##### 



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 Amendment No. 1 to Form 10-K
 þ
    
    Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
 for the fiscal year ended
December 31, 2004 or
 o
    
    Transition report pursuant to section 12 or 15(d) of the Securities Exchange Act of 1934
 for transition period
from  to
 Commission File Number: 0-15083
 The South Financial Group, Inc.
  South Carolina
    
    57-0824914(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)102 South Main Street, Greenville, South Carolina
    
    29601(Address of principal executive offices)
    
    (Zip Code)
 (864) 255-7900
 Securities registered pursuant to Section 12(b) of the Act:
 None
    
    None(Title of Each Class)
    
    (Name of each exchange on which registered)
 Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 Par Value
 þ o
 o
 þ o
 o o
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



INDEX
 PageExplanatory Note  2005 Restatement
    
    
    iPART IItem 1.
    
    Business
    
    
    1Item 2.
    
    Properties
    
    
    8Item 3.
    
    Legal Proceedings
    
    
    9Item 4.
    
    Submission of Matters to a Vote of Shareholders
    
    
    9PART IIItem 5.
    
    Market for the Registrants Common Equity, Related Shareholder Matters, and Issuer
Purchases of Equity Securities
    
    
    9Item 6.
    
    Selected Financial Data
    
    
    11Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    50Item 8.
    
    Financial Statements and Supplementary Data
    
    
    51Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    111Item 9A.
    
    Controls and Procedures
    
    
    111Item 9B.
    
    Other Information
    
    
    112PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    112Item 11.
    
    Executive Compensation
    
    
    113Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    113Item 13.
    
    Certain Relationships and Related Transactions
    
    
    113Item 14.
    
    Principal Accountant Fees and Services
    
    
    113PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    113




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##### 



Explanatory Note  2005 Restatement
     Effect of CorrectionIncrease(decrease) inYear Ended
    
    
    net income2001
    
    
    $
    2092002
    
    
    
    4,6752003
    
    
    
    (11,475
    )2004
    
    
    
    391Cumulative through December 31, 2004
    
    
    $
    (6,200
    )




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##### 








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##### 



PART I
 Item 1. Business
 The Company
      Available Information
  Subsidiary Banks
  1




---



##### 



Carolina First Bank.
  
    
    the Greenville and Anderson metropolitan area (located in the Upstate region of South Carolina);
    
    the Hendersonville and Asheville metropolitan area (located in the Western region of North Carolina);
    
    the Rock Hill, or greater South Charlotte, metropolitan area (located in the Piedmont region of South Carolina);
    
    the Columbia metropolitan area (located in the Midlands region of South Carolina);
    
    the Myrtle Beach, Georgetown, and Wilmington metropolitan areas (located in Coastal
region of South Carolina and North Carolina ); and
    
    the Charleston and Hilton Head metropolitan areas (located in the lower Coastal
region of South Carolina).
    Mercantile Bank
 
    
    the Orlando metropolitan area (located in the Central Florida region);
    
    the Tampa Bay metropolitan area (located in the Tampa Bay region);
    
    the Gainesville metropolitan area (located in the North Central region);
    
    the Jacksonville metropolitan area (located in the North Florida region); and
    
    the Broward County area (located in the South Florida region).
   2




---



##### 



Non-Bank Subsidiaries
  American Pensions, Inc.
 Carolina First Community Development Corporation.
 CF Investment Company.
 CF Technology Services Company.
 Gardner Associates, Inc.
 REIT Subsidiaries.
 South Financial Asset Management, Inc.
 Business Segments
  Competition
   3




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##### 



Employees
  Monetary Policy
   Impact of Inflation
  Supervision and Regulation
 General
  The South Financial Group.
 4




---



##### 



5




---



##### 



Carolina First Bank and Mercantile Bank.
  CF Investment Company.
 Other Regulations.
 Dividends
  Capital Adequacy
 TSFG.
 6




---



##### 



Carolina First Bank and Mercantile Bank.
 Deposit Insurance Assessments
  Other Safety and Soundness Regulations
 Prompt Corrective Action.
 Brokered Deposits.
 Transactions Between TSFG, its Subsidiaries, and Affiliates
  7




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##### 



Anti-Money Laundering Legislation
  Sarbanes-Oxley
   
    
    It requires a statement of managements responsibility for establishing and
maintaining adequate internal control over financial reporting.
    
    It requires a statement identifying the framework used by management to evaluate the
effectiveness of internal control over financial reporting.
    
    It requires that management discuss its assessment of the effectiveness of internal
control over financial reporting.
    
    It requires a statement that the issuers independent auditor has issued an
attestation report on managements assessment.
  Additional Information
  8




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##### 



Item 2. Properties
    Item 3. Legal Proceedings
  Item 4. Submission of Matters to a Vote of Shareholders
  PART II
 Item 5.
    
    Market for the Registrants Common Equity, Related Stockholder Matters, and Issuer
Purchases of Equity Securities
 Market for Common Stock and Related Matters
  Three Months EndedDecember 31,
    
    September 30,
    
    June 30,
    
    March 31,2004Common stock price:High
    
    $
    32.61
    
    
    $
    29.59
    
    
    $
    30.18
    
    
    $
    31.09Low
    
    
    27.95
    
    
    
    26.41
    
    
    
    25.85
    
    
    
    27.00Close
    
    
    32.53
    
    
    
    28.20
    
    
    
    28.37
    
    
    
    29.59Cash dividend declared
    
    
    0.16
    
    
    
    0.15
    
    
    
    0.15
    
    
    
    0.15Volume traded
    
    
    16,947,410
    
    
    
    20,775,558
    
    
    
    24,615,808
    
    
    
    17,570,520
 Three Months EndedDecember 31,
    
    September 30,
    
    June 30,
    
    March 31,2003Common stock price:High
    
    $
    29.58
    
    
    $
    25.99
    
    
    $
    25.38
    
    
    $
    22.06Low
    
    
    24.50
    
    
    
    22.90
    
    
    
    21.60
    
    
    
    19.25Close
    
    
    27.75
    
    
    
    25.03
    
    
    
    23.13
    
    
    
    21.65Cash dividend declared
    
    
    0.15
    
    
    
    0.14
    
    
    
    0.14
    
    
    
    0.14Volume traded
    
    
    22,312,042
    
    
    
    10,205,766
    
    
    
    12,528,964
    
    
    
    11,949,964
 9




---



##### 



Unregistered Sales of Securities
  Purchases of Equity Securities by the Issuer and Affiliated Purchasers
 ISSUER PURCHASES OF EQUITY SECURITIES
 Total Number
    
    
    Maximumof Shares
    
    
    Number ofPurchased as
    
    
    Shares thatPart of Publicly
    
    
    May Yet BeTotal Number
    
    
    Average Price
    
    
    Announced
    
    
    Purchasedof Shares
    
    
    Paid per
    
    
    Plans or
    
    
    Under PlansPeriod
    
    Purchased
    
    
    Share
    
    
    Programs
    
    
    or Programs(2)October 1, 2004 to October 31, 2004
    
    
    8,074
    (1)
    
    $
    28.72
    
    
    
    
    
    
    
    1,289,502November 1, 2004 to November 30, 2004
    
    
    3,448
    (1)
    
    
    31.68
    
    
    
    
    
    
    
    1,289,502December 1, 2004 to December 31, 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,289,502Total
    
    
    11,522
    
    
    $
    29.61
    
    
    
    
    
    
    
    1,289,502
 
 (1)
    
    These shares were canceled in connection with option exercises. Pursuant to TSFGs
stock option plans, participants may exercise stock options by surrendering shares of TSFG
common stock owned by the participants as payment of the option exercise price. Shares
surrendered by participants are repurchased pursuant to the terms of the applicable stock
option plan and not pursuant to publicly announced share repurchase programs.(2)
    
    In February of 2003, TSFG announced a stock repurchase program authorizing TSFG to
repurchase up to 1 million shares of its common stock. In April of 2003, TSFG announced a
stock repurchase program authorizing TSFG to repurchase up to 1 million shares of its common
stock. Neither of these stock repurchase programs has an expiration date and each respective
program will expire upon completion of repurchases totaling the amount authorized to
repurchase. At December 31, 2004, there are 289,502 shares remaining under the February 2003
authorization and 1 million shares under the April 2003 authorization.  10




---



##### 



Item 6. Selected Financial Data
  SIX-YEAR SUMMARY OF SELECTED FINANCIAL DATA
(dollars and shares (except per share data) in thousands)
 Five-YearYears Ended December 31,
    
    
    
    
    
    
    Compound2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    
    
    
    
    
    
    
    
    Growth Rate(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    2000
    
    
    1999
    
    
    (Restated)Income Statement DataNet interest income
    
    $
    335,841
    
    
    $
    250,890
    
    
    $
    210,143
    
    
    $
    173,023
    
    
    $
    167,111
    
    
    $
    174,614
    
    
    
    14.0
    %Noninterest income
    
    
    124,877
    
    
    
    100,739
    
    
    
    74,563
    
    
    
    55,686
    
    
    
    48,545
    
    
    
    59,649
    
    
    
    15.9Total revenue
    
    
    460,718
    
    
    
    351,629
    
    
    
    284,706
    
    
    
    228,709
    
    
    
    215,656
    
    
    
    234,263
    
    
    
    14.5Provision for loan losses
    
    
    34,987
    
    
    
    20,581
    
    
    
    22,266
    
    
    
    22,045
    
    
    
    23,378
    
    
    
    18,273
    
    
    
    13.9Noninterest expenses
    
    
    250,244
    
    
    
    207,170
    
    
    
    162,840
    
    
    
    140,820
    
    
    
    181,538
    
    
    
    154,829
    
    
    
    10.1Income from continuing operations
    
    
    119,998
    
    
    
    83,583
    
    
    
    65,239
    
    
    
    41,819
    
    
    
    6,989
    
    
    
    40,450
    
    
    
    24.3Net income
    
    
    119,508
    
    
    
    83,583
    
    
    
    63,833
    
    
    
    42,101
    
    
    
    6,989
    
    
    
    40,450
    
    
    
    24.2Per Common Share DataBasic:Income from continuing operations
    
    $
    1.86
    
    
    $
    1.70
    
    
    $
    1.56
    
    
    $
    0.99
    
    
    $
    0.16
    
    
    $
    0.95
    
    
    
    14.4
    %Net income
    
    
    1.85
    
    
    
    1.70
    
    
    
    1.53
    
    
    
    1.00
    
    
    
    0.16
    
    
    
    0.95
    
    
    
    14.3
    %Diluted:Income from continuing operations
    
    
    1.81
    
    
    
    1.66
    
    
    
    1.53
    
    
    
    0.98
    
    
    
    0.16
    
    
    
    0.93
    
    
    
    14.2Net income
    
    
    1.80
    
    
    
    1.66
    
    
    
    1.49
    
    
    
    0.98
    
    
    
    0.16
    
    
    
    0.93
    
    
    
    14.1Average common shares outstanding:Basic
    
    
    64,592
    
    
    
    49,204
    
    
    
    41,715
    
    
    
    42,098
    
    
    
    42,908
    
    
    
    42,686
    
    
    
    8.6Diluted
    
    
    66,235
    
    
    
    50,328
    
    
    
    42,715
    
    
    
    42,824
    
    
    
    43,551
    
    
    
    43,618
    
    
    
    8.7Book value (December 31)
    
    $
    19.56
    
    
    $
    16.46
    
    
    $
    13.76
    
    
    $
    11.12
    
    
    $
    11.04
    
    
    $
    11.55
    
    
    
    11.1Market price (December 31)
    
    
    32.53
    
    
    
    27.75
    
    
    
    20.66
    
    
    
    17.75
    
    
    
    13.25
    
    
    
    18.25
    
    
    
    12.3Cash dividends declared
    
    
    0.61
    
    
    
    0.57
    
    
    
    0.50
    
    
    
    0.45
    
    
    
    0.41
    
    
    
    0.37
    
    
    
    10.5Balance Sheet Data (Year End)Total assets
    
    $
    13,798,205
    
    
    $
    10,724,240
    
    
    $
    7,939,310
    
    
    $
    6,029,060
    
    
    $
    5,220,554
    
    
    $
    4,768,656
    
    
    
    23.7
    %Securities
    
    
    4,310,088
    
    
    
    4,007,571
    
    
    
    2,572,186
    
    
    
    1,643,395
    
    
    
    899,544
    
    
    
    964,146
    
    
    
    34.9Loans held for investment
    
    
    8,107,757
    
    
    
    5,732,205
    
    
    
    4,434,011
    
    
    
    3,730,250
    
    
    
    3,722,552
    
    
    
    3,246,129
    
    
    
    20.1Allowance for loan losses
    
    
    96,918
    
    
    
    73,287
    
    
    
    70,275
    
    
    
    44,587
    
    
    
    43,024
    
    
    
    33,756
    
    
    
    23.5Intangible assets
    
    
    611,450
    
    
    
    353,079
    
    
    
    242,182
    
    
    
    97,140
    
    
    
    107,254
    
    
    
    113,960
    
    
    
    39.9Deposits
    
    
    7,670,944
    
    
    
    6,032,238
    
    
    
    4,585,927
    
    
    
    3,604,664
    
    
    
    3,894,662
    
    
    
    3,481,651
    
    
    
    17.1Long-term debt
    
    
    2,972,270
    
    
    
    2,711,699
    
    
    
    1,221,511
    
    
    
    411,294
    
    
    
    318,326
    
    
    
    314,279
    
    
    
    56.7Shareholders equity
    
    
    1,393,460
    
    
    
    972,299
    
    
    
    651,683
    
    
    
    458,383
    
    
    
    468,653
    
    
    
    500,590
    
    
    
    22.7Balance Sheet Data (Averages)Total assets
    
    $
    12,208,069
    
    
    $
    9,261,657
    
    
    $
    6,496,692
    
    
    $
    5,459,475
    
    
    $
    5,032,700
    
    
    $
    4,282,274
    
    
    
    23.3
    %Securities (excludes unrealized gains
(losses) on available for sale securities)
    
    
    4,158,202
    
    
    
    3,471,324
    
    
    
    1,850,798
    
    
    
    1,125,602
    
    
    
    875,876
    
    
    
    711,276
    
    
    
    42.4Loans held for investment
    
    
    6,909,545
    
    
    
    4,864,168
    
    
    
    3,969,786
    
    
    
    3,759,786
    
    
    
    3,545,336
    
    
    
    3,045,913
    
    
    
    17.8Total earning assets
    
    
    11,101,951
    
    
    
    8,425,590
    
    
    
    5,924,077
    
    
    
    4,928,970
    
    
    
    4,450,016
    
    
    
    3,820,904
    
    
    
    23.8Deposits
    
    
    6,899,366
    
    
    
    5,144,412
    
    
    
    3,852,776
    
    
    
    3,687,822
    
    
    
    3,699,553
    
    
    
    3,373,282
    
    
    
    15.4Shareholders equity
    
    
    1,164,004
    
    
    
    709,791
    
    
    
    499,579
    
    
    
    484,022
    
    
    
    479,800
    
    
    
    483,214
    
    
    
    19.2Performance RatiosNet interest margin (tax-equivalent)
    
    
    3.06
    %
    
    
    3.01
    %
    
    
    3.59
    %
    
    
    3.55
    %
    
    
    3.81
    %
    
    
    4.62
    %Return on average assets
    
    
    0.98
    
    
    
    0.90
    
    
    
    0.98
    
    
    
    0.77
    
    
    
    0.14
    
    
    
    0.94Return on average equity
    
    
    10.27
    
    
    
    11.78
    
    
    
    12.78
    
    
    
    8.70
    
    
    
    1.46
    
    
    
    8.37Tangible equity to tangible assets
    
    
    5.93
    
    
    
    5.97
    
    
    
    5.32
    
    
    
    6.09
    
    
    
    7.07
    
    
    
    8.31Asset QualityNonperforming assets
    
    $
    55,976
    
    
    $
    60,774
    
    
    $
    74,186
    
    
    $
    43,857
    
    
    $
    21,514
    
    
    $
    13,972
    
    
    
    32.0Nonperforming assets as a % of loans
held for investment and foreclosed
property
    
    
    0.69
    %
    
    
    1.06
    %
    
    
    1.67
    %
    
    
    1.17
    %
    
    
    0.58
    %
    
    
    0.43
    %Net charge-offs to average loans
held for investment
    
    
    0.46
    
    
    
    0.62
    
    
    
    0.49
    
    
    
    0.54
    
    
    
    0.39
    
    
    
    0.39Allowance for loan losses as a % of
loans held for investment
    
    
    1.20
    
    
    
    1.28
    
    
    
    1.58
    
    
    
    1.20
    
    
    
    1.16
    
    
    
    1.04Operations DataBranch offices
    
    
    154
    
    
    
    134
    
    
    
    117
    
    
    
    90
    
    
    
    94
    
    
    
    108Employees (full-time equivalent)
    
    
    2,308
    
    
    
    1,918
    
    
    
    1,700
    
    
    
    1,346
    
    
    
    1,374
    
    
    
    1,514
 11




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##### 



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
       12




---



##### 



Impact of Restatement on Income before Taxes
    
    
    Impact of Restatement on Net IncomePre-Tax
    
    
    % of Pre-Tax
    
    
    
    
    
    
    
    
    
    
    % of NetImpact
    
    
    Income
    
    
    Income
    
    
    After Tax
    
    
    Net Income
    
    
    Incometo Income
    
    
    before
    
    
    before
    
    
    Impact to
    
    
    before
    
    
    beforebefore taxes
    
    
    Restatement
    
    
    Restatement
    
    
    Net Income
    
    
    Restatement
    
    
    RestatementQ1-01
    
    $
    515
    
    
    $
    13,195
    
    
    
    3.90
    %
    
    $
    330
    
    
    $
    8,632
    
    
    
    3.82
    %Q2-01
    
    
    (716
    )
    
    
    15,193
    
    
    
    (4.71
    )
    
    
    (472
    )
    
    
    9,644
    
    
    
    (4.89
    )Q3-01
    
    
    2,181
    
    
    
    17,631
    
    
    
    12.37
    
    
    
    1,396
    
    
    
    11,000
    
    
    
    12.69Q4-01
    
    
    (1,532
    )
    
    
    19,377
    
    
    
    (7.91
    )
    
    
    (1,045
    )
    
    
    12,616
    
    
    
    (8.28
    )2001
    
    
    448
    
    
    
    65,396
    
    
    
    0.69
    
    
    
    209
    
    
    
    41,892
    
    
    
    0.50Q1-02
    
    
    (527
    )
    
    
    21,940
    
    
    
    (2.40
    )
    
    
    (358
    )
    
    
    13,107
    
    
    
    (2.73
    )Q2-02
    
    
    2,835
    
    
    
    23,983
    
    
    
    11.82
    
    
    
    1,903
    
    
    
    15,339
    
    
    
    12.41Q3-02
    
    
    4,301
    
    
    
    22,746
    
    
    
    18.91
    
    
    
    2,986
    
    
    
    14,776
    
    
    
    20.21Q4-02
    
    
    205
    
    
    
    24,117
    
    
    
    0.85
    
    
    
    144
    
    
    
    15,936
    
    
    
    0.902002
    
    
    6,814
    
    
    
    92,786
    
    
    
    7.34
    
    
    
    4,675
    
    
    
    59,158
    
    
    
    7.90Q1-03
    
    
    (1,731
    )
    
    
    30,967
    
    
    
    (5.59
    )
    
    
    (1,178
    )
    
    
    20,045
    
    
    
    (5.88
    )Q2-03
    
    
    (397
    )
    
    
    34,852
    
    
    
    (1.14
    )
    
    
    (270
    )
    
    
    22,699
    
    
    
    (1.19
    )Q3-03
    
    
    (8,121
    )
    
    
    34,018
    
    
    
    (23.87
    )
    
    
    (5,685
    )
    
    
    23,893
    
    
    
    (23.79
    )Q4-03
    
    
    (6,203
    )
    
    
    40,493
    
    
    
    (15.32
    )
    
    
    (4,342
    )
    
    
    28,421
    
    
    
    (15.28
    )2003
    
    
    (16,452
    )
    
    
    140,330
    
    
    
    (11.72
    )
    
    
    (11,475
    )
    
    
    95,058
    
    
    
    (12.07
    )Q1-04
    
    
    9,814
    
    
    
    46,311
    
    
    
    21.19
    
    
    
    6,843
    
    
    
    32,293
    
    
    
    21.19Q2-04
    
    
    (23,340
    )
    
    
    44,922
    
    
    
    (51.96
    )
    
    
    (15,580
    )
    
    
    29,987
    
    
    
    (51.96
    )Q3-04
    
    
    16,509
    
    
    
    44,543
    
    
    
    37.06
    
    
    
    11,556
    
    
    
    31,015
    
    
    
    37.26Q4-04
    
    
    (3,760
    )
    
    
    40,488
    
    
    
    (9.29
    )
    
    
    (2,428
    )
    
    
    25,822
    
    
    
    (9.40
    )2004
    
    
    (777
    )
    
    
    176,264
    
    
    
    (0.44
    )
    
    
    391
    
    
    
    119,117
    
    
    
    0.33Cumulative Impact
through
December 31, 2004
    
    $
    (9,967
    )
    
    $
    474,776
    
    
    
    (2.10
    )%
    
    $
    (6,200
    )
    
    $
    315,225
    
    
    
    (1.97
    )%
   13




---



##### 



Forward-Looking Statements
  
    
    risks from changes in economic, monetary policy, and industry conditions;
    
    changes in interest rates, deposit rates, the net interest margin, and funding sources;
    
    market risk (including net interest income at risk analysis and economic value of equity risk analysis) and inflation;
    
    risks inherent in making loans including repayment risks and value of collateral;
    
    loan growth, the adequacy of the allowance for loan losses, provision for loan
losses, and the assessment of problem loans (including loans acquired via acquisition);
    
    level, composition, and repricing characteristics of the securities portfolio;
    
    deposit growth, change in the mix or type of deposit products;
    
    fluctuations in consumer spending;
    
    competition in the banking industry and demand for our products and services;
    
    dependence on senior management;
    
    technological changes;
    
    ability to increase market share;
    
    income and expense projections;
    
    risks associated with income taxes, including the potential for adverse adjustments;
    
    acquisitions, greater than expected deposit attrition or customer loss, inaccuracy
of related cost savings estimates, inaccuracy of estimates of financial results, and
unanticipated integration issues;
    
    significant delay or inability to execute strategic initiatives designed to grow revenues;
    
    changes in accounting policies and practices;
    
    changes in the evaluation of the effectiveness of our hedging strategies;
    
    changes in regulatory actions, including the potential for adverse adjustments;
    
    changes, costs, and effects of litigation, and environmental remediation; and
    
    recently-enacted or proposed legislation.
  Non-GAAP Financial Information
  14




---



##### 



Overview
  
    
    Carolina First Bank, the largest South Carolina-headquartered commercial bank, operates
in South Carolina and North Carolina, and on the Internet under the brand name, Bank
CaroLine; and
    
    Mercantile Bank operates in the Jacksonville, Orlando, Tampa Bay, Gainesville, and Ft.
Lauderdale Florida markets.
        15




---



##### 



Critical Accounting Policies and Estimates
  Allowance for loan losses
   16




---



##### 



Fair Value of Certain Financial Instruments
      Income Taxes
   17




---



##### 



Accounting for Acquisitions
      18




---



##### 



Acquisitions and Sales
  Table 1
Summary of Completed Acquisitions
(dollars in thousands)
 Purchase
    
    
    IdentifiableAcquisition
    
    
    Total
    
    
    Shares
    
    
    Price Paid
    
    
    IntangibleDate
    
    
    Assets(1)
    
    
    Issued
    
    
    in Cash
    
    
    Assets(2)
    
    
    Goodwill(2)Bank AcquisitionsCNB Florida
Lake City, Florida
    
    
    07/16/04
    
    
    $
    839,148
    
    
    
    5,312,974
    
    
    $
    
    
    
    $
    11,312
    
    
    $
    117,164Florida Banks
Jacksonville, Florida
    
    
    07/16/04
    
    
    
    1,023,290
    
    
    
    5,418,890
    
    
    
    
    
    
    
    5,982
    
    
    
    137,845MountainBank Financial Corporation
Hendersonville, North Carolina
    
    
    10/03/03
    
    
    
    943,394
    
    
    
    5,485,293
    
    
    
    
    
    
    
    12,113
    
    
    
    87,622Central Bank of Tampa
Tampa, Florida
    
    
    12/31/02
    
    
    
    223,223
    
    
    
    3,241,737
    
    
    
    
    
    
    
    2,700
    
    
    
    35,964Rock Hill Bank & Trust
Rock Hill Bank, South Carolina
    
    
    10/31/02
    
    
    
    204,815
    
    
    
    430,017
    
    
    
    
    
    
    
    1,204
    
    
    
    26,154
    (3)Gulf West Banks, Inc.
St. Petersburg, Florida
    
    
    08/31/02
    
    
    
    530,296
    
    
    
    3,925,588
    
    
    
    32,400
    
    
    
    8,424
    
    
    
    71,241Insurance Agency/Other AcquisitionsSummit Title, LLC
Hendersonville, North Carolina
    
    
    04/12/04
    
    
    
    86
    
    
    
    8,371
    (4)
    
    
    
    
    
    
    55
    
    
    
    129Allied Assurance
Columbia, South Carolina
    
    
    09/22/03
    
    
    
    95
    
    
    
    3,950
    (5)
    
    
    
    
    
    
    
    
    
    
    128American Pensions, Inc.
Mount Pleasant, South Carolina
    
    
    04/30/03
    
    
    
    348
    
    
    
    159,839
    
    
    
    
    
    
    
    1,050
    
    
    
    3,237Gardner Associates, Inc.
Columbia, South Carolina
    
    
    09/20/02
    
    
    
    1,312
    
    
    
    249,011
    (6)
    
    
    
    
    
    
    1,521
    
    
    
    2,175
 
 (1)
    
    Book value at the acquisition date.(2)
    
    Carrying amount (identifiable intangible assets are not reported net of accumulated
amortization) at December 31, 2004.(3)
    
    TSFG acquired substantially all of the assets and liabilities. TSFG agreed to pay a
cash earnout based on recoveries with respect to certain loans and net amounts recovered under
RHBT Financial Corporations (RHBT) blanket bond insurance policy.(4)
    
    TSFG agreed to issue annual earnout shares, valued at the time of issuance at
$66,906, for each of April 12, 2005, 2006, 2007, and 2008, based on revenue retention and
earnings achievement.(5)
    
    TSFG agreed to issue annual earnout shares, valued at the time of issuance at
approximately $45,000, for each of August 31, 2005, 2006, and 2007, based on revenue
retention.(6)
    
    Of this amount, up to 59,211 of these shares are subject to forfeiture back to TSFG
if certain five-year financial performance targets are not met.   19




---



##### 



Table 2
Summary of Bank Acquisitions  Geographic Focus
 NumberAcquisition
    
    ofDate
    
    Branches
    
    Geographic FocusCNB Florida
    
    07/16/04
    
    
    16
    
    
    Northeast and North Central FloridaFlorida Banks
    
    07/16/04
    
    
    7
    
    
    Tampa, Jacksonville, Alachua County (Gainesville), Broward
County (Ft. Lauderdale), Pinellas County (Largo), Marion County
(Ocala), and West Palm BeachMountainBank Financial Corporation
    
    10/03/03
    
    
    19
    
    
    Western North Carolina, including Asheville and HendersonvilleCentral Bank of Tampa
    
    12/31/02
    
    
    5
    
    
    Tampa, FloridaRock Hill Bank & Trust
    
    10/31/02
    
    
    3
    
    
    York County, South Carolina (Greater South Charlotte)Gulf West Banks, Inc.
    
    08/31/02
    
    
    15
    
    
    Tampa Bay area of Florida
  Branch Acquisition
  Pending Acquisition
  Sales
   Balance Sheet Review
 Loans
 20




---



##### 



Table 3
Loan Portfolio Composition
(dollars in thousands)
 December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Commercial, financial and agricultural
    
    $
    1,584,198
    
    
    $
    1,358,409
    
    
    $
    913,368
    
    
    $
    742,218
    
    
    $
    561,360Real estateconstruction (1)
    
    
    1,007,061
    
    
    
    619,124
    
    
    
    570,265
    
    
    
    532,037
    
    
    
    458,577Real estateresidential mortgage (1-4 family)
    
    
    1,278,310
    
    
    
    940,744
    
    
    
    643,941
    
    
    
    551,119
    
    
    
    890,693Commercial secured by real estate (1)
    
    
    3,109,242
    
    
    
    2,146,650
    
    
    
    1,765,103
    
    
    
    1,400,466
    
    
    
    1,348,604Consumer
    
    
    1,128,946
    
    
    
    667,278
    
    
    
    541,210
    
    
    
    503,901
    
    
    
    459,317Lease financing receivables
    
    
    
    
    
    
    
    
    
    
    124
    
    
    
    509
    
    
    
    4,001Loans held for investment
    
    
    8,107,757
    
    
    
    5,732,205
    
    
    
    4,434,011
    
    
    
    3,730,250
    
    
    
    3,722,552Loans held for sale
    
    
    21,302
    
    
    
    29,619
    
    
    
    67,218
    
    
    
    6,513
    
    
    
    12,630Allowance for loan losses
    
    
    (96,918
    )
    
    
    (73,287
    )
    
    
    (70,275
    )
    
    
    (44,587
    )
    
    
    (43,024
    )Total net loans
    
    $
    8,032,141
    
    
    $
    5,688,537
    
    
    $
    4,430,954
    
    
    $
    3,692,176
    
    
    $
    3,692,158Percentage of Loans Held for InvestmentCommercial, financial and agricultural
    
    
    19.5
    %
    
    
    23.7
    %
    
    
    20.6
    %
    
    
    19.9
    %
    
    
    15.1
    %Real estateconstruction (1)
    
    
    12.4
    
    
    
    10.8
    
    
    
    12.9
    
    
    
    14.3
    
    
    
    12.3Real estateresidential mortgage (1-4 family)
    
    
    15.8
    
    
    
    16.4
    
    
    
    14.5
    
    
    
    14.8
    
    
    
    23.9Commercial secured by real estate (1)
    
    
    38.4
    
    
    
    37.5
    
    
    
    39.8
    
    
    
    37.5
    
    
    
    36.2Consumer
    
    
    13.9
    
    
    
    11.6
    
    
    
    12.2
    
    
    
    13.5
    
    
    
    12.4Lease financing receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 
 (1)
    
    These categories include loans to businesses other than real estate companies where
owner-occupied real estate is pledged on loans to finance operations, equipment, and
facilities. 21




---



##### 



Table 4
Loan Portfolio Composition Based on Loan Purpose
(dollars in thousands)
 December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Commercial LoansCommercial and industrial
    
    $
    2,077,646
    
    
    $
    1,591,157
    
    
    $
    1,178,955
    
    
    $
    1,055,747
    
    
    $
    807,973Owner  occupied real estate (1)
    
    
    825,582
    
    
    
    634,604
    
    
    
    733,819
    
    
    
    627,412
    
    
    
    577,552Commercial real estate
    
    
    3,246,729
    
    
    
    2,071,242
    
    
    
    1,420,252
    
    
    
    1,085,750
    
    
    
    1,101,5806,149,957
    
    
    
    4,297,003
    
    
    
    3,333,026
    
    
    
    2,768,909
    
    
    
    2,487,105Consumer LoansIndirect  sales finance
    
    
    790,372
    
    
    
    586,325
    
    
    
    420,294
    
    
    
    340,484
    
    
    
    270,298Direct retail
    
    
    466,484
    
    
    
    306,476
    
    
    
    273,419
    
    
    
    302,992
    
    
    
    427,905Home equity
    
    
    535,988
    
    
    
    384,037
    
    
    
    243,648
    
    
    
    151,570
    
    
    
    141,9141,792,844
    
    
    
    1,276,838
    
    
    
    937,361
    
    
    
    795,046
    
    
    
    840,117Mortgage Loans
    
    
    164,956
    
    
    
    158,364
    
    
    
    163,624
    
    
    
    166,295
    
    
    
    395,330Total loans held for investment
    
    $
    8,107,757
    
    
    $
    5,732,205
    
    
    $
    4,434,011
    
    
    $
    3,730,250
    
    
    $
    3,722,552Percentage of Loans Held for InvestmentCommercial and industrial
    
    
    25.6
    %
    
    
    27.8
    %
    
    
    26.6
    %
    
    
    28.3
    %
    
    
    21.7
    %Owner  occupied real estate (1)
    
    
    10.3
    
    
    
    11.1
    
    
    
    16.6
    
    
    
    16.8
    
    
    
    15.5Commercial real estate
    
    
    40.0
    
    
    
    36.0
    
    
    
    32.0
    
    
    
    29.1
    
    
    
    29.6Consumer
    
    
    22.1
    
    
    
    22.3
    
    
    
    21.1
    
    
    
    21.3
    
    
    
    22.6Mortgage
    
    
    2.0
    
    
    
    2.8
    
    
    
    3.7
    
    
    
    4.5
    
    
    
    10.6Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 
 (1)
    
    In Table 3, these loans are included in the Real estate-construction and
Commercial secured by real estate categories, which also include loans to non-real estate
industry borrowers. Commercial and industrial loans
 Owner-occupied real estate loans
 Commercial real estate loans
 Indirect  sales finance loans
 Direct retail consumer loans
 22




---



##### 



Home equity loans
 Mortgage loans
   Table 5
Commercial Real Estate Loans
(dollars in thousands)
 December 31, 2004
    
    
    December 31, 2003% of
    
    
    
    
    
    
    % ofBalance
    
    
    Total
    
    
    Balance
    
    
    TotalCommercial Real Estate Loans by Geographic DiversificationWestern North Carolina (Hendersonville/Asheville)
    
    $
    545,533
    
    
    
    16.8
    %
    
    $
    360,173
    
    
    
    17.4
    %North Coastal South Carolina (Myrtle Beach)
    
    
    376,494
    
    
    
    11.6
    
    
    
    286,251
    
    
    
    13.8Upstate South Carolina (Greenville)
    
    
    358,693
    
    
    
    11.0
    
    
    
    321,401
    
    
    
    15.5Tampa Bay Florida
    
    
    330,130
    
    
    
    10.2
    
    
    
    196,677
    
    
    
    9.5Midlands South Carolina (Columbia)
    
    
    291,139
    
    
    
    9.0
    
    
    
    258,870
    
    
    
    12.5South Coastal South Carolina (Charleston)
    
    
    264,178
    
    
    
    8.1
    
    
    
    198,419
    
    
    
    9.6Central Florida (Orlando)
    
    
    245,398
    
    
    
    7.6
    
    
    
    221,172
    
    
    
    10.7Northeast Florida (Jacksonville)
    
    
    244,989
    
    
    
    7.5
    
    
    
    80,474
    
    
    
    3.9Alachua Florida (Gainesville)
    
    
    151,233
    
    
    
    4.7
    
    
    
    
    
    
    
    Greater South Charlotte South Carolina (Rock Hill)
    
    
    110,965
    
    
    
    3.4
    
    
    
    87,567
    
    
    
    4.2North Central Florida
    
    
    105,409
    
    
    
    3.2
    
    
    
    
    
    
    
    South Florida (Ft. Lauderdale)
    
    
    102,969
    
    
    
    3.2
    
    
    
    
    
    
    
    Other (1)
    
    
    119,599
    
    
    
    3.7
    
    
    
    60,238
    
    
    
    2.9Total commercial real estate loans
    
    $
    3,246,729
    
    
    
    100.0
    %
    
    $
    2,071,242
    
    
    
    100.0
    %Commercial Real Estate Loans by Product TypeCommercial construction/development
    
    $
    965,838
    
    
    
    29.7
    %
    
    $
    463,984
    
    
    
    22.4
    %1-4 family residential investment property
    
    
    328,558
    
    
    
    10.1
    
    
    
    140,917
    
    
    
    6.8Mixed use
    
    
    313,612
    
    
    
    9.7
    
    
    
    219,232
    
    
    
    10.6Undeveloped land
    
    
    301,165
    
    
    
    9.3
    
    
    
    154,384
    
    
    
    7.5Retail
    
    
    266,584
    
    
    
    8.2
    
    
    
    131,716
    
    
    
    6.4Hotel/motel
    
    
    242,525
    
    
    
    7.5
    
    
    
    239,266
    
    
    
    11.5Multi-family residential
    
    
    171,929
    
    
    
    5.3
    
    
    
    110,085
    
    
    
    5.3Residential construction
    
    
    152,988
    
    
    
    4.7
    
    
    
    156,592
    
    
    
    7.5Other (1)
    
    
    503,530
    
    
    
    15.5
    
    
    
    455,066
    
    
    
    22.0Total commercial real estate loans
    
    $
    3,246,729
    
    
    
    100.0
    %
    
    $
    2,071,242
    
    
    
    100.0
    %
 
 (1)
    
    Other includes all loans in categories smaller than the lowest percentages shown
above.Note:
    
    At December 31, 2004 and December 31, 2003, average loan size for commercial real estate
loans totaled $370,000 and $324,000, respectively. 23




---



##### 



Table 6
Selected Loan Maturity and Interest Sensitivity
(dollars in thousands)
 Over One But
    
    OverOne Year
    
    Less Than
    
    Fiveor Less
    
    Five Years
    
    Years
    
    TotalCommercial secured by real estate
    
    $
    386,988
    
    
    $
    847,179
    
    
    $
    1,875,075
    
    
    $
    3,109,242Commercial, financial and agricultural
    
    
    451,787
    
    
    
    602,223
    
    
    
    530,188
    
    
    
    1,584,198Real estate  construction
    
    
    219,231
    
    
    
    562,468
    
    
    
    225,362
    
    
    
    1,007,061Total of loans with:Floating interest rates
    
    
    938,982
    
    
    
    1,635,616
    
    
    
    1,723,871
    
    
    
    4,298,469Predetermined interest rates
    
    
    119,024
    
    
    
    376,254
    
    
    
    906,754
    
    
    
    1,402,032
  Table 7
Loan Relationships Greater than $10 Million
 Outstanding Principal BalancePercentage ofNumber
    
    Total
    
    
    
    
    
    Total Loanof Borrowers
    
    Commitment
    
    Amount
    
    PortfolioDecember 31, 2004
    
    
    90
    
    
    $1.5 billion
    
    $914.1 million
    
    
    11.3
    %December 31, 2003
    
    
    72
    
    
    1.1 billion
    
    671.4 million
    
    
    11.7
   Credit Quality
  24




---



##### 



Table 8
Credit Quality Indicators
(dollars in thousands)
 December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Loans held for investment
    
    $
    8,107,757
    
    
    $
    5,732,205
    
    
    $
    4,434,011
    
    
    $
    3,730,250
    
    
    $
    3,722,552Allowance for loan losses
    
    
    96,918
    
    
    
    73,287
    
    
    
    70,275
    
    
    
    44,587
    
    
    
    43,024Nonaccrual loans  commercial (1)
    
    $
    38,015
    
    
    $
    47,137
    
    
    $
    61,206
    
    
    $
    35,245
    
    
    $
    17,240Nonaccrual loans  consumer
    
    
    2,312
    
    
    
    2,686
    
    
    
    2,384
    
    
    
    3,643
    
    
    
    1,173Nonaccrual loans  mortgage loans (2)
    
    
    4,755
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructured loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total nonperforming loans
    
    
    45,082
    
    
    
    49,823
    
    
    
    63,590
    
    
    
    38,888
    
    
    
    18,413Foreclosed property (other real estate owned and
personal property repossessions) (3)
    
    
    10,894
    
    
    
    10,951
    
    
    
    10,596
    
    
    
    4,969
    
    
    
    3,101Total nonperforming assets
    
    $
    55,976
    
    
    $
    60,774
    
    
    $
    74,186
    
    
    $
    43,857
    
    
    $
    21,514Loans past due 90 days or more (mortgage and
consumer with interest still accruing) (2)
    
    $
    3,764
    
    
    $
    3,960
    
    
    $
    5,414
    
    
    $
    10,482
    
    
    $
    10,682Total nonperforming assets as a percentage of loans
held for investment and foreclosed property
    
    
    0.69
    %
    
    
    1.06
    %
    
    
    1.67
    %
    
    
    1.17
    %
    
    
    0.58
    %Allowance for loan losses to nonperforming loans
    
    
    2.15
    x
    
    
    1. 47
    x
    
    
    1.11
    x
    
    
    1.15
    x
    
    
    2.34
    x
 
 (1)
    
    At December 31, 2004, nonaccrual loans  commercial included $4.7 million in
restructured loans.(2)
    
    Effective September 30, 2004, TSFG began placing residential mortgage loans in
nonaccrual status when they become 150-days delinquent. Previously, these loans were not
placed in nonaccrual status (unless impairment was evident), but any associated accrued
interest was reserved. See (3) below.(3)
    
    At December 31, 2004, personal property repossessions totaled $652,000 and were
included in nonperforming assets. Personal property repossessions totaled $1.0 million, $1.3
million, $2.7 million, and $1.7 million at December 31, 2003, 2002, 2001, and 2000,
respectively, and were excluded from nonperforming assets.   Allowance for Loan Losses
  25




---



##### 



26




---



##### 



Table 9
Summary of Loan Loss Experience
(dollars in thousands)
 At and For The Year Ended December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Allowance for loan losses, beginning of year
    
    $
    73,287
    
    
    $
    70,275
    
    
    $
    44,587
    
    
    $
    43,024
    
    
    $
    33,756Purchase accounting acquisitions
    
    
    20,682
    
    
    
    12,690
    
    
    
    22,973
    
    
    
    
    
    
    
    Allowance adjustment for loans sold
    
    
    (506
    )
    
    
    
    
    
    
    (12
    )
    
    
    (230
    )
    
    
    (252
    )Charge-offs:Commercial, financial and agricultural
    
    
    20,882
    
    
    
    18,474
    
    
    
    6,680
    
    
    
    8,346
    
    
    
    7,548Real estate  construction
    
    
    2,513
    
    
    
    3,049
    
    
    
    3,206
    
    
    
    1,885
    
    
    
    Secured by real estate
    
    
    6,822
    
    
    
    5,444
    
    
    
    5,509
    
    
    
    3,896
    
    
    
    1,458Consumer
    
    
    6,786
    
    
    
    7,657
    
    
    
    8,161
    
    
    
    9,027
    
    
    
    6,617Credit cards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    450Total loans charged-off
    
    
    37,003
    
    
    
    34,624
    
    
    
    23,556
    
    
    
    23,154
    
    
    
    16,073Recoveries:Commercial, financial and agricultural
    
    
    2,762
    
    
    
    1,997
    
    
    
    1,970
    
    
    
    1,553
    
    
    
    1,314Real estate  construction
    
    
    719
    
    
    
    109
    
    
    
    444
    
    
    
    195
    
    
    
    Secured by real estate
    
    
    984
    
    
    
    1,399
    
    
    
    255
    
    
    
    164
    
    
    
    156Consumer
    
    
    1,006
    
    
    
    860
    
    
    
    1,348
    
    
    
    990
    
    
    
    627Credit cards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118Total loans recovered
    
    
    5,471
    
    
    
    4,365
    
    
    
    4,017
    
    
    
    2,902
    
    
    
    2,215Net charge-offs
    
    
    31,532
    
    
    
    30,259
    
    
    
    19,539
    
    
    
    20,252
    
    
    
    13,858Additions to reserve through provision expense
    
    
    34,987
    
    
    
    20,581
    
    
    
    22,266
    
    
    
    22,045
    
    
    
    23,378Allowance for loan losses, end of year
    
    $
    96,918
    
    
    $
    73,287
    
    
    $
    70,275
    
    
    $
    44,587
    
    
    $
    43,024Average loans held for investment
    
    $
    6,909,545
    
    
    $
    4,864,168
    
    
    $
    3,969,786
    
    
    $
    3,759,786
    
    
    $
    3,545,336Loans held for investment (period end)
    
    
    8,107,757
    
    
    
    5,732,205
    
    
    
    4,434,011
    
    
    
    3,730,250
    
    
    
    3,722,552Net charge-offs as a percentage of average loans held
for investment
    
    
    0.46
    %
    
    
    0.62
    %
    
    
    0.49
    %
    
    
    0.54
    %
    
    
    0.39
    %Allowance for loan losses as a percentage of loans held
for investment
    
    
    1.20
    
    
    
    1.28
    
    
    
    1.58
    
    
    
    1.20
    
    
    
    1.16
 Table 10
Composition of Allowance for Loan Losses
(dollars in thousands)
 December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Commercial, financial and agricultural
    
    $
    20,077
    
    
    $
    16,568
    
    
    $
    15,831
    
    
    $
    8,784
    
    
    $
    6,935Real estate  construction
    
    
    12,763
    
    
    
    7,551
    
    
    
    9,883
    
    
    
    6,292
    
    
    
    5,622Real estate  residential mortgage (1-4 family)
    
    
    2,092
    
    
    
    804
    
    
    
    796
    
    
    
    731
    
    
    
    1,769Commercial secured by real estate
    
    
    39,404
    
    
    
    26,182
    
    
    
    30,589
    
    
    
    16,562
    
    
    
    16,539Consumer
    
    
    17,325
    
    
    
    18,162
    
    
    
    11,166
    
    
    
    9,804
    
    
    
    10,168Unallocated
    
    
    5,257
    
    
    
    4,020
    
    
    
    2,010
    
    
    
    2,414
    
    
    
    1,991Total
    
    $
    96,918
    
    
    $
    73,287
    
    
    $
    70,275
    
    
    $
    44,587
    
    
    $
    43,024
 
 Note:
    
    See Table 3 for composition of loan portfolio. Securities
  27




---



##### 



Table 11
Investment Securities Portfolio Composition
(dollars in thousands)
 December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Trading Account(at fair value)U.S. Treasury
    
    $
    
    
    
    $
    
    
    
    $
    5
    
    
    $
    
    
    
    $
    U.S. Government agencies
    
    
    
    
    
    
    460
    
    
    
    345
    
    
    
    1,142
    
    
    
    4,610State and municipal
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    435
    
    
    
    360Other investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    480
    
    
    
    350
    
    
    
    1,577
    
    
    
    5,004Securities Available for Sale(at fair value)U.S. Treasury
    
    
    234,538
    
    
    
    246,659
    
    
    
    254,121
    
    
    
    503,191
    
    
    
    12,163U.S. Government agencies
    
    
    930,046
    
    
    
    866,968
    
    
    
    833,900
    
    
    
    106,983
    
    
    
    186,507Mortgage-backed securities
    
    
    2,502,440
    
    
    
    2,375,557
    
    
    
    1,193,080
    
    
    
    817,237
    
    
    
    507,817State and municipals
    
    
    272,535
    
    
    
    127,181
    
    
    
    56,402
    
    
    
    12,092
    
    
    
    12,409Other investments:Corporate bonds
    
    
    141,970
    
    
    
    148,517
    
    
    
    77,707
    
    
    
    69,127
    
    
    
    49,509Federal Home Loan Bank stock
    
    
    72,733
    
    
    
    50,411
    
    
    
    42,990
    
    
    
    23,690
    
    
    
    26,200Federal National Mortgage Association preferred stock
    
    
    50,062
    
    
    
    54,678
    
    
    
    
    
    
    
    
    
    
    
    Community bank stocks
    
    
    14,899
    
    
    
    23,487
    
    
    
    16,802
    
    
    
    13,059
    
    
    
    11,972Federal Home Loan Mortgage Corp. preferred stock
    
    
    11,990
    
    
    
    12,130
    
    
    
    
    
    
    
    
    
    
    
    NetBank, Inc. common stock
    
    
    122
    
    
    
    4,778
    
    
    
    7,018
    
    
    
    12,314
    
    
    
    7,711Other equity investments
    
    
    3,508
    
    
    
    5,628
    
    
    
    6,924
    
    
    
    3,293
    
    
    
    2,4854,234,843
    
    
    
    3,915,994
    
    
    
    2,488,944
    
    
    
    1,560,986
    
    
    
    816,773Securities Held to Maturity(at amortized cost)U.S. Government agencies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,650State and municipal
    
    
    75,145
    
    
    
    90,745
    
    
    
    82,789
    
    
    
    80,729
    
    
    
    75,015Other investments
    
    
    100
    
    
    
    352
    
    
    
    103
    
    
    
    103
    
    
    
    10275,245
    
    
    
    91,097
    
    
    
    82,892
    
    
    
    80,832
    
    
    
    77,767Total
    
    $
    4,310,088
    
    
    $
    4,007,571
    
    
    $
    2,572,186
    
    
    $
    1,643,395
    
    
    $
    899,544
    28




---



##### 



29




---



##### 



Table 12
Investment Securities Maturity Schedule
(dollars in thousands)
 Available for Sale Fair Value
 After One
    
    
    After Five
    
    
    
    
    
    
    NoWithin
    
    
    But Within
    
    
    But Within
    
    
    After
    
    
    ContractualOne Year
    
    
    Five Years
    
    
    Ten Years
    
    
    Ten Years
    
    
    Maturity
    
    
    TotalU.S. Treasury
    
    $
    
    
    
    $
    145,111
    
    
    $
    89,427
    
    
    $
    
    
    
    $
    
    
    
    $
    234,538U.S. Government agencies
    
    
    
    
    
    
    59,364
    
    
    
    397,022
    
    
    
    473,660
    
    
    
    
    
    
    
    930,046Mortgage-backed securities
    
    
    534
    
    
    
    277,560
    
    
    
    618,346
    
    
    
    1,606,000
    
    
    
    
    
    
    
    2,502,440State and municipal
    
    
    16,883
    
    
    
    135,047
    
    
    
    108,070
    
    
    
    12,535
    
    
    
    
    
    
    
    272,535Other investments (1)
    
    
    
    
    
    
    51,440
    
    
    
    61,882
    
    
    
    29,164
    
    
    
    152,798
    
    
    
    295,284$
    17,417
    
    
    $
    668,522
    
    
    $
    1,274,747
    
    
    $
    2,121,359
    
    
    $
    152,798
    
    
    $
    4,234,843Weighted Average YieldU.S. Treasury
    
    
    
    %
    
    
    3.17
    %
    
    
    4.11
    %
    
    
    
    %
    
    
    
    %
    
    
    3.53
    %U.S. Government agencies
    
    
    
    
    
    
    4.12
    
    
    
    4.44
    
    
    
    5.60
    
    
    
    
    
    
    
    5.01Mortgage-backed securities
    
    
    6.19
    
    
    
    4.52
    
    
    
    4.40
    
    
    
    4.33
    
    
    
    
    
    
    
    4.37State and municipal
    
    
    1.52
    
    
    
    2.23
    
    
    
    3.32
    
    
    
    4.30
    
    
    
    
    
    
    
    2.71Other investments (1)
    
    
    
    
    
    
    3.79
    
    
    
    5.46
    
    
    
    8.13
    
    
    
    n/a
    
    
    
    6.132.07
    %
    
    
    3.67
    %
    
    
    4.34
    %
    
    
    4.78
    %
    
    
    
    %
    
    
    4.44
    %Held to Maturity Amortized CostState and municipal
    
    $
    12,406
    
    
    $
    39,152
    
    
    $
    22,840
    
    
    $
    747
    
    
    $
    
    
    
    $
    75,145Other investments
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    100$
    12,406
    
    
    $
    39,152
    
    
    $
    22,940
    
    
    $
    747
    
    
    $
    
    
    
    $
    75,245Weighted Average YieldState and municipal
    
    
    2.63
    %
    
    
    3.40
    %
    
    
    3.76
    %
    
    
    3.38
    %
    
    
    
    %
    
    
    3.38
    %Other investments
    
    
    
    
    
    
    
    
    
    
    5.48
    
    
    
    
    
    
    
    
    
    
    
    5.482.63
    %
    
    
    3.40
    %
    
    
    3.77
    %
    
    
    3.38
    %
    
    
    
    %
    
    
    3.38
    %
 
 (1)
    
    Approximately $153 million of these securities have no contractual maturity or yield
and accordingly are excluded from the Other Investments yield calculation, as well as the
overall Available for Sale yield calculation. Community Bank Stocks.
 Intangible Assets
  Deposits
  30




---



##### 



Table 13
Types of Deposits
(dollars in thousands)
 December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)Noninterest-bearing demand deposits
    
    $
    1,237,877
    
    
    $
    882,129
    
    
    $
    743,174
    
    
    $
    524,437
    
    
    $
    488,323Interest-bearing checking
    
    
    816,933
    
    
    
    699,956
    
    
    
    679,747
    
    
    
    618,236
    
    
    
    591,371Money market accounts
    
    
    2,704,287
    
    
    
    2,237,299
    
    
    
    1,017,095
    
    
    
    758,243
    
    
    
    704,417Savings accounts
    
    
    192,769
    
    
    
    159,013
    
    
    
    156,204
    
    
    
    112,227
    
    
    
    116,165Brokered deposits
    
    
    1,216,872
    
    
    
    701,451
    
    
    
    538,288
    
    
    
    141,695
    
    
    
    99,167Time deposits under $100,000
    
    
    856,386
    
    
    
    814,802
    
    
    
    883,506
    
    
    
    924,295
    
    
    
    1,342,195Time deposits of $100,000 or more
    
    
    645,820
    
    
    
    537,588
    
    
    
    567,913
    
    
    
    525,531
    
    
    
    553,024Total deposits
    
    $
    7,670,944
    
    
    $
    6,032,238
    
    
    $
    4,585,927
    
    
    $
    3,604,664
    
    
    $
    3,894,662Percentage of DepositsNoninterest-bearing demand deposits
    
    
    16.1
    %
    
    
    14.6
    %
    
    
    16.2
    %
    
    
    14.6
    %
    
    
    12.5
    %Interest-bearing checking
    
    
    10.6
    
    
    
    11.6
    
    
    
    14.8
    
    
    
    17.2
    
    
    
    15.2Money market accounts
    
    
    35.3
    
    
    
    37.1
    
    
    
    22.2
    
    
    
    21.0
    
    
    
    18.1Savings accounts
    
    
    2.5
    
    
    
    2.7
    
    
    
    3.4
    
    
    
    3.1
    
    
    
    3.0Brokered deposits
    
    
    15.9
    
    
    
    11.6
    
    
    
    11.7
    
    
    
    3.9
    
    
    
    2.5Time deposits under $100,000
    
    
    11.2
    
    
    
    13.5
    
    
    
    19.3
    
    
    
    25.6
    
    
    
    34.5Time deposits of $100,000 or more
    
    
    8.4
    
    
    
    8.9
    
    
    
    12.4
    
    
    
    14.6
    
    
    
    14.2Total deposits
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
     Elevate
  31




---



##### 



Table 14
Maturity Distribution of Time Deposits of $100,000 or More
(dollars in thousands)
 Three months or less
    
    $
    32,079Over three through six months
    
    
    53,140Over six through twelve months
    
    
    224,174Over twelve months
    
    
    336,427Total outstanding
    
    $
    645,820
 Borrowed Funds
  Table 15
Type of Borrowings
(dollars in thousands)
 December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000(Restated)
    
    
    (Restated)Short-Term BorrowingsFederal funds purchased and repurchase agreements
    
    $
    1,583,495
    
    
    $
    834,866
    
    
    $
    1,110,840
    
    
    $
    1,269,538
    
    
    $
    232,110FHLB advances
    
    
    
    
    
    
    
    
    
    
    29,600
    
    
    
    98,000
    
    
    
    203,000Commercial paper
    
    
    29,405
    
    
    
    36,949
    
    
    
    37,609
    
    
    
    26,902
    
    
    
    7,641Treasury, tax and loan note
    
    
    14,111
    
    
    
    11,781
    
    
    
    14,444
    
    
    
    25,060
    
    
    
    9,366Lines of credit and other
    
    
    
    
    
    
    7,349
    
    
    
    
    
    
    
    
    
    
    
    15,0001,627,011
    
    
    
    890,945
    
    
    
    1,192,493
    
    
    
    1,419,500
    
    
    
    467,117Long-Term BorrowingsRepurchase agreements
    
    
    1,665,134
    
    
    
    1,494,800
    
    
    
    400,000
    
    
    
    
    
    
    
    FHLB advances
    
    
    1,057,167
    
    
    
    989,500
    
    
    
    806,920
    
    
    
    371,290
    
    
    
    278,620Subordinated notes
    
    
    155,695
    
    
    
    135,075
    
    
    
    11,000
    
    
    
    37,344
    
    
    
    36,728Mandatory redeemable preferred stock of subsidiary
    
    
    89,800
    
    
    
    89,800
    
    
    
    
    
    
    
    
    
    
    
    Employee stock ownership plan note payable
    
    
    800
    
    
    
    1,100
    
    
    
    1,400
    
    
    
    1,675
    
    
    
    1,975Note payable
    
    
    900
    
    
    
    927
    
    
    
    968
    
    
    
    985
    
    
    
    1,003Purchase accounting premiums, net of amortization
    
    
    2,774
    
    
    
    497
    
    
    
    1,223
    
    
    
    
    
    
    
    Total long-term debt
    
    
    2,972,270
    
    
    
    2,711,699
    
    
    
    1,221,511
    
    
    
    411,294
    
    
    
    318,326Debt associated with trust preferred securities
    
    
    
    
    
    
    
    
    
    
    95,500
    
    
    
    31,000
    
    
    
    Total long-term borrowings
    
    
    2,972,270
    
    
    
    2,711,699
    
    
    
    1,317,011
    
    
    
    442,294
    
    
    
    318,326Total borrowings
    
    $
    4,599,281
    
    
    $
    3,602,644
    
    
    $
    2,509,504
    
    
    $
    1,861,794
    
    
    $
    785,443
  32




---



##### 



Table 16  Short-Term Borrowings  (dollars in thousands)
 Maximum
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    InterestOutstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rate atat any
    
    
    Average
    
    
    Average
    
    
    Ending
    
    
    YearYear Ended December 31,
    
    Month End
    
    
    Balance
    
    
    Interest Rate
    
    
    Balance
    
    
    End2004Federal funds purchased and repurchase agreements
    
    $
    1,715,306
    
    
    $
    1,275,936
    
    
    
    1.37
    %
    
    $
    1,583,495
    
    
    
    2.14
    %FHLB advances
    
    
    205,000
    
    
    
    17,084
    
    
    
    0.56
    
    
    
    
    
    
    
    Treasury, tax and loan note
    
    
    110,377
    
    
    
    17,740
    
    
    
    0.43
    
    
    
    14,111
    
    
    
    1.75Commercial paper
    
    
    39,743
    
    
    
    38,321
    
    
    
    2.86
    
    
    
    29,405
    
    
    
    2.79Line of credit to unaffiliated bank and other
    
    
    7,349
    
    
    
    1,249
    
    
    
    5.53
    
    
    
    
    
    
    
    $
    1,350,330
    
    
    
    1.40
    %
    
    $
    1,627,011
    
    
    
    2.15
    %2003Federal funds purchased and repurchase agreements
    
    $
    1,062,102
    
    
    $
    886,480
    
    
    
    1.14
    %
    
    $
    834,866
    
    
    
    0.96
    %FHLB advances
    
    
    5,000
    
    
    
    2,292
    
    
    
    4.25
    
    
    
    
    
    
    
    Treasury, tax and loan note
    
    
    18,387
    
    
    
    7,155
    
    
    
    0.57
    
    
    
    11,781
    
    
    
    0.57Commercial paper
    
    
    39,431
    
    
    
    37,880
    
    
    
    3.02
    
    
    
    36,949
    
    
    
    2.81Line of credit to unaffiliated bank and other
    
    
    7,350
    
    
    
    1,837
    
    
    
    3.03
    
    
    
    7,349
    
    
    
    2.85$
    935,644
    
    
    
    1.22
    %
    
    $
    890,945
    
    
    
    1.05
    %2002Federal funds purchased and repurchase agreements
    
    $
    1,521,495
    
    
    $
    1,365,117
    
    
    
    1.46
    %
    
    $
    1,110,840
    
    
    
    1.30
    %FHLB advances
    
    
    29,600
    
    
    
    22,936
    
    
    
    2.80
    
    
    
    29,600
    
    
    
    1.73Treasury, tax and loan note
    
    
    25,697
    
    
    
    13,412
    
    
    
    0.99
    
    
    
    14,444
    
    
    
    0.99Commercial paper
    
    
    40,559
    
    
    
    36,233
    
    
    
    3.62
    
    
    
    37,609
    
    
    
    3.18$
    1,437,698
    
    
    
    1.53
    %
    
    $
    1,192,493
    
    
    
    1.37
    %
    33




---



##### 



Environmental Remediation Costs
  Capital Resources and Dividends
      34




---



##### 



Table 17
Capital Ratios
 December 31, 2004
    
    Well Capitalized(Restated)
    
    RequirementTSFGTotal risk-based capital
    
    
    11.14
    %
    
    
    n/aTier 1 risk-based capital
    
    
    9.47
    
    
    
    n/aLeverage ratio
    
    
    7.34
    
    
    
    n/aCarolina First BankTotal risk-based capital
    
    
    11.20
    %
    
    
    10.0
    %Tier 1 risk-based capital
    
    
    8.77
    
    
    
    6.0Leverage ratio
    
    
    6.31
    
    
    
    5.0Mercantile BankTotal risk-based capital
    
    
    11.79
    %
    
    
    10.0
    %Tier 1 risk-based capital
    
    
    8.47
    
    
    
    6.0Leverage ratio
    
    
    7.23
    
    
    
    5.0
     Results of Operations
 Net Interest Income
  35




---



##### 



Table 18
Comparative Average Balances  Yields and Costs
(dollars in thousands)
 Years Ended December 31,2004 (Restated)
    
    
    2003 (Restated)
    
    
    2002 (Restated)Average
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateAssetsEarning assetsLoans (1)
    
    $
    6,927,336
    
    
    $
    376,742
    
    
    
    5.44
    %
    
    $
    4,915,437
    
    
    $
    280,609
    
    
    
    5.71
    %
    
    $
    4,008,094
    
    
    $
    260,718
    
    
    
    6.50
    %Investment securities, taxable (2)
    
    
    3,876,099
    
    
    
    157,171
    
    
    
    4.05
    
    
    
    3,334,410
    
    
    
    128,060
    
    
    
    3.84
    
    
    
    1,757,344
    
    
    
    87,554
    
    
    
    4.98Investment securities, nontaxable (2)(3)
    
    
    282,103
    
    
    
    12,446
    
    
    
    4.41
    
    
    
    136,914
    
    
    
    7,661
    
    
    
    5.60
    
    
    
    93,454
    
    
    
    6,719
    
    
    
    7.19Federal funds sold and interest
bearing bank balances
    
    
    16,413
    
    
    
    229
    
    
    
    1.40
    
    
    
    38,829
    
    
    
    479
    
    
    
    1.23
    
    
    
    65,185
    
    
    
    1,100
    
    
    
    1.69Total earning assets
    
    
    11,101,951
    
    
    
    546,588
    
    
    
    4.92
    
    
    
    8,425,590
    
    
    
    416,809
    
    
    
    4.95
    
    
    
    5,924,077
    
    
    
    356,091
    
    
    
    6.01Non-earning assets
    
    
    1,106,118
    
    
    
    
    
    
    
    
    
    
    
    836,067
    
    
    
    
    
    
    
    
    
    
    
    572,615Total assets
    
    $
    12,208,069
    
    
    
    
    
    
    
    
    
    
    $
    9,261,657
    
    
    
    
    
    
    
    
    
    
    $
    6,496,692Liabilities and Shareholders EquityLiabilitiesInterest-bearing liabilitiesInterest-bearing depositsInterest-bearing checking
    
    $
    735,461
    
    
    $
    3,641
    
    
    
    0.50
    %
    
    $
    645,836
    
    
    $
    3,824
    
    
    
    0.59
    %
    
    $
    604,714
    
    
    $
    6,718
    
    
    
    1.11
    %Savings
    
    
    183,403
    
    
    
    633
    
    
    
    0.35
    
    
    
    154,202
    
    
    
    674
    
    
    
    0.44
    
    
    
    123,855
    
    
    
    846
    
    
    
    0.68Money market
    
    
    2,513,187
    
    
    
    41,031
    
    
    
    1.63
    
    
    
    1,614,190
    
    
    
    26,775
    
    
    
    1.66
    
    
    
    806,964
    
    
    
    13,488
    
    
    
    1.67Time deposits
    
    
    2,429,133
    
    
    
    79,563
    
    
    
    3.28
    
    
    
    1,962,227
    
    
    
    64,833
    
    
    
    3.30
    
    
    
    1,755,861
    
    
    
    69,915
    
    
    
    3.98Total interest-bearing deposits
    
    
    5,861,184
    
    
    
    124,868
    
    
    
    2.13
    
    
    
    4,376,455
    
    
    
    96,106
    
    
    
    2.20
    
    
    
    3,291,394
    
    
    
    90,967
    
    
    
    2.76Borrowings
    
    
    4,034,522
    
    
    
    81,523
    
    
    
    2.02
    
    
    
    3,262,645
    
    
    
    67,132
    
    
    
    2.06
    
    
    
    2,005,513
    
    
    
    52,629
    
    
    
    2.62Total interest-bearing liabilities
    
    
    9,895,706
    
    
    
    206,391
    
    
    
    2.09
    
    
    
    7,639,100
    
    
    
    163,238
    
    
    
    2.14
    
    
    
    5,296,907
    
    
    
    143,596
    
    
    
    2.71Noninterest-bearing liabilitiesNoninterest-bearing deposits
    
    
    1,038,182
    
    
    
    
    
    
    
    
    
    
    
    767,957
    
    
    
    
    
    
    
    
    
    
    
    561,382Other noninterest-bearing liabilities
    
    
    110,177
    
    
    
    
    
    
    
    
    
    
    
    101,911
    
    
    
    
    
    
    
    
    
    
    
    76,447Total liabilities
    
    
    11,044,065
    
    
    
    
    
    
    
    
    
    
    
    8,508,968
    
    
    
    
    
    
    
    
    
    
    
    5,934,736Minority interest in consolidated
subsidiary (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,898
    
    
    
    
    
    
    
    
    
    
    
    62,377Shareholders equity
    
    
    1,164,004
    
    
    
    
    
    
    
    
    
    
    
    709,791
    
    
    
    
    
    
    
    
    
    
    
    499,579Total liabilities and shareholders
equity
    
    $
    12,208,069
    
    
    
    
    
    
    
    
    
    
    $
    9,261,657
    
    
    
    
    
    
    
    
    
    
    $
    6,496,692Net interest income (tax-equivalent)
    
    
    
    
    
    $
    340,197
    
    
    
    3.06
    %
    
    
    
    
    
    $
    253,571
    
    
    
    3.01
    %
    
    
    
    
    
    $
    212,495
    
    
    
    3.59
    %Less: tax-equivalent adjustment (3)
    
    
    
    
    
    
    4,356
    
    
    
    
    
    
    
    
    
    
    
    2,681
    
    
    
    
    
    
    
    
    
    
    
    2,352Net interest income
    
    
    
    
    
    $
    335,841
    
    
    
    
    
    
    
    
    
    
    $
    250,890
    
    
    
    
    
    
    
    
    
    
    $
    210,143
 
 (1)
    
    Nonaccrual loans are included in average balances for yield computations.(2)
    
    The average balances for investment securities exclude the unrealized gain or loss
recorded for available for sale securities.(3)
    
    The tax-equivalent adjustment to net interest income adjusts the yield for assets
earning tax-exempt income to a comparable yield on a taxable basis.(4)
    
    The minority interest in consolidated subsidiary pertains to the REIT preferred
stock, which qualifies as regulatory capital and pays cumulative dividends. Effective July 1,
2003, in accordance with the adoption of SFAS 150, TSFG reclassified these amounts to
long-term debt.Note:
    
    Average balances are derived from daily balances. 36




---



##### 



Table 19
Rate/Volume Variance Analysis (Restated)
(dollars in thousands)
 2004 Compared to 2003
    
    
    2003 Compared to 2002Total
    
    
    Change in
    
    
    Change
    
    
    Total
    
    
    Change in
    
    
    ChangeChange
    
    
    Volume
    
    
    in Rate
    
    
    Change
    
    
    Volume
    
    
    in RateEarning assetsLoans
    
    $
    96,133
    
    
    $
    109,980
    
    
    $
    (13,847
    )
    
    $
    19,891
    
    
    $
    54,332
    
    
    $
    (34,441
    )Investment securities, taxable
    
    
    29,111
    
    
    
    21,668
    
    
    
    7,443
    
    
    
    40,506
    
    
    
    64,230
    
    
    
    (23,724
    )Investment securities, nontaxable
    
    
    4,785
    
    
    
    6,691
    
    
    
    (1,906
    )
    
    
    942
    
    
    
    2,655
    
    
    
    (1,713
    )Federal funds sold and interest-bearing bank
balances
    
    
    (250
    )
    
    
    (335
    )
    
    
    85
    
    
    
    (621
    )
    
    
    (375
    )
    
    
    (246
    )Total interest income
    
    
    129,779
    
    
    
    138,004
    
    
    
    (8,225
    )
    
    
    60,718
    
    
    
    120,842
    
    
    
    (60,124
    )Interest-bearing liabilitiesInterest-bearing depositsInterest-bearing checking
    
    
    (183
    )
    
    
    491
    
    
    
    (674
    )
    
    
    (2,894
    )
    
    
    430
    
    
    
    (3,324
    )Savings
    
    
    (41
    )
    
    
    115
    
    
    
    (156
    )
    
    
    (172
    )
    
    
    177
    
    
    
    (349
    )Money market
    
    
    14,256
    
    
    
    14,684
    
    
    
    (428
    )
    
    
    13,287
    
    
    
    13,390
    
    
    
    (103
    )Time deposits
    
    
    14,730
    
    
    
    15,298
    
    
    
    (568
    )
    
    
    (5,082
    )
    
    
    7,646
    
    
    
    (12,728
    )Total interest-bearing deposits
    
    
    28,762
    
    
    
    30,588
    
    
    
    (1,826
    )
    
    
    5,139
    
    
    
    21,643
    
    
    
    (16,504
    )Borrowings
    
    
    14,391
    
    
    
    15,617
    
    
    
    (1,226
    )
    
    
    14,503
    
    
    
    27,692
    
    
    
    (13,189
    )Total interest expense
    
    
    43,153
    
    
    
    46,205
    
    
    
    (3,052
    )
    
    
    19,642
    
    
    
    49,335
    
    
    
    (29,693
    )Net interest income
    
    $
    86,626
    
    
    $
    91,799
    
    
    $
    (5,173
    )
    
    $
    41,076
    
    
    $
    71,507
    
    
    $
    (30,431
    )
     37




---



##### 



Provision for Loan Losses
   38




---



##### 



Noninterest Income
  Table 20
Components of Noninterest Income
(dollars in thousands)
 Years Ended December 31,2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Service charges on deposit accounts
    
    $
    36,332
    
    
    $
    30,856
    
    
    $
    23,410Debit card income
    
    
    4,211
    
    
    
    2,370
    
    
    
    1,425Customer service fee income
    
    
    2,956
    
    
    
    2,240
    
    
    
    1,705Total customer fee income
    
    
    43,499
    
    
    
    35,466
    
    
    
    26,540Brokerage income
    
    
    4,722
    
    
    
    5,181
    
    
    
    3,359Trust income
    
    
    3,779
    
    
    
    3,283
    
    
    
    3,064Total brokerage and trust income
    
    
    8,501
    
    
    
    8,464
    
    
    
    6,423Bank-owned life insurance
    
    
    11,215
    
    
    
    8,320
    
    
    
    7,429Merchant processing fees
    
    
    8,653
    
    
    
    7,214
    
    
    
    5,908Mortgage banking income
    
    
    6,106
    
    
    
    10,481
    
    
    
    5,144Insurance income
    
    
    4,520
    
    
    
    3,565
    
    
    
    1,698Gain on trading and derivative activities
    
    
    33,319
    
    
    
    7,092
    
    
    
    13,989Impairment of perpetual preferred stock
    
    
    (10,367
    )
    
    
    
    
    
    
    Gain on available for sale securities
    
    
    6,998
    
    
    
    11,080
    
    
    
    2,985Gain on equity investments
    
    
    4,723
    
    
    
    5,376
    
    
    
    3,135Gain on disposition of assets and liabilities
    
    
    2,350
    
    
    
    601
    
    
    
    Other
    
    
    5,360
    
    
    
    3,080
    
    
    
    1,312Total noninterest income
    
    $
    124,877
    
    
    $
    100,739
    
    
    $
    74,563Total noninterest income as a
percentage of total revenue (1)
    
    
    27.1
    %
    
    
    28.6
    %
    
    
    26.2
    %
 
 (1)
    
    Calculated as noninterest income, divided by the sum of net interest income and
noninterest income.     39




---



##### 



Table 21
Components of Mortgage Banking Income
(dollars in thousands)
 Years Ended December 31,2004
    
    
    2003
    
    
    2002Origination income and secondary marketing operations
    
    $
    6,833
    
    
    $
    12,734
    
    
    $
    8,936Mortgage servicing loss, net of related amortization and subservicing payments
    
    
    (936
    )
    
    
    (2,235
    )
    
    
    (2,696
    )Loss on sale of portfolio mortgage loans
    
    
    
    
    
    
    
    
    
    
    (393
    )Recovery (impairment) on mortgage servicing rights
    
    
    209
    
    
    
    (18
    )
    
    
    (703
    )Total mortgage banking income
    
    $
    6,106
    
    
    $
    10,481
    
    
    $
    5,144
         40




---



##### 



Noninterest Expenses
   Table 22
Components of Noninterest Expenses
(dollars in thousands)
 Years Ended December 31,2004
    
    
    2003
    
    
    2002Salaries and wages
    
    $
    89,141
    
    
    $
    78,243
    
    
    $
    58,688Employee benefits
    
    
    29,269
    
    
    
    22,535
    
    
    
    16,430Occupancy
    
    
    21,878
    
    
    
    18,925
    
    
    
    15,238Furniture and equipment
    
    
    20,938
    
    
    
    17,922
    
    
    
    15,341Professional fees
    
    
    8,206
    
    
    
    6,479
    
    
    
    5,289Merchant processing expense
    
    
    6,811
    
    
    
    5,622
    
    
    
    4,767Telecommunications
    
    
    4,834
    
    
    
    4,815
    
    
    
    3,564Amortization of intangibles
    
    
    6,043
    
    
    
    3,433
    
    
    
    1,519Merger-related costs
    
    
    7,866
    
    
    
    5,127
    
    
    
    6,664Employment contract payments
    
    
    1,080
    
    
    
    512
    
    
    
    1,846Impairment (recovery) loss from write-down of assets
    
    
    (277
    )
    
    
    268
    
    
    
    1,449Conservation grant of land
    
    
    3,350
    
    
    
    
    
    
    
    Loss on early extinguishment of debt
    
    
    1,429
    
    
    
    2,699
    
    
    
    354Other
    
    
    49,676
    
    
    
    40,590
    
    
    
    31,691Total noninterest expenses
    
    $
    250,244
    
    
    $
    207,170
    
    
    $
    162,840Efficiency ratio (1)
    
    
    54.3
    %
    
    
    58.9
    %
    
    
    57.2
    %
 
 (1)
    
    Calculated as noninterest expenses, divided by the sum of net interest income and
noninterest income.   41




---



##### 



Income Taxes
   Risk Management
    Market Risk and Asset/Liability Management
  42




---



##### 



Table 23
Net Interest Income at Risk Analysis
 Annualized Hypothetical Percentage Change inInterest Rate Scenario
    
    
    Net Interest Income2.00%
    
    
    
    (0.86
    )%1.00
    
    
    
    (0.11)Flat
    
    
    
    (1.00)
    
    
    
    (3.65
    )
    43




---



##### 



Table 24
Economic Value of Equity Risk Analysis
 Annualized Hypothetical Percentage Change inInterest Rate Scenario
    
    
    Economic Value of Equity2.00%
    
    
    
    0.78
    %1.00
    
    
    
    1.18Flat
    
    
    
    (1.00)
    
    
    
    (4.72
    )
   44




---



##### 



Table 25
Interest Sensitivity Gap Analysis (Restated)
(dollars in thousands)
 0-3
    
    
    4-12
    
    
    One to
    
    
    AfterMonths
    
    
    Months
    
    
    Three Years
    
    
    Three Years
    
    
    TotalInterest-Sensitive AssetsEarning assetsLoans
    
    $
    5,300,099
    
    
    $
    792,083
    
    
    $
    1,280,730
    
    
    $
    756,147
    
    
    $
    8,129,059Investment securities (1)
    
    
    666,703
    
    
    
    727,902
    
    
    
    642,652
    
    
    
    2,302,355
    
    
    
    4,339,612Federal funds sold and interest-bearing
bank balances
    
    
    4,669
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,669Total earning assets
    
    $
    5,971,471
    
    
    $
    1,519,985
    
    
    $
    1,923,382
    
    
    $
    3,058,502
    
    
    $
    12,473,340Interest-Sensitive LiabilitiesLiabilitiesInterest-sensitive liabilitiesInterest-bearing depositsInterest checking
    
    $
    
    
    
    $
    245,080
    
    
    $
    285,927
    
    
    $
    285,926
    
    
    $
    816,933Savings
    
    
    
    
    
    
    19,277
    
    
    
    96,384
    
    
    
    77,108
    
    
    
    192,769Money market
    
    
    2,335,975
    
    
    
    151,658
    
    
    
    108,327
    
    
    
    108,327
    
    
    
    2,704,287Time deposits
    
    
    704,636
    
    
    
    1,457,642
    
    
    
    357,532
    
    
    
    199,268
    
    
    
    2,719,078Total interest-bearing deposits
    
    
    3,040,611
    
    
    
    1,873,657
    
    
    
    848,170
    
    
    
    670,629
    
    
    
    6,433,067Noninterest-bearing deposits (2)
    
    
    
    
    
    
    123,788
    
    
    
    618,938
    
    
    
    495,151
    
    
    
    1,237,877Borrowings
    
    
    3,991,771
    
    
    
    80,339
    
    
    
    124,072
    
    
    
    403,099
    
    
    
    4,599,281Total interest-sensitive liabilities
    
    
    7,032,382
    
    
    
    2,077,784
    
    
    
    1,591,180
    
    
    
    1,568,879
    
    
    
    12,270,225Periodic interest-sensitive gap
    
    $
    (1,060,911
    )
    
    $
    (557,799
    )
    
    $
    332,202
    
    
    $
    1,489,623
    
    
    $
    203,115Cumulative interest-sensitive gap
    
    $
    (1,060,911
    )
    
    $
    (1,618,710
    )
    
    $
    (1,286,508
    )
    
    $
    203,115
    
    
    $
    
 
 (1)
    
    Investment securities exclude the unrealized loss on available for sale securities
of $29.5 million.(2)
    
    Noninterest-bearing deposits respond in part to changes in interest rates.  Derivatives and Hedging Activities.
   45




---



##### 



Economic Risk
  Credit Risk
  Liquidity Risks
  Operational Risk
    46




---



##### 



Compliance and Litigation Risks
    Off-Balance Sheet Arrangements
  Lending Commitments.
    47




---



##### 



Derivatives.
  Liquidity
   Table 26
Contractual Obligations (Restated)
(dollars in thousands)
 Payments Due by PeriodLessthan 1
    
    
    1-3
    
    
    4-5
    
    
    After 5Total
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    YearsTime deposits
    
    $
    2,719,078
    
    
    $
    1,234,479
    
    
    $
    333,514
    
    
    $
    241,887
    
    
    $
    909,198Short-term borrowings
    
    
    1,627,011
    
    
    
    1,627,011
    
    
    
    
    
    
    
    
    
    
    
    Long-term debt
    
    
    2,969,496
    
    
    
    9,335
    
    
    
    247,713
    
    
    
    1,232,900
    
    
    
    1,479,548Operating leases
    
    
    122,804
    
    
    
    11,061
    
    
    
    21,265
    
    
    
    18,174
    
    
    
    72,304Total contractual cash obligations
    
    $
    7,438,389
    
    
    $
    2,881,886
    
    
    $
    602,492
    
    
    $
    1,492,961
    
    
    $
    2,461,050
    48




---



##### 



Recently Adopted Accounting Pronouncements
 Accounting for Investments in Limited Liability Companies
  Accounting for Certain Loans or Debt Securities Acquired in a Transfer
  Recently Issued Accounting Pronouncements
 The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments
    49




---



##### 



Share-Based Payment
  
    
    Employee awards with cash-based settlement or repurchase features, such as a stock
appreciation right with a cash-settlement option;
    
    Awards for a fixed dollar amount settleable in the companys stock;
    
    Share-based awards with a net-settlement feature for an amount in excess of the minimum tax withholding; and
    
    Awards that vest or become exercisable based on the achievement of a condition other
than service, performance, or market condition.
  
    
    Share-based awards with net-settlement features for minimum tax withholdings;
    
    Awards that permit a cashless exercise using a broker unrelated to the employer;
    
    Awards containing a put feature that give employees the right to require the company to
repurchase the shares at fair value, when the employee bears the risks and rewards normally
associated with ownership for six months or longer.
  Accounting for Nonmonetary Transactions
  Item 7A. Quantitative and Qualitative Disclosures about Market Risk
  50




---



##### 



Item 8. Financial Statements and Supplementary Data
 MANAGEMENTS STATEMENT OF FINANCIAL RESPONSIBILITY
     -s- Mack I. Whittle, Jr.
    

-s- Timothy K. SchoolsMack I. Whittle, Jr.
    
    Timothy K. SchoolsPresident and
    
    Executive Vice PresidentChief Executive Officer
    
    and Chief Financial Officer
 51




---



##### 



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING (Restated)
    Accounting for Derivative Instruments and Hedging Activities (SFAS 133)
   -s- Mac I. Whittle, Jr.
    
    -s- Mac I. Whittle, Jr.Mack I. Whittle, Jr.
    
    Timothy K. SchoolsPresident and
    
    Executive Vice PresidentChief Executive Officer
    
    and Chief Financial Officer
 52




---



##### 



Report of Independent Registered Public Accounting Firm
 The Board of Directors and Shareholders
The South Financial Group, Inc.:
     Accounting for Derivative Instruments and Hedging Activities
(SFAS 133)
   53




---



##### 



54




---



##### 



Report of Independent Registered Public Accounting Firm
 The Board of Directors and Shareholders
The South Financial Group, Inc.:
      
 
 55




---



##### 



THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
 December 31,2004
    
    
    2003(Restated)
    
    
    (Restated)AssetsCash and due from banks
    
    $
    199,847
    
    
    $
    184,057Interest-bearing bank balances
    
    
    4,669
    
    
    
    2,048Federal funds sold
    
    
    
    
    
    
    137SecuritiesTrading
    
    
    
    
    
    
    480Available for sale
    
    
    4,234,843
    
    
    
    3,915,994Held to maturity (market value $76,552 in 2004 and $93,188 in 2003)
    
    
    75,245
    
    
    
    91,097Total securities
    
    
    4,310,088
    
    
    
    4,007,571LoansLoans held for sale
    
    
    21,302
    
    
    
    29,619Loans held for investment
    
    
    8,107,757
    
    
    
    5,732,205Allowance for loan losses
    
    
    (96,918
    )
    
    
    (73,287
    )Net loans
    
    
    8,032,141
    
    
    
    5,688,537Premises and equipment, net
    
    
    170,648
    
    
    
    142,705Accrued interest receivable
    
    
    65,174
    
    
    
    48,365Goodwill
    
    
    571,853
    
    
    
    324,495Other intangible assets
    
    
    39,597
    
    
    
    28,584Other assets
    
    
    404,188
    
    
    
    297,741$
    13,798,205
    
    
    $
    10,724,240Liabilities and Shareholders EquityLiabilitiesDepositsNoninterest-bearing
    
    $
    1,237,877
    
    
    $
    882,129Interest-bearing
    
    
    6,433,067
    
    
    
    5,150,109Total deposits
    
    
    7,670,944
    
    
    
    6,032,238Federal funds purchased and repurchase agreements
    
    
    1,583,495
    
    
    
    834,866Other short-term borrowings
    
    
    43,516
    
    
    
    56,079Long-term debt
    
    
    2,972,270
    
    
    
    2,711,699Accrued interest payable
    
    
    31,943
    
    
    
    24,520Other liabilities
    
    
    102,577
    
    
    
    92,539Total liabilities
    
    
    12,404,745
    
    
    
    9,751,941Shareholders equityPreferred stock-no par value; authorized 10,000,000 shares; issued and
outstanding none
    
    
    
    
    
    
    Common stock-par value $1 per share; authorized 200,000,000 shares; issued
and outstanding 71,252,346 shares in 2004 and 59,064,375 shares in 2003
    
    
    71,252
    
    
    
    59,064Surplus
    
    
    1,056,185
    
    
    
    712,788Retained earnings
    
    
    288,002
    
    
    
    210,087Guarantee of employee stock ownership plan debt and nonvested restricted stock
    
    
    (3,483
    )
    
    
    (2,494
    )Common stock held in trust for deferred compensation
    
    
    (901
    )
    
    
    (151
    )Deferred compensation payable in common stock
    
    
    901
    
    
    
    151Accumulated other comprehensive loss, net of tax
    
    
    (18,496
    )
    
    
    (7,146
    )Total shareholders equity
    
    
    1,393,460
    
    
    
    972,299$
    13,798,205
    
    
    $
    10,724,240
  56




---



##### 



THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
 Year Ended December 31,2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Interest IncomeInterest and fees on loans
    
    $
    376,742
    
    
    $
    280,609
    
    
    $
    260,718Interest and dividends on securities:Taxable
    
    
    157,171
    
    
    
    128,060
    
    
    
    87,554Exempt from federal income taxes
    
    
    8,090
    
    
    
    4,980
    
    
    
    4,367Total interest and dividends on securities
    
    
    165,261
    
    
    
    133,040
    
    
    
    91,921Interest on short-term investments
    
    
    229
    
    
    
    479
    
    
    
    1,100Total interest income
    
    
    542,232
    
    
    
    414,128
    
    
    
    353,739Interest ExpenseInterest on deposits
    
    
    124,868
    
    
    
    96,106
    
    
    
    90,967Interest on short-term borrowings
    
    
    18,908
    
    
    
    11,419
    
    
    
    21,975Interest on long-term debt
    
    
    62,615
    
    
    
    55,713
    
    
    
    30,654Total interest expense
    
    
    206,391
    
    
    
    163,238
    
    
    
    143,596Net Interest Income
    
    
    335,841
    
    
    
    250,890
    
    
    
    210,143Provision for Loan Losses
    
    
    34,987
    
    
    
    20,581
    
    
    
    22,266Net interest income after provision for loan losses
    
    
    300,854
    
    
    
    230,309
    
    
    
    187,877Noninterest Income
    
    
    124,877
    
    
    
    100,739
    
    
    
    74,563Noninterest Expenses
    
    
    250,244
    
    
    
    207,170
    
    
    
    162,840Income before income taxes, minority interest, discontinued operations,
and cumulative effect of change in accounting principle
    
    
    175,487
    
    
    
    123,878
    
    
    
    99,600Income taxes
    
    
    55,489
    
    
    
    38,283
    
    
    
    31,111Income before minority interest, discontinued operations, and cumulative
effect of change in accounting principle
    
    
    119,998
    
    
    
    85,595
    
    
    
    68,489Minority interest in consolidated subsidiary, net of income tax
    
    
    
    
    
    
    (2,012
    )
    
    
    (3,250
    )Income from continuing operations
    
    
    119,998
    
    
    
    83,583
    
    
    
    65,239Discontinued operations, net of income tax
    
    
    (490
    )
    
    
    
    
    
    
    Cumulative effect of change in accounting principle, net of income tax
    
    
    
    
    
    
    
    
    
    
    (1,406
    )Net Income
    
    $
    119,508
    
    
    $
    83,583
    
    
    $
    63,833Average Common Shares Outstanding, Basic
    
    
    64,592
    
    
    
    49,204
    
    
    
    41,715Average Common Shares Outstanding, Diluted
    
    
    66,235
    
    
    
    50,328
    
    
    
    42,715Per Common Share, BasicIncome from continuing operations
    
    $
    1.86
    
    
    $
    1.70
    
    
    $
    1.56Discontinued operations
    
    
    (0.01
    )
    
    
    
    
    
    
    Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.03
    )Net income
    
    $
    1.85
    
    
    $
    1.70
    
    
    $
    1.53Per Common Share, DilutedIncome from continuing operations
    
    $
    1.81
    
    
    $
    1.66
    
    
    $
    1.53Discontinued operations
    
    
    (0.01
    )
    
    
    
    
    
    
    Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.04
    )Net income
    
    $
    1.80
    
    
    $
    1.66
    
    
    $
    1.49
  57




---



##### 



THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
(dollars in thousands, except per share data)
 Retained
    
    
    AccumulatedShares of
    
    
    
    
    
    
    
    
    
    
    Earnings
    
    
    OtherCommon
    
    
    Common
    
    
    
    
    
    
    and
    
    
    ComprehensiveStock
    
    
    Stock
    
    
    Surplus
    
    
    Other*
    
    
    Income (Loss)
    
    
    TotalBalance, December 31, 2001
    
    
    41,228,976
    
    
    
    41,229
    
    
    
    311,305
    
    
    
    111,744
    
    
    
    (6,104
    )
    
    
    458,174Prior period adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    209
    
    
    
    
    
    
    
    209Balance, December 31, 2001 (restated)
    
    
    41,228,976
    
    
    
    41,229
    
    
    
    311,305
    
    
    
    111,953
    
    
    
    (6,104
    )
    
    
    458,383Net income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,833
    
    
    
    
    
    
    
    63,833Other comprehensive income, net of tax of $13,594
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,254
    
    
    
    30,254Comprehensive income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    94,087Cash dividends declared ($0.50 per common share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,493
    )
    
    
    
    
    
    
    (21,493
    )Common stock activity:Acquisitions
    
    
    7,846,353
    
    
    
    7,846
    
    
    
    157,321
    
    
    
    (1,927
    )
    
    
    
    
    
    
    163,240Repurchase of stock
    
    
    (2,141,907
    )
    
    
    (2,142
    )
    
    
    (46,341
    )
    
    
    
    
    
    
    
    
    
    
    (48,483
    )Exercise of stock options
    
    
    341,895
    
    
    
    342
    
    
    
    2,932
    
    
    
    
    
    
    
    
    
    
    
    3,274Dividend reinvestment plan
    
    
    102,732
    
    
    
    103
    
    
    
    1,934
    
    
    
    
    
    
    
    
    
    
    
    2,037Cancellation of stock
    
    
    (100,575
    )
    
    
    (101
    )
    
    
    (1,926
    )
    
    
    
    
    
    
    
    
    
    
    (2,027
    )Restricted stock plan
    
    
    59,096
    
    
    
    59
    
    
    
    1,950
    
    
    
    44
    
    
    
    
    
    
    
    2,053Employee stock purchase plan
    
    
    10,805
    
    
    
    11
    
    
    
    199
    
    
    
    
    
    
    
    
    
    
    
    210Miscellaneous
    
    
    
    
    
    
    
    
    
    
    74
    
    
    
    328
    
    
    
    
    
    
    
    402Balance, December 31, 2002 (restated)
    
    
    47,347,375
    
    
    
    47,347
    
    
    
    427,448
    
    
    
    152,738
    
    
    
    24,150
    
    
    
    651,683Net income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83,583
    
    
    
    
    
    
    
    83,583Other comprehensive loss, net of tax of $16,461 (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,296
    )
    
    
    (31,296
    )Comprehensive income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,287Cash dividends declared ($0.57 per common share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,327
    )
    
    
    
    
    
    
    (29,327
    )Common stock activity:Issuance of stock, net
    
    
    6,325,000
    
    
    
    6,325
    
    
    
    154,758
    
    
    
    
    
    
    
    
    
    
    
    161,083Acquisitions
    
    
    5,634,760
    
    
    
    5,635
    
    
    
    139,074
    
    
    
    454
    
    
    
    
    
    
    
    145,163Repurchase of stock
    
    
    (1,274,808
    )
    
    
    (1,275
    )
    
    
    (27,283
    )
    
    
    
    
    
    
    
    
    
    
    (28,558
    )Exercise of stock options, including income tax
benefit of $2,358
    
    
    792,757
    
    
    
    793
    
    
    
    11,708
    
    
    
    
    
    
    
    
    
    
    
    12,501Dividend reinvestment plan
    
    
    135,330
    
    
    
    135
    
    
    
    2,921
    
    
    
    
    
    
    
    
    
    
    
    3,056Restricted stock plan
    
    
    66,860
    
    
    
    67
    
    
    
    3,232
    
    
    
    (1
    )
    
    
    
    
    
    
    3,298Employee stock purchase plan
    
    
    23,511
    
    
    
    23
    
    
    
    373
    
    
    
    
    
    
    
    
    
    
    
    396Director compensation
    
    
    13,590
    
    
    
    14
    
    
    
    330
    
    
    
    
    
    
    
    
    
    
    
    344Common stock purchased by trust for deferred
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (151
    )
    
    
    
    
    
    
    (151
    )Deferred compensation payable in common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    151
    
    
    
    
    
    
    
    151Miscellaneous
    
    
    
    
    
    
    
    
    
    
    227
    
    
    
    146
    
    
    
    
    
    
    
    373Balance, December 31, 2003 (restated)
    
    
    59,064,375
    
    
    
    59,064
    
    
    
    712,788
    
    
    
    207,593
    
    
    
    (7,146
    )
    
    
    972,299Net income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    119,508
    
    
    
    
    
    
    
    119,508Other comprehensive loss, net of tax of $6,667 (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,350
    )
    
    
    (11,350
    )Comprehensive income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108,158Cash dividends declared ($0.61 per common share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41,594
    )
    
    
    
    
    
    
    (41,594
    )Common stock activity:Acquisitions
    
    
    10,754,557
    
    
    
    10,754
    
    
    
    318,733
    
    
    
    241
    
    
    
    
    
    
    
    329,728Exercise of stock options, including income tax
benefit of $5,421
    
    
    1,098,105
    
    
    
    1,098
    
    
    
    17,042
    
    
    
    
    
    
    
    
    
    
    
    18,140Dividend reinvestment plan
    
    
    117,660
    
    
    
    118
    
    
    
    3,135
    
    
    
    
    
    
    
    
    
    
    
    3,253Restricted stock plan
    
    
    197,607
    
    
    
    198
    
    
    
    3,901
    
    
    
    (1,478
    )
    
    
    
    
    
    
    2,621Employee stock purchase plan
    
    
    11,393
    
    
    
    11
    
    
    
    306
    
    
    
    
    
    
    
    
    
    
    
    317Director compensation
    
    
    8,659
    
    
    
    9
    
    
    
    240
    
    
    
    
    
    
    
    
    
    
    
    249Common stock purchased by trust for deferred
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (750
    )
    
    
    
    
    
    
    (750
    )Deferred compensation payable in common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750
    
    
    
    
    
    
    
    750Miscellaneous
    
    
    (10
    )
    
    
    
    
    
    
    40
    
    
    
    249
    
    
    
    
    
    
    
    289Balance, December 31, 2004 (restated)
    
    
    71,252,346
    
    
    $
    71,252
    
    
    $
    1,056,185
    
    
    $
    284,519
    
    
    $
    (18,496
    )
    
    $
    1,393,460
 
 *
    
    Other includes guarantee of employee stock ownership plan debt, nonvested restricted stock and
deferred compensation.  58




---



##### 



THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
 Years Ended December 31,2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Cash Flows from Operating ActivitiesNet income
    
    $
    119,508
    
    
    $
    83,583
    
    
    $
    63,833Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation, amortization, and accretion, net
    
    
    52,733
    
    
    
    54,180
    
    
    
    33,572Provision for loan losses
    
    
    34,987
    
    
    
    20,581
    
    
    
    22,266Impairment of perpetual preferred stock
    
    
    10,367
    
    
    
    
    
    
    
    Gain on sale of available for sale securities
    
    
    (6,998
    )
    
    
    (11,080
    )
    
    
    (2,985
    )Gain on equity investments
    
    
    (4,723
    )
    
    
    (5,376
    )
    
    
    (3,135
    )(Gain) loss on trading and derivative activities
    
    
    (5,759
    )
    
    
    12,394
    
    
    
    (6,593
    )Gain on disposition of assets and liabilities
    
    
    (2,350
    )
    
    
    (601
    )
    
    
    Gain on sale of loans
    
    
    (6,818
    )
    
    
    (7,734
    )
    
    
    (2,957
    )Loss (gain) on disposition of premises and equipment
    
    
    161
    
    
    
    (64
    )
    
    
    (60
    )Loss on disposition of other real estate owned
    
    
    485
    
    
    
    712
    
    
    
    599Conservation grant of land
    
    
    3,350
    
    
    
    
    
    
    
    Impairment (recovery) loss from write-down of assets
    
    
    (277
    )
    
    
    449
    
    
    
    1,449Impairment (recovery) loss from write-down of mortgage servicing rights
    
    
    (209
    )
    
    
    18
    
    
    
    703Loss on early extinguishment of debt
    
    
    1,429
    
    
    
    2,699
    
    
    
    354Deferred income tax expense (benefit)
    
    
    9,433
    
    
    
    (7,993
    )
    
    
    690Minority interest in consolidated subsidiary
    
    
    
    
    
    
    2,012
    
    
    
    3,250Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    1,406Trading account assets, net
    
    
    549
    
    
    
    (1,403
    )
    
    
    209,158Origination of loans held for sale
    
    
    (557,445
    )
    
    
    (620,154
    )
    
    
    (498,553
    )Sale of loans held for sale and principal repayments
    
    
    625,684
    
    
    
    668,282
    
    
    
    463,728Other assets, net
    
    
    (33,959
    )
    
    
    (10,963
    )
    
    
    (1,850
    )Other liabilities, net
    
    
    (11,046
    )
    
    
    4,056
    
    
    
    12,928Net cash provided by operating activities
    
    
    229,102
    
    
    
    183,598
    
    
    
    297,803Cash Flows from Investing ActivitiesSale of securities available for sale
    
    
    1,826,897
    
    
    
    1,717,382
    
    
    
    1,174,005Maturity, redemption, call, or principal repayments of securities available for sale
    
    
    1,417,347
    
    
    
    2,343,755
    
    
    
    1,593,485Maturity, redemption, call, or principal repayments of securities held to maturity
    
    
    15,114
    
    
    
    37,260
    
    
    
    9,647Purchase of available for sale securities
    
    
    (3,617,212
    )
    
    
    (5,466,725
    )
    
    
    (3,649,784
    )Purchase of securities held to maturity
    
    
    
    
    
    
    (42,238
    )
    
    
    (11,861
    )Purchase of bank-owned life insurance
    
    
    (15,000
    )
    
    
    (25,000
    )
    
    
    Originations of loans held for investment, net of principal repayments
    
    
    (982,225
    )
    
    
    (570,435
    )
    
    
    (144,449
    )Sale of other real estate owned
    
    
    12,477
    
    
    
    14,904
    
    
    
    6,151Sale of premises and equipment
    
    
    4,166
    
    
    
    2,620
    
    
    
    1,527Sale of long-lived assets held for sale
    
    
    908
    
    
    
    
    
    
    
    Purchase of premises and equipment
    
    
    (30,749
    )
    
    
    (16,494
    )
    
    
    (16,432
    )Disposition of assets and liabilities, net
    
    
    (1,394
    )
    
    
    (5,738
    )
    
    
    Cash equivalents acquired for branch acquisitions
    
    
    6,919
    
    
    
    
    
    
    
    Cash equivalents acquired, net of payment for purchase acquisitions
    
    
    241,215
    
    
    
    31,435
    
    
    
    78,817Net cash used for investing activities
    
    
    (1,121,537
    )
    
    
    (1,979,274
    )
    
    
    (958,894
    )
  59




---



##### 



THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
 Years Ended December 31,2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Cash Flows from Financing ActivitiesDeposits, net
    
    
    91,591
    
    
    
    677,018
    
    
    
    198,477Federal funds purchased and repurchase agreements, net
    
    
    629,351
    
    
    
    (291,182
    )
    
    
    (207,762
    )Other short-term borrowings, net
    
    
    (13,563
    )
    
    
    (33,838
    )
    
    
    (78,069
    )Issuance of long-term debt
    
    
    1,321,134
    
    
    
    1,295,295
    
    
    
    790,200Payments of long-term debt
    
    
    (1,094,134
    )
    
    
    (69,756
    )
    
    
    (36,006
    )Prepayment penalty on early extinguishment of debt
    
    
    (1,429
    )
    
    
    (2,699
    )
    
    
    Issuance of common stock, net
    
    
    
    
    
    
    161,083
    
    
    
    Issuance of preferred stock associated with minority interest stock, net
    
    
    
    
    
    
    
    
    
    
    49,248Issuance of debt associated with trust preferred securities, net
    
    
    
    
    
    
    
    
    
    
    62,496Cash dividends paid on common stock
    
    
    (39,068
    )
    
    
    (27,089
    )
    
    
    (19,823
    )Cash dividends paid on minority interest
    
    
    
    
    
    
    (3,997
    )
    
    
    (4,448
    )Repurchase of common stock
    
    
    
    
    
    
    (28,558
    )
    
    
    (48,483
    )Other common stock activity
    
    
    16,827
    
    
    
    14,312
    
    
    
    5,923Net cash provided by financing activities
    
    
    910,709
    
    
    
    1,690,589
    
    
    
    711,753Net change in cash and cash equivalents
    
    
    18,274
    
    
    
    (105,087
    )
    
    
    50,662Cash and cash equivalents at beginning of year
    
    
    186,242
    
    
    
    291,329
    
    
    
    240,667Cash and cash equivalents at end of year
    
    $
    204,516
    
    
    $
    186,242
    
    
    $
    291,329Supplemental Cash Flow DataInterest paid
    
    $
    178,350
    
    
    $
    139,640
    
    
    $
    133,865Income taxes paid
    
    
    57,863
    
    
    
    37,217
    
    
    
    32,489Significant non-cash investing and financing transactions:Available for sale securities transferred to trading securities and
subsequently sold
    
    
    
    
    
    
    
    
    
    
    208,163Debt associated with trust preferred securities transferred to long-term debt
    
    
    
    
    
    
    115,500
    
    
    
    Minority interest in consolidated subsidiary reclassified to long-term debt
    
    
    
    
    
    
    89,800
    
    
    
    Change in unrealized (loss) gain on available for sale securities
    
    
    (18,017
    )
    
    
    (47,757
    )
    
    
    43,848Loans transferred to other real estate owned
    
    
    10,868
    
    
    
    16,070
    
    
    
    12,378Business combinations:Fair value of assets acquired (includes cash and cash equivalents)
    
    
    2,117,114
    
    
    
    1,043,995
    
    
    
    1,103,555Fair value of common stock issued and stock options recognized
    
    
    (329,728
    )
    
    
    (145,163
    )
    
    
    (163,240
    )Basis of stock investment in acquiree, shares canceled effective with the
acquisition closing date
    
    
    (8,970
    )
    
    
    
    
    
    
    Cash paid for common shares
    
    
    (4
    )
    
    
    (24
    )
    
    
    (32,408
    )Liabilities assumed
    
    
    1,778,412
    
    
    
    898,808
    
    
    
    907,907
  60




---



##### 



THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Summary of Significant Accounting Policies
  Nature of Operations
  Accounting Estimates and Assumptions
  Principles of Consolidation
   61




---



##### 



Reclassifications
  Restatement
       62




---



##### 



Impact to Consolidated Balance Sheets(In thousands)December 31, 2004
    
    December 31, 2003As
    
    
    
    
    
    AsPreviously
    
    As
    
    Previously
    
    AsReported
    
    Restated
    
    Reported
    
    RestatedOther assets
    
    $
    395,797
    
    
    $
    404,188
    
    
    $
    292,902
    
    
    $
    297,741Total assets
    
    
    13,789,814
    
    
    
    13,798,205
    
    
    
    10,719,401
    
    
    
    10,724,240Interest-bearing deposits
    
    
    6,427,660
    
    
    
    6,433,067
    
    
    
    5,146,520
    
    
    
    5,150,109Total deposits
    
    
    7,665,537
    
    
    
    7,670,944
    
    
    
    6,028,649
    
    
    
    6,032,238Long-term debt
    
    
    2,962,143
    
    
    
    2,972,270
    
    
    
    2,702,879
    
    
    
    2,711,699Total liabilities
    
    
    12,389,211
    
    
    
    12,404,745
    
    
    
    9,739,532
    
    
    
    9,751,941Retained earnings
    
    
    294,202
    
    
    
    288,002
    
    
    
    216,678
    
    
    
    210,087Accumulated other comprehensive loss, net of tax
    
    
    (17,553
    )
    
    
    (18,496
    )
    
    
    (6,167
    )
    
    
    (7,146
    )Total shareholders equity
    
    
    1,400,603
    
    
    
    1,393,460
    
    
    
    979,869
    
    
    
    972,299
 63




---



##### 



Impact to Consolidated Statements of Income(In thousands, except share data)Year Ended December 31,2004
    
    2003
    
    2002As
    
    
    
    
    
    As
    
    
    
    
    
    AsPreviously
    
    As
    
    Previously
    
    As
    
    Previously
    
    AsReported
    
    Restated
    
    Reported
    
    Restated
    
    Reported
    
    RestatedInterest expense on deposits
    
    $
    96,619
    
    
    $
    124,868
    
    
    $
    76,344
    
    
    $
    96,106
    
    
    $
    82,858
    
    
    $
    90,967Interest expense on long-term debt
    
    
    59,977
    
    
    
    62,615
    
    
    
    53,774
    
    
    
    55,713
    
    
    
    30,654
    
    
    
    30,654Total interest expense
    
    
    175,504
    
    
    
    206,391
    
    
    
    141,537
    
    
    
    163,238
    
    
    
    135,487
    
    
    
    143,596Net interest income
    
    
    366,728
    
    
    
    335,841
    
    
    
    272,591
    
    
    
    250,890
    
    
    
    218,252
    
    
    
    210,143Net interest income after provision for loan
losses
    
    
    331,741
    
    
    
    300,854
    
    
    
    252,010
    
    
    
    230,309
    
    
    
    195,986
    
    
    
    187,877Noninterest income
    
    
    94,767
    
    
    
    124,877
    
    
    
    95,490
    
    
    
    100,739
    
    
    
    59,640
    
    
    
    74,563Income before income taxes, minority interest,
discontinued operations, and cumulative
effect of change in accounting principle
    
    
    176,264
    
    
    
    175,487
    
    
    
    140,330
    
    
    
    123,878
    
    
    
    92,786
    
    
    
    99,600Income taxes
    
    
    56,657
    
    
    
    55,489
    
    
    
    43,260
    
    
    
    38,283
    
    
    
    28,972
    
    
    
    31,111Income before minority interest,
discontinued operations, and cumulative
effect of change in accounting principle
    
    
    119,607
    
    
    
    119,998
    
    
    
    97,070
    
    
    
    85,595
    
    
    
    63,814
    
    
    
    68,489Income from continuing operations
    
    
    119,607
    
    
    
    119,998
    
    
    
    95,058
    
    
    
    83,583
    
    
    
    60,564
    
    
    
    65,239Net income
    
    
    119,117
    
    
    
    119,508
    
    
    
    95,058
    
    
    
    83,583
    
    
    
    59,158
    
    
    
    63,833Per common share, basic:Income from continuing
operations
    
    $
    1.85
    
    
    $
    1.86
    
    
    $
    1.93
    
    
    $
    1.70
    
    
    $
    1.45
    
    
    $
    1.56Net income
    
    
    1.84
    
    
    
    1.85
    
    
    
    1.93
    
    
    
    1.70
    
    
    
    1.42
    
    
    
    1.53Per common share, diluted:Income from continuing
operations
    
    $
    1.81
    
    
    $
    1.81
    
    
    $
    1.89
    
    
    $
    1.66
    
    
    $
    1.42
    
    
    $
    1.53Net income
    
    
    1.80
    
    
    
    1.80
    
    
    
    1.89
    
    
    
    1.66
    
    
    
    1.38
    
    
    
    1.49
 Impact to Consolidated
Statements of Changes In Shareholders Equityand Comprehensive Income (Loss)(In thousands, except share data)Year Ended December 31,2004
    
    2003
    
    2002As
    
    
    
    
    
    As
    
    
    
    
    
    AsPreviously
    
    As
    
    Previously
    
    As
    
    Previously
    
    AsReported
    
    Restated
    
    Reported
    
    Restated
    
    Reported
    
    RestatedTotal shareholders equity, January 1
    
    $
    979,869
    
    
    $
    972,299
    
    
    $
    646,799
    
    
    $
    651,683
    
    
    $
    458,174
    
    
    $
    458,383Net income
    
    
    119,117
    
    
    
    119,508
    
    
    
    95,058
    
    
    
    83,583
    
    
    
    59,158
    
    
    
    63,833Other comprehensive (loss) income, net of tax
    
    
    (11,386
    )
    
    
    (11,350
    )
    
    
    (30,317
    )
    
    
    (31,296
    )
    
    
    30,254
    
    
    
    30,254Total shareholders equity, December 31
    
    
    1,400,603
    
    
    
    1,393,460
    
    
    
    979,869
    
    
    
    972,299
    
    
    
    646,799
    
    
    
    651,683
 64




---



##### 



Impact to Consolidated Statements of Cash Flows(In thousands, except share data)Year Ended December 31,2004
    
    2003
    
    2002As
    
    
    
    
    
    As
    
    
    
    
    
    AsPreviously
    
    As
    
    Previously
    
    As
    
    Previously
    
    AsReported
    
    Restated
    
    Reported
    
    Restated
    
    Reported
    
    RestatedCash Flows from Operating Activities:Net income
    
    $
    119,117
    
    
    $
    119,508
    
    
    $
    95,058
    
    
    $
    83,583
    
    
    $
    59,158
    
    
    $
    63,833Loss (gain) on trading and derivative
activities
    
    
    (3,209
    )
    
    
    (5,759
    )
    
    
    (1,843
    )
    
    
    12,394
    
    
    
    934
    
    
    
    (6,593
    )Change in other assets, net
    
    
    (37,286
    )
    
    
    (35,127
    )
    
    
    (13,178
    )
    
    
    (15,940
    )
    
    
    (2,563
    )
    
    
    289Cash flows from operating activities
    
    
    229,102
    
    
    
    229,102
    
    
    
    183,598
    
    
    
    183,598
    
    
    
    297,803
    
    
    
    297,803
 Business Combinations
  Cash and Cash Equivalents
  Securities
       65




---



##### 



Loans Held for Sale
   Loans Held for Investment
    Allowance for Loan Losses
  66




---



##### 



Concentrations of Credit Risk
  Premises and Equipment
   Impairment of Long-Lived Assets
    Intangible Assets
  67




---



##### 



Mortgage Servicing Rights
  Derivative Financial Instruments and Hedging Activities
  68




---



##### 



69




---



##### 



Other Investments
      Foreclosed Property
  70




---



##### 



Debt Issuance Costs
  Borrowed Funds
  Commitments and Contingencies
  Deposit Accounts
  Income Taxes
   Comprehensive Income
  71




---



##### 



Stock-Based Compensation
   2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Net IncomeNet income, as reported
    
    $
    119,508
    
    
    $
    83,583
    
    
    $
    63,833Deduct:Total stock-based employee compensation expense determined under
fair value based method for all option awards, net of income tax
    
    
    (2,452
    )
    
    
    (2,822
    )
    
    
    (2,277
    )Pro forma net income
    
    $
    117,056
    
    
    $
    80,761
    
    
    $
    61,556Basic Earnings Per ShareAs reported
    
    $
    1.85
    
    
    $
    1.70
    
    
    $
    1.53Pro forma
    
    
    1.81
    
    
    
    1.64
    
    
    
    1.48Diluted Earnings Per ShareAs reported
    
    $
    1.80
    
    
    $
    1.66
    
    
    $
    1.49Pro forma
    
    
    1.77
    
    
    
    1.60
    
    
    
    1.44
  2004
    
    2003
    
    2002Expected life (in years)
    
    
    7.09
    
    
    
    7.25
    
    
    
    8.05Expected volatility
    
    
    34.85
    %
    
    
    33.77
    %
    
    
    29.38
    %Risk-free interest rate
    
    
    3.78
    
    
    
    3.51
    
    
    
    4.19Expected dividend yield
    
    
    2.04
    
    
    
    2.80
    
    
    
    2.80Weighted-average fair value of options granted during the year
    
    $
    10.62
    
    
    $
    7.69
    
    
    $
    5.90
 Per Share Data
  72




---



##### 



Business Segments
  Risk and Uncertainties
   Recently Adopted Accounting Pronouncements
 Accounting for Investments in Limited Liability Companies
  Accounting for Certain Loans or Debt Securities Acquired in a Transfer
  Recently Issued Accounting Pronouncements
 The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments
  73




---



##### 



Share-Based Payment
  
    
    Employee awards with cash-based settlement or repurchase features, such as a stock
appreciation right with a cash-settlement option;
    
    Awards for a fixed dollar amount settleable in the companys stock;
    
    Share-based awards with a net-settlement feature for an amount in excess of the minimum tax withholding; and
    
    Awards that vest or become exercisable based on the achievement of a condition other
than service, performance, or market condition.
  
    
    Share-based awards with net-settlement features for minimum tax withholdings;
    
    Awards that permit a cashless exercise using a broker unrelated to the employer;
    
    Awards containing a put feature that give employees the right to require the company to
repurchase the shares at fair value, when the employee bears the risks and rewards normally
associated with ownership for six months or longer.
  Accounting for Nonmonetary Transactions
  74




---



##### 



Note 2. Accumulated Other Comprehensive (Loss) Income
  2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Unrealized (Losses) Gains on Available for Sale SecuritiesBalance at beginning of year
    
    $
    (7,146
    )
    
    $
    24,150
    
    
    $
    (6,104
    )Other comprehensive income (loss):Unrealized holding (losses) gains arising during the year
    
    
    (16,663
    )
    
    
    (31,301
    )
    
    
    49,968Income tax benefit (expense)
    
    
    6,260
    
    
    
    10,480
    
    
    
    (15,503
    )Less: reclassification adjustment for net gains included in net income
    
    
    (1,354
    )
    
    
    (16,456
    )
    
    
    (6,120
    )Income tax expense
    
    
    407
    
    
    
    5,981
    
    
    
    1,909(11,350
    )
    
    
    (31,296
    )
    
    
    30,254Balance at end of year
    
    
    (18,496
    )
    
    
    (7,146
    )
    
    
    24,150Unrealized Gains (Losses) on Cash Flow HedgesBalance at beginning of year
    
    
    
    
    
    
    
    
    
    
    Other comprehensive income:Unrealized gain on change in fair values
    
    
    
    
    
    
    
    
    
    
    Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of year
    
    
    
    
    
    
    
    
    
    
    $
    (18,496
    )
    
    $
    (7,146
    )
    
    $
    24,150
 75




---



##### 



Note 3. Supplemental Financial Information To Consolidated Statements of Income
  2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Noninterest IncomeService charges on deposit accounts
    
    $
    36,332
    
    
    $
    30,856
    
    
    $
    23,410Debit card income
    
    
    4,211
    
    
    
    2,370
    
    
    
    1,425Customer service fee income
    
    
    2,956
    
    
    
    2,240
    
    
    
    1,705Total customer fee income
    
    
    43,499
    
    
    
    35,466
    
    
    
    26,540Brokerage income
    
    
    4,722
    
    
    
    5,181
    
    
    
    3,359Trust income
    
    
    3,779
    
    
    
    3,283
    
    
    
    3,064Total brokerage and trust income
    
    
    8,501
    
    
    
    8,464
    
    
    
    6,423Bank-owned life insurance
    
    
    11,215
    
    
    
    8,320
    
    
    
    7,429Merchant processing income
    
    
    8,653
    
    
    
    7,214
    
    
    
    5,908Mortgage banking income
    
    
    6,106
    
    
    
    10,481
    
    
    
    5,144Insurance income
    
    
    4,520
    
    
    
    3,565
    
    
    
    1,698Impairment of perpetual preferred stock
    
    
    (10,367
    )
    
    
    
    
    
    
    Gain on sale of available for sale securities
    
    
    6,998
    
    
    
    11,080
    
    
    
    2,985Gain on equity investments
    
    
    4,723
    
    
    
    5,376
    
    
    
    3,135Gain (loss) on trading and derivative activities
    
    
    33,319
    
    
    
    7,092
    
    
    
    13,989Gain on disposition of assets and liabilities
    
    
    2,350
    
    
    
    601
    
    
    
    Other
    
    
    5,360
    
    
    
    3,080
    
    
    
    1,312Total noninterest income
    
    $
    124,877
    
    
    $
    100,739
    
    
    $
    74,563Noninterest ExpensesSalaries and wages
    
    $
    90,221
    
    
    $
    78,755
    
    
    $
    60,534Employee benefits
    
    
    29,269
    
    
    
    22,535
    
    
    
    16,430Occupancy
    
    
    21,878
    
    
    
    18,925
    
    
    
    15,238Furniture and equipment
    
    
    20,938
    
    
    
    17,922
    
    
    
    15,341Professional fees
    
    
    8,206
    
    
    
    6,479
    
    
    
    5,289Merchant processing expense
    
    
    6,811
    
    
    
    5,622
    
    
    
    4,767Telecommunications
    
    
    4,834
    
    
    
    4,815
    
    
    
    3,564Amortization of intangibles
    
    
    6,043
    
    
    
    3,433
    
    
    
    1,519Merger-related costs
    
    
    7,866
    
    
    
    5,127
    
    
    
    6,664Conservation grant of land
    
    
    3,350
    
    
    
    
    
    
    
    Loss on early extinguishment of debt
    
    
    1,429
    
    
    
    2,699
    
    
    
    354Impairment (recovery) loss from write-down of assets
    
    
    (277
    )
    
    
    268
    
    
    
    1,449Other
    
    
    49,676
    
    
    
    40,590
    
    
    
    31,691Total noninterest expenses
    
    $
    250,244
    
    
    $
    207,170
    
    
    $
    162,840
 76




---



##### 



Note 4. Business Combinations
 CNB Florida Bancshares, Inc. and Florida Banks, Inc.
     July 16, 2004CNB
    
    
    FloridaFlorida
    
    
    Banks
    
    
    CombinedPurchase price
    
    $
    161,920
    
    
    $
    175,947
    
    
    $
    337,867Fair value of net assets acquired (1)
    
    
    33,444
    
    
    
    32,120
    
    
    
    65,564Excess of purchase price over fair value of net assets acquired
    
    
    128,476
    
    
    
    143,827
    
    
    
    272,303Core deposit intangibles
    
    
    10,571
    
    
    
    3,282
    
    
    
    13,853Non-compete agreements
    
    
    741
    
    
    
    2,700
    
    
    
    3,441Goodwill
    
    $
    117,164
    
    
    $
    137,845
    
    
    $
    255,009
 
 (1)
    
    Includes direct acquisition costs incurred and deferred income taxes related
to fair value adjustments.   77




---



##### 



July 16, 2004CNB
    
    
    FloridaFlorida
    
    
    Banks
    
    
    CombinedAssetsCash and cash equivalents
    
    $
    80,833
    
    
    $
    160,746
    
    
    $
    241,579Securities
    
    
    3,718
    
    
    
    4,040
    
    
    
    7,758LoansLoans held for sale
    
    
    114
    
    
    
    58,371
    
    
    
    58,485Loans held for investment
    
    
    714,605
    
    
    
    772,341
    
    
    
    1,486,946Allowance for loan losses
    
    
    (8,398
    )
    
    
    (12,284
    )
    
    
    (20,682
    )Net loans
    
    
    706,321
    
    
    
    818,428
    
    
    
    1,524,749Intangible assets
    
    
    128,476
    
    
    
    143,827
    
    
    
    272,303Other assets
    
    
    31,685
    
    
    
    37,629
    
    
    
    69,314Total assets acquired
    
    
    951,033
    
    
    
    1,164,670
    
    
    
    2,115,703LiabilitiesDeposits
    
    
    755,550
    
    
    
    855,034
    
    
    
    1,610,584Borrowed funds
    
    
    31,904
    
    
    
    118,785
    
    
    
    150,689Other liabilities
    
    
    1,659
    
    
    
    14,904
    
    
    
    16,563Total liabilities assumed
    
    
    789,113
    
    
    
    988,723
    
    
    
    1,777,836Net Assets Acquired
    
    $
    161,920
    
    
    $
    175,947
    
    
    $
    337,867
  Summit Title, LLC
  MountainBank Financial Corporation
   Allied Assurance
  78




---



##### 



American Pensions, Inc.
  Central Bank of Tampa
  Rock Hill Bank & Trust
     Gardner Associates, Inc.
  79




---



##### 



Gulf West
  Amortization of Premiums and Discounts
  Pro Forma Financial Information
  Years Ended December 31,2004
    
    2003(Restated)
    
    (Restated)Net interest income
    
    $
    368,760
    
    
    $
    333,731Noninterest income, excluding wholesale mortgage banking income
    
    
    127,713
    
    
    
    115,428Wholesale mortgage banking income
    
    
    2,266
    
    
    
    12,124Employment contract termination costs resulting from business combination and paid by
acquiree
    
    
    9,749
    
    
    
    9,749Net income
    
    
    105,562
    
    
    
    90,277Per common share:Net income, basic
    
    
    1.50
    
    
    
    1.41Net income, diluted
    
    
    1.46
    
    
    
    1.36
 Note 5. Branch Acquisition
  Note 6. Disposition of Assets and Liabilities
  80




---



##### 



Note 7. Discontinued Operations
  Note 8. Restrictions on Cash and Due From Banks
   81




---



##### 



Note 9. Securities
  2004Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueSecurities Available for SaleU.S. Treasury
    
    $
    236,804
    
    
    $
    288
    
    
    $
    2,554
    
    
    $
    234,538U.S. Government agencies
    
    
    934,442
    
    
    
    1,187
    
    
    
    5,583
    
    
    
    930,046Mortgage-backed securities
    
    
    2,530,056
    
    
    
    3,911
    
    
    
    31,527
    
    
    
    2,502,440State and municipals
    
    
    272,949
    
    
    
    1,475
    
    
    
    1,889
    
    
    
    272,535Other investments
    
    
    290,116
    
    
    
    5,951
    
    
    
    783
    
    
    
    295,284$
    4,264,367
    
    
    $
    12,812
    
    
    $
    42,336
    
    
    $
    4,234,843Securities Held to MaturityState and municipals
    
    $
    75,145
    
    
    $
    1,488
    
    
    $
    181
    
    
    $
    76,452Other investments
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    100$
    75,245
    
    
    $
    1,488
    
    
    $
    181
    
    
    $
    76,552
 2003Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueSecurities Available for SaleU.S. Treasury
    
    $
    247,695
    
    
    $
    712
    
    
    $
    1,748
    
    
    $
    246,659U.S. Government agencies
    
    
    869,016
    
    
    
    3,472
    
    
    
    5,520
    
    
    
    866,968Mortgage-backed securities
    
    
    2,389,174
    
    
    
    4,299
    
    
    
    17,916
    
    
    
    2,375,557State and municipals
    
    
    127,280
    
    
    
    840
    
    
    
    939
    
    
    
    127,181Other investments
    
    
    294,336
    
    
    
    12,079
    
    
    
    6,786
    
    
    
    299,629$
    3,927,501
    
    
    $
    21,402
    
    
    $
    32,909
    
    
    $
    3,915,994Securities Held to MaturityState and municipals
    
    $
    90,745
    
    
    $
    2,292
    
    
    $
    201
    
    
    $
    92,836Other investments
    
    
    352
    
    
    
    
    
    
    
    
    
    
    
    352$
    91,097
    
    
    $
    2,292
    
    
    $
    201
    
    
    $
    93,188
  82




---



##### 



December 31, 2004Amortized
    
    
    EstimatedCost
    
    
    Fair ValueSecurities Available for SaleDue in one year or less
    
    $
    17,387
    
    
    $
    17,417Due after one year through five years
    
    
    672,985
    
    
    
    668,522Due after five years through ten years
    
    
    1,285,794
    
    
    
    1,274,747Due after ten years
    
    
    2,140,367
    
    
    
    2,121,359No contractual maturity
    
    
    147,834
    
    
    
    152,798$
    4,264,367
    
    
    $
    4,234,843Securities Held to MaturityDue in one year or less
    
    $
    12,406
    
    
    $
    12,427Due after one year through five years
    
    
    39,152
    
    
    
    40,149Due after five years through ten years
    
    
    22,940
    
    
    
    23,246Due after ten years
    
    
    747
    
    
    
    730$
    75,245
    
    
    $
    76,552
  2004
    
    
    2003
    
    
    2002Gross realized gains
    
    $
    15,394
    
    
    $
    19,132
    
    
    $
    11,423Gross realized losses
    
    
    (3,673
    )
    
    
    (2,676
    )
    
    
    (5,303
    )Net gain on available for sale securities and equity investments
    
    $
    11,721
    
    
    $
    16,456
    
    
    $
    6,120Sale proceeds
    
    $
    1,826,897
    
    
    $
    1,717,382
    
    
    $
    1,174,005
    83




---



##### 



Less than 12 Months
    
    
    12 Months or Longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesSecurities Available for SaleU.S. Treasury
    
    $
    176,438
    
    
    $
    1,553
    
    
    $
    46,394
    
    
    $
    1,001
    
    
    $
    222,832
    
    
    $
    2,554U.S. Government agencies
    
    
    435,567
    
    
    
    3,335
    
    
    
    111,766
    
    
    
    2,248
    
    
    
    547,333
    
    
    
    5,583Mortgage-backed securities
    
    
    1,340,913
    
    
    
    19,459
    
    
    
    621,984
    
    
    
    12,068
    
    
    
    1,962,897
    
    
    
    31,527State and municipals
    
    
    130,403
    
    
    
    1,210
    
    
    
    44,037
    
    
    
    679
    
    
    
    174,440
    
    
    
    1,889Other investments
    
    
    51,524
    
    
    
    591
    
    
    
    14,317
    
    
    
    192
    
    
    
    65,841
    
    
    
    783$
    2,134,845
    
    
    $
    26,148
    
    
    $
    838,498
    
    
    $
    16,188
    
    
    $
    2,973,343
    
    
    $
    42,336Securities Held to MaturityState and municipals
    
    $
    13,786
    
    
    $
    37
    
    
    $
    12,116
    
    
    $
    144
    
    
    $
    25,902
    
    
    $
    181Other investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    13,786
    
    
    $
    37
    
    
    $
    12,116
    
    
    $
    144
    
    
    $
    25,902
    
    
    $
    181
    84




---



##### 



Note 10. Loans
  2004
    
    
    2003Commercial, financial and agricultural
    
    $
    1,584,198
    
    
    $
    1,358,409Real estate  construction
    
    
    1,007,061
    
    
    
    619,124Real estate  residential mortgages (1-4 family)
    
    
    1,278,310
    
    
    
    940,744Commercial secured by real estate
    
    
    3,109,242
    
    
    
    2,146,650Consumer
    
    
    1,128,946
    
    
    
    667,278Loans held for investment
    
    
    8,107,757
    
    
    
    5,732,205Loans held for sale
    
    
    21,302
    
    
    
    29,619Allowance for loan losses
    
    
    (96,918
    )
    
    
    (73,287
    )Net loans
    
    $
    8,032,141
    
    
    $
    5,688,537Included in the above:Nonaccrual loans
    
    $
    45,082
    
    
    $
    49,823Loans past due 90 days still accruing interest
    
    $
    3,764
    
    
    $
    3,960
   2004
    
    
    2003Impaired loans (year end)
    
    $
    28,836
    
    
    $
    47,137Related allowance (year end)
    
    
    11,129
    
    
    
    9,689
 2004
    
    
    2003
    
    
    2002Interest income recognized
    
    $
    
    
    
    $
    
    
    
    $
    125Foregone interest
    
    
    1,935
    
    
    
    2,887
    
    
    
    2,973
   85




---



##### 



Note 11. Allowance for Loan Losses
  2004
    
    
    2003
    
    
    2002Balance at beginning of year
    
    $
    73,287
    
    
    $
    70,275
    
    
    $
    44,587Purchase accounting acquisitions
    
    
    20,682
    
    
    
    12,690
    
    
    
    22,973Allowance adjustment for loans sold
    
    
    (506
    )
    
    
    
    
    
    
    (12
    )Provision for loan losses
    
    
    34,987
    
    
    
    20,581
    
    
    
    22,266Loans charged off
    
    
    (37,003
    )
    
    
    (34,624
    )
    
    
    (23,556
    )Recoveries of loans previously charged off
    
    
    5,471
    
    
    
    4,365
    
    
    
    4,017Balance at end of year
    
    $
    96,918
    
    
    $
    73,287
    
    
    $
    70,275
 Note 12. Premises and Equipment
  2004
    
    
    2003Land and land improvements
    
    $
    33,031
    
    
    $
    25,709Buildings
    
    
    72,201
    
    
    
    61,323Furniture, fixtures and equipment
    
    
    91,231
    
    
    
    72,301Capitalized software
    
    
    20,725
    
    
    
    17,866Leasehold improvements
    
    
    31,349
    
    
    
    30,733Construction in progress
    
    
    4,476
    
    
    
    2,497253,013
    
    
    
    210,429Less accumulated depreciation and amortization
    
    
    82,365
    
    
    
    67,724$
    170,648
    
    
    $
    142,705
  Note 13. Long-Lived Assets Held For Sale
     86




---



##### 



Note 14. Goodwill
  CarolinaFirst
    
    
    MercantileBank
    
    
    Bank
    
    
    Other
    
    
    TotalBalance, December 31, 2002
    
    $
    116,279
    
    
    $
    108,033
    
    
    $
    
    
    
    $
    224,312Purchase accounting adjustments
    
    
    90,501
    
    
    
    (664
    )
    
    
    10,346
    
    
    
    100,183Balance, December 31, 2003
    
    
    206,780
    
    
    
    107,369
    
    
    
    10,346
    
    
    
    324,495Purchase accounting adjustments
    
    
    (379
    )
    
    
    254,846
    
    
    
    (466
    )
    
    
    254,001Dispositions
    
    
    
    
    
    
    
    
    
    
    (6,643
    )
    
    
    (6,643
    )Balance, December 31, 2004
    
    $
    206,401
    
    
    $
    362,215
    
    
    $
    3,237
    
    
    $
    571,853
 th
 Note 15. Other Intangible Assets
  2004
    
    
    2003Core deposit intangible
    
    $
    52,206
    
    
    $
    38,770Less accumulated amortization
    
    
    (18,463
    )
    
    
    (13,507
    )33,743
    
    
    
    25,263Non-compete agreement intangible
    
    
    5,672
    
    
    
    2,213Less accumulated amortization
    
    
    (1,099
    )
    
    
    (294
    )4,573
    
    
    
    1,919Customer list intangible
    
    
    1,595
    
    
    
    1,558Less accumulated amortization
    
    
    (314
    )
    
    
    (156
    )1,281
    
    
    
    1,402$
    39,597
    
    
    $
    28,584
  2004
    
    
    2003
    
    
    2002Core deposit intangible
    
    $
    5,080
    
    
    $
    3,098
    
    
    $
    1,404Non-compete agreement intangible
    
    
    805
    
    
    
    203
    
    
    
    91Customer list intangible
    
    
    158
    
    
    
    132
    
    
    
    24Total amortization expense of intangible assets
    
    $
    6,043
    
    
    $
    3,433
    
    
    $
    1,519
 87




---



##### 



Core
    
    
    Non-Compete
    
    
    CustomerDeposit
    
    
    Agreement
    
    
    ListIntangible
    
    
    Intangible
    
    
    Intangible
    
    
    Total2005
    
    $
    5,696
    
    
    $
    1,315
    
    
    $
    160
    
    
    $
    7,1712006
    
    
    5,095
    
    
    
    1,314
    
    
    
    160
    
    
    
    6,5692007
    
    
    4,607
    
    
    
    1,206
    
    
    
    160
    
    
    
    5,9732008
    
    
    3,801
    
    
    
    527
    
    
    
    160
    
    
    
    4,4882009
    
    
    3,095
    
    
    
    209
    
    
    
    160
    
    
    
    3,464Aggregate total for all years thereafter
    
    
    11,449
    
    
    
    2
    
    
    
    481
    
    
    
    11,932$
    33,743
    
    
    $
    4,573
    
    
    $
    1,281
    
    
    $
    39,597
 Note 16. Mortgage Servicing Rights
  2004
    
    
    2003Balance at beginning of year
    
    $
    1,781
    
    
    $
    4,386MSRs amortized
    
    
    (885
    )
    
    
    (2,587
    )MSRs impairment recovery (loss) from the valuation of MSRs
    
    
    209
    
    
    
    (18
    )Balance at end of year
    
    $
    1,105
    
    
    $
    1,781
   Note 17. Derivative Financial Instruments and Hedging Activities
  December 31, 2004
    
    
    December 31, 2003(Restated)
    
    
    (Restated)Fair Value
    
    
    Notional
    
    
    Fair Value
    
    
    NotionalAsset
    
    
    Liability
    
    
    Amount
    
    
    Asset
    
    
    Liability
    
    
    AmountCash Flow HedgesInterest rate swaps associated with borrowing activities
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Fair Value HedgesInterest rate swaps associated with lending activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    276
    
    
    
    3,000Interest rate swaps associated with borrowing activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest rate swaps associated with deposit taking activities
    
    
    364
    
    
    
    5,737
    
    
    
    154,721
    
    
    
    
    
    
    
    1,246
    
    
    
    45,000Other derivativesFutures contracts
    
    
    6
    
    
    
    
    
    
    
    20,000
    
    
    
    
    
    
    
    664
    
    
    
    92,000Options, interest rate swaps and other
    
    
    13,071
    
    
    
    32,606
    
    
    
    1,371,974
    
    
    
    2,127
    
    
    
    18,683
    
    
    
    909,505$
    13,441
    
    
    $
    38,343
    
    
    $
    1,546,695
    
    
    $
    2,127
    
    
    $
    20,869
    
    
    $
    1,049,505
 88




---



##### 



Note 18. Deposits
  2004
    
    
    2003(Restated)
    
    
    (Restated)Noninterest-bearing demand deposits
    
    $
    1,237,877
    
    
    $
    882,129Interest-bearing checking
    
    
    816,933
    
    
    
    699,956Money market accounts
    
    
    2,704,287
    
    
    
    2,237,299Savings accounts
    
    
    192,769
    
    
    
    159,013Time deposits under $100,000
    
    
    856,386
    
    
    
    814,802Time deposits of $100,000 or more
    
    
    645,820
    
    
    
    537,588Brokered deposits
    
    
    1,216,872
    
    
    
    701,451$
    7,670,944
    
    
    $
    6,032,238
  (Restated)2005
    
    $
    1,234,4792006
    
    
    198,1622007
    
    
    135,3522008
    
    
    99,7312009
    
    
    142,156Thereafter
    
    
    909,198$
    2,719,078
  89




---



##### 



Note 19. Income Taxes
  2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Income before minority interest, discontinued operations, and cumulative
effect of change in accounting principle
    
    $
    55,489
    
    
    $
    38,283
    
    
    $
    31,111Dividends on minority interest in consolidated subsidiary
    
    
    
    
    
    
    (1,096
    )
    
    
    (1,903
    )Discontinued operations
    
    
    (264
    )
    
    
    
    
    
    
    Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    Shareholders equity:Change in unrealized gains on fair value of cash flow hedges
    
    
    
    
    
    
    
    
    
    
    Change in unrealized (losses) gains on available for sale securities
    
    
    (6,667
    )
    
    
    (16,461
    )
    
    
    13,594$
    48,558
    
    
    $
    20,726
    
    
    $
    42,802
  2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)CurrentU.S. Federal
    
    $
    41,295
    
    
    $
    42,140
    
    
    $
    28,305State and local
    
    
    4,761
    
    
    
    4,136
    
    
    
    2,11646,056
    
    
    
    46,276
    
    
    
    30,421DeferredU.S. Federal
    
    
    8,808
    
    
    
    (8,117
    )
    
    
    325State and local
    
    
    625
    
    
    
    124
    
    
    
    3659,433
    
    
    
    (7,993
    )
    
    
    690Total income tax expense
    
    $
    55,489
    
    
    $
    38,283
    
    
    $
    31,111
  2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Income tax expense at federal statutory rate
    
    $
    61,420
    
    
    $
    43,357
    
    
    $
    34,860State income tax, net of federal benefit
    
    
    3,501
    
    
    
    2,769
    
    
    
    1,569Increase (decrease) resulting from:Subsidiary stock, recognition of basis difference
    
    
    
    
    
    
    (6,530
    )
    
    
    (3,027
    )Bank-owned life insurance
    
    
    (3,926
    )
    
    
    (2,912
    )
    
    
    (2,600
    )Nontaxable municipal interest
    
    
    (2,632
    )
    
    
    (1,621
    )
    
    
    (1,425
    )Basis difference on gain on sale of substantially all of the assets and
liabilities of Community National Bank
    
    
    2,246
    
    
    
    
    
    
    
    Income tax credits
    
    
    (436
    )
    
    
    (97
    )
    
    
    (100
    )Dividends received deduction
    
    
    (871
    )
    
    
    (501
    )
    
    
    Change in federal and state valuation allowance for deferred
income tax assets
    
    
    47
    
    
    
    2,550
    
    
    
    1,402Other, net
    
    
    (3,860
    )
    
    
    1,268
    
    
    
    432$
    55,489
    
    
    $
    38,283
    
    
    $
    31,111
 90




---



##### 



2004
    
    
    2003(Restated)
    
    
    (Restated)Deferred Income Tax AssetsLoan loss allowance deferred for income tax purposes
    
    $
    35,070
    
    
    $
    26,238Unrealized losses on securities available for sale
    
    
    11,028
    
    
    
    4,361Compensation expense deferred for income tax reporting purposes
    
    
    10,449
    
    
    
    8,787Federal capital loss carryforward
    
    
    8,034
    
    
    
    8,170Unrealized losses on fair value of derivatives not qualifying for hedge accounting
    
    
    4,275
    
    
    
    3,174Excess basis of MSRs for income tax purposes over financial reporting purposes
    
    
    1,886
    
    
    
    2,144State net operating loss carryforwards
    
    
    1,251
    
    
    
    980Excess basis of securities for income tax purposes over financial reporting purposes
    
    
    1,112
    
    
    
    1,771Environmental remediation costs
    
    
    231
    
    
    
    2,364Federal net operating loss carryforward
    
    
    176
    
    
    
    108Other
    
    
    3,854
    
    
    
    3,60677,366
    
    
    
    61,703Less valuation allowance
    
    
    6,368
    
    
    
    6,23870,998
    
    
    
    55,465Deferred Income Tax LiabilitiesExcess basis of intangible assets for financial reporting purposes over income tax basis
    
    
    20,918
    
    
    
    15,252Income tax depreciation in excess of book depreciation
    
    
    9,849
    
    
    
    11,681Excess basis of prepaid and deferred expenses for financial reporting purposes over income tax
basis
    
    
    8,482
    
    
    
    Excess carrying value of assets acquired for financial reporting purposes over income tax basis
    
    
    232
    
    
    
    6,556Employee benefits deduction accelerated for income tax reporting purposes
    
    
    
    
    
    
    65Income tax bad debt reserve recapture adjustment
    
    
    39
    
    
    
    58Other
    
    
    
    
    
    
    76239,520
    
    
    
    34,374Net deferred income tax assets
    
    $
    31,478
    
    
    $
    21,091
  2004
    
    
    2003(Restated)
    
    
    (Restated)Balance at beginning of year
    
    $
    21,091
    
    
    $
    (1,964
    )Purchase accounting acquisitions
    
    
    13,153
    
    
    
    (1,399
    )Income tax benefit from change in unrealized gains on available for sale securities
    
    
    6,667
    
    
    
    16,461Deferred income tax (expense) benefit on continuing operations
    
    
    (9,433
    )
    
    
    7,993Balance at end of year
    
    $
    31,478
    
    
    $
    21,091
   91




---



##### 



Note 20. Short-Term Borrowed Funds
  2004
    
    
    2003Amount
    
    
    Rate
    
    
    Amount
    
    
    RateFederal funds purchased and repurchase agreements
    
    $
    1,583,495
    
    
    
    2.14
    %
    
    $
    834,866
    
    
    
    0.96
    %Treasury, tax and loan note
    
    
    14,111
    
    
    
    1.75
    
    
    
    11,781
    
    
    
    0.57Commercial paper
    
    
    29,405
    
    
    
    2.79
    
    
    
    36,949
    
    
    
    2.81Line of credit to unaffiliated bank and other
    
    
    
    
    
    
    
    
    
    
    7,349
    
    
    
    2.85$
    1,627,011
    
    
    
    2.15
    %
    
    $
    890,945
    
    
    
    1.05
    %
   2004
    
    
    2003Federal funds purchased and repurchase agreements
    
    $
    1,715,306
    
    
    $
    1,062,102FHLB advances
    
    
    205,000
    
    
    
    5,000Treasury, tax and loan note
    
    
    110,377
    
    
    
    18,387Commercial paper
    
    
    39,743
    
    
    
    39,431Line of credit to unaffiliated bank and other
    
    
    7,349
    
    
    
    7,350Aggregate short-term borrowings
    
    
    1,769,005
    
    
    
    1,113,091
  92




---



##### 



2004
    
    
    2003
    
    
    2002Federal funds purchased and repurchase agreements
    
    $
    17,568
    
    
    $
    10,080
    
    
    $
    19,888FHLB advances
    
    
    96
    
    
    
    97
    
    
    
    642Treasury, tax and loan note
    
    
    80
    
    
    
    41
    
    
    
    133Commercial paper
    
    
    1,095
    
    
    
    1,145
    
    
    
    1,312Line of credit to unaffiliated bank and other
    
    
    69
    
    
    
    56
    
    
    
    $
    18,908
    
    
    $
    11,419
    
    
    $
    21,975
 Note 21. Unused Lines of Credit
    93




---



##### 



Note 22. Long-Term Debt
  2004
    
    
    2003(Restated)
    
    
    (Restated)FHLB advances; fixed interest rates ranging from 1.29% to 6.27% due from
2005 to 2018; collateralized by a blanket lien on qualifying loans secured
by first mortgages on one-to-four family residences valued at $282.2 million
and mortgage-backed securities valued at $926.0 million; initial maturity
of one year or greater; interest payable quarterly
    
    $
    1,057,167
    
    
    $
    989,500Repurchase agreements; fixed and variable rates ranging from 1.10% to 4.23%
due from 2005 to 2014; collateralized by securities of the United States government
or its agencies, which are held by third-party safekeepers and corporate bonds
valued at $1.8 billion; interest payable quarterly
    
    
    1,665,134
    
    
    
    1,494,800Subordinated Notes; due June 26, 2033; unsecured; interest payable quarterly
and at maturity at a rate per annum equal to three-month LIBOR plus 3.10% (not to exceed
11.75% through June 26, 2008); balance can be prepaid in whole or in part after
June 26, 2008 at accrued and unpaid interest plus outstanding principal (1)
    
    
    3,093
    
    
    
    Subordinated Notes; due December 26, 2032; unsecured; interest payable quarterly
and at maturity at a rate per annum equal to three-month LIBOR plus 3.25% (not to exceed
11.75% through December 26, 2007); balance can be prepaid in whole or in part after
December 26, 2007 at accrued and unpaid interest plus outstanding principal (1)
    
    
    3,093
    
    
    
    Subordinated Notes; due November 7, 2032; unsecured; interest payable semi-annually
and at maturity at a rate per annum equal to ninety-day LIBOR plus 3.45% (not to exceed
12.5% through November 7, 2007); balance can be prepaid in whole or in part after
November 7, 2007 at accrued and unpaid interest plus outstanding principal (1)
    
    
    22,681
    
    
    
    22,681Subordinated Notes; due October 7, 2032; unsecured; interest payable quarterly
and at maturity at a rate per annum equal to three-month LIBOR plus 3.65% (not to
exceed 12.5% through July 7, 2007); balance can be prepaid in whole or in part on or after
July 7, 2007 at accrued and unpaid interest plus outstanding principal (1)
    
    
    25,774
    
    
    
    25,774Subordinated Notes; due July 30, 2032; unsecured; interest payable semi-annually
and at maturity at a rate per annum equal to six-month LIBOR plus 3.625% (not to exceed
12.0% through July 30, 2007); balance can be prepaid in whole or in part after July 30, 2007
at accrued and unpaid interest plus outstanding principal (1)
    
    
    18,042
    
    
    
    18,042Subordinated Notes; due June 30, 2032; unsecured; interest payable quarterly
and at maturity at a rate per annum equal to three-month LIBOR plus 3.65% (not to exceed
12.0% through June 30, 2007); balance can be prepaid in whole or in part after June 30, 2007
at accrued and unpaid interest plus outstanding principal (1)
    
    
    20,619
    
    
    
    20,619Subordinated Notes; due June 30, 2032; unsecured; interest payable quarterly
and at maturity at a rate per annum equal to three-month LIBOR plus 3.65% (not to exceed
12.0% through June 30, 2007); balance can be prepaid in whole or in part after
June 30, 2007 at accrued and unpaid interest plus outstanding principal (1)
    
    
    4,124
    
    
    
    Subordinated Notes; due April 22, 2032; unsecured; interest payable semi-annually
and at maturity at a rate per annum equal to six-month LIBOR plus 3.70% (not to exceed
11.0% through April 22, 2007); balance can be prepaid in whole or in part after
April 22, 2007 at accrued and unpaid interest plus outstanding principal (1)
    
    
    4,124
    
    
    
    Subordinated Notes; due December 18, 2031; unsecured; interest payable quarterly
and at maturity at a rate per annum equal to three-month LIBOR plus 3.60% (not to exceed
12.5% through December 18, 2006); balance can be prepaid in whole or in part after
December 18, 2006 at accrued and unpaid interest plus outstanding principal (1)
    
    
    6,186
    
    
    
    
 94




---



##### 



2004
    
    
    2003(Restated)
    
    
    (Restated)Subordinated Notes; due July 8, 2031; unsecured; interest payable semi-annually
and at maturity at a rate per annum equal to six-month LIBOR plus 3.75% (not to exceed
11.0% through December 8, 2006); balance can be prepaid in whole or in part after
December 8, 2006 at accrued and unpaid interest plus outstanding principal (1)
    
    
    31,959
    
    
    
    31,959Subordinated Notes; due December 17, 2013; unsecured; interest payable quarterly
and at maturity at a rate per annum equal to three-month LIBOR plus 2.83%;
balance can be prepaid on December 17, 2008 at par plus accrued and unpaid interest
    
    
    10,000
    
    
    
    10,0006.33% Subordinated Notes; due December 20, 2006; unsecured; interest payable
semi-annually of each year and at maturity; balance can be prepaid on
December 20, 2001 at par plus accrued and unpaid interest
    
    
    6,000
    
    
    
    6,000Mandatory redeemable preferred stock of subsidiary; redeemable May 31, 2012;
unsecured; dividends payable quarterly and at maturity at a rate per annum equal to
three-month LIBOR plus 3.50% (2)
    
    
    38,500
    
    
    
    38,500Mandatory redeemable preferred stock of subsidiary; redeemable January 31, 2031;
unsecured; dividends payable quarterly and at maturity at a rate per annum equal to
11.125% (2)
    
    
    26,300
    
    
    
    26,300Mandatory redeemable preferred stock of subsidiary; redeemable January 31, 2011;
preferred stock can be redeemed in whole or part on or after December 8, 2005; unsecured;
dividends payable quarterly and at maturity at a rate per annum equal to
three-month LIBOR plus 3.00% (2)
    
    
    25,000
    
    
    
    25,000Employee stock ownership plan note payable to RBC/Centura Bank; due July 23, 2007;
collateralized by 51,459 shares of TSFG stock valued at approximately
$1.7 million; interest at Centura Banks prime rate less 1.25% with monthly
principal payments of $25,000
    
    
    800
    
    
    
    1,100Note payable; interest at 12.50% due December 31, 2012; collateralized by a United
States Treasury note valued at $2.3 million; with current annual payments of
approximately $125,000
    
    
    900
    
    
    
    9272,969,496
    
    
    
    2,711,202Purchase accounting premiums, net of amortization
    
    
    2,774
    
    
    
    497$
    2,972,270
    
    
    $
    2,711,699
 
 (1)
    
    The balance can be prepaid in whole (but not in part) at any time within a
specified number of days (as defined in the indenture) following the occurrence of a tax
event, an investment company event, or a capital treatment event at a special redemption
price (as defined in the indenture).(2)
    
    The balance can be redeemed in whole or in part following the occurrence of a tax
or capital event (as defined in the terms of the preferred stock).  (Restated)2005
    
    $
    9,3352006
    
    
    16,3372007
    
    
    231,3762008
    
    
    112,8472009
    
    
    1,120,053Thereafter
    
    
    1,479,548$
    2,969,496
 95
         Note 23. Minority Interest in Consolidated Subsidiary
      96




---



##### 



Note 24. Contingent Liabilities and Commitments
 Legal Proceedings
  Environmental Remediation Costs
  Recourse Reserve
  97




---



##### 



Lease Commitments
  2005
    
    $
    11,0612006
    
    
    10,8392007
    
    
    10,4262008
    
    
    9,5712009
    
    
    8,603Thereafter
    
    
    72,304$
    122,804
  Lending Commitments and Guarantees
     Loan commitments:Commercial, financial, agricultural, and other
    
    $
    982,956Commercial secured by real estate
    
    
    773,718Home equity loans
    
    
    388,650Standby letters of credit
    
    
    135,178Documentary letters of credit
    
    
    2,412Unused business credit card lines
    
    
    17,550
   98




---



##### 



Note 25. Capital Stock
    Note 26. Regulatory Capital Requirements
    99




---



##### 



To Be Well CapitalizedUnder PromptFor Capital Adequacy
    
    Corrective ActionActual (Restated)
    
    Purposes (Restated)
    
    Provisions (Restated)2004
    
    2003
    
    2004
    
    2003
    
    2004
    
    2003TSFGTier 1 capital
    
    $
    961,294
    
    
    $
    767,066
    
    
    $
    406,206
    
    
    $
    294,740
    
    
    
    n/a
    
    
    
    n/aTotal risk-based capital
    
    
    1,131,233
    
    
    
    914,332
    
    
    
    812,413
    
    
    
    589,480
    
    
    
    n/a
    
    
    
    n/aTier 1 capital ratio
    
    
    9.47
    %
    
    
    10.41
    %
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    n/a
    
    
    
    n/aTotal risk-based capital ratio
    
    
    11.14
    
    
    
    12.41
    
    
    
    8.00
    
    
    
    8.00
    
    
    
    n/a
    
    
    
    n/aLeverage ratio
    
    
    7.34
    
    
    
    7.43
    
    
    
    4.00
    
    
    
    4.00
    
    
    
    n/a
    
    
    
    n/aCarolina First BankTier 1 capital
    
    $
    565,664
    
    
    $
    541,288
    
    
    $
    258,039
    
    
    $
    225,555
    
    
    $
    387,059
    
    
    $
    338,333Total risk-based capital
    
    
    722,827
    
    
    
    695,070
    
    
    
    516,078
    
    
    
    451,111
    
    
    
    645,098
    
    
    
    563,888Tier 1 capital ratio
    
    
    8.77
    %
    
    
    9.60
    %
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    6.00
    %
    
    
    6.00
    %Total risk-based capital ratio
    
    
    11.20
    
    
    
    12.33
    
    
    
    8.00
    
    
    
    8.00
    
    
    
    10.00
    
    
    
    10.00Leverage ratio
    
    
    6.31
    
    
    
    6.54
    
    
    
    4.00
    
    
    
    4.00
    
    
    
    5.00
    
    
    
    5.00Mercantile BankTier 1 capital
    
    $
    323,110
    
    
    $
    151,530
    
    
    $
    152,642
    
    
    $
    68,166
    
    
    $
    228,963
    
    
    $
    102,249Total risk-based capital
    
    
    449,784
    
    
    
    202,379
    
    
    
    305,284
    
    
    
    136,332
    
    
    
    381,606
    
    
    
    170,415Tier 1 capital ratio
    
    
    8.47
    %
    
    
    8.89
    %
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    6.00
    %
    
    
    6.00
    %Total risk-based capital ratio
    
    
    11.79
    
    
    
    11.88
    
    
    
    8.00
    
    
    
    8.00
    
    
    
    10.00
    
    
    
    10.00Leverage ratio
    
    
    7.23
    
    
    
    7.10
    
    
    
    4.00
    
    
    
    4.00
    
    
    
    5.00
    
    
    
    5.00Community National BankTier 1 capital
    
    
    n/a
    
    
    $
    5,128
    
    
    
    n/a
    
    
    $
    1,471
    
    
    
    n/a
    
    
    $
    2,206Total risk-based capital
    
    
    n/a
    
    
    
    5,619
    
    
    
    n/a
    
    
    
    2,942
    
    
    
    n/a
    
    
    
    3,677Tier 1 capital ratio
    
    
    n/a
    
    
    
    13.95
    %
    
    
    n/a
    
    
    
    4.00
    %
    
    
    n/a
    
    
    
    6.00
    %Total risk-based capital ratio
    
    
    n/a
    
    
    
    15.28
    
    
    
    n/a
    
    
    
    8.00
    
    
    
    n/a
    
    
    
    10.00Leverage ratio
    
    
    n/a
    
    
    
    8.47
    
    
    
    n/a
    
    
    
    4.00
    
    
    
    n/a
    
    
    
    5.00
 Note 27. Restriction of Dividends from Subsidiaries
   100




---



##### 



Note 28. Average Share Information
  2004
    
    
    2003
    
    
    2002BasicAverage common shares outstanding (denominator)
    
    
    64,592,317
    
    
    
    49,204,173
    
    
    
    41,714,994DilutedAverage common shares outstanding
    
    
    64,592,317
    
    
    
    49,204,173
    
    
    
    41,714,994Dilutive potential common shares
    
    
    1,642,854
    
    
    
    1,124,180
    
    
    
    999,944Average diluted shares outstanding (denominator)
    
    
    66,235,171
    
    
    
    50,328,353
    
    
    
    42,714,938
  2004
    
    
    2003
    
    
    2002Number
    
    
    Range of
    
    
    Number
    
    
    Range of
    
    
    Number
    
    
    Range ofof shares
    
    
    Exercise Prices
    
    
    of shares
    
    
    Exercise Prices
    
    
    of shares
    
    
    Exercise Prices25,180
    
    
    $
    29.93 to $30.35
    
    
    
    393,639
    
    
    $
    24.10 to $26.94
    
    
    
    472,150
    
    
    $
    21.00 to $21.5133,489
    
    
    $
    31.26
    
    
    
    504,950
    
    
    $
    27.50
    
    
    
    454,145
    
    
    $
    21.56 to $23.05515,710
    
    
    $
    31.96
    
    
    
    105,788
    
    
    $
    28.03 to $31.26
    
    
    
    390,467
    
    
    $
    23.13 to $31.26
 Note 29. Stock Compensation Plans
  2004 Long-Term Incentive Plan
   Restricted Stock Plan
  101




---



##### 



2004
    
    
    2003
    
    
    2002Shares granted
    
    
    210,145
    
    
    
    69,805
    
    
    
    59,097Shares canceled
    
    
    (12,538
    )
    
    
    (2,945
    )
    
    
    (1
    )197,607
    
    
    
    66,860
    
    
    
    59,096Weighted-average fair value of restricted stock granted during the year
    
    $
    28.31
    
    
    $
    21.42
    
    
    $
    18.00Compensation expense recognized (in thousands)
    
    $
    1,368
    
    
    $
    3,298
    
    
    $
    2,053
 Stock Option Plan
   2004
    
    
    2003
    
    
    2002Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding, January 1
    
    
    4,240,795
    
    
    $
    18.66
    
    
    
    3,962,518
    
    
    $
    16.05
    
    
    
    3,223,162
    
    
    $
    15.63Granted:Price = Fair Value
    
    
    813,270
    
    
    
    30.87
    
    
    
    915,659
    
    
    
    25.52
    
    
    
    675,597
    
    
    
    20.64Price > Fair Value
    
    
    11,760
    
    
    
    27.98
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Price < Fair Value (from acquisitions)
    
    
    998,176
    
    
    
    12.21
    
    
    
    331,886
    
    
    
    10.12
    
    
    
    539,217
    
    
    
    8.10Cancelled
    
    
    (154,300
    )
    
    
    24.05
    
    
    
    (150,722
    )
    
    
    18.53
    
    
    
    (133,563
    )
    
    
    17.65Exercised
    
    
    (1,168,728
    )
    
    
    12.90
    
    
    
    (818,546
    )
    
    
    10.26
    
    
    
    (341,895
    )
    
    
    7.99Outstanding, December 31
    
    
    4,740,973
    
    
    $
    20.52
    
    
    
    4,240,795
    
    
    $
    18.66
    
    
    
    3,962,518
    
    
    $
    16.05Exercisable, December 31
    
    
    2,944,270
    
    
    $
    17.37
    
    
    
    2,629,173
    
    
    $
    16.64
    
    
    
    2,631,337
    
    
    $
    14.79
 102




---



##### 



Options Outstanding
    
    
    Options ExercisableWeighted-Number
    
    
    Average
    
    
    Weighted-
    
    
    Number
    
    
    Weighted-of Option
    
    
    Remaining
    
    
    Average
    
    
    of Option
    
    
    AverageShares
    
    
    Contractual
    
    
    Exercise
    
    
    Shares
    
    
    ExerciseRange of Exercise Prices Low/High Outstanding
    
    Outstanding
    
    
    Life (in yrs.)
    
    
    Price
    
    
    Exercisable
    
    
    Price$1.49/$10.45
    
    
    514,242
    
    
    
    2.9
    
    
    $
    7.43
    
    
    
    514,242
    
    
    $
    7.43$10.71/$13.16
    
    
    583,875
    
    
    
    4.7
    
    
    
    12.33
    
    
    
    540,493
    
    
    
    12.34$13.88/$18.00
    
    
    615,990
    
    
    
    5.0
    
    
    
    16.40
    
    
    
    490,596
    
    
    
    16.08$18.06/$21.06
    
    
    559,114
    
    
    
    7.0
    
    
    
    19.65
    
    
    
    286,769
    
    
    
    19.31$21.42/$21.91
    
    
    511,151
    
    
    
    6.9
    
    
    
    21.49
    
    
    
    232,354
    
    
    
    21.50$22.34/$25.37
    
    
    536,563
    
    
    
    5.0
    
    
    
    23.41
    
    
    
    505,593
    
    
    
    23.36$26.25/$27.51
    
    
    537,770
    
    
    
    7.5
    
    
    
    27.34
    
    
    
    191,130
    
    
    
    27.05$27.70/$31.26
    
    
    367,208
    
    
    
    7.8
    
    
    
    28.56
    
    
    
    183,093
    
    
    
    28.64$31.96
    
    
    515,060
    
    
    
    10.0
    
    
    
    31.96
    
    
    
    
    
    
    
    4,740,973
    
    
    
    6.2
    
    
    $
    20.52
    
    
    
    2,944,270
    
    
    $
    17.37
 Note 30. Employee Benefits
     103




---



##### 



Note 31. Merger-Related and Direct Acquisition Costs
  2004
    
    
    2003
    
    
    2002Merger-Related CostsCompensation-related expenses
    
    $
    2,533
    
    
    $
    823
    
    
    $
    2,504System conversion costs
    
    
    1,505
    
    
    
    1,196
    
    
    
    1,355Travel
    
    
    910
    
    
    
    214
    
    
    
    588Impairment loss from write-down of assets
    
    
    
    
    
    
    181
    
    
    
    Advertising
    
    
    214
    
    
    
    542
    
    
    
    1,021Other
    
    
    2,704
    
    
    
    2,171
    
    
    
    1,196$
    7,866
    
    
    $
    5,127
    
    
    $
    6,664
 2004
    
    
    2003
    
    
    2002Direct Acquisition CostsInvestment banking and professional fees
    
    $
    5,432
    
    
    $
    2,257
    
    
    $
    6,273Contract and lease terminations
    
    
    8,547
    
    
    
    875
    
    
    
    1,205Severance
    
    
    1,094
    
    
    
    6,486
    
    
    
    306$
    15,073
    
    
    $
    9,618
    
    
    $
    7,784
   Note 32. Related Party Transactions
  104




---



##### 



Note 33. Fair Value of Financial Instruments
     105




---



##### 



2004 (Restated)
    
    2003 (Restated)Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    ValueFinancial AssetsCash and due from banks
    
    $
    199,847
    
    
    $
    199,847
    
    
    $
    184,057
    
    
    $
    184,057Interest-bearing bank balances
    
    
    4,669
    
    
    
    4,669
    
    
    
    2,048
    
    
    
    2,048Federal funds sold
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    137Trading securities
    
    
    
    
    
    
    
    
    
    
    480
    
    
    
    480Securities available for sale
    
    
    4,234,843
    
    
    
    4,234,843
    
    
    
    3,915,994
    
    
    
    3,915,994Securities held to maturity
    
    
    75,245
    
    
    
    76,552
    
    
    
    91,097
    
    
    
    93,188Net loans
    
    
    8,032,141
    
    
    
    8,150,559
    
    
    
    5,688,537
    
    
    
    5,802,264Derivative assets
    
    
    13,441
    
    
    
    13,441
    
    
    
    2,127
    
    
    
    2,127Financial LiabilitiesDeposits
    
    $
    7,670,944
    
    
    $
    7,683,671
    
    
    $
    6,032,238
    
    
    $
    6,053,773Federal funds purchased and repurchase agreements
    
    
    1,583,495
    
    
    
    1,583,495
    
    
    
    834,866
    
    
    
    834,866Other short-term borrowings
    
    
    43,516
    
    
    
    43,516
    
    
    
    56,079
    
    
    
    56,079Long-term debt
    
    
    2,972,270
    
    
    
    2,993,712
    
    
    
    2,711,699
    
    
    
    2,732,241Derivative liabilities
    
    
    38,343
    
    
    
    38,343
    
    
    
    20,869
    
    
    
    20,869
 Note 34. Business Segments
   106




---



##### 



(Restated)CarolinaFirst
    
    Mercantile
    
    
    
    
    
    EliminatingBank
    
    Bank
    
    Other
    
    Entries
    
    TotalYear Ended December 31, 2004Net interest income
    
    $
    239,253
    
    
    $
    103,272
    
    
    $
    (6,684
    )
    
    $
    
    
    
    $
    335,841Provision for loan losses
    
    
    27,591
    
    
    
    7,387
    
    
    
    9
    
    
    
    
    
    
    
    34,987Noninterest income
    
    
    97,331
    
    
    
    20,510
    
    
    
    79,948
    
    
    
    (72,912
    )
    
    
    124,877Noninterest expenses
    
    
    163,018
    
    
    
    74,110
    
    
    
    86,028
    
    
    
    (72,912
    )
    
    
    250,244Merger-related costs (a)
    
    
    779
    
    
    
    7,010
    
    
    
    77
    
    
    
    
    
    
    
    7,866Amortization of intangibles (a)
    
    
    3,170
    
    
    
    2,658
    
    
    
    215
    
    
    
    
    
    
    
    6,043Income tax expense
    
    
    44,710
    
    
    
    16,757
    
    
    
    (5,978
    )
    
    
    
    
    
    
    55,489Discontinued operations
    
    
    
    
    
    
    (490
    )
    
    
    
    
    
    
    
    
    
    
    (490
    )Net income
    
    
    101,265
    
    
    
    25,038
    
    
    
    (6,795
    )
    
    
    
    
    
    
    119,508December 31, 2004Total assets
    
    $
    9,242,220
    
    
    $
    4,870,466
    
    
    $
    1,609,685
    
    
    $
    (1,924,166
    )
    
    $
    13,798,205Loans
    
    
    5,021,721
    
    
    
    3,197,326
    
    
    
    1,197
    
    
    
    (91,185
    )
    
    
    8,129,059Deposits
    
    
    4,688,851
    
    
    
    3,043,772
    
    
    
    
    
    
    
    (61,679
    )
    
    
    7,670,944Year Ended December 31, 2003Net interest income
    
    $
    197,263
    
    
    $
    59,325
    
    
    $
    (5,698
    )
    
    $
    
    
    
    $
    250,890Provision for loan losses
    
    
    13,588
    
    
    
    7,068
    
    
    
    (75
    )
    
    
    
    
    
    
    20,581Noninterest income
    
    
    73,489
    
    
    
    19,078
    
    
    
    66,467
    
    
    
    (58,295
    )
    
    
    100,739Noninterest expenses
    
    
    144,296
    
    
    
    51,187
    
    
    
    69,982
    
    
    
    (58,295
    )
    
    
    207,170Merger-related costs (a)
    
    
    2,781
    
    
    
    2,303
    
    
    
    43
    
    
    
    
    
    
    
    5,127Amortization of intangibles (a)
    
    
    1,753
    
    
    
    1,559
    
    
    
    121
    
    
    
    
    
    
    
    3,433Income tax expense
    
    
    35,106
    
    
    
    6,274
    
    
    
    (3,097
    )
    
    
    
    
    
    
    38,283Minority interest in consolidated subsidiary,
net of tax
    
    
    (2,010
    )
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2,012
    )Net income
    
    
    75,752
    
    
    
    13,872
    
    
    
    (6,041
    )
    
    
    
    
    
    
    83,583December 31, 2003Total assets
    
    $
    8,517,669
    
    
    $
    2,275,524
    
    
    $
    1,288,074
    
    
    $
    (1,357,027
    )
    
    $
    10,724,240Loans
    
    
    4,372,476
    
    
    
    1,383,279
    
    
    
    41,402
    
    
    
    (35,333
    )
    
    
    5,761,824Deposits
    
    
    4,545,712
    
    
    
    1,498,790
    
    
    
    53,024
    
    
    
    (65,288
    )
    
    
    6,032,238
 107




---



##### 



(Restated)CarolinaFirst
    
    
    Mercantile
    
    
    
    
    
    
    EliminatingBank
    
    
    Bank
    
    
    Other
    
    
    Entries
    
    
    TotalYear Ended December 31, 2002Net interest income
    
    $
    182,838
    
    
    $
    33,331
    
    
    $
    (6,026
    )
    
    $
    
    
    
    $
    210,143Provision for loan losses
    
    
    15,509
    
    
    
    6,799
    
    
    
    (42
    )
    
    
    
    
    
    
    22,266Noninterest income
    
    
    54,016
    
    
    
    9,890
    
    
    
    63,721
    
    
    
    (53,064
    )
    
    
    74,563Noninterest expenses
    
    
    120,743
    
    
    
    32,355
    
    
    
    62,806
    
    
    
    (53,064
    )
    
    
    162,840Merger-related costs (a)
    
    
    921
    
    
    
    5,743
    
    
    
    
    
    
    
    
    
    
    
    6,664Amortization of intangibles (a)
    
    
    1,093
    
    
    
    426
    
    
    
    
    
    
    
    
    
    
    
    1,519Income tax expense
    
    
    32,394
    
    
    
    1,303
    
    
    
    (2,586
    )
    
    
    
    
    
    
    31,111Minority interest in consolidated subsidiary,
net of tax
    
    
    (3,247
    )
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    (3,250
    )Cumulative effect of change in accounting
principle, net of tax
    
    
    
    
    
    
    
    
    
    
    (1,406
    )
    
    
    
    
    
    
    (1,406
    )Net income
    
    
    64,961
    
    
    
    2,761
    
    
    
    (3,889
    )
    
    
    
    
    
    
    63,833
 
 (a)
    
    Included in noninterest expenses. Note 35. Parent Company Financial Information
  Condensed Balance Sheets
 December 31,2004
    
    
    2003(Restated)
    
    
    (Restated)AssetsCash and due from banks
    
    $
    51,790
    
    
    $
    56,493Investment in subsidiaries:Bank subsidiaries
    
    
    1,462,472
    
    
    
    1,025,077Nonbank subsidiaries
    
    
    17,165
    
    
    
    42,946Total investment in subsidiaries
    
    
    1,479,637
    
    
    
    1,068,023Receivable from subsidiaries
    
    
    2,710
    
    
    
    1,491Other investments
    
    
    15,311
    
    
    
    16,656Other assets
    
    
    41,397
    
    
    
    26,441$
    1,590,845
    
    
    $
    1,169,104Liabilities and Shareholders EquityAccrued expenses and other liabilities
    
    $
    19,577
    
    
    $
    23,045Payables to subsidiaries
    
    
    1,908
    
    
    
    3,386Borrowed funds
    
    
    30,205
    
    
    
    51,299Subordinated debt
    
    
    145,695
    
    
    
    119,075Shareholders equity
    
    
    1,393,460
    
    
    
    972,299$
    1,590,845
    
    
    $
    1,169,104
 108




---



##### 



Condensed Statements of Income
 Years Ended December 31,2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)IncomeDividend income from subsidiaries
    
    $
    84,638
    
    
    $
    43,750
    
    
    $
    55,865Equity in undistributed net income of subsidiaries
    
    
    37,854
    
    
    
    43,558
    
    
    
    11,572Gain on equity investments
    
    
    6,056
    
    
    
    3,785
    
    
    
    3,538Interest income from subsidiaries
    
    
    277
    
    
    
    275
    
    
    
    455Sundry
    
    
    5,134
    
    
    
    5,917
    
    
    
    3,139133,959
    
    
    
    97,285
    
    
    
    74,569ExpensesInterest on borrowed funds
    
    
    8,149
    
    
    
    7,016
    
    
    
    6,963Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    354Sundry
    
    
    10,853
    
    
    
    8,347
    
    
    
    5,70319,002
    
    
    
    15,363
    
    
    
    13,020Income before taxes
    
    
    114,957
    
    
    
    81,922
    
    
    
    61,549Income tax benefit
    
    
    (4,551
    )
    
    
    (1,661
    )
    
    
    (2,284
    )Net income
    
    $
    119,508
    
    
    $
    83,583
    
    
    $
    63,833
 Condensed Statements of Cash Flows
 Years Ended December 31,2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Operating ActivitiesNet income
    
    $
    119,508
    
    
    $
    83,583
    
    
    $
    63,833Adjustments to reconcile net income to net cash provided by operationsEquity in undistributed net income of subsidiaries
    
    
    (37,854
    )
    
    
    (43,558
    )
    
    
    (11,572
    )Gain on disposition of equity investments
    
    
    (6,056
    )
    
    
    (3,785
    )
    
    
    (3,538
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    354Other assets, net
    
    
    (2,739
    )
    
    
    (11,790
    )
    
    
    (4,177
    )Other liabilities, net
    
    
    (5,515
    )
    
    
    13,013
    
    
    
    885Net cash provided by operating activities
    
    
    67,344
    
    
    
    37,463
    
    
    
    45,785Investing ActivitiesInvestment in subsidiaries
    
    
    (37,279
    )
    
    
    (132,096
    )
    
    
    (37,491
    )Loans to subsidiaries, net
    
    
    (1,697
    )
    
    
    1,794
    
    
    
    3,233Proceeds from disposition of equity investments
    
    
    7,282
    
    
    
    4,023
    
    
    
    4,844Purchase of equity investments
    
    
    (3,018
    )
    
    
    (4,425
    )
    
    
    (5,000
    )Net cash used for investing activities
    
    
    (34,712
    )
    
    
    (130,704
    )
    
    
    (34,414
    )Financing ActivitiesBorrowings, net
    
    
    (15,094
    )
    
    
    1,290
    
    
    
    (15,912
    )Issuance of subordinated debt, net
    
    
    
    
    
    
    
    
    
    
    62,496Issuance of common stock, net
    
    
    
    
    
    
    161,083
    
    
    
    Cash dividends paid
    
    
    (39,068
    )
    
    
    (27,089
    )
    
    
    (19,823
    )Repurchase of common stock
    
    
    
    
    
    
    (28,558
    )
    
    
    (48,483
    )Other
    
    
    16,827
    
    
    
    14,312
    
    
    
    5,923Net cash (used for) provided by financing activities
    
    
    (37,335
    )
    
    
    121,038
    
    
    
    (15,799
    )Net change in cash and cash equivalents
    
    
    (4,703
    )
    
    
    27,797
    
    
    
    (4,428
    )Cash and cash equivalents at beginning of year
    
    
    56,493
    
    
    
    28,696
    
    
    
    33,124Cash and cash equivalents at end of year
    
    $
    51,790
    
    
    $
    56,493
    
    
    $
    28,696
 109




---



##### 



Note 36. Quarterly Financial Data (Unaudited)
  2004 Quarterly Financial Data
 Three Months EndedDecember 31,
    
    
    September 30,
    
    
    June 30,
    
    
    March 31,(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)Interest income
    
    $
    160,039
    
    
    $
    147,218
    
    
    $
    117,961
    
    
    $
    117,014Interest expense
    
    
    62,915
    
    
    
    55,134
    
    
    
    45,080
    
    
    
    43,262Net interest income
    
    
    97,124
    
    
    
    92,084
    
    
    
    72,881
    
    
    
    73,752Provision for loan losses
    
    
    10,829
    
    
    
    9,440
    
    
    
    6,996
    
    
    
    7,722Noninterest income
    
    
    19,082
    
    
    
    48,266
    
    
    
    10,163
    
    
    
    47,366Noninterest expenses
    
    
    68,649
    
    
    
    69,858
    
    
    
    54,466
    
    
    
    57,271Income before income taxes and discontinued operations
    
    
    36,728
    
    
    
    61,052
    
    
    
    21,582
    
    
    
    56,125Income taxes
    
    
    13,009
    
    
    
    18,316
    
    
    
    7,175
    
    
    
    16,989Income from continuing operations
    
    
    23,719
    
    
    
    42,736
    
    
    
    14,407
    
    
    
    39,136Discontinued operations, net of tax
    
    
    (325
    )
    
    
    (165
    )
    
    
    
    
    
    
    Net income
    
    $
    23,394
    
    
    $
    42,571
    
    
    $
    14,407
    
    
    $
    39,136Per common share, basic:Income from continuing operations
    
    $
    0.33
    
    
    $
    0.62
    
    
    $
    0.24
    
    
    $
    0.66Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    0.33
    
    
    $
    0.62
    
    
    $
    0.24
    
    
    $
    0.66Per common share, diluted:Income from continuing operations
    
    $
    0.32
    
    
    $
    0.61
    
    
    $
    0.24
    
    
    $
    0.64Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    0.32
    
    
    $
    0.61
    
    
    $
    0.24
    
    
    $
    0.64
 2003 Quarterly Financial Data
 Three Months EndedDecember 31,
    
    
    September 30,
    
    
    June 30,
    
    
    March 31,(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)Interest income
    
    $
    117,162
    
    
    $
    97,416
    
    
    $
    100,579
    
    
    $
    98,971Interest expense
    
    
    44,861
    
    
    
    40,910
    
    
    
    39,959
    
    
    
    37,508Net interest income
    
    
    72,301
    
    
    
    56,506
    
    
    
    60,620
    
    
    
    61,463Provision for loan losses
    
    
    4,290
    
    
    
    5,591
    
    
    
    5,200
    
    
    
    5,500Noninterest income
    
    
    23,924
    
    
    
    25,523
    
    
    
    29,129
    
    
    
    22,163Noninterest expenses
    
    
    57,644
    
    
    
    50,541
    
    
    
    50,095
    
    
    
    48,890Income before income taxes and minority interest
    
    
    34,291
    
    
    
    25,897
    
    
    
    34,454
    
    
    
    29,236Income taxes
    
    
    10,211
    
    
    
    7,689
    
    
    
    11,026
    
    
    
    9,357Income before minority interest
    
    
    24,080
    
    
    
    18,208
    
    
    
    23,428
    
    
    
    19,879Minority interest in consolidated subsidiary, net of tax
    
    
    
    
    
    
    
    
    
    
    (1,000
    )
    
    
    (1,012
    )Net income
    
    $
    24,080
    
    
    $
    18,208
    
    
    $
    22,428
    
    
    $
    18,867Net income per common share, basic
    
    $
    0.43
    
    
    $
    0.39
    
    
    $
    0.48
    
    
    $
    0.40Net income per common share, diluted
    
    $
    0.42
    
    
    $
    0.38
    
    
    $
    0.47
    
    
    $
    0.39
 110




---



##### 



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  Item 9A. Controls and Procedures
   Accounting for Derivative Instruments and Hedging Activities (SFAS 133)
  (b)
    
    (1) Statement of managements responsibility for maintaining adequate internal
controls:
  (2) Statement identifying the framework utilized by management to assess internal
control:
 (3) Managements assessment of the effectiveness of internal control:
  111




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##### 



(4) Statement that the independent registered public accounting firm has issued
an attestation report on managements assessment of internal control:
  (c)
    
    Attestation report of KPMG LLP, an independent registered public
accounting firm, on TSFGs revised assessment of the effectiveness of its internal
control over financial reporting:See Report of Independent Registered Public Accounting Firm included in Item 8 of
this Annual Report on Form 10-K/A.(d)
    
    Changes in internal control over financial reporting:TSFG continually assesses the adequacy of its internal control over financial
reporting and enhances its controls in response to internal control assessments and
internal and external audit and regulatory recommendations.There was no change in our internal control over financial reporting during the
quarter ended December 31, 2004, that materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. Subsequently, we
have implemented several important changes in our internal control over financial
reporting related to our accounting for derivatives. These actions include:
 
    
    Enhancing risk management policies and procedures related
to reviewing derivative transactions;
    
    Reviewing policies and procedures related to the
initiation and subsequent review of hedge strategies;
    
    Engaging a third party consultant to provide ongoing
expertise related to hedge documentation at inception and
ongoing monitoring, and to assist management in evaluating
the appropriateness of the accounting for these transactions
in accordance with Generally Accepted Accounting Principles;
    
    Changing policies and procedures to limit the Companys
use of the short-cut method.
  Item 9B. Other Information
  PART III
 112




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##### 



Item 10. Directors and Executive Officers of the Registrant
    Item 11. Executive Compensation
  Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  Item 13. Certain Relationships and Related Transactions
  Item 14. Principal Accountant Fees and Services
  PART IV
 Item 15. Exhibits and Financial Statement Schedules
   
 113




---



##### 



114




---



##### 



Exhibit No.
    
    Description of Exhibit
    
    Location2.41
    
    Asset Sale Agreement entered into as
of September 3, 2002 by and among
TSFG, Carolina First Bank and Rock
Hill Bank & Trust
    
    Incorporated by
reference to Exhibit
2.1 of TSFGs
Registration Statement
on Form S-4,
Commission File No.
333-1001003.1
    
    Articles of Incorporation.
    
    Incorporated by
reference to Exhibits
3.1 and 3.2 of TSFGs
Quarterly Report on
Form 10-Q for the
three months ended
March 31, 2004,
Commission File No.
15083.3.2
    
    Amended and Restated Bylaws of TSFG
as amended and restated as of
December 18, 1996
    
    Incorporated by
reference to Exhibit
3.1 of TSFGs Current
Report on Form 8-K
dated December 18,
1996, Commission File
No. 0-150834.1
    
    Specimen TSFG Common Stock certificate
    
    Incorporated by
Reference to Exhibit
4.1 of TSFGs
Registration Statement
on Form S-1,
Commission File No.
33-74704.2
    
    Articles of Incorporation, as amended
    
    Included as Exhibit 3.14.3
    
    Bylaws
    
    Included as Exhibit 3.24.4
    
    Amended and Restated Common Stock
Dividend Reinvestment Plan
    
    Incorporated by
reference to the
Prospectus in TSFGs
Registration Statement
on Form S-3, Commission
File No. 333-11240410.1
    
    TSFG Amended and Restated
Restricted Stock Agreement Plan, as
amended by Amendment #1 and #2.
    
    Incorporated by
reference to Exhibit
99.1 from TSFGs
Registration Statement
on Form S-8, Commission
File No. 33-82668/82670;
Exhibit 10.1.1 from
TSFGs Annual Report on
Form 10-K for the year
ended December 31, 2001;
and Exhibit 10.1.2 from
TSFGs Annual Report on
Form 10-K for the year
ended December 31, 2001,
Commission File No.
0-15083.10.1.1*
    
    Amendment #3 to TSFG Amended and
Restated Restricted Stock Agreement
Plan
    
    Incorporated by
reference to Exhibit
10.1.1 of TSFGs Annual
Report on Form 10-K for
the year ended December
31, 2002, Commission
File No. 0-1508310.2*
    
    TSFG Employee Stock Ownership Plan
    
    Incorporated by
reference to Exhibit
10.2 of TSFGs Annual
Report on Form 10-K for
the year ended December
31, 1991, Commission
File No. 0-1508310.3*
    
    TSFG Amended and Restated Stock
Option Plan, as amended by
Amendment #1, #2, #3 and #4
    
    Incorporated by
reference to Exhibit
10.2 of TSFGs Quarterly
Report on Form 10-Q for
the quarter ended March
30, 1998, Commission
File No. 0-15083;
Exhibit 10.3.2 of TSFGs
Registration Statement
on Form S-4, Commission
File No. 333-32590;
Exhibit 10.3.3 of TSFGs
Annual Report on Form
10-K for the year ended
December 31, 2001,
Commission File No.
0-15083; and Exhibit
10.3.4 of TSFGs Annual
Report on Form 10-K for
the year ended December
31, 2001, Commission
File No. 0-15083
 115




---



##### 



Exhibit No.
    
    Description of Exhibit
    
    Location10.4*
    
    TSFG Salary Reduction Plan
    
    Incorporated by
reference to
Exhibit 28.1 of
TSFGs Registration
Statement on Form
S-8, Commission
File No. 33-2542410.5*
    
    Noncompetition, Severance and Employment
Agreement dated October 13, 2000, by and
between TSFG and Mack I. Whittle, Jr.:
    
    Incorporated by
reference to
Exhibit 10.5 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 2001,
Commission File No.
0-1508310.6*
    
    Noncompetition, Severance and Employment
Agreement dated October 13, 2000, by and
between TSFG and William S. Hummers III
    
    Incorporated by
reference to
Exhibit 10.6 of
TSFGs Annual
Report on Form 10-K
for year ended
December 31, 2001,
Commission File No.
0-1508310.7*
    
    Noncompetition and Severance Agreement dated
February 21, 1996, between TSFG and James W.
Terry, Jr.
    
    Incorporated by
reference to
Exhibit 10.7 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 1995,
Commission File No.
0-1508310.8*
    
    Noncompetition, Severance and Employment
Agreement dated as of January 1, 2002, by and
between TSFG and John C. DuBose
    
    Incorporated by
reference to
Exhibit 10.8 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 2001,
Commission File No.
0-1508310.9*
    
    Noncompetition, Severance and Employment
Agreement dated as of March 31, 2000, by and
between TSFG and Andrew B. Cheney
    
    Incorporated by
reference to
Exhibit 10.10 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 2001,
Commission File No.
0-1508310.10*
    
    Noncompetition, Severance and Employment
Agreement dated January 10, 2000, between
Carolina First Bank, TSFG and Stephen L.
Chryst, as amended by Amendment #1 dated
September 19, 2001
    
    Incorporated by
reference to
Appendix C of Annex
A of TSFGs
Registration
Statement on Form
S-4, Commission
File No. 333-32590
and Exhibit 10.1 of
TSFGs Quarterly
Report on Form 10-Q
for the quarter
ended September 30,
2001, Commission
File No. 0-1508310.11*
    
    Noncompetition, Severance and Employment
Agreement dated January 10, 2000, between
Carolina First Bank, TSFG and Tommy E. Looper,
as amended by Amendment #1 dated September 19,
2001.
    
    Incorporated by
reference to
Appendix D of Annex
A of TSFGs
Registration
Statement on Form
S-4, Commission
File No. 333-32590
and Exhibit 10.2 of
TSFGs Quarterly
Report on Form 10-Q
for the quarter
ended September 30,
2001, Commission
File No. 0-1508310.12*
    
    TSFG Short-Term Performance Plan
    
    Incorporated by
reference to
Exhibit 10.3 of
TSFGs Quarterly
Report on Form 10-Q
for the quarter
ended September 30,
1993, Commission
File No. 0-1508310.13*
    
    TSFG Amended and Restated 2001 Long-Term
Incentive Plan
    
    Incorporated by
reference to
Exhibit 10.14 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 2001,
Commission File No.
0-1508310.14*
    
    Amended and Restated TSFG Employee Stock
Purchase Plan
    
    Incorporated by
reference to
Exhibit 10.1 of
TSFGs Quarterly
Report on Form 10-Q
for the quarter
ended June 30,
2000, Commission
File No. 1508310.15*
    
    TSFG Directors Stock Option Plan
    
    Incorporated by
reference to
Exhibit 99.1 from
TSFGs Registration
Statement on Form
S-8, Commission
File No.
33-82668/8267010.16*
    
    TSFG Amended and Restated Fortune 50 Plan
    
    Incorporated by
reference to the
Prospectus in
TSFGs Registration
Statement on Form
S-8, Commission
File No. 333-3194810.17*
    
    Carolina First Bank Supplemental Executive
Retirement Plan
    
    Incorporated by
reference to
Exhibit 10.20 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 2001,
Commission File No.
0-1508310.18*
    
    Supplemental Executive Retirement Agreements
between TSFG and Mack I. Whittle, Jr., William S.
Hummers III, John C. DuBose, Andrew B.
Cheney and James W. Terry, Jr.
    
    Incorporated by
reference to
Exhibit 10.25 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 2003,
Commission File No.
0-15083
 116




---



##### 



Exhibit No.
    
    Description of Exhibit
    
    Location10.19
    
    Standstill Agreement dated August 16, 2001 by
and among TSFG, Mid-Atlantic Investors, and
Individuals set forth in the Agreement
    
    Incorporated by
reference to
Exhibit 10.3 of
TSFGs Quarterly
Report on Form 10-Q
for the fiscal
Quarter ended
September 30, 200110.20*
    
    TSFG 2004 Long Term Incentive Plan
    
    Incorporated by
reference to
Exhibit 10.25 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 2002,
Commission File No.
0-1508310.22*
    
    TSFG Executive Deferred Compensation Plan
    
    Incorporated by
reference to
Exhibit 10.27 of
TSFGs Annual
Report on Form 10-K
for the year ended
December 31, 2002,
Commission File No.
0-1508310.23*
    
    Form of Grant for TSFG 2004-2006 Long-Term
Incentive Plan  Restricted Stock Unit Award
Agreement
    
    Incorporated by reference to
Exhibit 10.23 of TSFGs Annual Report on Form 10-K for the year ended
December 31, 2004 filed on March 15, 200510.24*
    
    Management Incentive Compensation Plan Targets
    
    Incorporated by reference to
Exhibit 10.24 of TSFGs Annual Report on Form 10-K for the year ended
December 31, 2004 filed on March 15, 200511.1
    
    Statement of Computation of Earnings Per Share.
    
    Filed herewith as
Note 28 of the
Notes to
Consolidated
Financial
Statements21.1
    
    Subsidiaries of TSFG
    
    Incorporated by reference to
Exhibit 21.1 of TSFGs Annual Report on Form 10-K for the year ended
December 31, 2004 filed on March 15, 200522.1
    
    Proxy Statement for the 2005 Annual Meeting of
Shareholders
    
    Future filing
incorporated by
reference pursuant
to General
Instruction G(3)23.1
    
    Consent of KPMG LLP
    
    Filed herewith23.2
    
    Opinion of Independent Registered Public
Accounting Firm
    
    Included herewith.31.1
    
    Certification of Principal Executive Officer
pursuant to Rule 13a-14a/15(d)-14(a) of
Securities Exchange Act of 1934, as amended,
as adopted pursuant to Section 302 of the
Sarbanes Oxley Act of 2002.
    
    Filed herewith31.2
    
    Certification of Principal Financial Officer
pursuant to Rule 13a-14a/15(d)-14(a) of
Securities Exchange Act of 1934, as amended,
as adopted pursuant to Section 302 of the
Sarbanes Oxley Act of 2002.
    
    Filed herewith32.1
    
    Certification of Chief Executive Officer
pursuant to 18 U.S.C. 1350, as adopted
pursuant to section 906 of the Sarbanes Oxley
Act of 2002.
    
    Filed herewith32.2
    
    Certification of Principal Financial Officer
pursuant to 18 U.S.C. 1350, as adopted
pursuant to section 906 of the Sarbanes Oxley
Act of 2002.
    
    Filed herewith
 
 *
    
    This is a management contract or compensatory plan.  Type
    
    Date Filed
    
    Reporting Purpose
 (c)
    
    See Item 15(a)(3).
 117




---



##### 



SIGNATURES
  The South Financial Group, Inc.
 Name
    
    Title
    
    Date/s/ Mack I. Whittle, Jr.

Mack I. Whittle, Jr.
    
    President and Chief Executive Officer
    
    November 21, 2005/s/ Timothy K. Schools

Timothy K. Schools
    
    Executive Vice President
(Principal Accounting and Chief Financial Officer)
    
    November 21, 2005
  Name
    
    Title
    
    Date/s/William R. Timmons, Jr.

William R. Timmons, Jr.
    
    Chairman of the Board
    
    November 21, 2005/s/Mack I. Whittle, Jr.

Mack I. Whittle, Jr.
    
    Director
    
    November 21, 2005/s/ William S. Hummers III

William S. Hummers III
    
    Director
    
    November 21, 2005/s/ William P. Brant

William P. Brant
    
    Director
    
    November 21, 2005/s/ J. W. Davis

J. W. Davis
    
    Director
    
    November 21, 2005C. Claymon Grimes, Jr.
    
    Director
    
    November 21, 2005/s/ M. Dexter Hagy

M. Dexter Hagy
    
    Director
    
    November 21, 2005/s/ Darla Moore

Darla Moore
    
    Director
    
    November 21, 2005/s/ Jon W. Pritchett

Jon W. Pritchett
    
    Director
    
    November 21, 2005
 118




---



##### 



Name
    
    Title
    
    Date/s/ H. Earle Russell, Jr.

H. Earle Russell, Jr.
    
    Director
    
    November 21, 2005/s/Charles B. Schooler

Charles B. Schooler
    
    Director
    
    November 21, 2005/s/ Edward J. Sebastian

Edward J. Sebastian
    
    Director
    
    November 21, 2005/s/John C. B. Smith, Jr.

John C. B. Smith, Jr.
    
    Director
    
    November 21, 2005/s/ William R. Timmons III

William R. Timmons III
    
    Director
    
    November 21, 2005/s/ Samuel H. Vickers

Samuel H. Vickers
    
    Director
    
    November 21, 2005/s/ David C. Wakefield III

David C. Wakefield III
    
    Director
    
    November 21, 2005
 119