Ahead Of The Bell: South Financial Group

NEW YORK (AP) — Shares of South Financial Group Inc. tumbled in premarket trading Friday after the regional bank announced plans to raise capital from various securities swaps and sales of assets and common stock, which would likely more than double the company's shares outstanding.

The stock sank 17 cents, or 12 percent, to $1.19 in premarket trading and has changed hands between 66 cents and $13.50 in the past 12 months.

On Thursday, Greenville, S.C.-based South Financial said it hoped to raise between $300 million and $315 million from securities exchanges and sales in order to bolster its balance sheet.

The holding company for 180 bank branches in South and North Carolina and Florida said the moves would boost its financial cushion to weather a potentially worsening economy, but shares closed down 27.5 percent, or 24 cents, to $1.36 Thursday as investors feared the plan would likely dilute the value of existing stock.

South Financial has 85.2 million shares outstanding, according to Thomson Reuters data.

SunTrust Robinson Humphrey analyst Jennifer Demba said in a note to investors Friday that the money raised by the bank will "eliminate any doubt about survivability" amid its problems with deteriorating home mortgage, construction and land loans.