SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
(Mark One)
[XX] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 15, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 0-15083
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
CAROLINA FIRST 401(K) PLAN
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B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
THE SOUTH FINANCIAL GROUP, INC.
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(Exact name of Registrant as specified in its charter)
South Carolina 57-0824914
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
102 South Main Street, Greenville, SC 29601
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (864) 255-7900
1
REQUIRED INFORMATION
A. Financial Statements
Report of Independent Auditors
Statements of Net Assets Available for Benefits
Statements of Changes in Net Assets Available for Benefits
Notes to Financial Statements
B. Exhibits
Consent of Independent Auditors
2
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Carolina First 401(k) Plan
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(Name of Plan)
THE SOUTH FINANCIAL GROUP, INC. DATE: JUNE 28, 2001
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(Registrant/Issuer)
/s/ William S. Hummers III
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Title: Executive Vice President
3
CAROLINA FIRST 401(k) PLAN
Financial Statements
December 15, 2000 and 1999
(With Independent Auditors' Report Thereon)
CAROLINA FIRST 401(k) PLAN
Financial Statements
December 15, 2000 and 1999
Independent Auditors' Report F-1
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 15, 2000 and 1999 F-2
Statements of Changes in Net Assets Available for Benefits
for the years ended December 15, 2000 and 1999 F-3
Notes to Financial Statements F-4
Supplemental Schedule F-9
Independent Auditors' Report
Administrative Committee
Carolina First 401(k) Plan
We have audited the accompanying statement of net assets available for benefits
of Carolina First 401(k) Plan (the "Plan") as of December 15, 2000 and the
related statement of changes in net assets available for benefits for the period
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The accompanying financial statements of Carolina
First 401(k) Plan as of December 15, 1999, were audited by other auditors whose
report thereon dated September 22, 2000 expressed an unqualified opinion on
those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit includes assessing the accounting principles used and
significant estimates made by the Plan's management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 15, 2000, and the changes in net assets available for benefits for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic 2000
financial statements taken as a whole. The supplementary information included in
Schedule 1 is presented for purposes of additional analysis and is not a
required part of the basic 2000 financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audit of the 2000 financial statements and, in our opinion, is fairly
stated in all material respects in relation to the 2000 financial statements
taken as a whole.
June 12, 2001
F-1
CAROLINA FIRST 401(k) PLAN
Statements of Net Assets Available for Benefits
December 15, 2000 and 1999
2000 1999
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Assets
Investments, at fair value $ 20,481,553 15,156,189
Employer contributions receivable 429,303 332,269
Accrued interest and dividends 189,604 -
Cash - 16,683
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Total assets 21,100,460 15,505,141
Liabilities
Refund payable for excess contributions 7,436 -
Overdraft 77,234 -
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Net assets available for benefits $ 21,015,790 15,505,141
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See accompanying notes to financial statements.
F-2
CAROLINA FIRST 401(k) PLAN
Statements of Changes in Net Assets Available for Benefits
For the years ended December 15, 2000 and 1999
2000 1999
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Additions to net assets attributed to:
Investment (loss) income:
Net realized and unrealized depreciation in fair value
of investments $ (2,894,117) (3,329,981)
Interest and dividends 795,972 356,592
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Total investment loss (2,098,145) (2,973,389)
Contributions:
Employer 2,091,704 1,789,641
Participant 2,916,347 1,884,348
Rollovers 314,204 311,852
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Total contributions 5,322,255 3,985,841
Merger of Anchor Financial Corporation 401(k) Plan 5,179,617 -
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Total additions 8,403,727 1,012,452
Deductions:
Distributions to participants 2,893,078 1,595,589
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Net increase (decrease) in net assets 5,510,649 (583,137)
Net assets available for benefits at beginning of period 15,505,141 16,088,278
------------------- ---------------
Net assets available for benefits at end of period $ 21,015,790 15,505,141
=================== ===============
See accompanying notes to financial statements.
F-3
CAROLINA FIRST 401(k) PLAN
Notes to Financial Statements
December 15, 2000 and 1999
(1) DESCRIPTION OF PLAN
The following description of Carolina First 401(k) Plan (the "Plan"),
formerly Carolina First Salary Reduction Plan, provides only general
information. Participants should refer to the Plan Document and Summary
Plan Description for a more complete description of the Plan's
provisions.
(a) General
The Plan, which was formed in January, 1989, is a defined
contribution plan with a cash-or-deferred arrangement subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA). It covers all eligible employees of The South Financial
Group (formerly Carolina First Corporation) and its subsidiaries
(collectively Plan Sponsor, Employer) who are age 18 or older.
Employees are eligible to begin participation in the Plan on the
first day of the month coincident with or following the later of
their date of employment or attainment of age 18.
(b) Fiscal Year
During 1999, the Plan adopted an amendment which changed its fiscal
year end from December 31, to December 15.
(c) Contributions
Each year, participants may defer up to sixteen percent of pretax
annual compensation, as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified
defined benefit or defined contribution plans. The Plan Sponsor will
contribute a discretionary matching contribution of a percentage of
the participants' compensation that a participant contributes to the
Plan. The Plan Sponsor may also contribute a discretionary Employer
non-elective contribution.
Upon enrollment in the Plan, an employee may direct employee and
employer contributions to any of the Plan's fund options.
Participants may change their investment options daily.
(d) Participant Accounts
Each participant's account is credited with the participant's
contributions and allocations of (a) the Employer's contributions and
(b) Plan investment results. Allocations are based on participant
earnings or account balances, as defined. Forfeited balances of
terminated participants' nonvested accounts are used to reduce future
Employer contributions. Forfeited balances were $120,119 in 2000 and
$101,375 in 1999. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's account.
F-4
(e) Vesting
Participants are immediately vested in their own contributions plus
actual earnings thereon. Vesting of contributions plus actual
earnings thereon is based upon years of continuous service. A year of
service is defined as working a minimum of 1,000 hours in a plan year
after reaching age 18. A participant is 100% vested after five years
of credited service, according to the following schedule:
Percent of
Years of Service Nonforfeitable Interest
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
Notwithstanding the aforementioned, upon reaching normal retirement
age or upon death or disability, participants became 100% vested.
(f) Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000
up to a maximum equal to the lesser of $50,000 of 50% of their vested
account balances. Loan terms range from one to five years or up to 20
years for the purchase of a primary residence. The loans are secured
by the balance in the participant's account and bear interest at a
rate commensurate with local prevailing rates as determined by
Carolina First Bank (Trustee). Principal and interest are paid
ratably through payroll deductions.
(g) Payment of Benefits
Participants are entitled to receive a distribution of their vested
accounts upon the occurrence of retirement, death, total and
permanent disability, or termination of employment for any other
reason. Vested participants are also entitled to leave their benefits
in the Plan until retirement. The method of payment is a lump-sum
distribution.
(h) Plan Termination
Although it has not expressed any intent to do so, the Employer has
the right under the Plan to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, participants will become 100 percent
vested in their accounts.
F-5
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The financial statements have been prepared on an accrual basis of
accounting in accordance with accounting principles generally
accepted in the United States of America.
(b) Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Fair value is
determined by the quoted market prices on the last business day of
the plan year. The participant loans are valued at their
outstanding balances, which approximate fair value. Purchases and
sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
Refunds payable to participants at December 15, 2000 were $7,436.
This refund is due to excess contributions, which were refunded to
participants in 2001 for the year ended December 15, 2000.
(c) Payment of Benefits
Benefits are recorded when paid.
(d) Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, and changes
therein and the disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
(3) Investments
The fair value of individual investments that represent five percent or
more of the Plan's net assets at December 15, 2000 and 1999 are as
follows:
2000 1999
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Investments, at fair value as determined by quoted market price:
Vanguard 500 Index Admiral Shares $ 4,915,027 2,647,076
Dow Jones Global Portfolio Index Fund V 1,165,016 890,605
The South Financial Group Common Stock 7,204,395 7,218,997
SEI Diversified U.S. Stock Fund 1,667,548 1,004,004
Federated Prime Obligations Fund 1,706,204 971,617
Putnam International Growth 1,223,444 *
* Less than 5% of Plan assets
F-6
During 2000 and 1999, the Plan's investments (including investments
bought, sold and held during the year) depreciated in value by $2,894,117
and $3,329,981, respectively, as follows:
2000 1999
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Investments, at fair value as determined by quoted
market price:
Mutual Funds $ (444,854) 409,289
Collective Trust Funds (136,220) 126,439
Employer Common Stock (2,313,043) (3,865,709)
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$ (2,894,117) (3,329,981)
============== ===============
(4) Party-in-Interest Transactions
The Plan's investments are held in trust by Carolina First Bank.
Substantially all administrative expenses related to the Plan are paid by
The South Financial Group. During 2000 and 1999, the Plan received
dividends of $198,207 and $141,469, respectively, on its investment in
common stock of the Employer.
Included in Plan net assets available for benefits is $16,683 of cash at
December 15, 1999 and a $77,234 overdraft at December 15, 2000, which are
held in an account with Carolina First Bank.
(5) Income Tax Status
The Plan has received a determination letter from the Internal Revenue
Service dated September 30, 1991, stating that the Plan is qualified
under Section 401(a) of the Internal Revenue Code (Code) and, therefore,
the related trust is exempt from taxation. The Plan has been amended
since receiving the determination letter. Once qualified, the Plan is
required to operate in conformity with the Code to maintain its
qualification. The Plan Sponsor has indicated that it will take the
necessary steps, if any, to maintain the Plan's qualified status.
(6) Voluntary Request for Closing Agreement Program
In January 1999, the Plan Sponsor filed a Voluntary Request for Closing
Agreement Program (CAP) Consideration with the Internal Revenue Service
(IRS). The Plan Sponsor discovered various errors in the assumptions used
in the Plan's administration relative to allocation of benefits,
eligibility, vesting and compensation. The Plan Sponsor believes the
errors have been corrected. In March 1999, the Company contributed
$466,320 to the Plan on behalf of all participants who were adversely
affected by these operational errors. The Company received final IRS
approval of the CAP filing in 2000.
F-7
(7) Anchor Financial Corporation 401(k)
In June 2000, the Plan Sponsor acquired Anchor Financial Corporation. As
a result, the net assets available for benefits totaling $5,179,617 in
the Anchor Financial Corporation 401(k) Plan were merged into the Plan in
August 2000.
F-8
Schedule 1
CAROLINA FIRST 401(k) PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 15, 2000
(a) (b) (c)
Party Identity of issue, Description of investment (e)
in- borrower, lessor, including maturity date, rate of interest, (d) Current
interest or similar party collateral, par or maturity value Cost Value
- --------- -------------------- ------------------------------------------- ----- -------------
Money Market Funds
Federated Prime Obligations Fund ** $ 1,706,204
Mutual Funds
Morgan Keegan Select Capital Growth Fund ** 403,524
Putnam International Growth Fund ** 1,223,444
SEI Core Fixed Income Fund ** 392,352
SEI Diversified Conservative Income Fund ** 618,916
SEI Diversified U.S. Stock Fund ** 1,667,548
Vanguard Index Trust 500 ** 4,915,027
Collective Trust Funds
Dow Jones Global Portfolio Index Fund III ** 836,122
Dow Jones Global Portfolio Index Fund V ** 1,165,016
Common Stock
* The South Financial Group The South Financial Group ** 7,204,395
* Participant loans With an interest rate of prime and a range of
maturity dates from 2001 to 2005 349,005
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$ 20,481,553
============
* Indicates party-in-interest to the Plan
** Cost information has not been included in column (d) because all investments are participant directed.
See accompanying independent auditors' report.
F-9