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(

Updated with analyst downgrade of the stock

.)

GREENVILLE, S.C. (

TheStreet

) --

South Financial Group

(TSFG)

shares tumbled Wednesday on above-average volume after the regional bank posted a wider-than-expected third-quarter loss.

South Financial Group late Tuesday said it lost $340.8 million, or $1.95 a share, in the third quarter, widening from its year-ago loss and worse than the Thomson Reuters average estimate for a loss of only 44 cents a share. The bank said the loss came primarily from credit provisions and related costs.

The provision for credit losses for the third quarter totaled $224.2 million, South Financial said, compared with $131.3 million in the second quarter. The overall allowance for credit losses increased to $345.3 million in the recent quarter, up from $289.7 million sequentially, the bank said.

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Following the earnings release, Sun Trust Robinson Humphrey downgraded South Financial's stock to neutral from buy. The firm said the stock's upside potential has diminished significantly following the larger-than-expected quarterly loss.

Shares of South Financial were falling by 43 cents, or 30.3%, to 99 cents. Earlier in the session, the stock touched an intraday low of 98 cents. More than 33.7 million shares changed hands by 1:45 p.m. EDT Wednesday, compared to the stock's 50-day average daily volume of 4.5 million, according to the

Nasdaq

.

South Financial has a 167.4 million-share float with a short interest float of 2% as of Sept. 25, according to Yahoo! Finance. Only 1.9% of the company's shares are held by insiders with another 61.4% owned by institutions.

-- Written by Robert Holmes in New York

.

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