Exhibit 99.1
The South Financial Group Third Quarter 2004 Net Income Rises 30% to
$31 Million
GREENVILLE, S.C., Oct. 19 /PRNewswire-FirstCall/ -- The South Financial
Group, Inc. (Nasdaq: TSFG) today reported third quarter 2004 net income,
including merger-related costs, of $31.0 million or $.44 per diluted share,
compared to $23.9 million or $.50 per diluted share in the third quarter of
2003. Net income for the first nine months of 2004 totaled $93.3 million or
$1.46 per diluted share, compared to $66.6 million or $1.39 per diluted share
for the same period of 2003.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000424/TSFGLOGO )
Third quarter 2004 operating earnings, which excludes merger-related costs
and other non-operating items, totaled $34.9 million or $.50 per diluted
share, compared to $21.9 million or $0.46 per diluted share for third quarter
2003. Operating earnings for the first nine months of 2004 totaled $92.5
million or $1.44 per diluted share, compared to $61.5 million or $1.28 per
diluted share in 2003.
"I am very proud of our third quarter performance," said Mack I. Whittle,
Jr., President and Chief Executive Officer of The South Financial Group. "The
momentum of our operating earnings continues to improve, led by the
combination of continued strong loan growth, a higher and improving net
interest margin and excellent operating efficiency. We are on track to finish
another solid year."
"In addition to our strong operating performance, we accomplished two
significant objectives this quarter," added Whittle. "First, we significantly
reduced the Company's reliance on investment security revenue, improving the
Company's earning asset mix, through continued high levels of organic loan
growth and the positive impact of our recent acquisitions. Securities to
total assets declined to 31.6% from 38.1% in the third quarter of last year."
"Second, we further strengthened our franchise value by expanding our
Florida presence with the acquisitions of CNB Florida Bancshares, Inc. and
Florida Banks, Inc.," added Whittle. "With the addition of these two
organizations, we have $3.1 billion of deposits in Florida which now comprise
40% of total deposits. It is important to note, with the hard work of our
merger-integration team, the identified synergies were quickly addressed
allowing our operating efficiency ratio to remain essentially flat with the
prior quarter."
Revenue Spurred by Strong Loan Growth
Third quarter 2004 total revenue increased 37% to $123.8 million, compared
with third quarter 2003 revenue of $90.2 million. This increase in revenue
was primarily attributable to strong organic loan growth, an increasing net
interest margin, and the positive impact of mergers in the fourth quarter of
2003 and the third quarter of 2004.
Net interest income rose from $62.4 million in the third quarter 2003 to
$99.8 million in the third quarter 2004, an increase of 60%. Organic loans
grew 16%, on a sequential quarter annualized basis, during the third quarter
of 2004, and exceeds the 14% annualized sequential quarter growth rate for the
third quarter of 2003. For the first nine months of 2004, organic loan growth
was 19% on an annualized basis. Commercial loans represented more than 80% of
the organic loan growth during the quarter, of which 75% were variable rate
loans.
Noninterest income was $24.1 million for third quarter 2004, down 13% from
$27.7 million for third quarter 2003. Excluding gains on sales of securities
and asset sales, third quarter 2004 noninterest income increased to $23.8
million, up 9% from $21.8 million a year earlier.
Customer fee income, which includes service charges on deposit accounts,
customer service fee income and debit card income, showed strong growth.
Together these fees totaled $11.7 million during third quarter 2004, compared
with $8.8 million for third quarter 2003, an increase of 33%. Mortgage
banking income lagged behind prior year levels as the rate of refinancing
activity slowed from a year ago.
Net Interest Margin Expansion and Improvement in Earning Asset Mix
Favorable balance sheet trends continued in the third quarter as the
earning asset mix continued to become less reliant on investment securities,
earning asset yields improved at a faster rate than interest bearing
liabilities, and noninterest bearing deposits increased.
The tax-equivalent net interest margin for the third quarter 2004 rose 13
basis points to 3.36%, an increase from 3.23% in the second quarter 2004 and
3.01% in the third quarter of 2003. As loans continued to grow at a faster
rate than investment securities, the Company reduced the securities portfolio
in relation to total assets to 31.6% for third quarter 2004 from 38.1% for the
same period last year. During the third quarter of 2004, the earning asset
yield rose 22 basis points compared with 11 basis points for the Company's
interest bearing liability cost.
As rates rise, the importance of noninterest bearing deposits increases,
benefiting the net interest margin spread. The Company continues to emphasize
growth in this product and its money market accounts, while electing to reduce
its dependency on higher cost certificates of deposit. During the third
quarter of 2004, noninterest bearing balances, excluding acquired deposits,
grew 3% on an annualized sequential quarter basis during the third quarter of
2004, and increased 15% annualized year-to-date. On a combined basis, savings
and money market accounts, excluding acquired deposits, experienced 23% growth
on an annualized sequential quarter basis during the third quarter of 2004,
and 17% annualized year-to-date.
Credit Quality Ratios Remain Solid
Nonperforming assets as a percentage of loans held for investment and
foreclosed property improved every quarter over the last year. At September
30, 2004 the nonperforming asset ratio was 0.83%, and compared favorably with
0.92% at June 30, 2004 and 1.33% at September 30, 2003. The Company also
experienced improvement in delinquency rates and watch loan levels.
The allowance for loan losses was 1.21% of loans, consistent with the
second quarter of 2004. The coverage ratio of allowance for loan losses to
nonperforming loans increased to 1.67 times at September 30, 2004 from 1.14
times at September 30, 2003. Net loans charged-off as a percentage of average
loans held for investment were 0.51% for the third quarter 2004, an increase
from 0.36% for the second quarter 2004 and a decline from 0.57% for the third
quarter 2003. The Company expects fourth quarter levels to remain at a
similar level but is working toward a goal of 0.35%.
Florida Acquisitions Enhance Franchise Value
On July 16, 2004 TSFG completed its acquisitions of CNB Florida
Bancshares, Inc. and Florida Banks, Inc., and successfully completed the
systems integration. Enhancing its presence in many of the strongest and
fastest-growing markets in Florida, TSFG now ranks among the top ten banks in
Tampa Bay, Orlando and Jacksonville. The South Financial Group's Florida
banking subsidiary, Mercantile Bank, now has 53 branches, ranks #9 in deposit
market share in the Florida markets in which the Company operates, and holds
the #18 deposit market share position in the entire state of Florida.
General Information
The South Financial Group is a financial services company headquartered in
Greenville, South Carolina with approximately $13.7 billion in total assets.
TSFG operates two subsidiary banks, Carolina First Bank and Mercantile Bank,
which conduct operations through 153 branch offices in Florida, North
Carolina, and South Carolina. Carolina First Bank, the largest South
Carolina-based commercial bank, operates in North Carolina, South 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. CIO magazine recognized The South Financial Group among
its "Agile 100" companies in information technology for 2004. 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 third 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 1-866-453-1998 or 1-203-369-1224.
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 3rd Quarter Earnings
Conference Call." For those unable to participate during the live webcast, it
will be archived on The South Financial Group website until November 2, 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 and 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
9/30/04 9/30/03 % Change
Diluted Diluted Diluted
EPS EPS EPS
RECONCILIATION OF
GAAP TO NON-GAAP
MEASURES
NET INCOME, AS
REPORTED (GAAP) $31,015 $0.44 $23,893 $0.50 29.8 % (12.0) %
Merger-related costs 5,487 345
Related income taxes (1,646) (104)
Net income,
excluding merger-
related costs 34,856 0.50 24,134 0.50 44.4 -
Other non-operating
items:
Gain on sale of
available for sale
securities (678) (4,498)
Loss (gain) on
equity investments 367 (1,455)
Employment contract
payments 174 -
Loss on early
extinguishment of
debt - 2,699
Related income
taxes 41 976
Discontinued
operations, net of
income tax 165 -
OPERATING EARNINGS
(net income,
excluding merger-related
costs and other
non-operating items) $34,925 $0.50 $21,856 $0.46 59.8 8.7
Net income,
excluding merger-
related costs $34,856 $24,134
Add: Amortization
of intangibles,
net of tax 1,287 511
CASH BASIS EARNINGS $36,143 $0.51 $24,645 $0.51 46.7 -
Average common
shares outstanding,
diluted 70,342,922 47,992,601 46.6
SELECTED BALANCE
SHEET (Averages)
Total assets $13,162,855 $9,089,407 44.8
Intangible assets (551,625) (244,531) 125.6
Tangible assets 12,611,230 8,844,876 42.6
Shareholders' equity 1,292,159 648,658 99.2
Intangible assets (551,625) (244,531) 125.6
Tangible equity 740,534 404,127 83.2
PERFORMANCE RATIOS
(Annualized)
RETURN ON AVERAGE
ASSETS:
Using GAAP earnings 0.94 % 1.05 %
Using operating
earnings 1.06 0.96
Using cash basis
earnings on average
tangible assets 1.14 1.11
RETURN ON AVERAGE
EQUITY:
Using GAAP earnings 9.55 14.73
Using operating
earnings 10.75 13.48
Using cash basis
earnings on average
tangible equity 19.42 24.39
NONINTEREST INCOME
AS A % OF TOTAL
REVENUE (A):
Using GAAP earnings 19.45 30.76
Excluding other non-
operating items 19.24 25.86
EFFICIENCY RATIOS
(B):
Using GAAP earnings 56.41 56.06
Excluding other non-
operating items 51.97 56.41
Excluding merger-
related costs and
other non-operating
items, cash basis 50.48 55.54
(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.
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)
Nine Months Ended
9/30/04 9/30/03 % Change
Diluted Diluted Diluted
EPS EPS EPS
RECONCILIATION OF
GAAP TO NON-GAAP
MEASURES
NET INCOME, AS
REPORTED (GAAP) $93,295 $1.46 $66,637 $1.39 40.0 % 5.0 %
Merger-related costs 6,239 2,224
Related income taxes (1,891) (705)
Net income,
excluding merger-
related costs 97,643 1.53 68,156 1.42 43.3 7.7
Other non-operating
items:
Gain on sale of
available for sale
securities (6,499) (8,681)
Gain on equity
investments (3,456) (3,330)
Gain on disposition
of assets and
liabilities (2,350) (601)
Employment contract
payments 115 -
Impairment
(recovery) loss
from write-down of
assets (277) 268
Conservation grant
of land 3,350 -
Loss on early
extinguishment of
debt 1,429 2,699
Related income taxes 2,383 3,021
Discontinued
operations, net of
income tax 165 -
OPERATING EARNINGS
(net income,
excluding merger-related
costs and other
non-operating items) $92,503 $1.44 $61,532 $1.28 50.3 12.5
Net income, excluding
merger-related costs $97,643 $68,156
Add: Amortization of
intangibles, net of
tax 2,918 1,482
CASH BASIS EARNINGS $100,561 $1.57 $69,638 $1.45 44.4 8.3
Average common shares
outstanding, diluted 64,019,889 48,002,656 33.4
SELECTED BALANCE
SHEET (Averages)
Total assets $11,698,898 $8,784,831 33.2
Intangible assets (418,889) (243,691) 71.9
Tangible assets 11,280,009 8,541,140 32.1
Shareholders' equity 1,097,597 650,375 68.8
Intangible assets (418,889) (243,691) 71.9
Tangible equity 678,708 406,684 66.9
PERFORMANCE RATIOS
(Annualized)
RETURN ON AVERAGE
ASSETS:
Using GAAP earnings 1.07 % 1.01 %
Using operating
earnings 1.06 0.93
Using cash basis
earnings on average
tangible assets 1.19 1.09
RETURN ON AVERAGE
EQUITY:
Using GAAP earnings 11.35 13.66
Using operating
earnings 11.26 12.61
Using cash basis
earnings on average
tangible equity 19.79 22.83
NONINTEREST INCOME AS
A % OF TOTAL REVENUE
(A):
Using GAAP earnings 23.24 26.95
Excluding other non-
operating items 20.37 23.31
EFFICIENCY RATIOS
(B):
Using GAAP earnings 53.17 56.29
Excluding other non-
operating items 51.86 57.04
Excluding merger-
related costs and
other non-operating
items, cash basis 50.58 56.19
(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)
Three Months Ended %
9/30/04 9/30/03 Change
INCOME STATEMENT
Interest income (tax-equivalent) $148,371 $98,063 51.3 %
Interest expense 47,460 34,996 35.6
Net interest income (tax-equivalent) 100,911 63,067 60.0
Less: Tax-equivalent adjustment 1,153 647 78.2
Net interest income 99,758 62,420 59.8
Provision for loan losses 9,440 5,591 68.8
Net interest income after provision
for loan losses 90,318 56,829 58.9
NONINTEREST INCOME:
Customer fee income 11,736 8,836 32.8
Brokerage and trust income 2,064 1,946 6.1
Mortgage banking income, excluding
recovery 1,498 3,404 (56.0)
Recovery on mortgage servicing rights
impairment 16 400 (96.0)
Other 8,458 7,191 17.6
Noninterest income, excluding non-
operating gains on asset sales 23,772 21,777 9.2
Gain on sale of available for sale
securities 678 4,498 n/m
(Loss) gain on equity investments (367) 1,455 n/m
Gains on non-operating asset sales,
net 311 5,953 n/m
Total noninterest income 24,083 27,730 (13.2)
NONINTEREST EXPENSES:
Personnel expense 31,984 23,681 35.1
Occupancy 5,841 4,699 24.3
Furniture and equipment 5,670 4,466 27.0
Amortization of intangibles 1,839 730 151.9
Other 18,863 13,921 35.5
Noninterest expenses, excluding non-
operating items 64,197 47,497 35.2
Employment contract payments 174 - n/m
Merger-related costs 5,487 345 n/m
Loss on early extinguishment of debt - 2,699 n/m
Non-operating noninterest expenses 5,661 3,044 n/m
Total noninterest expenses 69,858 50,541 38.2
Income before income taxes and
discontinued operations 44,543 34,018 30.9
Income tax expense 13,363 10,125 32.0
Discontinued operations, net of
income tax (165) - n/m
Net income $31,015 $23,893 29.8 %
SHARE DATA:
Net income per common share, basic $0.45 $0.51 (11.8)%
Net income per common share, diluted 0.44 0.50 (12.0)
Cash dividends declared per common
share 0.15 0.14 7.1
Average common shares outstanding,
basic 68,635,847 46,955,200 46.2
Average common shares outstanding,
diluted 70,342,922 47,992,601 46.6
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
Nine Months Ended %
9/30/04 9/30/03 Change
INCOME STATEMENT
Interest income (tax-equivalent) $385,319 $298,865 28.9 %
Interest expense 120,030 102,903 16.6
Net interest income (tax-equivalent) 265,289 195,962 35.4
Less: Tax-equivalent adjustment 3,126 1,899 64.6
Net interest income 262,163 194,063 35.1
Provision for loan losses 24,158 16,291 48.3
Net interest income after provision
for loan losses 238,005 177,772 33.9
NONINTEREST INCOME:
Customer fee income 31,828 25,540 24.6
Brokerage and trust income 6,529 6,579 (0.8)
Mortgage banking income, excluding
impairment 4,557 8,633 (47.2)
Impairment recovery (loss) on mortgage
servicing rights 137 (96) (242.7)
Other 24,010 18,323 31.0
Noninterest income, excluding non-
operating gains on asset sales 67,061 58,979 13.7
Gain on sale of available for sale
securities 6,499 8,681 n/m
Gain on equity investments 3,456 3,330 n/m
Gain on disposition of assets and
liabilities 2,350 601 n/m
Gains on non-operating asset sales,
net 12,305 12,612 n/m
Total noninterest income 79,366 71,591 10.9
NONINTEREST EXPENSES:
Personnel expense 84,768 74,013 14.5
Occupancy 16,098 13,981 15.1
Furniture and equipment 15,175 13,271 14.3
Amortization of intangibles 4,229 2,159 95.9
Other 50,469 40,911 23.4
Noninterest expenses, excluding non-
operating items 170,739 144,335 18.3
Employment contract payments 115 - n/m
Merger-related costs 6,239 2,224 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 2,699 n/m
Non-operating noninterest expenses 10,856 5,191 n/m
Total noninterest expenses 181,595 149,526 21.4
Income before income taxes, minority
interest, and discontinued operations 135,776 99,837 36.0
Income tax expense 42,316 31,188 35.7
Minority interest in consolidated
subsidiary, net of income tax - (2,012) (100.0)
Discontinued operations, net of income
tax (165) - n/m
Net income $93,295 $66,637 40.0 %
SHARE DATA:
Net income per common share, basic $1.49 $1.42 4.9 %
Net income per common share, diluted 1.46 1.39 5.0
Cash dividends declared per common
share 0.45 0.42 7.1
Average common shares outstanding,
basic 62,470,768 46,968,749 33.0
Average common shares outstanding,
diluted 64,019,889 48,002,656 33.4
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
% Change
3rd Quarter
9/30/04 12/31/03 9/30/03 2004/2003
BALANCE SHEET (Period
End)
Cash and due from
banks $210,125 $184,057 $186,069 12.9 %
Interest-bearing bank
balances 850 2,048 7,958 (89.3)
Federal funds sold - 137 - n/m
Securities 4,308,485 4,007,571 3,510,665 22.7
Loans held for sale 21,933 29,619 45,817 (52.1)
Loans held for
investment 7,984,824 5,732,205 4,857,154 64.4
Allowance for loan
losses (96,318) (73,287) (63,000) 52.9
Net loans 7,910,439 5,688,537 4,839,971 63.4
Premises and
equipment, net 163,428 142,705 132,137 23.7
Intangible assets 610,347 353,079 245,791 148.3
Other assets 447,775 341,267 293,771 52.4
Total assets $13,651,449 $10,719,401 $9,216,362 48.1 %
Noninterest-bearing
deposits $1,222,467 $882,129 $811,919 50.6 %
Interest-bearing
deposits 6,589,002 5,146,520 4,454,096 47.9
Total deposits 7,811,469 6,028,649 5,266,015 48.3
Federal funds
purchased and
repurchase
agreements 2,999,794 2,329,666 2,013,441 49.0
Debt and other
borrowed funds 1,340,364 1,264,158 1,172,657 14.3
Other liabilities 117,148 117,059 107,583 8.9
Total liabilities 12,268,775 9,739,532 8,559,696 43.3
Shareholders' equity 1,382,674 979,869 656,666 110.6
Total liabilities
and shareholders'
equity $13,651,449 $10,719,401 $9,216,362 48.1
BALANCE SHEET
(Averages - Three
Months Ended)
Total assets $13,162,855 $10,673,057 $9,089,407 44.8 %
Loans 7,617,721 5,685,409 4,787,522 59.1
Securities (excludes
unrealized gains
(losses) on AFS) 4,313,121 4,033,841 3,491,068 23.5
Total earning assets 11,949,727 9,728,449 8,318,166 43.7
Intangible assets 551,625 337,820 244,531 125.6
Interest-bearing
liabilities 10,601,586 8,838,544 7,569,746 40.1
Total deposits 7,671,886 6,017,132 5,132,531 49.5
Shareholders' equity 1,292,159 883,514 648,658 99.2
BALANCE SHEET
(Averages - Year to
Date)
Total assets $11,698,898 $9,260,767 $8,784,831 33.2 %
Loans 6,543,119 4,915,437 4,655,959 40.5
Securities (excludes
unrealized gains
(losses) on AFS) 4,096,363 3,471,324 3,281,757 24.8
Total earning assets 10,649,406 8,425,590 7,986,530 33.3
Intangible assets 418,889 267,416 243,691 71.9
Interest-bearing
liabilities 9,513,983 7,638,862 7,234,573 31.5
Total deposits 6,598,296 5,147,627 4,854,607 35.9
Shareholders' equity 1,097,597 709,139 650,375 68.8
NET INTEREST MARGIN
Three months ended 3.36 % 3.23 % 3.01 %
Year to date 3.33 3.27 3.28
OPERATIONS DATA
Branch offices 153 134 115 33.0 %
ATMs 141 122 106 33.0
Employees (full-time
equivalent) 2,324 1,918 1,726 34.6
Internet banking
customers 155,248 90,132 68,256 127.4
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data) (unaudited)
% Change
3rd Quarter
9/30/04 12/31/03 9/30/03 2004/2003
CREDIT QUALITY
Nonaccrual loans -
commercial $51,881 $47,137 $52,341 (0.9)%
Nonaccrual loans -
consumer 2,239 2,686 2,876 (22.1)
Nonaccrual loans -
mortgage (A) 3,594 - - n/m
Restructured loans - - - -
Nonperforming loans 57,714 49,823 55,217 4.5
Foreclosed property
(other real estate
owned and personal
property repossessions)
(B) 8,859 10,951 9,695 (8.6)
Nonperforming assets 66,573 60,774 64,912 2.6
Nonperforming loans as
a % of loans held for
investment 0.72 % 0.87 % 1.14 %
Nonperforming assets as
a % of loans held for
investment and foreclosed
property (B) 0.83 1.06 1.33
Allowance for loan
losses as a % of loans
HFI 1.21 1.28 1.30
Allowance for loan
losses to
nonperforming loans 1.67 x 1.47 x 1.14 x
Specific allowance for
impaired loans $15,001 $9,689 $12,222 22.7
Loans past due 90 days
or more (mortgage and
consumer with interest
accruing) (C) 2,374 3,960 5,634 (57.9)
Net loan charge-offs:
Three months ended 9,715 6,693 6,743 44.1
Year to date 21,303 30,259 23,566
Average loans held for
investment:
Three months ended 7,602,063 5,651,082 4,721,131
Year to date 6,523,832 4,864,168 4,598,980
Net loan charge-offs as
a % of avg. loans HFI
(annualized):
Three months ended 0.51 % 0.47 % 0.57 %
Year to date 0.44 0.62 0.69
CAPITAL RATIOS
Tier 1 risk-based
capital 11.25 10.51 8.40
Leverage ratio 7.52 7.49 6.01
Tangible equity to
tangible assets 5.92 6.05 4.58
SHARE DATA
Book value per common
share $19.50 $16.59 $13.95 39.8 %
Shares outstanding 70,894,247 59,064,375 47,073,578 50.6
STOCK PERFORMANCE
Market price per share
of common stock $28.20 $27.75 $25.03 12.7 %
Indicated annual
dividend 0.60 0.60 0.56 7.1
Dividend yield 2.13 % 2.16 % 2.24 %
Price/book ratio 1.45 x 1.67 x 1.79 x
Market capitalization $1,999,218 $1,639,036 $1,178,252 69.7
(A) Effective September 30, 2004, TSFG began placing residential mortgage
loans in nonaccrual status when they become 150-days delinquent.
Previously, these loans were not placed in nonaccrual status (unless
impairment was evident), but any associated accrued interest was
reserved. See (C) below.
(B) Personal property repossessions totaled $1.0 million and $1.1 million,
at December 31, 2003 and September 30, 2003, respectively, and were
excluded from nonperforming assets.
(C) TSFG's accrued interest reserve associated with these loans totaled
$474,000 and $509,000 at December 31, 2003 and September 30, 2003,
respectively.
SOURCE The South Financial Group
-0- 10/19/2004
/CONTACT: Marsha L. Smunt, Director of Investor Relations of The South
Financial Group, +1-864-255-4919/
/Photo: http://www.newscom.com/cgi-bin/prnh/20000424/TSFGLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, 888-776-6555 or 212-782-2840 /
/Web site: http://www.thesouthgroup.com /
(TSFG)
CO: South Financial Group
ST: South Carolina
IN: FIN
SU: ERN CCA MAV