The Federal Reserve announced Friday that on May 4 it placed South Financial Group Inc. of Greenville, S.C., under a written agreement that, among other things, prevents the $12 billion-asset company from paying dividends without prior approval.

The Fed's move follows a consent order for South Financial's Carolina First Bank from the South Carolina State Board of Financial Institutions and the Federal Deposit Insurance Corp. on April 30.

That earlier order calls for the bank to develop a plan to reduce problem assets and gives it 120 days to boost its leverage ratio to 8% and its total risk-based capital ratio to 12%. At March 31, those ratios were 6.87% and 10.45%, causing the bank to be well capitalized by regulatory standards.

South Financial has been addressing particularly stubborn but stable problem assets. At March 31, total nonperforming assets stood at $518 million, or 4.17% of total assets. That was comparable to the level a year earlier and at Dec. 31.

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