BUY TSFG -  last $0.96. The South Financial Group said its preliminary net loss for the third quarter was $340.8 million, or $1.95 a share, down from a net loss of $31.2 million, or 43 cents a share, in the third quarter of 2008. A good deal of its losses came from loans issued in Florida by its subsidiary, Mercantile Bank. The net loss for the just-ended quarter primarily was due to credit provisions and related costs, as well as a $200 million non-cash charge related to the recording of a valuation allowance for deferred tax assets, the company said in a news release. In the third quarter, the company had a $224.2 million provision for credit losses. The environment remains challenging and credit stress continues to be high, H. Lynn Harton, South Financial’s president and CEO, said in the release. He added that, during the quarter, the bank took advantage of improving liquidity in the loan sale market to significantly increase its sales of problem and potential problem loans. The move increased quarterly credit losses, but also contributed to the bank’s first decline in nonperforming assets since the beginning of the credit cycle in early 2008, Harton said. South Financial increased its reserves in recognition of the environment and continued to maintain a very liquid balance sheet, raising $280 million in core capital since mid June. The bank is “well capitalized,” he said.

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Best Idea – Add to position on valuation. – -2009-Oct-22 06:56:27: BUY TSFG @ 0.96.