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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

   X  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2004
 
       Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ____ to ____

Commission file number 0-15083

The South Financial Group, Inc.
(Exact name of registrant as specified in its charter)

South Carolina   57-0824914
(State or other jurisdiction of
incorporation or organization)		   (IRS Employer Identification No.)

102 South Main Street, Greenville, South Carolina   29601
(Address of principal executive offices)   (ZIP Code)

(864) 255-7900
Registrant’s telephone number, including area code

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes   X     No       

The number of outstanding shares of the issuer’s $1.00 par value common stock as of August 3, 2004 was 70,647,166.

PART I. FINANCIAL INFORMATION

Item 1.     Financial Statements

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data) (Unaudited)

June 30, December 31,
2004 2003 2003
Assets                
Cash and due from banks   $ 265,401   $ 212,445   $ 184,057  
Interest-bearing bank balances    603    64,738    2,048  
Federal funds sold    --    50,000    137  
Securities  
   Trading    2,718    2,197    480  
   Available for sale    3,981,529    3,513,173    3,915,994  
   Held to maturity (market value $80,450, $71,410 and $93,188, respectively)    79,651    68,495    91,097  
   
 
 
 
      Total securities    4,063,898    3,583,865    4,007,571  
   
 
 
 
Loans  
   Loans held for sale    22,908    60,661    29,619  
   Loans held for investment    6,246,953    4,688,591    5,732,205  
   Allowance for loan losses    (75,910 )  (64,152 )  (73,287 )
   
 
 
 
      Net loans    6,193,951    4,685,100    5,688,537  
   
 
 
 
Premises and equipment, net    144,861    132,966    142,705  
Accrued interest receivable    51,307    41,828    48,365  
Intangible assets    344,195    245,007    353,079  
Other assets    411,053    241,900    292,902  
   
 
 
 
    $ 11,475,269   $ 9,257,849   $ 10,719,401  
   
 
 
 
   
Liabilities and shareholders' equity  
Liabilities  
   Deposits  
      Noninterest-bearing   $ 971,540   $ 814,945   $ 882,129  
      Interest-bearing    5,465,370    4,306,394    5,146,520  
   
 
 
 
         Total deposits    6,436,910    5,121,339    6,028,649  
   Federal funds purchased and repurchase agreements    1,001,192    702,792    834,866  
   Other short-term borrowings    354,692    42,452    56,079  
   Long-term debt    2,569,597    2,287,784    2,702,879  
   Debt associated with trust preferred securities    --    95,500    --  
   Accrued interest payable    23,342    21,799    24,520  
   Other liabilities    94,938    239,343    92,539  
   
 
 
 
      Total liabilities    10,480,671    8,511,009    9,739,532  
   
 
 
 
Minority interest in consolidated subsidiary    --    86,616    --  
   
 
 
 
Shareholders' equity  
   Preferred 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 59,796,124, 46,896,994, and 59,064,375 shares,  
      respectively    59,796    46,897    59,064  
   Surplus    724,374    412,608    712,788  
   Retained earnings    261,049    180,601    216,678  
   Guarantee of employee stock ownership plan debt and nonvested  
   restricted stock    (4,388 )  (2,937 )  (2,494 )
   Common stock held in trust for deferred compensation    (710 )  (147 )  (151 )
   Deferred compensation payable in common stock    710    147    151  
   Accumulated other comprehensive income (loss), net of tax    (46,233 )  23,055    (6,167 )
   
 
 
 
      Total shareholders' equity    994,598    660,224    979,869  
   
 
 
 
    $ 11,475,269   $ 9,257,849   $ 10,719,401  
   
 
 
 

See notes to consolidated financial statements, which are an integral part of these statements.

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data) (Unaudited)

Three Months Ended
June 30,		 Six Months Ended,
June 30,
2004 2003 2004 2003
Interest income                    
Interest and fees on loans   $ 80,348   $ 68,325   $ 158,365   $ 135,658  
Interest and dividends on securities  
   Taxable    35,684    30,937    72,894    61,236  
   Exempt from Federal income taxes    1,906    1,105    3,665    2,326  
   
 
 
 
 
      Total interest and dividends on securities    37,590    32,042    76,559    63,562  
Interest on short-term investments    23    212    51    330  
   
 
 
 
 
      Total interest income    117,961    100,579    234,975    199,550  
   
 
 
 
 
Interest expense  
Interest on deposits    20,003    18,335    39,453    36,334  
Interest on borrowed funds    17,569    16,072    33,117    31,573  
   
 
 
 
 
   Total interest expense    37,572    34,407    72,570    67,907  
   
 
 
 
 
   Net interest income    80,389    66,172    162,405    131,643  
Provision for loan losses    6,996    5,200    14,718    10,700  
   
 
 
 
 
   Net interest income after provision for loan losses    73,393    60,972    147,687    120,943  
Noninterest income    25,995    23,975    55,283    43,861  
Noninterest expenses, excluding merger-related costs    53,891    49,713    110,985    97,106  
Merger-related costs    575    382    752    1,879  
   
 
 
 
 
   Income before income taxes and minority interest    44,922    34,852    91,233    65,819  
Income taxes    14,935    11,153    28,953    21,063  
   
 
 
 
 
   Income before minority interest    29,987    23,699    62,280    44,756  
Minority interest in consolidated subsidiary, net of tax    --    (1,000 )  --    (2,012 )
   
 
 
 
 
   Net income   $ 29,987   $ 22,699   $ 62,280   $ 42,744  
   
 
 
 
 
   
Average common shares outstanding, basic    59,494,363    46,629,666    59,354,354    46,975,635  
Average common shares outstanding, diluted    60,837,792    47,760,781    60,823,631    48,007,767  
Basic earnings per share   $ 0.50   $ 0.49   $ 1.05   $ 0.91  
   
 
 
 
 
Diluted earnings per share   $ 0.49   $ 0.48   $ 1.02   $ 0.89  
   
 
 
 
 

See notes to consolidated financial statements, which are an integral part of these statements.

THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(in thousands, except share and per share data) (Unaudited)

<
Shares of
Common
Stock		 Common
Stock		 Surplus Retained
Earnings
and
Other*		 Accumulated
Other
Comprehensive
Income(Loss)		 Total
Balance, December 31, 2002      47,347,375   $ 47,347   $ 427,448   $ 147,854   $ 24,150   $ 646,799  
Net income    --    --    --    42,744    --    42,744  
Other comprehensive loss, net of  
   tax of $1,472    --    --    --    --    (1,095 )  (1,095 )
Comprehensive income    --    --    --    --    --    41,649  
                      
 
Cash dividends declared  
   ($0.28 per common share)    --    --    --    (13,091 )  --    (13,091 )
                      
 
Common stock activity:  
   Repurchase of stock    (1,272,805 )  (1,273 )  (27,285 )  --    --    (28,558 )
   Acquisitions