Filed by The South Financial Group, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933, as amended,
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934.
Subject Company: The South Financial Group, Inc.
Commission File No.: 0-15083
[THE SOUTH FINANCIAL GROUP LOGO OMITTED]
102 South Main Street
Greenville,SC 29601
864.255.4919
NEWS RELEASE
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DATE: October 3, 2002
RELEASE DATE: Immediate
THE SOUTH FINANCIAL GROUP TO ACQUIRE CENTRAL BANK OF TAMPA,
THE 3RD LARGEST INDEPENDENT BANK HEADQUARTERED IN TAMPA
GREENVILLE, SC - The South Financial Group, Inc. (Nasdaq/NM: TSFG) today
announced the execution of a definitive agreement to acquire Central Bank of
Tampa, a closely-held community bank headquartered in Tampa, Florida, in a stock
transaction valued at approximately $68 million.
Central Bank of Tampa, which has $215 million in assets, operates 5 branches in
Tampa and ranks 11th in total deposits in Hillsborough County. These locations
will add to The South Financial Group's growing presence in the greater Tampa
Bay area. Following the merger, The South Financial Group's Florida banking
subsidiary, Mercantile Bank, will have 20 branch offices in the greater Tampa
Bay area and the 7th deposit market share in Hillsborough County. Throughout
Florida, Mercantile Bank will have $1.6 billion in assets and 36 branch offices,
principally in Jacksonville, Orlando, and greater Tampa Bay.
"We are enthusiastic about the opportunity to strengthen our presence in the
greater Tampa Bay area, which is one of the most attractive banking markets in
the country," said Mack I. Whittle, Jr., President and Chief Executive Officer
of The South Financial Group. "Central Bank of Tampa's financial performance is
exceptional. Last year, their ROA exceeded 2%, and their ROE was 16%. These
results prove the strength of the Tampa market and management's focus on core
profitability, including credit quality. This merger advances our strategy of
operating in superior markets and is another step forward in reaching our
financial return goals."
"We are very pleased with what this merger means for our shareholders,
customers, and community," said Anthony V. Ferlita, President and Chief
Executive Officer of Central Bank of Tampa. "We will continue to deliver the
high level of performance and outstanding customer service that fit well with
The South Financial Group's focus. We look forward to playing an integral part
in building the premier super-community bank in the greater Tampa Bay area."
The South Financial Group will issue a number of shares equal to $68 million
divided by the deemed per share value of TSFG common stock. Such value will be
equal to the average closing price on the ten trading days ending on the second
trading day prior to closing (except that the value will never be deemed less
than $15.00 or greater than $25.00). Following completion of the merger, Central
Bank of Tampa will operate under the Mercantile Bank name. The transaction,
which is subject to receipt of shareholder and regulatory approval, is expected
to close in the fourth quarter 2002.
The transaction, valued at approximately 237% of Central Bank of Tampa's book
value at June 30, 2002 and 16.8x earnings for the last-twelve-months through
June 30, 2002, is expected to be accretive to The South Financial Group's 2003
earnings. The South Financial Group estimates cost savings of approximately 25%
of projected operating expenses for 2003.
On August 31, 2002, The South Financial Group completed its merger with Gulf
West Banks, Inc., which had $527 million in assets and operated 15 branches in
the greater Tampa Bay area of Florida. This merger marked The South Financial
Group's first banking locations in the greater Tampa Bay area.
The South Financial Group, headquartered in Greenville, South Carolina, is a
financial services company with $6.7 billion in total assets and 106 branch
offices in South Carolina, Florida, and North Carolina. It operates two
subsidiary banks: Carolina First Bank and Mercantile Bank. Carolina First Bank,
the largest South Carolina-based commercial bank, operates in South Carolina,
North Carolina, and on the internet under the brand name, Bank CaroLine.
Mercantile Bank operates in Florida, principally in the Jacksonville, Orlando,
and Tampa Bay 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 web
site: www.thesouthgroup.com.
TRANSACTION SUMMARY
Aggregate transaction value Approximately $68 million in TSFG common stock
and consideration
Tax treatment Tax-free exchange of stock
Exchange ratio If TSFG's stock price is between $15.00 and
$25.00 per share, the exchange ratio floats
based upon 10-day average closing price ending
on the second trading day prior to closing. If
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TSFG's stock price is less than or equal to
$15.00 per share, the exchange ratio fixes
at 13.7742. If TSFG's stock price is greater
than or equal to $25.00 per share, the
exchange ratio fixes at 8.2645.
Indicated price per CBT share $206.61
(based on 10/2/02 price)
Indicated TSFG shares to issue Approximately 3.2 million shares
(based on10/2/02 price)
Expected closing Fourth quarter 2002
Due diligence Completed
Required approvals Regulatory, CBT shareholders
PRICING OVERVIEW
Price to LTM EPS ($12.33) 16.8x
Price to 6/30/02 book value ($87.26) 2.37x
CENTRAL BANK OF TAMPA PROFILE
- - $215 million full-service community bank headquartered in Tampa, FL
- - 5 branches in Tampa Bay area
- - 11th in total deposits in Hillsborough County (5th largest county in FL)
- - 3rd largest independent both in Hillsborough County and the city of Tampa
- - Annualized ROA of 2.09% for first half of 2002 and 2.01% for 2001
- - Annualized ROE of 16.02% for first half of 2002 and 15.94% for 2001
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, include, but are not limited to,
factors which may affect earnings, expected financial results for the Central
Bank of Tampa merger, estimates of merger-related cost savings, 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 Quarterly Report on Form 10-Q for the quarter ended June 30,
2002. TSFG undertakes no obligation to release revisions to these
forward-looking statements or reflect events or circumstances after the date of
this release.
The foregoing may be deemed to be offering materials of TSFG in
connection with TSFG's proposed acquisition of Central Bank of Tampa, on the
terms and subject to the conditions in the Agreement and Plan of Merger, dated
October 2, 2002, between TSFG and Central Bank of Tampa. This disclosure is
being made in connection with Regulation of Takeovers and Security Holder
Communications (Release Nos. 33-7760 and 34-42055) adopted by the Securities and
Exchange Commission ("SEC"). Shareholders of Central Bank of Tampa and other
investors are urged to read the proxy statement/prospectus that will be included
in the registration statement on Form S-4, which TSFG will file with the SEC in
connection with the proposed merger because it will contain important
information about TSFG, Central Bank of Tampa, the merger, the persons
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soliciting proxies in the merger and their interests in the merger and related
matters. After it is filed with the SEC, the proxy statement/prospectus will be
available for free, both on the SEC web site (http://www.sec.gov) and from TSFG
and Central Bank of Tampa as follows:
Mary M. Gentry, Investor Relations, The South Financial Group, Inc.,
102 South Main Street, Greenville, SC 29601, Phone: (864) 255-4919, mary.gentry@
thesouthgroup.com.
Anthony V. Ferlita, Chief Executive Officer, Central Bank of Tampa,
2307 West Kennedy Blvd., Tampa, FL 33609, Phone: (813) 253-3302.
In addition to the proposed registration statement and proxy
statement/prospectus, TSFG files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information filed by TSFG at the SEC's public
reference rooms at 450 Fifth Street, N.W., Washington, D.C., 20549 or at the
SEC's other public reference rooms in New York and Chicago. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. TSFG's
filings with the SEC are also available to the public from commercial
document-retrieval services and on the SEC's web site at http://www.sec.gov.
CONTACTS:
William S. Hummers III, Executive Vice President, (864) 255-7913
Mary M. Gentry, Treasurer, (864) 255-4919
***END***
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