South Financial Group gets $347M from Treasury

GREENVILLE, S.C. - The South Financial Group Inc. said Friday it has sold $347 million of preferred stock to the U.S. Treasury Department as part of the government's capital purchase program.

The Treasury also received 10-year warrants to buy up to 10.1 million common shares at an exercise price of $5.15 apiece.

H. Lynn Harton, interim chief executive, said in a statement that the investment gives the bank "greater flexibility to manage our balance sheet and to explore strategic investments in our banking franchise."

As part of the government's $700 billion financial rescue package passed in September, the Treasury is pouring $250 billion into stock purchases of various institutions in an effort to encourage banks to resume normal lending.

Additionally, South Financial Group said it plans to participate in the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Programs. This includes a program that provides full FDIC insurance coverage of noninterest-bearing deposit and certain other transaction accounts regardless of the dollar amount through December 31, 2009.

South Financial Group operates 180 branches in Florida and the Carolinas.

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