Today, John C.B. Smith, Chairman of the Board of Directors of The South Financial Group, Inc. (NASDAQ: TSFG) released the following statement on behalf of the Company in response to the comments made by the Governor of South Carolina:

On September 2, 2008, prior to the announcement of the Troubled Asset Relief Program (“TARP”) by the U.S. Treasury, the Board and Mack I. Whittle, Jr. agreed that he would retire as Chairman, President and CEO on or before December 30, 2008. The management transition has progressed, and subsequently, the Board specified that Mr. Whittle’s retirement would be effective October 27, 2008.

Mr. Smith commented, “The terms of Mr. Whittle’s retirement are consistent with the provisions of his employment agreement, which were disclosed to both the public and the banking regulators. The retirement reflected his 20 year career with TSFG as its founder and only chief executive officer. Moreover, TSFG did not have the right to unilaterally limit Mr. Whittle’s rights embodied in his long-standing agreement with the Company.”

As previously announced, TSFG is proceeding with applying for proceeds from the TARP Capital Purchase Program and will fully comply with all restrictions specified by the U.S. Treasury with respect to their investment, including executive compensation rules and regulations. The TARP Capital Purchase Program restrictions were not and are not currently applicable to Mr. Whittle’s agreement. However, if they had been applicable, less than 15% of the amount payable to him would exceed the TARP restrictions on executive compensation.

Mr. Smith continued, “The Bank has always been a good corporate citizen, and in the event that the Bank participates in the TARP program, it will comply with the letter and the spirit of the law. TSFG is an important part of the business community in South Carolina. It employs over 1,600 persons in the State, made over $1 billion of loans in this State last year alone, and supports countless business and charitable endeavors throughout the State. Although Governor Sanford made no attempt to discuss these matters with TSFG prior to his press conference, we would welcome the opportunity to discuss this matter with the Governor, as we believe that a strong TSFG is in the best interests of South Carolina.”

General Information

The South Financial Group is the largest publicly-traded bank holding company headquartered in South Carolina and ranks among the top 50 U.S. commercial bank holding companies in total assets. At September 30, 2008, it had approximately $13.7 billion in total assets and 180 branch offices in Florida, North Carolina, and South Carolina. TSFG operates Carolina First Bank, which conducts banking operations in North Carolina and South Carolina (as Carolina First Bank), in Florida (as Mercantile Bank), and on the Internet (as Bank CaroLine). At September 30, 2008, approximately 45% of TSFG’s total customer deposits were in South Carolina, 41% were in Florida, and 14% were in North Carolina. Investor information is available at www.thesouthgroup.com.

The South Financial Group, Inc.
James R. Gordon, 864-552-9050
Senior EVP & Chief Financial Officer
or
Mary M. Gentry, 864-421-1068
EVP – Investor Relations