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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: January 17, 2005
The South Financial Group, Inc.
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(Exact name of registrant as specified in its charter)
South Carolina 0-15083 57-0824914
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
102 South Main Street, Greenville, South Carolina 29601
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (864) 255-7900
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Securities Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
On January 17, 2005, The South Financial Group, Inc. ("TSFG") issued a
press release (the "Press Release") announcing its results of operations for the
quarter and year ended December 31, 2004. A copy of the Press Release is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 2.06. Material Impairments.
TSFG currently holds 1,200,750 shares of various series of perpetual
preferred stock of the Federal National Mortgage Association ("Fannie Mae") and
260,000 shares of various series of perpetual preferred stock of the Federal
Home Loan Mortgage Corporation ("Freddie Mac"). The Fannie Mae and Freddie Mac
preferred stock is collectively referred to herein as the "Preferred Stock."
Prior to the actions described in this paragraph, TSFG had a book value in the
Preferred Stock of $72.4 million. At December 31, 2004, the Preferred Stock had
a current market value of $62.0 million. On January 14, 2005, the Chief
Financial Officer of TSFG determined that the Preferred Stock was impaired and
wrote down the value of the Preferred Stock to $62.0 million, which resulted in
a charge of $10.4 million.
In connection with the preparation of its 2004 financial statements,
TSFG assessed whether the impairment of the Preferred Stock was "other than
temporary" in accordance with Generally Accepted Accounting Principles. The
Company's assessment considered the duration and severity of the unrealized
loss, the financial condition and near term prospects of the issuers, and the
Company's intent and ability to hold the investments to allow for a recovery in
market value in a reasonable period of time. Based on this assessment, the
Company concluded that the impairment was other than temporary and recorded an
impairment charge of $10.4 million to reflect the investments at their fair
values.
This $10.4 million impairment is a non-cash charge and will not result
in future cash expenditures. The value of the Preferred Stock will be
periodically re-assessed in accordance with Generally Accepted Accounting
Principles.
Item 9.01. Financial Statements and Exhibits .
Exhibit No. Description
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99.1 Press Release dated January 17, 2005
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE SOUTH FINANCIAL GROUP, INC.
January 18, 2005 By: /w/ William P. Crawford, Jr.
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William P. Crawford, Jr.
Executive Vice President and
General Counsel
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