The South Financial Group Reports First Quarter Earnings

Apr 17, 2001, 01:00 ET from The South Financial Group

    GREENVILLE, S.C., April 17 /PRNewswire/ --
     The South Financial Group, Inc. (Nasdaq-NM: TSFG) today reported first
 quarter 2001 earnings totaling $8.6 million, or $0.20 per diluted share.
 Reported earnings for the first quarter last year were $10.4 million, or $0.24
 per diluted share, which included a $2.3 million pre-tax gain associated with
 the sale of equity investments.  In the first quarter of 2000, net income,
 excluding other items, totaled $9.2 million, or $0.21 per diluted share.
     For the first quarter of 2001, The South Financial Group's earnings,
 excluding other items, totaled $7.6 million, or $0.18 per diluted share.
 During the first quarter of 2001, The South Financial Group recorded $821,000
 in pre-tax gains on equity investments, primarily associated with an
 electronic transaction processing company, and several other items.  For the
 first quarter of 2001, The South Financial Group's "cash basis" earnings,
 excluding other items, totaled $9.0 million, or $0.21 per diluted share, $0.03
 higher than earnings, excluding other items.  "Cash basis" results exclude the
 impact of intangible assets and related amortization expense.
     Mack I. Whittle, Jr., President and Chief Executive Officer of The South
 Financial Group, said, "We are very pleased to report first quarter earnings
 in line with consensus analyst expectations.  We experienced a better than
 expected improvement in our net interest margin, which was up 20 basis points
 from the fourth quarter.  Our strong loan growth continued with average loans
 up 12% compared to the first quarter last year.  Net loan charge-offs of 0.39%
 were consistent with our expectations."
     Loans held for investment totaled $3.7 billion at March 31, 2001.  During
 March 2001, the Company securitized $112 million of mortgage loans and sold
 approximately $80 million of these securities.  Adjusting for the
 securitization, loans held for investment increased 14% from last year and an
 annualized 12% from December 31, 2000.  The Company's Florida markets fueled
 approximately 40% of the loan growth.
     Mortgage origination fees, which totaled approximately $1.0 million for
 the first quarter of 2001, were enhanced by the hiring of additional mortgage
 originators and the falling interest rate environment.  The Company continued
 its efforts to realign its mortgage banking strategy to place more emphasis on
 mortgage originations.  In connection with these on-going efforts, the Company
 securitized approximately $112 million in mortgage loans (as discussed above)
 and sold mortgage servicing rights.  These transactions increased mortgage
 banking income by approximately $1.3 million.  Mortgage banking income for the
 first quarter of 2001 also included a $280,000 writedown in the value of
 capitalized mortgage servicing rights due to falling interest rates.
     Whittle continued, "Our primary focus for 2001 is to realize the earnings
 associated with our outstanding geographic footprint.  In the past few years,
 we focused on building significant market share in South Carolina's most
 attractive markets and on building a critical presence in Florida's
 Jacksonville and Orlando markets.  We've accomplished that.  Our goal is to
 increase earnings per share in 2001 as we build momentum and execute our
 operating plans."
     Stephen L. Chryst, Chief Operating Officer of Carolina First Bank and
 former Chief Executive Officer of Anchor Financial Corporation, which merged
 with The South Financial Group in June 2000, commented, "Together, we have
 built one of the most attractive geographic franchises in the banking
 industry.  We have combined our unique strengths and occupy competitive
 positions in the regions that we serve.  We are now intensely focused on
 realizing the value of our franchise and demonstrating the value in tangible
 terms on the bottom line."
      In December 2000, the Board of Directors of The South Financial Group
 authorized a stock repurchase program for up to 2 million shares, or
 approximately 5% of its outstanding shares.  The South Financial Group has
 repurchased approximately 907,000 shares in connection with this program and
 may continue to repurchase shares on an opportunistic basis.
     The South Financial Group, headquartered in Greenville, South Carolina, is
 a financial services company with $5.3 billion in total assets and 94 branch
 offices in South Carolina, Florida, and North Carolina.  It operates two
 subsidiary banks: Carolina First Bank and Citrus 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.
 Citrus Bank operates in Florida, principally in the Jacksonville and Orlando
 markets.  The South Financial Group's common stock trades on the Nasdaq
 National Market under the symbol TSFG.  The South Financial Group's press
 releases are available by telefax at no charge by calling PR Newswire's
 Company News On-Call at 800-758-5804, extension 144553.  Press releases along
 with additional information may also be found at The South Financial Group's
 web site: http://www.thesouthgroup.com.
     The South Financial Group will conduct a conference call today at 10:00
 a.m. (ET) to discuss the earnings results, as well as update the outlook for
 2001, and answer analyst questions.  To participate, please call
 1-888-405-5393 or 1-212-547-0144 using the access code "The South."  A 48-hour
 rebroadcast of the call will be available beginning at approximately noon (ET)
 until April 21, 2001.  Access to the rebroadcast is available via
 1-888-756-0563 or 1-402-998-0775.
     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.  However, such performance involves risks and
 uncertainties (including uncertainties relating to the realization of cost
 savings) 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 the Company's actual results, see
 the Company's Quarterly Report on Form 10-K for the year ended December 31,
 2000.
 
                     The South Financial Group and Subsidiaries
                                Financial Highlights
                  ($ in thousands, except share data) (Unaudited)
 
                                            For the Three Months Ended
                                                   March 31,             %
                                                  2001          2000   Change
 
     Income Statement
     Interest income                           $100,521      $90,711    10.8 %
     Interest expense                            57,575       46,291    24.4
     Net interest income                         42,946       44,420    (3.3)
     Net interest income (fully tax
      equivalent)                                43,433       44,747    (2.9)
     Provision for loan losses                    4,508        3,945    14.3
     Noninterest income:
           Service charges on deposit
            accounts                              4,368        4,261     2.5
           Mortgage banking income                2,419        1,344    80.0
           Fees for investment services           1,243        1,358    (8.5)
           Gain on sale of securities               482           71   578.9
           Gain (loss) on disposition of
            assets and liabilities                 (262)          --     n/m
           Gain on equity investments               821        2,278   (64.0)
           Other                                  3,844        3,402    13.0
              Total noninterest income           12,915       12,714     1.6
     Noninterest expenses:
           Personnel expense                     18,694       19,058    (1.9)
           Occupancy                              3,663        3,638     0.7
           Furniture and equipment                3,398        2,681    26.7
           Amortization of intangibles            1,570        1,608    (2.4)
           Restructuring and merger-related
            recoveries                             (413)          --     n/m
           System conversion costs                   --          380     n/m
           Impairment loss from write-down
            of assets                               215           --     n/m
           Other                                 11,031       10,304     7.1
              Total noninterest expenses         38,158       37,669     1.3
     Income taxes                                 4,750        5,117    (7.2)
     Minority interest in consolidated
      subsidiary, net of tax                         95           --     n/m
     Cumulative effect of change in
      accounting principle, net of tax              282           --     n/m
     Net income                                  $8,632      $10,403   (17.0)%
 
     Net income per common share:
           Basic                                   0.20         0.24   (16.7)
           Diluted                                 0.20         0.24   (16.7)
     Cash dividends declared per common
      share                                        0.11         0.10    10.0
     Average common shares outstanding:
           Basic                             42,424,190   42,944,844    (1.2)
           Diluted                           43,117,270   43,629,026    (1.2)
 
     Net Income Excluding Other Items
     Other items, (income)/expense:
           Gain on sale of securities              (482)         (71)
           Loss on disposition of assets
            and liabilities                         262           --
           Gain on equity investments              (821)      (2,278)
           Restructuring and merger-related
            recoveries                             (413)          --
           System conversion costs                   --          380
           Impairment loss from write-down
            of assets                               215            -
           Related income taxes                     446          768
           Cumulative effect of change in
            accounting principle, net of
            tax                                    (282)          --
                 Other items,
                  (income)/expense (after-
                  tax)                           (1,075)      (1,201)
     Excluding other items:
           Net income                            $7,557       $9,202   (17.9)%
           Net income per common share -
            diluted                                0.18         0.21   (14.3)
 
 
                                           For the Three Months Ended
                                                      March 31,           %
                                                 2001         2000     Change
 
     Performance Ratios (Annualized)
     Excluding other items:
           Return on average assets              0.58 %        0.76 %  (23.7)%
           Return on average equity              6.28          7.64    (17.8)
     Net interest margin (fully tax
      equivalent)                                3.75          4.21    (10.9)
 
     Cash Basis Performance (A)
     Excluding other items:
           Net income                          $8,960       $10,636    (15.8)%
           Net income per common share -
            diluted                              0.21          0.24    (12.5)
           Return on average tangible
            assets                               0.70 %        0.91 %  (23.1)
           Return on average tangible
            equity                               9.56         11.55    (17.2)
 
     Selected Average Balances
     Total assets                          $5,217,482    $4,813,472      8.4 %
     Loans-net of unearned income           3,749,320     3,336,302     12.4
     Securities                               906,952       905,012      0.2
     Total earning assets                   4,696,023     4,275,279      9.8
     Interest-bearing liabilities           4,222,974     3,752,423     12.5
     Total deposits                         3,802,461     3,545,742      7.2
     Shareholders' equity                     481,327       481,580     (0.1)
 
     (A) Excludes the amortization of intangibles from earnings and goodwill
     and acquisition intangibles from assets and equity.
 
     Note: Earning assets, ROA, ROE and net interest margin include the net
     unrealized securities gain.  All prior periods have been restated
                     to include this unrealized gain.
 
                                                                     % Change
                             March 31,    December 31,   March 31,  1st Quarter
                                2001          2000          2000      2001/2000
 
     Balance Sheet (Period End)
     Total assets            $5,277,752    $5,220,554    $4,868,932      8.4 %
     Loans held for sale         17,974        12,630        39,502    (54.5)
     Loans held for
      investment - net of
      unearned income         3,716,450     3,722,552     3,368,269     10.3
     Allowance for loan
      losses                     43,741        43,024        35,862     22.0
     Securities                 964,538       899,544       931,611      3.5
     Total earning assets     4,730,211     4,661,922     4,373,871      8.1
     Goodwill and
      acquisition
      intangibles               105,501       107,254       112,337     (6.1)
     Total deposits           3,816,380     3,894,662     3,607,753      5.8
     Shareholders' equity       477,992       468,653       486,209     (1.7)
 
     Tier 1 capital to total
      assets (leverage ratio)      6.96 %        6.93 %        7.83 %
     Risk-based capital
      ratios:
          Tier 1 capital           8.58          8.63          9.86
          Total capital           10.61         10.37         11.73
 
     Book value per common
      share                      $11.24        $11.04        $11.31     (0.6)%
     Shares outstanding at
      quarter end            42,526,005    42,460,358    42,999,809     (1.1)
 
     Credit Quality
     Nonaccrual loans           $20,156       $18,413       $14,914     35.1 %
     Restructured loans              --            --            --       --
          Nonperforming
           loans                 20,156        18,413        14,914     35.1
     Nonperforming loans as
      a % of loans                 0.54 %        0.49 %        0.44 %
     Allowance for loan
      losses as a %
      nonperforming loans           217           234           240
     Allowance for loan
      losses as a % loans
      held for investment          1.18          1.16          1.06
     Other real estate owned     $4,455        $3,101        $3,372     32.1
          Nonperforming
           assets                24,611        21,514        18,286     34.6
     Nonperforming assets as
      a % of loans and other real
      estate owned                 0.66 %        0.58 %        0.54 %
     Loans past due 90 days
      still accruing
      interest                  $11,780       $10,682        $7,008     68.1
     Net loan charge-offs:
          QTR ended              $3,690        $3,895        $1,839    100.7
     Net loan charge-offs as
      a % of avg. loans
      (annualized):
          QTR ended                0.39 %        0.42 %        0.22 %
 
     Operations Data
     Banking offices                 94            94           108    (13.0)%
     ATMs                            78            78            85     (8.2)
     Employees (full-time
      equivalent)                 1,361         1,374         1,539    (11.6)
     Internet banking
      customers                  20,153        18,427         8,277    143.5
     Bank CaroLine (Internet
      Bank) only:
          Number of accounts      7,598         9,270         3,431    121.5
          Total deposits       $191,779      $221,190       $99,616     92.5
 
     Stock Performance (At
      Quarter End)
     Market price per share
      of common stock            $14.25        $13.25        $13.13      8.5 %
     Indicated annual
      dividend                     0.44          0.44          0.40     10.0
     Dividend yield                3.09 %        3.32 %        3.05 %
     Price/book ratio              1.27 x        1.20 x        1.16 x
     Market capitalization     $605,996      $562,600      $564,587      7.3
 
 
     Note: Earning assets, ROA, ROE and net interest margin include the net
     unrealized securities gain.  All prior periods have been restated
                  to include this unrealized gain.
 
 
                                                 Quarter Ended     1st Qtr 2001
                                            March 31,  December 31,     vs.
                                                2001         2000  4th Qtr 2000
 
     Earnings and Dividends
     Net interest income                       $42,946      $40,910      5.0 %
     Provision for loan losses                   4,508        4,242      6.3
     Noninterest income                         11,874       12,468     (4.8)
     Gains (losses) on asset sales               1,041        7,139    (85.4)
     Noninterest expenses                       38,571       43,093    (10.5)
     Restructuring and merger-related
      costs                                       (413)       1,423   (129.0)
     Net income                                  8,632        8,617      0.2
     Net income, excluding other items (B)       7,557        7,552      0.1
     Net income, cash basis (B)                  8,960        8,957      0.0
     Per share - basic:
        Net income                               $0.20        $0.20       --
        Net income, excluding other items (B)     0.18         0.18       --
        Net income, cash basis  (B)               0.21         0.21       --
     Per share - diluted:
        Net income                               $0.20        $0.20       --
        Net income, excluding other items (B)     0.18         0.18       --
        Net income, cash basis  (B)               0.21         0.21       --
     Cash dividends declared per share            0.11         0.11       --
     Return on average assets  (B)                0.58         0.58       --
     Return on average equity  (B)                6.28         6.33     (0.8)
     Net interest margin (fully tax
      equivalent)                                 3.75         3.55      5.6
 
     Balance Sheet (Period End)
     Total assets                           $5,277,752   $5,220,554      1.1 %
     Loans held for investment, net of
      unearned income                        3,716,450    3,722,552     (0.2)
     Securities                                964,538      899,544      7.2
     Goodwill and acquisition intangibles      105,501      107,254     (1.6)
     Total deposits                          3,816,380    3,894,662     (2.0)
     Shareholders' equity                      477,992      468,653      2.0
     Total market capitalization               605,996      562,600      7.7
     Book value per common share                 11.24        11.04      1.8
     Market price per share of common
      stock                                      14.25        13.25      7.5
 
     Asset Quality Summary
     Nonperforming assets                      $24,611      $21,514     14.4 %
     Allowance for loan losses                  43,741       43,024      1.7
     Nonperforming assets as a % of loans
      and other real estate owned                 0.66         0.58
     Net charge-offs as a % of average
      loans (annualized)                          0.39         0.42
     Allowance for loan losses to loans           1.18         1.16
 
     Operations Data
     Branch offices                                 94           94       --  %
     ATMs                                           78           78       --
     Employees (full-time equivalent)            1,361        1,374     (0.9)
 
 
      (B)  Calculated using net income excluding gains (losses) on asset sales,
      restructuring and merger-related costs, and other items.
 
     Note: Earning assets, ROA, ROE and net interest margin include the net
     unrealized securities gain.  All prior periods have been restated
                  to include this unrealized gain.
 
                                                        Quarter Ended
 
                                            September 30,  June 30,   March 31,
                                                 2000        2000       2000
 
     Earnings and Dividends
     Net interest income                       $43,944     $45,355     $44,420
     Provision for loan losses                   6,709       8,482       3,945
     Noninterest income                          9,908      10,245      10,365
     Gains (losses) on asset sales              (3,511)        385       2,349
     Noninterest expenses                       42,475      37,424      37,669
     Restructuring and merger-related costs      7,851      19,924          --
     Net income                                 (3,082)     (8,949)     10,403
     Net income, excluding other items (B)       7,517       8,884       9,202
     Net income, cash basis (B)                  8,936      10,327      10,636
     Per share - basic:
        Net (loss) income                        (0.07)      (0.21)       0.24
        Net income, excluding other items
         (B)                                      0.18        0.21        0.21
        Net income, cash basis  (B)               0.21        0.24        0.25
     Per share - diluted:
        Net (loss) income                        (0.07)      (0.21)       0.24
        Net income, excluding other items
         (B)                                      0.17        0.20        0.21
        Net income, cash basis  (B)               0.21        0.24        0.24
     Cash dividends declared per share            0.10        0.10        0.10
     Return on average assets  (B)                0.59        0.72        0.76
     Return on average equity  (B)                6.34        7.37        7.64
     Net interest margin (fully tax
      equivalent)                                 3.90        4.22        4.21
 
     Balance Sheet (Period End)
     Total assets                           $5,128,115  $5,086,132  $4,868,932
     Loans held for investment, net of
      unearned income                        3,665,705   3,572,745   3,368,269
     Securities                                904,159     918,114     931,611
     Goodwill and acquisition intangibles      108,962     110,675     112,337
     Total deposits                          3,758,957   3,705,296   3,607,753
     Shareholders' equity                      476,917     473,136     486,209
     Total market capitalization               544,790     624,325     564,587
     Book value per common share                 11.06       10.99       11.31
     Market price per share of common stock      12.63       14.50       13.13
 
     Asset Quality Summary
     Nonperforming assets                      $22,823     $21,731     $18,286
     Allowance for loan losses                  42,847      41,742      35,862
     Nonperforming assets as a % of loans
      and other real estate owned                 0.62        0.61        0.54
     Net charge-offs as a % of average
      loans (annualized)                          0.61        0.30        0.22
     Allowance for loan losses to loans           1.17        1.17        1.06
 
     Operations Data
     Branch offices                                 96         108         108
     ATMs                                           86          85          85
     Employees (full-time equivalent)            1,348       1,481       1,539
 
      (B)  Calculated using net income excluding gains (losses) on asset sales,
      restructuring and merger-related costs, and other items.
 
     Note: Earning assets, ROA, ROE and net interest margin include the net
     unrealized securities gain.  All prior periods have been restated
                  to include this unrealized gain.
 
 

SOURCE The South Financial Group
    GREENVILLE, S.C., April 17 /PRNewswire/ --
     The South Financial Group, Inc. (Nasdaq-NM: TSFG) today reported first
 quarter 2001 earnings totaling $8.6 million, or $0.20 per diluted share.
 Reported earnings for the first quarter last year were $10.4 million, or $0.24
 per diluted share, which included a $2.3 million pre-tax gain associated with
 the sale of equity investments.  In the first quarter of 2000, net income,
 excluding other items, totaled $9.2 million, or $0.21 per diluted share.
     For the first quarter of 2001, The South Financial Group's earnings,
 excluding other items, totaled $7.6 million, or $0.18 per diluted share.
 During the first quarter of 2001, The South Financial Group recorded $821,000
 in pre-tax gains on equity investments, primarily associated with an
 electronic transaction processing company, and several other items.  For the
 first quarter of 2001, The South Financial Group's "cash basis" earnings,
 excluding other items, totaled $9.0 million, or $0.21 per diluted share, $0.03
 higher than earnings, excluding other items.  "Cash basis" results exclude the
 impact of intangible assets and related amortization expense.
     Mack I. Whittle, Jr., President and Chief Executive Officer of The South
 Financial Group, said, "We are very pleased to report first quarter earnings
 in line with consensus analyst expectations.  We experienced a better than
 expected improvement in our net interest margin, which was up 20 basis points
 from the fourth quarter.  Our strong loan growth continued with average loans
 up 12% compared to the first quarter last year.  Net loan charge-offs of 0.39%
 were consistent with our expectations."
     Loans held for investment totaled $3.7 billion at March 31, 2001.  During
 March 2001, the Company securitized $112 million of mortgage loans and sold
 approximately $80 million of these securities.  Adjusting for the
 securitization, loans held for investment increased 14% from last year and an
 annualized 12% from December 31, 2000.  The Company's Florida markets fueled
 approximately 40% of the loan growth.
     Mortgage origination fees, which totaled approximately $1.0 million for
 the first quarter of 2001, were enhanced by the hiring of additional mortgage
 originators and the falling interest rate environment.  The Company continued
 its efforts to realign its mortgage banking strategy to place more emphasis on
 mortgage originations.  In connection with these on-going efforts, the Company
 securitized approximately $112 million in mortgage loans (as discussed above)
 and sold mortgage servicing rights.  These transactions increased mortgage
 banking income by approximately $1.3 million.  Mortgage banking income for the
 first quarter of 2001 also included a $280,000 writedown in the value of
 capitalized mortgage servicing rights due to falling interest rates.
     Whittle continued, "Our primary focus for 2001 is to realize the earnings
 associated with our outstanding geographic footprint.  In the past few years,
 we focused on building significant market share in South Carolina's most
 attractive markets and on building a critical presence in Florida's
 Jacksonville and Orlando markets.  We've accomplished that.  Our goal is to
 increase earnings per share in 2001 as we build momentum and execute our
 operating plans."
     Stephen L. Chryst, Chief Operating Officer of Carolina First Bank and
 former Chief Executive Officer of Anchor Financial Corporation, which merged
 with The South Financial Group in June 2000, commented, "Together, we have
 built one of the most attractive geographic franchises in the banking
 industry.  We have combined our unique strengths and occupy competitive
 positions in the regions that we serve.  We are now intensely focused on
 realizing the value of our franchise and demonstrating the value in tangible
 terms on the bottom line."
      In December 2000, the Board of Directors of The South Financial Group
 authorized a stock repurchase program for up to 2 million shares, or
 approximately 5% of its outstanding shares.  The South Financial Group has
 repurchased approximately 907,000 shares in connection with this program and
 may continue to repurchase shares on an opportunistic basis.
     The South Financial Group, headquartered in Greenville, South Carolina, is
 a financial services company with $5.3 billion in total assets and 94 branch
 offices in South Carolina, Florida, and North Carolina.  It operates two
 subsidiary banks: Carolina First Bank and Citrus 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.
 Citrus Bank operates in Florida, principally in the Jacksonville and Orlando
 markets.  The South Financial Group's common stock trades on the Nasdaq
 National Market under the symbol TSFG.  The South Financial Group's press
 releases are available by telefax at no charge by calling PR Newswire's
 Company News On-Call at 800-758-5804, extension 144553.  Press releases along
 with additional information may also be found at The South Financial Group's
 web site: http://www.thesouthgroup.com.
     The South Financial Group will conduct a conference call today at 10:00
 a.m. (ET) to discuss the earnings results, as well as update the outlook for
 2001, and answer analyst questions.  To participate, please call
 1-888-405-5393 or 1-212-547-0144 using the access code "The South."  A 48-hour
 rebroadcast of the call will be available beginning at approximately noon (ET)
 until April 21, 2001.  Access to the rebroadcast is available via
 1-888-756-0563 or 1-402-998-0775.
     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.  However, such performance involves risks and
 uncertainties (including uncertainties relating to the realization of cost
 savings) 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 the Company's actual results, see
 the Company's Quarterly Report on Form 10-K for the year ended December 31,
 2000.
 
                     The South Financial Group and Subsidiaries
                                Financial Highlights
                  ($ in thousands, except share data) (Unaudited)
 
                                            For the Three Months Ended
                                                   March 31,             %
                                                  2001          2000   Change
 
     Income Statement
     Interest income                           $100,521      $90,711    10.8 %
     Interest expense                            57,575       46,291    24.4
     Net interest income                         42,946       44,420    (3.3)
     Net interest income (fully tax
      equivalent)                                43,433       44,747    (2.9)
     Provision for loan losses                    4,508        3,945    14.3
     Noninterest income:
           Service charges on deposit
            accounts                              4,368        4,261     2.5
           Mortgage banking income                2,419        1,344    80.0
           Fees for investment services           1,243        1,358    (8.5)
           Gain on sale of securities               482           71   578.9
           Gain (loss) on disposition of
            assets and liabilities                 (262)          --     n/m
           Gain on equity investments               821        2,278   (64.0)
           Other                                  3,844        3,402    13.0
              Total noninterest income           12,915       12,714     1.6
     Noninterest expenses:
           Personnel expense                     18,694       19,058    (1.9)
           Occupancy                              3,663        3,638     0.7
           Furniture and equipment                3,398        2,681    26.7
           Amortization of intangibles            1,570        1,608    (2.4)
           Restructuring and merger-related
            recoveries                             (413)          --     n/m
           System conversion costs                   --          380     n/m
           Impairment loss from write-down
            of assets                               215           --     n/m
           Other                                 11,031       10,304     7.1
              Total noninterest expenses         38,158       37,669     1.3
     Income taxes                                 4,750        5,117    (7.2)
     Minority interest in consolidated
      subsidiary, net of tax                         95           --     n/m
     Cumulative effect of change in
      accounting principle, net of tax              282           --     n/m
     Net income                                  $8,632      $10,403   (17.0)%
 
     Net income per common share:
           Basic                                   0.20         0.24   (16.7)
           Diluted                                 0.20         0.24   (16.7)
     Cash dividends declared per common
      share                                        0.11         0.10    10.0
     Average common shares outstanding:
           Basic                             42,424,190   42,944,844    (1.2)
           Diluted                           43,117,270   43,629,026    (1.2)
 
     Net Income Excluding Other Items
     Other items, (income)/expense:
           Gain on sale of securities              (482)         (71)
           Loss on disposition of assets
            and liabilities                         262           --
           Gain on equity investments              (821)      (2,278)
           Restructuring and merger-related
            recoveries                             (413)          --
           System conversion costs                   --          380
           Impairment loss from write-down
            of assets                               215            -
           Related income taxes                     446          768
           Cumulative effect of change in
            accounting principle, net of
            tax                                    (282)          --
                 Other items,
                  (income)/expense (after-
                  tax)                           (1,075)      (1,201)
     Excluding other items:
           Net income                            $7,557       $9,202   (17.9)%
           Net income per common share -
            diluted                                0.18         0.21   (14.3)
 
 
                                           For the Three Months Ended
                                                      March 31,           %
                                                 2001         2000     Change
 
     Performance Ratios (Annualized)
     Excluding other items:
           Return on average assets              0.58 %        0.76 %  (23.7)%
           Return on average equity              6.28          7.64    (17.8)
     Net interest margin (fully tax
      equivalent)                                3.75          4.21    (10.9)
 
     Cash Basis Performance (A)
     Excluding other items:
           Net income                          $8,960       $10,636    (15.8)%
           Net income per common share -
            diluted                              0.21          0.24    (12.5)
           Return on average tangible
            assets                               0.70 %        0.91 %  (23.1)
           Return on average tangible
            equity                               9.56         11.55    (17.2)
 
     Selected Average Balances
     Total assets                          $5,217,482    $4,813,472      8.4 %
     Loans-net of unearned income           3,749,320     3,336,302     12.4
     Securities                               906,952       905,012      0.2
     Total earning assets                   4,696,023     4,275,279      9.8
     Interest-bearing liabilities           4,222,974     3,752,423     12.5
     Total deposits                         3,802,461     3,545,742      7.2
     Shareholders' equity                     481,327       481,580     (0.1)
 
     (A) Excludes the amortization of intangibles from earnings and goodwill
     and acquisition intangibles from assets and equity.
 
     Note: Earning assets, ROA, ROE and net interest margin include the net
     unrealized securities gain.  All prior periods have been restated
                     to include this unrealized gain.
 
                                                                     % Change
                             March 31,    December 31,   March 31,  1st Quarter
                                2001          2000          2000      2001/2000
 
     Balance Sheet (Period End)
     Total assets            $5,277,752    $5,220,554    $4,868,932      8.4 %
     Loans held for sale         17,974        12,630        39,502    (54.5)
     Loans held for
      investment - net of
      unearned income         3,716,450     3,722,552     3,368,269     10.3
     Allowance for loan
      losses                     43,741        43,024        35,862     22.0
     Securities                 964,538       899,544       931,611      3.5
     Total earning assets     4,730,211     4,661,922     4,373,871      8.1
     Goodwill and
      acquisition
      intangibles               105,501       107,254       112,337     (6.1)
     Total deposits           3,816,380     3,894,662     3,607,753      5.8
     Shareholders' equity       477,992       468,653       486,209     (1.7)
 
     Tier 1 capital to total
      assets (leverage ratio)      6.96 %        6.93 %        7.83 %
     Risk-based capital
      ratios:
          Tier 1 capital           8.58          8.63          9.86
          Total capital           10.61         10.37         11.73
 
     Book value per common
      share                      $11.24        $11.04        $11.31     (0.6)%
     Shares outstanding at
      quarter end            42,526,005    42,460,358    42,999,809     (1.1)
 
     Credit Quality
     Nonaccrual loans           $20,156       $18,413       $14,914     35.1 %
     Restructured loans              --            --            --       --
          Nonperforming
           loans                 20,156        18,413        14,914     35.1
     Nonperforming loans as
      a % of loans                 0.54 %        0.49 %        0.44 %
     Allowance for loan
      losses as a %
      nonperforming loans           217           234           240
     Allowance for loan
      losses as a % loans
      held for investment          1.18          1.16          1.06
     Other real estate owned     $4,455        $3,101        $3,372     32.1
          Nonperforming
           assets                24,611        21,514        18,286     34.6
     Nonperforming assets as
      a % of loans and other real
      estate owned                 0.66 %        0.58 %        0.54 %
     Loans past due 90 days
      still accruing
      interest                  $11,780       $10,682        $7,008     68.1
     Net loan charge-offs:
          QTR ended              $3,690        $3,895        $1,839    100.7
     Net loan charge-offs as
      a % of avg. loans
      (annualized):
          QTR ended                0.39 %        0.42 %        0.22 %
 
     Operations Data
     Banking offices                 94            94           108    (13.0)%
     ATMs                            78            78            85     (8.2)
     Employees (full-time
      equivalent)                 1,361         1,374         1,539    (11.6)
     Internet banking
      customers                  20,153        18,427         8,277    143.5
     Bank CaroLine (Internet
      Bank) only:
          Number of accounts      7,598         9,270         3,431    121.5
          Total deposits       $191,779      $221,190       $99,616     92.5
 
     Stock Performance (At
      Quarter End)
     Market price per share
      of common stock            $14.25        $13.25        $13.13      8.5 %
     Indicated annual
      dividend                     0.44          0.44          0.40     10.0
     Dividend yield                3.09 %        3.32 %        3.05 %
     Price/book ratio              1.27 x        1.20 x        1.16 x
     Market capitalization     $605,996      $562,600      $564,587      7.3
 
 
     Note: Earning assets, ROA, ROE and net interest margin include the net
     unrealized securities gain.  All prior periods have been restated
                  to include this unrealized gain.
 
 
                                                 Quarter Ended     1st Qtr 2001
                                            March 31,  December 31,     vs.
                                                2001         2000  4th Qtr 2000
 
     Earnings and Dividends
     Net interest income                       $42,946      $40,910      5.0 %
     Provision for loan losses                   4,508        4,242      6.3
     Noninterest income                         11,874       12,468     (4.8)
     Gains (losses) on asset sales               1,041        7,139    (85.4)
     Noninterest expenses                       38,571       43,093    (10.5)
     Restructuring and merger-related
      costs                                       (413)       1,423   (129.0)
     Net income                                  8,632        8,617      0.2
     Net income, excluding other items (B)       7,557        7,552      0.1
     Net income, cash basis (B)                  8,960        8,957      0.0
     Per share - basic:
        Net income                               $0.20        $0.20       --
        Net income, excluding other items (B)     0.18         0.18       --
        Net income, cash basis  (B)               0.21         0.21       --
     Per share - diluted:
        Net income                               $0.20        $0.20       --
        Net income, excluding other items (B)     0.18         0.18       --
        Net income, cash basis  (B)               0.21         0.21       --
     Cash dividends declared per share            0.11         0.11       --
     Return on average assets  (B)                0.58         0.58       --
     Return on average equity  (B)                6.28         6.33     (0.8)
     Net interest margin (fully tax
      equivalent)                                 3.75         3.55      5.6
 
     Balance Sheet (Period End)
     Total assets                           $5,277,752   $5,220,554      1.1 %
     Loans held for investment, net of
      unearned income                        3,716,450    3,722,552     (0.2)
     Securities                                964,538      899,544      7.2
     Goodwill and acquisition intangibles      105,501      107,254     (1.6)
     Total deposits                          3,816,380    3,894,662     (2.0)
     Shareholders' equity                      477,992      468,653      2.0
     Total market capitalization               605,996      562,600      7.7
     Book value per common share                 11.24        11.04      1.8
     Market price per share of common
      stock                                      14.25        13.25      7.5
 
     Asset Quality Summary
     Nonperforming assets                      $24,611      $21,514     14.4 %
     Allowance for loan losses                  43,741       43,024      1.7
     Nonperforming assets as a % of loans
      and other real estate owned                 0.66         0.58
     Net charge-offs as a % of average
      loans (annualized)                          0.39         0.42
     Allowance for loan losses to loans           1.18         1.16
 
     Operations Data
     Branch offices                                 94           94       --  %
     ATMs                                           78           78       --
     Employees (full-time equivalent)            1,361        1,374     (0.9)
 
 
      (B)  Calculated using net income excluding gains (losses) on asset sales,
      restructuring and merger-related costs, and other items.
 
     Note: Earning assets, ROA, ROE and net interest margin include the net
     unrealized securities gain.  All prior periods have been restated
                  to include this unrealized gain.
 
                                                        Quarter Ended
 
                                            September 30,  June 30,   March 31,
                                                 2000        2000       2000
 
     Earnings and Dividends
     Net interest income                       $43,944     $45,355     $44,420
     Provision for loan losses                   6,709       8,482       3,945
     Noninterest income                          9,908      10,245      10,365
     Gains (losses) on asset sales              (3,511)        385       2,349
     Noninterest expenses                       42,475      37,424      37,669
     Restructuring and merger-related costs      7,851      19,924          --
     Net income                                 (3,082)     (8,949)     10,403
     Net income, excluding other items (B)       7,517       8,884       9,202
     Net income, cash basis (B)                  8,936      10,327      10,636
     Per share - basic:
        Net (loss) income                        (0.07)      (0.21)       0.24
        Net income, excluding other items
         (B)                                      0.18        0.21        0.21
        Net income, cash basis  (B)               0.21        0.24        0.25
     Per share - diluted:
        Net (loss) income                        (0.07)      (0.21)       0.24
        Net income, excluding other items
         (B)                                      0.17        0.20        0.21
        Net income, cash basis  (B)               0.21        0.24        0.24
     Cash dividends declared per share            0.10        0.10        0.10
     Return on average assets  (B)                0.59        0.72        0.76
     Return on average equity  (B)                6.34        7.37        7.64
     Net interest margin (fully tax
      equivalent)                                 3.90        4.22        4.21
 
     Balance Sheet (Period End)
     Total assets                           $5,128,115  $5,086,132  $4,868,932
     Loans held for investment, net of
      unearned income                        3,665,705   3,572,745   3,368,269
     Securities                                904,159     918,114     931,611
     Goodwill and acquisition intangibles      108,962     110,675     112,337
     Total deposits                          3,758,957   3,705,296   3,607,753
     Shareholders' equity                      476,917     473,136     486,209
     Total market capitalization               544,790     624,325     564,587
     Book value per common share                 11.06       10.99       11.31
     Market price per share of common stock      12.63       14.50       13.13
 
     Asset Quality Summary
     Nonperforming assets                      $22,823     $21,731     $18,286
     Allowance for loan losses                  42,847      41,742      35,862
     Nonperforming assets as a % of loans
      and other real estate owned                 0.62        0.61        0.54
     Net charge-offs as a % of average
      loans (annualized)                          0.61        0.30        0.22
     Allowance for loan losses to loans           1.17        1.17        1.06
 
     Operations Data
     Branch offices                                 96         108         108
     ATMs                                           86          85          85
     Employees (full-time equivalent)            1,348       1,481       1,539
 
      (B)  Calculated using net income excluding gains (losses) on asset sales,
      restructuring and merger-related costs, and other items.
 
     Note: Earning assets, ROA, ROE and net interest margin include the net
     unrealized securities gain.  All prior periods have been restated
                  to include this unrealized gain.
 
 SOURCE  The South Financial Group