With the proper foundation solidly in place – namely our management team, common operating system and market presence in attractive markets – we achieved consistent quarter-by-quarter operating earnings growth. The fourth quarter of 2002 represented the seventh consecutive quarter of operating earnings growth.

    This increasing profitability was due, in part, to our concentration on several fundamental areas. For example, we hired the best banking professionals in our markets. We also focused on top-line revenue growth in 2002 through increased earning assets and various fee income initiatives. In addition, we worked hard to improve our efficiency ratio and core credit quality measures.

     We also introduced an on-going, customer-focused sales process –
which we call Elevate – with the goal of creating a new “sales” culture within the company. Elevate, which builds on our customer-focused traditions, has helped accelerate top-line revenue growth through increased product referrals and product sales. This ultimately contributes to our consistent earnings growth.

     In short, we achieved our goal of consistent earnings growth – growth that has been reflected in our stock performance. The total market return, including dividends, for The South Financial Group stock increased 19% in 2002, outpacing financial industry and market indexes.