UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended |
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period |
Commission file number 0-15083
The South Financial Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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South Carolina |
57-0824914 |
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(State or Other Jurisdiction of |
(IRS Employer Identification No.) | ||||
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Incorporation or Organization) |
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102 South Main Street, Greenville, South Carolina |
29601 |
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(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 May 3, 2005 was 71,901,830.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data) (Unaudited)
| March 31, | December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2005 | 2004 | 2004 | ||||||||||||
| Assets | ||||||||||||||
| Cash and due from banks | $ | 219,968 | $ | 220,636 | $ | 199,847 | ||||||||
| Interest-bearing bank balances | 5,793 | 1,048 | 4,669 | |||||||||||
| Federal funds sold | -- | 4,477 | -- | |||||||||||
| Securities | ||||||||||||||
| Trading | 20 | 1,462 | -- | |||||||||||
| Available for sale | 4,763,986 | 3,779,782 | 4,234,843 | |||||||||||
| Held to maturity (market value $70,269, $87,050 and $76,552, respectively) | 69,805 | 84,876 | 75,245 | |||||||||||
| Total securities | 4,833,811 | 3,866,120 | 4,310,088 | |||||||||||
| Loans | ||||||||||||||
| Loans held for sale | 23,958 | 15,850 | 21,302 | |||||||||||
| Loans held for investment | 8,398,360 | 5,986,684 | 8,107,757 | |||||||||||
| Allowance for loan losses | (98,690 | ) | (74,871 | ) | (96,918 | ) | ||||||||
| Net loans | 8,323,628 | 5,927,663 | 8,032,141 | |||||||||||
| Premises and equipment, net | 178,044 | 144,860 | 170,648 | |||||||||||
| Accrued interest receivable | 63,861 | 47,914 | 65,174 | |||||||||||
| Goodwill | 574,130 | 324,614 | 571,853 | |||||||||||
| Other intangible assets | 37,791 | 27,389 | 39,597 | |||||||||||
| Other assets | 447,854 | 309,913 | 395,797 | |||||||||||
| $ | 14,684,880 | $ | 10,874,634 | $ | 13,789,814 | |||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||
| Liabilities | ||||||||||||||
| Deposits | ||||||||||||||
| Noninterest-bearing | $ | 1,290,427 | $ | 924,753 | $ | 1,237,877 | ||||||||
| Interest-bearing | 6,864,148 | 5,120,577 | 6,427,660 | |||||||||||
| Total deposits | 8,154,575 | 6,045,330 | 7,665,537 | |||||||||||
| Federal funds purchased and repurchase agreements | 1,724,813 | 1,115,432 | 1,583,495 | |||||||||||
| Other short-term borrowings | 36,312 | 43,986 | 43,516 | |||||||||||
| Long-term debt | 3,197,287 | 2,524,966 | 2,962,143 | |||||||||||
| Accrued interest payable | 37,892 | 23,090 | 31,943 | |||||||||||
| Other liabilities | 149,602 | 96,009 | 102,577 | |||||||||||
| Total liabilities | 13,300,481 | 9,848,813 | 12,389,211 | |||||||||||
| 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 71,757,924, 59,599,431, and 71,252,346 shares, | ||||||||||||||
| respectively | 71,758 | 59,599 | 71,252 | |||||||||||
| Surplus | 1,064,673 | 720,758 | 1,056,185 | |||||||||||
| Retained earnings | 317,286 | 240,027 | 294,202 | |||||||||||
| Guarantee of employee stock ownership plan debt and nonvested restricted stock | (4,341 | ) | (5,071 | ) | (3,483 | ) | ||||||||
| Common stock held in trust for deferred compensation | (1,383 | ) | (706 | ) | (901 | ) | ||||||||
| Deferred compensation payable in common stock | 1,383 | 706 | 901 | |||||||||||
| Accumulated other comprehensive (loss) gain, net of tax | (64,977 | ) | 10,508 | (17,553 | ) | |||||||||
| Total shareholders' equity | 1,384,399 | 1,025,821 | 1,400,603 | |||||||||||
| $ | 14,684,880 | $ | 10,874,634 | $ | 13,789,814 | |||||||||
See notes to consolidated financial statements, which are an integral part of these statements.
1
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data) (Unaudited)
| Three Months Ended March 31, |
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| 2005 | 2004 | ||||||||||
| Interest Income | |||||||||||
| Interest and fees on loans | $ | 121,478 | $ | 78,017 | |||||||
| Interest and dividends on securities: | |||||||||||
| Taxable | 46,148 | 37,210 | |||||||||
| Exempt from federal income taxes | 2,462 | 1,759 | |||||||||
| Total interest and dividends on securities | 48,610 | 38,969 | |||||||||
| Interest on short-term investments | 161 | 28 | |||||||||
| Total interest income | 170,249 | 117,014 | |||||||||
| Interest Expense | |||||||||||
| Interest on deposits | 34,382 | 19,450 | |||||||||
| Interest on short-term borrowings | 10,111 | 2,109 | |||||||||
| Interest on long-term debt | 21,855 | 13,439 | |||||||||
| Total interest expense | 66,348 | 34,998 | |||||||||
| Net Interest Income | 103,901 | 82,016 | |||||||||
| Provision for Loan Losses | 10,962 | 7,722 | |||||||||
| Net interest income after provision for loan losses | 92,939 | 74,294 | |||||||||
| Noninterest Income | 25,743 | 29,288 | |||||||||
| Noninterest Expenses | 66,510 | 57,271 | |||||||||
| Income before income taxes and discontinued | |||||||||||
| operations | 52,172 | 46,311 | |||||||||
| Income taxes | 17,217 | 14,018 | |||||||||
| Income from continuing operations | 34,955 | 32,293 | |||||||||
| Discontinued operations, net of income tax | (396 | ) | -- | ||||||||
| Net Income | $ | 34,559 | $ | 32,293 | |||||||
| Average Common Shares Outstanding, Basic | 71,376 | 59,214 | |||||||||
| Average Common Shares Outstanding, Diluted | 73,021 | 60,809 | |||||||||
| Per Common Share, Basic | |||||||||||
| Income from continuing operations | $ | 0.49 | $ | 0.55 | |||||||
| Discontinued operations | (0.01 | ) | -- | ||||||||
| Net income | $ | 0.48 | $ | 0.55 | |||||||
| Per Common Share, Diluted | |||||||||||
| Income from continuing operations | $ | 0.48 | $ | 0.53 | |||||||
| Discontinued operations | (0.01 | ) | -- | ||||||||
| Net income | $ | 0.47 | $ | 0.53 | |||||||
See notes to consolidated financial statements, which are an integral part of these statements.
2
THE SOUTH FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY AND COMPREHENSIVE (LOSS) 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, 2003 | 59,064,375 | $ | 59,064 | $ | 712,788 | $ | 214,184 | $ | (6,167 | ) | $ | 979,869 | ||||||||
| Net income | -- | -- | -- | 32,293 | -- | 32,293 | ||||||||||||||
| Other comprehensive income, net of | ||||||||||||||||||||
| income tax of $9,608 | -- | -- | -- | -- | 16,675 | 16,675 | ||||||||||||||
| Comprehensive income | -- | -- | -- | -- | -- | 48,968 | ||||||||||||||
| Cash dividends declared | ||||||||||||||||||||
| ($0.15 per common share) | -- | -- | -- | (8,944 | ) | -- | (8,944 | ) | ||||||||||||
| Common stock activity: | ||||||||||||||||||||
| Exercise of stock options, including | ||||||||||||||||||||
| income tax benefit of $1,887 | 299,923 | 300 | 4,235 | -- | -- | 4,535 | ||||||||||||||
| Acquisitions | (294 | ) | -- | (7 | ) | -- | -- | (7 | ) | |||||||||||
| Dividend reinvestment plan | 28,617 | 29 | 787 | -- | -- | 816 | ||||||||||||||
| Restricted stock plan | 202,289 | 202 | 2,841 | (2,639 | ) | -- | 404 | |||||||||||||
| Employee stock purchase plan | 2,091 | 2 | 57 | -- | -- | 59 | ||||||||||||||
| Director compensation | 2,430 | 2 | 66 | -- | -- | 68 | ||||||||||||||
| Common stock purchased by trust for | ||||||||||||||||||||
| defer | ||||||||||||||||||||