South Financial Group Inc 8-k (events Or Changes Between Quarterly Reports) 2009-02-23

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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 (Date of earliest event reported): February 23, 2009 The South Financial Group, Inc. (Exact name of registrant as specified in its charter)

0-15083 57-0824914 South Carolina (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number)

102 South Main Street, Greenville, South Carolina (Address of principal executive offices)

29601 (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:

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 7.01

Regulation FD Disclosure

Information presented by The South Financial Group, Inc. to investors is included herewith. Item 9.01

Exhibits

99.1

Investor Presentation, First Quarter 2009

Signature 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. February 23, 2009

By: /s/ William P. Crawford, Jr. William P. Crawford, Jr. Executive Vice President and General Counsel

-2-

Investor Presentation First Quarter 2009

Forward-Looking Statements and Non-GAAP Financial Information The forward-looking statements, as defined in the applicable federal securities laws, being made today are subject to risks

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Forward-Looking Statements and Non-GAAP Financial Information The forward-looking statements, as defined in the applicable federal securities laws, 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 TSFG’s return goals, loan growth, loan sales, customer funding growth, expense control, income tax rate, expected financial results for acquisitions, noninterest income, adequacy of capital and future capital levels, factors that will affect credit quality and the net interest margin, effectiveness of hedging strategies, risks and effects of changes in interest rates, effects of general economic and financial market conditions, and market performance. 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 that exclude the impact of certain nonoperating items. TSFG management uses these non-GAAP, or operating measures, in its analysis of TSFG’s performance. TSFG believes presentations of financial measures excluding the impact of certain items provide useful supplemental information and better reflect its core operating activities. Management uses operating measures, 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 operations. Operating measures adjust GAAP information to exclude the effects of nonoperating items, such as gains or losses on certain asset sales, early extinguishment of debt, employment contract buyouts, impairment charges, and other nonoperating expenses. The limitations associated with utilizing operating measures 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 and operating measures. These disclosures should not be considered an alternative to GAAP results. A reconciliation of GAAP results and non-GAAP measures is provided in the Quarterly Financial Data Supplement on our web site, www.thesouthgroup.com, in the Investor Relations section under Quarterly Earnings.

Company Overview TSFG AT A GLANCE $ in billions, as of 12/31/08

Total assets

$13.6

Loans held for investment

$10.2

Customer funding*

$8.0

Tangible shareholders’ equity

$1.4

Tangible equity to tangible assets

10.29%

Branch offices:

* Customer funding includes total deposits less brokered deposits plus customer sweeps. ** Mercantile Bank is a division of Carolina First Bank.

NC

27

SC

82

FL

71

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Company Overview TSFG AT A GLANCE $ in billions, as of 12/31/08

Total assets

$13.6

Loans held for investment

$10.2

Customer funding*

$8.0

Tangible shareholders’ equity

$1.4

Tangible equity to tangible assets

10.29%

Branch offices:

NC

27

SC

82

FL

71

* Customer funding includes total deposits less brokered deposits plus customer sweeps. ** Mercantile Bank is a division of Carolina First Bank.

Goal: Relationship Bank of Choice Building core banking relationships Focused on customer relationships with local decision-making Accessible and responsive Involved in our communities Target small businesses, middle market, and retail customers Built through multi-product relationships Located in attractive Southeastern markets with long-term growth potential Led by local Market Presidents in 12 markets Average of 24 years banking experience Local market and customer knowledge Local authority to make customer decisions

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Goal: Relationship Bank of Choice Building core banking relationships Focused on customer relationships with local decision-making Accessible and responsive Involved in our communities Target small businesses, middle market, and retail customers Built through multi-product relationships Located in attractive Southeastern markets with long-term growth potential Led by local Market Presidents in 12 markets Average of 24 years banking experience Local market and customer knowledge Local authority to make customer decisions

Footprint: Long-term Growth Potential PROJECTED HOUSEHOLD GROWTH (2008-2013) Company Name United Community Banks

14.2%

Cullen/Frost

11.8

Zions Bancorporation

11.1

SunTrust Banks

10.5

Colonial BancGroup

10.5

The South Financial Group

10.2

Synovus

8.8

BB&T

8.3

Whitney

7.0

BOK Financial

6.7

U.S. Median

6.5

Operating Peer Median

6.5

Regions

6.4

Trustmark

6.3

First Horizon

5.5

Growth estimates deposit weighted by county as of 6/30/08 SOURCE: SNL Financial

Household Growth (%)

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Footprint: Long-term Growth Potential PROJECTED HOUSEHOLD GROWTH (2008-2013) Household Growth (%)

Company Name United Community Banks

14.2%

Cullen/Frost

11.8

Zions Bancorporation

11.1

SunTrust Banks

10.5

Colonial BancGroup

10.5

The South Financial Group

10.2

Synovus

8.8

BB&T

8.3

Whitney

7.0

BOK Financial

6.7

U.S. Median

6.5

Operating Peer Median

6.5

Regions

6.4

Trustmark

6.3

First Horizon

5.5

Growth estimates deposit weighted by county as of 6/30/08 SOURCE: SNL Financial

Footprint: Geographic Diversification DEPOSITS BY STATE*

As of December 31, 2008

*Percent of total deposits by state as of December 31; reflects customer deposits after 12/31/04

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Footprint: Geographic Diversification DEPOSITS BY STATE*

As of December 31, 2008

*Percent of total deposits by state as of December 31; reflects customer deposits after 12/31/04

Proactive and Realistic Approach to Cycle $250 million Capital Raise in May 2008 Attracted sophisticated large investors Reduced quarterly common cash dividend to $0.01 per share; preserves $52 million annually in retained capital Strengthened overall Liquidity Position $4.4 billion unused secured capacity at 12/31/08 In May 2008, suspended indirect automobile lending in Florida Parent company has $210 million in cash at 12/31/08 to cover expected cash flow needs, debt service and existing dividends through 2012 with no support from banking subsidiary New Risk Management team Lynn Harton (former Chief Credit Officer of Regions/Union Planters) hired in June 2007; now President & CEO Significant number of senior leadership level hires from same team Large bank experience in turnaround situations

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Proactive and Realistic Approach to Cycle $250 million Capital Raise in May 2008 Attracted sophisticated large investors Reduced quarterly common cash dividend to $0.01 per share; preserves $52 million annually in retained capital Strengthened overall Liquidity Position $4.4 billion unused secured capacity at 12/31/08 In May 2008, suspended indirect automobile lending in Florida Parent company has $210 million in cash at 12/31/08 to cover expected cash flow needs, debt service and existing dividends through 2012 with no support from banking subsidiary New Risk Management team Lynn Harton (former Chief Credit Officer of Regions/Union Planters) hired in June 2007; now President & CEO Significant number of senior leadership level hires from same team Large bank experience in turnaround situations

Proactive and Realistic Approach (continued) Resulted in Early Identification of real estate credit issues New management processes reflected in risk grades identified growing level of problems Disclosed rising levels of nonaccruals in 1Q08, ahead of Southeastern Peers Increased loan loss reserve in 1Q08 to one of the highest levels in the Southeast; built to 2.45% at 12/31/08 Began loan sales (2Q08) earlier than peers Recognized by analysts as having a realistic and aggressive posture in managing credit risk $347 million of U.S. Treasury CPP Capital in December 2008 Lynn Harton named President & CEO in February 2009 Served as Interim since 11/13/08

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Proactive and Realistic Approach (continued) Resulted in Early Identification of real estate credit issues New management processes reflected in risk grades identified growing level of problems Disclosed rising levels of nonaccruals in 1Q08, ahead of Southeastern Peers Increased loan loss reserve in 1Q08 to one of the highest levels in the Southeast; built to 2.45% at 12/31/08 Began loan sales (2Q08) earlier than peers Recognized by analysts as having a realistic and aggressive posture in managing credit risk $347 million of U.S. Treasury CPP Capital in December 2008 Lynn Harton named President & CEO in February 2009 Served as Interim since 11/13/08

New Leadership - Initial Actions Organizational leadership changes New Florida leadership Executive Mgmt structure modified to clarify responsibilities/ownership Director of Commercial Banking Strategy created to drive support and strategy for largest business line All line bankers now reporting to the State Bank Presidents instead of operating in “silo” lines of business Intense focus on communication to clarify ONE Bank strategy Clarify target customers and methods of delivering value Changed incentive plans to support relationship bank strategy Created internal segmentation of “core/non-core” product segments to measure success of each piece of the business Quick moves to begin streamlining cost structure December 2008 staff reductions No 2008 bonus or 2009 merit increases for Executive Mgmt Team Corporate campus evaluation Initiated Phase 1 of Project NOW 8 workstreams, each with a full-time employee “owner” supported by outside project management experts Anticipated annual pre-tax operating benefits of $18-$20 million

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New Leadership - Initial Actions Organizational leadership changes New Florida leadership Executive Mgmt structure modified to clarify responsibilities/ownership Director of Commercial Banking Strategy created to drive support and strategy for largest business line All line bankers now reporting to the State Bank Presidents instead of operating in “silo” lines of business Intense focus on communication to clarify ONE Bank strategy Clarify target customers and methods of delivering value Changed incentive plans to support relationship bank strategy Created internal segmentation of “core/non-core” product segments to measure success of each piece of the business Quick moves to begin streamlining cost structure December 2008 staff reductions No 2008 bonus or 2009 merit increases for Executive Mgmt Team Corporate campus evaluation Initiated Phase 1 of Project NOW 8 workstreams, each with a full-time employee “owner” supported by outside project management experts Anticipated annual pre-tax operating benefits of $18-$20 million

Executive Management Team Name

Position

H. Lynn Harton

President and CEO

47

2007

BB&T/Union Planters/Regions

Tanya A. Butts

EVP, Chief Operations and Technology Officer

50

2006

Colonial/Chase Manhattan Mortgage/HomeSide Lending

William P. Crawford, Jr.

EVP, Chief Legal and Risk Officer

46

2002

Wyche, Burgess, Freeman & Parham

J. Ernesto “Ernie” Diaz

President, Florida

43

2007

Regions/Terrabank/Southeast Bank

Robert A. Edwards

EVP, Chief Credit Officer

44

2007

BB&T/Regions

Scott M. Frierson

President, North and South Carolina

45

1988

Citizens/Southern Bank

Christopher S. Gompper

EVP, Director Commercial Strategy

49

2005

AmSouth/Wells Fargo

James R. Gordon

Sr. EVP, Chief Financial Officer

43

2007

PwC/Union Planters/National Commerce

Christopher T. Holmes

Sr. EVP, Director Retail Strategy

45

2006

National Commerce/Trustmark

Mary A. Jeffrey

EVP, Chief Human Resources Officer

58

2002

Barnett Bank/NationsBank

Keith D. Williamson

EVP, General Auditor

54

2005

First Horizon

NOTE:

Shading indicates new role or added responsibilities effective in 4Q08.

Age

Year Joined TSFG Prior Experience

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Executive Management Team Name

Position

H. Lynn Harton

President and CEO

47

2007

BB&T/Union Planters/Regions

Tanya A. Butts

EVP, Chief Operations and Technology Officer

50

2006

Colonial/Chase Manhattan Mortgage/HomeSide Lending

William P. Crawford, Jr.

EVP, Chief Legal and Risk Officer

46

2002

Wyche, Burgess, Freeman & Parham

J. Ernesto “Ernie” Diaz

President, Florida

43

2007

Regions/Terrabank/Southeast Bank

Robert A. Edwards

EVP, Chief Credit Officer

44

2007

BB&T/Regions

Scott M. Frierson

President, North and South Carolina

45

1988

Citizens/Southern Bank

Christopher S. Gompper

EVP, Director Commercial Strategy

49

2005

AmSouth/Wells Fargo

James R. Gordon

Sr. EVP, Chief Financial Officer

43

2007

PwC/Union Planters/National Commerce

Christopher T. Holmes

Sr. EVP, Director Retail Strategy

45

2006

National Commerce/Trustmark

Mary A. Jeffrey

EVP, Chief Human Resources Officer

58

2002

Barnett Bank/NationsBank

Keith D. Williamson

EVP, General Auditor

54

2005

First Horizon

NOTE:

Age

Year Joined TSFG Prior Experience

Shading indicates new role or added responsibilities effective in 4Q08.

Strategic Objectives EXECUTION POINTS

OBJECTIVES

Credit Quality

Aggressively identify and resolve stressed portfolios Improve longer-term performance relative to peers

Funding

Focus on liquidity in near-term with longer-term view of improving NIM Lower funding costs longer-term by improving volume, mix, and cost of deposits

Capital Management

Continue to manage tangible equity ratio Maintain strong regulatory capital ratios

Expense Control

Control operating noninterest expenses, excluding environmental costs Launched Phase 1 of efficiency project with focus on both expense management and revenue opportunities

Noninterest Income

Increase through growth in deposits and wealth management revenues

Loan Growth

Focus on relationship-based lending to small and family-owned businesses in market Deemphasize noncore portfolios: indirect, lot loans, residential construction, shared national credits

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Strategic Objectives EXECUTION POINTS

OBJECTIVES

Credit Quality

Aggressively identify and resolve stressed portfolios Improve longer-term performance relative to peers

Funding

Focus on liquidity in near-term with longer-term view of improving NIM Lower funding costs longer-term by improving volume, mix, and cost of deposits

Capital Management

Continue to manage tangible equity ratio Maintain strong regulatory capital ratios

Expense Control

Control operating noninterest expenses, excluding environmental costs Launched Phase 1 of efficiency project with focus on both expense management and revenue opportunities

Noninterest Income

Increase through growth in deposits and wealth management revenues

Loan Growth

Focus on relationship-based lending to small and family-owned businesses in market Deemphasize noncore portfolios: indirect, lot loans, residential construction, shared national credits

Diversified Loan Portfolio Diversified portfolio By product and customer By geography

Loan Mix As of December 31, 2008

Mortgage* Home Equity C&I

Indirect Sales Finance Residential Construction

Commercial Dev elopment

OwnerOccupied

Income Property

($ in millions)

Total Loans Held for Inv estment

$10,192

* Mortgage includes Consumer Lot Loans and Other (Direct Retail and Unsecured Lines).

In-footprint focus Customers we know; markets we understand No broker mortgage/HE loans Minimal subprime exposure Suspended Florida indirect Disciplined approval and portfolio management processes Local credit officers Executive credit committee approval for largest relationships Special assets department for high risk loans Centralized consumer approval and collections Specialized credit support for our largest businesses CRE; Corporate Banking/SNC

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Diversified Loan Portfolio Diversified portfolio By product and customer By geography

Loan Mix As of December 31, 2008

Mortgage* Home Equity C&I

Indirect Sales Finance Residential Construction

Commercial Dev elopment

OwnerOccupied

Income Property

($ in millions)

Total Loans Held for Inv estment

$10,192

* Mortgage includes Consumer Lot Loans and Other (Direct Retail and Unsecured Lines).

In-footprint focus Customers we know; markets we understand No broker mortgage/HE loans Minimal subprime exposure Suspended Florida indirect Disciplined approval and portfolio management processes Local credit officers Executive credit committee approval for largest relationships Special assets department for high risk loans Centralized consumer approval and collections Specialized credit support for our largest businesses CRE; Corporate Banking/SNC

Credit Quality Results Residential construction and housing-related loans continue to be primary stress across entire footprint Reduced residential construction portfolio by $365 million, or 22%, since 3/31/08 Recession showing signs of impacting C&I and consumer loan categories NCOs $76.1 million, or 2.93% of average loans annualized (YTD 2.16%) Provision of $122.9 million, a $38.3 million increase from 3Q08 Exceeds NCOs by $46.9 million; reserve build of $121.2 million in 2008 Built reserve to 2.45% (from 1.97% at 9/30/08 and 1.26% at 12/31/07) NPAs increased to 4.10% of loans and foreclosed property NPLs held for investment increased to $355.6 million, up from $240.1 million at 9/30/08 Commercial NALs carried at 67% after deducting specific reserves Inflows reflect migration of existing watch loans (NAL inflows: $195 million for 4Q08, $104 million for 3Q08, $74 million for 2Q08, and $175 million for 1Q08) Gaining control of assets through foreclosure process Limited loan sale activity in 4Q08 due to less liquidity for buyers and continuing uncertainty regarding market outlook

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Credit Quality Results Residential construction and housing-related loans continue to be primary stress across entire footprint Reduced residential construction portfolio by $365 million, or 22%, since 3/31/08 Recession showing signs of impacting C&I and consumer loan categories NCOs $76.1 million, or 2.93% of average loans annualized (YTD 2.16%) Provision of $122.9 million, a $38.3 million increase from 3Q08 Exceeds NCOs by $46.9 million; reserve build of $121.2 million in 2008 Built reserve to 2.45% (from 1.97% at 9/30/08 and 1.26% at 12/31/07) NPAs increased to 4.10% of loans and foreclosed property NPLs held for investment increased to $355.6 million, up from $240.1 million at 9/30/08 Commercial NALs carried at 67% after deducting specific reserves Inflows reflect migration of existing watch loans (NAL inflows: $195 million for 4Q08, $104 million for 3Q08, $74 million for 2Q08, and $175 million for 1Q08) Gaining control of assets through foreclosure process Limited loan sale activity in 4Q08 due to less liquidity for buyers and continuing uncertainty regarding market outlook

Loan and Credit Quality Composition As of December 31, 2008, $ in millions

% of O/S Balance

Outstanding Balance

C&I

$ 2,723

27%

Owner-occupied CRE

1,271

12%

Completed income property

2,203

22%

Commercial development

608

Residential construction

NAL % of O/S Balance

Nonaccrual Loans HFI*

YTD Net Chargeoffs

30-day past due %

1.32%

$17.6

$42.1

1.01%

1.17%

1.8

3.5

1.19%

59

2.67%

10.3

15.2

1.32%

6%

29

4.85%

2.6

15.1

1.45%

1,263

12%

142

11.24%

24.5

102.6

4.93%

Indirect – sales finance

636

6%

1

0.11%

5.0

14.1

2.21%

Home equity

813

8%

8

1.01%

2.4

6.1

1.42%

Mortgage**

580

6%

59

10.17%

12.1

24.1

9.46%

95

1%

--

0.26%

0.0

1.0

3.04%

$10,192

100%

$223.4

2.22%

Other** Total Loans HFI

$36

QTD Net Chargeoffs

15

$349

3.42%

$76.1

9/30/08

$10,300

$238

2.30%

$75.4

1.16%

6/30/08

$10,476

$219

2.09%

$47.0

0.84%

3/31/08

$10,276

$222

2.16%

$25.0

1.14%

HFI = Held for Investment; 30-day past due % of outstanding balance excludes nonaccrual loans. See page 9 of the Quarterly Financial Data Supplement for Commercial Real Estate loans by product type and by geography. Commercial Development includes Commercial A&D and Commercial Construction. Residential Construction includes Residential A&D, Residential Construction, Residential Condo, and Undeveloped Land. * Nonaccrual loans exclude nonaccrual loans held for sale of $16.5 million. ** Mortgage includes Consumer Lot Loans. Other includes Direct Retail and Unsecured Lines.

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Loan and Credit Quality Composition As of December 31, 2008, $ in millions

% of O/S Balance

Outstanding Balance

C&I

NAL % of O/S Balance

Nonaccrual Loans HFI*

$ 2,723

27%

Owner-occupied CRE

1,271

12%

Completed income property

2,203

22%

Commercial development

608

Residential construction

YTD Net Chargeoffs

30-day past due %

1.32%

$17.6

$42.1

1.01%

1.17%

1.8

3.5

1.19%

59

2.67%

10.3

15.2

1.32%

6%

29

4.85%

2.6

15.1

1.45%

1,263

12%

142

11.24%

24.5

102.6

4.93%

Indirect – sales finance

636

6%

1

0.11%

5.0

14.1

2.21%

Home equity

813

8%

8

1.01%

2.4

6.1

1.42%

Mortgage**

580

6%

59

10.17%

12.1

24.1

9.46%

95

1%

--

0.26%

0.0

1.0

3.04%

$10,192

100%

$223.4

2.22%

Other** Total Loans HFI

$36

QTD Net Chargeoffs

15

$349

3.42%

$76.1

9/30/08

$10,300

$238

2.30%

$75.4

1.16%

6/30/08

$10,476

$219

2.09%

$47.0

0.84%

3/31/08

$10,276

$222

2.16%

$25.0

1.14%

HFI = Held for Investment; 30-day past due % of outstanding balance excludes nonaccrual loans. See page 9 of the Quarterly Financial Data Supplement for Commercial Real Estate loans by product type and by geography. Commercial Development includes Commercial A&D and Commercial Construction. Residential Construction includes Residential A&D, Residential Construction, Residential Condo, and Undeveloped Land. * Nonaccrual loans exclude nonaccrual loans held for sale of $16.5 million. ** Mortgage includes Consumer Lot Loans. Other includes Direct Retail and Unsecured Lines.

Credit Quality Trends - Commercial $ in millions

C&I

Owner-occupied CRE

Completed income

Commercial development

Residential construction

Outstanding Balance

Nonaccrual Loans HFI

NAL % of O/S Balance

QTD Net Charge-offs

30-day past due %

4Q08

$ 2,723

$36

1.32%

$17.6

1.01%

3Q08

$2,824

$28

0.97%

$12.7

0.44%

2Q08

$2,891

$28

0.98%

$4.4

0.50%

4Q08

$1,271

$15

1.17%

$1.8

1.19%

3Q08

$1,207

$7

0.58%

$0.8

0.79%

2Q08

$1,184

$5

0.43%

$0.4

0.43%

4Q08

$2,203

$59

2.67%

$10.3

1.32%

3Q08

$2,084

$22

1.05%

$1.9

1.15%

2Q08

$2,037

$17

0.84%

$2.6

0.21%

4Q08

$608

$29

4.85%

$2.6

1.45%

3Q08

$601

$11

1.87%

$2.5

0.27%

2Q08

$575

$3

0.57%

$8.7

0.86%

4Q08

$1,263

$142

11.24%

$24.5

4.93%

3Q08

$1,410

$127

9.03%

$44.6

1.76%

2Q08

$1,550

$131

8.47%

$22.3

1.33%

HFI = Held for Investment; 30-day past due % of outstanding balance excludes nonaccrual loans.

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Credit Quality Trends - Commercial $ in millions

C&I

Owner-occupied CRE

Completed income

Commercial development

Residential construction

Outstanding Balance

Nonaccrual Loans HFI

NAL % of O/S Balance

QTD Net Charge-offs

30-day past due %

4Q08

$ 2,723

$36

1.32%

$17.6

1.01%

3Q08

$2,824

$28

0.97%

$12.7

0.44%

2Q08

$2,891

$28

0.98%

$4.4

0.50%

4Q08

$1,271

$15

1.17%

$1.8

1.19%

3Q08

$1,207

$7

0.58%

$0.8

0.79%

2Q08

$1,184

$5

0.43%

$0.4

0.43%

4Q08

$2,203

$59

2.67%

$10.3

1.32%

3Q08

$2,084

$22

1.05%

$1.9

1.15%

2Q08

$2,037

$17

0.84%

$2.6

0.21%

4Q08

$608

$29

4.85%

$2.6

1.45%

3Q08

$601

$11

1.87%

$2.5

0.27%

2Q08

$575

$3

0.57%

$8.7

0.86%

4Q08

$1,263

$142

11.24%

$24.5

4.93%

3Q08

$1,410

$127

9.03%

$44.6

1.76%

2Q08

$1,550

$131

8.47%

$22.3

1.33%

HFI = Held for Investment; 30-day past due % of outstanding balance excludes nonaccrual loans.

Credit Quality Trends - Consumer $ in millions

Indirect–sales finance

Home equity

Mortgage**

Other**

Outstanding Balance

Nonaccrual Loans HFI

NAL % of O/S Balance

QTD Net Charge-offs

30-day past due %

4Q08

$636

$1

0.11%

$5.0

2.21%

3Q08

$680

$1

0.10%

$3.4

1.69%

2Q08

$729

$1

0.07%

$3.3

1.46%

4Q08

$813

$8

1.01%

$2.4

1.42%

3Q08

$784

$5

0.68%

$2.6

0.71%

2Q08

$781

$5

0.60%

$0.8

0.74%

4Q08

$580

$59

10.17%

$12.1

9.46%

3Q08

$610

$36

5.92%

$6.9

4.64%

2Q08

$629

$28

4.51%

$3.8

3.21%

4Q08

$95

$ --

0.26%

$0.0

3.04%

3Q08

$100

$1

0.94%

$0.0

1.84%

2Q08

$100

$ --

0.20%

$1.0

1.95%

HFI = Held for Investment; 30-day past due % of outstanding balance excludes nonaccrual loans. ** Mortgage includes Consumer Lot Loans. Other includes Direct Retail and Unsecured Lines.

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Credit Quality Trends - Consumer $ in millions

Indirect–sales finance

Home equity

Mortgage**

Other**

Outstanding Balance

Nonaccrual Loans HFI

NAL % of O/S Balance

QTD Net Charge-offs

30-day past due %

4Q08

$636

$1

0.11%

$5.0

2.21%

3Q08

$680

$1

0.10%

$3.4

1.69%

2Q08

$729

$1

0.07%

$3.3

1.46%

4Q08

$813

$8

1.01%

$2.4

1.42%

3Q08

$784

$5

0.68%

$2.6

0.71%

2Q08

$781

$5

0.60%

$0.8

0.74%

4Q08

$580

$59

10.17%

$12.1

9.46%

3Q08

$610

$36

5.92%

$6.9

4.64%

2Q08

$629

$28

4.51%

$3.8

3.21%

4Q08

$95

$ --

0.26%

$0.0

3.04%

3Q08

$100

$1

0.94%

$0.0

1.84%

2Q08

$100

$ --

0.20%

$1.0

1.95%

HFI = Held for Investment; 30-day past due % of outstanding balance excludes nonaccrual loans. ** Mortgage includes Consumer Lot Loans. Other includes Direct Retail and Unsecured Lines.

Residential Construction by Geography As of December 31, 2008, $ in millions Outstanding Balance

% of Resid. Constr.

NAL % of O/S Balance

Nonaccrual Loans HFI

QTD Net Chargeoffs

30-day past due %

YTD Net Chargeoffs

Residential Construction: FL undeveloped land

$252

20%

145

11%

FL residential construction

59

FL residential condo

FL residential A&D

Total FL, 12/31/08 9/30/08

Total NC,12/31/08 9/30/08

Total SC, 12/31/08 9/30/08

Overall Total, 12/31/08

$51

20.20%

$2.4

$19.7

11.88%

16

11.21%

7.9

35.6

1.29%

5%

9

16.16%

2.1

5.5

1.46%

78

6%

14

17.61%

6.2

28.0

0.00%

$534

42%

16.94%

$18.6

$88.8

6.13%

$619

44%

$96

15.47%

$39.4

$290

23%

$30

10.45%

$3.9

$306

22%

$21

6.93%

$2.7

$439

35%

$22

4.85%

$2.0

$485

34%

$10

2.14%

$2.5

$1,263

100%

$142

11.24%

$24.5

$90

1.87%

$8.3

2.10% 3.63%

$5.5

5.35% 0.45%

$102.6

4.93%

9/30/08

$1,410

$127

9.03%

$44.6

1.76%

6/30/08

$1,550

$131

8.47%

$22.3

1.33%

3/31/08

$1,628

$134

8.23%

$11.2

1.58%

30-day past due % of outstanding balance excludes nonaccrual loans. See page 9 of the Quarterly Financial Data Supplement for detail for NC and SC.

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Residential Construction by Geography As of December 31, 2008, $ in millions Outstanding Balance

% of Resid. Constr.

NAL % of O/S Balance

Nonaccrual Loans HFI

QTD Net Chargeoffs

30-day past due %

YTD Net Chargeoffs

Residential Construction: FL undeveloped land

$252

20%

20.20%

$2.4

$19.7

11.88%

145

11%

16

11.21%

7.9

35.6

1.29%

FL residential construction

59

5%

9

16.16%

2.1

5.5

1.46%

FL residential condo

78

6%

14

17.61%

6.2

28.0

0.00%

$534

42%

16.94%

$18.6

$88.8

6.13%

$619

44%

$96

15.47%

$39.4

$290

23%

$30

10.45%

$3.9

$306

22%

$21

6.93%

$2.7

$439

35%

$22

4.85%

$2.0

$485

34%

$10

2.14%

$2.5

$1,263

100%

$142

11.24%

$24.5

FL residential A&D

Total FL, 12/31/08 9/30/08

Total NC,12/31/08 9/30/08

Total SC, 12/31/08 9/30/08

Overall Total, 12/31/08

$51

$90

1.87%

$8.3

2.10% 3.63%

$5.5

5.35% 0.45%

$102.6

4.93%

9/30/08

$1,410

$127

9.03%

$44.6

1.76%

6/30/08

$1,550

$131

8.47%

$22.3

1.33%

3/31/08

$1,628

$134

8.23%

$11.2

1.58%

30-day past due % of outstanding balance excludes nonaccrual loans. See page 9 of the Quarterly Financial Data Supplement for detail for NC and SC.

Commercial Nonaccruals – Net Balance $ in millions Unpaid Principal (1)

C&I

-

Cumulativ e Net Chargeoffs

=

(2)

12/31/08 Nonaccrual Loan Balance

-

12/31/08 Specific Reserv e(3)

=

Net Balance Less Specific Reserv e

Net Balance as % of Unpaid Principal

$49

$13

$36

$8

$28

57%

Owner-occupied CRE

17

2

15

4

11

65%

Completed income property

71

12

59

5

54

76%

Commercial development

38

9

29

8

22

57%

Residential construction

177

35

142

19

122

69%

Total Commercial

$352

$71

$281

$44

$237

67%

(1) Outstanding balance at default (2) Typically charge-down at nonaccrual to approximately 80% of most recent appraised value (3) Additional specific reserves are established as necessary based on estimated disposal costs, estimated holding period and current market and economic conditions; recognized as charge-offs when realized. However, these amounts do not include the qualitative components within the overall allowance for credit loans.

Consistent with 9/30/08

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Commercial Nonaccruals – Net Balance $ in millions Unpaid Principal

Cumulativ e Net Charge-

-

(1)

offs

C&I

=

(2)

12/31/08 Nonaccrual Loan Balance

-

12/31/08 Specific Reserv e(3)

=

Net Balance Less Specific Reserv e

Net Balance as % of Unpaid Principal

$49

$13

$36

$8

$28

57%

Owner-occupied CRE

17

2

15

4

11

65%

Completed income property

71

12

59

5

54

76%

Commercial development

38

9

29

8

22

57%

Residential construction

177

35

142

19

122

69%

Total Commercial

$352

$71

$281

$44

$237

67%

Consistent with 9/30/08

(1) Outstanding balance at default (2) Typically charge-down at nonaccrual to approximately 80% of most recent appraised value (3) Additional specific reserves are established as necessary based on estimated disposal costs, estimated holding period and current market and economic conditions; recognized as charge-offs when realized. However, these amounts do not include the qualitative components within the overall allowance for credit loans.

Indirect – Sales Finance As of December 31, 2008, $ in millions

Total, $636 million or 6% of loans By Auto Make Other 29%

Toyota 29%

Dodge 7% Ford 7%

In 5/08, ceased production in Florida Effective 1/09, offered only through full relationship dealerships in NC and SC

Honda 10% Kia 9%

Summary Statistics

Chevrolet 9%

30-day Past Dues, By Auto Make (Top 10) O/S$

30-day %

Toyota

$183

1.99%

Honda

62

2.09%

Chevrolet

60

2.94%

Kia

56

1.77%

Ford

47

2.10%

Dodge

42

2.78%

Nissan

25

2.20%

Jeep

19

0.98%

Chrysler

18

2.35%

Hyundai

18

2.55%

Top 10

$530

2.16%

NC/SC

FL

Total

12/08 Balance

$255

$381

$636

12/07 Balance

$235

$464

$699

Orig FICO

729

716

722

Jan 09 FICO

710

686

695

New %

61%

70%

66%

Used %

39%

30%

34%

Domestic %

52%

34%

41%

Foreign %

48%

66%

59%

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Indirect – Sales Finance As of December 31, 2008, $ in millions

Total, $636 million or 6% of loans By Auto Make Other 29%

Toyota 29%

Dodge 7%

In 5/08, ceased production in Florida Effective 1/09, offered only through full relationship dealerships in NC and SC

Honda 10%

Ford 7%

Summary Statistics

Chevrolet 9%

Kia 9%

30-day Past Dues, By Auto Make (Top 10) O/S$

30-day %

Toyota

$183

1.99%

Honda

62

2.09%

Chevrolet

60

2.94%

Kia

56

1.77%

Ford

47

2.10%

Dodge

42

2.78%

Nissan

25

2.20%

Jeep

19

0.98%

Chrysler

18

2.35%

Hyundai

18

2.55%

Top 10

$530

2.16%

NC/SC

FL

Total

12/08 Balance

$255

$381

$636

12/07 Balance

$235

$464

$699

Orig FICO

729

716

722

Jan 09 FICO

710

686

695

New %

61%

70%

66%

Used %

39%

30%

34%

Domestic %

52%

34%

41%

Foreign %

48%

66%

59%

Home Equity Lines/Loans As of December 31, 2008, $ in millions

Total, $813 million or 8% of loans By Geography

Originated by TSFG sales force in-market; no broker loans Strong FICO scores

Other, $41 5%

Conservative LTV position and usage amounts

NC, $135 17% SC, $354 43%

Not pushed as a growth product

FL, $283 35%

Summary Statistics By Vintage 2008, $112 14% 2004 or before $294, 36%

2007, $155 19%

2006, $131 16%

2005, $121 15%

Home Equity Portfolio = HE Line and HE Loan portfolios Geography based on customer address

Lines

Loans

Total

Balance $

$627

$185

$812

Orig FICO

730

711

727

Jan 09 FICO

724

701

718

1stLien %

33%

81%

44%

2ndLien %

67%

19%

56%

Orig WAvg LTV %

70%

66%

69%

WAvg Util %

70%

NA

NA

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Home Equity Lines/Loans As of December 31, 2008, $ in millions

Originated by TSFG sales force in-market; no broker loans

Total, $813 million or 8% of loans By Geography

Strong FICO scores

Other, $41 5%

Conservative LTV position and usage amounts

NC, $135 17% SC, $354 43%

Not pushed as a growth product

FL, $283 35%

Summary Statistics By Vintage 2008, $112 14% 2004 or before $294, 36%

2007, $155 19%

2006, $131 16%

2005, $121 15%

Lines

Loans

Total

Balance $

$627

$185

$812

Orig FICO

730

711

727

Jan 09 FICO

724

701

718

1stLien %

33%

81%

44%

2ndLien %

67%

19%

56%

Orig WAvg LTV %

70%

66%

69%

WAvg Util %

70%

NA

NA

Home Equity Portfolio = HE Line and HE Loan portfolios Geography based on customer address

Mortgage Banking Portfolio As of December 31, 2008, $ in millions 4Q08

3Q08

2Q08

1Q08

Balance

$290.7

$282.3

$267.9

$251.8

30-89 DPD

7.90%

1.89%

0.90%

6.22%

90+ DPD

3.41%

2.21%

0.69%

1.87%

NAL %

5.59%

2.94%

3.04%

1.56%

NAL $

$16.3

$8.3

$8.1

$3.9

Balance

$225.5

$249.1

$266.2

$291.4

30-89 DPD

6.34%

3.84%

2.09%

5.34%

90+ DPD

1.84%

2.34%

2.00%

1.03%

NAL %

13.20%

6.12%

4.07%

2.89%

NAL $

$29.9

$15.2

$10.8

$8.4

Balance

$64.0

$78.8

$95.7

$113.3

30-89 DPD

5.22%

1.70%

5.86%

2.91%

90+ DPD

0.00%

0.00%

0.00%

0.00%

NAL %

20.02%

15.98%

9.85%

4.11%

NAL $

$12.8

$12.6

$9.4

$4.7

SIVA* Alt-A:

Lot Loans:

Construction Perm:

Mortgage Portfolio = Mortgage, Consumer Lot Loans, and Construction Perm products (excludes HE Loan) * SIVA = Stated Income Verified Assets

Remains a small portion of entire portfolio $580 million 6% of total loans HFI NAL increase of $23 million from Q3 to Q4 Increases from higher risk portions of the portfolio (Lot Loans and Construction Perm) Reduced balances in Lot Loans and Construction Perm products by $136 million in 2008 Consumer restructured loans of $3.6 million (included in NPLs) from working with borrowers to do loan modifications

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Mortgage Banking Portfolio As of December 31, 2008, $ in millions 4Q08

3Q08

2Q08

1Q08

Balance

$290.7

$282.3

$267.9

$251.8

30-89 DPD

7.90%

1.89%

0.90%

6.22%

90+ DPD

3.41%

2.21%

0.69%

1.87%

NAL %

5.59%

2.94%

3.04%

1.56%

NAL $

$16.3

$8.3

$8.1

$3.9

Balance

$225.5

$249.1

$266.2

$291.4

30-89 DPD

6.34%

3.84%

2.09%

5.34%

90+ DPD

1.84%

2.34%

2.00%

1.03%

NAL %

13.20%

6.12%

4.07%

2.89%

NAL $

$29.9

$15.2

$10.8

$8.4

Balance

$64.0

$78.8

$95.7

$113.3

30-89 DPD

5.22%

1.70%

5.86%

2.91%

90+ DPD

0.00%

0.00%

0.00%

0.00%

NAL %

20.02%

15.98%

9.85%

4.11%

NAL $

$12.8

$12.6

$9.4

$4.7

SIVA* Alt-A:

Lot Loans:

Construction Perm:

Remains a small portion of entire portfolio $580 million 6% of total loans HFI NAL increase of $23 million from Q3 to Q4 Increases from higher risk portions of the portfolio (Lot Loans and Construction Perm) Reduced balances in Lot Loans and Construction Perm products by $136 million in 2008 Consumer restructured loans of $3.6 million (included in NPLs) from working with borrowers to do loan modifications

Mortgage Portfolio = Mortgage, Consumer Lot Loans, and Construction Perm products (excludes HE Loan) * SIVA = Stated Income Verified Assets

Net Interest Margin Net Interest Margin (FTE)

Decrease 4Q08 vs. 3Q08 Increase in nonaccrual interest reversals: -4 bp Maturing prime-based swaps: -4 bp Balance sheet mix: -3 bp 1Q09 Headwind Limitations for passingthrough the recent sharp Federal funds rate cuts given the low absolute level of interest rates on nonmaturity deposits and impact from credit issues

Basis Point Change: TSFG

-3

-2

+17

-16

-11

Peer

-3

-10

+3

-5

+5

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Net Interest Margin Net Interest Margin (FTE)

Decrease 4Q08 vs. 3Q08 Increase in nonaccrual interest reversals: -4 bp Maturing prime-based swaps: -4 bp Balance sheet mix: -3 bp 1Q09 Headwind Limitations for passingthrough the recent sharp Federal funds rate cuts given the low absolute level of interest rates on nonmaturity deposits and impact from credit issues

Basis Point Change: TSFG

-3

-2

+17

-16

-11

Peer

-3

-10

+3

-5

+5

Customer Funding $ in millions

12/31/08 Balance

9/30/08 Balance

LQ % Change

$ Change

Customer deposits: Noninterest-bearing

$1,041

$1,023

$18

1.8%

Interest-bearing

1,079

1,091

(12)

(1.1)%

Money market

1,834

1,806

28

(1.6)%

190

150

40

26.7%

Time deposits < $100,000

1,864

1,840

24

1.3%

Time deposits $100,000 or more

1,489

1,525

(36)

(2.4)%

7,497

7,435

62

0.8%

493

552

(59)

(10.7)%

$7,990

$7,987

$3

-- %

Savings accounts

Customer deposits Customer sweep accounts Total customer funding

Customer funding reflects total deposits excluding brokered deposits plus customer sweeps. Customer deposits reflect seasonal increase in public funds.

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Customer Funding $ in millions

12/31/08 Balance

9/30/08 Balance

LQ % Change

$ Change

Customer deposits: Noninterest-bearing

$1,041

$1,023

$18

1.8%

Interest-bearing

1,079

1,091

(12)

(1.1)%

Money market

1,834

1,806

28

(1.6)%

190

150

40

26.7%

Time deposits < $100,000

1,864

1,840

24

1.3%

Time deposits $100,000 or more

1,489

1,525

(36)

(2.4)%

7,497

7,435

62

0.8%

493

552

(59)

(10.7)%

$7,990

$7,987

$3

-- %

Savings accounts

Customer deposits Customer sweep accounts Total customer funding

Customer funding reflects total deposits excluding brokered deposits plus customer sweeps. Customer deposits reflect seasonal increase in public funds.

Wholesale Borrowings As of December 31, 2008, $ in millions

By Maturity 1 year or less Fed funds purchased Fed Reserve and T,T&L Repurchase agreements

>1 year

Unused Secured capacity

Total

Parent Company Liquidity Strong parent company liquidity position

$ 67

$ --

$67

$ --

1,054

--

1,054

2,670

--

200

200

851

Commercial paper

13

--

13

--

FHLB advances

30

203

233

864

1,190

719

1,909

--

--

274

274

--

$2,354

$1,396

$3,750

$4,385

Brokered CDs Other* Total wholesale borrowings

Parent company cash of $210 million at 12/31/08 No debt maturities until 2033 Expected annual dividends of $43 million (preferred and common) Cash sufficient to satisfy all fixed obligations over the next 4 years

$4.7 billion at 9/30/08

* No bank ($68 million) exposure to capital markets rollover risk for debt obligations until 2012

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Wholesale Borrowings As of December 31, 2008, $ in millions

By Maturity 1 year or less Fed funds purchased Fed Reserve and T,T&L Repurchase agreements

>1 year

Unused Secured capacity

Total

Parent Company Liquidity Strong parent company liquidity position

$ 67

$ --

$67

$ --

1,054

--

1,054

2,670

--

200

200

851

Commercial paper

13

--

13

--

FHLB advances

30

203

233

864

1,190

719

1,909

--

--

274

274

--

$2,354

$1,396

$3,750

$4,385

Brokered CDs Other* Total wholesale borrowings

Parent company cash of $210 million at 12/31/08 No debt maturities until 2033 Expected annual dividends of $43 million (preferred and common) Cash sufficient to satisfy all fixed obligations over the next 4 years

$4.7 billion at 9/30/08

* No bank ($68 million) exposure to capital markets rollover risk for debt obligations until 2012

Capital Position Capital Purchase Program (U.S. Treasury Investment) Received $347 million on December 5, 2008 Issued warrant to purchase 10.1 million shares at $5.15 per share ($19.6 million allocated value) Effective dividend yield of 6.3% Utilized $260 million for capital injection into Carolina First Bank Kept $87 at parent company for liquidity Temporary use of proceeds to enhance liquidity (increase cash reserves and pay-down wholesale borrowings) pending opportunity to lend Tangible common equity to tangible assets of 6.05% Down 56 bp from 12/31/07 while absorbing $344.6 million of credit losses in 2008 Does not include Mandatorily Convertible Preferred Stock (MCPS) of $238.7 million, or 179 basis points reflecting conversion Believe MCPS should be viewed as key component of common equity since automatically converts on May 1, 2011; conversion is assumed when looking at common tangible book value per share Approximately $60 million has already converted to date, including $48.7 million subsequent to year-end (which includes conversion involving issuance of 2.5 million common shares as inducement to convert)

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Capital Position Capital Purchase Program (U.S. Treasury Investment) Received $347 million on December 5, 2008 Issued warrant to purchase 10.1 million shares at $5.15 per share ($19.6 million allocated value) Effective dividend yield of 6.3% Utilized $260 million for capital injection into Carolina First Bank Kept $87 at parent company for liquidity Temporary use of proceeds to enhance liquidity (increase cash reserves and pay-down wholesale borrowings) pending opportunity to lend Tangible common equity to tangible assets of 6.05% Down 56 bp from 12/31/07 while absorbing $344.6 million of credit losses in 2008 Does not include Mandatorily Convertible Preferred Stock (MCPS) of $238.7 million, or 179 basis points reflecting conversion Believe MCPS should be viewed as key component of common equity since automatically converts on May 1, 2011; conversion is assumed when looking at common tangible book value per share Approximately $60 million has already converted to date, including $48.7 million subsequent to year-end (which includes conversion involving issuance of 2.5 million common shares as inducement to convert)

Capital Position $ in millions

9/30/08 Actual

12/31/08 Actual*

Capital in Excess of Well Capitalized Minimum After-tax $

Well Capitalized Minimum

THE SOUTH FINANCIAL GROUP Tangible common equity to tangible assets

6.06%

6.05%

Tier 1 risk-based

11.18%

12.86%

6%

$808

Total risk-based

12.68%

14.35%

10%

$512

9.70%

11.22%

5%

$839

Leverage

Assuming conversion of Mandatorily Convertible Preferred:*** Tangible common equity to tangible assets

7.94%

7.84%

Common tangible book value per share

$9.42

$9.40

Tier 1 risk-based

9.82%

10.88%

6%

$573

Total risk-based

11.55%

12.59%

10%

$304

8.54%

9.49%

5%

$604

CAROLINA FIRST BANK

Leverage

* Estimated ** For illustrative purposes only *** Assumes full conversion of $239 million of Mandatorily Convertible Preferred at $6.50 per common share fixed conversion ratio (automatically converts into common stock on May 1, 2011) and excludes CPP Preferred

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Capital Position $ in millions

9/30/08 Actual

Capital in Excess of Well Capitalized Minimum After-tax $

Well Capitalized Minimum

12/31/08 Actual*

THE SOUTH FINANCIAL GROUP Tangible common equity to tangible assets

6.06%

6.05%

Tier 1 risk-based

11.18%

12.86%

6%

$808

Total risk-based

12.68%

14.35%

10%

$512

9.70%

11.22%

5%

$839

Leverage

Assuming conversion of Mandatorily Convertible Preferred:*** Tangible common equity to tangible assets

7.94%

7.84%

Common tangible book value per share

$9.42

$9.40

Tier 1 risk-based

9.82%

10.88%

6%

$573

Total risk-based

11.55%

12.59%

10%

$304

8.54%

9.49%

5%

$604

CAROLINA FIRST BANK

Leverage

* Estimated ** For illustrative purposes only *** Assumes full conversion of $239 million of Mandatorily Convertible Preferred at $6.50 per common share fixed conversion ratio (automatically converts into common stock on May 1, 2011) and excludes CPP Preferred

Noninterest Expenses $ in millions

$ Change 4Q08 Salaries and employee benefits

3Q08

4Q08 vs. 3Q08

4Q07

4Q08 vs. 4Q07

$45.9

$46.9

$42.4

$(1.0)

$3.5

(2.0)

(2.3)

(3.6)

0.3

1.6

Loan and foreclosed asset*

4.6

4.5

1.5

0.1

3.1

FDIC insurance*

3.4

3.0

1.5

0.4

1.9

17.4

16.8

15.4

0.6

2.0

4.8

4.6

3.8

0.2

1.0

15.7

13.9

14.8

1.8

0.9

91.8

89.7

79.4

2.1

12.4

237.6

--

--

237.6

237.6

Employment contracts

9.6

4.6

--

5.0

9.6

Other

2.8

(0.1)

1.3

$341.8

$94.2

$80.7

FAS 91 Salary Deferral (included in Salaries)*

Occupancy and FF&E Professional fees Other Operating noninterest expenses Goodwill impairment

Total noninterest expenses

*Approximately half of the $12.4 million year-over-year increase relates to the current environment – higher loan and foreclosed asset and FDIC insurance expense and lower loan origination salary deferrals. For 2009, expect higher FDIC insurance, loan and foreclosed asset expense, and non-operating charges related to the corporate campus under construction (evaluation of alternatives underway). Note: Other includes (gain) loss on early extinguishment of debt ($1.7 million for 4Q08, $(125,000) for 3Q08, and $499,000 for 4Q07), loss on derivative collateral ($1.1 million for 4Q08), and Visa-related litigation ($881,000 for 4Q07).

2.9 $247.6

1.5 $261.1

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Noninterest Expenses $ in millions

$ Change 4Q08 Salaries and employee benefits

3Q08

4Q08 vs. 3Q08

4Q07

4Q08 vs. 4Q07

$45.9

$46.9

$42.4

$(1.0)

$3.5

(2.0)

(2.3)

(3.6)

0.3

1.6

Loan and foreclosed asset*

4.6

4.5

1.5

0.1

3.1

FDIC insurance*

3.4

3.0

1.5

0.4

1.9

17.4

16.8

15.4

0.6

2.0

4.8

4.6

3.8

0.2

1.0

15.7

13.9

14.8

1.8

0.9

91.8

89.7

79.4

2.1

12.4

237.6

--

--

237.6

237.6

Employment contracts

9.6

4.6

--

5.0

9.6

Other

2.8

(0.1)

1.3

$341.8

$94.2

$80.7

FAS 91 Salary Deferral (included in Salaries)*

Occupancy and FF&E Professional fees Other Operating noninterest expenses Goodwill impairment

Total noninterest expenses

2.9

1.5

$247.6

$261.1

*Approximately half of the $12.4 million year-over-year increase relates to the current environment – higher loan and foreclosed asset and FDIC insurance expense and lower loan origination salary deferrals. For 2009, expect higher FDIC insurance, loan and foreclosed asset expense, and non-operating charges related to the corporate campus under construction (evaluation of alternatives underway). Note: Other includes (gain) loss on early extinguishment of debt ($1.7 million for 4Q08, $(125,000) for 3Q08, and $499,000 for 4Q07), loss on derivative collateral ($1.1 million for 4Q08), and Visa-related litigation ($881,000 for 4Q07).

Noninterest Income $ in millions

$ Change 4Q08 Customer fee income*

3Q08

4Q08 vs. 3Q08

4Q07

$13.2

$14.8

Wealth management income*

6.3

7.2

7.5

(0.9)

(1.2)

Mortgage banking income

1.1

0.9

1.3

0.2

(0.2)

Merchant processing income, net

0.7

0.9

0.8

Bank-owned life insurance**

3.9

2.9

3.1

(0.3)

(0.2)

--

3.2

2.9

28.1

Gain/(loss) on certain derivative activities Other Operating noninterest income

$14.8 $(1.6)

4Q08 vs. 4Q07

(0.2)

$(1.6)

(0.1)

1.0

0.8

(0.1)

(0.3)

2.8

0.3

0.4

29.4

30.3

(1.3)

(2.2)

1.6

(0.7)

(1.3)

2.3

2.9

$29.7

$28.7

$29.0

$1.0

$0.7

Non-operating items: Gain/(loss) on securities Total noninterest income

*Together, approximately 70% of operating noninterest income. Reflect impacts from economic downturn, such as fewer customer transactions and lower asset valuations. **4Q08 includes $1.3 million for death proceeds partially offset by $645,000 in related compensation expense (included in operating noninterest expenses).

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Noninterest Income $ in millions

$ Change 4Q08 Customer fee income*

3Q08

4Q08 vs. 3Q08

4Q07

$13.2

$14.8

Wealth management income*

6.3

7.2

7.5

(0.9)

(1.2)

Mortgage banking income

1.1

0.9

1.3

0.2

(0.2)

Merchant processing income, net

0.7

0.9

0.8

Bank-owned life insurance**

3.9

2.9

3.1

(0.3)

(0.2)

--

3.2

2.9

28.1

Gain/(loss) on certain derivative activities Other Operating noninterest income

$14.8 $(1.6)

4Q08 vs. 4Q07 $(1.6)

(0.2)

(0.1)

1.0

0.8

(0.1)

(0.3)

2.8

0.3

0.4

29.4

30.3

(1.3)

(2.2)

1.6

(0.7)

(1.3)

2.3

2.9

$29.7

$28.7

$29.0

$1.0

$0.7

Non-operating items: Gain/(loss) on securities Total noninterest income

*Together, approximately 70% of operating noninterest income. Reflect impacts from economic downturn, such as fewer customer transactions and lower asset valuations. **4Q08 includes $1.3 million for death proceeds partially offset by $645,000 in related compensation expense (included in operating noninterest expenses).

Expectations for 2009 Operating environment and results will remain challenging for all of 2009 Credit losses for first half of 2009 similar to last half of 2008; provisioning depends on continuing economic developments Continued headwinds from loan collection costs and FDIC insurance Potential one-time charges arising from ultimate corporate campus decision and continuing evaluation of small level of other investments for impairment Continue to evaluate the realizability of the net deferred tax asset throughout 2009 for both book and regulatory purposes Near-term pressure on margin in first half of year, followed by expansion of margin as pricing initiatives on both the loan and deposit side begin to show results Positive impact from Project NOW and other expense initiatives Potential for FDIC deposit transactions if market overlap promotes efficiency and product set improves customer funding measures Focus on cross sell; customer satisfaction; other measures that support our strategic positioning

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Expectations for 2009 Operating environment and results will remain challenging for all of 2009 Credit losses for first half of 2009 similar to last half of 2008; provisioning depends on continuing economic developments Continued headwinds from loan collection costs and FDIC insurance Potential one-time charges arising from ultimate corporate campus decision and continuing evaluation of small level of other investments for impairment Continue to evaluate the realizability of the net deferred tax asset throughout 2009 for both book and regulatory purposes Near-term pressure on margin in first half of year, followed by expansion of margin as pricing initiatives on both the loan and deposit side begin to show results Positive impact from Project NOW and other expense initiatives Potential for FDIC deposit transactions if market overlap promotes efficiency and product set improves customer funding measures Focus on cross sell; customer satisfaction; other measures that support our strategic positioning

Positioned to Emerge Stronger Mission to be best relationship bank in each of our markets Leverage strategic footprint and its long-term growth potential Deep and experienced management team Risk management talent and processes Maintain strong balance sheet throughout credit environment Capital position Liquidity management Higher loan loss reserves Relationship lending with focus on deposit balances

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Positioned to Emerge Stronger Mission to be best relationship bank in each of our markets Leverage strategic footprint and its long-term growth potential Deep and experienced management team Risk management talent and processes Maintain strong balance sheet throughout credit environment Capital position Liquidity management Higher loan loss reserves Relationship lending with focus on deposit balances

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Appendix – List of Operating Peers Associated (ASBC) BOK Financial (BOKF) Colonial (CNB) Commerce (CBSH) Cullen/Frost (CFR) Fulton (FULT) Synovus (SNV) Trustmark (TRMK) United Community (UCBI) Valley National (VLY)

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Appendix – List of Operating Peers Associated (ASBC) BOK Financial (BOKF) Colonial (CNB) Commerce (CBSH) Cullen/Frost (CFR) Fulton (FULT) Synovus (SNV) Trustmark (TRMK) United Community (UCBI) Valley National (VLY)

TSFG’s Footprint: Household Growth PROJECTED HOUSEHOLD GROWTH (2008-2013)

TSFG Weighted Average* 10.2%

U.S. Median

6.5%

*Deposit weighted by county based on TSFG deposits in each market SOURCE: SNL Financial

NOTE: The regions highlighted are complete MSAs except for Greater South Charlotte, which is York County, SC (Rock Hill), Hendersonville, NC, which is Henderson County, and West Palm Beach, which is Palm Beach County.

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TSFG’s Footprint: Household Growth PROJECTED HOUSEHOLD GROWTH (2008-2013)

TSFG Weighted Average* 10.2%

U.S. Median

6.5%

*Deposit weighted by county based on TSFG deposits in each market SOURCE: SNL Financial

NOTE: The regions highlighted are complete MSAs except for Greater South Charlotte, which is York County, SC (Rock Hill), Hendersonville, NC, which is Henderson County, and West Palm Beach, which is Palm Beach County.

Current as of 2/19/09

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Current as of 2/19/09