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: CNB Florida Bancshares, Inc.
Commission File No. 0-25988
The South Financial Group, Inc. [Logo Omitted] 104 South Main Street
Greenville, SC 29601
864.255.4919
News Release
Date: January 21, 2004
Release Time: Immediate
THE SOUTH FINANCIAL GROUP TO ACQUIRE CNB FLORIDA;
ENHANCES HIGH-GROWTH FLORIDA FRANCHISE
GREENVILLE, SC - The South Financial Group, Inc. (Nasdaq/NM: TSFG) today
announced a definitive agreement to acquire CNB Florida Bancshares, Inc.
(Nasdaq: CNBB), headquartered in Jacksonville, Florida, in an all stock
transaction valued at approximately $157 million. CNB Florida's banking
subsidiary, CNB National Bank, operates 16 branch offices in 8 counties and has
approximately $810 million in assets.
CNB National Bank, the largest community bank headquartered in Northeast
Florida, ranks #8 in deposit market share in Northeast Florida. It operates
entirely in Northeast Florida in growth markets from Jacksonville to
Gainesville. Following the merger, The South Financial Group's Northeast Florida
deposit market share will increase to #7 from #20. For TSFG's Northeast/Central
Florida markets, its deposit market share will increase to #7 from #11. CNB
National Bank will merge into TSFG's Florida banking subsidiary, Mercantile
Bank. Once the merger is complete, Mercantile Bank will have 50 branches, over
$3 billion in assets, and over $2 billion in deposits.
"We have been looking for the right merger opportunity in Northeast Florida, and
CNB Florida is the right answer," said Mack I. Whittle, Jr., President and CEO
of The South Financial Group. "CNB Florida is a strategic merger, giving us a
significant presence in fast-growing Northeast Florida--one of the most dynamic
areas in Florida. We have stated that we want to be in the top 10 in our target
Florida markets between Tampa Bay and Jacksonville. CNB Florida puts us firmly
in that position. With this merger, we increase our Northeast Florida market
ranking to #7 and gain an excellent foundation to build on."
Whittle continued, "While our desire to achieve scale in key Florida markets is
important, we remain committed to doing so only in a manner that adds to
shareholder value. Our merger with CNB Florida is consistent with our
disciplined acquisition criteria. As we've previously stated, we will only do
mergers that are accretive to earnings per share in the first year, enhance our
3-year goals, and strengthen our geographic franchise. We also have a track
record of successfully integrating mergers. Our integration of CNB Florida will
be no different."
The South Financial Group entered Florida in 1999 with the acquisition of
Citizens First National and a de novo branch in Jacksonville. CNB Florida
represents The South Financial Group's 5th acquisition in Florida. With the CNB
Florida merger, The South Financial Group's Florida deposits represent 30% of
TSFG's total deposits.
"We are excited by the opportunity to join The South Financial Group," stated
K.C. Trowell, Chairman and Chief Executive Officer of CNB Florida. "Both
companies are committed to our customers and our communities. Together, we can
broaden our product offerings, expand customer relationships, and continue to
build market share in our outstanding markets. The South Financial Group shares
our focus on community banking, including making decisions locally and knowing
our customers well."
Under the terms of the agreement, CNB Florida shareholders will receive 0.84
shares of The South Financial Group for each CNB Florida share. Based on TSFG's
1/20/04 closing price of $28.70, this represents $24.11 for each common share of
CNB Florida. The transaction, which is expected to close in July 2004, is
subject to regulatory and CNB Florida shareholder approvals.
Assuming expense savings of 20%, the merger is expected to be accretive in the
first full year. This estimate does not include any anticipated revenue
enhancements nor does it include the benefits of excess capital generated
through this combination.
The South Financial Group is a financial services company headquartered in
Greenville, South Carolina, which had total assets of approximately $10 billion
at September 30, 2003 after giving effect to TSFG's recent acquisition of
MountainBank Financial Corporation. TSFG operates two primary subsidiary banks,
Carolina First Bank and Mercantile Bank, which conduct operations through
approximately 135 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 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 website: www.thesouthgroup.com.
Transaction Summary
- -------------------
Implied price per CNB common $24.11
share1
Aggregate transaction value1 Approximately $157 million
Form of consideration 100% common stock
Fixed exchange ratio 0.84 TSFG shares per CNB share
Break-up fee $5 million
Expected closing July 2004
Anticipated merger cost savings Approximately $4.5 million pre-tax fully
phased in by 2005, or 20%
Anticipated merger-related Approximately $12 million pre-tax
charges, including direct
acquisition costs
CNB options To be converted into the right to purchase
TSFG common stock based on the exchange
ratio
Due diligence Completed
Required approvals Regulatory approval; CNB shareholder
approval
Pricing Overview
- ----------------
Price to 2003 EPS estimate ($1.03)2 23.4x
Price to 9/30/03 book value ($8.72) 2.76x
Price to 9/30/03 tangible book value ($7.83) 3.08x
CNB Florida Profile
- -------------------
- - $810 million full-service community bank headquartered in Jacksonville, FL
- - Largest community bank headquartered in Northeast Florida
- - 16 branches in 8 counties
- - Ranks #8 in deposit market share in Northeast Florida
Notes:
(1) Based on TSFG's 1/20/04 closing stock price of $28.70 per share after
cancellation of 125,000 CNB Florida shares owned by TSFG.
(2) Based on First Call consensus median.
Conference Call / Webcast Information
- -------------------------------------
The South Financial Group will host a conference call on Wednesday, January 21,
2004 at 9:00 a.m. (ET) to discuss the acquisition of CNB Florida and answer
analyst questions. It will also provide a live webcast of the call, which may be
accessed through The South Financial Group's Internet site at
www.thesouthgroup.com under the Investor Relations tab. Additional material
information, including forward-looking statements such as future projections,
may be discussed during the presentation. To participate in the 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 1-800-860-4696 or
1-402-280-9966. The South Financial Group will also provide a copy of the
presentation in the Investor Relations section of its website.
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, 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, 2002. 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 foregoing may be deemed to be offering materials of TSFG in connection with
TSFG's proposed acquisition of CNB Florida, on the terms and subject to the
conditions in the Agreement and Plan of Merger, dated January 20, 2004, between
TSFG and CNB Florida. 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 CNB Florida 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, CNB Florida, the
merger, the persons 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 CNB Florida as follows:
Mary M. Gentry, Investor Relations, The South Financial Group,
102 South Main Street, Greenville, SC 29601, Phone: (864) 255-4919,
mary.gentry@thesouthgroup.com.
G. Thomas Frankland, CNB Florida Bancshares, Executive Vice President
and Chief Financial Officer, 9715 Gate Parkway North, Jacksonville, FL 32246,
Phone: (904) 265-0261, tfrankland@cnbnb.com.
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, Vice Chairman and CFO, (864) 255-7913
Mary M. Gentry, Director of Investor Relations, (864) 255-4919
***END***
THE SOUTH FINANCIAL GROUP, INC. [LOGO OMITTED]
ACQUISITION OF
CNB NATIONAL BANK [LOGO OMITTED]
ENHANCING OUR HIGH-GROWTH FLORIDA FRANCHISE
JANUARY 21, 2004
Forward-Looking Statements and
Non-GAAP Financial Information
The forward-looking statements being made today are subject to risks and
uncertainties. TSFG's actual results may differ materially from those set forth
in such forward-looking statements. These statements include, but are not
limited to, factors that may affect earnings, return goals, expected financial
results for mergers, estimates of merger synergies and merger-related charges,
and credit quality assessment. Reference is made to TSFG's reports filed with
the Securities and Exchange Commission for a discussion of factors that may
cause such differences to occur. TSFG undertakes no obligation to release
revisions to these forward-looking statements or reflect events or circumstances
after today's presentation.
This presentation contains certain non-GAAP measures, which TSFG management uses
in its analysis of TSFG's performance. TSFG believes presentations of financial
measures excluding the impact of these items provide useful supplemental
information and better reflect its core operating activities. Management uses
operating earnings, 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
banking operations.
Non-GAAP Financial Information (continued)
TSFG also provides data eliminating intangibles and related amortization in
order to present data on a "cash basis." Operating earnings adjust GAAP
information to exclude the effects of non-operating items, such as
merger-related costs, gains or losses on asset sales, and non-operating
expenses. Cash basis items exclude intangibles and their amortization. The
limitations associated with utilizing operating earnings and cash basis
information are the risk that persons might disagree as to the appropriateness
of items comprising these measures and different companies might calculate these
measures differently. Management compensates for these limitations by providing
detailed reconciliations between GAAP information and operating earnings. These
disclosures should not be viewed as a substitute for GAAP operating results. A
reconciliation of GAAP results and non-GAAP performance measures is provided on
our web site, www.thesouthgroup.com, in the Investor Relations section under
Financial Information.
Transaction Summary
Transaction Summary
Implied Value per CNB Common Share(1): $24.11
Aggregate Transaction Value(1): Approximately $157 million
Form of Consideration: 100% common stock
Exchange Ratio: Fixed at 0.840 TSFG shares per CNB share
Board Representation 1 CNB Board member to join the TSFG Board
Expected Closing: July 2004
Break-up Fee: $5 million
Other Terms: Identified cost savings - approximately $4.5 million pre-tax fully-phased in by 2005
(represents 20% of CNB's historical cash non-interest expense base)
Anticipated merger-related charges (including direct acquisition costs) -
approximately $12.0 million pre-tax charges, including employment contracts and
severance ($3.3 million), contract terminations ($1.5 million), professional fees
($1.6 million), system conversion costs ($1.6 million) and other costs ($4.0
million)
Due diligence: Completed
Required approvals: Regulatory (Federal Reserve, FDIC, State of Florida), CNB shareholder
(1) Based on TSFG's January 20, 2004 closing stock price of $28.70 per share; Deal value excludes 125,000 shares of CNB
Expands Northeast Florida Potential
* Jacksonville is one of the most dynamic markets in the U.S.
o Top 10 best places to live -- Money magazine
o #1 "hottest city" for business relocation-- Expansion Management
o Top 15 "best cities for corporate headquarters" -- Business Facilities
o Ranked #12 in the nation for private construction activity in 2003
o 2005 Super Bowl host
* As Jacksonville matures, growth is starting to extend out Interstate 10 to
Baker and Columbia county
* Gainesville remains one of the key education hubs in Florida with a
sophisticated, growing population
Projected Household Growth by Northeast Florida County (2003-2008)
- ------------------------------------------------------------------
St. Johns 17.1%
Suwannee 12.9%
Baker 12.4%
Columbia 10.8%
Alachua 10.8%
Union 10.1%
Duval 9.3%
Bradford 8.0%
CNB = 11.0%
TSFG = 9.3%
Added Value for TSFG Shareholders
* Consistent with TSFG's stated disciplined approach to acquisitions:
o Accretive to EPS in the first full year
o Advances 3-year goals
o In-market transaction with low execution risk
o Less than 10% of our asset size
o Neutral to capital ratios
o Conservative assumptions with meaningful upside
* Builds out TSFG's successful Florida franchise:
o #20 to #7 in Northeast Florida deposit market share
o #11 to #7 in Northeast/Central Florida deposit market share (TSFG's
Florida markets)
* Accelerates TSFG's growth:
o CNB has grown loans 27% annually since 1999
o CNB has grown deposits 28% annually since 1999
o CNB has grown EPS 21% annually since 1999
CNB: A Very Attractive Opportunity
* Expands existing presence with 16 branches and 7 new counties
* Largest independent community bank headquartered in Northeast Florida
* 18 year-old institution founded with similar ambitions and culture to
TSFG
* Excellent mature market strategy for building a strong deposit base and
generating quality loans
* Great opportunity to take deposit and loan share from super-regionals in
dynamic markets like Jacksonville and Gainesville
* Market Presidents are well-known and have significant tenure in markets
* Credit culture is very similar to TSFG and recent CNB sales culture
initiatives would give TSFG an early start with Elevate
* TSFG's Management Team, many of them former Barnett Bank employees, knows
these markets well
Transaction Rationale
Expands and Enhances Our Florida Strategy
Flordia represents over 30% of TSFG's pro forma loan and deposit base
Pre CNB acquisition
Deposits
NC 14%
FL 24%
SC 62%
Loans
NC 14%
FL 23%
SC 63%
Post CNB acquisition
Deposits
NC 13%
FL 32%
SC 55%
Loans
NC 12%
FL 31%
SC 57%
Fills in Northeast Florida - Significantly Increases TSFG's Overall Florida
Presence
[Map Omitted]
Northeast Florida Ranking (1)
Percent
of
Total Total parent
deposits market deposits
Rank Institution Branches $mm share (%) (%)
- ---------------------------------------------------------------------------
1 Bank of America Corp. (NC) 104 $8,046 25.5% 1.6%
2 Wachovia Corp. (NC) 96 7,152 22.7 3.6
3 SunTrust Banks Inc. (GA) 60 3,348 10.6 4.5
4 SouthTrust Corp. (AL) 54 1,917 6.1 6.2
5 Alliance Capital Partners 4 1,240 3.9 100.0
LP (FL)
6 Compass Bancshares Inc. 30 971 3.1 6.3
(AL)
(7) Pro forma 22 909 2.9 10.7
7 AmSouth Bancorp. (AL) 28 797 2.5 2.8
8 CNB Florida Bancshares 16 712 2.3 100.0
Inc. (FL)
9 Regions Financial Corp. 9 503 1.6 1.7
(AL)
10 Prosperity Banking Company 13 427 1.4 100.0
(FL)
20 South Financial Group Inc. 6 197 0.6 3.3
(SC)
Total 630 $31,542 100.0%
Northeast and Central Flordia Market Ranking (2)
Percent
of
Total Total parent
deposits market deposits
Rank Institution Branches $mm share (%) (%)
- ---------------------------------------------------------------------------
1 Bank of America Corp. (NC) 332 $23,651 23.3% 4.6%
2 Wachovia Corp. (NC) 286 16,748 16.5 8.5
3 SunTrust Banks Inc. (GA) 241 16,174 15.9 21.7
4 SouthTrust Corp. (AL) 144 5,436 5.4 17.5
5 AmSouth Bancorp. (AL) 114 4,120 4.1 14.5
6 Colonial BancGroup Inc. (AL) 68 2,440 2.4 24.8
(7) Pro forma 50 2,120 2.1 26.3
7 BB&T Corp. (NC) 54 2,042 2.0 3.1
8 Golden West Financial (CA) 11 1,725 1.7 3.8
9 Washington Mutual Inc. (WA) 41 1,720 1.7 1.3
10 Regions Financial Corp. (AL) 35 1,419 1.4 4.8
11 South Financial Group Inc. 34 1,408 1.4 23.7
(SC)
17 CNB Florida Bancshares Inc. 16 712 0.7 100.0
(FL)
Total 2,026 $101,658 100.0%
Source: SNL Financial
Note:Deposits and market share as of June 30, 2003, pro forma for acquisitions
(includes CNB branch opened in 4th quarter 2003); totals are for all 70
institutions in Northeast Florida and all 308 institutions in Florida
(1) Includes counties of Nassau, Duval, Clay, St. Johns, Flagler, Volusia,
Marion, Putnam, Baker, Union, Bradford, Alachua, Levy, Gilchrist, Columbia,
Suwannee, Hamilton, Lafayette, Dixie
(2) Includes counties of Nassau, Duval, Clay, St. Johns, Flagler, Marion,
Putnam, Baker, Union, Bradford, Alachua, Levy, Gilchrist, Columbia,
Suwannee, Hamilton, Lafayette, Dixie, Citrus, Hernando, Pasco, Pinellas,
Hillsborough, Polk, Osceola, Brevard, Seminole, Orange, Volusia, Lake,
Sumter
Consistent with Stated Market Goals
Projected Household growth (2003-2008)
Myrtle Beach 14.7%
Orlando 14.0%
Wilmington 13.0%
Greater South Charlotte 11.0%
Jacksonville 10.9%
Gainesville 10.8%
Hendersonville 9.7%
Columbia 8.4%
Tampa/St. Pete 8.2%
Asheville 7.5%
Charleston 7.2%
Greenville 7.1%
Southeast median - 8.2% (2)
U.S. median - 6.0%
Source: SNL Financial, Claritas
Note: The regions highlighted are MSAs except for Greater South Charlotte,
which is York County ("Rock Hill"), and Hendersonville, which is
Henderson County
(1) Deposit weighted by county based on TSFG deposits in each market
(2) Includes AL, FL, GA, MS, NC, SC, TN, VA
Consistent with Stated Market Goals
Projected Per capita income growth (2003-2008)
TSFG weighted average (1) = 16.9%
Wilmington 19.5%
Charleston 18.8%
Columbia 17.7%
Greenville 17.2%
Myrtle Beach 16.8%
Jacksonville 16.7%
Asheville 16.5%
Gainesville 16.3%
Greater South Charlotte 16.3%
Tampa/St. Pete 15.9%
Hendersonville 14.6%
Orlando 13.3%
Southeast median = 15.9%
U.S. median = 14.9%
Source: SNL Financial, Claritas
Note: The regions highlighted are MSAs except for Greater South Charlotte,
which is York County ("Rock Hill"), and Hendersonville, which is
Henderson County
(1) Deposit weighted by county based on TSFG deposits in each market
(2) Includes AL, FL, GA, MS, NC, SC, TN, VA
Accretive to TSFG's growth
CNB Florida standalone
Loans ($mm)
1999 $263
2000 $377
2001 $516
2002 $610
9/03 $650
27.3% CAGR
Revenues ($mm)
1999 $18
2000 $21
2001 $26
2002 $32
2003(1) $34
18.9% CAGR
Deposits ($mm)
1999 $288
2000 $368
2001 $533
2002 $649
9/03 $728
28.0% CAGR
GAAP EPS ($)
1999 $0.48
2000 $0.41
2001 $0.48
2002 $0.87
2003(2) $1.03
21.0% CAGR
(1) 2003 revenues are annualized based on YTD revenues as of 9/03
(2) First call consensus median
Source: Company Filings
Summary ratios show real opportunity
CNB TSFG
Opportunity for improvement
Efficiency ratio 64% 55%
Non-interest income to total revenue, GAAP 17% 30%
Non-interest income to total revenue, Operating1 17% 25%
Margin, credit and capital are all positives
Net interest margin 3.79% 3.08%
Including Rock Hill Bank & Trust Workout Loans:
Net charge-offs to average loans 0.04% 0.57%
Nonperforming assets to loans and OREO 0.65% 1.33%
Excluding Rock Hill Bank & Trust Workout Loans:
Net charge-offs to average loans 0.04% 0.41%
Nonperforming assets to loans and OREO 0.65% 0.88%
Tangible equity to tangible assets, GAAP 6.05% 4.58%
Tangible equity to tangible assets, Pro forma2 6.05% 6.07%
Note: all numbers at or for the quarter ended September 30, 2003
Source: Company Filings
1 Excluding non-operating items. For details, see reconciliation of GAAP to
operating earnings on TSFG's web site, www.thesouthgroup.com, in the
Investor Relations section under Financial Information
2 Includes the impact of the Oct. 2003 MountainBank merger and Nov. 2003 $161
million common stock offering
Assumptions are conservative and the upside is substantial
* Cost savings are identified and achievable
o CNB's efficiency ratio is currently 64% - eliminating 20% of the
costs brings the ratio down to 51%, which is still high for a
division
o 20% is consistent with what we have announced in past deals and is
below what we have achieved
* Revenue synergies identified but not included in deal impact analysis
o $225mm of CDs are coming due within the next twelve months with an
average rate of 2.80%
o Limited non-interest income activity despite markets with
tremendous potential
o Size constrains CNB from being the relationship bank to many of
its most attractive customers in metropolitan markets
o Two branches opened in 2001 in Jacksonville and St. Augustine are
now seasoned and ready for higher growth
o Two new branches just opened with significant upside are not
currently in the run-rate numbers
Transaction Pricing and
Financial Impact
Favorable Pricing
2003 Florida deals(2)
--------------------------------------------------------------------------------
TSFG/ BB&T/ Republic Synovus/ FNB/ Colonial/ Alabama Nat./
CNB Peoples Charter P.C.B. Indian River
- -----------------------------------------------------------------------------------------------------------------------------
Price to LTM EPS 23.4x(1) 44.6x 26.7x 22.7x 24.7x 21.0x
5-day premium 7.2% 7.6% NR NR NR NR
Price to book value 2.76x 2.03x 4.56x 3.22x 3.16x 2.89x
Price to tangible book value 3.08x 2.20x 4.56x 3.79x 4.16x 2.89x
Core deposit premium 20.4% 12.7% 37.2% 30.2% 22.8% 18.6%
- -----------------------------------------------------------------------------------------------------------------------------
Source: Company Filings, SNL Securities
Note: Price as of January 20, 2004
(1) Based on 2003 I/B/E/S EPS
(2) Florida whole company deals over $75 million
Financial Assumptions
* Due diligence has been completed
* Transaction targeted to close in July 2004
* Approximately $4.5 million pre-tax merger cost savings (20%); 100%
realized by 2005
o Salaries and benefits: $2.9 million
o Data processing / FFE: $1.3 million
o Other operating: $0.3 million
* Excludes impact of revenue enhancements
* Merger-related charges, including direct acquisition costs, of
approximately $12 million
* Core deposit premium of 2.5%; core deposit intangibles amortized over
10-year period using sum-of-the-years digits
* 5.5mm TSFG shares issued in the transaction assuming cancellation of
125,000 shares owned by TSFG (on a diluted basis)
Financial Impact
Pro forma Results (MM, except per share)
2004(1) 2005
Stand-alone net income
TSFG2 $116.2 $126.7
CNB Florida3 4.4 9.9
Pro forma net income $120.6 $136.5
Transaction adjustments
Add: merger cost savings $1.6 $3.3
Subtract: core deposit amortization 0.9 1.6
Adjusted pro forma GAAP net income $121.3 $138.2
Cash adjustments
New amortization $0.9 $1.6
Existing amortization 3.3 2.9
Adjusted pro forma cash net income $125.5 $142.8
Pro forma share count 63.1 65.8
Pro forma GAAP EPS $1.92 $2.10
Standalone GAAP EPS $1.93 $2.10
Pro forma cash EPS $1.99 $2.17
Standalone cash EPS $1.97 $2.15
- -------------------------------------------------------------------------------
GAAP accretion (0.2%) 0.0%
Cash accretion 1.0 1.0
- -------------------------------------------------------------------------------
1 CNB is only represented for the time period after the close of 6/30/04
2 Based on First Call consensus estimates of $1.93 in 2004 and $2.10 (using
consensus long-term growth) in 2005 multiplied by 60.4 million fully diluted
shares
3 Based on 4th quarter 2003 estimated EPS grown at an annualized rate of 12% for
2004 and 2005 multiplied by 6.4 million shares
Summary
Summary
* Significantly strengthens our deposit market share position in Florida:
o #20 to #7 in Northeast Florida
o #11 to #7 in Northeast/Central Florida
* Northeast Florida is a market with tremendous growth opportunities
* CNB is the largest independent bank located in Northeast Florida
* CNB shares our culture and focus on super community banking
* Accelerates our growth rate
* Consistent with our stated disciplined approach to acquisitions:
o Accretive to EPS in the first full year
o Advances 3-year goals
o In-market transaction with low execution risk
o Less than 10% of our asset size
o Neutral to capital ratios
o Conservative assumptions with meaningful upside
Appendix: CNB Overview
CNB Timeline and History
Year Event(s)
- --------------------------------------------------------------------------------
1986 * CNB National Bank founded in Lake City, Florida
1988 * Live Oak branch opens
1990 * Ft. White branch opens
* Surpass $60mm in assets
1992 * Acquires Macclenny branch from Anchor Savings
1993 * Acquires a Lake City and Live Oak branch from Anchor Savings
* Assets approach $150mm
1994 * Merger with Bradford Bankshares in Starke
1996 * Enters Gainesville through merger with Riherd Bank
* Assets approach $250mm
1998 * Adopted 5-year expansionary strategic plan
* IPO
1999 * Change holding company name to CNB Florida Bancshares, Inc.
* First Jacksonville branch opens
2000 * Opens new Gainesville branch
* Moves holding company headquarters to Jacksonsville
2001 * Opens new Jacksonville and St. Augustine branches; acquires 2
branches from Republic
2003 * Opens new Gainesville branch in the 3rd quarter and Glen St.
Mary branch in 4th quarter
Source: Company Filings
Organizational Chart
[Organization Chart Omitted]
Summary Market Share by County
Total
Florida Market Branch deposits in % of
County share rank count market ($mm) Market share total deposits
------- ---------- -------- ------------- ------------ --------------
Columbia 1 4 $175.4 34.1% 24.6%
Alachua 8 3 114.3 4.3 16.1
Duval 12 2 109.5 0.7 15.4
Suwannee 2 2 101.9 31.5 14.3
Baker 1 2 100.1 61.3 14.1
Bradford 2 1 55.8 38.6 7.8
Union 1 1 37.8 93.2 5.3
St. Johns 15 1 16.9 1.2 2.4
- -------------------------------------------------------------------------------------------------------
Note: Deposits and market share as of June 30, 2003, pro forma for acquisitions
(includes CNB branches opened in 3rd and 4th quarters of 2003)
Source: SNL Securities
Summary Balance Sheet
($000) 2000 2001 2002 9/30/03
---- ---- ---- -------
Balance Sheet
-------------
Cash and balances due $20,898 $20,677 $33,601 $31,734
Investment securities 40,696 37,063 49,682 90,588
Net loans 377,151 506,442 599,211 647,592
Intangible assets 1,033 6,802 6,056 5,512
Other assets 27,815 41,037 42,124 34,873
------- ------- ------- -------
Total assets 467,593 612,021 730,674 810,299
------- ------- ------- -------
Deposits 367,686 532,891 648,636 727,803
Other liabilities 55,271 32,461 31,117 28,277
------- ------- ------- -------
Total liabilities 422,957 565,352 679,753 756,080
------- ------- ------- -------
Total equity 44,636 46,669 50,921 54,219
------- ------- ------- -------
Total liabilities and equity $467,593 $612,021 $730,674 $810,299
------- ------- ------- -------
Source: Company Filings
Summary Income Statement
2000 2001 2002 9/30/03(1)
Interest income $32,061 $40,417 $41,398 $32,331
Interest expense 14,736 19,629 15,646 11,881
------- ------- ------- -------
Net interest income 17,325 20,788 25,752 20,450
Provision 1,350 2,050 2,375 1,650
Non-interest income 3,338 5,633 6,304 4,937
Non-interest expense 15,481 19,836 21,156 16,314
------- ------- ------- -------
Pre-tax income 3,832 4,535 8,525 7,423
Income taxes 1,325 1,594 3,141 2,716
------- ------- ------- -------
Net income $2,507 $2,941 $5,384 $4,707
Diluted shares (mm) 6.1 6.2 6.2 6.4
Diluted EPS $0.41 $0.48 $0.87 $0.74
Source: Company Filings
(1) Data is for nine-months only
Summary Asset Quality
Allowance 2000 2001 2002 9/30/03
--------- ---- ---- ---- -------
Beginning balance $2,671 $3,670 $5,205 $6,574
Provision 1,350 2,050 2,375 1,650
Charge-offs (524) (875) (1,232) (1,256)
Recoveries 173 250 226 80
Acquisitions 0 110 0 0
Ending balance $3,670 $5,205 $6,574 $7,048
Ratios 2000 2001 2002 9/30/03
------ ---- ---- ---- -------
NPAs/loans + OREO 0.39% 0.56% 1.33% 0.65%
Reserves to NPLs 258.6% 196.6% 81.7% 171.4%
Reserves to loans 0.97% 1.02% 1.09% 1.08%
NCOs to average loans 0.11% 0.14% 0.18% 0.25%
Source: Company Filings
THE SOUTH FINANCIAL GROUP, INC. [LOGO OMITTED]
Nasdaq/NM: TSFG
www.thesouthgroup.com
Contact: Mary Gentry, Director of Investor Relations
864.255.4919
mary.gentry@thesouthgroup.com