 98,985 12.9
Income before income taxes and
minority interest 91,233 65,819 38.6
Income tax expense 28,953 21,063 37.5
Minority interest in consolidated
subsidiary, net of tax - (2,012) (100.0)
Net income $62,280 $42,744 45.7 %
SHARE DATA:
Net income per common share, basic $1.05 $0.91 15.4 %
Net income per common share, diluted 1.02 0.89 14.6
Cash dividends declared per common
share 0.30 0.28 7.1
Average common shares outstanding,
basic 59,354,354 46,975,635 26.4
Average common shares outstanding,
diluted 60,823,631 48,007,767 26.7
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
% Change
2nd Quarter
6/30/04 12/31/03 6/30/03 2004/2003
BALANCE SHEET (Period End)
Cash and due from banks $265,401 $184,057 $212,445 24.9 %
Interest-bearing bank
balances 603 2,048 64,738 (99.1)
Federal funds sold - 137 50,000 n/m
Securities 4,063,898 4,007,571 3,583,865 13.4
Loans held for sale 22,908 29,619 60,661 (62.2)
Loans held for investment 6,246,953 5,732,205 4,688,591 33.2
Allowance for loan losses (75,910) (73,287) (64,152) 18.3
Net loans 6,193,951 5,688,537 4,685,100 32.2
Premises and equipment, net 144,861 142,705 132,966 8.9
Intangible assets 344,195 353,079 245,007 40.5
Mortgage servicing rights 1,391 1,781 2,188 (36.4)
Other assets 460,969 339,486 281,540 63.7
Total assets $11,475,269 $10,719,401 $9,257,849 24.0 %
Noninterest-bearing
deposits $971,540 $882,129 $814,945 19.2 %
Interest-bearing deposits 5,465,370 5,146,520 4,306,394 26.9
Total deposits 6,436,910 6,028,649 5,121,339 25.7
Federal funds purchased and
repurchase agreements 2,579,626 2,329,666 1,998,087 29.1
Debt and other borrowed
funds 1,345,855 1,264,158 1,130,441 19.1
Other liabilities 118,280 117,059 261,142 (54.7)
Total liabilities 10,480,671 9,739,532 8,511,009 23.1
Minority interest in
consolidated subsidiary - - 86,616 n/m
Shareholders' equity 994,598 979,869 660,224 50.6
Total liabilities and
shareholders' equity $11,475,269 $10,719,401 $9,257,849 24.0
BALANCE SHEET (Averages -
Three Months Ended)
Total assets $11,092,032 $10,673,057 $8,863,338 25.1 %
Loans 6,144,778 5,685,409 4,656,461 32.0
Securities 3,987,234 4,033,841 3,339,471 19.4
Total earning assets 10,137,649 9,728,449 8,067,012 25.7
Intangible assets 351,133 337,820 244,410 43.7
Interest-bearing
liabilities 9,064,636 8,838,544 7,279,817 24.5
Total deposits 6,170,912 6,017,132 4,834,710 27.6
Shareholders' equity 1,002,000 883,514 649,411 54.3
BALANCE SHEET (Averages -
Year to Date)
Total assets $10,958,876 $9,260,767 $8,630,020 27.0 %
Loans 5,999,914 4,915,437 4,589,087 30.7
Securities 3,986,793 3,471,324 3,175,367 25.6
Total earning assets 9,992,101 8,425,590 7,817,963 27.8
Intangible assets 351,791 267,416 243,263 44.6
Interest-bearing
liabilities 8,964,206 7,638,862 7,064,208 26.9
Total deposits 6,055,603 5,147,627 4,713,341 28.5
Shareholders' equity 999,247 709,139 651,248 53.4
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
% Change
2nd Quarter
6/30/04 12/31/03 6/30/03 2004/2003
CREDIT QUALITY
Nonaccrual loans -
commercial $46,436 $47,137 $54,306 (14.5)%
Nonaccrual loans -
consumer 2,133 2,686 2,928 (27.2)
Restructured loans - - - -
Nonperforming loans 48,569 49,823 57,234 (15.1)
Other real estate owned 8,985 10,951 7,827 14.8
Nonperforming assets 57,554 60,774 65,061 (11.5)
Nonperforming loans as
a % of loans held for
investment 0.78 % 0.87 % 1.22 %
Nonperforming assets as
a % of loans HFI and
OREO 0.92 1.06 1.39
Allowance for loan
losses as a % of
loans HFI 1.22 1.28 1.37
Allowance for loan
losses to
nonperforming loans 1.56 x 1.47 x 1.12 x
Specific allowance for
impaired loans $10,806 $9,689 $11,937 (9.5)
Loans past due 90 days
or more (mortgage and
consumer) (A) 3,930 3,960 5,456 (28.0)
Net loan charge-offs:
Three months ended 5,450 6,693 7,181 (24.1)
Year to date 11,588 30,259 16,823
Average loans held for
investment:
Three months ended 6,120,984 5,651,082 4,605,660
Year to date 5,978,791 4,864,168 4,536,893
Net loan charge-offs as
a % of avg. loans HFI
(annualized):
Three months ended 0.36 % 0.47 % 0.63 %
Year to date 0.39 0.62 0.75
CREDIT QUALITY -
Excluding Rock Hill
B&T Workout Loans
Loans held for
investment $6,222,794 $5,703,602 $4,637,959 34.2 %
Allowance for loan
losses 73,192 70,123 55,798 31.2
Nonaccrual loans -
commercial 30,499 28,952 28,747 6.1 %
Nonaccrual loans -
consumer 2,133 2,686 2,928 (27.2)
Restructured loans - - - -
Nonperforming loans 32,632 31,638 31,675 3.0
Other real estate owned 7,014 9,561 7,827 (10.4)
Nonperforming assets 39,646 41,199 39,502 0.4
Nonperforming loans as
a % of loans held for
investment 0.52 % 0.55 % 0.68 %
Nonperforming assets as
a % of loans HFI and
OREO 0.64 0.72 0.85
Allowance for loan
losses as a % of
loans HFI 1.18 1.23 1.20
Allowance for loan
losses to
nonperforming loans 2.24 x 2.22 x 1.76 x
Specific allowance for
impaired loans $8,363 $7,000 $5,549 50.7
Loans past due 90 days
or more (mortgage and
consumer) (A) 3,825 3,855 5,067 (24.5)
Net loan charge-offs:
Three months ended 5,215 5,110 4,523 15.3
Year to date 10,705 19,962 10,056
Average loans held for
investment:
Three months ended 6,095,558 5,615,944 4,548,526
Year to date 5,952,033 4,812,668 4,474,359
Net loan charge-offs as
a % of avg. loans HFI
(annualized):
Three months ended 0.34 % 0.36 % 0.40 %
Year to date 0.36 0.41 0.45
(A) TSFG's accrued interest reserve associated with these loans totaled
$295,000, $474,000, and $513,000 at June 30, 2004, December 31, 2003, and
June 30, 2003, respectively.
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
% Change
2nd Quarter
6/30/04 12/31/03 6/30/03 2004/2003
CAPITAL RATIOS
Total risk-based capital 12.62 % 12.51 % 10.57 %
Tier 1 risk-based capital 10.70 10.51 8.44
Leverage ratio 7.79 7.49 5.95
Tangible equity to
tangible assets 5.84 6.05 4.61
SHARE DATA
Book value per common
share $16.63 $16.59 $14.08 18.1 %
Shares outstanding 59,796,124 59,064,375 46,896,994 27.5
OPERATIONS DATA
Branch offices 133 134 114 16.7 %
ATMs 123 122 105 17.1
Employees (full-time
equivalent) 1,971 1,918 1,718 14.7
Internet banking customers 127,366 90,132 53,369 138.7
STOCK PERFORMANCE
Market price per share
of common stock $28.37 $27.75 $23.13 22.7 %
Indicated annual dividend 0.60 0.60 0.56 7.1
Dividend yield 2.11 % 2.16 % 2.42 %
Price/book ratio 1.71 x 1.67 x 1.64 x
Market capitalization $1,696,416 $1,639,036 $1,084,727 56.4
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
Three Months Ended
6/30/04 6/30/03 % Change
Diluted Diluted Diluted
EPS EPS EPS
RECONCILIATION OF GAAP
TO NON-GAAP MEASURES
NET INCOME, AS
REPORTED (GAAP) $29,987 $0.49 $22,699 $0.48 32.1 % 2.1 %
Merger-related costs 575 382
Related income taxes (191) (122)
Net income, excluding
merger-related costs 30,371 0.50 22,959 0.48 32.3 4.2
Add: Amortization of
intangibles, net of tax 798 492
CASH BASIS EARNINGS $31,169 $0.51 $23,451 $0.49 32.9 4.1
Average common shares
outstanding, diluted 60,837,792 47,760,781 27.4
Other non-operating items:
Gain on sale of available
for sale securities $607 $3,197
Gain on equity investments 1,013 -
Gain on disposition of
assets and liabilities - 601
Impairment loss from
write-down of assets 277 (268)
Related income taxes (631) (1,129)
Total other non-operating
items, net of income tax $1,266 $2,401
SELECTED BALANCE SHEET
(Averages)
Total assets $11,092,032 $8,863,338 25.1
Intangible assets (351,133) (244,410) 43.7
Tangible assets 10,740,899 8,618,928 24.6
Shareholders' equity 1,002,000 649,411 54.3
Intangible assets (351,133) (244,410) 43.7
Tangible equity 650,867 405,001 60.7
PERFORMANCE RATIOS
(Annualized)
RETURN ON AVERAGE ASSETS:
Using GAAP earnings 1.09 % 1.02 %
Using GAAP earnings, excluding
merger-related costs 1.10 1.04
Using cash basis earnings
on average tangible assets 1.17 1.09
RETURN ON AVERAGE EQUITY:
Using GAAP earnings 12.04 13.98
Using GAAP earnings, excluding
merger-related costs 12.19 14.14
Using cash basis earnings
on average tangible equity 19.26 23.16
NET INTEREST MARGIN 3.23 3.32
NONINTEREST INCOME AS A %
OF TOTAL REVENUE (A):
Using GAAP earnings 24.44 26.60
Excluding other
non-operating items 23.27 23.37
EFFICIENCY RATIOS (B):
Using GAAP earnings 51.20 55.57
Excluding merger-related
costs and other non-
operating items 51.70 57.26
Excluding merger-related
costs and other non-
operating items, cash basis 50.56 56.42
(A) Calculated as noninterest income, divided by the sum of net interest
income and noninterest income.
(B) Calculated as noninterest expenses, divided by the sum of net interest
income and noninterest income.
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
Six Months Ended
6/30/04 6/30/03 % Change
Diluted Diluted Diluted
EPS EPS EPS
RECONCILIATION OF GAAP
TO NON-GAAP MEASURES
NET INCOME, AS
REPORTED (GAAP) $62,280 $1.02 $42,744 $0.89 45.7 % 14.6 %
Merger-related costs 752 1,879
Related income taxes (245) (601)
Net income, excluding
merger-related costs 62,787 1.03 44,022 0.92 42.6 12.0
Add: Amortization of
intangibles, net of tax 1,631 971
CASH BASIS EARNINGS $64,418 $1.06 $44,993 $0.94 43.2 12.8
Average common shares
outstanding, diluted 60,823,631 48,007,767 26.7
Other non-operating items:
Gain on sale of available
for sale securities $5,821 $4,183
Gain on equity investments 3,823 1,875
Gain on disposition of
assets and liabilities 2,350 601
Employment contract reversal 59 -
Impairment loss from
write-down of assets 277 (268)
Conservation grant
of land (3,350) -
Loss on early
extinguishment of debt (1,429) -
Related income taxes (2,342) (2,045)
Total other non-operating
items, net of income tax $5,209 $4,346
SELECTED BALANCE SHEET
(Averages)
Total assets $10,958,876 $8,630,020 27.0
Intangible assets (351,791) (243,263) 44.6
Tangible assets 10,607,085 8,386,757 26.5
Shareholders' equity 999,247 651,248 53.4
Intangible assets (351,791) (243,263) 44.6
Tangible equity 647,456 407,985 58.7
PERFORMANCE RATIOS
(Annualized)
RETURN ON AVERAGE ASSETS:
Using GAAP earnings 1.14 % 0.99 %
Using GAAP earnings, excluding
merger-related costs 1.15 1.02
Using cash basis earnings
on average tangible assets 1.22 1.07
RETURN ON AVERAGE EQUITY:
Using GAAP earnings 12.53 13.13
Using GAAP earnings,
excluding merger-related
costs 12.64 13.52
Using cash basis earnings
on average tangible equity 20.01 22.06
NET INTEREST MARGIN 3.31 3.43
NONINTEREST INCOME AS A %
OF TOTAL REVENUE (A):
Using GAAP earnings 25.40 24.99
Excluding other non-
operating items 21.05 22.03
EFFICIENCY RATIOS (B):
Using GAAP earnings 51.33 56.40
Excluding merger-related
costs and other non-
operating items 51.80 57.35
Excluding merger-related
costs and other non-
operating items, cash basis 50.63 56.51
(A) Calculated as noninterest income, divided by the sum of net interest
income and noninterest income.
(B) Calculated as noninterest expenses, divided by the sum of net interest
income and noninterest income.
SOURCE The South Financial Group
-0- 07/20/2004
/CONTACT: William S. Hummers III, Vice Chairman and CFO, +1-864-255-7913,
or Kevin J. Mast, SVP Finance, +1-864-421-1354, both of The South Financial
Group/
/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20000424/TSFGLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com/
/Web site: http://www.thesouthgroup.com/
(TSFG)
CO: South Financial Group
ST: South Carolina
IN: FIN
SU: ERN CCA